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17 September 2014
Prior Sex Offender Sentenced to 10 Years in Prison for Possessing Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Austin Portner, age 55, of Hagerstown, Maryland, today to 10 years in prison followed by 20 years of supervised release for possessing child pornography and of having a prior sex offense conviction. Judge Bennett ordered that upon his release from prison, Portner must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Colonel Marcus L. Brown, Superintendent of the Maryland State Police.
According to his plea agreement, on November 14, 2002, Portner was convicted of second and third degree sex offenses in Washington County, Maryland for having sexual contact with a 10 year-old victim. He was released from prison in 2009. Portner was employed in Pennsylvania.
In August of 2012, Maryland State Police discovered multiple handwritten letters between Portner and an individual who was incarcerated at the Maryland Correctional Institute in Hagerstown for sexual offenses involving children. Portner referred to the inmate in his letters as “Big Brother.” The mailings contained sketches of young children portrayed in lascivious manner with attending captions describing sexual contact with men, and references to the predation of children. Portner also explained that he had found a computer and that he was visiting websites for child pornography. One of the letters contained a photo of two young girls whom Portner stated were located in Pennsylvania.
When asked about the letters, Portner stated that he met “Big Brother” while he was in prison and that they shared a mutual interest in sex with children. Portner looked forward to the inmate’s release from prison so that he could learn how to attract young children. Portner stated that after his release from prison, he had viewed child pornography roughly one to three times a week from his residence on a netbook computer that linked to the WiFi network of a nearby coffee shop. Portner initially stated that he had destroyed the computer and that he no longer owned or had access to a computer, but later acknowledged owning a computer.On February 11, 2013, law enforcement recovered a laptop computer from Portner’s residence, as well as additional letters between Portner and his “Big Brother.” The computer contained more than 200 images of visual depictions of minors engaging in sexually explicit conduct. Some of the images included photos of young children and infants who are bound or restrained and subjected to physical and sexual abuse.
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.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the HSI Baltimore and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Mark W. Crooks, who prosecuted the case.
Press AdvisoryRead the Press Release
Saint Lawrence County kidnapping case
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian will conduct a press conference on Thursday, Sept. 18th at 11:30 AM, in the U.S. Attorney’s Office, 9th floor, 100 S. Clinton Street, Syracuse, NY.
No further information will be provided prior to the press conference.
Pennsylvania Man Pleads Guilty in Conspiracy to Illegally Export Restricted Laboratory Equipment to SyriaRead the Press Release
U.S. Attorney Peter Smith for the Middle District of Pennsylvania, Special Agent in Charge John Kelleghan for Philadelphia, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Special Agent in Charge Sidney M. Simon of the New York Field Office, Office of Export Enforcement, U.S. Department of Commerce announced that yesterday Harold Rinko, 72, of Hallstead, Pennsylvania, appeared before Senior District Court Judge Edwin M. Kosik in Scranton and pleaded guilty to conspiracy to illegally export laboratory equipment, including items used to detect chemical warfare agents, from the United States to Syria, in violation of federal law.
During the guilty plea hearing, Rinko admitted that he conspired to export items from the United States through third party countries to customers in Syria, without the required U.S. Commerce Department licenses.
According to a factual stipulation signed by Rinko and made part of the record, the conspirators prepared false invoices that undervalued and mislabeled the goods being purchased and also listed false information as to the identity and geographic location of the purchasers of the goods. The stipulation indicates that the items would be shipped from the United States to Jordan, the United Arab Emirates, and the United Kingdom, and thereafter transshipped to Syria.
“HSI will use all resources at its disposal to prevent sensitive and restricted technology from being exported to Syria though the black market,” said Special Agent in Charge Kelleghan. “No good comes of illegal exports to Syria during this time of gross misgovernment and civil strife, and HSI will do all in its power as the principal enforcer of export controls to ensure that sensitive technology doesn’t fall into the wrong hands in Syria. I applaud our colleagues at the Department of Commerce, along with our law enforcement counterparts in the United Kingdom, who helped us make this complex investigation a success.”
“Today's plea represents the effort of law enforcement agencies working together to make our country safer,” said Simon. “Office of Export Enforcement Special Agents with the U.S. Department of Commerce work tirelessly every day to pursue those who flout our export control laws and attempt to supply anyone with technology that threatens our national security. We will seek and arrest violators wherever located, worldwide, and we will continue to leverage our unique authorities as the only federal law enforcement agency exclusively dedicated to enforcing dual-use export violations.”
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines. Rinko is facing a potential maximum sentence of five years’ imprisonment, a fine of $250,000, and a three-year term of supervised release.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
The case was investigated by the U.S. Immigration and Customs, Homeland Security Investigations (HSI) in partnership with the U.S. Department of Commerce, Office of Export Enforcement and assigned to Assistant U.S. Attorney Todd K. Hinkley and Trial Attorney Mariclaire Rourke with the Department of Justice, National Security Division, Counterespionage Section.
Pennsylvania Man Pleads Guilty in Conspiracy to Illegally Export Restricted Laboratory Equipment to SyriaRead the Press Release
U.S. Attorney Peter Smith for the Middle District of Pennsylvania, Special Agent in Charge John Kelleghan for Philadelphia, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Special Agent in Charge Sidney M. Simon of the New York Field Office, Office of Export Enforcement, U.S. Department of Commerce announced that yesterday Harold Rinko, 72, of Hallstead, Pennsylvania, appeared before Senior District Court Judge Edwin M. Kosik in Scranton and pleaded guilty to conspiracy to illegally export laboratory equipment, including items used to detect chemical warfare agents, from the United States to Syria, in violation of federal law.
During the guilty plea hearing, Rinko admitted that he conspired to export items from the United States through third party countries to customers in Syria, without the required U.S. Commerce Department licenses.
According to a factual stipulation signed by Rinko and made part of the record, the conspirators prepared false invoices that undervalued and mislabeled the goods being purchased and also listed false information as to the identity and geographic location of the purchasers of the goods. The stipulation indicates that the items would be shipped from the United States to Jordan, the United Arab Emirates, and the United Kingdom, and thereafter transshipped to Syria.
“HSI will use all resources at its disposal to prevent sensitive and restricted technology from being exported to Syria though the black market,” said Special Agent in Charge Kelleghan. “No good comes of illegal exports to Syria during this time of gross misgovernment and civil strife, and HSI will do all in its power as the principal enforcer of export controls to ensure that sensitive technology doesn’t fall into the wrong hands in Syria. I applaud our colleagues at the Department of Commerce, along with our law enforcement counterparts in the United Kingdom, who helped us make this complex investigation a success.”
“Today's plea represents the effort of law enforcement agencies working together to make our country safer,” said Simon. “Office of Export Enforcement Special Agents with the U.S. Department of Commerce work tirelessly every day to pursue those who flout our export control laws and attempt to supply anyone with technology that threatens our national security. We will seek and arrest violators wherever located, worldwide, and we will continue to leverage our unique authorities as the only federal law enforcement agency exclusively dedicated to enforcing dual-use export violations.”
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines. Rinko is facing a potential maximum sentence of five years’ imprisonment, a fine of $250,000, and a three-year term of supervised release.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
The case was investigated by the U.S. Immigration and Customs, Homeland Security Investigations (HSI) in partnership with the U.S. Department of Commerce, Office of Export Enforcement and assigned to Assistant U.S. Attorney Todd K. Hinkley and Trial Attorney Mariclaire Rourke with the Department of Justice, National Security Division, Counterespionage Section.
****Oxford Business Owner Sentenced to AYear in Prison for Role in Conspiracy ToFile False Tax ReturnsRead the Press Release
A business owner from Oxford was sentenced to a year in prison for filing false tax returns and conspiring to file false tax returns with the Internal Revenue Service, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Jarod Koopman, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
U.S. District Judge Arthur J. Tarnow imposed the sentence on Randal Bellestri, 57. Judge Tarnow also ordered Bellestri to pay a fine of $500,000.00.
Bellestri pleaded guilty in June to filing false tax returns and conspiracy to file false tax returns with the IRS. According to court records, his company, Odyssey, Inc. of Lake Orion, produces machine tools for the aviation industry. Between 2000 and 2009, Bellestri had an agreement with an employee at Odyssey regarding the sale of scrap metal left over from Odyssey’s manufacturing operations. Bellestri authorized the employee to serve as a contact with the scrap metal buyer and to collect the proceeds from the sales in cash. The proceeds were then divided between Bellestri and the employee. Bellestri did not claim the cash proceeds from these scrap metal sales as income on his federal income tax returns. Bellestri’s failure to report these cash proceeds for the 2005 through 2008 tax years caused his income to be understated by approximately $2,155,000.
“Every American has a duty to pay their fair share of taxes. The prosecution of Mr. Bellestri, who intentionally concealed income and filed false tax returns, is vital to maintaining public confidence in our tax system,” said Acting Special Agent in Charge Jarod Koopman.
The case was investigated by special agents of the IRS-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Christopher L. Varner.Owner of Monterey Wine Cellar Sentenced to Prison for Failure to Pay Wine Excise TaxRead the Press Release
SAN JOSE – Brenda Jo Kibbee, was sentenced yesterday to nine months’ imprisonment for intentionally failing to pay Federal excise tax on wine, and ordered to pay $877,126.94 in restitution to the Alcohol and Tobacco Tax and Trade Bureau (TTB), announced United States Attorney Melinda Haag, TTB Assistant Administrator for Field Operations Tom Crone, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
On Dec. 17, 2013, Kibbee pleaded guilty to one count of failing to pay an excise tax on wine. According to the plea agreement, Kibbee owned and operated Monterey Wine Services, a bonded wine cellar located in Monterey County, Calif. For each of the reporting periods from Aug. 1, 2008, through at least May 31, 2009, Monterey Wine Services had taxable removals of wine from its bonded wine cellar, which resulted in a wine excise tax due and owing to TTB. Kibbee failed to pay the excise tax due for each of these periods. In the wine warehousing industry, bonded wine cellars pay wine excise tax on the removal of wine, but then typically pass this cost on to their winery customers. Even though Kibbee did not pay the excise tax due to TTB, she invoiced her customers and received payments from them for the excise taxes. Kibbee agreed that the tax loss resulting from her misconduct was at least $877,126.94.
TTB Assistant Administrator for Field Operations Tom Crone said, “Tax evasion is not a victimless crime. Law abiding businesses rely on us to ensure a level playing field. We take that responsibility seriously.”
Kibbee, 41 of Salinas, Calif., was indicted on Sept. 26, 2012, on 11 counts of failing to pay an excise tax on wine. She pleaded guilty to one count.
The sentence was handed down by the Honorable D. Lowell Jensen, United States District Court Judge, in San Jose. Judge Jensen also sentenced Kibbee to a three-year term of supervised release. Kibbee was ordered to surrender on December 16, 2014.
Matthew J. Kluge, Trial Attorney with the United States Department of Justice, and Thomas Moore, Assistant United States Attorney for the Northern District of California, are prosecuting the case. The prosecution is the result of an investigation by the TTB, and the IRS, Criminal Investigation.
(Kibbee indictment )
New York Man Involved in Israeli Counterfeiting Ring Pleads GuiltyRead the Press Release
ALEXANDRIA, Va. – Johnny Elegante Lee, 45, of Roosevelt, New York, who was one of 13 alleged members of a criminal counterfeiting operation that manufactured, produced and distributed millions of dollars up and down the eastern United States, pleaded guilty yesterday to participating in a racketeering conspiracy.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Kathy Michalko, U.S. Secret Service Special Agent in Charge, Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady.
Lee was indicted on Aug. 7, 2014, by a federal grand jury. In a statement of facts filed with his plea agreement, Lee admitted that from 2004 through his arrest in June 2014, he was a member of a criminal enterprise that manufactured, produced, distributed and uttered millions of high-quality counterfeit $100 Federal Reserve Notes that were manufactured in Israel and the United States. The counterfeit U.S. currency was printed on off-set printing presses and sold to dealers such as Lee, and then uttered at retail establishments throughout the eastern United States, resulting in loss to merchants and individuals who provided goods and services in exchange for counterfeit $100 bills. Lee also admitted that his previous counterfeiting conviction in Richmond, Virginia in 2004 was part of his participation in this enterprise.
He faces a maximum penalty of 20 years in prison when he is sentenced on January 9, 2015. The maximum statutory sentences outlined above are prescribed by Congress and are provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This case was investigated by the United States Secret Service. Assistant United States Attorneys Kimberly R. Pedersen and Gordon L. Kromberg are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-00206.
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New Jersey Bank Officer Sentenced to Two Years in Prison for BriberyRead the Press Release
PHILADELPHIA - Michael Ghabrial, 60, of Martinsville, New Jersey was sentenced today to two years in prison for agreeing to accept bribes as an officer of a bank. Ghabrial pleaded guilty on October 31, 2013 to one count of bank bribery.
Ghabrial was Senior Vice President and Director of Real Estate for Valley National Bank (“VNB”), headquartered in Wayne, New Jersey. In that position, Ghabrial handled the sale of numerous bank properties. Ghabrial solicited and accepted a $7,500 bribe in exchange for agreeing to sell real estate property owned by VNB at favorable terms. In total, Ghabrial solicited and agreed to accept over $120,000 in bribes in exchange for the sale of VNB properties.
In addition to the two-year prison term, U.S. District Court Judge J. Curtis Joyner ordered a fine of $10,000, two years of supervised release, a $100 special assessment, and restitution of $7,500.
The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Vineet Gauri.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525New Haven Man Sentenced to 37 Months in Federal Prison for Illegally Possessing Loaded FirearmRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that TYISHOUN MATHENEY, 20, of New Haven, was sentenced today by Senior U.S. District Judge Warren W. Eginton in Bridgeport to 37 months of imprisonment, followed by three years of supervised release, for being a convicted felon in possession of a loaded firearm.
According to court documents and statements made in court, on April 17, 2013, MATHENEY possessed a stolen semi-automatic pistol loaded with seven bullets in the magazine. MATHENEY was a member of the Grape Street Crips and claimed that he possessed the firearm for protection against members of a rival gang. The investigation also revealed that MATHENEY was involved in the distribution of crack cocaine.
MATHENEY was previously convicted of a state burglary offense and, on October 17, 2012, was sentenced to five years of incarceration, 18 months to serve, and three years of probation. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
On August 20, 2013, MATHENEY waived his right to indictment and pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the FBI’s New Haven Safe Streets Task Force, the New Haven, Hamden and Milford Police Departments, and the State of Connecticut Department of Correction. The case was prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and H. Gordon Hall.PUBLIC AFFAIRS CONTACT:
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(203) 821-3722 [email protected]Naples Man Indicted for Two Armed Bank RobberiesRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces an indictment charging John Robert Haldemann (30, Naples) with two counts of armed bank robbery. Each count carries a maximum penalty of 25 years in federal prison. The indictment also notifies Haldemann that the United States is seeking a money judgment in the amount of $12,308.00, the total proceeds of the armed bank robberies.
According to the indictment, on July 12, 2014, Haldemann committed an armed robbery at a Wells Fargo Bank, in Naples. The indictment further alleges that on July 25, 2014, he committed an armed robbery at a Bank of America in Punta Gorda.
An indictment is merely a formal charge that a defendant has committed a violation of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation Violent Crimes Task Force, the Punta Gorda Police Department, the Naples Police Department, and the Collier County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney David G. Lazarus.
Miami Resident Sentenced in Identity Theft Tax Fraud and Social Security SchemesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Thomas Caul, Special Agent in Charge, Social Security Administration (SSA), Office of Inspector General, announce that Kevin Cimeus, 21, of Miami, was sentenced before Judge William J. Zloch to 156 months in prison, to be followed by three years of supervised release.
On June 20, 2014, Cimeus was convicted after a four day jury trial in Fort Lauderdale for his roles in identity theft tax fraud and social security schemes. Specifically, Cimeus was convicted of ten counts in the superseding indictment, including one count of conspiracy to steal government property or money, in violation of Title 18, United States Code, Section 371, three counts of theft of government money or property, in violation of Title 18, United States Code, Section 641, one count of access device theft, in violation of Title 18, United States Code, Section 1029(a)(3), and five counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to records filed in this case and statements made in court, federal agents found over 2,400 social security numbers and names of real people stored on thumb drives, laptop computers, iPad, and Cimeus’ email account at Cimeus’ residence. The evidence at the trial also showed that Cimeus recruited Miami Dade College (MDC) students to allow the defendant to use their Higher One Bank accounts to receive fraudulently obtained tax refunds and that Cimeus used his own Higher One Bank and Chase accounts to receive fraudulently obtained tax refunds. Cimeus filed at least one thousand tax returns from two IP addresses. He also used the two IP addresses to access the Social Security Administration’s web site and create online profiles for social security recipients in order to re-route the victims’ social security payments to other accounts.
Mr. Ferrer commended the investigative efforts of FBI, IRS-CI, and the SSA. This case is being prosecuted by Assistant U.S. Attorneys Gera R. Peoples and Cynthia 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.
Medicaid Provider and Wife Convicted of Health Care FraudRead the Press Release
NORFOLK, Va. – W. Wayne Perry, Jr., 55, and his wife, Angela Perry, 52, formerly of Suffolk, Va., were convicted after a three-week trial late yesterday afternoon by a federal jury of one count of conspiracy to commit health care fraud, four counts of health care fraud, eight counts of false statements relating to health care matters, one count of alteration of records and four counts of aggravated identity theft.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, Virginia Attorney General Mark R. Herring and Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office made the announcement today. The verdicts were accepted by United States District Judge Mark S. Davis.
W. Wayne Perry, Jr. and Angela Perry each face a maximum penalty of ten years in prison for conspiracy to commit health care fraud, ten years in prison for each count of health care fraud, five years on each of the false statement counts, twenty years for alteration of records, and two years on each of the aggravated identity theft counts when they are sentenced on January 8, 2015.
W. Wayne Perry, Jr. and Angela Perry were indicted on charges of conspiracy to commit health care fraud and seventeen other counts of related charges by a federal grand on February 5, 2014. According to court records and the evidence presented at trial, W. Wayne Perry, Jr. was the owner and operator of Community Personal Care, a business located in Norfolk, Va. that was authorized to provide home health care services that are reimbursable by Medicaid, including personal care and respite care services. Angela Perry was an officer and agent of the company. Between January 2009 and December 2012, Wayne Perry and Angela Perry orchestrated a false billing scheme where numerous fraudulent claims were submitted to the Virginia Medicaid program, falsely representing that personal care and respite care services had been provided to Medicaid recipients by Community Personal Care. A forfeiture provision in the superseding indictment asserts that the amount of the fraud is approximately $1.3 million dollars. In order to conceal the fraudulent payments, Wayne Perry and Angela Perry altered the company’s office records, including time sheets. This was done with the assistance of Allison Hunter-Evans, a former employee in the administration department of the Virginia Medicaid program, who previously pled guilty on May 14, 2014 and is scheduled to be sentenced on October 16, 2014.
This case was investigated by the FBI and the Virginia Attorney General’s Medicaid Fraud Control Unit, with the assistance of the Virginia Department of Medical Assistance Services. Assistant United States Attorneys Alan M. Salsbury and Melissa E. O’Boyle are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
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Manhattan Beach Executive Charged with Raiding Company CoffersRead the Press Release
SAN DIEGO – James (“Jim”) Miller, a Manhattan Beach attorney and corporate executive, appeared in magistrate court in Los Angeles County yesterday to face allegations that he embezzled over a quarter-million dollars from his former employer, MWRC Internet Sales LLC (“MWRC”).
As alleged in a five-count Indictment, Miller – an attorney who worked for Body Glove, International and served as the President and Managing Partner of MWRC – devised a scheme to steal money from MWRC to pay for his personal, non-company related expenses.
The Defendant carried out his scheme by writing checks from MWRC’s bank account to pay himself unauthorized income and supplemented his legitimate salary to the tune of hundreds of thousands of dollars over approximately four years. The Indictment further alleges that the Defendant failed to disclose to other MWRC partners his on-going self-enrichment scheme and failed to disclose to the banks that the checks he wrote to himself were not authorized by MWRC.
The criminal case against Miller (14CR0471) is assigned to U.S. District Court Judge Andre Birotte, Jr. The trial is set for November 11, 2014 at 8:30 a.m. Magistrate Judge Patrick J. Walsh ordered the Defendant released on a $50,000 bond pending trial.
DEFENDANT Case Number: 14cr0471 James R. Miller Age: 65 Manhattan Beach, CA CHARGESWire Fraud – Title 18, U.S.C., Section 1343
INVESTIGATING AGENCY
Maximum penalty: 20 years’ imprisonment and $250,000 fineFederal Bureau of Investigation
Internal Revenue Service Criminal Investigations*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Local Property Investor Pleads Guilty to Making False Statements on Real Estate Closing DocumentsRead the Press Release
COLUMBUS – Cynthia S. Mild, 41, of Lewis Center, Ohio pleaded guilty in U.S. District Court today to one count of making false statements relative to down payment information entered on a Department of Housing and Urban Development Form HUD-1. Mild faces a maximum of 5 years in prison and a fine of up to $250,000.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Kevin Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced Mild’s plea entered today before U.S. District Judge Michael Watson.
According to court documents, between September 2004 and December 2007, Mild worked as a property investor focusing on single family homes in and around Columbus, Ohio. Mild located, purchased, refinanced, rehabilitated, rented, and sold properties in Columbus. Mild purchased approximately 30 residential family homes in the Columbus area during this time frame. Mild sold 24 of these homes to friends, colleagues, and a family member. Many of the buyers obtained mortgage loans from Fifth Third Bank. Mild, unbeknownst to Fifth Third Bank, made the down payments for her buyers by purchasing official bank checks, made out to the closing title agency, and naming the buyers as the remitters on the checks. At closing, Mild signed HUD-1 Settlement Statements for each property sale indicating that the buyers were providing the down payments, when Mild knew that she was providing the buyers’ down payment.
At closing, Mild’s original mortgage loans were paid off and the excess seller proceeds were deposited into bank accounts under her control. The seller proceeds covered the amount Mild paid for the buyers’ down payments. In some instances, Mild provided cash back to her buyers. The majority of the homes sold by Mild eventually went into foreclosure.
Specifically, $447,200 in mortgage loans was secured from Fifth Third Bank relative to the purchase of 6 homes from Mild. Mild paid for the down payments on these 6 homes and did not accurately disclose this fact on the HUD-1 Settlement Statements. Due to the mortgage loan defaults and foreclosures suffered on these 6 properties, Fifth Third Bank suffered losses of approximately $357,000.
Mild was released on bond pending sentencing for which a date has not been set.
U.S. Attorney Stewart commended the cooperative investigation by the IRS and FBI, and Assistant U.S. Attorneys Laura M. Fulton and Dan Brown, who are prosecuting the case.
KC Man Charged with Throwing Molotov Cocktails at Congressional OfficeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was charged in federal court today with throwing Molotov cocktails at the local congressional office of U.S. Rep. Emanuel Cleaver II.
Eric G. King, 28, of Kansas City, was charged in a federal criminal complaint filed in the U.S. District Court in Kansas City, Mo., with using a dangerous instrument to oppose, impede, intimidate and interfere with a federal official engaged in the performance of his official duties.
On Sept. 11, 2014, at 2:52 a.m., a window was broken and two Molotov cocktails were thrown at Cleaver’s congressional office located at 101 W. 31st Street, Kansas City, Mo. The office was unoccupied at the time of the incident. A hammer used to break the window was recovered from the scene, as well as two broken Molotov cocktails. There was not any fire damage done to the building.
According to an affidavit filed in support of today’s criminal complaint, video footage shows King retrieve two bottles with a white ignition source from his backpack, then walk around the parking lot for a few minutes in an effort to hide from cars that were passing by. The footage allegedly shows King throwing a hammer through the west window and lighting the devices. The first device thrown appears to bounce off the side of the building. The second device is ignited and is thrown at the window. King allegedly sprints away from the office.
A Kansas City, Mo., Police Department detective, while investigating a series of anti-government related vandalisms in the immediate vicinity of the congressman’s office over the Labor Day weekend, reviewed surveillance footage from one of those incidents at a nearby Bank of America. The incidents involved spray painting anti-government/anarchy graffiti and included some police vehicles, a Federal Protective Police vehicle and the Liberty Memorial National World War I museum. According to the affidavit, detectives who were familiar with King from other previous investigations were able to confirm that it was in fact King on the surveillance footage.
Investigators reviewed social media and Facebook posts by King, the affidavit says. One post, dated Sept. 3, 2014, states: “KC Fight Back celebrated its first labor day with a lovely variety of action, action and more action against a series of government and Financial properties.” Other posts include King posting “KC Fight Back Insurrectionist Collective is alive,” and “these cops aren’t going to kill themselves, get to the streets.” On Aug. 10, 2014, King allegedly posted, “I want to leave kc better than I found or an ashes.” A social media post allegedly by King on the day before the incident at the congressman’s office, Sept. 10, 2014, reads, “KC Fight Back has been in serious in its Insurrection activity, and that is the thing that is giving me the most pride in my life.”
King was arrested as he was leaving his apartment on Tuesday, Sept. 16, 2014. According to the affidavit, King was carrying a backpack that contained a red can of spray paint, Kingsford Charcoal Lighter fluid and a clear plastic soda bottle (containing an unknown liquid) with a tube sock placed over it.
Agents executed a search warrant at King’s residence and found a hand-written letter on a bedside shelf, entitled “Operation House Committee.” The letter lists: “(1) Paint thinner/alcohol, (2) face cover/hand cover/all tattoos covered, (3) Three bottles glass, (4) paper towels, old rags/lighter, (5) drive/driver, must be someone trust with. “ The letter then mentions the steps to light the devices, says to “use hammer/sledgehammer to break door,” “light bottles, throw them, light curtains,” and repeat these steps on “government buildings, all things police, certain law firms, corporations…” The first part of the backside of the letter reads, “The arsons committed on Sept 11, 2014 were committed solely by the KC FIGHT BACK Insurrectionist Collective.”
The letter then specifically reads “The Missouri congress has been a willing partner in the US governments capitalist war hungry agenda.” The letter discusses several future targets, including police officers, pay day loans, banks and the Federal Reserve. Towards the end of the letter it mentions “K.C.F.B. I.C. has declared war on the Missouri National Government.”
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Patrick C. Edwards. It was investigated by the FBI, the Kansas City, Mo., Police Department, the Federal Protective Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Jury Finds Tennessee Man Guilty for Failure to Register as A Sex OffenderRead the Press Release
Follow @SDILNewsRonald Douglas, a 59-year old Memphis, Tennessee, man was found guilty on September 17, 2014, in federal district court, in East St. Louis, Illinois, for failure to register as a sex offender, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Douglas will be sentenced on January 23, 2015.
The violation occurred in 2012, when Douglas moved from Illinois to Tennessee, after signing an Illinois Sex Offender Registration Act Notification Form on January 9, 2012, requiring him to either update his sex offender registration in Illinois to reflect his change of address, or register as a sex offender in Tennessee within three days. Douglas had been previously convicted of Aggravated Criminal Sexual Abuse on June 5, 1992, and July 8, 1999 in Madison County, Illinois.
“The Sex Offender Registration and Notification Act serves the important purpose of allowing persons to be aware of sex offenders who might be living in their neighborhoods. I am pleased that this federal jury rightfully recognized the importance of this concept in finding this offender guilty of not complying with the law.” said United States Attorney Wigginton.
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 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.”
The case was investigated by the United States Marshals Service and prosecuted by Assistant United States Attorneys Daniel T. Kapsak and Nathan D. Stump
Jersey City Man Sentenced to 114 Months in Prison for Armed Robbery of Jewelry StoreRead the Press Release
TRENTON, N.J. – A Jersey City man was sentenced today to 114 months in prison for committing an armed robbery of a jewelry store in Hudson County, New Jersey, U.S. Attorney Paul J. Fishman announced.
Mouhamadou Lamine Amar, 21, previously pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an indictment charging him with committing a Hobbs Act robbery and with brandishing a firearm during the robbery. Judge Cooper imposed the sentence – which includes 30 months on the robbery count and 84 months, served consecutively, on the weapons count – today in Trenton federal court.
According to documents filed in this case and statements made in court:
On June 28, 2013, Amar entered a jewelry store in Jersey City and held a gun to a store employee’s head. He grabbed and pushed the employee when the employee tried to flee. He tied up the employee and threatened to shoot the employee if the employee tried to escape. Amar was arrested inside the store while still in possession of the firearm.
In addition to the prison term, Judge Cooper sentenced Amar to three years of supervised release.
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 Jersey City Police Department and the Hudson County Prosecutor’s Office for their work on this case.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Jeffrey B. Steinfeld Esq., NewarkJeffrey Cohen Charged in Superseding Indictment with Wire Fraud, Money Laundering and Making False Statements to Fraudulently Obtain over $100 Million in Insurance PremiumsRead the Press Release
Allegedly Created and Transmitted False Documents and Made False Statements
Baltimore, Maryland - A federal grand jury has returned a superseding indictment charging Jeffrey Brian Cohen, age 39, of Reisterstown, Maryland, with wire fraud and money laundering in addition to the charges of making false statements to an insurance regulator that were included in the original indictment. The superseding indictment was returned on September 16, 2014.The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division.
According to the superseding indictment, Cohen acted as the president and chairman of the board of a Delaware corporation Indemnity Insurance Corporation RRG (Indemnity). Cohen previously controlled a District of Columbia corporation called Indemnity Insurance Corporation of DC, Risk Retention Group (Indemnity-DC), which was a predecessor entity to Indemnity. Both companies were located in Sparks, Maryland, and provided general liability insurance, liquor liability insurance, and excess liability insurance coverage to their customers, which were individuals and companies involved in the entertainment industry, such as nightclubs, concert tours, and special events. Both companies operated in several states, including Maryland. In 2012, Indemnity insured more than 3,000 policyholders, and collected over $25 million in premiums.
The Delaware Insurance Commissioner and the DC Insurance Commissioner were charged by law with the responsibility of protecting insurance policyholders and the general public by regulating insurance companies and risk retention groups and their products to ensure among other things, that insurance companies and risk retention groups have the ability to pay claims.
According to the 12-count superseding indictment, Cohen obtained and attempted to obtain money from insurance policyholders and potential insurance policyholders of Indemnity-DC and Indemnity based on financial ratings, financial audits, and insurance regulatory approvals that Cohen fraudulently obtained. The indictment alleges that beginning in January 2008, and continuing until the fall of 2013, Cohen defrauded insurance policyholders and prospective insurance policyholders in order to obtain more than $100 million in insurance premiums, by falsely representing the financial status of Indemnity-DC, Indemnity, and other Cohen controlled entities to insurance policyholders, prospective insurance policyholders, the rating agency A.M. Best, to independent auditors, the DC Insurance Commissioner, and the Delaware Insurance Commissioner.
Specifically, the superseding indictment alleges that Cohen created false financial documents, including bank statements, letters of credit, and confirmations of bank account balances. These documents allegedly included a bank confirmation from a fictitious entity called RBCI, purportedly showing that Indemnity-DC had a bank account with a balance of $10 million as of December 31, 2009, and a bank confirmation dated March 1, 2013, purportedly from RBC Government Demands, showing that Indemnity’s bank account ending in 6652 had a balance of $5,097,276. According to the indictment, Cohen transmitted these false documents to A.M. Best in order to obtain financial ratings for Indemnity-DC and Indemnity that were not based on the companies’ true financial condition. Cohen then allegedly touted the A.M. Best ratings to potential policyholders, policyholders, and regulatory agencies. Cohen also allegedly transmitted false and fraudulent emails, management representation letters, financial statements, and other documents to the auditing firms Marcum and BDO so the auditors would provide an unqualified audit opinion on Indemnity-DC and Indemnity financial statements that Cohen knew were false.
According to the superseding indictment, Cohen caused Indemnity-DC and Indemnity to issue insurance policies exceeding the coverage limits authorized by the DC Insurance Commissioner and the Delaware Insurance Commissioner. To conceal the true financial condition of the companies, Cohen allegedly transmitted fraudulent audited and unaudited financial statements for Indemnity-DC and Indemnity to the DC Insurance Commissioner and the Delaware Insurance Commissioner. Cohen also allegedly made false statements to representatives of the Delaware Insurance Commissioner in June 2012.According to the indictment, Cohen also conducted financial transactions with the proceeds of the scheme. Specifically the indictment alleges that Cohen transferred $666,667.67 from a corporate account he controlled to an account in the name of a law firm, and Cohen transferred $200,000 from a corporate account he controlled to one of his personal accounts.
The indictment seeks forfeiture of $100,866,667.67, believed to be the proceeds of the scheme.
Cohen faces a maximum sentence of 20 years in prison for each of five counts of wire fraud, 10 years in prison for each of two counts of money laundering, and 15 years in prison for each of five counts of making false statements to an insurance regulator. No court appearance has been scheduled and Cohen remains detained.
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 FBI, HSI Baltimore, IRS – Criminal Investigation and U.S. Postal Inspection Service - Washington Division for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Harry M. Gruber and Joyce K. McDonald, who are prosecuting the case.
Jacksonville Man Pleads Guilty to Conspiracy to Commit Theft of Government Property and Identity TheftRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that George Y. Salameh pleaded guilty yesterday to conspiracy to commit theft of government property and aggravated identity theft. He faces a maximum penalty of five years in federal prison. Salameh was charged by a criminal complaint on May 7, 2013. A sentencing date has not yet been set.
According to the plea agreement, in August 2011, Salameh joined a conspiracy in which a co-conspirator, Abas Issa, would obtain fraudulent tax refund checks and fraudulent tax refund anticipation loan checks from a source in Tampa. Issa would provide the checks to individuals like Salameh who, for a fee, would then deposit the fraudulent checks into a business banking account. Once the checks cleared, Salameh would provide the net proceeds to Issa. Many of the checks involved the identities of deceased individuals who were actually dead at the time the fraudulent tax returns were filed. During 2011, Salameh deposited $129,502.71 in fraudulent tax refund checks or tax refund anticipation loan checks.
This case was investigated by the Internal Revenue Service - Criminal Investigation, the United States Secret Service, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Mac D. Heavener, III.
Husband and Wife Sentenced on Tax Charges and Ordered to Pay the IRS Nearly $700,000 in TaxesRead the Press Release
Defendants hide assets in corporations with officers and directors named after their pets
DENVER – Mathew Zuckerman, age 70, of Woody Creek, Colorado, was sentenced on Tuesday, September 16th, 2014 by U.S. District Court Judge Robert E. Blackburn to serve 24 months in federal prison on income tax related charges, United States Attorney John F. Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Following his prison sentence, Mathew Zuckerman was ordered to serve 3 years on supervised release. He was ordered to report to a Bureau of Prisons facility after designation. Mathew Zuckerman’s wife, Sandra Zuckerman, age 67, of Woody Creek, was also sentenced that same day. She was ordered to serve 36 months’ probation by Judge Blackburn. Mathew Zuckerman was ordered to pay $693,706 in restitution to the IRS. Sandra Zuckerman was jointly liable for $112,511 of that restitution.
The Zuckermans were indicted by a federal grand jury in Denver on April 25, 2012. Mathew plead guilty on February 18, 2014 to income tax evasion and Sandra plead guilty to willful failure to pay income taxes on May 30, 2014. According to information contained in court documents, beginning in 1986 and continuing through 2009, the Zuckerman’s either failed to file an income tax return, or filed a return using incorrect income amounts. From 2003 through 2009 no income tax returns were filed with the IRS.
Starting in 1998, Mathew Zuckerman and an associate became 50/50 business partners and began to specialize in taking small companies public through reverse mergers of existing corporate shells. To operate their new venture, Zuckerman and his business partner formed Silicon Valley New Issues, Inc. (SVNI). In addition, he formed Intermountain Marketing & Finance, Inc., a corporation he solely owned which owned 50% of SVNI. As part of the scheme, Mathew Zuckerman evaded corporate income taxes on several million dollars of taxable income in 1999 from Silicon Valley New Issues, Inc. Over the course of the next 10 years, he continued to conceal his assets and business affairs from the IRS by utilizing additional corporations and trusts in order to avoid payment and collection of the Zuckerman's outstanding tax liabilities.
Specifically, to avoid IRS liens, in 1999, the Zuckerman’s caused the deed to their Woody Creek residence, purchased for approximately $1.2 million, to be recorded in the name of Hyperpanel University, Inc. ("Hyperpanel"), a Nevada corporation that listed the names of a cat and a dog as its officers and directors on its filings with the Secretary of State. Similarly, in 2004 Mathew Zuckerman formed a company called Treya, Inc. in Nevada that they used to purchase a $1.8 million home in 2004 in Toluca Lake, California. Based on the directions of Mathew, Sandra used her name from an earlier marriage, Sandra Eberli, to be used in connection with transactions conducted by Treya.
Furthermore, in December of 2004, Mathew Zuckerman created the Mathew Mark Zuckerman Trust ("MMZT") and placed himself in the position as "Trustor" and his CPA was appointed as trustee. In July of 2006, he caused his daughter to be appointed as the trustee and in 2008 caused 4,900,000 shares of Green Earth Technologies (a company for which he served as Chairman) to be issued to the trust using an incorrect employer identification number ("EIN") for MMZT. Then he instructed his daughter to sell shares of the stock and transfer funds to his personal bank accounts. By doing this he received profits in excess of $500,000 while evading payments of taxes owed to the IRS.
“The defendants established multiple entities to engage in a complex scheme to hide money owed to the IRS,” said U.S. Attorney John Walsh. “Despite their best efforts, the defendants were caught and ultimately held accountable for their criminal behavior.”
“For over a decade they committed tax fraud; it was only a matter of time until they were caught and brought to justice,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service and prosecuted by Assistant U.S. Attorney Tim Neff.
Hawaii Man Sentenced to 87 Months Improsonment for Communicating Classified National Defense Information to Unauthorized PersonRead the Press Release
WASHINGTON – Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Florence T. Nakakuni for the District of Hawaii announced today that Benjamin Pierce Bishop, 60, a former Honolulu, Hawaii, civilian defense contractor and retired lieutenant colonel in the U.S. Army, was sentenced today by U.S. District Judge Leslie E. Kobayashi to serve 87 months imprisonment and three years’ supervised release for willfully communicating classified national defense information to a person not authorized to receive it and unlawfully retaining classified national defense information at his home.
Bishop pleaded guilty to the two charges on March 13, 2014. In a plea agreement filed with the court and during court proceedings, Bishop admitted that, on March 12, 2012, he e-mailed classified information to a 27-year-old Chinese woman with whom he had a romantic relationship and who was present in the United States as a graduate student on a J1 Visa.
The classified information related to joint training and planning sessions between the United States and the Republic of Korea and was classified at the SECRET level. Bishop also admitted to unlawfully retaining at his residence multiple classified documents that related to the national defense, including the U.S. Armed Forces Defense Planning Guide for years 2014 through 2018, a document entitled Optimizing U.S. Force Posture in the Asia‑Pacific, the U.S. Department of Defense China Strategy, the 2010 Guidance for Employment of Force (GEF) and a classified photograph of a Chinese naval asset that Bishop retrieved from classified sources based on a request from the Chinese woman. The documents had been removed from Bishop’s workplace at U.S. Pacific Command.
“Willfully communicating national defense information to a person not entitled to receive it is a serious threat to our national security,” said Assistant Attorney General Carlin. “In committing this crime, Bishop violated his oath to protect the classified information with which he was entrusted. This conduct is unacceptable and we will continue to investigate and seek to hold accountable those who engage in it.”
“We remain steadfast and resolute in our pursuit of those who violate their sworn security agreements and divulge our nation’s secrets to foreign nationals and others,” said U.S. Attorney Nakakuni. “This is the second major espionage case prosecuted in the District of Hawaii, and is particularly troublesome because it involves the communication of classified information to a citizen of the People’s Republic of China.”
This case was investigated by the FBI and the Naval Criminal Investigative Service. The case was prosecuted by Assistant U.S. Attorney Ken Sorenson of the U.S. Attorney’s Office for the District of Hawaii and Senior Trial Attorney Robert E. Wallace Jr. of the Counterespionage Section of the Justice Department’s National Security Division.
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Hawaii Man Sentenced to 87 Months Imprisonment for Communicating Classified National Defense Information to Unauthorized PersonRead the Press Release
WASHINGTON – Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Florence T. Nakakuni for the District of Hawaii announced today that Benjamin Pierce Bishop, 60, a former Honolulu, Hawaii, civilian defense contractor and retired lieutenant colonel in the U.S. Army, was sentenced today by U.S. District Judge Leslie E. Kobayashi to serve 87 months imprisonment and three years’ supervised release for willfully communicating classified national defense information to a person not authorized to receive it and unlawfully retaining classified national defense information at his home.
Bishop pleaded guilty to the two charges on March 13, 2014. In a plea agreement filed with the court and during court proceedings, Bishop admitted that, on March 12, 2012, he e-mailed classified information to a 27-year-old Chinese woman with whom he had a romantic relationship and who was present in the United States as a graduate student on a J1 Visa.
The classified information related to joint training and planning sessions between the United States and the Republic of Korea and was classified at the SECRET level. Bishop also admitted to unlawfully retaining at his residence multiple classified documents that related to the national defense, including the U.S. Armed Forces Defense Planning Guide for years 2014 through 2018, a document entitled Optimizing U.S. Force Posture in the Asia Pacific, the U.S. Department of Defense China Strategy, the 2010 Guidance for Employment of Force (GEF) and a classified photograph of a Chinese naval asset that Bishop retrieved from classified sources based on a request from the Chinese woman. The documents had been removed from Bishop’s workplace at U.S. Pacific Command.
“Willfully communicating national defense information to a person not entitled to receive it is a serious threat to our national security,” said Assistant Attorney General Carlin. “In committing this crime, Bishop violated his oath to protect the classified information with which he was entrusted. This conduct is unacceptable and we will continue to investigate and seek to hold accountable those who engage in it.”
“We remain steadfast and resolute in our pursuit of those who violate their sworn security agreements and divulge our nation’s secrets to foreign nationals and others,” said U.S. Attorney Nakakuni. “This is the second major espionage case prosecuted in the District of Hawaii, and is particularly troublesome because it involves the communication of classified information to a citizen of the People’s Republic of China.”
This case was investigated by the FBI and the Naval Criminal Investigative Service. The case was prosecuted by Assistant U.S. Attorney Ken Sorenson of the U.S. Attorney’s Office for the District of Hawaii and Senior Trial Attorney Robert E. Wallace Jr. of the Counterespionage Section of the Justice Department’s National Security Division.
Harrisburg Businessman Pleads Guilty to $216,000 Withholding Tax FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania, announced that a 30-year old Harrisburg man pleaded guilty today before Senior U.S. District Court Judge William C. Caldwell to tax evasion in the amount of $216,000 between October 2006 and May 2011.
According to United States Attorney Peter Smith, Howard Ginting was the sole owner of Ginting Enterprises, Inc., a Pennsylvania corporation in Harrisburg. Ginting Enterprises supplied day laborers to various businesses in central and northeastern Pennsylvania. As the owner and operator, Ginting was required to withhold from the wages of the GEI employees the Federal Insurance Contributions Act (FICA) taxes on a quarterly basis. From October, 2006 through February, 2008, Ginting Enterprises paid wages totaling approximately $851.553, but Ginting falsely reported to the IRS that he had only paid wages in the amount of approximately $68,549. He underpaid the Social Security tax and Medicare taxes owed by GEI by approximately $119,799.
In February, 2008, Ginting shut down Ginting Enterpirses and operated his same labor supply business under the name Trojan Services, Inc. Between February, 2008 and May, 2011, Trojan paid wages of approximately $638,477, but Ginting failed to report to the IRS all wages paid to his employees, underpaying Social Security tax and Medicare taxes owed by Trojan by approximately $97,047.
This resulted in underreporting the employee and employer share of the Social Security and Medicare taxes in the total amount of approximately $216,846.
Ginting was charged by a grand jury in Harrisburg in an indictment in January 2014, following an investigation by the Internal Revenue Service Criminal Investigations.
Ginting faces a potential maximum sentence of 5 years imprisonment, a $250,000 fine and up to 3 years supervised release as well as restitution and tax penalties and interest.
The case is being prosecuted by Assistant U.S. Attorney Gordon Zubrod.
Heath Powers Indicted for Production, Distribution, and Possession of Child PornographyRead the Press Release
Plattsburgh man indicted on 13 counts related to production, distribution, and possession of child pornography
PLATTSBURGH, NEW YORK – A federal grand jury returned an indictment today charging Heath Powers, 33 years old of Plattsburgh, with 11 counts of production of child pornography, 1 count of distribution of child pornography, and 1 count of possession of child pornography announced United States Attorney Richard S. Hartunian and Federal Bureau of Investigation Special Agent-in-Charge Andrew W. Vale.
If the defendant is convicted, he faces at least 15 years and up to 30 years in prison on each production of child pornography charge; at least 5 years and up to 20 years in prison on the distribution of child pornography charge; and up to 20 years of prison on the possession of child pornography charge. If convicted, he also faces for each count a fine of up to $250,000, a lifetime term of supervised release and registration as a sex offender.
The case is being investigated by the Federal Bureau of Investigation. The prosecution is being handled by Assistant United States Attorney Katherine Kopita.
The charges in the indictment are merely accusations and the defendant is presumed innocent until and unless proven guilty.
If anyone has information regarding this matter, please contact the Federal Bureau of Investigation at telephone number 1-800-CALL-FBI.
Guatemalan Citizen Apprehended in Franklin County Charged with Illegal ReentryRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania and the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO) announced today that a 35-year-old native and citizen of Guatemala was charged on September 9 with illegal reentry into the United States.
According to United States Attorney Peter Smith, Homero Ruiz-Luis, age 35, was charged in a one-count information filed with the court in Harrisburg.
The information alleges that Ruiz-Luis, an alien who has previously been arrested and deported from the United States, reentered the United States illegally and was apprehended in Franklin County, Pennsylvania.
If convicted, Ruiz-Luis faces a maximum sentence of up to 6 months’ imprisonment and a $5,000 fine.
This investigation was conducted by the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO). It is being prosecuted by Special Assistant United States Attorney Alice Song Hartye.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Greece Woman Sentenced for Supplying Guns Used in Christmas Eve ShootingRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Dawn Nguyen, 25, of Greece, N.Y., who was convicted of knowingly making a false statement in connection with the purchase of firearms; selling and disposing of firearms to William Spengler, a known felon; and possession of firearms while being an unlawful user of marijuana, was sentenced to 96 months in prison by U.S. District Judge David G. Larimer.
The charges involve the purchase and disposition of the firearms that were used in the Christmas Eve shooting in December 2012 that resulted in the deaths of Webster Police Lieutenant Michael Chiapperini and West Webster Firefighter Tomasz Kaczowka, and seriously injured Firefighters Theodore Scardino and Joseph Hostetter.
Assistant U.S. Attorney Jennifer Noto, who handled the case, stated that Nguyen made false statements during the purchase of a Bushmaster semiautomatic rifle and a Mossberg 12 gauge shotgun at Gander Mountain in Henrietta, N.Y., in order to acquire those firearms on behalf of William Spengler, Jr. The defendant gave those firearms to Spengler with the knowledge that Spengler was a convicted felon. In addition, Nguyen unlawfully possessed the firearms at a time when she was an unlawful user of marijuana.
The sentencing is the culmination of an investigation on the part of the Webster Police Department, under the direction of Chief Gerald Pickering, Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge James S. Higgins, New York Field Division, the New York State Police, under the direction of Major Scott Crozier, and the Monroe County Sheriff’s Department, under the direction of Sheriff Patrick O’Flynn.Former Union Official Sentenced to Nine Months of Confinement for Embezzling More Than $190,000 in FundsDefendant Spent Thousands on Hotel Stays, Clothing, Other Personal ExpensesRead the Press Release
WASHINGTON – JC Stamps, a former union official, was sentenced today to nine months of confinement in a community correctional facility for embezzling more than $190,000 from two labor organizations he founded and an employee benefits fund.
The sentencing was announced by U.S. Attorney Ronald C. Machen Jr., Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Bill Jones, Special Agent in Charge for the Washington Region of the U.S. Department of Labor’s Office of Inspector General - Office of Labor Racketeering and Fraud Investigations; Mark Wheeler, District Director of the Washington District Office of the U.S. Department of Labor’s Office of Labor-Management Standards, and Marc Machiz, Philadelphia Regional Office Regional Director, Labor Department’s Employee Benefits Security Administration.
Stamps, 67, of Upper Marlboro, Md., pled guilty in June 2014 to one count of theft from an employee benefit plan. He was sentenced by the Honorable Chief Judge Richard W. Roberts. Upon completion of his period of confinement, Stamps will be placed on three years of supervised release. During that time, Chief Judge Roberts ordered that Stamps perform 100 hours of community service, and be prohibited from holding a position in or being a consultant to a labor organization or employee benefit plan. Chief Judge Roberts also ordered Stamps to pay a total of $192,091 in restitution, as well as a forfeiture money judgment of $84,745.
Stamps, a retired detective from the Metropolitan Police Department (MPD), founded two labor organizations based in Washington, D.C.: the National Union of Protective Services Associations, which represented private security guards, and the National Union of Law Enforcement Associations, which represented police officers. In addition, he founded a security guard firm, Stamps Associates, which also was based in Washington, D.C.
According to a statement of offense, signed by the defendant as well as the government, between 2004 and 2008, Stamps devised a scheme to defraud and embezzle money in several ways from the unions and the National Union of Protective Services Health and Welfare Fund.
In 2007 and 2008, for example, Stamps used money from the health and welfare fund’s bank account to pay American Express for a total of $48,541 in credit card charges for personal purchases and union expenses. None of these charges were related to the administration and operation of the health and welfare fund. Instead they paid for personal expenses, such as hotel stays, furniture, men’s fragrances, clothing, other retail purchases, and online services, as well as for union expenses, including hotel rental (for a holiday party) and automobile rentals.
Also, according to the statement of offense, from 2006 to 2008, Stamps caused the withdrawal of $36,203 from the health and welfare fund bank account to pay an attorney for legal expenses incurred by the unions – and not for the fund’s intended purpose.
In addition to the theft and embezzlement from the health and welfare fund, Stamps stole and embezzled at least $109,866 from the unions from 2004 to 2008. According to the statement of offense, more than half of this money was used to cover debts of Stamps Associates, the security guard company. Other money was used for personal expenses and fraudulent salary payments to an individual identified only as “Person A” in the court documents. “Person A,” who is described in the statement of offense as a close personal friend of Stamps, was nominally the sole owner of Stamps Associates, although Stamps controlled the company.
This case was investigated by the U.S. Department of Labor’s Office of Inspector General, as well as the Labor Department’s Office of Labor-Management Standards and Employee Benefits Security Administration. Assistance was provided by Assistant U.S. Attorney Anthony Saler, who is handling forfeiture issues; Paralegal Specialist Donna Galindo, and former Paralegal Specialists Shanna Hays, Lenisse Edloe, and Nicole Wattelet, all of the U.S. Attorney’s Office for the District of Columbia.
The case was prosecuted by Assistant U.S. Attorney Ellen Chubin Epstein of the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Kelly Pearson of the Department of Justice’s Organized Crime and Gang Section.
14-209Former North Liberty Man Sentenced for Federal Methamphetamine ConspiracyRead the Press Release
DAVENPORT, IA – On September 11, 2014, Donald Lee Engstrom, age 41, formerly of North Liberty, Iowa, was sentenced by United States District Judge John A. Jarvey to 120 months imprisonment for conspiracy to distribute methamphetamine, announced United States Attorney Nicholas A. Klinefeldt. Engstrom was also ordered to serve five years of supervised release following the imprisonment, and to pay $100 towards the Crime Victims Fund.
Beginning in approximately July 2013 and continuing until about November 14, 2013, Engstrom conspired with other persons to distribute ice methamphetamine in the Muscatine, Iowa, and North Liberty, Iowa areas. On multiple occasions, Engstrom obtained ice methamphetamine in Arizona, ranging in weight from ½ to multiple pounds, and drove it to Iowa where he sold the methamphetamine to various customers. On November 14, 2013, law enforcement intercepted a vehicle occupied by Engstrom as it arrived at the home of co-defendant Terry Joe Burns near North Liberty. The vehicle contained 333 grams of highly pure ice methamphetamine and $9,255 in U.S. currency. Engstrom was traveling to meet Burns because he had arranged a meeting with Burns and an acquaintance of Burns for the purpose of selling that person ½ pound of ice methamphetamine.
Co-defendant Burns has pled guilty to conspiracy to distribute methamphetamine and is awaiting sentencing.
This case was investigated by the Johnson County Drug Task Force, the United States Drug Enforcement Administration, the Iowa Department of Narcotics Enforcement, and the police departments from North Liberty and Iowa City, Iowa. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Former McHenry County Sheriff's Deputy Sentenced to 50 Years in Federal Prison for Child Sexual Abuse and ExploitationRead the Press Release
ROCKFORD — A former McHenry County sheriff’s deputy who was that department’s representative on the state’s Internet Crimes Against Children Task Force was sentenced today to 50 years in federal prison for child sexual abuse and exploitation. The defendant, GREGORY M. PYLE, 39, of Crest Hills, Ill., formerly of Crystal Lake, Ill., was also placed on lifetime supervision after release from custody by U.S. District Court Judge Frederick J. Kapala, who imposed the sentence in Federal Court in Rockford.
Pyle, a sheriff’s deputy for more than a decade, pleaded guilty on Jan. 3 of this year, admitting that he crossed a state line with intent to engage in a sexual act with a minor. Today’s sentencing hearing will be completed at 2:30 p.m. on Oct. 21, 2014, when restitution and special conditions of supervised release will be imposed.
“For over five years, [Pyle] was entrusted with the efforts of the McHenry County Sheriff’s Office to protect children from exploitation and abuse. When he knew he was under investigation, [Pyle] successfully obstructed investigators determining the full scope of his criminal conduct,” Assistant U.S. Attorney Michael D. Love argued in requesting a 50-year sentence.
In pleading guilty, Pyle admitted that on Dec. 13, 2008, he had custody of a child under 12 years of age, when he drove the child from Crystal Lake, Ill. to Milwaukee, Wis., intending to engage in sexual acts with the child and to produce visual depictions of the sexual conduct. Pyle admitted that he stayed overnight in a Milwaukee hotel and engaged in sexual acts with the child that were sadistic, masochistic, and violent. The defendant produced images of the child engaged in these sexual acts and later distributed the images over the Internet.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. The Illinois State Police, the McHenry County Sheriff’s Department, and the Illinois Internet Crimes Against Children Taskforce assisted in the investigation.
The government was represented by Assistant U.S. Attorney Michael D. Love.
Former Iowa City Man Sentenced on Federal Heroin ChargeRead the Press Release
DAVENPORT, IA – On September 10, 2014, Kyle Cameron Messerle, age 24, formerly of Iowa City, Iowa, was sentenced by Chief United States District Judge James E. Gritzner to 60 months imprisonment for distribution of heroin, announced United States Attorney Nicholas A. Klinefeldt. Messerle was also ordered to serve three years of supervised release following the imprisonment and to pay $100 towards the Crime Victims Fund.
On or about the night of November 10, 2012, Messerle was at a party in Iowa City and later admitted that he provided a quantity of “china white” heroin to two individuals. That same night, both of these individuals used the heroin provided by Messerle. The next day, one of these individuals was found dead, the result of mixed heroin and ethanol intoxication.
This case was investigated by the United States Drug Enforcement Administration, Johnson County Drug Task Force, and the Iowa City, Iowa, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Former Fairfield Community High School Cross Country Team Coach Pleads Guilty to Sex Offenses Involving MinorsRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on September 17, 2014, Timothy C. Going, 43, formerly of Fairfield, IL, where he worked as the coach for the cross country team, the assistant coach for the track team, and a math teacher at Fairfield Community High School, pled guilty to a four-count Indictment charging him, in Counts 1 through 3, with the Attempted Sexual Exploitation of Minors and, in Count 4, with Possession of Visual Depictions of Minors Engaged in Sexually Explicit Conduct.
For the three counts of Attempted Sexual Exploitation of Minors, Going faces a term of not less than fifteen years but not more than thirty years in federal prison, a fine up to $250,000, and a term of supervised release of not less than five years to life for each count. For the offense of Possession of Visual Depictions of Minors Engaged in Sexually Explicit Conduct, Going faces a term of not more than ten years in federal prison, a fine up to $250,000, and a term of supervised release of not less than five years to life.
Going’s sentencing is scheduled for January 5, 2015, in East St. Louis, Illinois. Going has been held without bond since his arraignment on July 21, 2014.
Court documents revealed that Going’s criminal activities began on May 5, 2014, when a hidden video camera was discovered above a bathroom stall in the girls’ locker room at Fairfield Community High School. The video camera was wired to a black box with an antennae attached to it and a SD card slot in it. The next day, an Illinois State Police (ISP) crime scene investigator collected the camera and black box as evidence and transported them to the ISP’s forensics crime lab in Springfield, Illinois.
An ISP Forensic Technician began a forensic examination of the SanDisk micro SD card (SD card) removed from the black box that was wired to the hidden video camera and discovered several video clips from May 5, 2014, which depicted teenage girls using the bathroom stall or standing or walking next to the bathroom stall in the girls’ locker room in various stages of undress. There were other video clips that had been deleted that showed that the camera had been hidden in different locations in the girls’ locker room, including the changing area, before being placed above the bathroom stall.
The SD card also contained a video clip from May 2, 2014, which captured the placement of the hidden camera in the location in which it was found, by a white male wearing shorts and white ankle socks at approximately 10:28 p.m. that night. A review of the school’s surveillance video showed Going entering the school near that time wearing black shorts, a black hoodie, a gray stocking cap, tennis shoes, and white ankle socks. The school’s surveillance system captured Going later going into the dark gym area, and, at approximately 10:28 p.m., leaving the gym area wearing his white ankle socks and carrying his shoes. The surveillance camera then showed Going exit the school, sit on the stairs to put on his shoes, walk to his truck and drive away.
Additional images recovered from the SD card showed images of members of the girls’ cross country team in various stages of undress as they prepared to and/or finished showering in what appeared to be different hotel bathrooms. Illinois State Police Special Agents spoke with the administration at Fairfield Community High School and learned that Going had taken the cross country team on two overnight trips in 2012 and one overnight trip in 2013 to attend track meets and two regional competitions at Southern Illinois University in Edwardsville, Illinois. Going drove the bus that carried both the cross country team to the meet and regional competitions.
Members of the girls’ 2012 and 2013 cross country teams were interviewed regarding these overnight trips. The interviews revealed that Going had the same routine when he arrived at and left the motel with the cross country team. He would either have the team wait on the bus or in the lobby while he checked them in and took the keys from the hotel clerk. He would then tell the kids to wait so he could check the rooms for any “damage” so that the damage would not be attributed to the students occupying the room, and subsequently charged to the school. After he returned, he would assign rooms to the girls and the boys, and give them the keys to their rooms. Likewise, before checking out of the motel the next day, Going would again have the team either wait in the lobby or on the bus while he would take their keys and tell them that he was going to check the rooms for any “damage” and to make sure all personal belongings had been removed. He would then turn the keys into the motel clerk and they would leave. It was at these times that Going installed and removed the hidden video camera from the bathroom of rooms he specifically assigned to members of the girls’ cross country team.
On May 9, 2014, Going was arrested and charged by the Wayne County State’s Attorney with unauthorized videotaping of students as well as burglary to the school. That same day, a state search warrant was executed at Going’s residence and numerous electronic media devices were seized. These electronic media devices, including, but not limited to, a MSI Generic desktop computer, a HP Pavilion laptop computer, were also submitted to the ISP’s forensics crime lab for forensic examination. During the forensic examinations of the MSI Generic desktop computer and the HP Pavilion laptop computer, a large number of visual depictions of minors engaged in sexually explicit conduct were found. The majority of the images had been downloaded via the internet, and depicted sexual interactions between minors and adults, as well as sexual interactions between minors, and the lascivious display of the genitals of minors.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 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."
The case was investigated by the Illinois State Police, the Fairview Heights Police Department, and the Federal Bureau of Investigation's Springfield Child Exploitation Task Force. The case is assigned to Assistant United States Attorney Angela Scott.
Former Contract Employee for U.S. Citizenship and Immigration Services Sentenced to 26 Months in Prison for Theft, Sale of FormsRead the Press Release
NEWARK, N.J. - A former contract employee for U.S. Citizenship and Immigration Services (USCIS) was sentenced today to 26 months in prison for stealing hundreds of immigration forms from the warehouse where he worked and selling them for ultimate use as part of a criminal enterprise, U.S. Attorney Paul J. Fishman announced.
Martin Trejo, 47, of Rialto, California, was previously convicted of one count of conspiracy to steal government property and transport it in interstate commerce and one count of transportation of stolen goods in interstate commerce. Trejo was convicted following a one-week trial before U.S. District Judge Faith S. Hochberg, who imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial: While working as a contract employee for USCIS, Trejo stole hundreds of immigration forms from the warehouse where he worked and sold them to a conspirator, who sold the forms to a criminal enterprise that used them to obtain hundreds of driver’s licenses for individuals living in New Jersey and other states illegally.
In addition to the prison term, Judge Hochberg sentenced Trejo to serve two years of supervised release and fined him $4,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and agents of the Department of Homeland Security, Office of Inspector General, under the direction of Acting Special Agent in Charge Edward Nasiatka of the New York field office, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Anthony Moscato and David M. Eskew of the U.S. Attorney’s Office Criminal Division in Newark.
14-329Defense counsel: John P McGovern Esq., Newark
Former Clark County Family Court Judge Steven Jones and Four Co-Defendants Plead Guilty to Investment Fraud SchemeRead the Press Release
LAS VEGAS, Nev. – Clark County Family Court Judge Steven E. Jones and four co-defendants pleaded guilty today to conspiracy charges for defrauding over 22 people of millions in an investment fraud scheme involving bogus water rights and real estate transactions, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Laura Bucheit, Special Agent in Charge of the FBI for Nevada. As part of his plea agreement with the government, Jones agreed to step down from the bench and surrender his law license to the State Bar of Nevada.
Jones, 56, Thomas A. Cecrle, Jr., 57, and Terry J. Wolfe, 59, of Henderson, Nev., and Mark L. Hansen, 56, of Corvallis, Ore., pleaded guilty before U.S. District Judge Jennifer A. Dorsey to one count of conspiracy to commit wire fraud. Also in connection with the same fraud scheme, Constance C. Fenton, 70, of Gig Harbor, Wash., pleaded guilty to one count of conspiracy to commit money laundering. They each face up to 20 years in prison, $250,000 in fines, and mandatory restitution, and are scheduled to be sentenced on Jan. 26, 2015. A sixth defendant charged in the scheme, Ashlee M. Martin, 30, of Las Vegas, Nev., pleaded guilty on Aug. 11 to conspiracy to commit money laundering, and is scheduled to be sentenced in August 2015.
“This prosecution was the result of a long, thorough, and resource-intensive investigation and should serve as a vivid reminder that public officials who use their offices as a means to commit a crime of whatever nature will be pursued vigorously and prosecuted to the utmost rigor of the law,” said U.S. Attorney Bogden. “Defendant Jones knowingly used his office to lull victims into a false sense of security about investments he knew were scams. No one is above the law, especially a person holding the office of judge.”
"These guilty pleas serve as evidence to the public that the FBI, working with our law enforcement partners and the U.S. Attorney’s Office, will continue to ensure that no one is above the law, and when public corruption is identified, it will be aggressively investigated and prosecuted,” said Special Agent in Charge Bucheit.
According to the plea memoranda, defendants lured victims into a fraud scheme by falsely telling them that Cecrle worked as a contractor for the U.S. Department of Homeland Security, purchasing and selling water rights worth millions of dollars as part of a secret government program. The co-conspirators then solicited money by falsely claiming that Cecrle needed short-term cash loans to complete his phantom water deals, loans he promised to repay in short order along with a very large return. Cecrle and his co-conspirators concocted a similar story involving a land deal on the Las Vegas Strip where Cecrle needed short-term loans to supposedly close a deal with Sir Richard Branson. In truth, however, Cecrle held no position with the federal government and there were no land or water rights deals.
Using his office as an elected state court judge, defendant Jones knowingly vouched for Cecrle and the legitimacy of the deals to potential investors when he knew the deals were, in fact, scams. According to the plea memorandum, Jones continued to further the conspiracy by receiving money from a victim in the parking lot of the Family Division Courthouse, meeting with at least one potential investor in his chambers and elsewhere in the courthouse to discuss the investment, obtaining an “Own Recognizance” bond to release Cecrle from custody after he was arrested for bad checks he had passed to a victim, and opening and maintaining a joint checking account with Cecrle, through which flowed over $260,000 in illegal proceeds. During the entire conspiracy, which lasted from about September 2002 to October 2012, the defendants defrauded at least 22 victims of more than $2.6 million, money they quickly converted to their own use.The case was investigated by the FBI and prosecuted by First Assistant U.S. Attorney Steven W. Myhre and Assistant U.S. Attorney Daniel R. Schiess of the U.S. Attorney’s Office for the District of Nevada.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.com.
Former Army Energy Program Manager Faces Additional Charges of Defrauding the Army at Fort KnoxRead the Press Release
LOUISVILLE, Ky. – A former Fort Knox Energy Program Manager was charged in a second superseding indictment today with devising multiple wire fraud schemes to defraud the United States and violating criminal conflict of interest laws, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Gary T. Meredith, age 65, of Leitchfield, Kentucky is charged in a 38 count second superseding indictment. According to the indictment, while he was still a government employee Meredith violated federal conflict of interest laws by creating a contract establishing a lucrative post-retirement job for himself as a contractor with Nolin Rural Electric Cooperative Corporation (Nolin). In the process of creating the outside job as a contractor, Meredith is charged with fraudulently diverting to Nolin a $582,329.85 credit received by the U.S. Army from Louisville Gas & Electric Company, for the purpose of funding his post-retirement contract position with Nolin.
Once Meredith began working as a Nolin contractor in October 2007, the indictment alleges that he violated another criminal conflict of interest law by representing Nolin before the Army, with the intent to influence, on the same contracts and matters that he had participated in personally and substantially before his retirement, while an Army employee. Meredith continued working as a Nolin contractor at Fort Knox until April 2012, when Senior District Judge John G. Heyburn II granted the United States’ motion for a restraining order, in a separate civil lawsuit, which barred Meredith from continuing to receive payment for work in the contractor position.
The second superseding indictment further charges Meredith with numerous counts of wire fraud committed while a Nolin contractor, including:
- Between January 2009 and August 2010, Meredith created a scheme to defraud the United States at Fort Knox by instructing Nolin to overbill for natural gas provided under Energy Conservation Order (ECO) 70. Meredith then approved the fraudulently inflated bills for payment, resulting in over $320,000 in overpayments to Nolin.
- Between January 25, 2010 and February 26, 2010, Meredith devised a scheme to defraud the United States Army at Fort Knox by instructing Nolin RECC to charge nearly $200,000 in unauthorized ECO 68 related expenses (ECO 68 was never approved) to ECO 78, an unrelated but approved contract. Meredith then approved the fraudulent ECO 78 invoices for payment by the Army.
- Between February 19, 2010 and May 26, 2010, Meredith devised a scheme to defraud the United States Army at Fort Knox by instructing Nolin to charge over $94,000 in unapproved and unauthorized expenses for a solar panel project to ECOs 13, 53, and 70, unrelated but approved contracts. Meredith then approved the fraudulent invoices for payment by the Army.
- Meredith knew that Nolin RECC could not charge the Army for services before those services were rendered, but on October 20, 2009, Meredith approved a $190,401 Nolin invoice for one year of Meredith’s contractor salary in advance.
On September 8, 2014, the Department of Defense, Office of Inspector General, released a report of an audit conducted on the Fort Knox energy program. Amongst other things, the audit concluded that “Fort Knox officials did not properly award and administer 108 task orders, valued at about $270 million, for energy savings projects. In addition, Fort Knox officials could not support the claim that projects achieved the projected energy savings. . . . Furthermore, the lack of adequate internal controls increases the risk of fraud, waste and abuse.” http://www.dodig.mil/pubs/report_summary.cfm?id=5958
If convicted of the charges, Meredith faces a maximum sentence of 730 years in prison, a maximum fine of $9,500,000, and a maximum three year period of supervised release. This case is being prosecuted by Assistant United States Attorney David Weiser and was investigated by the Defense Criminal Investigative Service (DCIS), Dayton Resident Agency.
The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
Florida Home Health Care Company and its Owners Agree to Resolve False Claims Act Allegations for $1.65 MillionRead the Press Release
A Plus Home Health Care Inc. and its owners, Tracy Nemerofsky and her father, Stephen Nemerofsky, have agreed to pay $1.65 million to the United States to settle allegations that A Plus paid spouses of referring physicians for sham marketing positions in order to induce patient referrals, the Justice Department announced today. A Plus is a home health care company located in Fort Lauderdale, Florida.
“Kickback schemes drive up the cost of health care and cause physicians to make decisions based on their own bottom line instead of what is in the best interest of their patients,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “We will hold any health care company, and the individuals that own those companies, responsible for using kickbacks to line their pockets at the expense of taxpayers and federal health care beneficiaries.”
The United States filed a complaint against A Plus and Tracy Nemerofsky alleging that, beginning in 2006, A Plus engaged in a scheme to increase Medicare referrals in the heavily saturated home health care market in southern Florida. The company allegedly hired at least seven physicians’ spouses and one physician’s boyfriend to perform marketing duties, but required the spouses and boyfriend to perform few, if any, actual job duties. Instead, the spouses’ and boyfriend’s salaries allegedly served as an inducement and reward for the physicians’ referrals of Medicare patients to A Plus. According to the complaint, Tracy Nemerofsky fired at least two spouses when their husbands failed to refer a certain number of patients to A Plus. Tracy Nemerofsky allegedly reaped large rewards for the scheme, receiving a salary of $685,000 from A Plus in 2010, when A Plus’ business increased as a result of Medicare referrals generated from the sham marketer scheme.
“Kickback schemes undermine the integrity of our public health care programs,” said U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida. “The settlement announced today holds A Plus accountable for its submission of false claims, including restoring funds paid as a result of the false claims to Medicare. We will not relent in our efforts to combat these kinds of fraudulent schemes.”
“Home health care company owners who engage in such blatant, aggressive kickback schemes to get physicians to refer Medicare patients for the company’s services will instead pay for their improper conduct at the settlement table,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “We will continue to crack down on such illegal, wasteful business kickback arrangements, which undermine impartial medical judgment, corrode the public’s trust in the health care system and divert scarce Medicare funding.”
The settlement resolves allegations that were originally brought by William Guthrie, a former director of development at A Plus, under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for the submission of false claims and to receive a share of any recovery. The False Claims Act authorizes the United States to intervene in such lawsuits and take over primary responsibility for litigating them, as the United States did here. Guthrie’s share of this settlement has not yet been determined.
The United States previously settled with five couples that allegedly accepted payments from A Plus: Steven and Fortuna Hornreich, Mark and Meredith Rogovin, Sam and Christy Sareh, Gary and Stacy Wolfson, and Keifer Wyble and Nuria Rodriguez.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Southern District of Florida, HHS-OIG and the FBI.
The lawsuit is captioned U.S. ex rel. Guthrie v. A Plus Home Health Care, Inc., 12 CV 60629 (S.D. Fla.). The claims settled by the lawsuit are allegations only, and there has been no determination of liability.
Florida Home Health Care Company and Its Owners Agree to Resolve False Claims Act Allegations for $1.65 MillionRead the Press Release
A Plus Home Health Care Inc. and its owners, Tracy Nemerofsky and her father, Stephen Nemerofsky, have agreed to pay $1.65 million to the United States to settle allegations that A Plus paid spouses of referring physicians for sham marketing positions in order to induce patient referrals, the Justice Department announced today. A Plus is a home health care company located in Fort Lauderdale, Florida.
“Kickback schemes undermine the integrity of our public health care programs,” said U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida. “The settlement announced today holds A Plus accountable for its submission of false claims, including restoring funds paid as a result of the false claims to Medicare. We will not relent in our efforts to combat these kinds of fraudulent schemes.”
“Kickback schemes drive up the cost of health care and cause physicians to make decisions based on their own bottom line instead of what is in the best interest of their patients,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “We will hold any health care company, and the individuals that own those companies, responsible for using kickbacks to line their pockets at the expense of taxpayers and federal health care beneficiaries.”
The United States filed a complaint against A Plus and Tracy Nemerofsky alleging that, beginning in 2006, A Plus engaged in a scheme to increase Medicare referrals in the heavily saturated home health care market in southern Florida. The company allegedly hired at least seven physicians’ spouses and one physician’s boyfriend to perform marketing duties, but required the spouses and boyfriend to perform few, if any, actual job duties. Instead, the spouses’ and boyfriend’s salaries allegedly served as an inducement and reward for the physicians’ referrals of Medicare patients to A Plus. According to the complaint, Tracy Nemerofsky fired at least two spouses when their husbands failed to refer a certain number of patients to A Plus. Tracy Nemerofsky allegedly reaped large rewards for the scheme, receiving a salary of $685,000 from A Plus in 2010, when A Plus’ business increased as a result of Medicare referrals generated from the sham marketer scheme.
“Home health care company owners who engage in such blatant, aggressive kickback schemes to get physicians to refer Medicare patients for the company’s services will instead pay for their improper conduct at the settlement table,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “We will continue to crack down on such illegal, wasteful business kickback arrangements, which undermine impartial medical judgment, corrode the public’s trust in the health care system and divert scarce Medicare funding.”
The settlement resolves allegations that were originally brought by William Guthrie, a former director of development at A Plus, under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for the submission of false claims and to receive a share of any recovery. The False Claims Act authorizes the United States to intervene in such lawsuits and take over primary responsibility for litigating them, as the United States did here. Guthrie’s share of this settlement has not yet been determined.
The United States previously settled with five couples that allegedly accepted payments from A Plus: Steven and Fortuna Hornreich, Mark and Meredith Rogovin, Sam and Christy Sareh, Gary and Stacy Wolfson, and Keifer Wyble and Nuria Rodriguez.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $22.4 billion through False Claims Act cases, with more than $14.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Southern District of Florida, HHS-OIG and the FBI.
The lawsuit is captioned U.S. ex rel. Guthrie v. A Plus Home Health Care, Inc., 12 CV 60629 (S.D. Fla.). The claims settled by the lawsuit are allegations only, and there has been no determination of liability.
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.
Five Individuals Charged in Connection with Unlawful ATV Ride in Recapture CanyonRead the Press Release
SALT LAKE CITY - A two-count misdemeanor information filed in federal court Wednesday morning in Salt Lake City charges five individuals in connection with an unlawful ATV ride in Recapture Canyon on May 10, 2014. The information alleges one count of conspiracy to operate off-road vehicles on public lands closed to off-road vehicles and one count of operation of off-road vehicles on public lands closed to off-road vehicles.
Charged in the information are Phillip Kay Lyman, age 50, of Blanding; Monte Jerome Wells, age 50, of Monticello; Jay Demar Redd, age 40, of Santa Clara; Shane Morris Marian, age 33, of Monticello; and Franklin Trent Holliday, age 31, of Blanding. A summons will be issued to the five to appear in federal court in Salt Lake City on Oct. 17, 2014, at 2 p.m., before U.S. Magistrate Judge Evelyn Furse. Each count in the information carries a potential penalty of up to a year in jail and a fine of $100,000. The investigation in the case is ongoing.
The information charges the five individuals with conspiracy to operate off-road vehicles on public lands closed to off-road vehicles. According to the information, from about Feb. 27, 2014, and continuing until about May 10, 2014, the defendants conspired among themselves, with each other, and with others known and unknown to operate off-road vehicles through land restricted to off-road vehicles and administered by the BLM. The information alleges the purpose of the conspiracy was to unlawfully operate off-road vehicles through the restricted area as a means of expressing opposition to the BLM and its management of Recapture Canyon.
“We respect the fact that the citizens of this State have differing and deeply held views regarding the management and use of Recapture Canyon, and recognize that they have the right to express those opinions freely. Nevertheless, those rights must be exercised in a lawful manner and when individuals choose to violate the law, rather than engage in lawful protest, we will seek to hold those individuals accountable under the law,” Acting U.S. Attorney Carlie Christensen said today.
“Regrettably, a number of individuals organized and engaged in an illegal ATV ride through Recapture Canyon, an area rich in archaeological history” said BLM Director Neil Kornze. “Today’s actions by the U.S. Attorney’s Office underscore the importance of protecting culturally significant areas and holding accountable those who broke the law.”
Count one of the information alleges that beginning on or about March 2, 2104, Lyman began advertising the proposed ATV ride through the restricted area to occur on May 8, 2014, through social media. It was further part of the conspiracy, the information alleges, that on April 11, 2014, Lyman advertised the proposed ATV ride through the restricted area of Recapture Canyon by publishing an article in the Deseret News. The information alleges Lyman further promoted the published article using social media. Later in April, according to the information, Lyman, using social media, began advertising a change in the date for the proposed ATV ride from May 8, 2014, to May 10, 2014, to allow more people to participate.
The information alleges that in late April, Lyman and Wells used social media websites to publish and promote an invitation, with accompanying instructions, to the public to join the proposed ATV ride through the off-road vehicle restricted area in Recapture Canyon on May 10, 2014.
Around May 5, 2014, Lyman and Wells filmed a three-part video interview in which they discussed the nature, origin, and plans for the proposed ATV ride through the off-road vehicle restricted area in Recapture Canyon. It was further part of the conspiracy, according to the information, that Lyman and Wells used various social media websites to advertise and promote the proposed ATV ride.
According to the information, Lyman and Redd spoke to a large gathering of people at a meeting in Blanding the morning of May 10, 2014, before the ride, instructing and encouraging the group assembled regarding the proposed ATV ride.
The information alleges each defendant committed an overt act in furtherance of the conspiracy by knowingly and willfully operating an off-road vehicle through the restricted area of Recapture Canyon on May 10, 2014.
Count two of the information alleges the five defendants operated an off-road vehicle through land closed to off-road vehicles and administered by the Bureau of Land Management and did aid and abet each other.
An information is not a finding of guilt. Individuals charged in an information are presumed innocent unless or until proven guilty in court.
Recapture Canyon is federal public land managed by the Bureau of Land Management. Recapture Canyon contains unique archaeological resources, including ancient rock art and dwellings that are culturally significant and irreplaceable. According to the BLM, the archaeological record left behind shows that the area was previously occupied for at least 2,000 years. For this reason, Recapture Canyon was closed to motorized use in 2007 but remains open to the public for walking, hiking and horseback riding.
There are more than 2,800 miles of OHV trails administered by the BLM in southeast Utah that are open to public use. The BLM will continue to work with all stakeholders to address the various uses of public lands, including the development of new OHV trails.
Federal Jury in El Paso Convicts Businessman for Small Business Administration Contract Fraud SchemeRead the Press Release
In El Paso, a federal jury convicted 55–year-old Thomas Gregory Harris of Friendswood, TX, former Sr. Vice President for Luster National Inc., yesterday afternoon of 16 counts of wire fraud in connection with a scheme to defraud the Small Business Administration (SBA) announced United States Attorney Robert Pitman and Special Agent in Charge Douglas E. Lindquist of the FBI’s El Paso Division.
SBA administers a program pursuant to the Small Business Act called the “Section 8(a) program” that is intended to promote the business development of companies owned and operated by “socially and economically disadvantaged individuals.” In that program, certain government contracts are sometimes set aside for performance by so-called “8(a) concerns,” that is, business entities whose owners/operators the SBA has determined meet the criteria for being "socially and economically disadvantaged."
In July 2010, the SBA approved a joint venture, called Tropical Luster Joint Venture ("TLJV"), between two business entities: Tropical Contracting, LLC ("Tropical"), which is based in San Antonio, and Luster National, Inc. ("Luster"), which has offices in Houston and California. The SBA had approved Tropical as an 8(a) concern in 2009. Luster was not a qualifying 8(a) concern.
Evidence presented during trial revealed that in 2010 and 2011, Harris, unbeknownst to the SBA, used Tropical’s qualifying 8(a) status to obtain three restricted contracts awarded by the SBA.
In 2011, the SBA awarded Harris and TLJV the “Net Zero contract” at Fort Bliss in El Paso to design and implement a written plan to reduce energy consumption at the base. In January 2012, the U.S. Army paid TLJV approximately $492,000 as compensation for work on the Net Zero contract.
In 2010 and 2011, the SBA awarded Harris and TLJV two separate contracts with the U.S. Army Corps of Engineers (USACE) in Galveston, TX for project management duties as assigned by USACE. From 2010 to 2012, USACE paid TLJV approximately $895,000 as compensation for work on USACE projects.
In all three matters, Tropical, the 8(a) concern, did not manage and control TLJV's performance of the contracts as required by law. In fact, personnel associated with Tropical did no work whatsoever on the contracts. Harris managed and controlled TLJV's entire performance of the contracts. Luster personnel, or subcontractors Luster retained, did all of the work. Had the SBA known that Tropical was not managing and controlling TLJV's work on any of the contracts, it would have disqualified TLJV as an approved 8(a) joint venture, which would have rendered it ineligible for the contracts to perform the work at Fort Bliss or USACE in Galveston.
“Today’s conviction of Mr. Harris, should serve as a strong message regarding the FBI’s pursuit and prosecution of vendors in the El Paso community who take advantage of socially and economically disadvantaged small businesses for self-profit. Nothing erodes the public trust more than those who illegally manipulate a contract acquisition process to benefit from taxpayer dollars,” stated FBI Special Agent in Charge Douglas E. Lindquist.
Harris is on bond pending sentencing. Sentencing is scheduled for 8:00am on December 10, 2014, before United States District Judge Philip R. Martinez in El Paso. Each wire fraud charge calls for up to 20 years in federal prison.This case was investigated by the Federal Bureau of Investigation (FBI) together with the United States Army Criminal Investigation Command, Major Procurement Fraud Unit. Assistant United States Attorneys John Klassen and Gregory McDonald are prosecuting this case on behalf of the Government.
Farrell Man Serving Time in State Prison Gets 7 More Years in Federal Prison for Gun CrimeRead the Press Release
PITTSBURGH - A resident of Farrell, Pa., was sentenced yesterday in federal court after pleading guilty to a charge of brandishing a firearm during and in relation to drug trafficking, United States Attorney David J. Hickton announced today.
On June 10, 2014, Jashaad Coleman, 20, pleaded guilty to one count of brandishing a firearm during and in relation to drug trafficking before Senior United States District Judge Maurice B. Cohill. On Sept. 16, 2014, Judge Cohill sentenced Coleman to seven years in federal prison, to be served consecutively to the 4- to 11- year sentence Coleman is currently serving in Pennsylvania state custody for a firearm and robbery conviction.
In connection with the guilty plea and sentencing, the Court was advised that in the early morning hours of July 31, 2012, a vehicle carrying two individuals known to be associated with drug trafficking was stopped by officers employed by the Southwest Mercer County Regional Police Department. Coleman knew that this vehicle was carrying a quantity of crack cocaine for distribution, and upon learning that this vehicle had been subject to a traffic stop, he rode to the scene of the stop. There, Coleman pulled out a 9mm firearm, which he discharged towards the officers, with the goal of distracting the officers from the vehicle that they had stopped. Law enforcement took cover, and both the occupants of the vehicle and the crack cocaine were not recovered by the police.
In February, 2013, Coleman was tried before a Mercer County jury for unauthorized possession of a firearm as it related to the abovementioned shooting. Coleman was acquitted of this crime. Federal charges were then brought resulting in the guilty plea to the federal firearms charge.
Assistant United States Attorney Eric S. Rosen is prosecuting this case on behalf of the United States.
The Pennsylvania State Police, the Southwest Mercer County Regional Police, the Mercer County District Attorney's Office, and the Federal Bureau of Investigation conducted the investigation that led to the successful prosecution of Jashaad Coleman.
Doctor Indicted for Illegal Distribution of PainkillersRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A West Virginia physician has been indicted on charges that she prescribed prescription painkillers outside the scope of her professional practice.
United States Attorney William J. Ihlenfeld, II, announced that Dr. Tressie M. DUFFY, age 44 of Martinsburg, W. Va., was indicted on 100 felony counts alleging that she aided and abetted the distribution of narcotic controlled substances. The indictment asserts that DUFFY signed blank prescription orders and then allowed employees at her medical practice to issue the prescriptions without being seen by a physician, all in violation of Federal law. DUFFY is alleged to have issued 157 prescriptions for controlled substances to 96 patients outside the course of professional practice.
DUFFY is engaged in the practice of medicine under the business name of “West Virginia Weight and Wellness, Inc.” She was indicted along with Amanda CLARK, age 29 of Martinsburg, an office assistant at West Virginia Weight & Wellness, and Tracie COLBERT, age 33 of Martinsburg, an employee of AIT Laboratories. DUFFY, CLARK, and COLBERT are each alleged to have aided and abetted the distribution of Oxycodone, Oxymorphone, Methadone, and Methylphenidate, HCL, all Schedule II controlled substances.
DUFFY and her co-defendants face up to twenty years in prison on each count, along with a fine of up to $1,000,000. Under the Federal Sentencing Guidelines the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history of each defendant. The charges contained in the indictment are merely accusations and are not evidence of guilt. The defendants are presumed innocent until and unless proven guilty.
The case will be prosecuted by Assistant U.S. Attorney Paul T. Camilletti and was investigated by the Drug Enforcement Administration.
Davenport Woman Sentenced on Federal Drug Trafficking OffenseRead the Press Release
DAVENPORT, IA – On September 11, 2014, Leann Sue Perez, age 39, of Davenport, Iowa, was sentenced by United States District Judge John A. Jarvey for possession with intent to distribute cocaine, announced United States Attorney Nicholas A. Klinefeldt. Perez was sentenced to 40 months in prison, and was ordered to serve three years of supervised release following the imprisonment, and to pay $100 towards the Crime Victims Fund.
On June 17, 2013, law enforcement executed a search warrant for a Davenport, Iowa, residence associated with Perez and her co-defendant, Jose Antonio Garcia. At that residence agents located, among other things, over one-half kilogram cocaine, digital scales, and packaging material. Perez possessed this cocaine and intended to distribute some or all of it to other persons. Prior to the June 17 search, Perez and Garcia obtained additional quantities of cocaine from a source of supply and distributed that cocaine to customers in the Davenport, Iowa, area.
On August 15, 2014, Judge Jarvey sentenced co-defendant Jose Antonio Garcia, age 44, of Davenport, Iowa, to 108 months in prison, and also ordered Garcia to serve three years of supervised release following the imprisonment and to pay $100 towards the Crime Victims Fund.
This case was investigated by the Davenport, Iowa, Police Department and the Iowa Division of Narcotics Enforcement. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Court Bars Florida Tax Preparer from Preparing Returns for OthersRead the Press Release
A federal district judge in the U.S. District Court for the Middle District of Florida has permanently barred Jeanne Covington, of Tampa, Florida, and her company, Jeanne’s Tax Preparation and Bookkeeping Inc., from preparing federal income tax returns for others, the Justice Department announced today.
The suit alleges that Covington has prepared returns that unlawfully understate income tax liabilities and overstate refunds through a variety of schemes, including fabricating or inflating business expenses that Covington’s customers never paid or incurred. The complaint also alleges that Covington prepared returns that wrongfully claimed tax credits, including education credits and the residential energy credit. Altogether, the government complaint alleges that Covington’s activities may have caused millions of dollars in loss to the U.S. Treasury.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
USA v. Jeanne Covington, et al.
OrderConvicted Felon Sentenced for Owning FirearmRead the Press Release
CINCINNATI – Santonio Watkins, 28, of Cincinnati, was sentenced in U.S. District Court to 72 months in prison for possessing a firearm as a felon.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Michael Boxler, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, Columbus Field Division (ATF) and Cincinnati Police Chief Jeffrey Blackwell, announced the sentence handed down today by Senior U.S. District Judge Sandra Beckwith.
While engaged in a traffic stop on January 29, 2014, law enforcement officers discovered Watkins was in possession of a 9mm pistol and 11 rounds of ammunition. As a previously convicted felon, this violated federal firearm statutes.
U.S. Attorney Stewart commended the cooperative investigation by the ATF and Cincinnati Police Department, as well as Cincinnati Branch Chief Anthony Springer, who represented the United States in this case.
Watkins pleaded guilty on May 12, 2014 to felon in possession of a firearm.Buffalo Man Pleads Guilty to Conspiracy to Commit ArsonRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today Michael Fijal, 61, of Buffalo, NY, pleaded guilty to conspiracy to commit arson before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of five years in prison, a $250,000 fine or both.
According to Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, in May 2011, Fijal, a local bank employee, conspired with others to burn down a duplex at 179 Mackinaw Street which is located in Buffalo's Old First Ward neighborhood. The defendant withdrew money from a local bank for the purpose of paying an accomplice to burn the building and paying the accomplice both before and after the fire on May 22, 2011.
The plea is the result of investigation on the part of Special Agents of the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Acting Special Agent in Charge James S. Higgins, New York Field Division, and Investigators with the Buffalo Fire Department, under the direction of Commissioner Garnell Whitfield.
Sentencing is scheduled for January 16, 2015 at 1:00 p.m. before Judge Arcara.Battlefield Man Sentenced for $945,000 Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Battlefield, Mo., man has been sentenced in federal court for embezzling $945,000 from his employer.
Travis E. Honaker, 36, of Battlefield, was sentenced by U.S. Chief District Judge Greg Kays on Tuesday, Sept. 16, 2014, to three years and one month in federal prison without parole. The court also ordered Honaker to pay $945,200 in restitution.
On March 18, 2014, Honaker pleaded guilty to wire fraud and money laundering. Honaker admitted that he engaged in a scheme to defraud his employer, Prime, Inc., from Aug. 22, 2007, to December 2011. Through his schemes, Honaker embezzled at least $945,200 over the five-year period of the investigation. The illegally obtained funds were used for Honaker’s personal living expenses and paid for such items as a 2005 BMW SUV, a 2009 Range Rover SUV, a down payment and subsequent mortgage payments on a residence in Battlefield and his wife’s extensive gambling expenses.
Honaker was employed as a salesperson at Success Leasing, Inc., an affiliated company of Prime. Honaker sold used equipment, including auxiliary power units (APUs) and used trucks that had previously been leased by Success to others. After the lease period expired and the trucks and equipment were returned to the company, Honaker was tasked with managing their sale to others.
In December 2011, Prime became aware that Honaker was engaged in illegal activity when they discovered that he was not reporting cash payments for APUs that he sold for Prime. A further audit of Honaker’s activities at Prime revealed that he was also receiving payments for unauthorized “finder’s fees,” “inspection fees,” or “deposits” on trucks owned by Prime that he sold. Honaker charged several of Prime’s largest clients a fee for “finding,” “inspecting,” or “holding” trucks for them. These payments, which Honaker never reported to his employer, typically amounted to $500 or $1,000 per truck, depending on the age or condition of each truck.
Honaker created a shell company, T&H Consulting, LLC, in January 2011 for the purpose of receiving these finder’s fees and deposits. Purchasers wired funds to this account, then Honaker transferred the funds to his personal bank accounts. The creation of the T&H account served to mask the nature of the transactions by creating a layer between Honaker and the purchasers.
This case was prosecuted by Assistant U.S. Attorney Gary Milligan. It was investigated by the U.S. Secret Service, IRS-Criminal Investigation and the Springfield, Mo., Police Department.
Baltimore Felon Exiled to over 8 Years in Prison for Robbery ConspiracyRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles Jr. sentenced Greyling Chase, age 53, of Baltimore, Maryland, today to 105 months in prison followed by three years of supervised release for conspiring to commit an armed robbery of a drug dealer.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.According to Chase’s plea agreement, in March 2013, Chase agreed with a confidential source to rob a stash house full of cocaine. Chase and the source subsequently met to plan the robbery and Chase confirmed that he would bring a gun to use during the robbery. On April 8, 2013, Chase and codefendant Rodney Ellis met with the source to commit the robbery. Chase’s vehicle was stopped and the two were arrested. Law enforcement recovered a 9mm handgun and a .32 caliber handgun from the vehicle.
Chase subsequently agreed to be interviewed by law enforcement and admitted that he planned to participate in the robbery of a drug dealer and that he had obtained a gun to use in the robbery.
Rodney Ellis, of Baltimore, pleaded guilty to his role in the conspiracy and was sentenced to 97 months in prison on June 17, 2014.
United States Attorney Rod J. Rosenstein commended the ATF, DEA, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney James T. Wallner, who prosecuted the case.
Baltimore Armed Robber Admits to Robbing and Attempting to Rob Three Stores and Two Customers in One DayRead the Press Release
Items From Two Robberies Committed Two Days Earlier Were Found in Defendant’s Home
Baltimore, Maryland – Thomas Mims, age 53, of Baltimore, pleaded guilty today to robbery and using a firearm during a robbery.The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Baltimore City State’s Attorney Gregg L. Bernstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, on February 3, 2014, Mims walked into a Rite-Aid on Belair Road in Baltimore, gestured towards his waistband to suggest that he was armed and demanded money from the cashier. The cashier ran away. After first trying to run after her, Mims ran from the store and drove away.
Later that day, Mims walked into Foreman Mills, a retail store also on Belair Road, and demanded money from an employee who was holding a cash register drawer at the customer service desk. Mims lifted his shirt to display the butt of a handgun. The employee ran away with the drawer into a back office. Mims then approached a cashier and demanded money from her register. The cashier saw Mims holding the gun in his hand. Mims also demanded that a customer give him her purse. When the customer’s fiancé intervened by pushing Mims away, Mims pointed the gun at the customer and pulled the trigger. The gun did not fire.
Mims left the store and pointed his gun at another customer in the parking lot, demanding her purse. When that customer did not immediately comply, Mims snatched her purse, ran to his vehicle and drove away.
Later that day, Mims entered the Rainbow Shop on Erdman Avenue in Baltimore and displayed his gun, demanding money from the cashier. The cashier gave him $400 from the register. Mims demanded more money and when the cashier said there was none, Mims put his finger on the trigger of the gun and told the cashier she better not have lied to him. Mims then fled and drove away.
Witnesses called 911. Baltimore police officers soon located a vehicle that matched descriptions provided by witnesses. When officers pursued the vehicle, it sped off and led officers on a high speed chase. Police trapped Mims’ vehicle in a cul-de-sac and as officers approached on foot, Mims sped toward them in his car. As a result, one officer shot Mims in the arm. Several minutes later the chase ended and Mims was arrested.
Police executed a search warrant at Mims’ house and car. They seized a loaded handgun, two ski masks, and clothing worn by the suspect in an earlier robbery at a Subway restaurant two days earlier on February 1, 2014, along with items stolen from an earlier robbery at Walgreens, also on February 1.
Mims faces a mandatory minimum sentence of seven years consecutive to any other sentence imposed, and a maximum sentence of life for using a firearm during a robbery; and a maximum sentence of 20 years in prison for the robbery. U.S. District Judge William D. Quarles, Jr. scheduled sentencing for December 16, 201, at 1:00 p.m.
United States Attorney Rod J. Rosenstein commended the Baltimore City State’s Attorney’s Office, FBI and Baltimore Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Debra L. Dwyer and Special Assistant United States Attorney Piper F. McKeithen, a cross-designated Baltimore City Assistant State’s Attorney assigned to Exile cases, who is prosecuting the case.
Aurora Return Preparer Pleads Guilty to Filing False Tax ReturnsRead the Press Release
DENVER – Keith G. Smith, age 54, of Aurora, Colorado, pled guilty yesterday before U.S. District Court Judge Raymond P. Moore for filing and assisting in preparing false tax returns, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Judge Moore is scheduled to sentence Smith on December 9, 2014. Smith was indicted by a federal grand jury in Denver on March 11, 2014.
According to information contained in the indictment and plea agreement, beginning in 1987 Smith operated a tax return preparation business. He told some of his clients that he formerly worked for the IRS and conducted audits, seized assets, and carried a weapon. When in fact, for about four years Smith worked in an administrative positon at the IRS; he was not a criminal investigator, he did not conduct audits, and he did not seize assets. In 2000, the IRS assessed Smith a civil penalty because of underreported tax liabilities on returns that he had prepared for clients. Smith thereafter continued to prepare clients' returns but no longer signed them as preparer, instead indicating on the returns that they were prepared by the taxpayers.
Among the returns that Smith prepared for the years 2006 through 2010 were 40 false tax returns requesting refunds, in amounts ranging from $715 to $7,124, all of which the IRS paid. Many of the returns falsely claimed deductions for medical and dental expenses, home mortgage interest payments, education expenses, and charitable contributions. The false statements on the 40 returns resulted in a total tax loss of $138,148. In addition, Smith falsified his personal income tax returns for years 2008 and 2009.
On December 8, 2011, two IRS special agents interviewed Smith at his residence in Aurora and the agents informed Smith that he was under investigation for preparing false returns for clients and for his own returns. Smith acknowledged that he had been preparing returns for clients since his IRS employment ended and he admitted that he falsified clients' returns. Smith said he falsified Schedules C and misstated other items on clients' returns. "I'm ready to bite the bullet," he said. "I did it. It's done. I'm guilty."
Each of the charges to which Smith pled guilty, one count of aiding and assisting in the preparation of a false tax return and one count of filing a false tax return, carries a penalty of not more than 3 years in federal prison and a fine of up to $100,000.
This case was investigated by Internal Revenue Service – Criminal Investigation.
Augusta Man Sentenced for Repackaging Pesticide and Making A False Statement to Federal AgentsRead the Press Release
Augusta, GA: Zong Geng Chen, 47, of Augusta, Georgia was sentenced last week by U. S. District Court Judge J. Randal Hall to 5 months in prison followed by 5 months of home confinement and 3 years of supervised release for illegally repackaging pesticides to distribute to restaurants across the country and for making a false statement to federal agents.
According to the evidence presented during the guilty plea and sentencing hearings, the United States Environmental Protection Agency (“EPA”) was referred to investigate Chen and his company, Chen and Friends Pest Solutions, later renamed C&Z Pest Solutions, after state investigators discovered repackaged pesticide inside a restaurant in Missouri that Chen had distributed. In December, 2012, after an EPA investigation, Chen entered into a Consent Order and Final Agreement with the EPA where he agreed to cease repackaging pesticide and pay a fine of $9,433.01 for previous violations. In late 2013, investigators with the EPA received information that additional repackaged insecticide was recovered in restaurants in Indiana and Missouri. An investigation showed that these bottles of repackaged pesticide could be traced back to Chen and were distributed after Chen agreed to cease repackaging. As part of the labeling on his repackaged pesticide, Chen warned not to show the pesticide to the “health department.”
Thereafter, Special Agents with the EPA conducted a covert conversation with Chen, during which the agents posed as perspective customers and Chen stated that he was allowed to sell pesticide. A few days later, EPA Special Agents held another conversation where they identified themselves and questioned Chen about his repackaging pesticides and his compliance with the Consent Order and Final Agreement. At that time, Chen falsely assured agents that he was not repackaging pesticides again because he knew it was wrong.
“If pesticides are not handled safely and as directed there can be severe, even fatal, consequences,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in Georgia. “Last week’s sentencing demonstrates EPA’s commitment to implementing pesticide regulations to protect public health. EPA and its partner agencies will prosecute those who break the law in order to make a profit.”
United States Attorney Edward J. Tarver said, “In this case, the defendant was repacking and distributing pesticides to restaurants, thereby putting patrons in harm’s way. This Office will continue to assist its partner agencies in investigating and prosecuting those who put the safety of our communities at risk.”
EPA Special Agents Chuck Carfagno, Mike Sparks, and Kimmy Poon conducted the investigation which led to the information and plea. Assistant United States Attorney C. Troy Clark is the prosecutor in this case. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Arizona Woman Pleads Guilty to Federal Assault Charge in New MexicoRead the Press Release
ALBUQUERQUE – Maraintoinette Lynn Yazzie, 26, an enrolled member of the Navajo Nation who resides in Lukachukai, Ariz., pleaded guilty this morning to an assault with a dangerous weapon charge under a plea agreement with the U.S. Attorney’s Office.
Yazzie, 26, and her brother Antonio Yazzie, 22, also of Lukachukai, Ariz., were arrested in April 2014, on a criminal complaint alleging that they attacked a Navajo man at his home in Tohlakai, N.M., on Feb. 26, 2014. The two subsequently were indicted in May 2014, and charged with one count of assault with a dangerous weapon and two counts of robbery. According to court filings, Yazzie and her brother assaulted the victim by restraining him and striking him repeatedly in the face and head with a rock and a coffee mug. The two then allegedly robbed the victim of cash and his truck.
During today’s plea hearing, Yazzie pled guilty to Count 1 of the indictment, charging her with assault with a dangerous weapon. Yazzie admitted that she and her brother struck the victim in the head and the face with a rock and a coffee mug with the intent to do bodily harm.
Antonio Yazzie previously entered a guilty plea to Count 1 of the indictment on Sept. 9, 2014. Both siblings have been in federal custody since their arrests and remain detained pending their sentencing hearings, which have yet to be scheduled. At sentencing, each faces a statutory maximum penalty of ten years in prison.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.