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Thursday 17 July 2014
Multi-Agency Law Enforcement Operation Tackles Gun Violence and Drug Trafficking in Broward CountyRead the Press Release
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Michael J. Satz, Broward State Attorney, Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Firearms, Tobacco and Explosives (ATF), Amos Rojas, Jr., U.S. Marshal, U.S. Marshal’s Service (USMS), and Scott Israel, Sheriff, Broward County Sheriff’s Office (BSO), announce the results of a concerted multi-agency effort to combat the crime and violence associated with illegal firearm and drug trafficking activity in Broward County. To that end, the U.S. Attorney’s Office, the Broward State Attorney’s Office, and federal and state law enforcement cooperated in a number of joint investigations and prosecutions targeting illegal firearms and drug trafficking. This joint effort resulted in 16 individuals being charged with federal and state firearm and narcotics offenses.
Of those charged, federal charges have been brought against three individuals. The federal criminal complaints filed on July 1, 2014 and unsealed today, charge: Freddy Lee Gardner, 49, of Plantation, with armed career criminal in possession of a firearm, in violation of Title 18, United States Code, Sections 922(g) and 924(e); Kasheem Antonio Saddoo, 23, of Lauderhill, with possession of a firearm with an obliterated serial number, in violation of Title 18, United States Code, Section 922(k); and Antonio James, 19, of Lauderhill, with possession of a short barreled rifle, in violation of Title 26, United States Code, Sections 5841, 5861(d), 5861(e) and 5871.
Additionally, law enforcement seized: 10 firearms, including one short barreled rifle; 45 grams of cocaine powder; 16 grams of crack cocaine; 95 grams of Molly powder; 74 capsules of Molly; and 149 grams of marijuana.
The defendants are scheduled to make their respective initial appearances on Friday, July 18, 2014, at 11:00 a.m., before U.S. Magistrate Judge Lurana S. Snow.
This investigation is, in large part, the result of the Violence Reduction Partnership, launched by the U.S. Attorney’s Office. Through the Partnership, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks in local neighborhoods, while simultaneously working with community leaders and concerned citizens to mentor at-risk youths, provide jobs and job training to young families, and help probationers and parolees successfully re-enter society.
United States Attorney Wifredo A. Ferrer stated, “Today, we announce the results of the most recent partnership between federal and state law enforcement to combat violent crime in our communities. The goal of the Violence Reduction Partnership is to help neighborhoods plagued with violent crime shake off the cycle of violence and make those neighborhoods safer for all residents. Enforcement of federal criminal statutes is an integral component of our holistic approach to community building. But we cannot arrest our way out of violent crime. For that reason, our Partnership also focuses on community-partnering, crime prevention, and reentry assistance for offenders attempting to put their pasts behind them and build healthy, productive lives in our community. The results of this investigation clearly illustrate that we remain committed to this comprehensive approach.”
“These arrests are a good example of state and federal law-enforcement agencies working together proactively to make our communities safer,” said Broward State Attorney Mike Satz. “We are going to continue this state-federal partnership and aggressively work together to reduce illegal firearms and drug trafficking.”
ATF Special Agent in Charge Hugo J. Barrera added, “This case illustrates law enforcement’s commitment to remain united in its war on violent crime. Those who choose to live outside the rule of law will be brought to justice.”
U.S. Marshal Amos Rojas, Jr. stated, “Today, as a result of the Violence Reduction Partnership, and these significant indictments, our community is a much safer place to live. The U.S. Marshals Service will continue to partner with other law enforcement agencies and the United States Attorney’s Office to reduce and eliminate gun violence and crime in our cities.”
“The key to the success of this operation is in the proactive nature of the enforcement. With the help of our federal partners, our V.I.P.E.R. unit was able to identify, locate and arrest these violent criminals,” Sheriff Scott Israel said. “We will never know how many crimes were prevented by taking these illegal weapons off the streets, but that’s a statistic I can live without.”
Mr. Ferrer thanked the many law enforcement agencies involved in this South Florida High Intensity Drug Trafficking Area Task Force (HIDTA) operation. In particular, Mr. Ferrer thanked the Broward State Attorney’s Office and commended the investigative efforts of ATF, USMS, and BSO. The federal cases resulting from this operation are being prosecuted by Assistant U.S. Attorney Donald Chase.
The South Florida HIDTA was established in 1990. This program, made up of federal, state and local law enforcement agencies, fosters intra-agency cooperation among law enforcement agencies in South Florida and involves them in developing a strategy to target the region’s drug-related threats to public safety. The South Florida HIDTA uses the funding provided by the Office of National Drug Control Policy that sponsors a variety of law enforcement initiatives that target the region’s illicit drug threats.
A criminal complaint is only an accusation and a defendant is presumed innocent unless and until proven guilty.
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.
Mounds View Man Pleads Guilty to Heroin DistributionRead the Press Release
MINNEAPOLIS—Today in federal court, a 27-year-old Mounds View man pleaded guilty to one count of Distribution of Heroin. Andrew Terrell Davis, Jr., who was indicted on May 12, 2014, entered his guilty plea this morning in Minneapolis before United States District Court Chief Judge Michael J. Davis.
According to the plea agreement, the defendant conducted a drug transaction with an undercover police officer in south Minneapolis. The undercover officer gave the defendant $700 and received 5.19 grams of heroin in return from the defendant. On a separate occasion, the defendant conducted a similar drug transaction with the undercover officer wherein the defendant provided 48.15 grams of heroin in exchange for $5,000. On April 17, 2014, law enforcement executed a search warrant of the defendant’s residence and recovered 16 grams of heroin and 56 grams of cocaine.
For his crime, Davis faces a potential maximum penalty of 20 years in federal prison and a supervised release term of three years. Judge Davis will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Drug Enforcement Administration and the Dakota County Drug Task Force. It is being prosecuted by Assistant U.S. Attorney Richard A. Newberry.Monroe County Man Charged with Distributing Crack CocaineRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a criminal Information was filed today charging a Monroe County resident with distributing crack cocaine during a seven-month time period.
According to United States Attorney Peter Smith, the Information alleges that Dominic Darby, age 31, of Stroudsburg, Pennsylvania, distributed and possessed with intent to distribute cocaine base (“crack”) in Monroe County from October 2013 to April 30, 2014.
The charge stems from an investigation by the Federal Bureau of Investigation and the Pennsylvania State Police.
Darby faces a potential maximum sentence of 20 years in prison and a $1 million fine if he is convicted of the charge.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
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.
In this case, the maximum penalty under the federal statute is 20 years imprisonment, a term of supervised release following imprisonment, and a fine. 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.
Mineral Man Sentenced on Kidnapping, Interstate Domestic Violence and Gun ChargesRead the Press Release
CHARLOTTESVILLE, VIRGINIA – A Louisa County man who was convicted of kidnapping his estranged wife, transporting her to West Virginia and sexually assaulting her, was sentenced today in the United States District Court for the Western District of Virginia in Charlottesville.
Thomas Earl Faulls, 48, of Mineral, Va., was convicted by a jury earlier this year of one count of kidnapping, one count of interstate domestic violence and one count of possession of a firearm in furtherance of a crime of violence. Today in District Court, he was sentenced to 295 months in federal prison and 15 years of supervised release thereafter. Because the jury found that the kidnapping conviction involved a sex offense as well, Faulls was further ordered to register as a sex offender upon his release.
“Mr. Faulls carefully planned and executed a scheme to kidnap and assault his estranged wife,” United States Attorney Timothy J. Heaphy said today. “His actions were the culmination of a long-running pattern of abuse he visited upon the victim in this case. If not for the brave actions of the victim, this incident could have had a more tragic ending.”
According to evidence presented during the February 2014 jury trial, and other hearings, by Assistant United States Attorney Nancy S. Healey, Faulls and the victim were married for more than 20 years before the victim ended the marriage due to a long history of domestic abuse by the defendant. When the victim finally decided to leave her husband, Faulls engaged in escalating threatening and assaultive behavior against his ex-wife, including the display of a firearm, a claim of possession of a firearm, striking his ex-wife’s vehicle and making a threat or suggestion that he would kill his ex-wife.
On August 22, 2012, Faulls called his estranged wife and requested that she come to the home they formerly shared in Mineral, Va., and transport him to his truck, which he claimed was in the shop for repairs. The victim agreed and met him at the home later that evening. Unbeknownst to the victim, in preparation for the encounter Faulls had parked his truck behind the home and out-of-sight. The defendant had packed the truck with clothes and camping gear. He also disabled the front passenger door handle and window, thus making it impossible to escape through that door. Upon arrival, Faulls threatened to bind the victim and showed her zip ties that he previously fashioned into constraints. The defendant also brought thousands of dollars of cash and a shotgun. He also discarded the victim’s cell phone. Faulls also rebuffed various family members’ attempts to check on the well-being of the victim.
The evidence at trial showed that the victim was transported, against her will, to West Virginia, where she and the defendant stayed the night in a hotel. The following morning, against her will, the defendant engaged in sexual intercourse with the victim.
The victim ultimately made a decision to get the defendant drunk at a local restaurant, and while they were walking back to the hotel through a nearby neighborhood, the victim was able to run and solicit help from two good Samaritans who called 911 and drove her to find local law enforcement.
Following his arrest and prior to his trial, Faulls made several jailhouse phone calls during which he attempted to convince his mother to contact the victim in the case and persuade her to change her story and drop the charges against him.
The investigation of the case was conducted by the Federal Bureau of Investigation, the Louisa County Sheriff’s Office and the Greenbrier, West Virginia, Sheriff’s Office. Assistant United States Attorneys Nancy S. Healey and Robert Abendroth prosecuted the case for the United States.
Miami-Dade Resident Pleads Guilty in Stolen Identity Tax Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, announce that Karla A. Wilkerson, 26, of Miami, pled guilty to one count of possession of fifteen or more access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Sentencing is scheduled for October 10, 2014. At sentencing, the defendant faces up to ten years in prison for the access device charge, and a mandatory term of two years in prison, consecutive to any other term in prison, for the aggravated identity theft charge.
According to court documents, in April 2013, law enforcement executed a search warrant on a residence associated with Wilkerson and found a variety of papers reflecting the personal identifying information (PII) — including names and social security numbers — of approximately 62 individuals, together with hand-written notations regarding the filing of fraudulent tax returns. The seized documents were processed for latent fingerprints. Approximately 156 latent fingerprints throughout the pages reflecting the PII of other individuals were positively matched as Wilkerson’s fingerprints. Additional investigation reflected fraudulent tax returns were filed using many of those 62 social security numbers. In total, Wilkerson is responsible for filing fraudulent tax returns in the amount of $118,522; however, not all of this money was paid by the Internal Revenue Service.
Court documents also state that when Wilkerson was arrested on May 29, 2014, she admitted she had filed fraudulent tax returns using other individuals’ names and social security numbers, which had been stolen from various places. She further admitted the 62 unique pieces of PII discovered in the residence belonged to her.
Mr. Ferrer commended the investigative efforts of IRS-CI and the USSS. The case is being prosecuted by Assistant U.S. Attorney Jamie Galvin.
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.
Miami-Dade Resident Pleads Guilty in Identity Theft Tax Fraud Scheme Involving Thousands of Individuals’ Personal Identifying InformationRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and Ronald J. Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, announce that William Hernandez, 29, of Miami, pled guilty to one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Sentencing is scheduled for October 8, 2014. At sentencing, the defendant faces up to ten years in prison for the unauthorized access device charge, and a mandatory term of two years in prison, consecutive to any other term in prison, for the aggravated identity theft charge.
According to court documents, on October 17, 2013, a cooperating defendant with the initials O.C. advised the IRS that Hernandez sold him personal identifying information (PII) that O.C. used as part of a stolen identity refund fraud scheme internally referred to as “the lotto scheme.” The lotto scheme listed the same address for unrelated taxpayers and the tax returns contained Forms W-2G, purportedly issued by the Florida Department of the Lottery, for alleged lottery winnings. On or around January 18, 2012, a lotto scheme tax return for tax year 2011 was filed with Hernandez’s PII requesting an $18,744.00 tax refund. Hernandez later admitted that O.C. filed a false return for Hernandez using the lotto scheme because Hernandez needed money.
Court documents also state that on March 28, 2014, during a recorded conversation, O.C. asked Hernandez to provide PII to another cooperating witness (CW) in exchange for payment. Hernandez agreed. Hernandez told O.C. that he would be able to provide the CW with names because he had thousands of names at his house.
According to court documents, IRS executed a search warrant at Hernandez’s residence and found thousands of PII. Hernandez told the IRS that he allowed O.C. to open a tax business in Hernandez’s name using Hernandez’s grandmother’s address. Hernandez also said that the stolen identities and identifying information in his possession were “for real people.” Some of the identities were for individuals who were “old” and some were for individuals who were deceased. Additionally, Hernandez admitted he knew that the stolen identities were being utilized for tax returns prepared by O.C.
Mr. Ferrer commended the investigative efforts of IRS-CI, ICE-HSI and USPIS. The case is being prosecuted by Assistant U.S. Attorney Bertha R. Mitrani.
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.
Members of Violent Bloods Street Gang Charged with Murder and Other Racketeering OffensesRead the Press Release
NEWARK, N.J. - Four alleged members of Sex Money Murder, a subset of the Bloods street gang, were indicted by a federal grand jury today on charges of murder, attempted murder, racketeering, robbery, weapons offenses and drug distribution, U.S. Attorney Paul J. Fishman announced.
Narik Wilson, a/k/a “Spaz,” 29, Emil Rutledge, a/k/a “Diddy,” 26, Laquan Reed, a/k/a “Drama,” 25, and Rajohn Wilson, a/k/a “1090,” 23, all of Newark, were charged in a 14-count superseding indictment in connection with their alleged membership in Sex Money Murder. Narik Wilson, the leader of the gang, is charged in all 14 counts, which include charges related to murder in aid of racketeering. Narik Wilson was previously charged with drug distribution and firearm possession on Oct. 7, 2011.
Rutledge is charged with 11 counts, including murder in aid of racketeering. Reed is charged with six counts, including felony murder. Rajohn Wilson is charged with three counts, which include charges related to attempted murder.
All four men are already in custody on related charges and are expected to appear in Newark federal court on a date to be determined.
“The offenses charged in today’s indictment are a checklist of the activities associated with a violent street gang that has plagued Newark for years,” U.S. Attorney Fishman said. “Illegal guns, violent assaults, murder – members of this gang allegedly used all of them to maintain control over the illicit drug trafficking that is the lifeblood of their criminal enterprise. Today’s charges call them to account for these crimes.”
“Drug dealing, illegal weapons and gang violence destroy the quality of life in our neighborhoods,” said FBI Special Agent in Charge Aaron T. Ford, Newark Division. “The charges in this indictment should reassure the residents of Newark and New Jersey that we will continue to aggressively address gang violence through increased investigative strategies and a multi-agency approach.”
According to documents filed in this case and statements made in court:
The Bloods street gang is organized into subgroups that operate in specific geographic locations. Sex Money Murder is the Bloods subgroup that operates primarily in Essex County, New Jersey. From 2007, Sex Money Murder controlled the distribution of heroin and crack cocaine in the area surrounding Martin Luther King Boulevard and Spruce Street in Newark. The gang primarily consisted of neighborhood friends and family members who joined at a young age. In addition, the gang was organized along typical Bloods governing rules, hierarchal power structures, and visible demonstrations of gang affiliations, including tattoos. The gang also stored and circulated numerous firearms from apartments located at 725 Martin Luther Blvd. and 90 Spruce St.
Under the leadership of Narik Wilson, and with the assistance of Rutledge, Reed, and Rajohn Wilson, gang members allegedly engaged in a wide range of violent criminal activity in order to deter rival gangs, secure their drug distribution business, and silence people they believed were cooperating with law enforcement. These acts included numerous murders, shootings, robberies and auto thefts.
Other members of Sex Money Murder are currently serving prison sentences in state and federal prison for gang-related crimes.
Among the charges are several attempted murders and murders including:
- Oct. 29, 2010- Rutledge and others allegedly attempted to murder a rival gang member, (described as “Victim 3” in the indictment) at Narik Wilson’s direction.
- June 16, 2011- Rutledge and others allegedly attempted to murder rival gang members, (described as “Victim 4,” “Victim 5,” “Victim 6,” and “Victim 7” in the indictment) at Narik Wilson’s direction.
- July 14, 2011- Rutledge and others allegedly murdered a rival gang member, (described as “Victim 8” in the indictment) at Narik Wilson’s direction.
- July 31, 2011- Laquan Reed and others allegedly murdered an individual (described as “Victim 9” in the indictment) while attempting to carjack the victim’s vehicle.
The counts in the Superseding Indictment carry the following maximum penalties:
Count
Offense
Defendant(s)
Maximum Penalties
Racketeering
Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson
Life in prison (death eligible); $250,000 fine
2
Racketeering conspiracy
Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson
Life in prison; $250,000 fine
3
Attempted murder in aid of racketeering
Narik Wilson, Emil Rutledge
10 years in prison; $250,000 fine
4
Assault with a dangerous weapon in aid of racketeering
20 years in prison; $250,000 fine
5
Use of a firearm during a violent crime
Life in prison; $250,000 fine
6
Attempted murder in aid of racketeering
10 years in prison; $250,000
7
Assault with a dangerous weapon in aid of racketeering
20 years in prison; $250,000 fine
8
Use of a firearm during a violent crime
Life in prison; $250,000 fine
9
Murder in aid of racketeering
Life in prison (death eligible); $250,000 fine
10
Use of a firearm during a violent crime
Life in prison; $250,000 fine
11
Attempted murder in aid of racketeering
Narik Wilson, Laquan Reed
10 years in prison; $250,000 fine
12
Assault with a dangerous weapon in aid of racketeering
20 years in prison; $250,000 fine
13
Use of a firearm during a violent crime
Life in prison; $250,000 fine
14
Conspiracy to use a firearm during a crime of violence or a drug trafficking crime conspiracy
Narik Wilson, Emil Rutledge, Laquan Reed, Rajohn Wilson
20 years in prison; $250,000 fine
The investigation into the criminal activities of Sex Money Murder was a combined effort by federal and local law enforcement. U.S. Attorney Fishman credited special agents of the FBI and the FBI’s Safe Streets Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Essex County Prosecutor Carolyn A. Murray; the Essex County Sheriff’s Office, under the direction of Sheriff Armando V. Fontoura; and the Newark Police Department with the investigation – with the significant assistance of special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), under the direction of Special Agent in Charge Stephanie R. Shoemaker.
The government is represented by Assistant U.S. Attorneys Michael H. Robertson and Dara Govan of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.14-253
Wilson, Narik et. al. Superseding Indictment
Louisville Daycare Owner/Operator Charged with Fraud in Seeking Child Care Payments from Kentucky AgencyRead the Press Release
– Lottie Carisa Burgos, owner of ABC Village Daycare, alleged to have falsified daycare attendance figures and qualifications of daycare workers
LOUISVILLE, Ky. –David J. Hale, United States Attorney for the Western District of Kentucky, announced today the indictment of a Louisville daycare owner on charges of wire fraud, aggravated identity theft, and money laundering.
Lottie Carisa Burgos, the owner and operator of ABC Village Daycare, was charged in a 20-count indictment returned by a federal grand jury on July 16, 2014. Burgos made an initial appearance in federal court today following her arrest.
Burgos operated ABC Village Daycare at two locations, 1801 West Market Street, Louisville, Kentucky, and 2823 7th Street Road, Louisville, Kentucky. According to the indictment, Burgos or others acting at her direction falsified a wide range of information which was a condition of payment for child care services from Kentucky’s Department for Community Based Services. The Department for Community Based Services provides child care benefits to low-income working parents and guardians. Burgos or others acting at her direction are alleged to have falsified the following information: high school diplomas, negative tuberculosis tests and CPR certificates of ABC Village Daycare employees; the employment status of parents; the number of children who attended the daycare centers; and the number of days children attended the daycare centers. In 12 separate counts, the indictment charges Burgos committed wire fraud on occasions ranging from March 2011 through March 2013. The fraud charges detailed in the indictment are associated with payments from the Department for Community Based Services totaling $275,576. At Burgos’ initial appearance today before Magistrate Judge James Moyer, Assistant U.S. Attorney David Weiser stated that the total loss was approximately 1.4 million dollars.
The indictment includes two charges that Burgos twice committed aggravated identity theft: in August 2011 she used without authority the name of another, unidentified person on a fraudulent CPR certificate to prove that person was CPR-certified; and in January 2012 she used without authority the name of another, unidentified person to bill for child care services that were not actually rendered.
The indictment also charges Burgos with six counts of money laundering, alleging that she engaged in various financial transactions with money derived from her wire-fraud scheme on six different occasions ranging from September 2011 through May 2012.
If convicted of all counts, Burgos faces a mandatory minimum sentence of 2 years in prison, a maximum sentence of 304 years in prison, a maximum fine of $5,000,000, and up to 3 years of supervised release. The Court may also order that the defendant make restitution to the victim agency.
This case is being prosecuted by Assistant United States Attorney David Weiser and was investigated by the Kentucky Cabinet for Health and Family Services and the Federal Bureau of Investigation.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Leavenworth Woman Sentenced for Failing to Report Inmate's EscapeRead the Press Release
KANSAS CITY, KAN. A woman who worked at the Grossman Center in Leavenworth has been sentenced to two years on federal probation for failing to report that she knew it when an inmate left the facility to avoid a drug test, U.S. Attorney Barry Grissom said.
Jessica Wilmer-Davis, 34, Leavenworth, Kan., pleaded guilty to one count of misprision, or failing to report a federal crime. In her plea, she admitted that while she was a contract employee working as a cook she began an intimate relationship with Joshua Spurgeon, an inmate at the facility. Spurgeon was allowed to leave the facility only to go to work or approved medical appointments.
On Dec. 8, 2013, Spurgeon told Wilmer-Davis he was going to leave the facility without permission because of an upcoming drug test. On Dec. 9, when Spurgeon turned up missing, Wilmer-Davis was asked if she knew anything about his disappearance. She did not disclose that he had told her he planned to escape.
Grissom commended the U.S. Marshals Service, the Justice Department’s Office of Inspector General and Assistant U.S. Attorney Chris Oakley for their work on the case.
Lancaster Woman Charged with Concealing A FugitiveRead the Press Release
Heather Murphy, 23, of Lancaster, Pennsylvania, was charged today by indictment with one count of concealing a fugitive, announced United States Attorney Zane David Memeger.
If convicted, the defendant faces a maximum possible sentence of up to five years in prison, three years of supervised release, a fine of $250,000, and a $100 special assessment.
The case was investigated by the United States Marshal and is being prosecuted by Assistant United States Attorney Laurie Magid.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Lake City Man Pleads Guilty to Possessing Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Ronald Charles Waters (65, Lake City) pleaded guilty to possessing child pornography. Waters faces up to 10 years in federal prison and a potential life term of supervision. Waters was arrested on November 20, 2013 in Lake City. He has been in the custody of the United States Marshals Service since that time.
According to court documents, agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) determined that several individuals had received an email containing images of child pornography. Further investigation revealed that the email address subscriber was listed as “R. Waters,” and the account was traced to a residence in Lake City where Waters resided. HSI agents interviewed Waters at his residence, at which time Waters consented to a search of his computer. Three images depicting child pornography were found on the computer. The images were located in deleted space.
On November 20, 2013, HSI agents and other law enforcement officers executed a federal search warrant at Waters’ residence. Waters was present and agreed to speak with the agents. During the interview, Waters stated that he was the only one who had access to his computer media. A forensic analysis of the computer revealed that it contained at least two videos and at least 16 images depicting minors engaged in sexually explicit conduct.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Jacksonville Sheriff=s Office, and the Lake City Police Department. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Killeen Area Man Found Guilty of Sex Trafficking of A MinorRead the Press Release
HOUSTON – Bobby Barrett, aka “Black,” 30, has been convicted of sex trafficking of a minor who was under 18 with force, fraud or coercion, and transporting her across state lines for the purpose of engaging in prostitution, announced U.S. Attorney Kenneth Magidson. The jury returned its verdicts against the Killeen area man after a four-day trial and less than two hours of deliberation.
Barrett was found guilty of one count each of sex trafficking of a minor and transportation of a minor with intent to engage in criminal sexual activity.
The federal charges brought against Barrett are the result of an investigation conducted by the Houston Innocence Lost Task Force, led by the FBI and the Shreveport, La., Police Department (SPD). The investigation began in October 2013 after the victim was detained during an enforcement operation in Houston. Barrett bonded her out and then transported her across state lines to Louisiana where ads for prostitution services were posted. SPD arrested her in another operation less than two weeks later along with Barrett and another woman.
Testimony at trial revealed Barrett posted no less than 26 Internet prostitution ads from his phone. Barrett rented hotel rooms for the prostitution dates and supplied the victim and another woman with marijuana. The victim, a 17-year-old minor, testified she was the person depicted in seductive settings for the purpose of some of the advertisements for prostitution posted online. She said that at the time of the incidents, Barrett not only knew she was 17, but her High School identification was found in his pocket. Moreover, the minor testified she feared Barrett and that he cut her face during an altercation just prior to his arrest.
In addition to the victim’s description, an expert further testified as to how this subculture operates. Barrett took all monies the minor victim earned.
Forensic analysis of Barrett’s cell phone conducted by the FBI revealed pictures of multiple victims that were used in Backpage ads posted on the Internet. Phone records also confirmed that Barrett posted multiple ads on Backpage, including at least two minors under the age of 18. Hotel records verified that Barrett traveled out of state with the victims.
U.S. District Judge Keith P. Ellison, who presided over the trial, has set sentencing for Oct. 15, 2014. At that time, Barrett faces up to 40 years in federal prison for sex trafficking of a minor and a mandatory minimum of 10 years and up to life imprisonment for transporting a minor with the intent to engage in criminal sexual activity. Upon completion of any prison term imposed, Barrett also faces a maximum of a life term of supervised release and will be required to register as a sex offender.
This case, prosecuted by Assistant U.S. Attorneys Julie N. Searle and Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Keymar Man Exiled to 10 Years in Prison for Possession of Stolen FirearmsRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Christopher Stevens, age 23, of Keymar, Maryland, today to 10 years in prison, followed by three years of supervised release, for possession of stolen firearms. Judge Russell ordered that six years of the federal sentence will be served consecutive to state sentences that Stevens is currently serving.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Captain Thomas J. Ledwell, Chief of the Frederick Police Department; Frederick County Sheriff Charles A. “Chuck” Jenkins; and Colonel Marcus L. Brown, Superintendent of the Maryland State Police.
According to Stevens’ plea agreement, on January 27, 2013, he and an accomplice broke into a sporting goods store, gaining entry through the roof of the building. Stevens stole 12 firearms from the store and hid them at his mother’s residence. Stevens and his accomplice then distributed 10 of the guns to an individual whom they believed to be a member of a “Crips” gang section located in Frederick, Maryland. At least one of the stolen firearms was used in a shooting in Frederick. Stevens also bartered at least one of the stolen guns in exchange for tattoos.
On March 5, 2013, Stevens was the rear passenger in a car stopped by a Maryland State Police trooper. A police drug detection canine that was brought to the scene alerted positively for the presence of drugs in the car. The occupants were removed from the car prior to a search. While exiting the car, the front seat passenger told the trooper that there was a gun under the front seat and neither of the other passengers knew of the gun. The gun, an unloaded semi-automatic handgun, was recovered. Investigation revealed that the gun had one obliterated serial number, but a second serial number was discovered, which revealed that the gun had been stolen in the sporting goods store robbery. Witnesses were found who would testify that Stevens brought the seized firearm into the car and when the car was stopped by the trooper, Stevens asked Myers to claim that the gun was his.
According to his plea agreement, Stevens also told several witnesses that the seized gun was his and that he had stolen it in the sporting goods store robbery. The government also obtained recordings of conversations with Stevens and individuals who were incarcerated in which Stevens admitted his participation in the firearms robbery from the sporting goods store.
United States Attorney Rod J. Rosenstein commended the ATF, Frederick Police Department, Maryland State Police and Frederick County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney John F. Purcell, who prosecuted the case.
Kentucky Man Indicted on Multiple Counts Related to Sexual Exploitation of A ChildRead the Press Release
A Kentucky man was indicted on multiple counts for activity related to taking a 13-year-old across state lines to engage in illicit sexual activity, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI's Cleveland office.
Shawn J. Bivens, 33, of Vanceburg, Kentucky, was charged with sexual exploitation of a child, transporting visual depictions of minors engaged in sexually explicit conduct, transportation of a minor to engage in illegal sexual activity and travel with intent to engage in illicit sexual conduct.
The indictment charges that from on or about January 21, 2014, through on or about February 28, 2014, and again from on or about February 28, 2014, through on or about March 2, 2014, Bivens, used, persuaded, induced, enticed and coerced a minor -- that is, a 13 year-old girl -- to engage in sexually explicit conduct, for the purpose of producing a visual depiction of such conduct, and knowing and having reason to know that such visual depiction would be transported, using any means or facility of interstate and foreign commerce, and in and affecting interstate and foreign commerce.
The indictment also charges that from on or about February 28, 2014, through on or about March 2, 2014, Bivens knowingly traveled in interstate commerce, from Kentucky to Ohio, for the purpose of engaging in illicit sexual conduct with a 13-year-old girl.
From on or about February 28, 2014, through on or about March 2, 2014, Bivens knowingly transported, using any means of interstate and foreign commerce and in and affecting interstate and foreign commerce, numerous computer files, which files contained visual depictions of a real minor engaged in sexually explicit conduct, according to the indictment.
From on or about May 3, 2014, through on or about May 8, 2014, Bivens knowingly transported an individual who had not attained the age of 18 years, that is a 13-year-old girl, in interstate commerce from the Ohio to Kentucky, with the intent that such 13-year-old girl engage in sexual activity for which Bivens could be charged with a criminal offense.
If convicted, the sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Elyria Office of the Federal Bureau of Investigation and the Lewis County, Kentucky, Sheriff’s Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Justice Department Reaches Agreement with Orange County Clerk of Courts in Florida to Ensure Equal Access to Court Records for Blind IndividualsRead the Press Release
The Justice Department announced today that it has reached a settlement with the Orange County Clerk of Courts in Florida to remedy violations of the Americans with Disabilities Act (ADA). The settlement resolves allegations that the Orange County Clerk of Courts failed to provide a blind attorney with electronic court documents in an accessible format readable by his screen reader technology, despite repeated requests. Indeed, a motion filed in one of his cases included over 20 exhibits, the majority of which were not provided in an accessible format for over four months.
Under the settlement agreement, the Orange County Clerk of Courts will provide individuals with disabilities with any document in the official court record in an accessible format upon request, and ensure that the Clerk of Courts’ website is accessible to individuals with disabilities, including blind individuals, in accordance with the Web Content Accessibility Guidelines (WCAG) 2.0 Level AA, available at http://www.w3.org/TR/WCAG20/. The Clerk of Courts will also pay $10,000 in damages to the complaining attorney and undergo training on the ADA and WCAG 2.0 AA accessibility requirements.
“The Civil Rights Division commends the Orange County Clerk of Courts for working with us to ensure equal access to the official court record for individuals with disabilities,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Access to court documents is critical to ensuring that individuals with vision impairments and other disabilities have full and equal access to the courts—a right fundamental to our justice system.”
Under the ADA and its implementing regulations, Florida clerks of court are required to make their programs, services and activities accessible to qualified individuals with disabilities. The official court record is a program, service and activity of the clerk of courts. Those interested in finding out more about this settlement or the obligations of state and local government entities under the ADA may call the department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website. ADA complaints may be filed by email
Justice Department Files Lawsuit Alleging Violations of Federal Law and Executive Order by Federal ContractorRead the Press Release
The Justice Department announced the filing of a lawsuit today against Entergy Corporation for violating Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. The lawsuit alleges that the defendant violated these laws and the executive order when it refused to comply with federal contractor requirements to submit proof of required affirmative action programs to the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). Because Entergy has refused to supply documentation and cooperate with auditing attempts, OFCCP has been unable to determine if Entergy is in compliance with its affirmative action obligations.
“Government contractors that choose to accept federal funds also agree to abide by laws and regulations aimed at preventing employment discrimination,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “When a government contractor, like Entergy, refuses to adhere to the obligations it accepted as a federal contractor, that refusal undermines the public trust that taxpayers expect in ensuring that public funding is used in a manner that complies with both federal law and agency regulations.”
“This issue has been litigated and re-litigated many times, and the courts have been clear: companies that profit from federal contracts must comply with our requests for proof that they are meeting their obligations,” said OFCCP Director Patricia A. Shiu. “Entergy already earns more than $1 billion in taxpayer-funded contracts to provide services to the government. We shouldn’t have to spend more of those dollars taking them to court because they refuse to abide by the law. So, I urge Entergy Chairman and CEO Leo Denault to respect our nation’s hard-won civil rights laws.”
Entergy, as a federal contractor, is prohibited from discriminating against employees and job applicants because of race, color, sex, religion, national origin, disability or protected veteran status. The company is also required to take affirmative action to employ qualified women, minorities, people with disabilities and protected veterans. To determine compliance with those affirmative action and non-discrimination requirements, government contractors, including Entergy, are required to develop and maintain written affirmative action programs, retain personnel and employment records, and provide OFCCP access to those documents during compliance reviews or investigations. The lawsuit seeks a permanent injunction requiring Entergy to comply with its obligations, including its obligation to produce documents requested by OFCCP within 30 days of the request.
The complaint, filed in the U.S. District Court for the Eastern District of Louisiana, alleges that since May 2012, Entergy has refused OFCCP’s repeated requests to turn over its written affirmative action programs and other records requested as part of the routine compliance review of 11 Entergy locations in Texas, Mississippi and Louisiana.
The Department of Labor referred this matter to the Department of Justice when Entergy refused to submit the documents requested by OFCCP even after receiving notices to show cause why enforcement proceedings should not be initiated.
The case is being handled by Senior Trial Attorney Valerie Meyer of the Department of Justice Civil Rights Division’s Employment Litigation Section.
More information about OFCCP is available on its website. Additional information about the Employment Litigation Section is available on the division website.
Jamie Gene Thompson Imprisoned for Access Device FraudRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Jamie Gene Thompson, 47, a California native who most recently lived in Vermont, was sentenced on July 15, 2014 in United States District Court in Brattleboro to 30 months of imprisonment upon his guilty plea to a charge of access device fraud. U.S. District Judge J. Garvan Murtha also ordered that Thompson serve a three-year term of supervised release following completion of his prison sentence and pay restitution in the amount of $65,143.47. Thompson has been incarcerated since his arrest in California in March 2013.
On February 27, 2013, a federal grand jury in Rutland returned a one-count indictment charging Thompson with access device fraud. Thompson pled guilty to the charge last October. According to court records, in about 2010, Thompson became a live-in care provider for an elderly couple in Charlotte. Thompson's duties involved providing medical and physical assistance and transportation. He also handled some of the couple's finances. Between September and October 2012 Thompson defrauded the couple by using one of their credit cards to make about 80 unauthorized purchases of goods and services which totaled approximately $9,000. He also made about $46,000 in unauthorized withdrawals from an investment account the couple had at Wells Fargo. The Wells Fargo funds were used to pay down balances on personal credit cards which had been issued to Thompson.
This case was investigated by the Vermont State Police and the Federal Bureau of Investigation.
Thompson is represented by Assistant Federal Public Defender Steven Barth. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Jamestown Man Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Victor Anguiera, 31, of Celeron, N.Y., who was convicted of conspiracy to possess with intent to distribute one kilogram or more of heroin and possession of a firearm in relation to drug trafficking activities, was sentenced to 180 months in prison by Chief U.S. District Judge William M. Skretny. The defendant was also ordered to forfeit $100,000 in proceeds from drug trafficking activities.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the case, stated that on March 17, 2011, based on information obtained through a wiretap investigation, the defendant was arrested in Celeron, N.Y. by Chautauqua County Sheriff’s Department deputies. At the time of his arrest, deputies seized approximately a ½ kilogram of heroin and two firearms. During a subsequent search of several locations, deputies also seized additional quantities of heroin, cocaine, firearms, vehicles and approximately $300,000 in United States currency.
Anguiera and seven others were arrested in this heroin trafficking investigation. All defendants have been convicted. Anguiera was the target of the wiretap investigation.
The sentencing is the culmination of an investigation by the Drug Enforcement Administration, under the direction of James J. Hunt, Acting Special Agent in Charge, New York Field Division, the Southern Tier Regional Drug Task Force, under the direction of Chautauqua County Sheriff’s Lieutenant David Bentley, the Chautauqua County Sheriff’s Department, under the direction of Sheriff Joseph Gerace, and the Jamestown Police Department, under the direction of Harry Snellings.Jacksonville Man Pleads Guilty to Producing Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Charles Franklin Hudson, Jr. (38, Jacksonville) yesterday pleaded guilty to two counts of using a minor to produce videos depicting child pornography. Hudson faces a mandatory minimum penalty of 15 years, up to 30 years in federal prison and a potential life term of supervised release on each count. Hudson was arrested in Jacksonville on January 8, 2014, and has been in custody since that time.
According to court documents, on January 6, 2014, an officer with the Jacksonville Sheriff’s Office (JSO) was dispatched to a residence in Jacksonville in response to a call regarding allegations of sexual battery on a minor child. Subsequently, JSO Sex Crimes detectives interviewed the minor child, who indicated that she has been sexually abused by Hudson.
On January 8, 2014, JSO detectives obtained a search warrant for Hudson’s residence in Jacksonville. Hudson was arrested later that day. During the execution of the search warrant at his residence, officers discovered, among other things, numerous items of digital media including multiple computers, cameras, SD cards, CDs and DVDs. Located in the attic of the residence was a backpack containing cameras, sex devices and restraints, along with several pill bottles bearing Hudson’s name. One of the pill bottles contained five SD media cards. Subsequent forensic analysis of the media cards revealed that they contained approximately 90 video and image files that depicted sexually explicit conduct involving Hudson. At least two of the videos, which had been produced by Hudson, depicted Hudson and a minor child engaged in sexually explicit conduct.
This case was investigated by the Jacksonville Sheriff’s Office and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Jacksonville Child Sex Offender Pleads Guilty to Producing Child Pornography, Faces A Mandatory Sentence of Life ImprisonmentRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Christopher Richard Cloonan (44, Jacksonville) yesterday pleaded guilty to using a minor child to produce images depicting child pornography. Cloonan is a registered child sex offender. He was convicted of two counts of attempted sexual battery on a child less than 12 years old on November 18, 1991, in Charlotte County. Because of his prior child sex convictions, Cloonan faces a mandatory sentence of life imprisonment. Cloonan was arrested on March 12, 2014 at his residence in Jacksonville, and he has been in custody since that time.
According to court documents, in early March 2014, an undercover officer (“UC”) with the District of Columbia Metropolitan Police Department posted an advertisement on a website known to be frequented by individuals who have a sexual interest in children and incest. On March 8, 2014, Cloonan, using a particular screen name, responded to the ad and expressed interest and experience in sexual activity with a minor child.
On March 11, 2014, Cloonan sent the UC an email with two images attached. Both images were produced by Cloonan and depicted an infant engaged in sexually explicit conduct. A few minutes later, Cloonan sent the UC another email with two more explicit images of the same infant.
On March 12, 2014, the FBI’s investigation revealed that the Internet Protocol (IP) address used to send the pornographic images belonged to Cloonen. He was also identified as the subscriber of the Internet account. Also, on the same date, Cloonan and the UC continued their online communications. In several different emails, Cloonan discussed his fantasies about sexual activities with children. At 5:33 p.m., Cloonan typed “Society is coming down so hard on ‘child molesters’ etc now, we are in danger everyday as lovers of children are not seen as different from those who hurt and kill them.”
A search warrant was issued for Cloonan’s residence on March 12, 2014. That evening, FBI agents and Jacksonville Sheriff’s Office (JSO) personnel executed the warrant, at which time Cloonan came out of the residence holding a smartphone. He was placed under arrest. A preliminary analysis of Cloonan’s smartphone revealed that it contained at least 85 images of child pornography, mostly depicting infants and toddlers. Two of the pornographic images were of the infant child that Cloonan had previously taken and sent to the UC by email. Additional images depicting adults performing sexual acts on infants were also found on the phone.
This case was investigated by the Federal Bureau of Investigation in Jacksonville and Washington, D.C., the Jacksonville Sheriff’s Office, and the District of Columbia Metropolitan Police Department. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
DO NOT REPLY TO THIS MESSAGE. IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE UNITED STATES ATTORNEY’S OFFICE AT 813-274-6000.
Insurance Business Owner Convicted of Tax FraudRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury yesterday found Luis Pomales guilty of filing fraudulent claims with the Internal Revenue Service (IRS). Pomales faces a maximum penalty of 5 years in federal prison. His sentencing hearing is scheduled for October 6, 2014.
Pomales was indicted on March 12, 2014.
According to testimony and evidence presented at trial, Pomales filed a false claim for a tax refund for the 2008 tax year. On April 15, 2009, Pomales submitted a 2008 IRS Form 1040 U.S. Individual Income Tax Return, with two Forms 1099-OID claiming interest income that was never earned. The fraudulent tax return and the Forms 1099-OID reflected $271,650 of taxable interest and $271,640 of federal withholding, which caused the IRS to issue a refund check for $196,872, an amount to which Pomales was not entitled.
Pomales deposited the United States Treasury check for $196,872 into an account at a local bank on June 22, 2009 and spent approximately $170,000 of the proceeds in the following six months.
This case was investigated by the Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorney E. Jackson Boggs Jr.DO NOT REPLY TO THIS MESSAGE. IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE UNITED STATES ATTORNEY’S OFFICE AT 813-274-6000.
Illinois Man Sentenced for Smuggling Counterfeit Goods and Drugs into the U.S.<br />Read the Press Release
An Illinois man, who previously pleaded guilty to trafficking in counterfeit goods and introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act, was sentenced today to serve 41 months in prison.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson for the Southern District of Texas and Special Agent in Charge Brian Moskowitz of Homeland Security Investigations (HSI) made the announcement.
Fayez Al-Jabri, 45, of Chicago, Illinois, was sentenced by U.S. District Court Judge Nancy F. Atlas in the Southern District of Texas. In addition to his prison term, Al-Jabri will serve three years of supervised release and ordered to pay $15,066 in restitution and forfeit $47,750.
According to court documents, Al-Jabri conspired to smuggle more than 26,000 counterfeit Viagra tablets from China into the United States for further distribution. As part of that conspiracy, between July 2011 and October 2012, Al-Jabri and his co-conspirator shipped thousands of counterfeit Viagra tablets from Chicago to an undercover agent in Houston, Texas. HSI submitted all of the tablets seized during the investigation to both the U.S. Food and Drug Administration (FDA) and Pfizer, Viagra’s manufacturer, for analysis. Both the FDA and Pfizer identified the tablets as counterfeit and misbranded Viagra.
Al-Jabri and Jamal Khattab, 49, of Katy, Texas, were indicted on Aug. 22, 2012. On March 21, 2014, Al-Jabri pleaded guilty to one count of conspiracy to traffic in counterfeit goods, to introduce misbranded prescription drugs into interstate commerce and to import such goods contrary to U.S. law; one count of trafficking in counterfeit goods; and one count of introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act. Khattab pleaded guilty on Dec. 3, 2013, to the same charges, and his sentencing is scheduled for Aug. 14, 2014.
This matter was investigated by HSI, the FDA’s Office of Criminal Investigations, the Department of State - Diplomatic Security Service and police departments in Houston and Chicago. The case is being prosecuted by Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Kebharu Smith and Jennifer Lowery of the Southern District of Texas.Illinois Man Sentenced for Trafficking Counterfeit Goods and Drugs into the U.S.Read the Press Release
HOUSTON - An Illinois man, who previously pleaded guilty to trafficking in counterfeit goods and introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act, was sentenced today to serve 41 months in prison.
U.S. Attorney Kenneth Magidson, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Brian Moskowitz of Homeland Security Investigations (HSI) made the announcement.
Fayez Al-Jabri, 45, of Chicago, Ill., was sentenced by U.S. District Judge Nancy F. Atlas. In addition to his prison term, Al-Jabri will serve three years of supervised release and must pay $15,066.92 in restitution. On March 21, 2014, Al-Jabri pleaded guilty to one count of conspiracy to traffic in counterfeit goods, to introduce misbranded prescription drugs into interstate commerce and to import such goods contrary to U.S. law; one count of trafficking in counterfeit goods; and one count of introducing counterfeit drugs into interstate commerce in violation of the Food, Drug and Cosmetic Act.
Al-Jabri was indicted on Aug. 22, 2012, along with one other individual, Jamal Khattab, 49, of Katy, for their respective roles in the conspiracy. Khattab pleaded guilty on Dec. 3, 2013, to the same charges, and his sentencing is scheduled for Aug. 14, 2014. According to court documents, Al-Jabri conspired to traffic in more than 26,000 counterfeit Viagra tablets over the course of the conspiracy, including the shipping of thousands of counterfeit Viagra tablets from Chicago to an undercover agent in Houston from July 2011 through October 2012. HSI submitted all of the tablets seized during the investigation to both the U.S. Food and Drug Administration (FDA) and Pfizer, Viagra’s manufacturer, for analysis. Both the FDA and Pfizer identified the tablets as counterfeit and misbranded Viagra.
This matter was investigated by HSI, the FDA’s Office of Criminal Investigations, Department of State - Diplomatic Security Service and police departments in Houston and Chicago. The case is being prosecuted by Assistant U.S. Attorneys Kebharu Smith and Jennifer Lowery and Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section.
Illegal Alien with Assault Style Shotgun Sentenced to Almost Three Years in PrisonRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that JUAN FLORES-FLORES, also known as Luis Carlos Flores and Luis Carlos Valdez, age 30, of Mexico, was sentenced this morning by Chief U.S. District Judge Brian A. Jackson to thirty-three (33) months in prison for being an illegal alien in possession of an assault style shotgun.
Today’s sentence stems from a burglary investigation by the Baton Rouge City Police Department on January 11, 2014. While investigating a burglary complaint, the police identified the defendant’s vehicle as matching the description of a vehicle seen in the vicinity of two reported burglaries. Police stopped the vehicle, observed the assault style shotgun in plain view, and arrested the defendant. The shotgun had been reported stolen from a burglarized pawn shop. The defendant, a resident of Mexico, was illegally in the United States, having been previously removed from this country on at least three prior occasions.
U.S. Attorney Green stated: “This office will continue to work with our federal, state, and local partners to remove illegal guns from our streets.”
This matter was investigated by U.S. Immigration and Customs Enforcement (ICE), through their Baton Rouge Enforcement and Removal Operations Office, and the Baton Rouge City Police Department. The case is being prosecuted by Assistant United States Attorney Lyman E. Thornton III.
Hummelstown Man Charged Federally with Illegal Possession of FirearmRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced today that Devonte Betts, 20, of Hummelstown, Pennsylvania was indicted by a federal grand jury in Harrisburg. The indictment charges Betts with Possession of a Firearm by a Convicted Felon, Possession of a Firearm in furtherance of Drug Trafficking, and two counts of Possession With Intent to Distribute a Controlled Substance.
According to United States Attorney Peter Smith, the charges against Betts are a result of allegations that Betts was in the vicinity of 13th and Market Streets, Harrisburg, on June 6, 2014, in possession of two firearms, as well as heroin and crack cocaine.
If convicted, Betts faces a statutory maximum of life imprisonment and a mandatory minimum of five years’ imprisonment.
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.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Harrisburg Bureau of Police as part of the ongoing cooperative effort to combat violent crime in the City. This case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
Hoboken Woman Sentenced to 57 Months in Prison for Embezzling over $400, 000 from EmployerRead the Press Release
WAYCROSS, GA – Angela Diane Griffis, 46, of Hoboken, Georgia, was sentenced last week to 57 months in prison by United States District Court Chief Judge Lisa Godbey Wood after earlier pleading guilty to embezzling over $400,000 from her employer.
According to evidence presented at the guilty plea and sentencing hearings, Griffis was employed as the office manager of a pediatric medical practice group in Waycross, Georgia. Over the course of nearly six years, Griffis schemed to embezzle from her employer by preparing fraudulent checks and electronic transfers for her own benefit. To cover up the scheme, Griffis made fraudulent entries in her employer’s accounting records to make it appear as if the fraudulent expenses were legitimate when, in fact, they were not. The stolen money was used to finance Griffis’s lavish lifestyle, including paying for numerous vacations, shopping sprees, and other personal expenses. As part of the sentence, Griffis was ordered to pay restitution in the amount of $406,545.26 to the victims.
United States Attorney Edward Tarver stated, “Protecting our community from financial fraud and economic crimes, whether occurring in the public or private sector, is a top priority for this Office. Griffis’s embezzlement scheme inflicted upon her employer and the community an unnecessary harm well beyond the direct financial impact. This United States Attorney’s Office and its law enforcement partners will continue to vigorously investigate and prosecute financial crimes.”
The case was jointly investigated by the FBI and the Waycross Police Department, Criminal Investigations Section. Assistant United States Attorney T. Shane Mayes prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Harrisburg Man Charged with Drug Trafficking OffensesRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced today that Nicholas Rivera, 40, of Harrisburg, Pennsylvania, was indicted by a federal grand jury in Harrisburg, Pennsylvania. The indictment charges Rivera with five counts of Distribution or Possession with Intent to Distribute a Controlled Substance.
According to United States Attorney Peter Smith, the charges against Rivera are a result of allegations that Rivera was selling cocaine and heroin in Harrisburg from March 2014 through May 2014.
If convicted, Rivera faces a statutory maximum 20 years’ imprisonment.
This case is being investigated by the Drug Enforcement Administration, the Pennsylvania State Police and the Dauphin County Drug Task Force. This case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
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.
Hallandale Resident Pleads Guilty and Is Sentenced in Attempted Extortion, Bank Robbery and Product Tampering Cases to 188 Months in PrisonRead 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, Paul Wysopal, Special Agent in Charge, Federal Bureau of Investigation, Tampa Field Office, Aaron T. Ford, Special Agent in Charge, Federal Bureau of Investigation, New Jersey Field Office, and Scott Israel, Sheriff, Broward County Sheriff's Office (BSO), announce that defendant Brian Henderson, 50, of Hallandale, pled guilty and was sentenced before U.S. District Judge Frederico A. Moreno in three separate cases involving attempted extortion, bank robbery and product tampering. Henderson was sentenced to 188 months in prison followed by three years of supervised release. The sentences imposed, as detailed below, are to run concurrently. These cases are the result of a joint investigation conducted by the FBI Miami Field Office, the Tampa Field Office and the New Jersey Field Office.
Brian Henderson pled guilty in the following cases:
Attempted Extortion Case: 14-CR-60044-Scola
Henderson pled guilty to ten counts of an 11-count indictment that charged Henderson with: attempted interference with commerce by extortion, in violation of Title 18, United States Code, Section 1951(a) (Count 1); using an instrument of interstate and foreign commerce to make a threat to destroy property by explosives, in violation of Title 18, United States Code, Section 844(e) (Counts 2, 4, 6 and 8); transmitting a communication in interstate and foreign commerce to extort money by damaging and destroying buildings, in violation of Title 18, United States Code, Section 875(d) (Counts 3, 5, 7 and 9); and attempting to destroy property by explosives, in violation of Title 18, United States Code, Section 844(i) (Count 10). According to the indictment, Henderson attempted to extort money from Publix Super Markets, Inc. (Publix), by the use of actual and threatened force, violence and fear of economic loss. As set forth in the factual statement for the guilty pleas, Henderson attempted to obtain money from Publix by sending several threatening emails to Publix in which he threatened to damage Publix stores through the use of explosive devices. In furtherance of his attempt to extort money from Publix, Henderson placed, and caused to be detonated, a pipe bomb at the Publix Super Market located in Dania.
Henderson was sentenced to 188 months in prison, followed by three years of supervised release on Counts 1 and 10; 120 months in prison, followed by three years of supervised release on Counts 2, 4, 6 and 8; and to 24 months in prison, followed by one year of supervised release on Counts 3, 5, 7 and 9.
Bank Robbery Case: 14-CR-60004-Scola
Henderson pled guilty to an indictment that charged him with bank robbery, in violation of Title 18, United States Code, Section 2113(a). According to the factual statement, Henderson presented a demand note to Chase Bank in which he threatened to detonate a bomb around his neck if the teller did not give him $40,000 in $100 bills. Law enforcement officers confronted Henderson when he departed the bank with the money and subsequently arrested him. Henderson was sentenced to 188 months in prison, followed by three years of supervised release.
Product Tampering Case: 14-CR-60154-Scola
Henderson pled guilty to an information that charged him with threatening to tamper with a consumer product with reckless disregard for the risk that another person would be placed in danger of death or bodily injury, in violation of Title 18, United States Code, Section 1365(d). According to the factual statement, Henderson emailed an extortionate demand to a company in New Jersey in which he threatened to put poison in 20 containers of a product distributed by the company and place those containers on the shelves of 20 different stores unless he was paid a sum of money. Henderson was sentenced to 60 months in prison, followed by three years of supervised release.
Case No. 14-CR-60154-Scola was originally prosecuted and investigated by the United States Attorney’s Office for the District of New Jersey, under the direction of U.S. Attorney Paul J. Fishman, and special agents of the FBI, under the Direction of Special Agent in Charge Aaron T. Ford, Newark Division, prior to being consolidated with other cases in the Southern District of Florida for purposes of Henderson’s guilty plea.
Mr. Ferrer commended the investigative efforts of the FBI Miami Field Office, Tampa Field Office and the New Jersey Field Office, and the BSO Bomb Squad. The case is being prosecuted by Assistant United States Attorney Michael Walleisa.
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.
Government Files Suit Against Missouri Neurosurgeon and Medical Device Supplier for Violations of the False Claims Act and Anti-Kickback StatuteRead the Press Release
WASHINGTON – The Justice Department announced today that it has filed a complaint against Midwest Neurosurgeons L.L.C. and its owner, Dr. Sanjay Fonn, M.D., and DS Medical L.L.C. and its owner, Deborah Seeger, for allegedly violating the Medicare Anti-Kickback Statute and the False Claims Act by conspiring to solicit and receive commissions from medical device manufacturers related to the purchase of spinal implants and supplies used during spinal fusion surgeries performed by Dr. Fonn.
“The Department of Justice remains committed to protecting federal healthcare programs from unscrupulous providers who seek to take advantage of those programs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We are particularly concerned about schemes such as this one that not only waste taxpayer money but also pose a potential risk to patient safety.”
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federal healthcare programs. It is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based upon the best interests of the patient.
The government’s complaint alleges that Dr. Fonn, 46, and his fiancée, Ms. Seeger, 47, both of Cape Girardeau, Missouri, incorporated D.S. Medical L.L.C. to serve as the distributor of medical devices and supplies to Dr. Fonn and his neurosurgery practice, Midwest Neurosurgeons L.L.C., in Missouri. Through D.S. Medical, Ms. Seeger demanded and was paid exorbitant commissions by medical device manufacturers for medical devices and supplies purchased by the hospital where Dr. Fonn performed spinal fusion surgeries. The hospital’s purchases were based on Dr. Fonn’s decision to use those devices and supplies during operations he performed. According to the complaint, once DS Medical started operating, Dr. Fonn altered the way he practiced medicine, generally using more spinal implants in each of his surgeries while performing more surgeries than he typically performed before or after DS Medical was operating. The commissions paid to D.S. Medical and Ms. Seeger by the manufacturers were allegedly used to purchase a house where Dr. Fonn and Seeger cohabited, a boat, an airplane and various home improvements, which they shared.
The allegations in the U.S. complaint were originally brought in a lawsuit filed under the qui tam provisions of the False Claims Act by several physicians, a spinal implant sales person, and a former employee of Midwest Neurosurgeons. Under the False Claims Act, a person that submits false or fraudulent claims to the government is liable for three times the government’s damages, plus civil penalties for each false claim. The act permits private citizens to sue on behalf of the government and share in any recovery. The United States is entitled to intervene in such a lawsuit, as it has done in this case.
The Commercial Litigation Branch of the Justice Department’s Civil Division, together with the U.S. Attorney’s Office for the Eastern District of Missouri, filed this case on behalf of the United States with the assistance of the Department of Health and Human Services Office of Inspector General and the FBI.
The qui tam case is captioned United States ex rel. Paul Cairns, Terry Cleaver, M.D., Kyle Colle, M.D., Scott Gibbs, M.D., Paul Tolentino, M.D., Kevin Vaught, M.D., and Daniel Henson v. D.S. Medical, L.L.C., Midwest Neurosurgeons, L.L.C., Sonjay Fonn, M.D., and Deborah Seeger, No. 1:12 CV 00004 SNLJ (E.D. Mo.). The complaint filed by the government contains allegations only; there has been no determination of liability.
Garland TX Man Sentenced to 70 Months for Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that KENNETH TODD PUCKETT, age 40, of Garland, Texas, was sentenced to 70 months imprisonment, followed by 3 years of supervised release for Possession with Intent to Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C).
The charge is a result from an investigation by the Choctaw Nation Tribal Police and the Bureau of Indian Affairs and the Drug Enforcement Administration. The defendant pled guilty in January 2014.
The Information alleged that on or about September 4, 2013, within the Eastern District of Oklahoma, the defendant did knowingly and intentionally possess with intent to distribute a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Four Hartford Men Indicted as Part of Project Longevity InvestigationRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury in Hartford has returned indictments against four Hartford residents allegedly involved in drug trafficking and associated criminal activity in the Garden Street area of Hartford known as the “Chicken Coop.” The indictments were returned on July 16, 2014.
KEITH SHEPARD, also known as “Pretty,” 23, is charged with four counts of distributing crack cocaine and one count of possession of a firearm by a convicted felon. The indictment alleges that on four occasions in June 2014, SHEPARD possessed and distributed crack cocaine. The indictment further alleges that on June 20, 2014, SHEPARD, who previously had been convicted of multiple felony offenses, possessed a .380 caliber Taurus pistol. He has been in custody since his arrest on June 23, 2014.
GARY PIERCE, also known as “GP,” 27, is charged with possession of a firearm by a convicted felon. The indictment alleges that on May 11, 2014, PIERCE, who previously had been convicted of multiple felony offenses, possessed a .45 caliber Taurus pistol. He has been in custody since his arrest on that date.
COURTNEY GRAVELY, also known as “Ceasar” and “Ceas,” 29, is charged with six counts of distributing crack cocaine and one count of possessing crack cocaine with intent to distribute it. The indictment alleges that on six occasions in June and July 2014, GRAVELY possessed and distributed crack cocaine, and, on July 9, 2014, he possessed with intent to distribute crack cocaine. He has been in custody since his arrest on July 9.
JAMES DUDLEY, also known as “Pooka,” 28, is charged with five counts of distributing crack cocaine, one count of maintaining a drug distribution premises, one count of being a felon in possession of firearms, and one count of possessing firearms in furtherance of drug trafficking crimes. The indictment alleges that in June and July 2014, DUDLEY manufactured crack cocaine in an apartment at 2505 Main Street in Hartford, and then distributed the drug on multiple occasions. The indictment further alleges that on July 9, 2014, DUDLEY, who previously had been convicted of multiple felony offenses, possessed a .380 caliber Taurus pistol and a .22 caliber Ruger rifle. He has been in custody since his arrest on July 9.
This prosecution stems from Project Longevity, a comprehensive initiative to reduce gun violence in Connecticut’s major cities. Through Project Longevity, community members and law enforcement directly engage with members of groups that are prone to commit violence. A critical component of the Project Longevity strategy is the “call-in,” a face-to-face meeting where Project Longevity partners engage group members and deliver a community message against violence, a law enforcement message about the consequences of further violence and an offer of help for those who want it. The alleged criminal activity engaged in by the four defendants occurred after a call-in that was held on April 1, 2014, and was attended by associates of the defendants.
U.S. Attorney Daly stated that the investigation is ongoing.
The charge of possession with intent to distribute, and distribution of crack cocaine carries a maximum term of imprisonment of 20 years and a fine of up to $1 million.
With respect to the firearms counts, it is against federal law for a person previously convicted of a felony offense to possess a firearm that has moved in interstate or foreign commerce. The charge of possession of a firearm by a previously convicted felon carries a maximum term of imprisonment of 10 years and a fine of up to $250,000.
DUDLEY faces an additional five-year consecutive term of incarceration if convicted of possessing firearms in furtherance of drug trafficking. He also faces a maximum term of imprisonment of 20 years and a fine of up to $500,000 if convicted of maintaining a drug distribution premises.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Hartford Police Department and the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Michael J. Gustafson.
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[email protected]Four Convicted in Sex Trafficking, Harboring and Money Laundering InvestigationRead the Press Release
HOUSTON – Four people have entered guilty pleas to conspiracy to harbor illegal aliens relating to their roles in a sex trafficking, harboring and money laundering organization, announced United States Attorney Kenneth Magidson.
Abel Medeles aka Chito, 64, and Odelia Hernandez, 45, both of Houston, entered their respective pleas this morning before U.S. District Judge Ewing Werlein Jr. as did Eduardo Guzman Gonzales aka Miguel Rojas or El Pantera, 30, Alberto Mendez Flores aka Ardilla, 25, both Mexican citizens illegally residing in the U.S.
As part of their pleas, all admitted they worked for Las Palmas II, a cantina located in Houston. They all knew the cantina concealed, harbored and shielded illegal aliens who worked there from detection by law enforcement and that the owners were profiting from such concealment. As part of their employment, they aided in the operation of the business and their conduct substantially facilitated the concealment, harboring and shielding of the employees and patrons of the Las Palmas II, whom they all knew were illegally in the U.S.
Medeles operated the Las Palmas II parking lot. It was part of his job to notify his co-conspirators inside the cantina of any law enforcement presence he observed in order for his co-conspirators to be able to conceal from law enforcement the illegal activities in the Las Palmas II. Similarly, on at least one occasion, Hernandez told co-conspirators to lock the doors when she realized law enforcement was coming.
Gonzales and Flores managed the cantina. They paid the owners $20,000 each week out of the money received from the operation of the Las Palmas II and kept all the monies received in excess of that amount.
The cases against the others charged in relation to the investigation remain pending. They are considered innocent unless and until proven guilty through due process of law.
Judge Werlein has set sentencing for Medeles and Hernandez on Oct. 10, 2014, while Gonzales and Flores will be sentenced the following week. At that time, each faces up to 10 years in federal prison and a possible $250,000 maximum fine. They all will remain in custody pending that hearing.
The three-year investigation was conducted as part of the Human Trafficking Rescue Alliance (HTRA) and includes FBI, Harris County Sheriff?s Office, Internal Revenue Service – Criminal Investigation, Homeland Security Investigations, Texas Alcoholic Beverage Commission, Department of State, Texas Department of Public Safety and the Houston Police Department.
Assistant United States Attorneys Ruben R. Perez and Joe Magliolo are prosecuting.
Former Sheriff Ordered to PrisonRead the Press Release
McALLEN, Texas - Guadalupe Trevino, aka Lupe Trevino, has been sentenced to federal prison following his conviction of conspiracy to commit money laundering, announced U.S. Attorney Kenneth Magidson. Trevino, 64, of McAllen, was the former sheriff of Hidalgo County and pleaded guilty April 14, 2014.
“No one is above the law,” said Magidson. “Those entrusted with protecting the public safety have a specific duty to guard against corruption. When they become crooked themselves, the interests of the people demand full accounting for their illegal activities.”
Calling this day a “sad” one for Hidalgo County, U.S. District Judge Micaela Alvarez upwardly departed from the recommended guidelines and handed Trevino a 60-month term of imprisonment. He was also ordered to pay a $60,000 fine and will serve a two-year-term of supervised release following completion of the prison sentence.
“The sentencing of the former Hidalgo County sheriff is the culmination of a long-term investigation into corruption and the violation of public trust,” said Special Agent in Charge Janice Ayala of Homeland Security Investigations (HSI) in San Antonio. “While the local community mourns this violation, they're now able to put this chapter behind them.”
Jose A. Padilla, of Weslaco, a former deputy commander with the Hidalgo County Sheriff’s Office who served under the leadership of Trevino pleaded guilty to receiving a bribe, in a separate, but related case. Nine others, including drug trafficker Tomas Reyes Gonzalez aka “El Gallo,” were convicted in relation to the underlying narcotics/money laundering conspiracy. They will all be sentenced Sept. 18, 2014, by U.S District Judge Randy Crane.
The investigation revealed that from 2007 to 2013, Reyes Gonzalez headed a drug trafficking organization responsible for the distribution of thousands of kilograms of marijuana and hundreds of kilograms of cocaine. The narcotics were transported from the Rio Grande Valley to Arkansas, Tennessee, Alabama and Georgia. Reyes Gonzalez used the resulting drug proceeds to purchase properties.
Trevino admitted he received cash contributions for his election campaign through Padilla from Reyes Gonzalez, acknowledging he accepted the money knowing it was from illegal activities. At the time of his guilty plea, Padilla also admitted he received cash from Reyes Gonzalez in exchange for providing information to him related to ongoing law enforcement activities.
Trevino admitted he accepted the monies directly and through others as donations to assist with his 2012 election campaign. Some of the monies received were subsequently deposited into bank accounts Trevino controlled and were comingled with other funds. During and after the transactions, Trevino and others acted to disguise and conceal the nature, location, source, ownership and control of the currency by filing false Candidate/Officeholder Campaign Finance Reports and producing other documents.
Trevino’s former chief of staff and campaign treasurer, Maria Patricia Medina, pleaded guilty to misprision of a felony, admitting she assisted Trevino in the concealment of the donations by falsifying election records. She will be sentenced July 23, 2014, by Chief U.S. District Judge Ricardo Hinojosa.
The overall investigation was conducted by Homeland Security Investigations, Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation and Texas Department of Public Safety, Rangers Division. Assistant United States Attorneys James Sturgis and Anibal Alaniz prosecuted the case.Former Pierce County Sheriff Sentenced to 93 Months in Prison for Providing Protection to Drug TraffickersRead the Press Release
WAYCROSS, GA – Randy Strickland, 55, a former Pierce County, Georgia Deputy Sheriff, was sentenced yesterday by United States District Court Judge William T. Moore, Jr. to 93 months in federal prison for providing protection for drug traffickers.
According to evidence presented during Strickland’s guilty plea and sentencing hearings, Strickland agreed to act as “security” for individuals he believed were dealing meth, by acting as the lookout. Strickland’s drug activities occurred while he was in uniform and armed, and while he was driving his police vehicle. After receiving information about Strickland’s apparent criminal activities, Pierce County Sheriff Ramsey Bennett immediately requested federal law enforcement assistance. As a result, Strickland’s last “protection detail” was for a confidential informant and under the watchful eyes of several federal agents. On that occasion, Strickland agreed to act as the lookout for who he believed to a drug dealer selling ounces of methamphetamine. Shortly after receiving his charged fee of $100, which at Strickland’s direction was placed in a potato chip bag on the side of a road, Strickland was arrested by federal authorities.
United States Attorney Edward Tarver stated, “Instead of protecting citizens, Strickland chose to serve drug dealers. His actions tarnished the badge and the community’s trust. While the public should be reminded that the vast majority of law enforcement officers live by their oaths, the public should also know that the U. S. Attorney’s Office will prosecute criminals dressed in police clothing.”
ATF Special Agent in Charge Christopher Shaefer said, “The criminal conduct of former Pierce County Deputy Sheriff Randy Strickland is unconscionable and unthinkable for those serving faithfully within the criminal justice community. Today’s sentencing of Strickland will serve as notice to others that this conduct will not be tolerated and ATF will use all resources to reduce violent crime.”
“Mr. Strickland compromised his integrity and the oath he took to uphold Georgia laws and protect members of society, not to mention putting other law enforcement officers in danger, through his corrupt scheme to provide security for drug traffickers,” said Ryan L. Spradlin, acting special agent in charge of U. S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) Atlanta. “Thanks to the hard work of HSI special agents and our partners at the ATF, FBI, Pierce County Sheriff’s Office, and the U. S. Attorney's Office, Strickland is being held accountable for this betrayal of the public’s trust.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “This case, while centering on a corrupt law enforcement officer, illustrates how the law enforcement community responds swiftly to such breaches of the public trust. The FBI will continue to work with those law enforcement partners in ensuring that the public’s trust in the criminal justice system is well founded and that those officers violating their oaths of office are identified and held accountable.”
Pierce County Sheriff Ramsey Bennett commented, “I’m pleased that justice was served and Mr. Strickland will pay his debt to society for the crimes he committed and his breach of trust to the people he swore to serve.”
This case was investigated by ATF, HSI, FBI and local law enforcement. Assistant United States Attorneys Greg Gilluly and Tania Groover prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United states Attorney James D. Durham at (912) 201-2547.Former New Orleans Police Officers Sentenced in Conspiracy to Commit Theft and Wire FraudRead the Press Release
U.S. Attorney Kenneth Allen Polite, Jr. announced today that RAFAEL DOBARD, age 39, and QUINCY JONES, age 33, both former New Orleans Police Department (“NOPD”) narcotics detectives, were sentenced by U.S. District Court Judge Nannette Jolivette Brown. DOBARD and JONES were each sentenced to eighteen months incarceration to be followed by three years of supervised release. Additionally, DOBARD and JONES were ordered to pay restitution to the City of New Orleans in the amount of $18,484.44 and $19,064.25, respectively.
On February 14, 2014, DOBARD and JONES pled guilty to conspiracy to commit theft from programs receiving federal funds and conspiracy to commit wire fraud. According to court documents, both defendants admitted that they conspired to enrich themselves and others by obtaining NOPD confidential informant funds by fraud and by corruptly making payments to other officers in their unit. They also admitted that they conspired to commit wire fraud by submitting NOPD timesheets that indicated they were working on duty for the NOPD when, in fact, they were working at non-NOPD detail jobs.
“The U.S. Attorney’s Office is committed to ensuring that no one is above the law,” stated U.S. Attorney Polite. “These officers, both of whom swore to uphold and enforce our laws, instead broke the law by stealing public funds.”
"Few breaches of the public trust rival law enforcement corruption so the FBI and the NOPD's Public Integrity Bureau will continue to ensure that all such matters receive our utmost attention with extensive investigative resources to match," stated Michael Anderson, Special Agent in Charge, Federal Bureau of Investigation, New Orleans Field Division.
The case was investigated jointly by the Federal Bureau of Investigation and the NOPD Public Integrity Bureau. The case is being prosecuted by Assistant United States Attorney Mark A. Miller and Special Assistant United States Attorney Michael B. Redmann, who is detailed to the U.S. Attorney’s Office from the Orleans Parish District Attorney’s Office.
Former MDC Corrections Officer Faces Federal Drug Trafficking ChargeRead the Press Release
ALBUQUERQUE – Lucas Segura, 22, of Los Lunas, N.M., made his initial appearance in federal court in Albuquerque, N.M., this morning on an indictment charging him with a heroin trafficking offense. Segura remains custody pending a detention hearing scheduled for July 18, 2014.
The indictment alleges that Segura unlawfully possessed heroin with intent to distribute in Bernalillo County, N.M., on April 1, 2014. At the time of the offense charged, Segura was a corrections officer at the Bernalillo County Metropolitan Detention Center (MDC).
According to state court filings, Segura was arrested on April 1, 2014, on related state charges of trafficking controlled substances, bringing contraband into a jail, and conspiracy. Segura was on conditions of release from the state charges when he surrendered himself to the FBI earlier today.
If convicted on the offense charged in the federal indictment, Segura faces a maximum statutory penalty of twenty years in federal prison. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the FBI, the Bernalillo County Sheriff’s Office, and MDC’s Threat Security Group with assistance from the 2nd Judicial District Attorney’s Office, and is being prosecuted by Assistant U.S. Attorney Reeve L. Swainston.
Former Florida Resident Sentenced on Fraud ChargesRead the Press Release
Boston – A former Florida resident who defrauded victims across the country, including in Massachusetts, was sentenced in U.S. District Court in Boston yesterday for his role in an advance-fee scheme.
John Condo, 62 of formerly of Clearwater, Fla., was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 90 months in prison and three years of supervised release. In March 2014, following his extradition from Italy, Condo pleaded guilty to conspiracy to commit wire fraud and 14 counts of wire fraud.
Between 2007 and 2011, Condo participated in a conspiracy to defraud developers who were seeking financing for large-scale alternative energy and commercial projects by pretending to be a representative of a multi-billion dollar fund located in Luxembourg. Condo and his co-conspirators convinced developers to give deposits in amounts between $300,000 and $1 million to this fake fund with the promise that the deposit would be fully refundable. Condo and his co-conspirators spent the developers' deposit money, and the fake fund never financed any projects. In perpetrating this scheme, the defendant continually reassured developers about safety of their deposits even as the deposits were being spent.
Over $7 million was stolen from victims, including $600,000 which had originally been provided by the West Springfield financial adviser Sean Mansfield. Mansfield had stolen the funds from his clients. In 2011, Mansfield was sentenced to 60 months in prison for defrauding his clients.
Condo’s co-defendants, Evripides Georgiadis, Frank Barecich, and Michael Zanetti, have all been convicted. In June 2014, Zanetti was sentenced to 37 months in prison. Earlier this month, Barecich was sentenced to 12 months in prison. Georgiadis is awaiting sentencing.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Susan Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case was prosecuted by Alex J. Grant and Karen L. Goodwin of Ortiz’s Springfield Branch Unit.
Former Executive of French Power Company Subsidiary Pleads Guilty in Connection with Foreign Bribery SchemeRead the Press Release
A former senior executive of a subsidiary of Alstom SA, the French power and transportation company, pleaded guilty today for his participation in a scheme to pay bribes to foreign government officials.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Michael J. Gustafson of the District of Connecticut and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
William Pomponi, a former vice president of regional sales at Alstom Power Inc., the Connecticut-based power subsidiary of Alstom, pleaded guilty today in federal court in New Haven, Connecticut, to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) in connection with the awarding of the Tarahan power project in Indonesia. Pomponi was charged in a second superseding indictment on July 30, 2013. Pomponi is the fourth defendant to plead guilty to charges stemming from this investigation. Frederic Pierucci, the vice president of global boiler sales at Alstom, pleaded guilty on July 29, 2013, to one count of conspiracy to violate the FCPA and one count of violating the FCPA; and, David Rothschild, a former vice president of regional sales at Alstom Power Inc., pleaded guilty to conspiring to violate the FCPA on Nov. 2, 2012. Marubeni Corporation, Alstom’s consortium partner on the Tarahan project, pleaded guilty on March 19, 2014, to one count of conspiracy to violate the FCPA and seven counts of violating the FCPA, and was sentenced to pay a criminal fine of $88 million. FCPA and money laundering charges remain pending against Lawrence Hoskins, the former senior vice president for the Asia region for Alstom, and trial is scheduled for June 2, 2015.
“Three Alstom corporate executives and Marubeni, a major Japanese corporation, have now pleaded guilty to a seven-year scheme to pay bribes to Indonesian officials to secure a $118 million power contract,” said Assistant Attorney General Caldwell. “The Criminal Division of the Department of Justice will follow evidence of corruption wherever it leads, including into corporate boardrooms and corner offices. As this case demonstrates, we will hold both companies and their executives responsible for criminal conduct.”
According to the court filings, the defendants, together with others, paid bribes to officials in Indonesia, including a member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia, in exchange for assistance in securing a $118 million contract, known as the Tarahan project, to provide power-related services for the citizens of Indonesia from facilities in Tarahan. To conceal the bribes, the defendants retained two consultants purportedly to provide legitimate consulting services on behalf of Alstom and Marubeni in connection with the Tarahan project. In reality, the primary purpose for hiring the consultants was to use the consultants to pay bribes to Indonesian officials.
The first consultant retained by the defendants allegedly received hundreds of thousands of dollars in his Maryland bank account to be used to bribe the member of Parliament. The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official. According to court documents, emails between Hoskins, Pomponi, Pierucci, Rothschild, and their co-conspirators discuss in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project.
However, in the fall of 2003, Hoskins, Pomponi, Pierucci and others determined that the first consultant was not effectively bribing key officials at PLN. One email between Alstom employees described PLN officials’ “concern that if we have won the job, whether their rewards will still be satisfactory or this agent only give them pocket money and disappear.” In another email, an employee at Alstom’s subsidiary in Indonesia sent an email to Hoskins asserting that the first consultant “has no grip on the PLN Tender team at all” and “is more or less similar to [a] cashier which I feel we pay too much.”
As a result, the co-conspirators retained a second consultant to bribe PLN officials, according to the court documents. The co-conspirators deviated from Alstom’s usual practice of paying consultants on a pro-rata basis in order to make a much larger up-front payment to the second consultant so that the consultant could “get the right influence.” An employee at Alstom’s subsidiary in Indonesia sent an email to Hoskins, Pomponi, Pierucci and others asking them to finalize the consultancy agreement with the front-loaded payments but stated that in the meantime the employee would give his word to a high-level official at PLN, according to the charges. The defendants and their co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials.
An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad, with assistance from the Meriden, Connecticut, Resident Agency of the FBI. Significant assistance was provided by the Criminal Division’s Office of International Affairs, and the department has also received substantial assistance from its law enforcement counterparts in Indonesia, Switzerland and Singapore and greatly appreciates their cooperation. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.Former Executive of French Power Company Subsidiary Pleads Guilty in Connection with Foreign Bribery SchemeRead the Press Release
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WASHINGTON - A former senior executive of a subsidiary of Alstom SA, the French power and transportation company, pleaded guilty today for his participation in a scheme to pay bribes to foreign government officials.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Michael J. Gustafson of the District of Connecticut and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
William Pomponi, a former vice president of regional sales at Alstom Power Inc., the Connecticut-based power subsidiary of Alstom, pleaded guilty today in federal court in New Haven, Connecticut, to a criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) in connection with the awarding of the Tarahan power project in Indonesia. Pomponi was charged in a second superseding indictment on July 30, 2013. Pomponi is the fourth defendant to plead guilty to charges stemming from this investigation. Frederic Pierucci, the vice president of global boiler sales at Alstom, pleaded guilty on July 29, 2013, to one count of conspiracy to violate the FCPA and one count of violating the FCPA; and, David Rothschild, a former vice president of regional sales at Alstom Power Inc., pleaded guilty to conspiring to violate the FCPA on Nov. 2, 2012. Marubeni Corporation, Alstom’s consortium partner on the Tarahan project, pleaded guilty on March 19, 2014, to one count of conspiracy to violate the FCPA and seven counts of violating the FCPA, and was sentenced to pay a criminal fine of $88 million. FCPA and money laundering charges remain pending against Lawrence Hoskins, the former senior vice president for the Asia region for Alstom, and trial is scheduled for June 2, 2015.
“Three Alstom corporate executives and Marubeni, a major Japanese corporation, have now pleaded guilty to a seven-year scheme to pay bribes to Indonesian officials to secure a $118 million power contract,” said Assistant Attorney General Caldwell. “The Criminal Division of the Department of Justice will follow evidence of corruption wherever it leads, including into corporate boardrooms and corner offices. As this case demonstrates, we will hold both companies and their executives responsible for criminal conduct.”
According to the court filings, the defendants, together with others, paid bribes to officials in Indonesia, including a member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia, in exchange for assistance in securing a $118 million contract, known as the Tarahan project, to provide power-related services for the citizens of Indonesia from facilities in Tarahan. To conceal the bribes, the defendants retained two consultants purportedly to provide legitimate consulting services on behalf of Alstom and Marubeni in connection with the Tarahan project. In reality, the primary purpose for hiring the consultants was to use the consultants to pay bribes to Indonesian officials.
The first consultant retained by the defendants allegedly received hundreds of thousands of dollars in his Maryland bank account to be used to bribe the member of Parliament. The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official. According to court documents, emails between Hoskins, Pomponi, Pierucci, Rothschild, and their co-conspirators discuss in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project.
However, in the fall of 2003, Hoskins, Pomponi, Pierucci and others determined that the first consultant was not effectively bribing key officials at PLN. One email between Alstom employees described PLN officials’ “concern that if we have won the job, whether their rewards will still be satisfactory or this agent only give them pocket money and disappear.” In another email, an employee at Alstom’s subsidiary in Indonesia sent an email to Hoskins asserting that the first consultant “has no grip on the PLN Tender team at all” and “is more or less similar to [a] cashier which I feel we pay too much.”
As a result, the co-conspirators retained a second consultant to bribe PLN officials, according to the court documents. The co-conspirators deviated from Alstom’s usual practice of paying consultants on a pro-rata basis in order to make a much larger up-front payment to the second consultant so that the consultant could “get the right influence.” An employee at Alstom’s subsidiary in Indonesia sent an email to Hoskins, Pomponi, Pierucci and others asking them to finalize the consultancy agreement with the front-loaded payments but stated that in the meantime the employee would give his word to a high-level official at PLN, according to the charges. The defendants and their co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials.
An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad, with assistance from the Meriden, Connecticut, Resident Agency of the FBI. Significant assistance was provided by the Criminal Division’s Office of International Affairs, and the department has also received substantial assistance from its law enforcement counterparts in Indonesia, Switzerland and Singapore and greatly appreciates their cooperation. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Florida Man Sentenced to 15 Years in Prison on Child Pornography Charges<br />Read the Press Release
Robert Eugene Revay, 79, of Oakland Park, Florida, was sentenced to serve 15 years in prison for conspiring to produce child pornography and for possession of child pornography.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida and Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) made the announcement. The sentence was imposed by U.S. District Judge Robert N. Scola of the Southern District of Florida. In addition to Revay’s prison term, he was sentenced to a life term of supervised release.
According to court documents and statements made at the plea hearing, in 2011, law enforcement initiated an investigation into an online chat group whose members traveled to engage in sex with prepubescent boys, and produced and distributed child pornography. Through the investigation, law enforcement obtained computer hard drives that belonged to two of the group’s members, Mark J. Newton and Peter Truong, who were sentenced to serve 40 years in prison and 30 years in prison, respectively, for their crimes. Forensic examination of the hard drives yielded images and videos of boys being sexually abused.
Revay was a member of that online chat group. In 1997, Revay and Truong were living together in an apartment in Germantown, Maryland, where they enticed a then-12-year-old child to come to their apartment. They sexually abused the victim on numerous occasions and took pictures and videos of the abuse.
On March 19, 2013, as part of the investigation, law enforcement officers executed a federal search warrant at Revay’s residence in Oakland Park, Florida. On Revay’s computer, law enforcement discovered child pornography in an encrypted container. Revay admitted that he had downloaded and possessed the child pornography. Revay also admitted that on previous occasions, he downloaded child pornography via the Internet.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc . For more information about Internet safety education, please visit www.justice.gov/psc and click on the “resources” tab on the left of the page.
The case was investigated by USPIS, and prosecuted by LisaMarie Freitas and Michael Grant of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Olivia Choe of the Southern District of Florida.Florida Man Sentenced to 15 Years in Prison on Child Pornography ChargesRead the Press Release
Robert Eugene Revay, 79, of Oakland Park, Florida, was sentenced to serve 15 years in prison for conspiring to produce child pornography and for possession of child pornography.
U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) made the announcement. The sentence was imposed by U.S. District Judge Robert N. Scola of the Southern District of Florida. In addition to Revay’s prison term, he was sentenced to a life term of supervised release.
According to court documents and statements made at the plea hearing, in 2011, law enforcement initiated an investigation into an online chat group whose members traveled to engage in sex with prepubescent boys, and produced and distributed child pornography. Through the investigation, law enforcement obtained computer hard drives that belonged to two of the group’s members, Mark J. Newton and Peter Truong, who were sentenced to serve 40 years in prison and 30 years in prison, respectively, for their crimes. Forensic examination of the hard drives yielded images and videos of boys being sexually abused.
Revay was a member of that online chat group. In 1997, Revay and Truong were living together in an apartment in Germantown, Maryland, where they enticed a then-12-year-old child to come to their apartment. They sexually abused the victim on numerous occasions and took pictures and videos of the abuse.
On March 19, 2013, as part of the investigation, law enforcement officers executed a federal search warrant at Revay’s residence in Oakland Park, Florida. On Revay’s computer, law enforcement discovered child pornography in an encrypted container. Revay admitted that he had downloaded and possessed the child pornography. Revay also admitted that on previous occasions, he downloaded child pornography via the Internet.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the “resources” tab on the left of the page.
The case was investigated by USPIS, and prosecuted by LisaMarie Freitas and Michael Grant of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Olivia Choe of the Southern District of Florida.
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.
Florence Man Pleads to Possession of Child PornographyRead the Press Release
Contact Person: Bill Day (803) 929-3000
Columbia, South Carolina -----United States Attorney Bill Nettles stated today that Andrew Stephen Jackson, age 44, of Florence, South Carolina has entered a guilty plea in federal court in Florence, to possession of child pornography, a violation of 18 U.S.C. § 2252A(a)(5)(B) and (b)(2) . United States District Judge R. Bryan Harwell of Florence accepted the guilty plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that Jackson was trading child pornography with an individual in Australia in October 2010. A search warrant was executed at Jackson's residence and thousands of images of child pornography were found on Jackson's computers.
Mr. Nettles stated the maximum penalty for possession of child pornography is imprisonment for 10 years and/or a fine of $250,000.
The case was investigated by agents of the FBI. Assistant United States Attorney William E Day, II of the Columbia office is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.# # #
Five Individuals Sentenced for Theft from Union FundRead the Press Release
Orlando, Florida – Senior U.S. District Judge G. Kendall Sharp yesterday sentenced five individuals for their roles in stealing from an employee benefit plan of a local union. James McCall (32, Orange City) was sentenced to 30 months in federal prison and was ordered to pay $93,405.89 in restitution. Ian Chase Dove (26, Orange City) was sentenced to 13 months in federal prison and was ordered to pay $18,662.70 in restitution. Jason Wesson (37, Orange City) was also sentenced to 13 months’ imprisonment. He was ordered to pay $19,975.32 in restitution. Michael Giesinger (36, Deltona) was sentenced to 1 year of probation, 6 months of home confinement, and was ordered to pay $20,009.62 in restitution. Shane Riley (32, Deland) was sentenced to 3 years of probation and was ordered to pay $18,374.64 in restitution. On April 23, 2014, all five pleaded guilty for their respective roles in this case.
According to court documents, Angela Deleon worked at Advance Administration, Inc. (AAI), which was the third-party administrator of an employee benefit plan for the Ironworkers Local 808. As the third-party administrator for the Ironworkers Local 808 Annuity Fund, AAI was responsible for processing members’ payment applications, paying the Fund’s bills, and speaking with union members. Deleon’s duties at AAI included data entry and the processing of payments.
Over a period of about 14 months, Deleon wrote 46 checks from the Fund, totaling over $427,000, to individuals who were not members of the Local 808 or participants in the Fund, including McCall, Dove, Wesson, Giesinger, and Riley. McCall, Dove, Wesson, Giesinger, and Riley cashed some of those checks and split some of the proceeds with Deleon.
In total, ten individuals have been charged in connection with this case. Deleon was previously sentenced to 2 years in federal prison for her participation in these crimes. Deleon was also ordered to pay $594,000 in restitution to the Ironworkers Local 808 Annuity Fund and to serve one year of supervised release. The $594,000 in restitution consists of more than $427,000 that she stole from the Fund, plus the amounts spent by the Fund to audit and reconstruct the records that were impacted by Deleon’s scheme.
Three others are scheduled for sentencing hearings on August 20, 2014. Brandon Alfonso (28, Orange City) pleaded guilty to one count of conspiracy. Marta Blackmer (71, Orange City) pleaded guilty to one count of conspiracy and ten counts of theft from an employee benefit plan. Phillip Simmons (50, Orange City) went to trial and was convicted of one count of conspiracy and two counts of theft from an employee benefit plan. Each of these individuals faces a maximum penalty of 5 years in federal prison for each count.
Lastly, Jason Ferrari (33, Orange City), is pending trial for one count of conspiracy and one count of theft from an employee benefit plan. If convicted, he faces a maximum penalty of 5 years in federal prison for each count.
“These sentencings demonstrate the OIG’s commitment to work with our law enforcement partners to bring to justice those who seek to illegally enrich themselves by defrauding union benefit plans,” said Special Agent-in-Charge Richard Walker, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“Theft of employee benefit assets jeopardizes the benefits of workers. This case reaffirms the Labor Department’s commitment to protect workers’ benefits by identifying criminal activity wherever and whenever it occurs,” said Isabel Colon, Regional Director of Employee Benefits Security Administration’s Atlanta Regional Office and Miami District Office.
These cases were investigated by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and the U.S. Department of Labor’s Employee Benefits Security Administration. They are being prosecuted by Assistant United States Attorney Roger B. Handberg.
Denver Man Arrested for Pointing Laser at Denver Police Department HelicopterRead the Press Release
DENVER – Nathan James Finneman, age 26, of Denver, Colorado, will appear today before a U.S. Magistrate Judge to be advised that he faces charges of aiming a laser pointer at an aircraft, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Finneman is scheduled to appear before U.S. Magistrate Judge Boyd N. Boland at 1:30 p.m. this afternoon in U.S. District Court in Denver for his initial appearance.
According to an indictment returned by a federal grand jury on July 2, 2014, twice on April 19, 2013 and once on April 20, 2013, Finneman allegedly aimed the beam of a laser pointer at an aircraft, namely a Bell helicopter operated by the Denver Police Department. The police helicopter, known as “Air One”, was able to use equipment on board to identify the source of the laser pointer.
“Pointing a laser at the pilot of a helicopter or airplane not only puts the pilot and passengers of the aircraft at risk, it exposes the public on the ground to the danger of an emergency landing or even a crash,” said U.S. Attorney John Walsh. “What might seem like a harmless prank is far from it – laser blinding of pilots is a serious and dangerous crime that we will prosecute.”
“This case demonstrates the FBI's commitment to ensuring the safety of the nation's aviation transportation system and those on the ground," said FBI Denver Special Agent in Charge Thomas Ravenelle. “With assistance from our law enforcement partners, the FBI will continue to aggressively investigate incidents involving laser attacks on aircraft.”
“Aiming a laser pointer at a helicopter or aircraft is not game – it is a crime,” said Denver Police Chief Robert White. “We are thankful that Air One has the technology to identify persons committing this type crime, as it did in this case.”
If convicted, Finneman faces not more than 5 years imprisonment, and up to a $250,000 fine, per count for each of his three counts.
This case was investigated by Federal Bureau of Investigation (FBI).
Finneman is being prosecuted by Assistant U.S. Attorney James Allison, Chief of the U.S. Attorney’s Office Criminal Division.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
For more information regarding the dangers associated with pointing lasers at aircraft please visit http://www.fbi.gov/news/stories/2014/february/protecting-aircraft-from-lasers .
Delaware County Business Owner Charged with Fraud Against the United StatesRead the Press Release
PHILADELPHIA – Kenneth Narzikul, 59, of Media, PA was charged today by information with major fraud against the United States, obstruction of audit, and making false claims to the government, in connection with operation of his business, NP Precision, Inc., a machine tool business located in Folcroft PA. .
According to the information, Narzikul was President and 85% owner of NP Precision, responsible for all aspects of NP Precision’s business, which included contracting with federal agencies to produce critical hardware components used in military helicopters and other aircraft. The information charges that as early as 2007, Narzikul began misusing progress payments on contracts with the United States, by failing to pay subcontractors and requesting progress payments under the contracts for costs that NP Precision had not actually incurred, and without the intention of using the progress payments for the costs and contracts at issue, in violation of Federal Acquisition Regulations (FAR). The information charges that Narzikul schemed to fraudulently divert and steal approximately $1.2 million in progress payments that the United States paid NP Precision under two contracts to produce drive shaft couplings for the U.S. Army helicopter Model CH-47, commonly known as a Chinook helicopter. Consequently, it is alleged that the United States received a very belated and many times incomplete product, far later than required under the delivery schedules. According to the information, Narzikul made false statements and caused others at NP Precision to make false statements to government auditors, and made false claims to falsely reflect progress on numerous Army and Air Force contracts and to continue to receive progress payments from the United States. The information charges that, at the direction of Narzikul, NP Precision used the diverted funds to pay outstanding obligations on other contracts and other business and personal expenses of the defendant and his family.
“The fraud alleged here was uncovered by the diligent efforts of our agents along with our federal law enforcement partners,” said Frank Robey, Director of the United States Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU). “Today’s charges should serve as a warning to others who might try to defraud the U.S. government -- no matter how deep you try to bury the evidence of your crime, we will find it.”
If convicted, the defendant faces a maximum possible sentence of 20 years in prison, three years of supervised release, a fine of up to $1.5 million, and a $300 special assessment. Full restitution of up to approximately $1.2 million also may be ordered.
The case was investigated by the Major Procurement Fraud Unit (MPFU) of the United States Army Criminal Investigative Command (Army CID), the Defense Criminal Investigative
Service (DCIS); and the United States Air Force Office of Special Inspection (Air Force OSI). It is being prosecuted by Assistant United States Attorney Mary E. Crawley.Click here to view the indictment
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Dedham Man Charged in Three Bank RobberiesRead the Press Release
BOSTON – A Dedham man was indicted today for robbing three Boston area banks.
According to the indictment, in January of this year, Joseph Wilcox, 46, robbed three banks, stealing over $8,000. The indictment alleges that on Jan. 15, Wilcox stole $1,318 from the Blue Hills Bank in Brookline; on Jan. 22, he stole $839 from the Eastern Bank in Cambridge; and on Jan. 25, he stole $6,260 from the TD Bank in Brookline.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Brookline Police Chief Daniel C. O’Leary; and Cambridge Police Commissioner Robert C. Haas, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Carlos A. López of Ortiz’s Major Crimes Unit.
Corporate Executives, Registered Brokers and an Attorney Indicted for Orchestrating A $300 Million Market Manipulation Scheme Involving Four Publicly Traded CompaniesRead the Press Release
A ten-count indictment was unsealed this morning in federal court in Brooklyn, New York, against seven defendants, Abraxas J. Discala, also known as “AJ Discala,” the Chief Executive Officer of OmniView Capital Advisors LLC (“OmniView”); Marc Wexler, the Managing Director of OmniView; Ira Shapiro, the Chief Executive Officer of CodeSmart Holdings, Inc. (“CodeSmart”), a publicly traded company; Matthew Bell, a registered broker and investment adviser representative; Craig Josephberg, a registered broker; Kyleen Cane, an attorney; and Victor Azrak, the Vice President and Director of Excel Corp., a publicly traded company.1 The charges include securities fraud, wire fraud and conspiracy to commit securities fraud, mail fraud and wire fraud in connection with the fraudulent market manipulation of four publicly traded companies -- CodeSmart, trading under the ticker symbol ITEN; Cubed, Inc. (“Cubed”), trading under the ticker symbol CRPT; StarStream Entertainment Inc. (“StarStream”), trading under the ticker symbol SSET; and The Staffing Group, Ltd. (“Staffing Group”), trading under the ticker symbol TSGL. In addition, the government restrained Discala’s residence in Norwalk, Connecticut, worth over $1 million, and seized a dozen bank and brokerage accounts containing criminal proceeds.
Shapiro, Josephberg and Azrak will be arraigned later today before Magistrate Judge Robert M. Levy, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York. Discala, Wexler and Cane’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 333 S. Las Vegas Blvd., Las Vegas, Nevada. Bell’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 655 E. Cesar E. Chavez Blvd., San Antonio, Texas.
The indictment was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Discala and his company insiders, registered brokers, investment advisers, an attorney and corrupt investors designed an elaborate but fraudulent scheme built on lies, deceit and manipulated trading activity to defraud the securities markets and the investing public. They took companies with essentially no assets or activity and deceived the market into believing they were worth hundreds of millions of dollars through a dizzying round of insider and unauthorized trades. When the defendants stopped their criminal game of musical shares it was the unsuspecting investors who were left holding the bag. The defendants abused their positions of trust and preyed upon unsuspecting and elderly investors, oftentimes placing worthless stocks in their retirement accounts, to perpetrate this far-reaching fraud,” stated United States Attorney Lynch. “Today’s seven arrests, across five states, reflect the scope of this fraud and our commitment to aggressively locate and bring to justice those who abuse our financial markets in order to fraudulently enrich themselves.” Ms. Lynch expressed her grateful appreciation to the FBI, the United States Securities and Exchange Commission and the Texas State Securities Board for their significant cooperation and assistance in the investigation.
“As outlined in the indictment, the defendants engaged in a coordinated and sophisticated scheme to manipulate the share price and trading volume of four publicly traded stocks for personal gain. This lucrative scheme to manipulate our financial markets made the defendants money, while draining the bank accounts of innocent investors. Their client-victims trusted them to manage their money as if it were their own, not to steal it. Together with our partners in both law enforcement and the private sector, to include the Securities and Exchange Commission, we remain vigilant in identifying and bringing to justice those who look to profit at the expense of hard-working Americans,” stated FBI Assistant Director-in-Charge Venizelos.
I. Overview
As alleged in the indictment and other court filings, between October 2012 and July 2014, the defendants, together with others, agreed to defraud investors and potential investors in four public companies: CodeSmart, Cubed, StarStream and Staffing Group (collectively, the “Manipulated Public Companies”) by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through, among other things: (a) false and misleading press releases; (b) false and misleading SEC filings; (c) fraudulent concealment of the defendants’ and their co-conspirators’ ownership interests; (d) engineering price movements and trading volume in the stocks; and (e) unauthorized purchases of stock in accounts of unwitting investors.
II. The CodeSmart Manipulation Scheme
In early May 2013, Discala and his co-conspirators engineered a reverse merger of CodeSmart, a private company, with a shell public company. After gaining control of CodeSmart’s three million unrestricted shares, Discala and his co-conspirators, on two occasions, fraudulently inflated CodeSmart’s share price and trading volume and then sold the unrestricted CodeSmart stock at a profit when the share price reached desirable levels -- a scheme commonly referred to as a “pump and dump.” The first pump and dump occurred between approximately May 13, 2013 and August 21, 2013. During this period, Discala and his co-conspirators manipulated CodeSmart’s stock price by raising it from $1.77 to a high of $6.94, before causing it to drop to $2.19. The second pump and dump occurred between approximately August 21, 2013 and September 20, 2013. During this period, Discala and his co-conspirators manipulated CodeSmart’s stock price by raising it from $2.19 to a high of $4.60, before causing it drop to $2.13.
CodeSmart’s market capitalization at its highest closing price of $6.94 per share on July 12, 2013 was $86,347,800. However, that same day, CodeSmart filed with the SEC an amended Form 10-K, signed by Shapiro, in which CodeSmart listed only $6,000 in total assets, $7,600 in revenue and a net loss of $103,141. By December 30, 2013, CodeSmart’s stock was trading at $0.66 per share, and on July 9, 2014, CodeSmart’s stock closed at $0.01 per share. On one occasion, Discala boasted that his manipulation of CodeSmart’s stock “should be in the hall of shame.”
To successfully orchestrate the two pumps and dumps, Discala and his co-conspirators coordinated their trading activity with the issuance of company press releases and public filings with the SEC, a number of which contained false and misleading information. Shapiro played a leading role in disseminating such information to the public. During the pump phase of the first pump and dump, CodeSmart issued a press release which stated that it was “the exclusive strategic partner” to provide medical coding and consulting services to the State University of New York at Binghamton. Contrary to this representation, CodeSmart was not the “exclusive strategic partner” for ICD-10 education courses at Binghamton University -- the university also offered courses through other providers and had no plans to exclusively market CodeSmart University to its students.
Similarly, during the pump phase of the second pump and dump, CodeSmart filed with the SEC a Form 8-K, signed by Shapiro, in which CodeSmart announced that Shapiro, its Chief Executive Officer, had purchased 25,000 shares of the company’s stock from the public market at the market value of $3.21 per share for a cost of $80,250. In this SEC filing, Shapiro extolled his purchase of CodeSmart stock, stating that it was “symbolic of [his] confidence in the Company and its mission.” In reality, Shapiro did not actually pay for the 25,000 CodeSmart shares purchased in his brokerage account -- the same day he paid $81,278 from his personal bank account to his brokerage firm for the 25,000 shares, Discala transferred $81,278 to Shapiro’s personal bank account.
Shapiro’s role in this scheme is further illustrated by his fluctuating revenue forecasts in SEC filings. After estimating $10 million in revenue over the next twelve months during the first pump, approximately one month later, on August 19, 2013, Shapiro stated that CodeSmart did not have sufficient funds and “may need to curtail or cease [its] operations” until it obtained sufficient funds. As the second pump began, a mere seven days later, Shapiro announced, “If we continue on the track we are on, I believe we will achieve our revenue and profit goals that were previously disclosed for 2013 and beyond.”
Discala and his co-conspirators profited by selling CodeSmart stock, issued to them at pennies, to investment adviser representative Bell’s clients and broker Josephberg’s customers. On some occasions, the CodeSmart shares were sold to Bell’s clients and Josephberg’s customers without their clients’ and customers’ knowledge and consent. Additionally, Bell and Josephberg were selling CodeSmart shares in their personal trading accounts at the same time that they were purchasing CodeSmart stock in their clients’ and customers’ accounts. During the first pump and dump, Discala and his co-conspirators sold approximately 800,000 shares of CodeSmart in their personal accounts while Bell and Josephberg purchased virtually the identical amount in their clients’ and customers’ accounts.
III. The Cubed Manipulation Scheme
In March 2014, Discala and his co-conspirators took Cubed public through an asset purchase agreement. On April 22, 2014, Cubed’s stock began trading in earnest. Between April 22, 2014 and April 30, 2014, Discala and his co-conspirators concocted trading volume in this stock by purchasing more than 50% of the total number of Cubed shares purchased during this period.
Between May 2, 2014 and June 29, 2014, law enforcement authorities conducted a judicially-authorized wiretap of Discala’s cellular telephone (the “Discala Wiretap”). The Discala Wiretap revealed that Discala, Wexler, Bell, Josephberg, Cane and Azrak, together with others, fraudulently manipulated Cubed’s stock by artificially controlling the price and volume of that stock through, among other things, wash trades and match trades.2 Rather than generating significant market interest and causing a quick pump and dump that would elicit regulators’ scrutiny this time, the defendants gradually increased the price of Cubed’s stock to give it the appearance of a legitimate company with genuine and steady market demand for the security. For example, on May 6, 2014, while Cubed was in a period of gradual increase from $5.20 on April 22, 2014 to $5.42 on May 22, 2014, Discala sent a text message to Josephberg stating, “Go 531. Please.” That day, Cubed’s stock closed at $5.32 per share.
The defendants used an escrow account maintained by Cane to successfully control the price and volume of Cubed’s stock. For example, on May 20, 2014, during a telephone call between Discala and Azrak, Discala emphasized his control over Cubed’s share price through the use of the escrow account, stating, “I’m the [expletive] brake and the gas, [expletive]. If I take my foot off the brake it’s 55 [dollars] tomorrow (laughter).”
On June 23, 2014, Cubed reached its highest closing price of $6.75 per share, resulting in a market capitalization of approximately $200 million. Previously, however, Cubed had filed with the SEC a Form 10-Q and reported less than $1,500 in cash, zero revenue, negative stockholders’ equity, a net loss of $15,000 and accrued professional fees of $131,824.
IV. The StarStream and Staffing Group Manipulation Schemes
In addition to the CodeSmart and Cubed stocks, Discala and his co-conspirators were simultaneously fraudulently manipulating StarStream’s and Staffing Group’s stocks by artificially controlling the price and volume of the stocks through the use of, among other things, text messages and telephone calls. Below are examples of text messages intercepted on the Discala Wiretap.
A. StarStream Manipulation
On May 7, 2014, Wexler sent a text message to Discala, stating, “We may need to buy SSET at close. I think EJA has some $. Got get it to 15 cents. LOL what a joke.” That day, StarStream’s stock price closed at $0.30 on 41,100 trading volume, a significant decrease from the previous day’s closing price of $0.48 on 16,200 trading volume. The following day, on May 8, 2014, StarStream’s stock price closed at $0.15 per share, exactly the price proposed by Wexler. Similarly, on May 13, 2014, before trading commenced, Discala sent a text message to Bell, stating, “We got good stuff going. Sset. Should be over a buck today.” That day, StarStream’s stock price, which opened at $0.35 per share, reached an intraday high of $1.05 per share, before closing at $0.80 per share.
B. Staffing Group Manipulation
On May 7, 2014, Bell sent a text message to Discala, stating, “TSGL is tanking. We still good?” In response, Discala stated, “Yes. Buy all u can at 20 or better. We’re cleaning it up.” That day, Staffing Group’s stock price closed at $0.25 on 178,300 trading volume, a significant decrease from the previous day’s closing price of $0.36 on no trading volume. Similarly, on May 30, 2014, Discala sent a text message to Wexler, stating, “Buy 5k more ts [TSGL] market im gonna get this thing flying.” That day, Staffing Group’s stock price closed at $0.42 per share on 187,300 trading volume, which was almost double the closing price of $0.23 on 6,000 trading volume on the previous day.
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes, Walter M. Norkin, Shannon C. Jones and Claire Kedeshian.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendants:
ABRAXAS J. DISCALA, also known as “AJ Discala”
Age: 43
Residence: Norwalk, Connecticut
MARC WEXLER
Age: 52
Residence: Colts Neck, New Jersey
IRA SHAPIRO
Age: 53
Residence: Congers, New York
MATTHEW BELL
Age: 47
Residence: Boerne, Texas
CRAIG JOSEPHBERG
Age: 41
Residence: New York, New York
KYLEEN CANE
Age: 59
Residence: Las Vegas, Nevada
VICTOR AZRAK
Age: 32
Residence: Brooklyn, New York
E.D.N.Y. Docket No. 14-CR-399
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1 The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
2 Wash trades are purchases and sales of securities that match each other in price, volume and time of execution, and involve no change in beneficial ownership. For example, a wash trade occurs when Investor A buys 100 shares at $5.00 of Company A through Broker A while simultaneously selling 100 shares at $5.00 of Company A through Broker B. Match trades are similar to wash trades but involve a related third person or party who places one side of the trade. For example, a match trade occurs when Investor A buys 100 shares at $5.00 of Company A through a broker, while Investor B, who coordinates with Investor A, simultaneously sells 100 shares at $5.00 of Company A through a broker. Both wash trades and match trades are used to create the appearance that the stock price rose as a result of genuine market demand for the securities.
Businessman Sentenced in Mortgage Fraud CaseRead the Press Release
Sebastian Restum, a Detroit Area businessman, was sentenced to 51 months in prison today and ordered to pay restitution in the amount of $4,992,082 by federal judge Marianne Battani for the role he played in a conspiracy to commit mortgage fraud, announced United States Attorney Barbara L. McQuade.
U.S. Attorney McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.
The evidence in the case demonstrated that Restum recruited straw buyers to purchase high dollar properties, then facilitated the falsification of material information on mortgage loan applications with aggregate value in excess of $8 million, beginning in 2006. The falsified information included inflated statements of assets, fraudulent income documentation, false verification of employment and false verification of bank account balances.
Restum earlier pleaded guilty of conspiracy to commit bank fraud in a plea agreement with the government.
The case was investigated by the FBI, and prosecuted by Assistant U.S. Attorney Graham Teall.
Bulgarian Man Pleads Guilty to Conspiring to use Counterfeit Access DevicesRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Petar Petrov, 42, a citizen of Bulgaria who resides Mississauga, Ontario, Canada, pleaded guilty before U.S. Magistrate Judge Leslie G. Foschio, to conspiracy to possess and use counterfeit access devices with intent to defraud. The charge carries a maximum penalty of five years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that the defendant was arrested on September 2, 2013, as he entered the United States from Canada at the Lewiston Bridge. A Customs and Border Patrol officer found ten counterfeit access devices in Petrov’s car. The devices were gift cards which had been altered by having legitimate credit card numbers imbedded in the magnetic strips on the back of the cards. Agents determined that all 10 cards were counterfeit. The defendant and a co-conspirator placed “skimming devices” on ATMs in Canada to obtain account information.
The scheme also involved the use of a surreptitiously placed camera to record the personal identification numbers (PINS) used by customers to transact business on the ATM’s. The account information was then placed on the magnetic strips of various gift cards, creating counterfeit access devices. Petrov also used several counterfeit access devices in the Buffalo area between July and September 2013 to withdraw money from various bank accounts in Canadian Banks. The Royal Bank of Canada and the Imperial Bank of Canada suffered losses totaling over $80,000.
“The facts of this case - including the defendant placing a camera near an ATM to record a victim’s identification information – reminds us of the lengths criminals go to steal,” said U.S. Attorney Hochul. “It also should serve as a reminder to the public to use caution anytime an account or credit card is utilized. Helpful information to protect one’s identity and finances can be found at www.stopfraud.gov.”
Co-conspirator Evgeniy Bandarmiliev is also charged with conspiracy to possess and use counterfeit access devices with intent to defraud. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The sentencing will be scheduled by, and take place before, Chief United States District Court Judge William M. Skretny.
The plea is the culmination of an investigation on the part of Special Agents of the Immigration and Customs Enforcement, Homeland Security, Homeland Security Investigations, under the direction of James C. Spero, Special Agent in Charge.Buffalo Man Pleads Guilty to Drug ChargesRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Travis Birdsong, 35, of Buffalo, N.Y., pleaded guilty before U.S. Magistrate Judge Leslie J. Foschio, to possession with intent to distribute 28 grams or more of crack cocaine. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40, a $5,000,000 fine or both.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that on June 5, 2013, Special Agents with the Drug Enforcement Administration searched a vehicle that the defendant was in and seized a quantity of crack cocaine. Also on June 5, law enforcement officers searched the defendant’s residence and seized a quantity of cocaine and scales and packaging materials. In addition, a confidential informant purchased cocaine from Birdsong on two separate occasions.
Sentencing will be scheduled at a later date.
The plea is the culmination of an investigation by the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge James J. Hunt, New York Field Division.