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Thursday 17 July 2014
Bradenton Woman Indicted for Production and Transportation of Child PornographyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the return by a grand jury of an indictment charging Renee Gregg (35, Bradenton) with production and transportation of child pornography. If convicted, Gregg faces a mandatory minimum penalty of 15 years, up to 30 years in federal prison for the production charge. For the transportation charge, she faces a mandatory minimum of 5 years, up to 20 years’ imprisonment.
According to the indictment and criminal complaint, in August 2011, Gregg produced an image in which she sexually abused a female toddler. She then sent this image via text messaging to an individual in Queens, New York. Gregg and this individual also discussed having sexual contact with children.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the New York Police Department. It will be prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case 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 (CEOS), 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.projectsafechildhood.gov.
Beckley-area Man Pleads Guilty to Federal Drug ChargesRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that a Beckley-area man pled guilty to a drug charge in federal court in Beckley. Tyrone Amar, age 37, of Crab Orchard, pled guilty to distribution of oxycodone. Amar admitted that in October of 2013, he distributed a quantity of oxycodone to a person cooperating with law enforcement authorities. The drug deal took place on Cunningham Avenue in Stanaford, Raleigh County, West Virginia. Amar faces a sentence of up to twenty years and a $1,000,000 fine. This case was investigated by the Beckley Raleigh County Drug and Violent Crime Task Force and is being prosecuted under the Beckley Pill Initiative directed by the United States Attorney’s Office.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
United States District Court Judge Irene C. Berger set Amar’s sentencing for November 6, 2014.
Beckley Man Pleads Guilty to Distributing HeroinRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that a Beckley man pled guilty to a drug charge in federal court in Beckley. Jason Kaylor, age 31, pled guilty to distribution of heroin. Kaylor admitted that in October of 2013, he distributed a quantity of heroin to a person cooperating with law enforcement authorities. The drug deal took place on Cunningham Avenue in Stanaford, Raleigh County, West Virginia. Kaylor faces a sentence of up to twenty years in prison and a $1,000,000 fine. This case was investigated by the Beckley Raleigh County Drug and Violent Crime Task Force and is being prosecuted under the Beckley Pill Initiative directed by the United States Attorney’s Office.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
United States District Court Judge Irene C. Berger set the sentencing for October 30, 2014.
Attorney General Holder Announces Plans to Send Seven Additional ATF Agents to ChicagoRead the Press Release
WASHINGTON – Following his recent visit to Chicago where he participated in a roundtable discussion with Mayor Emanuel on recent reductions in youth violence, Attorney General Eric Holder today announced plans to send seven additional Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), agents to the field division office in Chicago.
The new ATF agents will coordinate efforts with U.S. Attorney Zachary T. Fardon, as well as federal, state and local law enforcement and community partnerships to advance proven strategies to reduce illegal gun trafficking and gun crime. There are currently 45 ATF agents assigned to Chicago.
"The Department of Justice will continue to do everything in its power to help the city of Chicago combat gun violence,” said Attorney General Eric Holder. "These new agents are a sign of the federal government's ongoing commitment to helping local leaders ensure Chicago's streets are safe.”
The deployment of new ATF agents represents the latest step in strengthening the partnerships with the Chicago Police Department and other local law enforcement agencies. In early June, ATF opened the Chicago Crime Gun Intelligence Center. The Center combines the gun enforcement efforts of the Chicago Police Department, Illinois State Police and ATF to provide additional leads that otherwise might go unnoticed and further addresses the illegal sales and possession of firearms in the State of Illinois.In addition, U.S. Attorney Zachary T. Fardon announced a restructuring of the Criminal Division in his office and in doing so named a team of prosecutors who will work specifically to reduce violent crime in the city. The FBI currently has over 100 agents in Chicago assigned to curb gang and violent crimes. During the summer months, the city temporarily assigned an additional 20 agents to supplement crime reduction efforts. Under the 12 current grants administered by our Office of Juvenile Justice and Delinquency Prevention alone, the City of Chicago and Cook County has access to more than $6.6 million to further these efforts to address youth violence.
Gun crime is the primary driver of homicide in Chicago, and sixty percent of the guns recovered in violent crimes in Chicago were originally sold in other states and trafficked into the city. Given the interstate nature of these crimes, it is critical that federal and local law enforcement work together to identify traffickers and enforce federal gun laws. ATF will continue to concentrate its criminal enforcement on firearms trafficking throughout the region while curbing the supply of illegal guns that end up in the hands of gang members and other violent criminals.
“ATF’s commitment to targeting traffickers and trigger pullers in Chicago is bolstered by these additional resources,” said ATF Director B. Todd Jones. “These resources, combined with ATF’s Crime Gun Intelligence Center, will strengthen and build on our outstanding partnership with the Chicago Police Department and other local, state and regional law enforcement to bring safety and justice back to the community."
“We have enjoyed an ever-improving and increasingly productive relationship with our federal partners,” said Chicago Police Superintendent Garry McCarthy. “We look forward to continuing that relationship and welcoming additional personnel in our ongoing efforts to ensure everyone in Chicago enjoys the same sense of safety.”
The Justice Department will continue to build on this work in the months ahead through initiatives like Project Safe Neighborhoods; the National Forum on Youth Violence Prevention; and innovative community oriented policing tools in the neighborhoods across Chicago.21 Year Fugitive Pleads Guilty for Failing to Appear for 1993 Court AppearanceRead the Press Release
SAN FRANCISCO – Francisco R. Legaspi pleaded guilty to failing to appear for his sentencing on Jan. 28, 1993, U.S. Attorney Melinda Haag and IRS-CI Special Agent in Charge José M. Martinez, announced.
According to the plea, Legaspi was indicted on August 19, 1992, on three counts of aiding and assisting in the presentation of false tax returns. He was released from custody with the condition that he appear in court for all hearings. He pleaded guilty on November 5, 1992, to one count of preparing a false tax return. Legaspi’s attorney told him that his sentencing was set for Jan. 28, 1993. On Jan. 27, 1993, IRS employees went to Legaspi’s business to collect unpaid withholding payroll taxes. During the visit an IRS employee and Legaspi discussed the fact that he was scheduled to appear in court the next day for his criminal case. The next day, Jan. 28, 1993, Legaspi intentionally did not appear for sentencing and fled to Mexico and later to Canada to avoid prison time for his tax crime.
Legaspi, 61, of London, Ontario, Canada, formerly of Daly City, was located in Canada in 2012, after the U.S. Department of State’s Bureau of Diplomatic Security researched social media websites and found Legaspi’s Facebook page. The Royal Canadian Mounted Police used the information to apprehend Legaspi. Thereafter, he was extradited from Canada to the United States with the assistance of the U.S. Department of Justice’s Office of International Affairs.
On July 1, 2014, Legaspi made his initial appearance in federal court in San Francisco for failing to appear for his Jan. 28, 1993, sentencing. Legaspi is scheduled to be sentenced on both charges on Oct. 2, 2014, before the Honorable William H. Orrick, United States District Court Judge in San Francisco.
The maximum penalty for aiding and assisting in the filing of false tax returns, in violation of Title 26 U.S.C. § 7206(2), is three years in prison and a fine of $250,000. The maximum penalty for failure to appear, in violation of Title 18 U.S.C. § 3146, is two years in prison and a fine of $250,000.
Assistant U.S. Attorney Thomas Moore is prosecuting the case with the assistance of Edward Solis. The prosecution is the result of an investigation by the IRS, Criminal Investigation with assistance from the Royal Canadian Mounted Police; United States Department of State, Bureau of Diplomatic Security; and United States Department of Justice, Office of International Affairs.
(Legaspi indictment )
10th Street Gang Member Pleads Guilty to RacketeeringRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Derrick Yancey, 27, of Buffalo, N.Y., pleaded guilty before U.S. District Judge Richard J. Arcara, to Racketeering Influenced Corrupt Organizations Conspiracy (RICO Conspiracy). The charge carries a maximum penalty of life in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Joseph M. Tripi, who handled the case, stated that from 2005 through 2010, the defendant was a member of the 10th Street Gang. As a part of his involvement in the gang, Yancey admitted driving fellow 10th Street Gang members to shoot rival 7th Street Gang members. Specifically, on September 15, 2008, the defendant drove armed 10th Street Gang members to shoot rival 7th Street Gang members, who were standing outside on Busti Avenue in Buffalo. While Yancey drove the car, his 10th Street Gang accomplices shot and killed Omar Fraticello-Lugo, and injured two others. The defendant then drove the shooters from the scene. Brandon Bobbitt was also convicted for his role in the murder of Omar Fraticello-Lugo.
Derrick Yancey is the 39th 10th Street Gang member or associate convicted as a result of this investigation which began in 2009.
The plea is the culmination of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, New York Field Division, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the New York State Police, under the direction of Major Michael Cerretto.
Sentencing is scheduled for October 22, 2014 at 1:30 p.m. before Judge Arcara.
Wednesday 16 July 2014
Woodbridge Attorney Admits Failing to Pay Nearly $400k in Federal Income TaxesRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that JERRY GRUENBAUM, 59, of Woodbridge, waived his right to indictment and pleaded guilty yesterday before U.S. Magistrate Judge Thomas P. Smith in Hartford to failing to pay taxes on more than $1.3 million in income over a six-year period.
According to court documents and statements made in court, from 2005 to 2010, GRUENBAUM, an attorney, failed to report approximately $1,310,100 in taxable income on his federal tax returns. For the 2005, 2006 and 2007 tax years, GRUENBAUM filed tax returns that he knew significantly understated his actual taxable income, and for the 2008, 2009 and 2010 tax years, he failed to file any tax returns. Through this scheme, GRUENBAUM failed to pay $394,226 in additional tax due.
In pleading guilty, GRUENBAUM also admitted that he took steps to make it difficult for the IRS to determine his true income, including calculating the gross receipt figures for one of his businesses by reviewing just one of a number of the business’s bank accounts that he knew had reportable income. He also utilized corporate bank accounts to pay his personal expenses, and received compensation for services rendered from at least three different corporations in the form of stock shares and salaries, and failed to report this income on his tax returns.
GRUENBAUM pleaded guilty to two counts of filing a false federal tax return. He faces a maximum term of imprisonment of six years when he is sentenced by U.S. District Judge Vanessa L. Bryant.
GRUENBAUM will also be required to pay approximately $877,646 in back taxes, penalties and interest.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
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[email protected]Wilmington Man Sentenced to 210 Months in Child Pornography CaseRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that in federal court today Chief United States District Judge James C. Dever, III, sentenced MICHAEL THOMAS BASSETT, JR., 33, of Portsmouth, Ohio, to 210 months imprisonment followed by 20 years supervised release.
On November 25, 2013, a Federal Grand Jury returned a Criminal Indictment charging BASSETT. On April 16, 2014, BASSETT pled guilty to receipt of child pornography, in violation of Title 18, United States Code, Sections 2252(a)(2).
According to the investigation, in March, 2013, law enforcement received a tip advising that an unknown individual had posted child pornography images on the social networking site known as Second Life. A subpoena was issued for subscriber information and the accountholder identified as BASSETT, a registered sex offender from Wilmington, North Carolina. The information was then relayed to the Federal Bureau of Investigation, BASSETT’s estranged wife was contacted, who surrendered a laptop. Forensic examination of the laptop revealed 250 images of child pornography and 105 videos of child pornography.
On September 3, 2013, BASSETT was arrested and his computer and multiple media storage devices seized. The computer and devices were examined and revealed a total of 8,950 images of child pornography.
The criminal investigation of this case was conducted by the Federal Bureau of Investigation and the North Carolina State Bureau of Investigation. Assistant United States Attorney Ethan A. Ontjes is handling the prosecution on behalf of the Eastern District of North Carolina.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
White River Man Sentenced for First Degree BurglaryRead the Press Release
United States Attorney Brendan V. Johnson announced that a White River, South Dakota, man convicted of First Degree Burglary was sentenced on July 14, 2014, by U.S. District Judge Roberto A. Lange.
Christian Kelly, age 20, was sentenced to 12 months and 1 day of custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Kelly was indicted for First Degree Burglary and Assault with a Dangerous Weapon by a federal grand jury on July 17, 2013. He pled guilty to First Degree Burglary on April 23, 2014.
On May 10, 2013, Kelly and his co-defendant went to the victim’s home in Lower Swift Bear in Mellette County. Once inside the house, Kelly found the victim asleep in a bedroom. The victim awoke and Kelly and the victim began to argue. Kelly remained inside the victim’s home without permission and punched and struck the victim several times before exiting the house. Kelly drove away from the house before law enforcement officers arrived.
This case was investigated by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers prosecuted the case.
Kelly was remanded to the custody of the U.S. Marshals Service.
Washington, D.C., Mother and Son Charged with Conspiring to Defraud Internal Revenue ServiceRead the Press Release
Sherri Davis and her son, Andre Davis, were charged in a superseding indictment with conspiring to defraud the Internal Revenue Service (IRS) and with aiding and assisting in the preparation of false individual income tax returns, the Justice Department and IRS announced today. Sherri Davis was also charged with filing her own false individual income tax returns for tax years 2007 to 2009.
According to the superseding indictment, Sherri Davis was the previous owner and operator of 2FT Fast Facts Tax Service, a tax return preparation business located in Washington, D.C. Andre Davis is the current owner and operator of Davis Financial Services (DFS), a tax return preparation business also located in Washington, D.C. From January 2006 through April 15, 2013, Sherri Davis and Andre Davis conspired with others to defraud the IRS by preparing and filing false income tax returns that contained fraudulent deductions, expenses, losses and credits to which 2FT and DFS clients were not entitled, thereby generating fraudulent income tax refunds.
The superseding indictment alleges that Sherri Davis and Andre Davis falsified tax documents for 2FT and DFS clients in order to reduce their taxable income and to get a larger refund than what the client was entitled to receive. The superseding indictment also alleges that from 2007 through 2009, Sherri Davis filed her own false individual income tax returns which underreported 2FT’s gross receipts and falsely claimed business losses for 2FT.
An indictment merely alleges that crimes have been committed and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the conspiracy charge, the defendants face a statutory maximum sentence of five years in prison and a $250,000 fine. The charges of filing a false income tax return and aiding or assisting in filing a false return carry a statutory maximum sentence of three years in prison and a fine of $250,000 for each count.
The case is being prosecuted by Trial Attorneys Jessica Moran, Tiwana Fleming and Mark McDonald of the Justice Department’s Tax Division and was investigated by special agents of IRS-Criminal Investigation.
Related Materials:
United States v. Sherri Davis, et al.
Superseding IndictmentVale Man Sentenced for Lacey Act ViolationsRead the Press Release
United States Attorney Brendan V. Johnson announced that a Vale, South Dakota, man charged with Lacey Act Violations pled guilty to and was sentenced on July 11, 2014, by U.S. Magistrate Veronica L. Duffy.
Glen Schummer, age 68, was sentenced to 1 year of unsupervised probation, $17,500 in restitution, a $500 fine, and a $10 special assessment to the Federal Crime Victims Fund. Schummer is also prohibited from hunting for one year.
The conviction stems from an incident that took place on February 5, 2014, when a hawk was observed trapped in a pole trap on a property owned by Schummer in Meade County. An investigation revealed that Schummer had 2 illegal pole traps on his property. He used the traps to illegally trap and kill great-horned owls and various species of hawks. Once the migratory birds were trapped, Schummer would either shoot and kill the birds, or club them, and then dispose of the birds by throwing them into the river on his property. Schummer admitted to trapping and killing at least 10 migratory birds, to include great-horned owls and hawks on his property for the last several years.
The investigation was conducted by the U.S. Fish and Wildlife Service. The case was prosecuted by Assistant U.S. Attorney Meghan N. Dilges.
U.S. Settlement with Minnesota Coal-Fired Utility to Reduce EmissionsRead the Press Release
In a settlement with the United States, Minnesota Power (MP), an ALLETE company based in Duluth, Minnesota has agreed to install pollution control technology and meet stringent emission rates to reduce harmful air pollution from the company’s three coal-fired power plants located in Cohasset, Hoyt Lakes and Schroeder, Minnesota, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. The settlement will resolve claims that the company violated the New Source Review provisions of the Clean Air Act by unlawfully constructing major modifications at its plants without obtaining required permits and installing and operating the best available air pollution control technology, as the Act requires.
EPA expects that the actions required by the settlement will reduce harmful emissions by over 13,350 tons per year, which includes approximately 8,500 tons per year of sulfur dioxide. The company estimates that it will spend over $500 million to implement the required measures.
The settlement also requires that the company pay a civil penalty of $1.4 million to resolve Clean Air Act violations and spend at least $4.2 million on environmental projects to benefit local communities. The state of Minnesota is co-plaintiff to the settlement and will receive $200,000 of the penalty.
“Today’s settlement will require system-wide controls to reduce harmful air pollution and will benefit Minnesota residents today and for years to come,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This innovative agreement will also fund projects that contribute to renewable energy production and restore valuable wetland habitat.”
“Reducing harmful emissions from large sources of air pollution is a national priority for EPA,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “By meeting some of the lowest emission rates in the country, Minnesota Power will continue to provide energy to communities across northeastern Minnesota, while at the same time, reducing sulfur dioxide and nitrogen oxide in the air, which can pose serious health risks.”
The settlement requires that the company install pollution control technology and implement other measures to reduce sulfur dioxide ( SO2 ), nitrogen oxide (NOx ), and particulate matter emissions from its three coal-fired power plants, which include nine operating units, as well as a biomass-and-coal-fired cogeneration plant which provides power and steam to an adjacent paper mill. Among other requirements, the company must install control technologies and meet emission rates that will be among some of the lowest in the country for SO2 at its largest unit and for both SO2 and NOx at the second largest unit.
In addition, the company must retire, refuel, repower, or reroute emissions at five other units, and must meet emission rates and install additional control technologies at remaining units. The company also must comply with declining system-wide annual tonnage limits for both SO2 and NOx.
SO2 and NOx, two predominant pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog, and haze. These pollutants are converted in the air to particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death.
The settlement also requires that the company spend $4.2 million on projects that will benefit the environment and local communities, including $2 million to build a large-scale solar installation system to benefit a local tribe known as the Fond du Lac Band. In addition, the company will provide between $500,000 and $1 million to replace, retrofit, or upgrade wood burning appliances to reduce pollution, and $200,000 to the National Park Service to restore wetlands at Voyageurs National Park. For the remaining money, the company can select from the following four project types: land donation and restoration, electric vehicle charging stations, clean diesel projects, or installation of renewable energy.
This settlement is part of EPA’s national enforcement initiative to control harmful emissions from large sources of pollution, which includes coal-fired power plants, under the Clean Air Act’s New Source Review requirements. The total combined SO2 and NOx emission reductions secured from all these settlements will exceed two million tons each year once all the required pollution controls have been installed and implemented.
Minnesota Power provides electric service to approximately 143,000 people and 16 municipalities within a 26,000-square-mile area in northeastern Minnesota.
The settlement was lodged with the U.S. District Court for Minnesota and is subject to a 30-day public comment period and final court approval. It will be available for viewing at http://www.justice.gov/enrd/Consent_Decrees.html .
More information about EPA’s enforcement initiative: http://www.epa.gov/compliance/data/planning/initiatives/2011airpollution.htmlTwo Lawrence Men Sentenced to Lengthy Prison Terms for Firearm OffensesRead the Press Release
BOSTON - Two men, who pleaded guilty to illegally possessing firearms on Saratoga Street in Lawrence, were recently sentenced to lengthy prison terms in United States District Court in Boston.
Christopher Morales, 29, and Melvin Rivera, 26, pleaded guilty earlier this year to being felons in possession of a firearm and ammunition. On July 15, 2014, U.S. District Court Judge Denise J. Casper sentenced Morales to 180 months in prison, to be followed by five years of supervised release. On July 8, 2014, Judge Casper sentenced Rivera to 96 months in prison, to be followed by three years of supervised release.
The Federal Bureau of Investigation; the Drug Enforcement Administration; ICE - Homeland Security Investigations (HSI); Bureau of Alcohol, Tobacco, Firearms and Explosives; the Massachusetts State Police; the Lawrence Police Department and the Middlesex County Sheriff’s Department have been conducting a long-term investigation of violent kidnapping crews operating in Lawrence. This investigation revealed that these crews – commonly referred to as “Joloperros,” Spanish for “stick-up men” – targeted drug dealers for kidnapping.
On May 9, 2012, federal agents and detectives responded to Saratoga Street in Lawrence to investigate a possible kidnapping in progress. When they arrived, agents saw a van with two men inside. Agents observed and recovered duct tape and zip ties (or plastic handcuffs) from the van. Rivera and Morales were in a parked gray Acura behind the van, and were ordered out of the car. Agents recovered a loaded firearm from under Morales’s seat and a second loaded firearm from behind Morales’s seat (near Rivera). Both men were arrested and charged with firearm offenses in state court.
As agents sought to arrest Rivera on a federal arrest warrant at his home on Bennington Street in Lawrence, Rivera threw two loaded firearms from his bedroom window into a basement stairwell. Because of Morales’s criminal history, he was determined to be an armed career criminal and was subject to a 180-month mandatory minimum sentence.
United States Attorney Carmen M. Ortiz; Essex County District Attorney Jonathan Blodgett; Vince B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Lawrence Police Chief James X. Fitzpatrick, made the announcement today. The case was prosecuted by Peter K. Levitt and Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.
Two Defendants Indicted for Identity Theft and Unemployment Insurance FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Richard L. Walker, Special Agent in Charge of the Atlanta Regional Office, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, Jesse Panuccio, Executive Director, State of Florida’s Department of Economic Opportunity, and J.D. Patterson, Director, Miami-Dade Police Department (MDPD), announce the unsealing of a fourteen count indictment charging Stanley Fertil, 20, and Steven Fertil, 19, both of Miami, with access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2) and (a)(3), conspiracy to commit access device fraud, in violation of Title 18, United States Code, Section 1029(b)(2) and aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1). The defendants’ initial appearance was held today before U.S. Magistrate Judge Patrick White in Miami.
According to court records, Stanley and Steven Fertil possessed the personal identifying information (PII) of over a thousand unwitting individuals. The PII included such individuals’ names, dates of birth and social security numbers. The brothers are alleged to have conspired to receive State of Florida Unemployment Insurance benefits by fraudulently filing unemployment claims in the victims’ names using the victims’ PII. The individuals victimized included public and private sector employees.
Mr. Ferrer commended the investigative efforts of U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, the State of Florida’s Department of Economic Opportunity and the MDPD Public Corruption Unit. This case is being prosecuted by Assistant U.S. Attorney Jonathan E. Kobrinski.
An indictment 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.
Travelers Rest Man Pleads Guilty to Possession of Child PornRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina -----United States Attorney Bill Nettles stated today that Walter T. Alexander, age 31, of Travelers Rest, South Carolina, pled guilty today in federal court in Anderson, South Carolina, to possession of child pornography, a violation of 18 U.S.C. ' 2252A. United States District Judge Timothy M. Cain accepted the plea and will sentence Alexander once a pre-sentence investigation report has been prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that law enforcement began an investigation of Alexander after learning that an e-mail address associated with him had uploaded an image file containing child porn. The file was uploaded on October 10, 2012. A state law enforcement officer reviewed the upload and concluded that it did indeed contain child porn. Further investigation traced the IP address connected to the e-mail account to Alexander’s residence.
On April 22, 2013, law enforcement executed a search warrant on Alexander’s residence. They seized his computer and conducted a forensic examination of it. Approximately 90 child porn videos and 170 still images were found-- that is, images and videos of minors under the age of 18 engaged in sexually explicit conduct and the lascivious display of the genitals. Some of the minors had not attained the age of 12 and were prepubescent.
The case was investigated by agents of the Department of Homeland Security, Office of Investigations, and the State Law Enforcement Division. Assistant United States Attorney Bill Watkins of the Greenville office handled 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.Tokutek Resolves Allegations Involving National Science Foundation Award MoneyRead the Press Release
BOSTON – Tokutek, Inc., a Lexington-based software development company, has agreed to pay $120,000 to resolve allegations that it failed to create and maintain accurate time records reflecting work allegedly performed by its employees related to a National Science Foundation (NSF) award.
In January 2011, NSF awarded Tokutek a Small Business Innovation Research grant to support the development and commercialization of Tokutek’s software technology for use with large databases. The United States alleged that Tokutek provided NSF with interim and final progress reports to document work pursuant to the award, and these reports caused NSF to release incremental award payments to Tokutek. According to the government’s allegations, the progress reports claimed certain labor costs expended in performance of the award that Tokutek could not have substantiated at the time the claims were made, because it failed during that time to maintain complete timekeeping records for its employees.
“It is critical that government grant funds are being used in accordance with the purposes for which they were intended,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “In this instance, we credit Tokutek for promptly stepping forward to resolve this matter after the government brought its concerns to the company’s attention.”
NSF Inspector General Allison Lerner said, “Every year, billions of dollars in Federal funds are used to cover salary costs of individuals who work on Federal grants. This settlement agreement reflects my office’s robust oversight to ensure that such funds are not misused. I commend the U.S. Attorneys’ Office for its strong support in this case.”
This matter was investigated by the National Science Foundation, Office of the Inspector General, and was handled by District of Massachusetts Assistant United States Attorney Gregg Shapiro.
Three Indicted in Insurance Fraud Scheme Involving More Than $50 Million Worth of Unneeded Medical ProceduresRead the Press Release
SANTA ANA, California – A federal grand jury today indicted three Southern California residents in a scheme to defraud health insurance programs by submitting bills for more than $50 million in medically unnecessary medical procedures performed on insurance beneficiaries who received free or discounted cosmetic surgery.
The indictment outlines a scheme in which marketers or cappers lured patients to a surgery center in Orange known at various times as Empire Surgical Center, Vista Surgical Center and Princess Cosmetic Surgery. The marketers told patients that they could use their union or PPO health insurance plans to pay for cosmetic surgeries, which are generally not covered by insurance.
When patients came to the surgery center for a consultation, they were told that they could receive free or discounted cosmetic surgeries if they underwent multiple, medically unnecessary procedures that would be billed to their union or PPO health care benefit program, the indictment alleges. The unnecessary procedures typically performed on the “patients” were endoscopies (usually esophagogastroduodenoscopies, or EGDs), colonoscopies and cystoscopies. Once the health care benefit program paid the claims, the patients were given free or discounted cosmetic surgeries, including “tummy tucks,” breast augmentations, rhinoplasties (“nose jobs”) and liposuction. Further, according to the indictment, tummy tucks were billed as hernia repair surgeries, and rhinoplasties were billed as deviated septum repair surgeries.
The three defendants charged in today’s indictment are:
Vi Nguyen, 31, of Placentia, who was a consultant at the surgery center and who is charged with 10 counts of mail fraud;
Theresa Fisher, 44, of Tustin, who was another consultant at the surgery center and who is charged with five counts of mail fraud; and
Lindsay Hardgraves, 30, of San Pedro, who was a marketer and charged with two counts of mail fraud.
“As a result of the fraudulent scheme, defendants Nguyen, Fisher and Hardgraves caused losses to union and PPO health care benefit programs of more than $50 million in claims for functional procedures that were not medically necessary and in some cases not provided,” the indictment alleges.
The three defendants were arrested on July 1 pursuant to a still-under-seal criminal complaint. They made their initial court appearances on the same day, and all three were released on bond. The three defendants have been ordered to appear for an arraignment on July 28 at 10:00 a.m.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If convicted, the defendants each face a statutory maximum sentence of 20 years in federal prison for each mail fraud count.
This case is the product of an ongoing investigation by the Federal Bureau of Investigation, the United States Department of Labor – Office of Inspector General, and United States Department of Labor – Employee Benefits Security Administration.
Release No. 14-088
Spartanburg Man Pleads Guilty to Wire FraudRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina -----United States Attorney Bill Nettles stated today that Michael L. Wolfenbarger, age 42, of Spartanburg, South Carolina, pled guilty today in federal court in Anderson, South Carolina, to wire fraud, a violation of 18 U.S.C. ' 1343. United States District Judge Timothy M. Cain accepted the plea and will sentence Wolfenbarger once a pre-sentence investigation report has been prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that Wolfenbarger acted as the middleman between various automotive dealerships and private individuals in the purchase and sale of used vehicles. Wolfenbarger utilized bank accounts at Branch Banking & Trust Company and The Palmetto Bank in his business affairs. Wolfenbarger would write checks drawn on bank accounts with insufficient funds or create counterfeit instruments and deposit these checks into other accounts. The pattern of depositing insufficient funds (“NSF”) checks and counterfeit instruments resulted in the books and records of the Banks showing inflated balances that permitted these NSF checks or counterfeit instruments to be honored rather than returned unpaid. Wolfenbarger would then withdraw monies from the Banks and/or write checks for goods and services based on inflated balances and thus take advantage of the time required for a check deposited in one bank to be physically presented for payment at the bank on which it was drawn. It was further part of the scheme and artifice to defraud that Wolfenbarger, rather than remitting funds to the automotive dealerships once a used vehicle had been sold, would deposit these funds in accounts with the Banks in an effort to perpetuate the kite and cover bad checks that he had written. Through this scheme an artifice, the victims lost in excess of $1 million.
The case was investigated by agents of the Federal Bureau of Investigations and the Spartanburg County Sheriff’s Office. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.# # #
Sioux Falls Man Sentenced for Receipt of Child PornographyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man convicted of Receipt of Child Pornography was sentenced on July 15, 2014, by U.S. District Judge Roberto A. Lange.
Avugwi Alvarez, age, 22, was sentenced to 168 months in custody, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. He must also register as a sex offender.
Alvarez was indicted by a federal grand jury on June 12, 2013, for Distribution and Receipt of Material Involving the Sexual Exploitation of Minors and Possession of Child Pornography. He pled guilty to Receipt of Child Pornography on January 13, 2014.
Alvarez operated with several aliases including: Clarence One Feather; Clarence NovaCane Edwards; “Baby.Gambo.Productions”; and “legionairesz.”
Between November 1, 2012, and January 7, 2013, as well as earlier times, Alvarez would use the Internet and computer devices to receive and possess images of child pornography. At times using an alias, Alvarez actively bartered and traded for the child pornography. Alvarez received numerous images of child pornography on different dates, and the images came into his possession from various locations, including locations in California. The child pornography images were produced and transported via computers, cellular telephones, Facebook, and other online services.
“The sentence handed down demonstrates that people who are involved in child pornography will face serious consequences. Sexual abuse of our children happens in many forms, and child pornography exploits children in some of the most humiliating and damaging ways,” said Johnson. “I commend all of the law enforcement agencies involved in this investigation, as well as their aggressive pursuit of any case where the welfare of children is on the line.”
The investigation was conducted by the Federal Bureau of Investigation, South Dakota Division of Criminal Investigation, South Dakota Internet Crimes Against Children Task Force, Rosebud Sioux Tribe Law Enforcement Services, Bureau of Indian Affairs, Pennington County Sheriff’s Office, Rapid City Police Department, Sioux Falls Police Department, and the U.S. Marshals Service. U.S. Attorney Brendan Johnson and Assistant U.S. Attorneys Tim Maher and Sarah Collins prosecuted the case.
Alvarez was immediately turned over to the custody of the U.S. Marshals Service.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Launched in May 2006 by the Department of Justice, and led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Sex Offender Sentenced for Failure to RegisterRead the Press Release
BOSTON – A former Jamaica Plain man was sentenced yesterday for failing to register as a sex offender.
Gary Dixon, 49, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 33 months in prison, and five years of supervised release. In February 2014, Dixon pleaded guilty to failing to register as a sex offender.
In 1998 and 2003, Dixon was convicted in Massachusetts state courts for indecent assault and battery on a child, and in 2003 for open and gross lewd and lascivious behavior. He was required to register as a sex offender in Massachusetts and was designated a level three offender, the highest level. As such, Dixon was required to promptly inform law enforcement authorities of any change in his residence or employment. If he moved to another state, he was also required to appear in person within three days to inform local law enforcement authorities of his residency. During the summer of 2012, Dixon moved from his registered address in Jamaica Plain without informing Massachusetts authorities. Beginning as early as January 2013, Dixon resided in Maine where he was attempting to start a landscaping business without informing either Massachusetts or Maine law enforcement authorities of his move. In July 2013, he was located in Brunswick, Maine.United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal of the U.S. Marshals Service, District of Massachusetts, made the announcement today. The case was prosecuted by Victor A. Wild of Ortiz’s Economic Crimes Unit.
Seven Defendants Charged in Alleged Trafficking of Drugs and Firearms Between Suburban Harvey and Central OhioRead the Press Release
CHICAGO ― Seven defendants are facing federal charges here for their alleged participation in a drug and firearms trafficking operation between south suburban Harvey and Marion, Ohio, federal law enforcement officials announced today. At least 19 assorted firearms, many of them stolen from gun owners in central Ohio, were seized during the course of the investigation, which was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
One defendant was arrested today and one yesterday in Ohio, two were arrested last week (one here and one in Ohio), and three others are in state custody in Ohio. They were charged in three separate criminal complaints filed last week in U.S. District Court in Chicago, with the last complaint unsealed today.
One defendant, AUBREY BURKS, 22, of Harvey, allegedly led the trafficking operation. According to one of the complaints, five defendants conspired with Burks between January and April this year to distribute heroin and crack cocaine, some of which they obtained in the Chicago area, to drug customers in and around Marion, located approximately 50 miles north of Columbus. At times, Burks and five other defendants accepted firearms from their drug customers as payment. The defendants transported, or arranged for the transportation, of guns from Marion to Harvey, where they stored them at various residences. The defendants obtained drugs in the Chicago area by exchanging firearms for narcotics, or selling firearms for money they used to buy drugs, which they later sold to customers in Ohio, the charges allege.
Burks was charged alone in one complaint with being a felon-in-possession of firearms for allegedly possessing six firearms that were seized by Harvey police on Jan. 30, 2014, from a residence in Harvey. He was arrested last week in Ohio and is being transferred in custody to Chicago for prosecution.
Five defendants were charged together in a second complaint with conspiring with each other and Burks to possess and distribute heroin and crack cocaine, as well as to violate multiple federal firearms statutes, including dealing firearms without a federal license. They are: KIERRE WATERFORD, 24, also known as “Finess” and “Vaness;” KEVIN JACKSON, 23, aka “Ray-Ray” and “New York;” Burks’ brother, OMAR BURKS, 24, aka “T-O;” ANTHONY JACKSON, 20, aka “Smookie” and “B-D;” and DANIEL MURPHY, 28, all of whom have residential ties to Harvey and/or Marion.
Murphy was arrested today and Anthony Jackson was arrested yesterday, both in Ohio, while Waterford, Kevin Jackson, and Omar Burks are in state custody in Ohio.
The seventh defendant, ANTHONY GALVAN, 19, of Harvey, aka, “Ant,” was charged alone in a third complaint with selling firearms without a federal license. Galvan allegedly sold six firearms to an undercover police officer in a vehicle parked in front of his residence in Harvey during five transactions between Jan. 14 and Feb. 20, 2014. Galvan was arrested last week and remains in federal custody in Chicago without bond.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Carl Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Also assisting in the investigation were the Chicago Police Department and the CPD/ATF Firearms Trafficking Task Force, the Illinois State Police, the Harvey Police Department, the Marion Metro Drug Enforcement Unit (MARMET), the Marion Police Department, the Marion County Sheriff’s Office, the Ohio State Police, the Columbus Field Division of ATF, the U.S. Attorney’s Offices for the Northern and Southern District of Ohio, and the Chicago High Intensity Drug Trafficking Task Force (HIDTA).
Conspiracy and dealing firearms without a federal license each carry a maximum sentence of five years in prison, while the felon-in-possession count against Aubrey Burks carries a maximum sentence of 10 years in prison. The drug distribution conspiracy against five defendants carries a maximum penalty of 20 years in prison and a $1 million fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorney Sharon Fairley.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Burks Complaint
Galvan Complaint
Waterford ComplaintRochester Man Sentenced for Drug TraffickingRead the Press Release
ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Reggie Bullock, 40, of Rochester, N.Y., who was convicted of possession with intent to distribute 28 grams or more of crack cocaine, was sentenced to 108 months prison by U.S. District Judge Frank P. Geraci, Jr. The sentenced was imposed concurrently to the remainder of a 36-month sentence the defendant is serving for a violation of state parole.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that on September 26, 2012, officers of the New York State Division of Parole and Rochester Police Department arrived at 119 Bradburn Street in Rochester execute a search warrant at Bullock’s residence. The defendant, who was stopped and searched as he departed the location, had approximately $3,220 in U.S. currency and approximately 31 grams of crack cocaine packaged in 17 individual bags for street sale in his possession. During the search of the residence, officers discovered digital scales, baggies and other drug processing paraphernalia, and $54,600 in U.S. currency inside a safe hidden within a stereo speaker. A .45 auto caliber semi-automatic rifle and over three dozen rounds of ammunition was also seized from an unregistered vehicle in the driveway at the residence. The firearm had been placed in the vehicle by Bullock’s cousin Liddon Young. Liddon Young was recently sentenced to 15 years in prison on federal gun trafficking charges for transporting firearms from the state of Georgia and distributing them to felons and criminals in Rochester. The cash has been forfeited by the Drug Enforcement Administration as drug money, and forfeiture of the firearm and ammunition were ordered as part of Bullock’s sentence.
The sentencing is the culmination of an investigation on the part of the New York State Division of Parole, under the direction of Anthony J. Annucci, the Rochester Police Department, under the direction of Chief Michael Ciminelli, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives under the direction of Special Agent in Charge Thomas J. Cannon, New York Field Office.Prison Sentence UpheldRead the Press Release
“Personal Assistant” Fraud Case Where Patient Found Dead of Neglect is Affirmed By Court of Appeals
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on July 15, 2014, the four-year prison sentence imposed on Lisa C. Luckett, 50, of Cahokia, IL, was affirmed by a panel of the Seventh Circuit Court of Appeals. The Appellate Court noted, quoting Chief Judge Herndon, that, “The judge commented that what concerned him the most about the case was that ‘it’s not just simply fraud; it’s fraud on fraud and perhaps on fraud.'”
Luckett pled guilty to a two-count indictment charging that she engaged in a scheme to commit health care fraud. Luckett admitted that she had submitted or caused to be submitted, false fraudulent bills in regard to providing personal assistant services in the Home Services Program, a Medicaid Waiver Program. The program is designed to provide a person with a disability with assistance in performing daily living activities in the home in order to allow the person to stay at home instead of entering into a nursing home. In the Appellate Opinion, the Court noted that [Luckett] was at the time the scheme was undertaken, receiving food stamps and social security payments, decided to take into her home, Dorothy Cooper, who was also receiving food stamps and social security. In addition, Cooper, who was disabled, was eligible for personal assistant services paid by the State of Illinois. It was the additional income and personal assistant funds that the defendant took significant steps to receive and to conceal. A responding EMT testified that upon entering the bedroom, he was assailed with an overpowering foul odor. He found the victim’s body wrapped in a comforter covered in fresh and old fecal matter and showed numerous bed sores, some of which were so severe as to reveal the outline of her hip bone. In deference to Luckett’s presumption of innocence on the state charges she faces, all federal courts only took into account the fraud she committed in arriving at her sentence.
The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General; Illinois State Police; and the St. Clair County Sheriff’s Department. The case was prosecuted by Assistant United States Attorneys Ranley R. Killian, William E. Coonan, and Special Assistant United States Attorney Michael Hallock.
Portland Man Sentenced to 10 Years for Crack Cocaine TraffickingRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Abdullahi Nur, 26, of Portland, was sentenced today in U.S. District Court by Judge George Z.
Singal to 10 years in prison for crack cocaine trafficking. Nur was convicted following a jury
trial in October 2013.According to court records, Nur regularly acquired crack cocaine in Boston and
distributed it in the greater Portland area. He was involved in two traffic stops over three months
in 2011 during which narcotics were seized. The Wells Police Department stopped Nur on July
31, 2011 and seized from the trunk 174 30 mg. Oxycodone pills located on top of a 9mm Smith
and Wesson Sigma semi-automatic handgun on which Nur’s DNA was found. The weapon was
used in a shooting in South Portland less than two weeks prior to the traffic stop. The
Scarborough Police Department stopped Nur at 2:00 a.m. on October 25, 2011. Nur got out of
the vehicle and fled on foot into a nearby wooded area. Police officers eventually arrested him
and seized crack cocaine. Nur admitted that he sold drugs to make money and travelled to
Boston weekly to pick up an ounce of crack for resale in Portland.
In imposing the lengthy sentence, Judge Singal noted, among other things, Nur’s lengthy
criminal history, his long-time involvement in drug trafficking, his possession of a firearm
during his drug trafficking, and his contemptuous conduct during his trial.The investigation was conducted by the Scarborough, Wells and South Portland Police
Departments; the Maine Drug Enforcement Agency; and the Southern Maine Gang Task Force
which is comprised of investigators from the Federal Bureau of Investigation; the U.S. Drug
Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S.
Immigration and Customs Enforcement’s Homeland Security Investigations; and the Portland
and Biddeford Police Departments.Operation Check-Mate Defendant Sentenced to 30 Months in Federal PrisonRead the Press Release
PROVIDENCE, R.I. – John Sumo, 27, a Liberian national with no permanent address in the United States, was sentenced on Tuesday in U.S. District Court in Providence to 30 months in federal prison for his role in a sophisticated counterfeit check cashing scheme which resulted in the loss of more than $800,000 to financial institutions in at least four states. Sumo is one of thirteen defendants arrested as the result of a two-year federal, state and local law enforcement investigation dubbed Operation Check-Mate.
At sentencing, U.S. District Court Judge Mary M. Lisi also ordered Sumo to serve three years supervised release upon completion of his prison term and to pay restitution to the financial institutions in the amount of $814,208. Sumo pleaded guilty on April 4, 2014, to one count of conspiracy to commit bank fraud.
Four co-defendants in this matter are detained in federal custody, two of which have pleaded guilty and are awaiting sentencing; a third is scheduled to plead guilty on Friday; and a fourth is awaiting trial. Eight others are being prosecuted in Rhode Island state court.
Sumo’s sentence was announced by United States Attorney Peter F. Neronha, Rhode Island Attorney General Peter F. Kilmartin, Rhode Island State Police Superintendent Colonel Steven G. O’Donnell, Ted A. Arruda, Resident Agent in Charge of the Providence Office of the U.S. Secret Service, Warwick Police Chief Colonel Stephen M. McCartney and Providence Police Chief Colonel Hugh T. Clements, Jr.
According information and documents filed in federal court, an alleged sophisticated check cashing conspiracy from July 2011 to January 2014 involved the creation of hundreds of fraudulent checks drawn on accounts of legitimate businesses and individuals that were then deposited into bank accounts of dozens of individuals who agreed to participate in the scheme in exchange for cash. The deposits, totaling more than $800,000, were made in banks in Rhode Island, Massachusetts, Connecticut and Pennsylvania.Criminal complaints and indictments are merely allegations and are 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.
Defendants charged in federal court in this matter are being prosecuted by Assistant U.S. Attorney Lee H. Vilker.
Operation Check-Mate was a joint federal, state and local law enforcement investigation conducted by the offices of the United States Attorney and the Rhode Island Attorney General, the U.S. Secret Service, Rhode Island State Police, Warwick Police Department and the Providence Police Department.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Northampton County Man Charged with Orchestrating A Ponzi Scheme and Tax OffenseofficersRead the Press Release
PHILADELPHIA - Walter P. Lambert, a/k/a “Buddy,” 73, of Pen Argyl, PA, was charged by information, filed yesterday, with 16 counts of mail fraud, five counts of wire fraud, and one count of interfering with the due administration of the Internal Revenue Service, announced United States Attorney Zane David Memeger.
The information alleges that Lambert, who at the time was the CEO of Blue Mountain Consumer Discount Company (“BMCDC”), a consumer loan company based in Wind Gap, Pennsylvania, defrauded individual lenders into loaning over $5 million to BMCDC by promising them a high rate of return (typically 9% or 10%), which Lambert usually paid to the investors in cash and failed to document with the IRS. Lambert told the individual lenders that BMCDC would use the lenders’ funds to issue high-interest loans to consumers (at an interest rate of approximately 23% to 26%), thereby allowing BMCDC to make a profit of approximately 13% to 16% after paying the individual lenders their 10% return. However, rather than using the individual lenders’ loan principal payments to issue new consumer loans, it is alleged that Lambert used the funds for his own benefit, including: to pay BMCDC’s overhead (including his own salary); to purchase a life insurance policy for himself; to purchase personal items and collectibles for himself and his family members; to pay for gasoline and repairs to personal cars owned and used by himself, his family members, and the owner of BMCDC; and to issue loans to himself, his children, and other “preferred” consumers at a rate of 6% interest per year or less, rather than the annual interest rate of 23% to 26% that the individual lenders were quoted. The information alleges that prior to borrowing the principal from the individual lenders, Lambert failed to disclose that their loan principal would be used as set forth above. The information alleges that in order to keep the scheme afloat, Lambert continued to borrow money from new individual lenders, lied to them about what he would do with the money, and used the new loans to pay the old lenders their interest, and to pay BMCDC’s salary and overhead expenses.
It is further alleged that to hide his fraud, Lambert doctored the books of BMCDC, submitted false annual reports to the Pennsylvania Department of Banking, and falsified BMCDC’s tax returns. According to the information, Lambert withdrew hundreds of thousands of dollars from BMCDC for the benefit of himself that he caused to be recorded as “loans” to himself and his family members. In falsely issuing these “loans” to his family members, Lambert forged the signatures of his family members on the loan paperwork and the checks issued by BMCDC, and deposited the checks into his personal bank accounts. Lambert allegedly documented fictitious payments to deceive the Pennsylvania Department of Banking into believing that BMCDC was financially sound and operating appropriately.
The information further alleges that in carrying out this scheme, Lambert interfered with the due administration of the Internal Revenue Service by, among other things, overstating corporate income, understating BMCDC’s salaries and wages by failing to record cash salary payments to BMCDC employees, understating BMCDC’s interest expenses by failing to record interest payments to individual lenders that were made in cash, and submitting false tax returns for BMCDC. Lambert is also alleged to have paid a 1% “kickback” to one of the individual lenders, Nicholas R. Sabatine, III, charged separately, a local area attorney who referred clients to Lambert. While Lambert paid Sabatine’s clients 9% interest by check and provided them and the IRS with accurate annual IRS Forms 1099, Lambert paid Sabatine his promised 1% kickback in the form of cash that neither Lambert nor Sabatine timely declared to the IRS.
Lambert allegedly caused over 20 individual lenders to sustain losses of approximately $2,269,503, and caused the IRS to sustain a tax loss of at least approximately $252,621 for tax years 2007 through 2009.
If convicted, Walter Lambert faces a maximum sentence of 423 years in prison, a three-year period of supervised release, a $5.5 million fine, and a $2,200 special assessment.
The case was investigated by the Internal Revenue Service Criminal Investigations and the FBI. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.
Click here to view the indictment
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guiltyUNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525North Carolina Recycling Business and Owner Sentenced to Unlawful Handling of PCB-Contaminated Oil, Tax Violations, and False StatementsRead the Press Release
Benjamin Franklin Pass, 61, and P&W Waste Oil Services Inc. (P&W), of Leland, North Carolina were sentenced today in federal court in Raleigh, North Carolina. Pass was sentenced to 42 months in prison and ordered to pay restitution in the amount of $21,373,143.38 for clean-up costs associated with the environmental contamination at his business and an additional $538,857 to the Internal Revenue Service (IRS) for federal income taxes he failed to pay between 2002 and 2011.
Pass and the company previously pleaded guilty to crimes related to the unlawful handling and dilution of used oil contaminated with polychlorinated biphenyls (PCB). Pass also pleaded guilty to failure to pay taxes and P&W pleaded guilty to material false statements.
The court also ordered P&W to pay restitution in the amount of $21,373,143.38 for losses incurred by Colonial Oil and International Paper as a result of the defendants’ mishandling of used oil contaminated with PCBs that led to widespread contamination and millions of dollars in clean-up costs. P&W was also ordered to serve a five-year term of probation and to take remedial action to address the environmental contamination at its facility and other leased property in eastern North Carolina, including but not limited to, the proper treatment and disposal of PCB-contaminated waste oil.
“Today’s sentence is just punishment for the defendant’s actions, which placed the health of North Carolina’s residents and their natural resources at risk,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “ Environmental violations such as these are serious crimes, and the Justice Department and the U.S. Attorney’s Offices will continue to vigorously prosecute those individuals and companies who ignore the laws Congress enacted to protect people and our environment from toxic substances like PCBs.”
“This disregard of environmental protections resulted in significant contamination,” said U.S. Attorney Thomas G. Walker. “The defendant’s conduct placed an economic burden on the United States and an unreasonable risk to the health and safety of the citizens of North Carolina.”
According to information in the public record, Pass owned and operated P&W’s facility in Leland, North Carolina. The facility is located approximately 500 feet to the east of the Cape Fear River and a federally recognized wetland.
As part of its business operations, P&W collected, transported, processed, and marketed used oil that it received from small and large companies, such as automotive service stations, transformer repair companies and marinas. P&W also conducted tank cleaning and waste removal.
P&W, however, was not authorized to transport, store, or handle used oil containing more than two parts per million (ppm) of PCBs. PCBs are man-made organic chemicals that were manufactured domestically from 1929 to 1979 and were used in hundreds of industrial and commercial applications, such as thermal insulation in electrical transformers and capacitors. PCBs were determined to cause cancer and have been demonstrated to cause a variety of adverse health effects on the immune system, reproductive system, nervous system, and endocrine system. Accordingly, Congress banned the production of PCBs and mandated that no person may distribute in commerce, or use any PCBs other than in a totally enclosed manner, and directed the U.S. Environmental Protection Agency (EPA) to promulgate rules phasing out the manufacture of PCBs and regulating their disposal. PCBs still exist in products produced before the 1979 ban and if mishandled and released into the environment, can remain for long periods of time in the air, water, and soil.
In July 2009, an employee of P&W transported used-oil contaminated with more than 500 ppm of PCBs from a business in Wallace, South Carolina to its Leland facility where the contaminated used oil was blended and diluted with other used oil. Testing results obtained by Pass in October 2009 revealed PCB contamination in excess of 4,925 ppm.
The contaminated product was eventually resold to Colonial Oil and International Paper. Colonial Oil discovered the contamination as part of its standard sampling and testing protocol. As a result, over three million gallons of contaminated used oil had to be transported and incinerated at a certified disposal site for PCBs. The costs to Colonial Oil for the proper disposal of the contaminated used oil exceeded $17 million in addition to significant disruption of its business operations.
The investigation further revealed that at the direction of Pass, employees of P&W continued to transport and dilute the PCB-contaminated used oil at the facility after the contamination was discovered. The EPA intervened and had the Leland facility designated a Superfund site. Superfund is the name given to the federal environmental program established to clean up the nation’s uncontrolled hazardous waste sites. Costs for the clean-up of the contaminated tanks at the facility exceeded $3.4 million.
Law enforcement also learned that in 2009 and again in 2010, Pass and P&W falsely certified that its employees had taken requisite training on the handling of hazardous wastes and that, between 2002 through 2011, Pass failed to pay his federal income taxes despite having the ability to pay.
“Today’s sentencing is a direct result of the strong collaboration between EPA-CID and its federal law enforcement partners,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in North Carolina. “In order to safeguard the environment and public health, it is essential that we hold companies and their corporate officers responsible for failing to accurately report violations to avoid penalty. We will continue to pursue those who fraudulently report information critical to human health and the environment to preserve the integrity of programs designed to protect the public.”
“Mr. Pass’s disregard to uphold his legal obligations in business and paying income taxes have come with a price,” said Chief Richard Weber of the IRS Criminal Investigation. “Today’s sentencing reinforces law enforcements collaborative efforts to enforce the law and ensure public trust.” Thomas J. Holloman, Special Agent in Charge IRS Criminal Investigation added, “A fraud of this magnitude requires a coordinated effort among law enforcement agencies to stop those involved from profiting from their wrongdoing. We are the stewards of our environment and anyone who knowingly pollutes it should be held accountable.”
Acting Assistant Attorney General Hirsch and U.S. Attorney Walker praised the continued joint efforts of the EPA’s Criminal Investigation Division and the IRS’s Office of Criminal Investigations and the U.S. Coast Guard’s Criminal Investigative Services for their diligent work in the investigation of this matter. Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division are the prosecutors in charge of the case. Assistant U.S. Attorney Norman Acker and the Financial Litigation Unit provided significant support to the prosecution team.New Boston, Texas Woman Sentenced for Ricin LettersRead the Press Release
Department of Justice
Office of Public AffairsTEXARKANA, Texas – A 35-year-old New Boston, Texas woman has been sentenced to 18 years in federal prison on a biological weapons charge in the Eastern District of Texas, announced U.S. Attorney John M. Bales and Assistant Attorney General for National Security John Carlin today.
On December 10, 2013, Shannon Guess Richardson pleaded guilty to an Information charging her with possession of a toxin for use as a weapon before U.S. Magistrate Judge Caroline M. Craven. Richardson was named in an indictment returned by a federal grand jury on June 27, 2013, charging her with threatening the President of the United States, mailing a threatening letter to New York City Mayor Michael Bloomberg, and mailing a threatening letter to Mark Glaze in Washington, D.C.Richardson was sentenced to 216 months in federal prison today by U.S. District Judge Michael H. Schneider and ordered to pay restitution in the amount of $367,222.29.
“Today's sentencing brings an appropriate and just end to what is surely one of our most unusual, even bizarre cases,” said U.S. Attorney Bales. “The investigation was also very challenging and I hope that East Texans are encouraged to know that their East Texas law enforcement proved to be amazingly resourceful, determined and focused in all facets of this prosecution. It was truly a great job.”
According to the information presented in court, during April-May 2013, Richardson made several online purchases of items for the purpose of producing ricin. These supplies included castor bean seeds and sodium hydroxide (lye). Ricin is a biological toxin that can be fatal if ingested, inhaled, or injected. There is no known antidote or cure for ricin poisoning.
Richardson subsequently placed ricin onto threat letters addressed to President Barack Obama, Mayor Michael Bloomberg and Mark Glaze. On May 20, 2013, Richardson mailed the three threatening letters from the New Boston, Texas, Post Office. On May 30, 2013, Richardson traveled to the Shreveport, LA, Police Department and reported that her husband was responsible for the ricin-laced letters.
Richardson was arrested on June 7, 2013, in Mt. Pleasant, Texas, and has been detained since that time.
This case was investigated by the Federal Bureau of Investigation, the U.S. Secret Service, the U.S. Postal Inspection Service, the Texas Department of Public Safety, the New Boston, Texas Police Department, the Shreveport, Louisiana, Police Department and the New York City Police Department. This case was prosecuted by Assistant U.S. Attorneys Frank Coan, Ryan Locker, and Brit Featherston as well as Trial Attorney Jolie Zimmerman of the Justice Department’s National Security Division.
Mortgage Lender Pleads Guilty in Multi-Million Dollar Mortgage Fraud SchemeRead 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, and Drew J. Breakspear, Commissioner, Florida Office of Financial Regulation, announce that Karl Oreste, 56, of Miramar, pled guilty today before U.S. District Judge Robert N. Scola, Jr., to one count of conspiracy to commit wire fraud affecting a financial institution, in violation of Title 18, United States Code, Section 1349.
Sentencing has been scheduled for November 14, 2014 at 8:30 a.m. At sentencing, Oreste faces a maximum possible statutory sentence of up to 30 years in prison.
According to documents filed with the court and statements made in court during the plea, Oreste, president of KMC Mortgage Corporation of Florida, a mortgage lending business in North Miami Beach, along with co-defendants, Okechukwu Josiah Odunna, a/k/a “O.J. Odunna,” Marie Lucie Tondreau, a/k/a “Lucie Tondreau”, and Kelly Augustin, operated a multi-million dollar mortgage fraud scheme in Miami-Dade and Broward Counties, between December 2005 and May 2008. Oreste and Tondreau hosted several radio show programs in the South Florida area which catered to the South Florida Haitian community. During these programs they advertised the services offered by KMC Mortgage. Oreste and Tondreau recruited and paid some of the listeners who responded to those advertisements, as well as other individuals, to pose as borrowers to purchase properties identified by Oreste. Augustin, an employee of KMC Mortgage, also recruited straw borrowers.
According to statements made in court, Oreste, Odunna and other co-conspirators prepared or caused to be prepared applications on behalf of straw borrowers. Odunna was an attorney previously licensed to practice law in Florida and president of O.J. Odunna, P.A. and Direct Title and Escrow Services. These loan applications included false information relating to employment, wages, assets and intent to make the property being purchased a primary residence. The loan applications and documents were submitted by co-conspirators to various mortgage lenders throughout the United States. Once the loan applications were approved, the defendant wired loan funds to O.J. Odunna, P.A., Direct Title or other title companies for closing.
In some instances Oreste, Odunna and other co-conspirators created and submitted duplicate HUD-Settlement Statement Forms, which grossly inflated the true purchase price of the properties. Lenders were not told how the loan proceeds were being disbursed.
At closing, a portion of loan proceeds were disbursed to Oreste through his company, JR Investment and Mortgage Corporation, or other bank accounts controlled by him. A portion was in some instances diverted to accounts controlled by O.J. Odunna, P.A. and Direct Title. Oreste disbursed some of the proceeds that he received to pay recruiters, such as Tondreau and Augustin, and straw borrowers. Oreste also transferred a substantial portion of the funds to the bank account of LTO Investment Corporation’s, a company controlled by Tondreau. Tondreau used funds deposited in LTO Investment Corporation’s bank accounts to make payments on the falsely and fraudulently obtained mortgages in order to maintain the loans, and to conceal and further the fraud. She also used a portion of the funds deposited into LTO Investment Corporation’s bank accounts for her own personal use and benefit.
Over the course of the conspiracy, the defendants fraudulently obtained loans on approximately 20 properties, for which the lenders have suffered losses in the amount of approximately $11,000,000.00.
Mr. Ferrer commended the investigative efforts of the FBI and Florida Office of Financial Regulation. The case is being prosecuted by Assistant U.S. Attorney Lois Foster-Steers.
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.
Minnesota Man and Two Mobridge Women Charged with Kidnapping and Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that a Minneapolis, Minnesota, man and two Mobridge, South Dakota, women have been indicted by a federal grand jury for Kidnapping and Assault with a Dangerous Weapon.
Clayton Montreal, age 27, Yvette Montreal, age 47, and Wyndee Sitting Dog, age 30, were indicted on April 15, 2014. Yvette Montreal and Sitting Dog appeared before U.S. Magistrate Judge William D. Gerdes on May 1, 2014, and pled not guilty to the Indictment. Clayton Montreal appeared before U.S. Magistrate Judge William D. Gerdes on July 10, 2014, and also pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $500,000 fine, 5 years of supervised release, and $200 each to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about March 25, 2014, the Defendants kidnapped and unlawfully assaulted a female adult victim with a dangerous weapon.
The charges are merely accusations and the Defendants are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Clayton Montreal and Yvette Montreal were released on bond. Sitting Dog was remanded to the custody of the U.S. Marshals Service pending trial which has been set for August 26, 2014.
Minnesota Man and Two Mobridge Women Charged with Kidnapping and Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that a Minneapolis, Minnesota, man and two Mobridge, South Dakota, women have been indicted by a federal grand jury for Kidnapping and Assault with a Dangerous Weapon.
Clayton Montreal, age 27, Yvette Montreal, age 47, and Wyndee Sitting Dog, age 30, were indicted on April 15, 2014. Yvette Montreal and Sitting Dog appeared before U.S. Magistrate Judge William D. Gerdes on May 1, 2014, and pled not guilty to the Indictment. Clayton Montreal appeared before U.S. Magistrate Judge William D. Gerdes on July 10, 2014, and also pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $500,000 fine, 5 years of supervised release, and $200 each to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about March 25, 2014, the Defendants kidnapped and unlawfully assaulted a female adult victim with a dangerous weapon.
The charges are merely accusations and the Defendants are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Clayton Montreal and Yvette Montreal were released on bond. Sitting Dog was remanded to the custody of the U.S. Marshals Service pending trial which has been set for August 26, 2014.
Man Sentenced for Conspiracy to Distribute MarijuanaRead the Press Release
United States Attorney Deborah R. Gilg announced that Christopher Chramosta was sentenced to sixty months imprisonment by Judge John M. Gerrard following his conviction for conspiracy to distribute marijuana. Following his release from incarceration, he will serve four years of supervised release. Chramosta was ordered to forfeit to the United States certain computer equipment, $64,810.00 in cash, a 2012 BMW 550i sedan and a 1969 Mustang Mach 1. He will also be required to pay a money judgment in the amount of $120,000.00.
Between approximately June, 2011 through June 7, 2013, Chramosta and others were involved in the distribution of marijuana originating from California and distributed in the Lincoln, Nebraska area.
This case was investigated by the Lincoln-Lancaster County Narcotics Task Force.
Long Island Fish Dealer Pleads Guilty to Fraud, Falsifying Federal Records, and Lacey Act ViolationsRead the Press Release
Jones Inlet Seafood Co., Inc., a federally-licensed fish dealer located in Point Lookout, New York, its company president, Michael G. Mihale, and the company vice-president, Bruce Larson, Jr. pleaded guilty today in federal court in Central Islip, New York., to federal felonies stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.
Michael G. Mihale and Bruce Larson, Jr. pleaded guilty to one count of wire fraud and one count of falsification of federal records. The two were involved in a scheme to direct unwitting subordinates to falsify and submit at least 65 fisheries dealer reports from June 2009 to December 2011, defrauding the United States of 56,000 pounds of overharvested and underreported fluke valued at $116,000. Jones Inlet Seafood Co., Inc. pleaded guilty to the falsification of federal records charge as well as one count of Lacey Act False Labeling for the knowing use of false documents in connection with approximately $100,000 worth of fluke that was shipped to customers in Connecticut and New Jersey.
As part of the plea deal, the three defendants agreed to be subject to between $222,000 and $276,000 in combined fines and restitution. The defendants also agreed to make a $30,000 community service payment to the Cornell Cooperative Extension of Suffolk County in order to pay for the enhancement of fluke habitat through the C.C.E.’s Marine Meadows Program. The jointly proposed sentence includes a ban on Mihale and Larson, Jr. from holding a federal dealer license, accessing the National Oceanic and Atmospheric Administration’s (NOAA) SAFIS computer system, participating in the RSA program, or being in a position to direct others to complete dealer reports . Jones Inlet also agreed to increased recordkeeping and auditing requirements. The court will hear sentencing recommendations regarding non-agreed terms at a hearing set for Jan. 12, 2015.
Jones Inlet Seafood is “Fish Dealer Y” as that entity is identified in the related case of U.S. v. Anthony Joseph. As a federal fish dealer, Jones Inlet Seafood had a NOAA permit to purchase fish directly from commercial fishing vessels without having to go through an intermediary. In June 2009, Mihale and Larson, Jr. learned that Anthony Joseph, captain of the F/V Stirs One, was consistently overharvesting fluke through Joseph’s abuse of the RSA Program. By June 2009, on behalf of Jones Inlet Seafood, Mihale and Larson, Jr. were making regular purchases of illegal fluke from Joseph at the Point Lookout, New York waterfront.
In order to cover his illegal fishing, Joseph would mail falsified fishing logs, known as FVTRs, to NOAA, but falsified FVTRs were just one side of the equation. This is because fish dealers are required to report their purchases to NOAA on an electronic form known as a dealer report. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price and weight. NOAA utilizes the data in the dealer reports to set quotas and implement other management measures designed to ensure a sustainable fisheries. The dealer reports also serve as a check on the information that is submitted in FVTRs. In other words, in order to effectuate his scheme, Anthony Joseph needed to ensure that corresponding false dealer reports were being submitted that contained the same false information as was contained on the falsified FVTRs. A mismatch would have indicated a serious error or fraud, and would have been a red flag for fisheries managers. Accordingly, during June 2009 to December 2011, Mihale and Larson, Jr. schemed with Anthony Joseph to file at least 65 false dealer reports with NOAA, representing a loss of 56,000 pounds of fluke valued at $116,000. The vast majority of these three defendants’ illegal activity took place in 2011.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.Logan County Men Admit Roles in Arch Coal Kickback SchemeRead the Press Release
Stephen Herndon and Scott Ellis admit to structuring currency transactions to generate cash for kickbacks
CHARLESTON, West Virginia – Stephen B. Herndon, 37, and Scott Ellis, 44, both of Holden, West Virginia, each face up to five years in prison after pleading guilty on Wednesday, July 16, 2014, to structuring a transaction in order to evade federal reporting requirements, United States Attorney Booth Goodwin announced. Herndon and Ellis also admitted to paying hundreds of thousands of dollars in kickbacks to the general manager of Arch Coal’s Mountain Laurel mining complex, located in Logan County. The men entered their pleas before United States District Judge Thomas E. Johnston.
Ellis admitted that he owned Tri-State Mine Service, Inc., which was a vendor at Mountain Laurel that performed rebuilds. Ellis gave Herndon a half interest in Tri-State in approximately March 2011, after Herndon left his position at Mountain Laurel as the warehouse manager. To ensure that Tri-State received rebuild work from Mountain Laurel, Ellis, later joined by Herndon, participated in a bid-rigging scheme where, in exchange for a guaranteed winning bid on certain jobs, vendors had to pay cash kickbacks to a person identified in other court documents as David Runyon.Ellis initially delivered the cash to Herndon, while he worked at Mountain Laurel, or Runyon. Herndon admitted that while he was the warehouse manager at Mountain Laurel, from approximately 2006 through March 2011, he served as a facilitator of kickback payments by vendors at Mountain Laurel to Runyon.
To generate the necessary cash, Ellis, later joined by Herndon, structured cash withdrawals from various personal and business accounts in amounts of $10,000 or less. They conducted the cash withdrawals in that manner to avoid triggering the bank's obligation to file a currency transaction report with the Internal Revenue Service, had they withdrawn cash in sums greater than $10,000.
Between early 2009 and approximately March 2011, Ellis structured approximately $163,521.25 in cash transactions. Ellis estimates that almost all of those funds were used to pay cash kickbacks to Runyon, and that he paid approximately $187,000 in cash kickbacks during that time. Between April 1, 2011, and September 30, 2013, Herndon and Ellis, working together, structured approximately $183,853. They estimate that they used almost all of those funds to pay cash kickbacks to Runyon and that they paid approximately $237,000 in cash kickbacks during that period.
Ellis has agreed to forfeit $215,355.85 and Herndon has agreed to forfeit $132,000 to the United States, representing a portion of the funds involved in and traceable to structuring.
Ellis and Herndon are scheduled to be sentenced on October 27, 2014 in Charleston.
Today’s charges stem from an investigation being conducted by the FBI, IRS Criminal Investigation, United States Postal Inspection Service, and the West Virginia State Police. Assistant United States Attorney Meredith George Thomas is in charge of the prosecutions.
KC Woman Pleads Guilty to Tax Fraud Scheme, Stealing Clients' RefundsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., woman pleaded guilty in federal court today to a tax fraud scheme in which she stole portions of her client’s inflated tax refunds.
Dinette Kay Cadenhead, also known as Kay Taylor, 46, of Kansas City, pleaded guilty before U.S. Chief District Judge Greg Kays to the theft of public money.
By pleading guilty today, Cadenhead admitted that she prepared federal income tax returns for clients containing material false and fraudulent claims. Cadenhead, working at her office in Raytown, Mo., or from her residence, assisted at least 12 individuals to file at least 29 false and fraudulent income tax returns for the tax years 2008 through 2010. The tax loss associated with those false returns is $109,627. The aggregate tax loss, including relevant conduct is $134,237.
Cadenhead admitted that she utilized false deductions to increase her clients’ refunds without the clients’ knowledge. The false entries included fraudulent charitable deductions, medical expenses, accounting expenses, attorney expenses, unreimbursed employee expenses and other expenses. She also included false IRA deductions on 18 of the returns without the clients’ knowledge. She reported net business losses, false energy credits and fraudulent dependents for some clients, all without their knowledge. Cadenhead electronically filed returns and indicated the returns were self-prepared.
Cadenhead charged her clients a return preparation fee of between $65 and $600 per return. However, without the knowledge of her clients, Cadenhead diverted a portion of the fraudulent refund into her own bank account, which increased the amount she actually received for each return. She fraudulently received up to $2,600 for preparing a return. Cadenhead directed over $14,000 into her bank accounts by splitting her clients’ refunds without their knowledge or permission.
The specific charge to which Cadenhead pleaded guilty today is related to her unauthorized splitting of her clients’ refunds without their knowledge or permission. Cadenhead admitted that she stole portions of her clients’ inflated tax refunds, totaling $14,082, between Feb. 12 and March 14, 2012.
Under federal statutes, Cadenhead is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by IRS-Criminal Investigation and the Missouri Department of Revenue Criminal Tax Investigation Bureau.Justice Department Sues to Stop Chicago Man from Promoting Alleged Tax Scheme and Preparing Tax ReturnsRead the Press Release
The United States filed a complaint today to bar Victor M. Crown, individually and through his businesses Crown and Franklin Accounting and Refunds, Crown-Franklin Accounting Inc., Accurate Accounting PV, and Lourdes Theodossis Estate, from promoting two alleged tax fraud schemes and from preparing federal tax returns for others, the Justice Department announced.
The complaint alleges that Crown’s tax schemes and the tax returns and other tax documents he prepares are based, at least in part, on his customers’ employment with the city of Chicago or on his customers’ discrimination awards in the class-action case Shakman, et al., v. Democratic Organization of Cook County, et al. (Shakman). Shakman is a discrimination class-action lawsuit against the city of Chicago that alleged political patronage in the hiring and promotion of public officials. As part of the settlement, the city of Chicago agreed to set up a $12 million fund to compensate class members for injuries that allegedly arose from violations of court orders.
According to the complaint, Crown prepares federal income tax returns and other documents that claim false amounts of income tax withheld from his customers’ earnings. The government contends that Crown asserts that his customers can claim credit for false amounts of tax withheld based on his contention that the city of Chicago incorrectly calculated the income taxes it withheld from its employees’ wages. According to the complaint, Crown’s claims lack merit because an employee is not entitled to claim an income tax withholding credit for more than the amount of income taxes actually withheld from their wages.
The complaint also alleges that Crown prepares customers’ income tax returns and other documents that claim bogus net operating losses. According to the complaint, Crown asserts that his customers are entitled to claim these bogus losses because the customers sought, but did not receive, a certain award amount for their Shakman class-action claim. For example, Crown allegedly prepared a return for a Shakman claimant who sought a $100,000 award, but only received $12,500. According to the complaint, Crown falsely claimed the customer was entitled to an $87,500 net operating loss on the customer’s amended tax returns. The complaint alleges that Crown’s scheme lacks merit because nothing in the Internal Revenue Code permits a taxpayer to deduct the amount of a denied discrimination claim as a net operating loss. According to the complaint, Crown’s frivolous claims have resulted in fraudulently understated tax liabilities on his customers’ federal income tax returns.
Return-preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014 . The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website . An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Victor M. Crown, et al.
Complaint for Permanent Injunction and Other ReliefJustice Department Sues to Shut Down Texas Tax Return PreparersRead the Press Release
The United States has asked a federal court in Waco, Texas, to permanently bar several tax preparers individually and through the business Accounting System Services, doing business as A Kind Bookkeeping and Tax Service, from preparing federal tax returns for others, the Justice Department announced today.
The individually named defendants are Patricia Foley aka Sissy Foley, Amanda Smith, April Leann Morgan aka April Leann Ercanbrack, Cassandra Egbert and Joshua Stifle.
The complaint alleges that the defendants prepared income tax returns for their customers that contain false, improper or inflated business expense deductions on Schedule F (Profit or Loss from Farming) of their returns. As a result, the government contends the defendants’ customers have repeatedly reported and paid less tax than they actually owe. The complaint alleges that the tax harm caused by these understatements could be as much as $500,000.
Return-preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014 . The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website . An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Patricia Foley, etc., et al.
Complaint for Injunctive ReliefJudge Sentences Aliquippa Man to 10 Years in Prison for Robbing Ambridge BankRead the Press Release
PITTSBURGH – A Beaver County resident has been sentenced in federal court to 120 months imprisonment on his conviction for committing bank robbery, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Robert Cole, Sr., 45, of Aliquippa, Pa.
According to information presented to the court, on or about June 12, 2013, Cole robbed the Huntington National Bank located at 700 Merchant Street in Ambridge, Pa. Cole entered the bank, stated to the bank teller that he had a gun and was not afraid to use it, and escaped with $1,425.
Assistant United States Attorney Katherine A. King prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Beaver County District Attorney’s Office and the Ambridge Police Department for the investigation leading to the successful prosecution of Cole.
Jasper Man Sentenced to 11 Years in Prison for Walker County Bank Robbery and Bomb ThreatsRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Jasper man to more than 11 years in prison for robbing a Walker County bank, calling in bomb threats on a hospital and a highway bridge before the robbery, and possessing guns as a convicted felon, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge Karon O. Bowdre sentenced BRANDON JOSEPH PEAKE, 33, to 11 years and three months in prison for the July 2013 armed robbery of Traders and Farmers Bank on Curry Highway in Jasper, and to brandishing a gun during the robbery, a Heckler & Koch .40-caliber pistol that he pointed at one of the tellers. The judge also sentenced Peake on three counts of being a convicted felon in possession of a firearm, and to charges of using a telephone to make false bomb threats against Walker Baptist Medical Center and a bridge spanning Alabama Highway 69. Peake pleaded guilty to all charges in December. Peake has remained in custody since his arrest in Tennessee about a week after the bank robbery.
Peake called in the bomb threats on July 5, 2013, before the afternoon bank robbery, according to his plea agreement with the government. Because of the threats, the hospital was evacuated, a police bomb squad dispatched, and the bridge and a stretch of Highway 69 closed.
A Walker County Sheriff's deputy found the H&K .40-caliber pistol used in the robbery of Traders and Farmers Bank in woods near the bank. The gun was traced to Peake, who bought it in 2007. Peake, who was convicted in Jefferson County Circuit Court in August 2012 for felony possession of a controlled substance, was prohibited from possessing a firearm.
He admitted in his plea agreement that he had traveled to Tupelo, Miss., two days after the bank robbery to meet an acquaintance who sold him a Glock 9mm pistol and a Bushmaster .223-caliber semi-automatic rifle. A fourth gun Peake possessed illegally was a Beretta 9mm pistol, which was found July 11 in the Chattanooga hotel room where police arrested him for the Walker County bank robbery.
The FBI, Walker County Sheriff's Office and the Walker County District Attorney's Office investigated the case. Special Assistant U.S. Attorney E. Wilson Hunter prosecuted the case.
Indictment Unsealed in Unauthorized Aliens Employment ConspiracyRead the Press Release
HOUSTON – Four Houston residents and one from Puerto Rico have been charged in a 13-count indictment involving a conspiracy to employ unauthorized aliens and encouraging and inducing undocumented aliens to reside in the country, announced United States Attorney Kenneth Magidson along with Special Agent in Charge of Homeland Security Investigations (HSI) Brian Moskowitz.
The indictment was returned under seal May 21, 2014, and unsealed in its entirety today as Ceasar Santiago Arroyo, 49, of Puerto Rico, surrendered to agents in Houston. He is expected to make his initial appearance before U.S. Magistrate Judge Stephen Wm. Smith at 2:00 p.m. today. Also charged and previously arrested were Houston residents Mary Louise Flores, 43, Fernando Emmanuel Bustos, 31, Rudy Alexander Martinez, 33, and Israel Arquimides Martinez, 37.
They are all charged with conspiracy to and encouraging and inducing illegal aliens to reside in the U.S. as well as conspiracy to and unlawfully employing unauthorized aliens.
According to allegations in the indictment, Arroyo, Rudy Martinez and Israel Martinez were employees of a waste disposal company and worked at the company’s Afton Road location in Houston. Arroyo was the district operations manager, while Rudy Martinez and Israel Martinez were the commercial route manager and residential operations lead driver, respectively. Flores and Bustos were employed by a staffing company in Houston and worked as managers onsite at the waste disposal company’s Afton location, according to the indictment.
From on or around July 30, 2008, through on or around April 24, 2012, the five defendants allegedly conspired to hire and continue to employ aliens they knew were unauthorized work in the U.S. at the waste disposal company’s Afton location in Houston.
Federal law requires employers to hire only U.S. citizens and aliens who are authorized to work in the country. However, according to allegations, they hired manual laborers with little or no regard to their legal status.
The defendants and their co-conspirators allegedly failed to take corrective measures to ensure the hired workers were authorized to work in the U.S. The indictment alleges that even after internal audits demonstrated the workers were, in fact, unauthorized to work in the country, the defendants continued to facilitate their continued employment. In some cases, the aliens themselves provided information indicating they were not eligible to work in the U.S.
According to the allegations, the defendants encouraged undocumented aliens to obtain false documentation, assigned false identities to undocumented aliens and, in some cases, provided them with employment documents related to their false identity. The individuals whose identities were assumed did not authorize or even know their identities were being used, according to the indictment. Those individuals were often former employees of the companies, or individuals who had applied for employment but were never hired. The indictment alleges information was stolen from documentation and records executed in connection with applications for employment. The defendants and their co-conspirators would allegedly enter information from the assumed identities of others, resulting in a paycheck for the undocumented alien under the other individual’s name.
According to the allegations, on or around Jan. 31, 2012, the defendants and their co-conspirators “fired” at least 10 helpers they knew to be unauthorized aliens purportedly because the aliens failed to supply documentation establishing they were legally present and authorized to work in the U.S. The indictment alleges that during their “termination,” the defendants encouraged them to assume the identity of U.S. citizens or individuals who had authorization to reside and legally work in the country. The defendants also allegedly informed undocumented aliens that they could come back to work if they got “good papers” belonging to other individuals. Following the “termination” of these undocumented aliens, the defendants and their co-conspirators assigned false identities to certain aliens and assisted said aliens in obtaining related identifiers to use for employment and payroll purposes, according to the charges. The defendants then allegedly “rehired” at least 10 aliens under their assumed identities.
If convicted of encouraging and inducing aliens to reside or conspiracy to do so, all face up to 10 years in federal prison. Thye further face another five years on any of the charges relating to the unlawful employment of unauthorized aliens. All charges also carry as possible punishment, a maximum fine of $250,000, upon conviction.
The investigation leading to the charges was conducted by HSI. Assistant United States Attorneys Casey N. MacDonald and Suzanne Elmilady are prosecuting the case.
The defendants are presumed innocent unless and until convicted through due process of lawIndependence Man Sentenced for Illegal FirearmRead the Press Release
Project Ceasefire
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Independence, Mo., man was sentenced in federal court today for illegally possessing a firearm.
Edward L. Garlock, Jr., 47, of Independence, was sentenced by U.S. District Judge Dean Whipple to 16 years and eight months in federal prison without parole. Garlock was sentenced as an armed career criminal due to his prior felony convictions.
On April 25, 2014, Garlock pleaded guilty to being a felon in possession of a firearm. Garlock admitted that he was in possession of a Phoenix Arms .22-caliber pistol on June 28, 2013.
According to court documents, Garlock was arrested on June 28, 2013, after a stand-off with police officers that lasted more than seven hours. The stand-off occurred after Independence police officers arrived at Garlock’s residence to arrest him for several outstanding warrants. Garlock’s girlfriend, who was questioned outside the residence, told officers that Garlock was inside the residence and that he was armed with a pistol. She said that he was hiding under a pile of dirty clothes in the laundry room in the basement. She also told officers that Garlock was becoming increasingly paranoid about going back to prison and had made statements he would not be taken peacefully and would “shoot it out” with the police if he were cornered.
Officers attempted to order Garlock out of the residence without success. Believing Garlock was a threat to officers and the public, the Special Response Team was deployed to the residence initiating a stand-off that lasted more than seven hours. At about 2:18 a.m., officers forced entry into the residence after deploying multiple canisters of CS gas and diversionary devices. Garlock was taken into custody without further incident.
When police officers searched the residence, they found the loaded pistol in a closet adjacent to the laundry room in the basement. According to court documents, Garlock later told police officers that he purchased the pistol for $50 about a month earlier and he attempted to hide the pistol before police officers entered his residence. Garlock admitted he was a habitual drug user and he was addicted to methamphetamine.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearms or ammunition. Garlock has three prior felony convictions for tampering, as well as prior felony convictions for burglary, resisting arrest, stealing and distributing a controlled substance.
This case was prosecuted by Assistant U.S. Attorney Bruce E. Clark. It was investigated by the Independence, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Ceasefire
Project Ceasefire, launched in October 1999, is a cooperative initiative by federal and local law enforcement and the Kansas City Crime Commission that targets for federal prosecution persons who unlawfully use or possess firearms.Illinois Federal Court Enjoins Certified Public Accountant from Specific ConductRead the Press Release
A federal court in East St. Louis, Illinois, permanently barred Ronald Manis, a certified public accountant, of Carbondale, Illinois, from engaging in certain conduct, the Justice Department announced today. This includes preparing or filing federal tax returns by improperly claiming deductions for commuting to and from work, unsubstantiated meals and entertainment expenses, or other non-deductible personal expenses.
The injunction order also bars Manis from misrepresenting his ability to practice before the Internal Revenue Service (IRS) and requires Manis to hire, and pay for, a third party monitor to review a sample of tax returns prepared by Manis each year for five years. Manis agreed to the injunction without admitting the allegations in the complaint.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Ronald E. Manis
Stipulated Final Judgment of Permanent Injunction Against Ronald ManisIdentity Theft Defendant Now Facing Weapons ChargesRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Kevin R. Feldis announced today that Joseph Keenan May, 60, was charged in a superseding indictment with federal weapons offenses. Defendant May, of Eagle River and Houston, Alaska, was indicted in June for identity theft crimes. He now faces three new federal charges, alleging that he unlawfully possessed firearms while a fugitive from justice, he unlawfully possessed unregistered explosive devices, and he lied in an application for a federal firearms license.
May was arrested by an FBI tactical team at a home in Eagle River in the early morning hours of
Friday, June 20. He had been wanted for capital sexual battery in Bradenton, Florida, since 1991. He was also the subject of a federal warrant charging unlawful flight to avoid prosecution since 1993.According to the indictment, May has been living under the identity of a stepbrother, Michael Camp, who died in his teens in the 1970s in Pennsylvania. May is a former deputy sheriff in Manatee County, Florida. The indictment charges two counts of unlawful use of a social security number, stemming from May’s use of Camp’s name and number to apply for an Alaska driver’s license in 2009 and unemployment benefits in 2013. He is also charged with aggravated identity theft. The new charges allege that he possessed eight firearms despite his status as a fugitive; that he possessed destructive devices and components to make them, including an exploding arrow and at least nine hand grenades; and the he lied on a 2011 application for a federal firearms license by using Camp’s identity and by claiming that he was not a fugitive from justice or then charged with a felony.
May faces up to 39 years in prison on the federal charges in Alaska. He potentially faces life imprisonment in Florida.
Mr. Feldis commends the efforts of the Social Security Administration, Office of the Inspector General; the Federal Bureau of Investigation, Anchorage Division; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, for conducting the investigation that led to the Alaska indictments and arrest. Thanks are also due to the FBI Tampa Division, the United States Attorney’s Office for the Middle District of Florida, the State’s Attorney’s Office in Brandenton, Florida, and the Manatee County Sheriff’s Office.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Horn Lake Man Pleads Guilty to Conspiring to Launder Bribes Received in AfghanistanRead the Press Release
Memphis, TN – Jerry Dennis, 68, of Horn Lake, MS, pled guilty today to a one-count information charging conspiracy to launder approximately $250,000 in bribe payments received from Afghan contractors in Afghanistan, announced Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division and United States Attorney for the Western District of Tennessee Edward L. Stanton III.
According to facts revealed in the criminal information and during the hearing, Jimmy Dennis, a former First Sergeant with the United States Army, was assigned to the Humanitarian Aid Yard at Bagram Air Field, Afghanistan. He served as a paying agent from March 2008 until his return to his home base at Fort Campbell, KY.
Together with a Project Purchasing Officer (PPO), Jimmy Dennis worked as a team to procure supplies from local Afghan contractors. These supplies were used as part of the Commander’s Emergency Response Program for urgent humanitarian relief requirements in Afghanistan.
Soon after Jimmy Dennis began working as a paying agent, an Afghan interpreter offered him a $10,000 bribe/kickback to accept certain Afghan contractors onto the list of eligible contractors. Jimmy Dennis accepted the money and later accepted bribe payments from a second interpreter to allow additional vendors onto the list of eligible contractors. Jimmy Dennis estimated that he personally received about $250,000 in bribes.
Jimmy Dennis smuggled the money home through the U.S. Mail through a variety of means including sending home a “jingle truck” (colorfully decorated trucks or buses in Afghanistan and Pakistan) to his father, Jerry Dennis. Jimmy Dennis hid the money in the rear compartment of the toy truck. Jimmy Dennis also shipped a hope chest containing approximately $100,000 in cash in a concealed compartment to Jerry Dennis. Jerry Dennis would then deposit the funds received from Jimmy Dennis into his personal bank account. Jerry Dennis stopped depositing the money into his bank account after being questioned by bank authorities regarding his cash deposits.
Jimmy Dennis then met with James Pittman while on leave and asked if he could send the money to Pittman to launder through his landscaping company. Pittman agreed and began sending “salary” checks to Jimmy Dennis after Jimmy Dennis provided Pittman with jingle trucks containing hidden cash and Jerry Dennis provided $20,000 remaining from the money he had received. Jerry and Jimmy Dennis used the money for a number of personal expenses including paying vehicle loans and buying motorcycles.
James Pittman and Jimmy Dennis pled guilty to the same charge, Pittman on May 15, 2014 before U.S. Magistrate Judge William B. Carter of the Eastern District of Tennessee and Jimmy Dennis on May 28, 2014 before U.S. District Judge Samuel H. Mays, Jr.
Jerry Dennis faces a maximum penalty of 20 years in prison, a $500,000 fine, restitution, forfeiture, and five years of supervised release. Sentencing is scheduled for November 20, 2014 at 2:00 p.m. before U.S. District Judge Samuel H. Mays, Jr.
This case was investigated by the Special Inspector General for Afghanistan Reconstruction, the FBI, the Army Criminal Investigative Division, the Defense Criminal Investigative Service, and the Air Force Office of Special Investigation. The prosecution is being handled by Trial Attorney Daniel Butler of the Criminal Division of the Department of Justice and Assistant U.S. Attorneys Frederick Godwin of the Western District of Tennessee and James Brooks of the Eastern District of Tennessee.Hampton Man Charged with Passport Fraud and False StatementsRead the Press Release
Abel Hernandez-Labra, age 43, from Hampton, Iowa, has been charged with passport fraud and false statements in a Complaint filed on July 15, 2014, in United States District Court in Cedar Rapids.
The Complaint alleges that Hernandez-Labra assumed the identity of a U.S. citizen by fraudulently obtaining the victim’s birth certificate. The Complaint also alleges the birth certificate, along with an Iowa driver’s license obtained by Hernandez-Labra in the victim’s name, was then used to apply for and receive a U.S. passport in 2008. The Complaint also alleges when confronted by investigating special agents, Hernandez-Labra completed a written sworn statement believed to contain several material false statements.
Hernandez-Labra appeared today in federal court in Cedar Rapids and was held without bond. Hernandez-Labra’s next appearance for a preliminary hearing is set for July 30, 2014, at 4:00 p.m.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorneys Rich Murphy and Daniel C. Tvedt and was investigated by the U.S. Department of State, Diplomatic Security Service (DSS) Chicago Field Office. DSS special agents were assisted in the arrest by officers of the Hampton Police Department, the Webster City Police Department, and the Hamilton County Sheriff’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-MJ-176.
Four Mississippi Men and Women Indicted for Racially Motivated Hate Crimes Spree in Jackson, MississippiRead the Press Release
Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division and U.S. Attorney Gregory K. Davis for the Southern District of Mississippi announced today that a federal grand jury has indicted John Louis Blalack, 20, of Brandon, Mississippi, Sarah Adelia Graves, 21, of Crystal Springs, Mississippi, Robert Henry Rice, 23, of Brandon, and Shelbie Brooke Richards, 20, of Pearl, Mississippi, for their alleged roles in a conspiracy to commit federal hate crimes against African-American people in Jackson, Mississippi.
Blalack, Graves and Richards are additionally charged with a racially motivated hate crime resulting in the death of a victim run over by a truck. Blalack and Rice are charged with two additional racially motivated hate crimes involving alleged assaults, and with carrying a firearm in relation to one of those assaults. Graves and Richards are additionally charged with soliciting others to commit hate crimes against African-Americans, and Graves is charged with making false statements to the FBI. Defendants Deryl Paul Dedmon, 20; John Aaron Rice, 19; Dylan Wade Butler, 21; William Kirk Montgomery, 23; Jonathan Kyle Gaskamp, 20; and Joseph Dominick, 22, all from Brandon, have previously entered guilty pleas in connection with their roles in these offenses.
The indictment alleges that, beginning in the spring of 2011, the defendants and others conspired with one another to harass and assault African-American people in and around the Jackson area. According to the indictment, on numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles, to cause, and attempt to cause, bodily injury to African-American people. The co-conspirators are alleged to have specifically targeted African-American people they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault. The co-conspirators would often boast about these racially motivated assaults. The indictment details several such assaults, including the fatal assault on a victim who was intentionally run over.
The defendants face a statutory maximum sentence of life in prison.
The case is the result of a cooperative effort between the U.S. Attorney’s Office for the Southern District of Mississippi, the Civil Rights Division and the Hinds County District Attorney’s office. This case was investigated by the Jackson Division of the FBI and the Jackson Police Department. It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division, and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.
The charges set forth in an indictment are merely accusations and the defendants are presumed innocent until proven guilty.
Former Social Security Administration Employee Sentenced to 18 Months in Prison for Taking Bribes in Return for Giving People Increased Benefits-Admits Accepting Total of $54,662 from 13 People-Read the Press Release
WASHINGTON – Christopher Payton, a former specialist for the Social Security Administration in Washington, D.C., was sentenced today to 18 months in prison for soliciting more than $50,000 in bribes from Social Security recipients in return for providing them with extra, unauthorized benefits.
The sentence was announced by U.S. Attorney Ronald C. Machen Jr. and Michael McGill, Special Agent in Charge of the Philadelphia Field Division of the Social Security Administration’s Office of the Inspector General.
Payton, 46, of Mount Rainier, Md., pled guilty in April 2014, in the U.S. District Court for the District of Columbia, to one count of bribery. He was sentenced by the Honorable Senior Judge Gladys Kessler. Following his prison term, Payton will be placed on three years of supervised release. He also must pay $54,662 in restitution to the Social Security Administration.
According to a statement of offense, signed by the defendant and the government, Payton was a Social Insurance Specialist for the Social Security Administration’s Anacostia Office in Southeast Washington. His duties included conducting interviews regarding eligibility for benefits, authorizing or disallowing entitlement, and reviewing and authorizing Supplemental Security Income. He had computerized access to the agency’s database.
Between January and May of 2013, Payton met with 13 people as part of his responsibilities at the agency. Upon meeting these individuals, Payton told them, in substance, that if they gave him a tip, he would take care of them. After they agreed to his solicitation, Payton caused retroactive Supplemental Security Income benefits to go into the individuals’ bank accounts. These retroactive payments were not properly authorized, and Payton knew that the people receiving them were not entitled to the extra income.
After the individuals began seeing increased retroactive benefits in their bank accounts, they met with Payton throughout the Anacostia neighborhood and gave him payments. All told, Payton received $54,662 in cash payments from the individuals for his actions.
Payton’s activities came to light after someone reported his suspicious conduct. In addition, authorities received information through a fraud hotline operated by the Social Security Administration’s Office of the Inspector General. The public can report allegations of waste, fraud, and abuse online at http://oig.ssa.gov/report or by phone at 1-800-269-0271.
In announcing the sentence, U.S. Attorney Machen and Special Agent in Charge McGill praised the work of those who investigated the case from the Social Security Administration’s Office of the Inspector General. They also acknowledged the efforts of those who handled the case from the U.S. Attorney’s Office, including Paralegal Specialists Donna Galindo, Krishawn Graham, and Angela Lawrence; Investigative Analyst Sharon Johnson, Intern Dan Chin, and former Paralegal Specialist Shanna Hays. They expressed appreciation for the assistance provided by Trial Attorney Edward P. Sullivan of the Department of Justice’s Public Integrity Section.
Finally, they commended the work of Assistant U.S. Attorney Philip A. Selden, who prosecuted the case, and Assistant U.S. Attorney Diane Lucas, who assisted with forfeiture issues.
14-167Former North Chicago School Board Member Sentenced to 10 Years in Federal Prison for Bus Contracts Fraud SchemeRead the Press Release
CHICAGO ― A former North Chicago school board member was sentenced today to 10 years in federal prison for receiving at least $566,000 in kickbacks from three co-defendants who controlled several different transportation companies that received more than $21 million in student bus contracts over nearly a decade.
The defendant, GLORIA HARPER, 63, formerly of North Chicago, pleaded guilty last October to one count each of wire fraud and filing a false federal income tax return. Harper admitted that between 2001 and 2010 she schemed to deprive the approximately 4,000-student North Chicago Community Unit School District 187 (NCSD) of her honest services. Harper instigated and orchestrated the fraud scheme with four co-defendants, including Alice Sherrod, the district’s former transportation director. The three co-defendants funneled kickbacks totaling at least $800,000 to Harper and Sherrod and made more than $9.6 million in profits.
“This was a serious, serious offense that took advantage of an impoverished school district and the ultimate victims were the school children of North Chicago,” U.S. District Judge Sharon Johnson Coleman said in imposing the sentence today after a hearing that began last week. Judge Coleman ordered Harper to serve her sentence consecutive to a 30-month federal sentence that Harper received in 2012 in Louisiana for defrauding the federal E-Rate program that funds education technology. The judge also ordered Harper to pay approximately $7.2 million in restitution.
“The North Chicago School District has one of the highest low-income populations in the state. But rather than looking out for the interests of the district’s taxpayers and the children who depended on the schools for education, Harper selfishly used her position to enrich herself, and then filed false tax returns,” Assistant U.S. Attorney Matthew Getter argued at sentencing.
Sherrod, 62, of Berwyn and formerly of Gurnee; Tommie Boddie, 69, of Harvest, Ala., and formerly of Wadsworth; Derrick Eubanks, 50, of Lake Villa; and Barrett White, 55, of Matteson, have also pleaded guilty and are awaiting sentencing.
Harper, who was a member of the NCSD board from 1999 to May 2009, and Sherrod, who was District 187's transportation director from 2001 to July 2010, used their positions to enrich themselves secretly by soliciting and accepting gifts and cash from their three codefendants in exchange for favorable official action regarding student transportation contracts. Initially, Harper and Sherrod received kickbacks of approximately $4,000 to $5,000 a month but, by 2003, they were collecting approximately $20,000 a month.
From the late 1990s until mid-2003, the NCSD contracted with various companies to provide student transportation, including T&M Transportation, which was owned in part and controlled by Boddie, and Eubanks Transportation, which was owned in part and controlled by Eubanks. In 2001, Harper and Sherrod met with Boddie and agreed they would arrange for the NCSD to increase the number of students that T&M transported in exchange for kickback payments.
In May 2003, Harper suggested to Boddie and Eubanks that they join together to form one company ― Safety First Transportation, Inc., which won the NCSD’s transportation contract in 2003, and Harper, Sherrod, Boddie, and Eubanks agreed that they would split the profits from the contract. After an IRS audit of Safety First in 2006-2007, White, who had been acting as the “bagman” for the kickbacks, began receiving funds from Safety First as both an employee and a contractor, even though he provided little service other than being the bagman.
In April 2008, the defendants agreed to set up a new company, Quality Trans, LLC, to replace Safety First and to assume its contracts with the school district. All five agreed to continue splitting profits from Quality Trans, and Boddie, Eubanks and White continued making cash payments to Harper and Sherrod.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The North Chicago School District cooperated with the investigation.
Former Caseworker for the Dallas Project Reconnect Is SentencedRead the Press Release
Defendant Pleaded Guilty to Witness Tampering, Making a False Statement to HUD and Deprivation Under Color of Law
DALLAS — Lawrence Hart, 37, was sentenced on Monday by U.S District Judge David C. Godbey to serve 15 months in federal prison and ordered to pay $8,619 in restitution following his guilty plea in April 2014 to felony and misdemeanor offenses stemming from his role as a caseworker for an outreach program managed by the City of Dallas’s Housing Department. Hart must surrender to the Bureau of Prisons in mid-October 2014. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.
Hart pleaded guilty to one count of witness tampering, one count of making a false statement to the U.S. Department of Housing and Urban Development (HUD) and one count of deprivation of rights under color of law.
According to documents filed in the case, in 2012 and 2013, Hart was a caseworker for Project Reconnect, a HUD-funded outreach program managed by the City of Dallas’s Housing Department. Project Reconnect provides reentry case management and community referrals to help non-violent offenders on parole settle back into the Dallas community. One of the main components of Project Reconnect is to provide housing to eligible individuals. As the program was being applied at the time, to be eligible for Project Reconnect, an individual must reside in Dallas, have felony conviction, be 18 years or older, be currently on parole or probation and meet HUD low to moderate income guidelines.
Hart admitted that in July 2012, he arranged for “Person A” to sign a lease for an apartment in Carrollton, under the Project Reconnect program, even though Person A did not qualify for the program at that time. The apartment’s rent was $980.00 per month, and Project Reconnect was responsible for $975 of that amount and Person A was responsible for $5.00 per month. Hart admitted that while he worked for the City of Dallas’s Housing Authority, he was in fact the sole occupant of that apartment and Person A never resided there. Hart further admitted that he submitted documentation to HUD reflecting that Person A was the sole occupant.
When HUD, the Dallas Police Department (DPD) and the FBI began investigating fraudulent activity related to Project Reconnect, they interviewed Hart about his involvement in Project Reconnect and his potential criminal activity. After that interview, Hart contacted Person A and instructed Person A to lie to a DPD detective and FBI special agent by telling them that Person A lived in the Carrollton apartment.
In late 2012, according to the factual resume filed in the case, Hart met “Person B” and fast-tracked Person B through the Project Reconnect program. While Person B was qualified for the program, Hart propositioned her for sex and expedited her placement in an apartment because she agreed to have sex with him. In January 2013, Person B ended her intimate relationship with Hart. Acting under color of law, Hart removed her from the HUD-subsidized apartment, wilfully depriving her of the right, to be free from discrimination in the terms, condition and privileges of rental of a dwelling because of her sex.
The DPD, HUD and FBI investigated the case. Assistant U.S. Attorney Errin Martin prosecuted.
Former CME Clerk Sentenced to Eight Months in Prison for Manipulating Trades to Profit More Than $200,000Read the Press Release
CHICAGO — A former clerk for a lean hogs futures trader was sentenced today to eight months in prison after being convicted in March of commodities fraud for manipulating trades to profit more than $200,000 for herself to the detriment of public customers.
The defendant, NICOLE M. GRAZIANO, 33, of Addison and formerly of Roselle, was also ordered to pay $212,000 in restitution to various clearing firms on behalf of victim investors. U.S. District Judge James Zagel, who found Graziano guilty of four counts of commodities fraud in March after a bench trial, imposed the sentence in Federal Court.
Graziano’s scheme resulted in an “almost unbelievable success rate” of 90 to 100 percent of winning trades for her own account, which would have been impossible in an ordinary market setting, Judge Zagel said when he delivered his verdict.
According to the evidence, Graziano, who was a clerk for a member broker at the Chicago Mercantile Exchange, now CME Group, secretly inserted order tickets for her own personal orders into the decks of tickets submitted by public customers. She provided the tickets and trade cards to brokers to execute during the closing bracket of trading in lean hogs futures contracts. Using her position as a clerk, Graziano fraudulently allocated favorable prices to her own trades (giving herself low prices for buy orders and high prices for sell orders), and reaped profits to the detriment of public customers. Between September 2009 and August 2010, Graziano submitted at least 89 fraudulent trade cards to the appropriate clearing firms, resulting in approximately $212,000 in illegal profits to her during the closing bracket.
Judge Zagel said that the scheme damaged “the legitimacy of the exchange itself” and hurt customers because she took away benefits that could have gone to them for her own advantage.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The CME Group assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Christopher R. McFadden and Tiffany McCormick.