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Tuesday 15 July 2014
Former Virginia-Based Attorney Convicted of Multi-Million Dollar Fraud SchemesRead the Press Release
ALEXANDRIA, Va. – Michael Eisner, 32, of Mastic, New York, entered a guilty plea today in connection with several different fraud schemes that Eisner conducted while he was a practicing attorney and licensed member of the Virginia State Bar.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee.
Eisner was indicted on May 15, 2014 by a federal grand jury, and he pleaded guilty to wire fraud and conspiracy to commit wire fraud. Eisner faces a maximum penalty of twenty years in prison when he is sentenced on October 31, 2014.
In a statement of facts filed with the plea agreement, Eisner admitted to defrauding financial institutions and his own clients of approximately $4.8 million in intended losses. When defrauding financial institutions, Eisner took advantage of the lag time between when a victim financial institution realized that one of Eisner’s checks or credit card payments was fraudulent and when Eisner could obtain real money from that victim. For example, Eisner and co-conspirator Mark Head, who pleaded guilty on Jan. 29, 2014, opened an account at Fidelity Cash Management in K.C.’s name, but without K.C.’s knowledge or permission. Head and Eisner then used that account to issue several large checks to Eisner’s law firm when, in reality, K.C.’s brokerage account never had more than $20 in it. Eisner deposited the checks at various Bank of America branches in northern Virginia and Washington, D.C., and he quickly withdrew approximately $350,000 before Bank of America realized that the checks were fraudulent.
In another scheme, Eisner obtained automobile loans from financial institutions, which he purportedly paid off using phony checks. Before the financial institutions realized the checks were phony, they released the automobile titles to Eisner. And before the financial institutions could reclaim title, Eisner worked to sell the automobiles to CarMax so that he could keep the proceeds despite not having valid title to the car.
In addition to these schemes to defraud financial institutions, Eisner admitted to defrauding his own clients of money he was supposed to have kept in trust. For example, around October 2009, A.T. hired Eisner to represent him in a bankruptcy-related legal matter. Eisner was supposed to have kept more than $300,000 of A.T.’s money in a trust account in connection with that bankruptcy. In reality, Eisner used A.T.’s funds for his own personal benefit.
In or about January 2013, Eisner signed an affidavit consenting to the revocation of his license to practice law in the Commonwealth of Virginia. In that affidavit, Eisner acknowledged that he never deposited client funds into a trust account and, in fact, did not have a trust account during the time he conducted this scheme.
This case was investigated by the FBI’s Washington Field Office. Assistant U.S. Attorney Chad Golder is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-167.
Former Miami-Dade Correctional Officer and Co-Defendants Sentenced in Stolen Identity Tax Refund SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, and Ronald J. Verrochio, Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division, announce that Anthony A. Pace, Jr., 29, Brandon A. Terry, 29, Derel L. Henry, 39, and Rosa Johnson, 26, all of Miami, were sentenced today before U.S. District Judge K. Michael Moore. Pace was sentenced to 81 months in prison, to be followed by three years of supervised release. Terry was sentenced to 60 months in prison, to be followed by three years of supervised release, and was ordered to pay $19,674 in restitution. Henry was sentenced to 40 months in prison, to be followed by three years of supervised release, and was ordered to pay $24,489 in restitution. Johnson was sentenced to one year and a day in prison, to be followed by three years of supervised release. Pace and Johnson were ordered to pay joint restitution of $62,683.
Each of the defendants previously pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286. Pace also pled guilty to one count of theft of government property, in violation of Title 18, United States Code, Section 641, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Terry and Henry also pled guilty to one count of possession of fifteen or more access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Johnson also pled guilty to one count of theft of government property, in violation of Title 18, United States Code, Section 641.
According to court documents, Pace was employed as a correctional officer with the Miami-Dade Corrections and Rehabilitation Department. From August 2012 to April 23, 2013, Pace, with the assistance of Johnson, filed 176 false and fraudulent tax returns using multiple stolen identities of former and current Miami-Dade County prisoners, among other stolen identities. A number of the tax returns list defendant Johnson as the preparer of the tax returns. The tax returns directed the IRS to deposit the tax refunds into accounts controlled by defendants Pace and Johnson at TD Bank and into an account controlled by Johnson at Bank of America.
Court documents also state that from August 2012 to April 23, 2013, defendant Henry filed 48 false and fraudulent tax returns using multiple stolen identities. During this time, defendant Terry filed 38 fraudulent returns. On April 23, 2013 search warrants were executed on both Henry and Terry’s apartments based, in part, on IP data demonstrating that multiple false tax returns had been filed from their apartments. A search of a computer found in Henry’s apartment revealed multiple .JPEGs which contained names, dates of birth and social security numbers of 243 individuals. In Terry’s apartment, agents saw a spreadsheet open on a computer screen, which spreadsheet, as well as other loose papers found in the apartment, contained personal identity information including names, dates of birth and social security numbers of hundreds of victims, at least some of which had been used to file false and fraudulent tax returns.
According to court documents, both Henry and Terry gave statements at the time of the searches where they admitted that they had been filing false and fraudulent tax returns using stolen identities. Henry admitted to obtaining the identities from his neighbor and co-defendant, Terry, who he claimed had taught him how to file false and fraudulent tax returns. Henry admitted that he had directed the IRS to put the tax refunds associated with these returns on debit cards that he had directed to be delivered to his apartment. Henry used the debit cards to obtain illicit tax proceeds through ATM withdrawals. Terry admitted that he had directed IRS to deposit the illicit tax refunds associated with these returns onto debit cards and into bank accounts provided to him by co-defendant Pace.
Mr. Ferrer commended the investigative efforts of IRS-CI, FBI, USSS and USPIS. The case is being prosecuted by Assistant U.S. Attorney Peter A. Forand.
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.
Former Hughestown Borough Police Officer Pleads Guilty to Drug Trafficking OffenseRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Robert F. Evans, Jr., age 38, of Moosic, Pennsylvania, pleaded guilty to a one-count Criminal Information charging that he distributed oxycodone on numerous occasions between August 2012 and July 29, 2013. At the time of the offense, Evans was employed as a police officer with the Hughestown Borough Police Department.
At the guilty plea hearing, United States District Court Judge Malachy E. Mannion accepted Evans’ guilty plea after Evans acknowledged distributing approximately 750 oxycodone pills during the scheme; possessing a firearm in connection with the activity; and abusing his position of trust as a police officer which significantly facilitated and concealed the offense. Judge Mannion ordered that a presentence investigation report be compiled in advance of the sentencing.
United States Attorney Peter J. Smith stated that the charge is the result of an investigation conducted by the Federal Bureau of Investigation and the Pennsylvania State Police. Prosecution is assigned to Assistant United States Attorney John Gurganus.
A sentence following a guilty plea is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines. In this particular case, the maximum penalty under the federal statute is twenty years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Former Employee of Touchstone Medical Imaging, LLC Pleads Guilty to Embezzling More Than $1.2 MillionRead the Press Release
Defendant Purchased Expensive Automobiles, Furs and Other Luxury Items
NASHVILLE, Tenn. - July 15, 2014- Michelle Nixon, 48, of Chicago, Illinois, formerly of Nashville, pleaded guilty today to a scheme to defraud her former employer of more than $1.2 million, announced David Rivera, U. S. Attorney for the Middle District of Tennessee. Nixon pleaded guilty to two counts of wire fraud in a hearing before U.S. District Court Judge Aleta A. Trauger.
During the plea hearing, Nixon admitted that, from June 2009 until August 2013, she embezzled more than $1.2 million from Touchstone Medical Imaging LLC, a provider of medical imaging services based in Brentwood, Tennessee, where she served as the Regional Controller. Nixon admitted generating fraudulent checks totaling more than $1,178,000 that were made payable to a company that she owned, despite lacking any permission or authority to do so and despite the fact that her company provided no goods or services to Touchstone. Nixon also admitted generating additional fraudulent checks that were made payable to herself and to taking steps to conceal her fraud, including making false entries in the corporate ledger. Nixon used funds derived from the fraudulent checks to purchase automobiles, jewelry, luxury items, and other goods.
On February 14, 2014, agents with the Federal Bureau of Investigation seized various items from Nixon’s residence in Nashville that had been purchased with proceeds from the fraud. Among the items seized were a Mercedes Benz sedan, a Range Rover sport utility vehicle, jewelry, fur coats, and various luxury items sold by Tiffany & Co., Louis Vuitton, Gucci, Prada, Cartier, Jimmy Choo, Versace, and others.
Nixon is presently scheduled to be sentenced by Judge Trauger on October 16, 2014. She faces up to 20 years in prison for each count of wire fraud, and has also agreed to pay restitution to Touchstone in the amount of $1,283,269.51 and to forfeit the proceeds of her crime to the United States.
The case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney William F. Abely.
Former City Clerk Sentenced to Twenty-One Months' Imprisonment for Defrauding the City of MasonvilleRead the Press Release
A woman, formerly the city clerk for Masonville, Iowa, who defrauded the city of more than $80,000, was sentenced on July 14, 2014, in federal court in Cedar Rapids.
Christine King, 42, from Strawberry Point, Iowa, received the prison term after a May 5, 2014, guilty plea to one count of mail fraud.
In a plea agreement, King admitted that, from July 2002 through October 2011, while working as the city clerk for the city of Masonville, she routinely issued herself fraudulent payroll and expense reimbursement checks. King further admitted she included fraudulently inflated bank account balances for the city’s bank accounts on reports King provided to the city council and to the Auditor for the State of Iowa in order to prevent anyone from discovering her fraud. At sentencing, the court determined King had defrauded Masonville of $81,524.24. King also agreed she was responsible for an $11,070.57 bill from the Iowa State Auditor to Masonville for an audit of Masonville after King’s fraud was discovered.
King was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. King was sentenced to twenty-one months’ imprisonment. A special assessment of $100 was imposed and she was ordered to make $82,594.81 in restitution to Masonville and $10,000 in restitution to an insurance company. She must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
King was released on conditions previously set and is to surrender to the United States Marshal on August 4, 2014.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/. The case file number is 14-CR-2009.
Father and Son Pizza Store Owners Plead Guilty to Tax FraudRead the Press Release
Thair Alwan and his son Saill Fadhil, owners and operators of Raleigh, North Carolina, area pizza stores, pleaded guilty today to willfully filing false tax returns in the U.S. Court for the Eastern District of North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today.
According to court documents and statements made in court, Alwan, of Garner, North Carolina, and Fadhil, of Raleigh, own and operate a number of pizza stores in and around Raleigh called I Love NY Pizza. During the tax years 2008 and 2009, Alwan and Fadhil willfully skimmed almost all of the company’s cash receipts from their various stores and filed false federal income tax returns which failed to report the flow-through income, resulting in substantial tax underpayments. The skimmed receipts – estimated at $1.34 million – were used for personal expenditures or deposited into their personal bank accounts. When making cash deposits, the defendants structured the transactions under $10,000 and avoided the filing of Currency Transaction Reports.
According to court documents and statements made in court, I Love NY Pizza had two stores locations in Raleigh and one store location in Knightdale by 2008, and in 2009 another location in Apex was added. Fadhil eventually assumed management responsibility for a location after he graduated from college. Although employees stated that the business was at least 40 percent cash sales, cash deposits into the corporate bank account, as a percentage of total deposits, were 1.3 percent in 2008 and 2.3 percent in 2009. Between 2007 and 2010, Alwan made or caused 73 currency deposits into his personal accounts. Of the 73 deposits, 50 were at least $9,000, and the majority of these were in the amount of $9,980. None of the deposits were more than $10,000.
Alwan and Fadhil each face a statutory maximum sentence of three years in prison, one year of supervised release and a maximum fine of $250,000 per count at their sentencings, which have not yet been scheduled. Alwan and Fadhil have also agreed to pay restitution to the IRS.
The case was investigated by special agents from IRS-Criminal Investigation and prosecuted by Trial Attorney Todd Ellinwood of the Justice Department's Tax Division and Assistant U.S. Attorney Adam Hulbig of the Eastern District of North Carolina.
Additional information about the Tax Division and its enforcement efforts may be found a t the division website .
Essex County, N.J., Tax Preparer Admits to Tax Fraud That Caused More Than $99,000 LossRead the Press Release
NEWARK, N.J. - A Bloomfield, New Jersey, woman who operated a tax return preparation business admitted today that she caused at least 37 fraudulent income tax returns to be filed with the IRS, causing a total tax loss of $99,864 to the United States, U.S. Attorney Paul Fishman announced.
Daidry Montanez, 41, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to four counts of aiding and assisting in the filing of false federal income tax returns for tax years 2009, 2010, 2011 and 2012.
According to the information and statements made in court:
Montanez owned and operated a tax preparation business called DM Multiservices, which she ran from a storefront in Newark. On behalf of her clients, she prepared false and fraudulent individual income tax returns that contained either falsely claimed or fabricated deductions, including fictional business expenses, such as rent or lease of other business property, supplies and travel. Also included within the tax returns were purported deductions for home mortgage interest and points, state or local income tax, and unreimbursed employee expenses. Montanez used the fraudulent deductions to substantially reduce her clients’ taxable income on their individual federal income tax returns, which resulted in her clients receiving tax returns that were larger than they were due.
Montanez falsified clients’ 2009, 2010, 2011 and 2012 individual federal income tax returns. She then caused these false and fraudulent individual federal income tax returns to be filed with the IRS, resulting in a total tax loss of more than $99,864 for 37 clients.
Each of the four tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing before U.S. District Judge Faith Hochberg is scheduled for Nov. 6, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, the inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates and special agents of the U.S. States Secret Service, under the direction of Special Agent in Charge James Mottola, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit.
14-250
Defense counsel: Arlindo B. Araujo Esq., Newark
Montanez, Daidry Information
Erie Man Charged with Illegally Possessing A Firearm and AmmunitionRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that James Presley, a 43-year-old Erie, Pennsylvania resident was indicted by a federal grand jury today for unlawfully possessing a firearm and ammunition as a convicted felon in Luzerne County on May 15, 2014.
According to United States Attorney Peter Smith, the grand jury alleges that James Presley unlawful possessed a Hi Point 9mm firearm. The indictment alleges that at the time he possessed the firearm and ammunition Presley was a convicted felon.
The charge stems from an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Pennsylvania State Police.
If the defendant is convicted of the charge, he faces up to 10 years in prison and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Eleven Defendants Charged in International Conspiracy to Smuggle Chemicals and Money LaunderingRead the Press Release
TULSA, Okla. — United States Attorney Danny C. Williams Sr. announced today the unsealing of a four count superseding indictment charging 11 defendants with conspiracy to defraud the United States and smuggle chemicals from China, substantive smuggling charges, and a money laundering conspiracy. A sealed superseding indictment was filed on June 9, 2014.
According to the superseding indictment, beginning in April of 2011, the defendants conspired to defraud the United States through deceit and dishonest means to smuggle chemicals with fraudulent documents and to sell and transport the chemicals after the chemicals had been smuggled into the United States.
The conspirators ordered chemicals from China and created fraudulent invoices and air waybills used to smuggle and transport the chemicals to residences, businesses, and other locations in Oklahoma, Nevada, Louisiana, California, and New Jersey.
Today, the Tulsa Offices of the United States Immigration Customs Enforcement Homeland Security Investigations, the Internal Revenue Service Criminal Investigations and the Tulsa County Sheriff’s Office coordinated a nationwide takedown with arrests and search warrants in the following locations:
- Tulsa: 2 arrest warrants
- Baton Rouge: 3 search warrants and 2 arrest warrants
- Las Cruces: 1 arrest warrant
- Las Vegas: 1 arrest warrant
- New Orleans: 1 arrest warrant
- Huntington Beach, CA: 1 arrest warrant
- Santa Ana, CA: 1 arrest warrant
- Houston: 1 seizure warrant
The following defendants have been arrested:
- Ban Lam and Huong Thi Dao, in Tulsa, Oklahoma
- Tim Minh Tran and Ariel Dunn, in Baton Rouge, Louisiana
- Denis Langevin, in Las Cruces, New Mexico
- Jason Eric Johnson, in Las Vegas, Nevada
- Liem Thanh Vu, in New Orleans, Louisiana
- Minh Thang Pham, in Huntington Beach, California
- Duc Huy Vu, in Santa Ana, California
Assistant United States Attorneys Janet Reincke, Catherine Depew, and Gary L. Davis II, are prosecuting the case on behalf of the United States.
An indictment is one method of charging a defendant with alleged violations of Federal Law, which must be proven in a court of law beyond a reasonable doubt to overcome a defendants’ presumption of innocence.
U.S. v. Tran et al.
Detroit Man Pleads Guilty to Role in Huntington Heroin RingRead the Press Release
HUNTINGTON, W.Va. – A Detroit man who participated in a conspiracy to distribute heroin in Huntington in 2013 pleaded guilty today to a federal drug charge, announced U.S. Attorney Booth Goodwin. Steven Edward Lewis, also known as “Rico,” 27, pleaded guilty before Chief United States District Judge Robert C. Chambers to conspiracy to distribute 100 grams or more of heroin.
Beginning in the summer of 2013, Lewis participated in a conspiracy with Christopher Lamarr-Shawn Harris, Denzel Lamar Bunkley, Jakaiser Wesley Jackson, Brandon S. Keaton and others, to distribute heroin primarily in West Huntington. As part of his guilty plea, Lewis admitted he was recruited by Harris to travel from Detroit to Huntington to assist in heroin distributions. Lewis also admitted to distributing heroin in West Huntington, transporting heroin between various locations, and transporting cash proceeds from heroin distributions from Huntington to Detroit.
On December 31, 2013, officers with the Huntington Police Department’s Special Investigations Unit executed a search warrant at an apartment located at 1416 Jefferson Avenue in West Huntington. Officers seized approximately 413 grams of heroin and $12,349 in cash during the search. Officers also arrested Lewis, Harris and Bunkley, who were located inside the apartment.
Harris, Bunkley and Jackson, all of Detroit, previously pleaded guilty to their roles in the conspiracy and will be sentenced in October 2014. Keaton, of Huntington, was sentenced yesterday to 15 months in federal prison for his role.
Lewis faces five to 40 years in federal prison when he is sentenced on October 14, 2014.
The Huntington Police Department Special Investigations Unit, the West Virginia State Police, the United States Drug Enforcement Administration, and the United States Marshals Service all participated in the investigation. Assistant United States Attorney Joseph F. Adams is in charge of the prosecution.
This case is being prosecuted as 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 heroin and prescription drugs. 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 opiates, including heroin, in communities across the Southern District.
Defendants in Prostitution Ring Sentenced in Federal CourtRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that four defendants were sentenced in Macon today by the Honorable Marc T. Treadwell, United States District Court Judge, in connection with the operation of a place of prostitution and money laundering activities. The charges against the four defendants, all Korean nationals, stemmed from the operation of the Sedona Tanning Salon, formerly known as the Soft Hands Massage Parlor, located at 1922 Riverside Drive, Macon, Georgia, from August 2008 to March, 2012.
The owner of the business and admitted leader of the operation, Hyeon Joo Chae, age 45, was sentenced to three years in federal prison for conspiracy to promote prostitution and money laundering offences. In addition, she forfeited her interest in a condominium in Buckhead (Atlanta) Georgia as well as a BMW X5 automobile and $4000 in cash. It should be noted that there is no parole in the federal penal system.Also sentenced for conspiracy to promote prostitution was Kye Wol Dyreson, age 73, who at various times served as the manager of the facility in the absence of Ms. Chae. Ms. Dyreson received three years probation for her role in the scheme.
The two remaining defendants, who cooperated with the prosecuting authorities in this case, each were sentenced to probation for the offense of misprision of a felony. Ki Un Jordan, age 49, was given three years probation and Jin Noh was sentenced to one year of probation for their activities in connection with the prostitution business.
Ms. Chae, the owner of the business, admitted changing the name of the business and putting its ownership into a “shell” corporation controlled by her when she became concerned that it had drawn the interest of law enforcement authorities. She also maintained and used various bank accounts in the name of herself, the business, and the corporation to launder, or conceal, the illegal nature of the income it was generating. Ms. Chae also admitted that, though the establishment purported to be a massage and tanning parlor, it operated solely as a place of prostitution, having only one unused tanning bed and no personnel qualified to perform legitimate massage services. Credit cards were accepted for payment, supplying the interstate nexus necessary for federal prosecution. Virtually all of the women employed by the business were Korean nationals. Ms. Chae had twice previously pled guilty to maintaining a place of prostitution in the State Court of Bibb County, Georgia.
The case was the result of a joint investigation conducted by the Macon/Bibb County Sheriff’s Department, the Federal Bureau of Investigation, the United States Internal Revenue Service-Criminal Investigation, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
“Among the priority programs of the United States Department of Justice are the prevention and prosecution of human trafficking and the protection of the most vulnerable in our society. This is one of several cases of this nature in which my office has been involved over the past months and it is an excellent example of the results that can be obtained from the outstanding cooperation by local and federal authorities such as occurred here,” said United States Attorney Michael J. Moore.J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: "Establishing and maintaining a false business front to allow for various criminal activities is something that could, if left unaddressed by law enforcement, lead to more established and organized criminal activities within our community to include that of human trafficking. The FBI will continue to work with its many law enforcement partners as we identify, investigate, and present for prosecution such individuals who are engaged in this type of criminal activity and are doing so in such a brazen fashion".
“This case is a perfect example of federal law enforcement agencies coming together to put a stop to criminal activity in Georgia communities,” said Ryan Spradlin, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Atlanta. “The U.S. Attorney’s Office has moved aggressively to prosecute prostitution activity in the Middle District of Georgia, and HSI special agents will continue to support these investigations wherever they might occur with the hopes of identifying victims of exploitation.”
“IRS Criminal Investigation is committed to addressing fraud at every level and is proud to have worked with our law enforcement partners to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice,” stated Special Agent in Charge, Veronica F. Hyman-Pillot. “The sentence today is a vital element in maintaining public confidence that the individuals and others who commit similar crimes will be held accountable.”
“I am proud to have been involved with these fine officers and the United States Attorney’s Office in bringing these defendants to justice. I believe this sends the message to all of the other houses of prostitution in this area that we will not tolerate the ongoing exploitation of disadvantaged people for the profit of a few,” said Rebecca Grist, Bibb County Solicitor-General.
Bibb County Sheriff David Davis said, “This case shows the wide geographic reach of these type offenses. Partnerships with federal authorities help our local agencies to make much more effective arrests and prosecutions.”
This case was prosecuted by former Assistant United States Attorney Verda Colvin and Criminal Division Chief Michael T. Solis of the United States Attorney’s Office.
Questions regarding this matter should be directed to Karen Moore of the United States Attorney’s Office for the Middle District of Georgia (478/621-2606; [email protected]).Corporation Owner/CEO Charged with Federal Income Tax FraudRead the Press Release
HOUSTON – Robert Earl Carter has been arrested following the return of a four-count indictment alleging false statement on his personal tax returns, announced United States Attorney Kenneth Magidson.
The indictment was returned under seal July 9, 2014, and unsealed today upon Carter’s arrest. He is expected to make his initial appearance before U.S. Magistrate Judge Stephen Wm. Smith at 2:00 p.m. today.
The indictment charges Carter, owner/CEO of Enterprise Advisory Services Inc., with willfully making materially false statements in his 2007, 2008, 2009 and 2010 personal federal income tax returns. According to the indictment, he allegedly under-reported the total income he had earned in each of those four years.
If convicted, Carter faces up to three years in federal prison and/or a $100,000 fine on each count.
The indictment was the result of an investigation conducted by Internal Revenue Service – Criminal Investigation and NASA - Office of Inspector General. Assistant U.S. Attorney Daniel C. Rodriguez is prosecuting.
An indictment is a formal accusation of criminal conduct, not evidence.
The defendant is presumed innocent unless and until convicted through due process of law.Co-conspirators Who Ran Store in Johnstown Arrested for Tax Evasion and Conspiracy to Defraud the IRSRead the Press Release
DENVER –Alan Timothy Hershey, age 49, of Gilcrest, Colorado, and Renee F. Molinar, age 46, of Johnstown, Colorado, were arrested yesterday without incident for tax evasion and conspiracy to defraud the Internal Revenue Service, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Hershey and Molinar appeared in court for their initial appearance before U.S. Magistrate Judge Boyd N. Boland yesterday afternoon, where they were advised of their rights and the charges pending against them. They were indicted by a federal grand jury in Denver on July 3, 2014. The indictment remained sealed pending their arrests.
According to the facts contained in the Indictment, from March 2001 through April 2012, Alan Timothy Hershey and Renee Molinar, conspired together to defraud the Internal Revenue Service. Johnstown Liquor is a retail liquor store located in Johnstown, Colorado. In March of 2001 Hershey transferred the store into Molinar’s name. They concealed from the IRS the fact that Molinar, who for much of the period of the conspiracy lived with Hershey, was the owner of Johnstown Liquor in name only, and that Hershey continued to control the operation of the business as its true owner.Hershey directed Molinar and others as to how to operate the business, usually by speaking to them at his home or by speaking to them by phone during business hours. Hershey dealt as much as possible in cash, and minimized his own use of bank accounts. Molinar opened bank accounts in the name of Johnstown Liquor over which she and individuals other than Hershey had signature authority. She also obtained a liquor license to operate Johnstown Liquor in her name.
They used a point of sale record-keeping system which was connected to the store’s cash registers and accurately recorded the business’s cash, check, and credit card receipts. It also maintained an accurate record of the items sold, the cost of each item sold, and the price for which it was sold. An unindicted co-conspirator, typically reconciled the sales receipts to the daily point of sale close-out reports, then placed the cash and checks in a safe in the store each night. At Hershey’s direction, Molinar then removed most of the cash receipts before preparing the deposit slips and causing the bank deposits to be made. She gave that cash to Hershey. To conceal the existence of the cash receipts that had been removed, they used a second set of books.
They also used the check-cashing business operated by Johnstown Liquor to conceal the true amount of the business’s cash receipts. Hershey filed no federal income tax returns for the entire period of the conspiracy and made no payments of income taxes to the IRS. Molinar sent payments to the IRS for each tax year from 2001 through 2010, but filed no returns with those payments to explain the amounts she sent. The amounts she paid were roughly consistent with what she may have earned as an employee at Johnstown Liquor, but not consistent with her income as sole proprietor of the business. In 2008, after she had been confronted by an IRS revenue agent about her failure to file federal income tax returns, she filed returns for 2005 and 2006. On these, she held herself out as the true owner of Johnstown Liquor and substantially understated the gross receipts of the business.
Johnstown Liquor was also required to withhold employment taxes from each employee’s wages and submit those withholdings, along with an Employer’s Quarterly Federal Tax Return (Form 941), to the IRS along with an annual Employer’s Annual Federal Unemployment Tax Return (Form 940). Molinar paid certain employees in cash at the direction of Hershey. No taxes were withheld from the wages paid in cash. To ensure the IRS would not discover employees paid in cash, Hershey instructed the employees who were paid in cash not to file tax returns.
To conceal Hershey’s control of Johnstown Liquor, its cash receipts, his income, and his assets from the IRS, he arranged for residential properties and businesses to be purchased in the names of nominees.
Renee Molinar was charged with one count of conspiracy to defraud the United States, which carries a penalty of not more than 5 years in federal prison and a fine of up to $250,000.
Alan Timothy Hershey was charged with one count of conspiracy to defraud the United States, which carries a penalty of not more than 5 years in federal prison and a fine of up to $250,000, and 10 counts of tax evasion, which carries a penalty of not more than 5 years in federal prison, and a fine of up to $100,000 per count.
This case was investigated by IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Linda Kaufman.
The charges contained in the indictment are allegations, and the defendants are presumed innocent until proven guilty
Cincinnati Man Sentenced to 32 Years in Prison for Producing Child Pornography Victimizing A Child He BabysatRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Caleb Zachary Storey, 31, Cincinnati, was sentenced in U.S. District Court to 384 months in prison for producing sexually explicit photographs of a child he was babysitting in the family’s home, and trading child pornography through an email account.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, FBI Cincinnati, Cincinnati Police Chief Jeffrey Blackwell, Hamilton County Sheriff Jim Neil and members of the Greater Cincinnati Internet Crimes Against Children Task Force (ICAC) announced the sentence handed down today by Senior U.S. District Judge Sandra Beckwith.
Storey pleaded guilty in March 2014 to one count of production of child pornography and one count of possession of child pornography. According to court documents, FBI agents and members of the FBI Violent Crimes Against Children Section, Major Case Coordination Unit, investigating a case in Savannah, Georgia found a sexually explicit image of a child and traced it to an address in Cincinnati. Further investigation determined that the photo was taken at the family’s home. The child’s parents identified Storey as their in-home child care provider when the photograph was taken.
On January 8, 2014 investigators searched Storey’s residence and found evidence that he had been trading child pornographic images using an email account and a photograph-sharing website. Preliminary forensic examination of computer and storage media seized from his residence have identified at least four other boys, all less than eight years old, pictured in pornographic images taken by Storey. The FBI arrested Storey on January 8 based on a criminal complaint. He has been in custody since his arrest.
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 U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The FBI Child Exploitation Task Force includes the Regional Electronics and Computer Investigations (RECI) unit from Hamilton County Sheriff Jim Neil’s Office and the Cincinnati Police Department. Other agencies participating in the Greater Cincinnati ICAC include Homeland Security Investigations (HSI), the U.S. Marshals Service, U.S. Secret Service, Hamilton County Prosecutor Joe Deters, and the police departments in Amberley Village, Blue Ash, and West Chester.
U.S. Attorney Stewart commended the FBI agents and task force officers who investigated the case, as well as Assistant U.S. Attorney Christy Muncy who represented the United States in this case.
Central Florida Businessman Pleads Guilty to $44 Million Bank Fraud ConspiracyRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that Pedro “Pete” Benevides (44, Astatula) today pleaded guilty to conspiracy to commit bank fraud and faces a maximum penalty of 30 years in federal prison. In addition, he agreed to forfeit $44,059,565, including several bank accounts holding approximately $40,000,000 in cash, and three exotic sports cars (i.e. a 2008 Lamborghini Murcielago; a 2009 Audi R8; and a 2009 Lamborghini Gallardo). Benevides also agreed to pay full restitution to the financial institutions that were the victims of his offense.
According to the plea agreement, from about 2005 through September 2008, Benevides obtained 20 commercial and residential loans and lines of credit from several federally insured financial institutions, totaling approximately $44,049,565. Benevides obtained the fraudulent loans by giving the financial institutions documents that, among other things, contained false information concerning the income and assets of Benevides or the business that he used to obtain the loans and lines of credit. During that time, Benevides controlled several Central Florida businesses, including a private jet charter service, an exotic car rental service, and hotels in Orange County and Pinellas County, Florida. Those companies included Superior International Investment Corporation (SIIC); ABC Auto Wholesalers, Inc.; Skyview Aviation, Inc.; Fidelity Investment Group LLC; PBJB Best Investment LLC; Divello Family LLC; and Leesburg Title and Escrow Company. Benevides then used the fraudulently-obtained funds for his own purposes, including paying the interest and principal on other, earlier loans that he had obtained in order to continue the fraudulent scheme, paying business expenses, paying the other co-conspirators involved in the scheme, and funding living expenses for himself and his family.
This case was investigated by the Internal Revenue Service (IRS) Criminal Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the United States Secret Service (USSS), and the St. Cloud IRS-USSS Federal Financial Crimes Task Force. It is being prosecuted by Assistant United States Attorneys Daniel C. Irick and James Mandolfo.
Calera Man Sentenced to 36 Months, $45,500 Restitution for Embezzlement by Bank Officer or EmployeeRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that DANIEL JAMES ABBOTT, age 32, of Calera, Oklahoma, was sentenced to 3 years of probation, 8 months of home detention and was ordered to pay $45,524.47 in restitution for Embezzlement By Bank Officer Or Employee, in violation of Title 18, United States Code, Section 656.
The charge arose from an investigation by the Durant Police Department and the United States Secret Service. The defendant pled guilty in March 2014.
The Information alleged that from on or about October 26, 2011 to on or about September 18, 2013, in the Eastern District of Oklahoma, the defendant, being an officer and employee of the First United Bank and Trust, Durant, Oklahoma, a bank whose deposits are insured by the Federal Deposit Insurance Corporation, with intent to injure and defraud First United Bank and Trust, willfully misapplied and embezzled the moneys, funds and assets belonging to said bank and entrusted to the custody and care of the defendant as an officer and employee in an amount exceeding $1,000.00.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing.
Assistant United States Attorney Chris Wilson represented the United States.
Buffalo Man Sentenced for Drug ConspiracyRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Orville Rodriguez, 31, of Buffalo, N.Y., who was convicted of conspiracy to distribute cocaine, was sentenced to 84 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Edward H. White, who handled the case, stated that from July of 2008 through October of 2008, Rodriguez distributed 10 kilograms of cocaine to co-defendant Marcus Chambers on three separate occasions. Chambers paid Rodriguez a total of $1,000,000 for the 30 kilograms of cocaine.
Marcus Chambers was convicted of similar drug charges.
The sentencing is the culmination of an investigation on the part of the Federal Bureau of Investigation.Aynor Resident Sentenced for Theft of Government Funds, FirearmsRead the Press Release
Contact Person: Bill Day (803) 929-3000
Columbia, South Carolina -----United States Attorney Bill Nettles stated today that Steven Mickey Bunker, age 47, of Aynor, South Carolina was sentenced today in federal court in Florence, South Carolina, for theft of government funds, a violation of 18 U.S.C. § 641, and conspiracy to make false statements when purchasing a firearm, a violation of 18 U.S.C. § 371. United States District Judge R. Bryan Harwell of Florence sentenced Bunker to imprisonment for 24 months, 3 years of supervised release, and restitution in the amount of $108,489.36.
Evidence presented at the change of plea hearing established that the Department of Veterans Affairs began an investigation of Steven Mickey Bunker after the Sun News interviewed Bunker and published an article concerning injuries he claimed to have sustained while serving in the military in Iraq. After the news article was published, the Department of Veterans Affairs was notified because the newspaper received so much negative feedback indicating that Bunker had made false statements concerning his injuries. At the time, Bunker was receiving total disability from the VA as a result of his claims that he was paralyzed and unable to walk, drive, eat, or otherwise take care of himself without assistance. Bunker’s total disability included payment for others to take care of him at his home. Bunker also received over $40,000 to purchase a vehicle to be driven by someone without the use of their legs, which Bunker promptly traded for a Hummer. The VA’s investigation revealed that Bunker was able to walk, drive, and otherwise take care of himself. As a result of Bunker’s false claims, he received over $159,000 in VA benefits. In addition, Bunker had purchased twenty-three firearms using straw purchasers. The straw purchasers falsely stated on the ATF forms that they were purchasing the firearms for themselves when in fact Steven Bunker picked out and paid for the firearms. Steven Bunker was not permitted to purchase firearms because of a prior felony conviction for lewd act or attempted lewd act upon a minor less than 16 years of age.
The case was investigated by agents of the Department of Veterans Affairs, Office of Inspector General and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney William E. Day II prosecuted the case.Atoka Woman Sentenced to 5 Months, $29,000 Restitution for Wire FraudRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that MICHELLE RENA McININCH, age 44, of Atoka, Oklahoma, was sentenced to 5 months imprisonment, followed by 5 months of home detention, 3 years of supervised release and ordered to pay $29,337.74 in restitution for Wire Fraud, in violation of Title 18, United States Code, Sections 1343.
The charges arose from an investigation by the Office of Emily Redman, District 19 District Attorney and the United States Secret Service. The defendant pled guilty in November 2013.
The Information alleged that in or about January, 2013 through in or about March, 2013, the defendant, did execute a scheme to defraud banks within the Eastern District of Oklahoma, to-wit: the defendant deposited false and fraudulent financial instruments into accounts at First United Bank, Landmark Bank, BancFirst and First Texoma Bank and immediately began withdrawing approximately $43,121.11 from the accounts by means of automated teller machines (ATMs). As part of the scheme to defraud, the defendant transmitted and caused to be transmitted by means of wire communication in interstate commerce, writings, signs, signals, pictures, or sounds, for the purpose of executing and attempting to execute the aforesaid scheme and artifice to defraud.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. The defendant was ordered to report to the Bureau of Prisons on August 14, 2014.
Assistant United States Attorney Chris Wilson represented the United States.
Albuquerque Man Sentenced to Ten Years for Robbing Wells Fargo Bank Branch at Gunpoint in September 2013Read the Press Release
ALBUQUERQUE – Mariano H. Herrera, 59, of Albuquerque, N.M., was sentenced today to 121 months in federal prison followed by five years of supervised release for his conviction on armed bank robbery and firearms charges.
Herrera was arrested on Sept. 20, 2013, and charged in a criminal complaint with armed bank robbery. Herrera was indicted in Oct. 2013, and charged with armed bank robbery and using a firearm in relation to a crime of violence. Herrera pleaded guilty on Jan. 28, 2014, to the indictment without the benefit of a plea agreement. In entering his guilty plea, Herrera admitted robbing the Wells Fargo Bank branch located on 3401 Coors Blvd. NW, in Albuquerque at gunpoint on Sept. 20, 2013.
Court filings reflect that on Sept. 20, 2013, a man wearing a ski mask entered the bank and drew a handgun from his pants. The masked man brandished the handgun at two bank tellers and demanded that they give him all their money. After the two tellers handed currency to the robber, he left the bank on foot and ran around the building where he got into a pickup truck. Two bank customers, who followed the robber and watched him get into the truck, called “911” and provided the truck’s license plate number.
Deputies of the Bernalillo County Sheriff’s Office proceeded to Herrera’s residence, which was listed as the address for the registered owner of the truck. The deputies arrested Herrera after one of the bank customers positively identified him as the bank robber having seen Herrera’s face as he pulled off the ski mask as he drove away from bank. Herrera then led the deputies to a toolbox that contained Herrera’s handgun and almost all the money Herrera stole from the bank.
This case was investigated by the Albuquerque office of the FBI and the Bernalillo County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney Norman Cairns.
Alabama Men Found Guilty of Robbing Eight Banks Across the SouthRead the Press Release
Gulfport, Miss – Following a two week trial in United States District Court in Gulfport, Keith Anthony Kiel, 38, of Mobile, Alabama, and Randy Laverne Marshall, 34, of Pritchard, Alabama, were found guilty of carrying out a series of eight bank robberies across the Southeast, announced U.S. Attorney Gregory K. Davis and FBI Acting Special Agent in Charge Johnnie Sharp.
The defendants were charged with bank robberies spanning from March 2008 through May 2013 in Mississippi, Alabama and Florida, and the investigation involved federal, state and local law enforcement from four federal judicial districts. The defendants were charged in three separate federal indictments which were consolidated together for trial.
Kiel was found guilty on eleven separate criminal counts including bank robbery, conspiracy to commit bank robbery, brandishing a firearm during a violent felony, interstate transportation of a stolen vehicle, and witness intimidation. Marshall was found guilty on seventeen counts of bank robbery, conspiracy to commit bank robbery, brandishing a firearm during a violent felony, and interstate transportation of a stolen vehicle.
Three of the robberies occurred from March – June 2008 with the other five robberies occurring from December 2012 through May 2013. Most of an approximately four-year gap in the robberies coincided with a period from July 2008 to May 2012 when defendant Randy Marshall was in continuous custody for another conviction.
A chronological list of the eight bank robberies in Mississippi, Alabama, and Florida is as follows:
Regions Bank, Bienville Boulevard, Ocean Springs, MS (3/4/08)
First Federal Savings and Loan, U.S. Highway 90, Gautier, MS (5/13/08)
Regions Bank, Eisenhower Drive, Biloxi, MS (6/19/08)
Merchants & Marine Bank, Mississippi Highway 613, Moss Point, MS (12/13/12)
Wells Fargo Bank, Mobile Highway, Pensacola, FL (1/28/13)
Hancock Bank, Cowan Road, Gulfport, MS (3/20/13)
Bancorp South, Fort Dale Road, Greenville, AL (5/2/13)
Hancock Bank, Main Street, Moss Point, MS (5/17/13)
Marshall was arrested on May 19, 2013, on a state warrant just days after the Hancock Bank robbery in Moss Point, and Kiel was arrested on a federal warrant in September 2013. Both Kiel and Marshall will be sentenced by Chief U.S. District Judge Louis Guirola, Jr. on October 14, 2014. The maximum penalty for each count of bank robbery is 25 years in prison and a $250,000.00 fine. The maximum penalty for each count of conspiracy is 5 years in prison and a $250,000.00 fine. The maximum penalty for brandishing a firearm during a violent felony is not less than 7 years in prison (consecutive to other penalties) and a $250,000.00 fine for the first conviction and not less than 25 years in prison (consecutive to other penalties) and a $250,000.00 fine each for subsequent convictions. The maximum penalty for each count of interstate transportation of a stolen vehicle is 10 years in prison and a $250,000.00 fine. The maximum penalty for witness intimidation is 20 years in prison and a $250,000.00 fine. Two other co-defendants in the case, Lamarcus Moore and Reginald Robinson of Saraland, Alabama, previously pled guilty to related charges and were cooperating accomplice witnesses against Kiel and Marshall. Moore pled guilty to one count of bank robbery and one count of conspiracy to commit bank robbery. He will be sentenced on September 4, 2014. Robinson pled guilty to conspiracy to commit bank robbery and will be sentenced on July 28, 2014.
This case was investigated by the Federal Bureau of Investigation with substantial assistance from the FBI Safe Streets Task Force, FBI Laboratory in Quantico, Virginia, and the FBI Cellular Analysis Survey Team. Also assisting in the case were multiple other federal, state and local law enforcement agencies including substantial assistance from the Mississippi and Alabama State Crime Labs. The case was prosecuted by Assistant U.S. Attorney Stan Harris.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Monday 14 July 2014
Woodbridge Man Charged with Defrauding Milford Company of More Than $1 MillionRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that GIOVANNI MASUCCI, also known as John Masucci, 46, of Woodbridge, was arrested yesterday on an indictment that charges him with defrauding a Connecticut company of more than $1 million.
MASUCCI appeared today before U.S. Magistrate Judge William I. Garfinkel in Bridgeport, entered a plea of not guilty and was ordered detained pending a hearing that is scheduled for July 17.
According to the indictment, MASUCCI operated a financial consulting business in North Haven. As part of his business, he provided financial consulting services to a company located in Milford and had access to the company’s checkbooks and financial ledgers. From approximately July 2011 to May 2014, it is alleged that MASUCCI defrauded the Milford company by diverting company funds to his own bank account. He then used the funds to pay personal expenses, including travel and lodging expenses, and purchases at several high-end retailers. It is further alleged that MASUCCI created false entries in the corporate check ledger that falsely indicated the checks were written for legitimate business purposes. MASUCCI would typically forge the signature of the authorized company representative on the check.
On July 9, 2014, a federal grand jury sitting in New Haven returned an indictment charging MASUCCI with four counts of wire fraud and three counts of mail fraud. Each charge carries a maximum term of imprisonment of 20 years and a fine of up to $250,000.
U.S. Attorney Daly stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Connecticut Financial Crimes Task Force, the United States Secret Service and the Greenwich Police Department. The case is being prosecuted by Assistant U.S. Attorney Ray Miller.
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[email protected]Wichita Man Pleads Guilty to Filing False Tax ReturnRead the Press Release
WICHITA, KAN. A Wichita man pleaded guilty Monday to filing a false tax return and agreed to pay $34,510 in restitution, U.S. Attorney Barry Grissom said.
James L. Pennington, 66, Wichita, Kan., pleaded guilty to one count of filing a false tax return. In his plea, he admitted his federal income tax return for calendar year 2006 made false claims of expenses for a consulting business. The tax return also failed to report income from the consulting business.
Pennington is a co-defendant with his son, Jason Matthew Pennington, 42, Bel Aire, Kan., who is awaiting trial on charges of wire fraud, money laundering, bank fraud and making false statements to a financial institution. The indictment alleges Jason Pennington stole money from the trust of Marlene M. Brown after her death.
James Pennington is set for sentencing Oct. 6. Both parties have agreed to recommend a year of supervised release in addition to the restitution.
Grissom commended the FBI, IRS - Criminal Investigation and Assistant U.S. Attorney Lanny Welch and Assistant U.S. Attorney Aaron Smith for their work on the case.
West Huntington Man Sentenced for Role in Heroin ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A West Huntington man was sentenced today to 15 months in federal prison for his role in a heroin distribution conspiracy, announced U.S. Attorney Booth Goodwin. Brandon S. Keaton, 28, pleaded guilty in April 2014 to conspiracy to distribute a quantity of heroin before Chief United States District Judge Robert C. Chambers in Huntington.
Beginning in the summer of 2013, Keaton participated in a conspiracy along with Christopher Lamarr-Shawn Harris, Denzel Lamar Bunkley, Jakaiser Wesely Jackson, and others, to distribute heroin primarily in West Huntington. On December 30, 2013, Keaton distributed heroin to a confidential informant in the 1400 block of Jefferson Avenue in West Huntington. After the distribution, Keaton was observed entering an apartment located at 1416 Jefferson Avenue.
On December 31, 2013, officers with the Huntington Police Department’s Special Investigations Unit executed a search warrant at the Jefferson Avenue apartment. Officers seized approximately 413 grams of heroin and $12,349 in United States currency during the search. Keaton was arrested on January 26, 2014, and admitted to officers that he participated with others in the conspiracy by distributing heroin in West Huntington from the apartment over a six-month period.
Harris, Bunkley, and Jackson all previously pleaded guilty to their roles in the conspiracy and are scheduled to be sentenced in October 2014.
The Huntington Police Department Special Investigations Unit, the West Virginia State Police, the United States Drug Enforcement Administration and the United States Marshals Service all participated in the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case is being prosecuted as 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 heroin and prescription drugs. 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 opiates, including heroin, in communities across the Southern District.
Wanblee Man Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wanblee, South Dakota, man charged with two counts of Simple Assault pled guilty to the charges and was sentenced on July 8, 2014, by U.S. Magistrate Judge Mark A. Moreno.
Lionel Between Lodges, age 26, was sentenced to 12 months of probation and a $20 assessment to the Federal Crime Victims Fund.
The conviction stems from an incident that took place in Eagle Butte on March 9, 2010, when Between Lodges unlawfully assaulted a male adult victim from Wanblee.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. The case was prosecuted by Assistant U.S. Attorney Mikal Hanson.
Virginia Beach Man Convicted of Conspiracy and Production of Child PornographyRead the Press Release
NORFOLK, Va. – Robert Harold Scott, Jr., 27, of Virginia Beach, Va., was convicted today by a federal jury on 28 counts involving child pornography and destruction of records charges.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Special Agent in Charge Clark Settles, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C., made the announcement after the verdict was accepted by Senior United States District Judge Robert G. Doumar.
Scott faces a maximum penalty of life imprisonment when he is sentenced on November 12, 2014.
A superseding indictment against Scott was returned on March 5, 2014, by a federal grand jury for five counts of conspiracy to produce child pornography; eight counts of production of child pornography; eight counts of receipt of child pornography; five counts of use of an interstate commerce facility to entice a minor to engage in sexual activity; and two counts of destruction of records.
According to court records and evidence at trial, Scott assumed the online identity of “Mike Pyro.” He would routinely communicate with women in and around the Tidewater area to set up “sex parties,” where the women would work as prostitutes and Scott would pay them for their services. In reality, Scott would not pay them and sometimes would extort the women by threatening to publish sexually explicit videos. In May 2013, Scott was convicted in Virginia Beach Circuit Court for felony extortion and larceny based on similar facts. In addition to the adult parties, Scott was found to be conspiring to and producing child pornography with at least five different women. Law enforcement found that, when discussing the sex parties, sometimes Scott would request these women to produce child pornography and was very specific as to the sex acts he wanted done on camera. Five different women complied, in return for the promise of money. Three of these women already pleaded guilty in Federal court to production of child pornography, and one of these women pleaded guilty in Chesapeake Circuit Court. In total, law enforcement identified seven minor victims involved in the sexual abuse and production, with the youngest being one year old and the oldest being five years old.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Elizabeth M. Yusi and Jay V. Prabhu are prosecuting the case on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
United States Attorney Joe Hogsett Announces Resignation from OfficeRead the Press Release
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced today his resignation from office, effective July 31, 2014. In a letter submitted to Attorney General Eric Holder this morning, Hogsett thanked his staff and reflected on his time as U.S. Attorney:
“It has been an honor to serve in this office for the last four years because I have had the privilege to do so alongside a talented group of Assistant United States Attorneys. I owe them and our tireless support staff a debt of gratitude for the dedication and resilience that has been displayed every day of my tenure…
The result of this effort has been the most exciting period in the office’s history. We have set new records for the number of defendants charged and the total number of criminal convictions. The office has led the nation in average length of sentences imposed on criminal defendants. Fiscally, annual office spending has fallen every year I have served, and is currently at a level not seen since the Bush Administration.
But numbers alone are not sufficient to describe the office’s accomplishments. Rather, the full story is told through the thousands of victims who found some sense of justice over the last four years – children who had faced horrific exploitation, grandmothers who had watched their retirement funds disappear, neighborhoods that used to live in fear of violent gangs that operated with no regard for the rule of law.”
In July 2010, Joseph H. Hogsett was nominated to serve as United States Attorney for the Southern District of Indiana. He was unanimously confirmed by the United States Senate and sworn into office on October 7, 2010.
A full-length copy of Hogsett’s resignation letter to Attorney General Holder is attached.
U.S. Attorney’s Office Reaches Forfeiture Settlement with RRA Liquidating TrusteeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that the United States Attorney’s Office has reached a forfeiture settlement, subject to court approval, with Michael I. Goldberg, Esq., the Liquidating Trustee for Rothstein, Rosenfeldt & Adler PA (“RRA”), globally resolving all issues between RRA’s bankruptcy estate and the United States relating to forfeiture and restitution matters in connection with the criminal prosecution of Scott W. Rothstein (“Rothstein”). The proposed settlement follows Rothstein’s 2010 guilty plea to conspiracy to violate the RICO statute in violation of Title 18, United States Code, Section 1962(d); conspiracy to commit money laundering in violation of Title 18, United States Code, Section 1956(h); conspiracy to commit mail fraud and wire fraud in violation of Title 18, United States Code, Section 1349; and two counts of wire fraud in violation of Title 18, United States Code, Section 1343. Rothstein was sentenced to 50 years in prison and was ordered to pay restitution to 320 victims of the scheme. Since Rothstein’s conviction, approximately 24 other defendants have been convicted in connection with the scheme.
The United States sought forfeiture of a vast array of real property, luxury boats and vehicles, bank accounts, jewelry, and investments valued at approximately $50 million. According to court documents, the parties will seek approval of the settlement agreement by both the U.S. Bankruptcy Court overseeing RRA’s bankruptcy and the U.S. District Court handling the underlying criminal case. Upon approval of the settlement agreement, the parties have agreed to the entry of a final order of forfeiture for assets sufficient to satisfy the U.S. District Court’s restitution orders. The United States has expressly agreed to restore all forfeited assets and proceeds from those assets to satisfy the restitution orders entered in the criminal case.
Further, subject to court approval, the settlement agreement provides an equitable mechanism that will allow for all non-subordinated victims to be paid in full. Approximately $28 million from the seized assets will go towards restitution payments to qualifying victims in the criminal case, while the RRA bankruptcy estate to receive a distribution in the approximate amount of $21 million. The full restitution to the qualifying victims is possible through a combination of forfeited funds as well as funds obtained by the victims through the bankruptcy proceedings, federal and state proceedings and other collateral sources.
The settlement agreement also provides for the appointment of Michael I. Goldberg, Esq., as the “Restitution Receiver” responsible for distributing the restitution funds to qualifying victims in accordance with the terms of the agreement and the eventual amended restitution order (which shall account for all collateral sources of recovery pursuant to Title 18, United States Code, Section 3664(j)).
U.S. Attorney Wifredo A. Ferrer stated that “This case demonstrates our commitment to work tirelessly to return stolen assets to the victims of the financial crimes perpetrated by Scott Rothstein’s criminal network. Today’s settlement is the culmination of many years of relentless work to maximize forfeiture to obtain restitution for the victims of Rothstein’s fraud consistent with the Department of Justice Asset Forfeiture Program and the Mandatory Victims Restitution Act.”
IRS-CI Acting Special Agent in Charge Donnell Young stated, “IRS-CI enforces the nation’s tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others. We are pleased with today’s settlement agreement to return assets to the victims of this case, and will continue to work with our law enforcement partners to assist in dismantling criminal enterprises and forfeiting their assets.”
“In addition to bringing fraud perpetrators to justice, a top priority for the FBI is seizing assets obtained through fraud in order to compensate victims,” said Acting FBI Special Agent in Charge Kelly M. Darden, Jr. “For many fraud perpetrators, taking their assets removes most or all benefit they obtained by their crimes.”
Mr. Ferrer commended the investigative efforts of the IRS-CI and the FBI. The criminal case was prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan. The forfeiture proceedings were handled by Assistant U.S. Attorneys Michelle B. Alvarez, Evelyn B. Sheehan, and Alison W. Lehr. The appeal of the forfeiture proceedings was handled by Assistant U.S. Attorney Madeleine R. Shirley
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.
U.S. Attorney John Walsh's Remarks at Citigroup Settlement Regarding Securities Containing Toxic MortgagesRead the Press Release
Click here for link to Department of Justice press release and settlement documents
Press Conference on Citi Settlement
July 14, 2014, 10:00 a.m.Remarks by John Walsh
United States Attorney for the District of ColoradoThank you, Tony. I am John Walsh, U.S. Attorney for the District of Colorado. I also serve as one of the national co-chairs of the Department’s RMBS Working Group.
The settlement announced today holds Citigroup responsible for its actions. It holds Citigroup responsible for using false representations to sell billions of dollars of residential mortgage-backed securities full of toxic mortgage loans.Citigroup’s conduct had far-reaching and financially devastating consequences for investors, including investors in Colorado, the housing market and ultimately, the global economy. Investors suffered billions of dollars in losses on the value of these RMBS securities.
Citi knew that when it sold these securities to investors, its representations about the mortgage loans were crucial. The mortgage loans had to have the quality and characteristics that Citi represented the loans to have. If not, then Citi was responsible. This settlement holds Citi to its word: The mortgage loans Citi packaged and sold to investors were not what Citi said they were. They were far worse, and Citi knew it. And now, Citi is being held responsible.
As U.S. Attorney Lynch will describe for you, the resolution announced today reflects the extraordinary hard work of prosecutors and staff in the U.S. Attorney’s Offices both in Brooklyn and in Colorado. Our investigation focused on whether Citi told the truth when it securitized and sold billions of dollars mortgage loans. Some details of what the investigation showed are set forth in a statement of facts that Citi has itself acknowledged. Let me briefly summarize those facts, as even Citi has acknowledged them.
In the years leading up to the global financial crisis of 2008, Citi securitized numerous pools of mortgage loans from loan originators such as Ameriquest, Accredited, and New Century. Each loan pool could contain hundreds or thousands of mortgage loans, worth billions of dollars. Citi packaged those loan pools into securities and sold them as safe investments.
When Citi sold those securities, it provided representations to investors about the underlying mortgage loans. Citi knew those representations were important. Investors, after all, did not have direct access to the loan files in order to make their own assessment of the loans.
But Citi did. It could review the loan files. And before securitizing the loan pools, Citi did conduct a review -- due diligence -- of some loans in the loan pools. Citi hired outside underwriting firms to review a limited sample of loan files from the pool.
Those firms checked some basic facts on the sample of loans. The firms looked at whether the loan originator – the lender -- had followed its “underwriting guidelines,” which were criteria used to check if a borrower could pay the mortgage. The firms checked whether the lender had followed federal, state, and local laws, laws that were designed to protect borrowers. And the firms reviewed house values and appraisals.
Those firms gave each loan a grade. Some loans were graded as passing. Other loans were graded as rejects.
The “reject” loans had material defects. For example, a loan might be a reject if the borrower did not the ability to pay the mortgage, or if the lender violated the law when issuing the loan, or if the home appeared to be worth far less than what was being reported, or if the borrower was underwater on the mortgage. Under its own procedures and from its representations made to investors, Citigroup knew these “reject” loans should be excluded from the securitization.
But as our investigation learned, Citi employees often personally ordered the due diligence firms to change the loan grades, from reject to acceptable. Citi frequently ordered these grade changes without giving a reason.
And even after Citi ordered these changes in the grades, the outside firms often still reported to Citi that significant percentages of the sampled loans were rejects. In certain instances, these “reject rates” indicated that a significant and likely comparable percentage of the unsampled loans in the pools were also “rejects.” In other words, a small sample of the loan pools showed high reject rates, but Citi did not attempt to find those same sort of reject loans that Citi knew would be included in the rest of the loan pool, which Citi had not reviewed.
Those significant reject rates told Citi that the representations Citigroup was providing about the loans were not true. But despite seeing these significant problems in the samples, Citi went ahead and securitized the remainder of the loan pools, and sold the resulting securities, while providing false representations about the loans.
The statement of facts, which Citi has acknowledged today, provides a few brief examples. Let me describe two examples.
First, in 2007, Citi bought thousands of loans from a loan originator. The due diligence firm told Citi that large numbers of the sampled loans had material defects. In fact, the words of a Citi trader say it all: “[I] went thru the Diligence Reports and think that we should start praying… I would not be surprised if half of these loans went down. There are a lot of loans that have unreasonable incomes, values below the original appraisals (CLTV would be >100), etc. It’s amazing that some of these loans were closed at all.” Despite this, Citi employees then changed hundreds of loan grades from reject to acceptable. And then Citi securitized the loans into two deals in 2007.
Second, the statement of facts also describes another series of four deals in 2007 in which Citi bought and securitized thousands of loans from a loan originator. In early 2007, Citi explored purchasing that originator’s assets as a way to be sure that Citi’s pipeline of mortgage loans to securitize did not run dry as the residential real estate market turned down. Citi conducted due diligence on the originator, and on the pools of loans that the originator sold to Citi. Through its own due diligence, Citi learned that there were substantial percentages of the originator’s loans that failed to adhere to the lender’s underwriting guidelines. Through its own due diligence, Citi learned that the originator lacked key internal quality control measures. The problems were spelled out for Citi in the originator’s own internal audit reports. Citi’s response to the serious issues raised about the underwriting violations and reject rates was to ignore the defects, and to purchase and securitize the loans in four securitizations in 2007.
To its credit, in this settlement, Citi has agreed to take responsibility for its conduct, in several ways, by paying a large penalty, by providing valuable consumer relief, and by acknowledging a statement of facts that describes its conduct. Taking responsibility for the conduct is an important step to restoring faith in the financial markets. The strength of our markets depends on the truth of the representations that banks provide to investors and the public every day. However, the work of the RMBS working group continues, because many other banks that have not yet accepted responsibility for their actions in selling RMBS securities full of toxic mortgages.The strength of our financial markets depends on the truth of the representations that banks provide to investors and the public every day. Today's $7 billion settlement is a major step toward restoring public confidence in those markets. Due to the tireless work by the Department of Justice, Citigroup is being forced to take responsibility for its home mortgage securitization misconduct in the years leading up to the Financial Crisis. As important a step as this settlement is, however, the work of the RMBS working group is far from done, we will continue to pursue our investigations and cases vigorously because many other banks have not yet taken responsibility for their misconduct in packaging and selling RMBS securities.
I want to thank the Attorney General for his strong support of the RMBS Working Group, as well as Associate Attorney General Tony West, U.S. Attorney Lynch and the entire team from the Eastern District of New York, and FHFA-OIG for their hard work in this case. I also particularly want to recognize Colorado Assistant U.S. Attorneys Kevin Traskos, J. Chris Larson and Lila Bateman, as well as the many other hardworking members of the team, for their outstanding work on this matter.Two Leaders of Israeli Fraud Ring Sentenced in Manhattan Federal Court in Connection with “Lottery” Scheme That Targeted Elderly Victims in the United StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that AVI AYACHE and YARON BAR, two leaders of an Israeli lottery fraud ring, were sentenced today by Chief United States District Judge Loretta A. Preska to 13 years and 12 years in prison, respectively, on mail and wire fraud charges. All 12 members of the ring who were charged in this case have pleaded guilty. With this sentence, nine of the twelve defendants have been sentenced. Before today’s sentencing, the sentences have ranged from 40 to 144 months in prison. Three remaining sentencings are scheduled for July and August, 2014.
Manhattan U.S. Attorney Preet Bharara said: “Avi Ayache and Yaron Bar were leaders of a predatory group that targeted elderly people in the U.S., conning them into believing they were lottery winners. Preying on their victims’ dreams of financial comfort, Ayache and Bar bilked them out of substantial portions of their life savings. Now Ayache and Bar will spend a substantial portion of their lives in prison.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made at various proceedings in this case:
From approximately 2005 through 2009, the defendants participated in a phony “lottery prize” scheme that targeted victims, mostly elderly, in the United States. The defendants identified victims, or “leads,” by purchasing from list brokers the names and contact information of U.S. residents who subscribed to sweepstakes lotteries. Then, operating out of telemarketing boiler rooms run by “Managers,” “Qualifiers” called the victims and, using a script, falsely told the victims they had won a substantial cash prize, and asked them about their assets. If the victim had sufficient assets, the victim was transferred to a “Shooter,” who purported to be an attorney in the U.S., and who told the victims that to obtain the prize, they had to pay several thousands of dollars in fees and taxes. Victims who complied were typically contacted again by Shooters and induced to send additional funds, amounting to tens and sometimes hundreds of thousands of dollars. In reality, there was no lottery prize and the victims were ultimately bilked out of an estimated total of more than $8 million.
The defendants operated multiple boiler rooms that used the names of various sham law firms purportedly located in New York, including law firms named “Abrahams Kline,” “Bernstein Schwartz,” “Steiner, Van Allen, and Colt,” “Bloomberg and Associates,” and “Meyer Stevens.” The defendants further used various aliases and call forwarding telephone numbers to mask the fact that the defendants were located in Israel. The defendants also possessed bank accounts in Israel, Cyprus, and Uganda, to which illegal proceeds were wired. In furtherance of the fraudulent scheme, the defendants even sent shipments of flowers and gift baskets to various victims in the United States in order to “congratulate” them on their purported lottery winnings.
In addition to the prison terms, Judge Preska also ordered AYACHE and BAR to forfeit $8.2 million and pay restitution of $8.2 million.
Eleven of the twelve defendants were arrested in Israel in July 2009. All 11 were extradited to the United States. A twelfth defendant, Matthew Getto, was arrested in July 2009 at Newark International Airport as he attempted to board a flight for Israel.
The earlier sentencings of the members of the lottery fraud scheme included the following:
- On June 5, 2012, Avi Perov was sentenced by the Honorable Barbara S. Jones to 51 months in prison on wire fraud charges;
- On August 4, 2011, Yulia Rayz was sentenced by the Honorable Barbara S. Jones to 40 months in prison on wire fraud charges;
- On December 15, 2011, Naor Green was sentenced by the Honorable Barbara S. Jones to 40 months in prison on wire fraud charges;
- On June 7, 2012, Ian Kaye was sentenced by the Honorable Barbara S. Jones to 51 months in prison on wire fraud charges;
- On April 18, 2013, Limor Cohen was sentenced by the Honorable Loretta A. Preska to 97 months in prison on wire fraud charges;
- On December 12, 2013, Matthew Getto was sentenced by the Honorable Harold Baer to 144 months in prison on wire fraud charges.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Peter M. Skinner is in charge of the prosecution.
Tennessee Business Owner Pleads Guilty to Cargo Theft SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Memphis, Tenn., business owner pleaded guilty in federal court today to his role in a cargo theft scheme that included a theft in West Plains, Mo.
Earl Stanley Nunn, 59, pleaded guilty before U.S. Magistrate Judge David P. Rush to theft of an interstate shipment.
Nunn, the owner of Nu World Trucking, LLC, was the leader of a cargo theft ring that used the resources of Nu World Trucking to steal cargo in various states. They did so by “bob-tailing” (meaning they traveled in a road tractor truck, without a semi-trailer attached) through truck stops and service stations located on or near interstate highways, looking for semi-trailers that had been left parked and unattended, and were not coupled to road tractors. When they located a semi-trailer that appeared to be unattended, they would steal the semi-trailer and the goods it contained by coupling their road tractor truck to it and driving off. After having stolen a semi-trailer and its contents, they usually transported the stolen goods to the Chicago, Ill., and Detroit, Mich., areas to be “fenced” or sold.
Nunn’s co-conspirators included his nephew, Michael Lee Sherley, 49, of Memphis, Tenn. (who pleaded guilty on March 19, 2014), his son, Roderick Nunn (who pleaded guilty in a related case in the Western District of Michigan) and others.
The government plans to establish that co-conspirators committed thefts in various states, including Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Missouri, Nebraska, Ohio, Tennessee, Texas, and Virginia.
The specific charge to which both Nunn and Sherley pleaded guilty involves a theft that occurred on May 11, 2013, at the Snappy Mart Truck Stop in West Plains. Nunn and Sherley stole a 2000 Wabash trailer (valued at $7,500), which contained a load of Green Giant canned corn (valued at $73,008). The trailer, owned by Bryant Freight, LLC, was in transit from Minnesota to a food bank in Arkansas. Nunn and Sherley admitted that they traveled through Missouri and Indiana with the stolen cargo before being apprehended in Michigan.
Under federal statutes, Nunn and Sherley are each 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 Steven M. Mohlhenrich. It was investigated by the FBI’s Memphis Cargo Theft Task Force, the U.S. Marshal’s Service, the West Plains, Mo., Police Department and the Michigan State Highway Patrol.St. Louis Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
Follow @SDILNewsTyrone H. Bailey, 56, of St. Louis, Missouri, was sentenced on July 11, 2014, in federal district court in East St. Louis, Illinois, for his failure to register as a sex offender, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Bailey was sentenced to 15 months in federal prison, five years of supervised release, ordered to pay $100 special assessment and a $300 fine.
Bailey moved back and forth from Missouri to Illinois between August 18, 2010, and November 19, 2013, failing to register within the three day requirement each time he changed his residence. The registration condition was due to his three count Statutory Rape conviction on November 17, 1995, in St. Louis County, Missouri.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The case was investigated by the United States Marshals Service and prosecuted by Assistant United States Attorney Daniel T. Kapsak.
Shiprock Man Pleads Guilty to Federal Assault ChargeRead the Press Release
ALBUQUERQUE – Thomas Navaho, 21, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., pleaded guilty this morning to a federal assault charge under a plea agreement with the U.S. Attorney’s Office.
Navaho was arrested on March 4, 2014, on a criminal complaint charging him with assault and subsequently was charged in a two-count indictment with assault resulting in serious bodily injury and assault with a dangerous weapon. According to court filings, Navaho assaulted the victim, another Navajo man, on Feb. 22, 2014, at a location within the Navajo Indian Reservation.
During today’s hearing, Navaho entered a guilty plea to Count 1 of the indictment charging him with assault resulting in serious bodily injury. Navaho admitted that on Feb. 22, 2014, he initiated the assault by choking the victim while he was asleep. Navaho continued his assault on the victim during a physical altercation, during which the victim sustained injuries that required medical attention.
Navaho has been in federal custody since his arrest and remains detained pending his sentencing hearing. At sentencing, Navaho faces a maximum penalty of ten years in prison when he is sentenced, which has yet to be scheduled.
This case was investigated by the Farmington Office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.
Saraland Man Sentenced to Fifteen Years in Child Pornography CaseRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Michael Dewayne Kimbrell, 52, of Saraland was sentenced to fifteen years in prison for receipt and distribution of child pornography. Kimbrell was sentenced by United States District Judge Charles R. Butler. Following his release, Kimbrell will be supervised by the United States Probation Office for the rest of his life and will be required to register as a sex offender.
Kimbrell pled guilty to the charge in November, 2013. He has been in custody since his arrest in June of 2013. The investigation revealed that Kimbrell had actively sought out and traded child pornography with other internet users, as well as downloaded images and videos of child pornography. Investigators recovered thousands of computer images, hundreds of videos, and more than 4,000 hard copy printouts from Kimbrell of victims as young as two years old. During a polygraph interview, Kimbrell initially denied ever having inappropriate contact with a child, but after being confronted with the results of the polygraph, ultimately admitted that when he was younger, he lured a toddler under a bridge, removed her diaper, and molested her.
The case was investigated by the Federal Bureau of Investigation. The prosecution was handled by Assistant United States Attorney Sean P. Costello as part of the Department of Justice’s Project Safe Childhood initiative, a unified and comprehensive strategy to combat child exploitation. The goal of Project Safe Childhood is to reduce the incidence of sexual exploitation of children. For more information, please visit http://www.justice.gov/psc/
Rothstein Associate Charged with Conspiracy to Commit Wire FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce the filing of charges against Frank Preve, 70, of Coral Springs, for conspiring to commit crimes associated with the operation of the former Fort Lauderdale law firm of Rothstein, Rosenfeldt and Adler, P.A. (RRA). In 2009, it was discovered that RRA was being utilized by its Chairman and Chief Executive Officer, Scott W. Rothstein, to commit a massive Ponzi scheme stemming from the sale of fictitious confidential settlements.
The information, which was filed earlier today, charges Preve with conspiracy to commit wire fraud, in violation of 18 U.S.C. ' 371. If convicted, the defendant faces a maximum statutory sentence of up to five years in prison.
According to the information, Preve worked for a number of companies, referred to as “the Banyon Group,” which solicited lenders and investors into the confidential settlement business being offered by Rothstein. The information further charges that, from in or about July 2009 through October 2009, Preve defrauded investors by not disclosing that Rothstein had failed to make payments that were due to the Banyon Group, that Rothstein had frozen certain bank accounts that were holding investor funds, that certain paperwork was not being prepared, and that verification of the investments was not taking place, all in violation of a private placement memorandum which had been circulated to potential investors by the Banyon Group. The information further charges that, through these material misrepresentations and omissions, Preve caused more than $20 million to be paid by investors to the Banyon Group.
Mr. Ferrer commended the investigative efforts of the IRS-CI and FBI. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan.
An information 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.
Rapid City Man Pleads Not Guilty to Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Bradley Makes Room For Them, age 29, was indicted on April 22, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on July 7, 2014, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is 10 years in custody and/or a $250,000 fine, a lifetime of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Makes Room For Them failing to register as a convicted sex offender between November 22, 2013, and April 22, 2014, in South Dakota.
The charge is merely an accusation and Makes Room For Them is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Eric Kelderman is prosecuting the case.
Makes Room For Them was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for September 9, 2014.
Quincy Man Charged with $3.4 Million Forex Investment SchemeRead the Press Release
Boston – A Quincy man was charged today with engaging in a scheme to defraud persons seeking to invest in the foreign currency exchange (“forex”) market.
Marcellus Lopes Lee, 46, was charged in an indictment unsealed today with 16 counts of wire fraud and six counts of monetary transactions in property derived from specified unlawful activity.
According to the Indictment, Lee was the owner and operator of Taurus Global Markets, Ltd. (TGM), an entity which he held out as being a company that executed transactions in the forex market on behalf of investors. The indictment alleges that Lee induced prospective investors to wire funds to TGM's Belize bank account for the purpose of trading in the highly-risky forex market when, in fact, Lee never intended to use the funds for that purpose, but instead converted investors’ funds to Lee 's own personal and other uses. It is alleged that Lee held out TGM as having staff, management and its computer network "distributed all across the world," when in fact TGM had no employees and Lee operated it primarily from his residence in Massachusetts. According to the indictment, Lee caused investors to be sent documents reflecting that their money was invested in the forex market, and that all or most of the investors' funds were lost in forex trading when, in fact, no actual forex transactions had occurred on behalf of investors, and Lee instead converted the money to his own use. The indictment alleges that Lee defrauded at least 65 individuals of more than $3.4 million through this scheme.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 on the charge of wire fraud, and on the charge of illegal monetary transactions, a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Pilot Flying J Enters into Criminal Enforcement AgreementRead the Press Release
Requires Full Restitution to Fraud Victims, Payment of $92 Million Monetary Penalty,and Complete Cooperation with Ongoing Federal Investigation
KNOXVILLE, Tenn. – Pilot Travel Centers LLC, d/b/a Pilot Flying J (Pilot), has entered into a Criminal Enforcement Agreement with the United States for the purpose of resolving the company’s criminal liability for its employees’ fraudulent conduct in deceptively withholding diesel fuel price discounts from hundreds of customers.
As stated in the attached agreement, Pilot has accepted legal responsibility for the criminal conduct of its employees, which caused more than $56 million in loss to its customers, and agreed to pay full restitution to every victim of the fraud. Pilot further acknowledged the gravity of its employees’ criminal wrongdoing by agreeing to pay the United States a $92 million monetary penalty – an amount within the fine range recommended by the U.S. Sentencing Guidelines. The agreement also expressly states that it provides no protection from prosecution to any individual, and moreover, imposes a continuing obligation on Pilot to provide complete cooperation with the ongoing federal investigation of current and former Pilot employees relating to fraudulent conduct involving the sale of diesel fuel. Pilot must also periodically report to the United States what it has done to ensure that a system of internal accounting controls and other compliance procedures have been established to prevent fraudulent conduct from occurring again in the sale of diesel fuel. In the event Pilot materially breaches its obligations under the agreement, Pilot has agreed that the United States may file the criminal information, attached to the agreement, and will not contest the allegations in that charging document.
“The terms of this agreement, including the significant monetary penalty and the very serious consequences if Pilot fails to comply, demonstrate quite clearly that no corporation, no matter how big, influential, or wealthy, is above the law,” said U.S. Attorney Bill Killian. “In addition, the company’s agreement to fully cooperate with the United States, including its obligation to identify its employees’ criminal conduct, will assist the ongoing federal investigation. The agreement ensures that Pilot’s extensive remediation efforts will continue until all trucking company victims have received full restitution and until Pilot has demonstrated to the United States that it has implemented sufficient internal controls to prevent this kind of fraudulent conduct from ever occurring again,” continued Killian.
Following a lengthy joint-investigation by the FBI and the IRS-Criminal Investigation into allegations of fraudulent conduct at Pilot, on April 15, 2013, search warrants were executed at multiple locations, including Pilot’s headquarters in Knoxville. Since that time, 10 Pilot employees, including those with supervisory responsibilities, agreed to cooperate with the ongoing federal investigation and entered guilty pleas to mail and wire fraud charges arising from their involvement in the fraudulent reduction of diesel fuel price discounts owed to Pilot customers.
In the agreement, Pilot confirmed that fraudulent conduct involving diesel fuel price discounts was prevalent within its Direct Sales group and carried out with the knowledge and participation of employees responsible for the operation and oversight of Direct Sales. Pilot further confirmed that supervisory employees encouraged participation in discount fraud for the company’s benefit. For example, during a November 19 and 20, 2012, annual sales training meeting at Pilot’s headquarters in Knoxville, a Pilot supervisor encouraged and taught Direct Sales employees how to deceptively reduce the rebates paid to some customers for the purpose of making targeted accounts more profitable for the company.
Pilot also confirmed that the discount fraud was executed generally in one of two ways: either by fraudulently reducing the amount of monthly rebate amounts to targeted customers or by deceptively reducing the off-invoice discounts of targeted customers. Pilot acknowledged that its employees emailed spreadsheets among each other that documented their fraudulent reductions, and that in some cases, its employees fabricated “back up” documentation sent to customers to justify fraudulently reduced rebate or discount amounts.
Additionally, Pilot confirmed that in February 2013 certain Pilot employees involved with Direct Sales expressed an intent to expand the scheme to defraud by having Direct Sales personnel identify and target Pilot’s off-invoice customers that were considered to be too unsophisticated to carefully monitor diesel pricing data in conjunction with their periodically received fuel invoices. As set forth in the agreement, certain Pilot employees involved with the operation and oversight of Direct Sales referred to this new aspect of the fraud as “cost plus B plan” – named after having two tiers of cost pricing for different types of customers: tier “A” and tier “B.” Pilot further acknowledged that certain employees involved with the operation and oversight of Direct Sales planned not to inform the targeted unsophisticated customers of their placement in the higher-priced tier, and these employees occasionally referred to these targeted customers as “Customer Bs.”
The FBI’s and IRS-Criminal Investigation’s joint investigation is ongoing. Assistant U.S. Attorneys F. M. (Trey) Hamilton III and David P. Lewen, Jr. are representing the United States.
(Download Agreement )
Omaha Man Sentenced to 30 Years Imprisonment on Firearm ChargesRead the Press Release
United States Attorney Deborah R. Gilg announced that Ranelle Perry of Omaha was sentenced on July 14, 2014, to 30 years in prison by United States District Judge Laurie Smith Camp. Perry had previously pled guilty to using a firearm during, and in relation to, a drug trafficking crime.
In October 2013, Perry was arrested in a High Intensity Drug Trafficking Area Program (HIDTA) sponsored law enforcement initiative that targeted gang violence in Omaha. During the joint investigation between the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Omaha Police Department, Perry sold two rifles, two handguns, and 8 grams of crack cocaine to a felon who was working with law enforcement as a cooperating witness.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Omaha Police Department.
Mt. Vernon Man Indicted on Methamphetamine Related ChargesRead the Press Release
Follow @SDILNewsRobert A. Tate, 30, of Mt. Vernon, IL, was indicted on July 8, 2014, on methamphetamine related charges in a two count Indictment returned by a Federal Grand Jury sitting in Benton, Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that from February 2013, until on or about June 2014, in Jefferson County, Tate knowingly conspired to manufacture methamphetamine. Count 2 charges that on March 31, 2014, in Jefferson County, Tate knowingly and intentionally distributed methamphetamine.
With respect to each Count, Tate faces up to 20 years imprisonment, up to $1,000,000 fine, and supervised release of at least 3 years.
An Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation in this case was conducted by the Joint Narcotics Unit of the Mt. Vernon Police Department and the Jefferson County Sheriff’s Department.
The case is being handled by Assistant United States Attorney George Norwood.
Middlesex County, N.J., Woman Pleads Guilty to Sexually Exploiting A MinorRead the Press Release
TRENTON, N.J. – A Middlesex County, New Jersey, woman admitted today to sexually exploiting a minor female by coercing the girl to live stream sexually explicit acts via the Internet, U.S. Attorney Paul J. Fishman announced.
Jane Dornick, 53, of South Plainfield, New Jersey, pleaded guilty, prior to the selection of a jury, to Count One of an indictment charging her with three counts of sexual exploitation of a child. The remaining counts will be dismissed at sentencing. Dornick entered her plea before U.S. District Judge Freda L. Wolfson in Trenton federal court.
According to documents filed in this case and statements made in court:
On August 16, 2010, Dornick coerced and used “Victim 1,” a minor female, to perform sexually explicit acts and live stream them over the Internet to Michael Grennier, 51, who watched remotely via his computer in his home in South Plainfield.
The charge of sexual exploitation of a child is punishable by a mandatory minimum sentence of 15 years in prison and a maximum penalty of 30 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 7, 2014.
Grennier pleaded guilty before Judge Wolfson to a separate charge of the sexual exploitation of a minor on Dec. 16, 2013, and is scheduled to be sentenced on August 20, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s plea. Fishman also thanked the South Plainfield Borough Police Department, under the direction of Chief of Police James Parker, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew Carey, for their assistance with the investigation.
The government is represented by Assistant U.S. Attorneys Fabiana Pierre-Louis and Harvey Bartle, Attorney-in-Charge of the U.S. Attorney’s Trenton Office.
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Defense counsel: Bruce Throckmorton Esq., Trenton
Dornick, Jane Indictment
Men Plead Guilty to Lying About Roles in Arch Coal Kickback SchemeRead the Press Release
CHARLESTON, W. Va. – Ronald Barnette, 53, of Holden, West Virginia, and Gary Griffith, 62, of Oceana, West Virginia, both pleaded guilty today to making a materially false statement in a federal matter, U.S. Attorney Booth Goodwin announced. Barnette and Griffith now each face up to five years in prison. Barnette admitted to lying about paying kickbacks to the general manager of Arch Coal’s Mountain Laurel mining complex, located in Logan County, while Griffith admitted to lying about receiving kickbacks as an employee of Arch Coal.
Barnette owned and operated Mining Repair Specialist, Inc., which did rebuild work on miners and bolters at the Mountain Laurel complex for several years. From 2009 through sometime in 2010, Barnette admitted that he paid approximately $300,000 in kickbacks to a high level Arch employee, who is identified in other court documents as mine general manager David Runyon, so that Runyon would continue hiring Barnette’s company to do rebuild work at the mine. Barnette further admitted that he lied to agents regarding paying cash kickbacks. When asked by Internal Revenue Service agents, along with investigators from the West Virginia State Police (WVSP), whether Barnette had ever paid cash kickbacks to Runyon, Barnette falsely stated that he did not.
Barnette has agreed to forfeit $400,000 to the Federal Bureau of Investigation (FBI) in connection with the kickback scheme.
Griffith, the former maintenance manager at Mountain Laurel, admitted that since 2002 he received cash kickbacks in the amount of at least $250,000 on behalf of himself and Runyon from an individual associated with the North American Rebuild Company, Inc. (NARCO). NARCO provided shuttle cars to Arch Coal’s Ben Creek mine and the Mountain Laurel mining complex. Griffith admitted that an individual, on behalf of NARCO, paid kickbacks to Griffith and Runyon for each shuttle car ordered at the mines. When Griffith was asked by federal agents about receiving kickbacks either personally or on behalf of Runyon, he denied it.
Griffith has agreed to pay $250,000 in restitution to Arch Coal, Inc., in connection with the kickback scheme.
Barnette and Griffith entered their guilty pleas before United States District Judge Thomas E. Johnston. Both are scheduled to be sentenced on October 20, 2014, in Charleston.
Today’s guilty pleas stem from an investigation being conducted by the FBI, IRS Criminal Investigation, United States Postal Inspection Service, and the WVSP. Assistant United States Attorney Meredith George Thomas is in charge of the prosecution.
Mayfield Heights Man Faces Additional Charges of Tax Violations at Daycare Centers He OperatedRead the Press Release
New tax charges were filed against a Mayfield Heights man who earlier this year pleaded guilty to his role in defrauding a Cleveland Heights charter school out of more than $400,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Joel B. Friedman, 66, is accused of withholding more than $293,000 in payroll taxes from employees at four daycare centers Friedman operated. But he kept the money for himself instead of paying it over to the IRS, according to a supplemental criminal information.
Friedman operated four daycare centers – A Child’s View, Bass Lake Child Care of Kirtland, Bass Lake Child Care of Chardon (also known as Barney Enterprises) and Bass Lake Child Care of Mentor (also known as Bryce Road Enterprises).
In that position, he was responsible for the daycare centers’ business and financial operations, including payroll and employment tax operations.
Between 2008 and 2011, Friedman deliberately failed to pay over to the IRS approximately $293,248 in taxes that were withheld from employees, according to the criminal information.
Friedman pleaded guilty earlier this year to five counts of mail fraud, two counts of wire fraud and two counts of conspiracy to commit money laundering for activities that took place at Greater Heights Academy, a charter school in Cleveland Heights.
Friedman served as chairman of the school and was part of a group that conspired to submit and approve more than $400,000 worth of fraudulent invoices, with a portion of the payments then being returned to Friedman, according to court documents.
“Not only did Friedman violate the trust of taxpayers and the students of Greater Heights Academy, he violated the trust of his employees by failing to pay over their withheld payroll taxes,” Enstrom said. “The failure to pay over withheld taxes is a serious offense. IRS Criminal Investigation vigorously pursues anyone who collects taxes and fails to timely remit those taxes.”
This case is being prosecuted by Assistant United States Attorney Robert J. Patton. The case was investigated by the Internal Revenue Service – Criminal Investigations and the Federal Bureau of Investigation.
If convicted, the defendant’s sentence will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Man Pleads Guilty to Bank Robbery in Franklin CountyRead the Press Release
KANSAS CITY, KAN. - A Kansas man pleaded guilty Monday to helping to rob a Franklin County Bank, U.S. Attorney Barr Grissom said.
Robert Martin, 39, Quenemo, Kan., pleaded guilty in U.S. District Court in Kansas City, Kan., to one count of bank robbery. In his plea, he admitted he took part in the March 19, 2014, robbery of Goppert State Service Bank at 118 East Franklin Street in Pomona, Kan. He said he drove to the bank with co-defendant Caleb Jeffcoat. He gave Jeffcoat a mask and BB gun that had been altered to make it look more like a real gun. Jeffcoat entered the bank and robbed a teller.
Investigators used video surveillance from a Dollar General store and a gas station in Pomona to identify the robber.
Co-defendants are:
Caleb Jeffcoat, 26, Quenemo, Kan., who is awaiting sentencing.
Christel Collins, 37, Quenemo, Kan., who is awaiting trial.Sentencing will be set for a later date. Martin faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. Grissom commended the Franklin County Sheriff’s Office, the Ottawa Police Department, the Kansas Bureau of Investigation, the FBI, the Franklin County Attorney’s Office and Assistant U.S. Attorney Scott Rask for their work on the case.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Licensed Pharmacist Convicted in “Pill Mill” Operation Is Sentenced to 60 Months in Federal PrisonRead the Press Release
DALLAS — A licensed pharmacist, who along with four co-defendants was convicted at trial earlier this year for their roles in a “pill mill” operation in Dallas, was sentenced this afternoon, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Lisa L. Hollier, 44, of Sunnyvale, Texas, was sentenced by U.S. District Judge Barbara M. G Lynn to 60 months in federal prison. She has been in custody since her conviction in February 2014.
Hollier owned and operated Urban Independent Pharmacy (UIP), located at 6300 Samuell Blvd., in Dallas. The jury convicted Hollier on one count of conspiracy to distribute, unlawfully, a controlled substance.
The four co-defendants who were convicted at trial on the same offense, Dallas residents Joesephis Austin, 60, Patricia A. Bryant, 59, and Walter R. Hudspeth, 62, along with Flower Mound, Texas, resident, Jose L. Martinez, 54, are scheduled to be sentenced on September 17, 2014. Each faces a maximum statutory penalty of 10 years in federal prison and a $500,000 fine.
Twelve other defendants charged in the case have pleaded guilty to their respective roles, and they have received sentences ranging from probation to 72 months in federal prison. Fourteen “dealers” were indicted and convicted in the case.
Defendants Austin, Bryant and Hudspeth operated as dealers who recruited “patients,” often from homeless shelters, and drove them in groups to Padron Wellness Clinic (PWC), located at 1000 Emerald Isle Drive in Dallas. Co-conspirators physician Nicolas Alfonso Padron, 54, of Garland, Texas, and Martinez opened PWC in the fall of 2010. PWC operated not as a legitimate medical facility, but as a place to unlawfully obtain controlled substances, such as hydrocodone.
Dr. Padron and Martinez, the PWC’s business manager, charged cash only for office visits in which Dr. Padron would do little to no physical examination and prescribe a “cocktail” of controlled substances, including hydrocodone, a Schedule II controlled substance and alprazolam, a Schedule IV controlled substance. Generally, they charged $250 for a new patient office visit and $185 for an established patient visit.
Typically, the dealers set appointments on PWC’s schedule and brought in multiple patients at a time. The dealers escorted the patients into the clinic, coordinated with Martinez and paid cash for the patients they brought. Dr. Padron would sometimes see two or more patients at a time in one exam room. Patient visits were short in duration and patients normally left with a 30-day prescription of 120 pills of hydrocodone and 30-90 units of alprazolam. Most of the patients were diagnosed by Dr. Padron with lower back pain and anxiety, without regard of their true condition; thus these prescriptions were medically unnecessary and outside the scope of professional practice.
Dr. Padron, who pleaded guilty in September 2013 to his role in this conspiracy and testified at trial, is also scheduled to be sentenced on September 17, 2014. He, too, faces a maximum statutory penalty of 10 years in federal prison and a $500,000 fine on this conviction.
Hollier and Dr. Padron coordinated a procedure for PWC’s staff to fax prescriptions for the controlled substances to UIP. Once Dr. Padron issued the prescriptions, these dealers would drive the patients to UIP to get the prescription filled. Typically, they did this in groups and Hollier had large amounts of hydrocodone and alprazolam in pre-filled bottles ready each day to handle the large groups of dealers and their patients. These dealers furnished the money to pay for the narcotics. Sometimes they paid Hollier directly for the prescriptions. After Hollier filled the prescriptions, the patients would give the dealers the pills that they would sell on the street for a profit.
In a separate and unrelated case, Dr. Padron pleaded guilty in September 2013 to one count of conspiracy to commit health care fraud stemming from his role as medical director of A Medical House Calls, a physician house-call company. Dr. Padron was sentenced in March 2014 to 57 months in federal prison, and he was ordered to pay nearly $9.5 million in restitution to the Centers for Medicare and Medicaid Services (CMS).
The Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit, investigated. Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are prosecuting.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for almost $6 billion. In addition, HHS’s CMS, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the HEAT Strike Force, see: www.stopmedicarefraud.gov
Justice Department, Federal and State Partners Secure Record $7 Billion Global Settlement with Citigroup for Misleading Investors About Securities Containing Toxic MortgagesRead the Press Release
The Justice Department, along with federal and state partners, today announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) prior to Jan. 1, 2009. The resolution includes a $4 billion civil penalty – the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public – including the investing public – about the mortgage loans it securitized in RMBS. The resolution also requires Citigroup to provide relief to underwater homeowners, distressed borrowers and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas. The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.
This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered $20 billion to date for American consumers and investors.
“This historic penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi,” said Attorney General Eric Holder. “The bank's activities contributed mightily to the financial crisis that devastated our economy in 2008. Taken together, we believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business. Citi is not the first financial institution to be held accountable by this Justice Department, and it will certainly not be the last.”
The settlement includes an agreed upon statement of facts that describes how Citigroup made representations to RMBS investors about the quality of the mortgage loans it securitized and sold to investors. Contrary to those representations, Citigroup securitized and sold RMBS with underlying mortgage loans that it knew had material defects. As the statement of facts explains, on a number of occasions, Citigroup employees learned that significant percentages of the mortgage loans reviewed in due diligence had material defects. In one instance, a Citigroup trader stated in an internal email that he “went through the Diligence Reports and think[s] [they] should start praying . . . [he] would not be surprised if half of these loans went down. . . It’s amazing that some of these loans were closed at all.” Citigroup nevertheless securitized the loan pools containing defective loans and sold the resulting RMBS to investors for billions of dollars. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.
“Today, we hold Citi accountable for its contributing role in creating the financial crisis, not only by demanding the largest civil penalty in history, but also by requiring innovative consumer relief that will help rectify the harm caused by Citi's conduct,” said Associate Attorney General Tony West. “In addition to the principal reductions and loan modifications we've built into previous resolutions, this consumer relief menu includes new measures such as $200 million in typically hard-to-obtain financing that will facilitate the construction of affordable rental housing, bringing relief to families pushed into the rental market in the wake of the financial crisis.”
Of the $7 billion resolution, $4.5 billion will be paid to settle federal and state civil claims by various entities related to RMBS: Citigroup will pay $4 billion as a civil penalty to settle the Justice Department claims under FIRREA, $208.25 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $102.7 million to settle claims by the state of California, $92 million to settle claims by the state of New York, $44 million to settle claims by the state of Illinois, $45.7 million to settle claims by the Commonwealth of Massachusetts, and $7.35 to settle claims by the state of Delaware.
Citigroup will pay out the remaining $2.5 billion in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup. That relief will take various forms, including loan modification for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to homebuyers, donations to organizations assisting communities in redevelopment and affordable rental housing for low-income families in high-cost areas. An independent monitor will be appointed to determine whether Citigroup is satisfying its obligations. If Citigroup fails to live up to its agreement by the end of 2018, it must pay liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.
The U.S. Attorney’s Offices for the Eastern District of New York and the District of Colorado conducted investigations into Citigroup’s practices related to the sale and issuance of RMBS between 2006 and 2007.
“The strength of our financial markets depends on the truth of the representations that banks provide to investors and the public every day,” said U.S. Attorney John Walsh for the District of Colorado, Co-Chair of the RMBS Working Group. “Today's $7 billion settlement is a major step toward restoring public confidence in those markets. Due to the tireless work by the Department of Justice, Citigroup is being forced to take responsibility for its home mortgage securitization misconduct in the years leading up to the financial crisis. As important a step as this settlement is, however, the work of the RMBS working group is far from done, we will continue to pursue our investigations and cases vigorously because many other banks have not yet taken responsibility for their misconduct in packaging and selling RMBS securities.”
“After nearly 50 subpoenas to Citigroup, Trustees, Servicers, Due Diligence providers and their employees, and after collecting nearly 25 million documents relating to every residential mortgage backed security issued or underwritten by Citigroup in 2006 and 2007, our teams found that the misconduct in Citigroup’s deals devastated the nation and the world’s economies, touching everyone,” said U.S. Attorney of the Eastern District of New York Loretta Lynch. “The investors in Citigroup RMBS included federally-insured financial institutions, as well as a host of states, cities, public and union pension and benefit funds, universities, religious charities, and hospitals, among others. These are our neighbors in Colorado, New York and around the country, hard-working people who saved and put away for retirement, only to see their savings decimated.”
This settlement resolves civil claims against Citigroup arising out of certain securities packaged, securitized, structured, marketed, and sold by Citigroup. The agreement does not release individuals from civil charges, nor does it release Citigroup or any individuals from potential criminal prosecution. In addition, as part of the settlement, Citigroup has pledged to fully cooperate in investigations related to the conduct covered by the agreement.
Michael Stephens, Acting Inspector General for the Federal Housing Finance Agency said, “Citigroup securitized billions of dollars of defective mortgages, after which investors suffered enormous losses by purchasing RMBS from Citi not knowing about those defects. Today’s settlement is another significant step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit in the lead up to the financial crisis, and is a necessary step toward reviving a sound RMBS market that is crucial to the housing industry and the American economy. We are proud to have worked with the Department of Justice, the U.S. Attorneys’ Offices in the Eastern District of New York and the District of Colorado. They have been great partners and we look forward to our continued work together.”
The underlying investigation was led by Assistant U.S. Attorneys Richard K. Hayes, Kevin Traskos, Lila Bateman, John Vagelatos, J. Chris Larson and Edward K. Newman, with the support of agents from the Office of the Inspector General for the Federal Housing Finance Agency, in conjunction with the President’s Financial Fraud Enforcement Task Force’s RMBS Working Group.
The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state Attorneys General offices around the country.
The RMBS Working Group is led by its Director Geoffrey Graber and its five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov
Related Materials:
SOF
Settlement Agreement
Appendix 1
Annex 2
Annex 3Justice Department, Federal and State Partners Secure Record $7 Billion Global Settlement with Citigroup for Misleading Investors About Securities Containing Toxic MortgagesRead the Press Release
WASHINGTON – The Justice Department, along with federal and state partners, today announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) prior to Jan. 1, 2009. The resolution includes a $4 billion civil penalty – the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public – including the investing public – about the mortgage loans it securitized in RMBS. The resolution also requires Citigroup to provide relief to underwater homeowners, distressed borrowers and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas. The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.
This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered $20 billion to date for American consumers and investors.
“This historic penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi,” said Attorney General Eric Holder. “The bank's activities contributed mightily to the financial crisis that devastated our economy in 2008. Taken together, we believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business. Citi is not the first financial institution to be held accountable by this Justice Department, and it will certainly not be the last.”
The settlement includes an agreed upon statement of facts that describes how Citigroup made representations to RMBS investors about the quality of the mortgage loans it securitized and sold to investors. Contrary to those representations, Citigroup securitized and sold RMBS with underlying mortgage loans that it knew had material defects. As the statement of facts explains, on a number of occasions, Citigroup employees learned that significant percentages of the mortgage loans reviewed in due diligence had material defects. In one instance, a Citigroup trader stated in an internal email that he “went through the Diligence Reports and think[s] [they] should start praying . . . [he] would not be surprised if half of these loans went down. . . It’s amazing that some of these loans were closed at all.” Citigroup nevertheless securitized the loan pools containing defective loans and sold the resulting RMBS to investors for billions of dollars. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.
“Today, we hold Citi accountable for its contributing role in creating the financial crisis, not only by demanding the largest civil penalty in history, but also by requiring innovative consumer relief that will help rectify the harm caused by Citi's conduct,” said Associate Attorney General Tony West. “In addition to the principal reductions and loan modifications we've built into previous resolutions, this consumer relief menu includes new measures such as $200 million in typically hard-to-obtain financing that will facilitate the construction of affordable rental housing, bringing relief to families pushed into the rental market in the wake of the financial crisis.”
Of the $7 billion resolution, $4.5 billion will be paid to settle federal and state civil claims by various entities related to RMBS: Citigroup will pay $4 billion as a civil penalty to settle the Justice Department claims under FIRREA, $208.25 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $102.7 million to settle claims by the state of California, $92 million to settle claims by the state of New York, $44 million to settle claims by the state of Illinois, $45.7 million to settle claims by the Commonwealth of Massachusetts, and $7.35 to settle claims by the state of Delaware.
Citigroup will pay out the remaining $2.5 billion in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup. That relief will take various forms, including loan modification for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to homebuyers, donations to organizations assisting communities in redevelopment and affordable rental housing for low-income families in high-cost areas. An independent monitor will be appointed to determine whether Citigroup is satisfying its obligations. If Citigroup fails to live up to its agreement by the end of 2018, it must pay liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.
The U.S. Attorney’s Offices for the Eastern District of New York and the District of Colorado conducted investigations into Citigroup’s practices related to the sale and issuance of RMBS between 2006 and 2007.
“The strength of our financial markets depends on the truth of the representations that banks provide to investors and the public every day,” said U.S. Attorney John Walsh for the District of Colorado, Co-Chair of the RMBS Working Group. “Today's $7 billion settlement is a major step toward restoring public confidence in those markets. Due to the tireless work by the Department of Justice, Citigroup is being forced to take responsibility for its home mortgage securitization misconduct in the years leading up to the financial crisis. As important a step as this settlement is, however, the work of the RMBS working group is far from done, we will continue to pursue our investigations and cases vigorously because many other banks have not yet taken responsibility for their misconduct in packaging and selling RMBS securities.”
“After nearly 50 subpoenas to Citigroup, Trustees, Servicers, Due Diligence providers and their employees, and after collecting nearly 25 million documents relating to every residential mortgage backed security issued or underwritten by Citigroup in 2006 and 2007, our teams found that the misconduct in Citigroup’s deals devastated the nation and the world’s economies, touching everyone,” said U.S. Attorney of the Eastern District of New York Loretta Lynch. “The investors in Citigroup RMBS included federally-insured financial institutions, as well as a host of states, cities, public and union pension and benefit funds, universities, religious charities, and hospitals, among others. These are our neighbors in Colorado, New York and around the country, hard-working people who saved and put away for retirement, only to see their savings decimated.”
This settlement resolves civil claims against Citigroup arising out of certain securities packaged, securitized, structured, marketed, and sold by Citigroup. The agreement does not release individuals from civil charges, nor does it release Citigroup or any individuals from potential criminal prosecution. In addition, as part of the settlement, Citigroup has pledged to fully cooperate in investigations related to the conduct covered by the agreement.
Michael Stephens, Acting Inspector General for the Federal Housing Finance Agency said, “Citigroup securitized billions of dollars of defective mortgages, after which investors suffered enormous losses by purchasing RMBS from Citi not knowing about those defects. Today’s settlement is another significant step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit in the lead up to the financial crisis, and is a necessary step toward reviving a sound RMBS market that is crucial to the housing industry and the American economy. We are proud to have worked with the Department of Justice, the U.S. Attorneys’ Offices in the Eastern District of New York and the District of Colorado. They have been great partners and we look forward to our continued work together.”
The underlying investigation was led by Assistant U.S. Attorneys Richard K. Hayes, Kevin Traskos, Lila Bateman, John Vagelatos, J. Chris Larson and Edward K. Newman, with the support of agents from the Office of the Inspector General for the Federal Housing Finance Agency, in conjunction with the President’s Financial Fraud Enforcement Task Force’s RMBS Working Group.
The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state Attorneys General offices around the country.
The RMBS Working Group is led by its Director Geoffrey Graber and its five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov.
Citi - Settlement Agreement SIGNED
Citi - SOF FINAL
Citi - Appendix 1 SOF
Citi - Annex 2 (Consumer Relief) FINAL (2)
Citi - Annex 3 (Deal List) FINALJoplin Man Pleads Guilty to Disaster Fraud Related to Tornado BenefitsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Joplin, Mo., man pleaded guilty in federal court today for fraudulently receiving federal disaster benefits following the tornado that struck the city of Joplin on May 22, 2011, killing 158 people and causing more than $2.9 billion in damage.
Fred Lewis Pickett, Jr., 34, pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of disaster fraud.
By pleading guilty today, Pickett admitted that he fraudulently received disaster benefits by claiming that he relocated from one primary residence to another primary residence in Joplin because of damage from the tornado. To substantiate his claim of relocation, Pickett submitted several leases and rent receipts bearing the signature of his purported landlord, Dustin Showalter, 36, of Joplin.
On the basis of Pickett’s representations, the Federal Emergency Management Agency (FEMA) authorized four rental assistance payments totaling $5,147. However, Pickett’s claim was false. Pickett did not relocate and Showalter was not his landlord. In fact, Showalter had been banned from the residence, which had been occupied by Showalter’s mother before she was relocated to a nursing home. Pickett and Showalter fabricated the documents Pickett used to substantiate his claim.
Showalter has pleaded guilty, in a separate case, to one count of disaster fraud. Showalter admitted that he committed disaster fraud by making false statements to FEMA in an application for disaster benefits. Showalter fraudulently received disaster benefits by claiming to have lived at a residence in Joplin at the time of the May 22, 2011, tornado, when in fact he did not live at that residence. On the basis of his application to FEMA, Showalter received $938 to which he was not entitled.
Under federal statutes, Pickett and Showalter are each subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the U.S. Department of Homeland Security – Office of Inspector General, the FBI and the Joplin, Mo., Police Department.
Disaster Fraud Hotline
Anyone with information about disaster fraud related to the Joplin tornado should call the National Center for Disaster Fraud hotline at 866-720-5721, the Joplin Police Department at 417-623-3131, or the FBI’s Joplin office at 417-206-5700.Inver Grove Heights Man Indicted for Trafficking in Counterfeit Sports JerseysRead the Press Release
MINNEAPOLIS—The United States Attorney’s Office announced today that a federal grand jury recently indicted a man on charges of conspiracy and trafficking in counterfeit goods. Brian Todd Gore, 45, of Inver Grove Heights, made his initial appearance on July 11, 2014 before U.S. Magistrate Judge Jeanne J. Graham.
The indictment alleges that from November 2009 through September 2012, Gore conspired with other individuals to traffic in goods, specifically counterfeit sports jerseys, imported from China. As part of the alleged conspiracy, Gore would order the counterfeit sports jerseys from suppliers in China, have them delivered to him in the United States, and then sell them to Co- conspirator A with the knowledge that the counterfeit jerseys would be sold to the public.
During this time, Co-conspirator A possessed hundreds of counterfeit sportswear items in his retail store in Roseville, Minnesota, some of which he had purchased from the defendant. The indictment further alleges that the defendant transported hundreds of counterfeit jerseys in his van and stored counterfeit jerseys at his residence in Inver Grove Heights, Minnesota and in a leased storage unit in Des Moines, Iowa.
In February 2010, the defendant traveled to Miami, Florida, the location of the 2010 NFL Super Bowl, to sell counterfeit NFL jerseys. During that time, the defendant allegedly possessed approximately 383 counterfeit NFL jerseys and two DHL shipping receipts showing packages sent from China to Fort Lauderdale, Florida. The defendant and Co-conspirator B also allegedly possessed approximately 70 counterfeit NFL jerseys at an apartment where they were temporarily residing in Fort Lauderdale.
United States Attorney Andrew Luger praised the work of federal agents from Homeland Security Investigations, stating “I am pleased that HSI is pursuing these counterfeit cases. We will prosecute those who traffic in counterfeit goods aggressively.”
“Trafficking in counterfeit goods is not a victimless crime,” said Special Agent in Charge J. Michael Netherland of HSI St. Paul. “Buying these items may appear at first to be a bargain, but when we take into account how the money it generates is often tied to organized crime or worse, we see that this 'victimless crime' harms us all in the long run."
If convicted, Gore faces a potential maximum penalty of 10 years in prison and a $2 million fine. All sentences are ultimately determined by a federal district court judge.
This case is being investigated by Homeland Security Investigations (“HSI”) and the Coalition to Advance the Protection of Sports Logos (“CAPS”). It is being prosecuted by Assistant United States Attorney Sarah E. Hudleston.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
Indiana Woman Convicted of $3 Million FraudRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Linda Deavers (61, Fishers, Indiana) guilty of 10 counts of wire fraud and 5 counts of money laundering. Deavers faces a maximum penalty of 20 years in federal prison for each count of wire fraud and 10 years in federal prison for each count of money laundering.
Deavers was indicted in September 2012. She was arrested in October 2013, after flying into California from Hong Kong. The jury returned the verdict on July 11, 2014. Her sentencing hearing is scheduled for October 2, 2014.
According to evidence presented at trial, Deavers devised an investment fraud scheme that used an entity by the name of Angel Annie Humanitarian Trust, LLC. As part of her pitch to investors, Deavers represented that the entity was a Section 501(c)(3) charitable organization, that she had connections to trading programs in Europe that would generate large rates of returns and that she had been successful in investing in such trading programs previously. She represented that any money invested with her and Angel Annie Humanitarian would be invested in such trading programs overseas. None of those representations were true. Deavers collected more than $5.2 million from investors located in Florida. After returning approximately $1.8 million to investors, Deavers used most of the remaining $3.4 million in proceeds to fund her lifestyle, in Indiana and Europe, and to pay various expenses for herself and her family, including a $1 million deposit on a mansion. To lull her investors into a false sense of security, Deavers used e-mail and Skype to provide the investors with a series of false excuses as to why she had not been able to successfully invest their money. Even after Deavers had spent the last of the funds from her victims, for several years, she continued to falsely claim that she was working on investments for them.
This type of scheme is sometimes referred to as a Prime Bank Investment Fraud scheme. For more information on this type of scheme, please visit the website of the United States Department of the Treasury, Office of Inspector General. This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Roger B. Handberg.