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Thursday 10 July 2014
Four Patient Recruiters Plead Guilty in Miami for Roles in $20 Million Health Care Fraud SchemeRead the Press Release
Four patient recruiters pleaded guilty in connection with a $20 million health care fraud scheme involving Trust Care Health Services Inc. (Trust Care), a defunct home health care company.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Acting Special Agent in Charge Ryan Lynch of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.
At a hearing today before U.S. District Judge Darrin P. Gayles of the Southern District of Florida, Estrella Perez, 57, and Solchys Perez, 34, both pleaded guilty to conspiracy to commit health care fraud, and Abigail Aguila, 40, pleaded guilty to conspiracy to defraud the United States and receive health care kickbacks. Sentencing for all three defendants is set for Sept. 18, 2014 in front of Judge Gayles. On June 17, 2014, another co-defendant, Monica Macias, 52, pleaded guilty to conspiracy to defraud the United States and receive health care kickbacks before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida. Sentencing for Macias is set for Sept. 10, 2014 before Judge Gayles.
According to court documents, the defendants worked as patient recruiters for the owners and operators of Trust Care, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Trust Care was operated for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.
The defendants recruited patients for Trust Care and solicited and received kickbacks and bribes from the owners and operators of Trust Care in return for allowing the agency to bill the Medicare program on behalf of the recruited Medicare patients. These Medicare beneficiaries were billed for home health care and therapy services that were not medically necessary and/or were not provided.
Estrella Perez and Solchys Perez also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for providing home health and therapy prescriptions, plans of care, and medical certifications for their recruited patients. Co-conspirators at Trust Care then used these prescriptions, plans of care and medical certifications to fraudulently bill the Medicare program for home health care services.
From approximately March 2007 through at least January 2010, Trust Care submitted more than $20 million in claims for home health services. Medicare paid Trust Care more than $15 million for these fraudulent claims.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne P. McNamara of the Criminal Division’s Fraud Section.
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 more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
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.
Four Men Charged in A Mortgage Fraud SchemeRead the Press Release
MINNEAPOLIS— A federal grand jury has recently returned an indictment charging four men in connection with the Split Rock Realty mortgage fraud investigation. On July 9, 2014, Thomas Edward Rosensteel III, 41, of Excelsior, Robert Scott “Rod” Aslesen, 65, of Little Canada, Justin Joseph Christenson, 34, of East Bethel, and Dale Russell Wurzinger, 57, of Burnsville, were each charged with eight counts of Wire Fraud and one count of Conspiracy to Commit Wire Fraud.
The four defendants allegedly participated in a scheme to defraud mortgage lenders in connection with the sale of excess unsold builder inventories of residential real estate. The scheme allegedly involved recruiting purchasers to buy properties at inflated prices, falsifying loan applications and other documents, fronting down payments for purchasers, and paying kickbacks to the purchasers outside of closing. The indictment alleges that the defendants concealed the fronted down payments and kickbacks from the lenders. United States Attorney Andrew Luger stated, “The allegations in this indictment illustrate a sophisticated scheme carried out by licensed professionals in the real estate industry. We have been working closely with the FBI and the Minnesota Department of Commerce Fraud Bureau to bring charges against these four individuals who used their knowledge and position to take advantage of the system.”
"The Commerce Department takes very seriously its job to stop fraud by licensed professionals, and to protect the public from these kinds of crimes,” said Commerce Commissioner Mike Rothman. “These criminal charges result from a thorough investigation done by the Commerce Fraud Bureau and FBI, in tandem with the U.S. Attorney's Office, and should send a strong message that when laws are broken, there will be tough consequences.”
Three other individuals have already pleaded guilty to criminal charges in connection with this scheme and are awaiting sentencing. They are Amri Elsafy, 42, of Brooklyn Park; Gerald Edwin Carlson, 67, of Kennedy, Minnesota; and James Bryan Crook, 58, of Brooklyn, New York.
If convicted, the defendants face a potential maximum penalty of 30 years in prison on each count. All sentences are ultimately determined by a federal district court judge.
This case is the result of an investigation by the Federal Bureau of Investigation and the Minnesota Department of Commerce Fraud Bureau. It is being prosecuted by Assistant U.S. Attorney William J. Otteson.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.
Four Individuals Indicted on Heroin Distribution ChargesRead the Press Release
MINNEAPOLIS— Recently in federal court, four defendants were charged with heroin distribution in two separate indictments. The first indictment charges Francisco James Bell, 38, of Madison, WI, with two counts of Distribution of Heroin.
Count One of the indictment alleges that on May 20, 2014, Bell distributed approximately 50 grams of heroin. Count Two alleges that on May 30, 2014, Bell distributed approximately 100 grams of heroin. According to an affidavit filed in court, surveillance officers recorded both drug transactions which took place between Bell and a cooperating individual (CI) in a McDonald’s parking lot in Duluth. Bell faces a potential maximum penalty of 40 years in prison. This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”).
The second indictment charges three Minneapolis men in a separate heroin distribution conspiracy. Darnell Travor King, 35, Latese Capree Hudson, 25, and James Purnell Thomas, 43, were charged with one count of Conspiracy to Distribute Heroin and one count of Possession with Intent to Distribute over 500 grams of Heroin. The indictment includes three forfeiture allegations related to the drug charges. Upon conviction of either of the counts, the defendants would forfeit $20,455 in U.S. currency seized during a search of the defendants’ apartment, along with a Ruger 9mm semi-automatic pistol and a Smith and Wesson .40 caliber pistol. The three defendants face a potential maximum penalty of 40 years in prison. This case is being investigated by the Drug Enforcement Administration (“DEA”) and the Hennepin County Sheriff’s Office.
“The U.S. Attorney’s Office and our law enforcement partners are committed to combating heroin trafficking in our state. We will continue working together to prosecute distributors who bring heroin into our communities,” said United States Attorney Andrew Luger.
These cases are being prosecuted by Assistant U.S. Attorney Jeffrey S. Paulsen.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.
Former Wells Fargo Loan Officer Sentenced to Two Years in Prison for Role in $40.8 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Ocean County, New Jersey, man who used his position as a loan officer of Wells Fargo Home Mortgage Inc., to get the company to release more than $4.6 million on fraudulent mortgage loan applications was sentenced today to 24 months in prison for his role in a $40.8 million mortgage fraud conspiracy, U.S. Attorney Paul J. Fishman announced.
Robert Serao, 48, of Bayville, New Jersey, previously pleaded guilty following his indictment to one count of conspiracy to commit wire fraud. He was the 10th defendant to plead guilty in the case. U.S. District Judge Joseph E. Irenas imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
While working in various positions – including branch manager, sales manager and loan officer – within Wells Fargo Home Mortgage Inc., a division of Wells Fargo Bank N.A., Serao entered into a conspiracy to submit mortgage loans to his employer for financially unqualified “straw buyers” based upon false and fraudulent information contained in Uniform Residential Loan Applications, HUD-1 Forms, tax returns and other documents.
Serao’s conspirators caused fraudulent mortgage loan applications and supporting documents to be submitted to Wells Fargo and numerous other mortgage lenders in various straw buyers’ names, attributing to them inflated income and assets in order to induce the mortgage lenders to approve the loans. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with the real estate closings on the properties, Serao’s conspirators took a portion of the proceeds from the fraudulent mortgage loans. Wells Fargo Home Mortgage released more than $4.6 million based on fraudulent mortgage loan applications. Serao profited from his role in the conspiracy by increased commissions on the mortgage funds.
In addition to the prison term, Judge Irenas sentenced Serao to three years of supervised release and ordered him to pay restitution of $1,520,606.
U.S. Attorney Fishman credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS B Criminal Investigation in Mays Landing, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
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Defense counsel: Robert A. Weir Jr. Esq. and Edward J. Plaza Esq., Red Bank, New Jersey
Former Lincoln Bank Employee Pleads Guilty to Embezzling from BankRead the Press Release
Springfield, Ill. – The former head teller at a Lincoln, Ill., bank, Nancy J. Huskins, 62, today entered a plea of guilty to embezzling nearly $2 million from the bank. Appearing before U.S. Magistrate Judge Thomas P. Schanzle-Haskins, Huskins, of the 900 block of S. Kickapoo St., Lincoln, Ill., waived indictment and entered a plea of guilty to an information that charged her with one count of bank embezzlement.
During her court appearance, and according to court documents, Huskins admitted that from about Jan. 1, 1996, to Nov. 4, 2013, when she was employed as the head teller of the State Bank of Lincoln, she embezzled approximately $1,982,685 for her personal use. Huskins admitted that in her position as head teller, she had access to the bank’s vault and was entrusted with significant access to portions of the vault that maintained large amounts of cash. Huskins admitted that she disguised the embezzlement by personally participating in audits of cash amounts, representing that a certain bag contained an amount of currency, when, in fact, she knew that the bag did not hold currency, but merely other empty currency bags.
The investigation was conducted by agents of the Federal Bureau of Investigation with the full cooperation of the State Bank of Lincoln. The case is being prosecuted by Assistant U.S. Attorney John E. Childress.
Huskins is currently on bond awaiting sentencing, which is scheduled on Nov. 10, 2014, before U.S. District Judge Sue E. Myerscough.
At sentencing, Huskins faces a maximum possible penalty of up to 30 years in prison, a fine of up to $1,000,000, and a term of supervised release up to five years to follow any term of imprisonment. The defendant may also be ordered to make full restitution to the bank.
Former Employee of Forty Fort GM Foodmart Store Sentenced to Two Years' Probation for Role in Synthetic Marijuana ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 26-year-old Indian national who worked at a GM Foodmart store in Kingston, Pennsylvania, was sentenced today to two years’ probation for his role in a conspiracy to distribute synthetic marijuana by Senior U.S. District Court Judge Edwin M. Kosik.
According to United States Attorney Peter Smith, the defendant, Manjinder Singh, also known as “Mintu,” who currently resides in New Jersey, previously admitted that he conspired with others to distribute synthetic marijuana from the store during January 2012 through July 2012.
The charge against Singh resulted from an investigation by the IRS Criminal Investigative Division, the Drug Enforcement Administration, and the Pennsylvania State Police.
Judge Kosik ordered Singh to spend the first four months of his sentence on home confinement with electronic monitoring.
The owner of the GM Foodmart store, Mastan Mathan, previously pleaded guilty to participating in a money laundering conspiracy connected to the sale of synthetic marijuana. He is awaiting sentencing.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Former Conway Pastor SentencedRead the Press Release
Contact Person: Bill Day(803) 929-3000
Columbia, South Carolina -----United States Attorney Bill Nettles stated today that Archie Larue Evans was sentenced late yesterday afternoon in federal court in Florence, South Carolina, for Mail Fraud, a violation of 18 U.S.C. § 1341, and conspiracy to Structure Transactions with a Financial Institution and to Launder Money, a violation of 18 U.S.C. § 371. United States District Judge R. Bryan Harwell of Florence sentenced Evans to seven years imprisonment; three years supervised release and ordered Evans to pay restitution of $3,763,339.53.
Evidence presented at the sentencing hearing established that Evans was the pastor of Tilley Swamp Baptist Church located in Conway, South Carolina. Evans also owned a limited liability corporation, Gold & Silver, LLC. Beginning in 2004, members of the congregation of the Tilley Swamp Baptist Church and others entered into investment contracts with Evans and Gold & Silver, LLC, which guaranteed the investors much higher interest payments than the rate being paid by financial institutions. From January 2009 to October 2011, Evans was involved in a Ponzi scheme and hid the fact that he had lost or spent the money invested with him by paying investors what he claimed to be their earned interest payments using funds he received from new investors. Evans continued to collect money from investors and caused losses of more than $2,500,000.00.
From May 2010 until October 2011, Evans was also involved in a conspiracy with others to structure currency deposits with Anderson Brothers Bank and First Citizens Bank, both in Conway. The deposits were structured in order to avoid the bank’s reporting requirements so that Evans’ conspirators’ income would not be reported. One of the individuals involved with Evans in structuring the deposits was involved in a lawsuit with an insurance company that had issued a bond on the individual’s business. The individual had pledged his investments with Evans as collateral and was attempting to hide assets from the insurance company. Evans opened three checking accounts with Anderson Brothers Bank and structured deposits in excess of $500,000.00 through the accounts. Evans structured approximately $340,000.00 into the accounts he had with First Citizens Bank.
Evans was taken into custody immediately after being sentenced because he attempted to bring a firearm to the sentencing hearing.
The case was investigated by agents of the Internal Revenue Service and U.S. Secret Service. Assistant United States Attorney William E. Day II of the Columbia office prosecuted the case.Former Chief Operating Officer of Nevada Endoscopy Center Pleads Guilty to Medicare/Medicaid Fraud Billing SchemeRead the Press Release
LAS VEGAS, Nev. – The former chief operating officer of a defunct Nevada endoscopy center, pleaded guilty today to conspiring with the former owner/physician of the center, Dipak Desai, to defraud Medicare, Medicaid and other private health insurance companies by inflating and overcharging for anesthesia services it provided, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Tonya Rushing, 46, of Las Vegas, pleaded guilty before U.S. District Judge Larry R. Hicks to one count of conspiracy to commit health care fraud, and is scheduled to be sentenced on Sept. 25, 2014, at 1:00 p.m. Rushing faces up to five years in prison and a $250,000 fine.
“Those perpetrating Medicare and Medicaid fraud cheat both taxpayers and vulnerable patients,” said U.S. Attorney Bogden. “We will hold criminals accountable and will seek to recover stolen dollars in each case of healthcare fraud we prosecute.”
According to the guilty plea agreement, between about January 2005 and February 2008, Desai and Rushing conspired to overcharge Medicare, Medicaid, and other private health insurance companies at the Endoscopy Center of Southern Nevada by significantly overstating the amount of time the certified registered nurse anesthetists spent with patients on a given procedure. Desai and Rushing created a separate company, Healthcare Business Solutions, owned by Rushing, to handle the billing for the anesthesia services. This company received approximately nine percent of all money collected for anesthesia services rendered at the endoscopy center. Desai and Rushing imposed intense pressure on the endoscopy center employees to schedule and treat as many patients as possible in a day, and instructed the nurse anesthetists to overstate in their records the amount of time they spent on the anesthesia procedures. Desai and Rushing also instructed the office staff to rely on the false anesthesia records when preparing the claims for reimbursement which were sent to Medicare, Medicaid and the insurance companies. The plea agreement states that Rushing received approximately $1.3 million as her share of the inflated anesthesia billing scheme.
Co-defendant Desai is currently being evaluated for his competency to face trial.
This case was investigated by the FBI, Office of the Nevada Attorney General, Health and Human Services Office of Inspector General, Department of Labor Office of Inspector General, Food and Drug Administration Office of Criminal Investigations, and the United States Postal Inspection Service, and prosecuted by Assistant U.S. Attorney Crane M. Pomerantz and Mark N. Kemberling, who was designated as a Special Assistant U.S. Attorney on this case and is Chief Deputy Nevada Attorney General.According to a recent report by the Inspector General for the U.S. Department of Health and Human Services, for every dollar the Departments of Justice and Health and Human Services have spent fighting health care fraud, they have returned an average of nearly eight dollars to the U.S. Treasury, the Medicare Trust Fund and others. To learn more or to report Medicare fraud, go to http://www.stopmedicarefraud.gov/
Former Chairman of Louisville Episcopal Church Education Foundation and His Spouse Plead Guilty to Embezzling More Than $1.1 Million from the CharityRead the Press Release
– Foundation Chairman laundered money through his wife’s business
LOUISVILLE, Ky. – The former chairman of the Woodcock Foundation and former owner of DBM-Dental Direct of Louisville pleaded guilty in United States District Court today, to a felony information charging the couple with interstate transportation of stolen property and money laundering totaling $1,141,030, from the Louisville Episcopal Church Education Foundation, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Charles Muir, age 61, and Diana Muir, age 60, of Louisville, admitted in court today, that between April 2007 and June 2011, in Louisville, Kentucky, the couple unlawfully transferred or caused to be transferred in interstate commerce approximately $1,141,030 of funds that had been stolen or taken by fraud from the Woodcock Foundation. The funds were transferred from Your Community Bank in Louisville, Kentucky, to locations outside of Kentucky. The $1,141,030 was taken without authority from the Woodcock Foundation, a charitable trust providing college scholarships in the Louisville, Kentucky area. In addition the defendants conducted financial transactions involving the proceeds of the $1,141,030 by depositing checks from the Woodcock Foundation into the Your Community Trust bank account of DBM dental to disguise the nature of the transactions.
According to the terms of the plea agreement, Charles Muir and Diana Muir agreed to plead guilty to the felony information and at the time of sentencing, pay restitution to the Woodcock Foundation, in the amount of $1,141,030. At the time of sentencing, the United States will agree that a sentence of imprisonment of six months is the appropriate sentence in this case for defendant Diana Muir and a sentence of 46 months is the appropriate sentence in this case for defendant Charles Muir.
From April 2007 through June 2011, Charles Muir was the chairman of the Woodcock Foundation, a charitable organization associated with the Episcopal Church of Louisville, Kentucky. During the same timeframe, Diana Muir owned and controlled DBM.
The Louisville couple was initially charged by grand jury indictment that was unsealed on December 6, 2012, when they appeared before Magistrate Judge Dave Whalin in Louisville. They were released on a $25,000 bond and asked to not travel outside of the Western District of Kentucky.
Sentencing is scheduled before Senior District John G. Heyburn II, on October 23, 2014, in Louisville.
This case is being prosecuted by Assistant United States Attorneys Bryan Calhoun and Jason Snyder, and was investigated by the United States Secret Service and the Criminal Investigation Division of the Internal Revenue Service.
Former Brunswick County Sheriff Charged with Weapons ViolationsRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced today that RONALD EMERY HEWETT, 51, of Supply, North Caolina, had his initial appearance in Wilmington. HEWETT was charged with possession of a firearm by a felon, in violation of Title 18, United States Code 922(g)(1). HEWETT is the former Brunswick County Sheriff who pled guilty to one count of Obstruction of Justice on June 2, 2008.
HEWETT was initially charged in a criminal complaint. As set forth in the affidavit supporting the complaint, multiple firearms were located in HEWETT’S residence on July 9, 2014. HEWETT is a convicted felon and was sentenced to a 16 month term of imprisonment on October 6, 2008.
If convicted, HEWETT faces a maximum penalty of 10 years imprisonment, a $250,000 fine, and 3 years supervised release. The actual sentence would be determined by the sentencing court after consideration of the advisory sentencing guidelines.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF) and the Brunswick County Sheriff’s Office. The prosecution is being handled by Assistant United States Attorney Jennifer E. Wells.
The charges contained in this indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Foresthill Man Sentenced to Prison for Destruction of U.S. Mail ReceptaclesRead the Press Release
SACRAMENTO, Calif. — Richard Lee Gray, 57, of Foresthill, was sentenced today by United States District Judge Troy L. Nunley to one year in prison for destroying U.S. Post Office letter boxes, being a felon in possession of ammunition, and possessing over 15 unauthorized access devices with intent to commit fraud, United States Attorney Benjamin B. Wagner announced. Judge Nunley ordered Gray to pay $10,333 in restitution to the United States Postal Service.
This case was the product of an investigation by the United States Postal Inspection Service and the Placer County Sheriff's Office, with the assistance of the United States Forest Service. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.
According to court documents, between January 2013 and April 2013, Gray pried open more than 20 post office letter boxes in the Placer County towns of Colfax, Auburn, and Foresthill. On April 2, 2013, a federal search warrant was executed at Gray's residence. In the house and in his car, officers found mail stolen from more than 108 victims. Gray also possessed burglary tools, pry bars, and ammunition.
Florida Man Sentenced on Fraud ChargesRead the Press Release
Boston – A Florida man was sentenced in U.S. District Court in Boston today for his role in an advance-fee scheme.
Frank Barecich, 35, of Hollywood, Fla., was sentenced by U.S. District Court Judge Nathaniel M. Gorton to one year in prison and three years of supervised release. In April 2014, Barecich pleaded guilty to conspiracy to commit wire fraud, 14 counts of wire fraud, and conspiracy to commit money laundering.
Between 2007 and 2011, Barecich participated in a conspiracy to defraud developers who were seeking financing for large-scale alternative energy and commercial projects by pretending to be a representative of a multi-billion dollar fund located in Luxembourg. Barecich and his co-conspirators convinced developers to give deposits in amounts between $300,000 and $1 million to this fake fund with the promise that the deposit would be fully refundable. Barecich and his co-conspirators spent the developers' deposit money, and the fake fund never financed any projects. In perpetrating this scheme, the defendant continually reassured developers about the safety of their deposits even as the deposits were being spent.
Barecich’s co-defendants, Evripides Georgiadis, John Condo, and Michael Zanetti, have all been convicted. In May 2014, Zanetti was sentenced to 37 months in prison. Georgiadis and Condo are awaiting sentencing.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Susan Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Alex J. Grant and Karen L. Goodwin of Ortiz’s Springfield Branch Unit.
Florida Man Pleads Guilty to Stealing Government MoneyRead the Press Release
Boston – A Florida man pleaded guilty in U.S. District Court in Worcester today to participating in a scheme to steal more than $110,000 from the federal government.
Sniders Jean-Jacques, 26, of Sunny Isles Beach, Fla., pleaded guilty to theft of public money. In June 2014, Jean-Jacques was charged in a felony information. Sentencing is scheduled for Thursday, Oct. 9, 2014 at 2:30 pm.
In early 2013, Jean-Jacques and a co-conspirator, Marvin Lubin, recruited several individuals in Worcester to work as couriers in a scheme to steal and launder Social Security and IRS tax refund payments. At the direction of Jean-Jacques or Lubin, the couriers opened bank accounts in Massachusetts in the names of fake businesses. On various dates in 2013, illegally obtained Social Security benefits and IRS refunds were directly deposited into the accounts. At the direction of Jean-Jacques or Lubin, the couriers immediately withdrew the money in cash, and then delivered the cash. Jean-Jacques or Lubin would typically authorize the couriers to retain a portion of the stolen money as payment for their courier services. In recorded phone calls in late 2013, Jean-Jacques instructed one of the couriers not to withdraw more than $10,000 per day to avoid having to fill out forms at the bank. He also told the courier, “we move money for people . . . and we get a percentage.”
The investigation so far has determined that as part of this scheme, Social Security payments totaling $11,689 were illegally obtained under the identities of 14 victims, and IRS payments totaling $98,610 were illegally obtained under the identities of 20 victims. In April 2014, Lubin pleaded guilty for his role in this scheme.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge U.S. Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Lisa Quinn, Special Agent in Charge of the U.S. Secret Service; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; and Worcester Police Chief Gary J. Gemme, made the announcement today. The case is being prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
Five Charged in Galveston with Distributing MethamphetamineRead the Press Release
GALVESTON, Texas - A four-count federal indictment has been unsealed in Galveston following the arrest of five area residents, announced United States Attorney Kenneth Magidson.
Abel Hinojosa, 34, Nelson Agapito Ventura, 37, Daniel Reyna, 33, Israel Sanchez, 20, were taken into custody today and made their initial appearances in federal court in Galveston before U.S. Magistrate Judge John R. Froeschner. A fifth defendant - Rodolfo Hernandez Perez, 26 - was previously in custody. A detention hearing is set for Tuesday, July 15, 2014.
The indictment was returned May 15, 2014, and unsealed upon the arrests of the La Marque residents today. All five are charged with one count of conspiracy to possess with the Intent to distribute more than 50 grams of methamphetamine as well as more than 500 grams of a mixture containing methamphetamine in the Galveston Division of the Southern District of Texas.
Perez and Hinojosa are further charged with one and three counts, respectfully, of possession with intent to distribute varying amounts of methamphetamine. The indictment also includes a notice of forfeiture.
Each face a minimum of 10 years and up to life in federal prison for the conspiracy. The possession with intent charges against Hinojosa and Perez also carry varying terms of either a minimum of five and up to 40 or another minimum of 10 and up to life for the underlying drug offenses.
The case is being investigation by the Drug Enforcement Administration, Homeland Security Investigations and Galveston Police Department. Assistant United States Attorneys Ted Imperato and Sharad Khandelwal are prosecuting.
An indictment is a formal accusation of criminal conduct, not evidence.
The defendants are presumed innocent unless and until convicted through due process of law.Federal Grand Jury Criminal Indictments AnnouncedRead the Press Release
TULSA, Okla. — The results of the July 2014 Federal Grand Jury were announced today by Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma.
The following named individuals have been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. The return of an indictment is a method of informing the defendant of alleged violations which must be proven in a court of law beyond a reasonable doubt to overcome the defendant’s presumption of innocence.
Timothy Olen Brown. Felon in Possession of Firearm and Ammunition. Brown, 40, of Tulsa, is charged with possessing a 9mm caliber pistol and ammunition after prior felony convictions. If convicted, the maximum penalty would be 10 years in prison and a $250,000 fine. The defendant would also forfeit the firearm and ammunition. The Tulsa Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives are the investigative agencies.
Jesus Jonathan Campos. Possession of Methamphetamine with Intent to Distribute. Campos, 35, of Tulsa, is charged with possessing methamphetamine with intent to distribute. If convicted, the maximum penalty would be 20 years in prison and a $1,000,000 fine. The defendant would also forfeit seized currency and face entry of a criminal forfeiture money judgment. The Tulsa Police Department and the Drug Enforcement Administration are the investigative agencies.
Demetric Andreal Jackson Jr. Mann Act and Interstate Travel and Transportation in Aid of Racketeering Enterprises. Jackson, 24, of Kansas City, Kansas is charged with transporting a woman from Kansas City, Missouri, to Tulsa, with the intent that the woman engage in prostitution. If convicted, the penalty for the Mann Act is not more than 10 years in prison and a $250,000 fine, and the penalty for the racketeering charge is not more than five years in prison and a $250,000 fine. The Tulsa Police Department is the investigative agency.
Frankie O’Neill Lampley Jr. Failure to Register as a Sex Offender. Lampley, 48, of Tulsa, is charged with failure to register as a sex offender after a prior conviction. If convicted, the maximum penalty would be 10 years in prison and a fine of $250,000. The U.S. Marshals Service is the investigative agency.
Fayetteville Man Sentenced to 300 Months for Hobbs Act Robbery & CarjackingRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, United States District Judge Terrence W. Boyle sentenced LONNELL DEANGELO MCRAE , 27, of Fayetteville to 300 months imprisonment, followed by 5 years of supervised release.
MCRAE was named in an Indictment filed on April 3, 2013, charging him with 7 counts. The Indictment charged MCRAE with 1 count of Hobbs Act Robbery and Aiding and Abetting, 2 counts of Brandishing a Firearm During and in Relation to a Crime of Violence and Abetting and Aiding, 1 count of Carjacking and Aiding and Abetting, 1 count of Possession of a Firearm by a Felon and Aiding and Abetting, 1 count of Possession of a Stolen Firearm and Aiding and Abetting, and 1 count of Possession of a Firearm by a Felon.
On February 3, 2014, MCRAE pled guilty to the Hobbs Act Robbery, Brandishing a Firearm During a Federal Crime of Violence, and to the Carjacking charge.
According to the investigation, MCRAE, armed with afirearmand his co-conspirator, Gregory James Burgess previously sentenced to 168 month imprisonment on April 18, 2014, entered the Little Vegas Sweepstakes, an internet gaming business located in Fayetteville, which is now closed. MCRAE and Burgess forced two victims from one room into another. MCRAE and Burgess tied them up with computer and telephone cords and took the customer’s truck.
At his arrest about a week later for these crimes, MCRAE was found to be in possession of a handgun and ammunition.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Fayetteville Police Department, the Hope Mills Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Fairview Heights Man Sentenced to Eight Years for Armed Robbery of Moto Mart Employee and CustomerRead the Press Release
Case Is One of many Prosecuted by United States Attorney Wigginton’s Hobbs Act Robbery Initiative
Follow @SDILNewsOn July 10, 2014, Jahrastafar Jamal Farmer, 25, of Fairview Heights, Illinois, received a 96 month sentence in federal prison, to be followed by a three year term of supervised release, and was ordered to pay a special assessment of $200, a fine of $200, and restitution in the amount of $206.88, following his plea of guilty to violating the Hobbs Act and Brandishing a Firearm During a Crime of Violence, in connection with the robbery of Moto Mart in Fairview Heights on November 2, 2013, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois announced today.
A factual stipulation filed at the time of the guilty plea indicates that a Moto Mart employee and a customer were ordered to the floor at gunpoint by Farmer, who then fled the scene with a mere $206.88. Alert employees and cooperative citizens provided valuable leads to the Fairview Heights Police Department, which ultimately led to a search of Farmer’s home and a recovery of physical evidence linking him to the armed robbery, to include a 9mm semiautomatic handgun. Text messages recovered from Farmer’s phone indicated he was having some financial difficulties and “had to do sum extreme shit to bounce back.”
“The Fairview Heights Police Department conducted a commendable investigation in this case. Metro East residents have grown intolerant of violence in their community. We’re very pleased with the cooperation we received in this case from citizens. Stated simply, they were instrumental in solving this crime.” said United States Attorney Wigginton. “I will continue to use the Hobbs Act, and any other tool that I have, to try to stop this sort of violence in Southern Illinois.”
This case, and others like it, are all part of the Metro East Armed Robbery Initiative. The case was investigated by the Fairview Heights Police Department and was prosecuted by Assistant United States Attorney Suzanne M. Garrison.
Fairport Woman Pleads Guilty to Lying to Federal InvestigatorsRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Ann Marie Laurini, 48, of Fairport, N.Y., pleaded guilty before U.S. District Judge Frank P. Geraci to making false statements to Special Agents of the Internal Revenue Service. The charge carries a maximum sentence of five years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Laurini repeatedly lied to IRS agents in connection with an investigation of Kenneth Griffin and others into financial fraud and money-laundering crimes. The defendant was employed by Griffin from March 2006 to May 2008, and engaged in acts that furthered the financial fraud. Laurini was interviewed by federal agents on several occasions concerning her knowledge and involvement in the fraud and during those interviews she falsely stated that she had not engaged in various acts of deception in furtherance of the fraud. The investigation ultimately resulted in charges against Kenneth Griffin, Brian Campbell, and two others, all of whom have been convicted.
The plea is the culmination of an investigation by the Internal Revenue Service Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office,.
Laurini will be sentenced by Judge Geraci on October 9, 2014 at 3:00 p.m.Fairbanks Man Sentenced to 110 MonthsRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced today that a man from Fairbanks, Alaska was sentenced in federal court in Fairbanks for possession of powder and cocaine base ("crack") with the intent to distribute.
Benjamin Dewayne Smith, age 37, from Fairbanks, Alaska was sentenced on Wednesday, July 9, 2014, by United States District Court Judge Sharon L. Gleason, at the United States District Courthouse in Fairbanks. Smith received a sentence of 110 months in prison and 4 years of supervised release for his conviction of possession of powder and cocaine base ("crack") with intent to distribute.
A residence located at 660 Wilcox Street in Fairbanks, Alaska was searched by federal law enforcement agents in January 2012, pursuant to a federal search warrant. During the search of the residence, law enforcement found 434 grams of marijuana, 215 grams of powder cocaine, and 62 grams of cocaine base ("crack"). Law enforcement also found other items in the residence consistent with drug distribution. It was later discovered that this apartment was used by Smith as a "trap house" where he would store illegal narcotics; he also used the apartment as a hub for his distribution activity.
Smith has two prior felony convictions with the State of Alaska for distribution of controlled substances and one prior felony conviction for possession of cocaine.
Before imposing a sentence, Judge Gleason commented that drug distribution crimes harm many individuals in the community and they should be taken seriously. She also noted that she hoped that members of the community would be aware of the lengthy sentence she intended to give Smith, and hoped that would serve as a deterrent to others in the community that may choose to engage in similar behavior as Smith.
Ms. Loeffler commended the Drug Enforcement Administration, the Fairbanks Police Department, and the Alaska State Troopers for the investigation leading to the successful prosecution of Mr. Smith.
Escapee from Federal Prison ChargedRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a one-count indictment today against a Seattle man who was serving a federal prison sentence in the Federal Correctional Institution Herlong in Lassen County, United States Attorney Benjamin B. Wagner announced.
Roderick Earl Vanga, 32, is charged with escape from custody. According to court documents, Vanga was serving a seven-year sentence for a drug offense when he escaped on April 5, 2013. He was apprehended on February 23, 2014, in Seattle and remains in custody.
This case is the product of an investigation by the U.S. Marshals Service, the King County (Wash.) District Attorney’s Office, and the police departments of Seattle and Renton. Assistant United States Attorney William Wong is prosecuting the case.
If convicted, Vanga faces a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
East St. Louis Man Sentenced for Multiple Crack Cocaine OffensesRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on July 9, 2014, Frederick C. Addison, 32, was sentenced in federal district court, in East St. Louis, Illinois. The Honorable Judge Michael J. Reagan sentenced Addison to a term of 210 months in federal prison, to be followed by a three-year term of supervised release. Addison was also fined $800 and was ordered to pay a $200 special assessment.
On March 7, 2014, a federal jury found Addison guilty of distributing crack cocaine and possessing crack cocaine with the intent to distribute it. A video during the trial showed Addison selling crack cocaine to multiple customers from a home in East St. Louis. When Addison and another man were arrested, police recovered approximately 17 grams of crack cocaine from an abandoned house where Addison and his associate had hidden it. The crack had a street value of about $12,000, according to police experts who testified at trial.
This case was investigated by the Metropolitan Enforcement Group of Southwestern Illinois (MEGSI) and prosecuted by Special Assistant United States Attorney Neal C. Hong and Assistant United States Attorney Robert L. Garrison.
East St. Louis Man Pleads Guilty to Cocaine ChargeRead the Press Release
Follow @SDILNewsThe United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that on July 9, 2014, Edward A. Banks, 42, pled guilty to a one-count indictment charging him with possession with intent to distribute cocaine.
On July 11, 2013, Banks sold cocaine to undercover law enforcement agents. Banks also gave the undercover agents his telephone number in order for them to contact him if they wanted to make future purchases. The agents contacted Banks the same day and bought more cocaine from him. Both transactions were recorded on video.
Banks is scheduled for sentencing on October 17, 2014, at which time he faces a maximum sentence of 20 years in prison and/or a fine of up to $1,000,000, not less than 3 years of supervised release following his prison term, and a mandatory special assessment of $100.
This case was investigated by the Metropolitan Enforcement Group of Southwestern Illinois (MEGSI) and prosecuted by Special Assistant United States Attorney Neal C. Hong.
East Pittsburgh Man Pleads Guilty in Drug Distribution SchemeRead the Press Release
PITTSBURGH - A Pittsburgh-area resident pleaded guilty in federal court to charges of conspiracy to distribute and possess with intent to distribute heroin and crack cocaine, United States Attorney David J. Hickton announced today.
Allen William Turner, 46, of East Pittsburgh, Pa., pleaded guilty to two counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that from September 2013 to December 2013, Turner conspired to distribute and possess with intent to distribute 100 grams or more of heroin, and 28 grams or more of crack cocaine.
Judge Cercone scheduled sentencing for Nov. 14, 2014, at 10 a.m. The law provides for a maximum total sentence for each count, of not less than 10 years and up to life in prison, a fine of $8,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Troy Rivetti is prosecuting this case on behalf of the government.
This prosecution is the result of a federal Organized Crime Drug Enforcement Task Force (OCDETF) investigation led by the Federal Bureau of Investigation and the Drug Enforcement Administration. Other participating agencies include the Allegheny County Police Department, Pennsylvania State Police, Allegheny County Sheriff's Office, Pittsburgh Bureau of Police, Munhall Police Department and Wilkinsburg Police Department.
Developer Sentenced to More Than 10 Years in Prison for Mortgage Fraud ConspiracyRead the Press Release
Tampa, Florida – U.S. District Judge Elizabeth A. Kovachevich yesterday sentenced Joseph Daniele (42, Tampa) to 10 years and 1 month in federal prison for conspiracy to commit wire fraud. As part of his sentence, the court also entered a money judgment in the amount of $7,469,739.00. Daniele pleaded guilty on May 29, 2013.
According to court documents, Daniele was a developer who “flipped” houses across Florida, including approximately 80 houses located in south St. Petersburg. Daniele and his conspirators advertised “no money down” home investment opportunities to buy Section 8-ready houses, for people with good credit. However, the loans arranged by the conspirators actually required that the borrowers put money into the deals. Daniele either fronted the down payments directly, or indirectly, through complicit title agents and mortgage brokers. The scheme involved hundreds of properties, almost all of which fell into foreclosure, resulting in at least $7 million in losses.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Thomas N. Palermo.
Dallas Man in Federal Custody for Possessing Prepubescent Child PornographyRead the Press Release
DALLAS — A Dallas man is in federal custody after law enforcement executed a search warrant at his residence and found him in possession of prepubescent child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Jose de Jesus Galicia-Fuentes, 58, was arrested yesterday on a federal criminal complaint charging possession of prepubescent child pornography. He made his initial appearance yesterday afternoon before a U.S. Magistrate Judge in Dallas who ordered him detained pending a hearing set for July 14, 2014.
According to the criminal complaint, an investigation into the sharing of child pornography files using peer-to-peer networks revealed that a user at a particular IP address, later determined to belong to Galicia-Fuentes, was sharing files indicative of child pornography. In April 2014, the user shared at least 27 unique files with keywords or names indicative of child pornography, hash values matching identified child victims, or files containing images previously identified as child pornography. As recently as July 2, 2014, the user was sharing 125 unique files of investigative interest.
Yesterday, special agents with the FBI’s Dallas Child Exploitation Task Force and officers with the Dallas Police Department executed a federal search warrant at Galicia-Fuentes’ apartment in North Dallas. Law enforcement located several videos on Galicia-Fuentes’ laptop depicting prepubescent child pornography.
A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The maximum statutory penalty for the offense as charged is 20 years in federal prison, a $250,000 fine and a lifetime of supervised release.
The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI’s Dallas Child Exploitation Task Force and the Dallas Police Department are conducting the investigation. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.
Convicted Felon Charged with Illegal Gun PossessionRead the Press Release
Anthony Andrews, 33, of Philadelphia, PA, was charged today by indictment with felon in possession of a firearm, announced United States Attorney Zane David Memeger. According to the indictment, on June 17, 2014, Andrews knowingly possessed four firearms and ammunition that included an MPA (Masterpiece Arms) 5.7x28 caliber pistol; an MPA (Masterpiece Arms), 9 millimeter pistol; a CAI (Century Arms International/Zastava Arms) 7.62x39 caliber pistol; and a Phoenix Arms, .25 ACP caliber pistol.
If convicted, Andrews faces a potential advisory sentencing guideline range of 235 to 293 months in prison with a 15-year mandatory-minimum, three years of supervised release, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It is being prosecuted by Assistant United States Attorney Jose Arteaga.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
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PATTY HARTMAN, Media Contact, 215-861-8525Computer Repairman Sentenced to 15 Years in Federal Prison on Child Pornography ConvictionRead the Press Release
DALLAS — A computer repairman from Dallas was sentenced this morning following his guilty plea in January 2013 to a felony child pornography offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Andrew McMahon, 37, was sentenced by U.S. District Judge Reed C. O’Connor to 15 years in federal prison to be followed by a five-year term of supervised release. McMahon pleaded guilty to an information charging one count of transportation of child pornography; he has been in custody since he entered that plea.
According to documents filed in the case, during an undercover investigation to identify persons using peer-to-peer file-sharing networks to distribute child pornography, a special agent with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) identified a computer with more than 300 files available for sharing that had files names indicative of child pornography.
A search warrant was executed at McMahon’s residence in Dallas in October 2012, and ICE HSI special agents seized a significant amount of computer equipment and related storage media, including 45 hard drives. McMahon admitted he used the internet and peer-to-peer file-sharing networks to view, download and distribute child pornography. He also admitted that he had more than 600 images and videos available to share on his file-sharing program. He advised that he had been downloading child pornography since the 1990’s.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
ICE HSI investigated. Assistant U.S. Attorney Camille Sparks prosecuted.
Company Settles Claims That It Deliberately Underpaid WorkersRead the Press Release
ATLANTA - Advanced Power & Lighting (“APL”) and two of the company’s former officers and/or employees, Richard Lee Robertson and Greg Piccione, have agreed to pay a total of $780,000 to settle allegations that they deliberately underpaid workers on several federally funded projects covered by the Davis-Bacon Act, and then violated the False Claims Act by submitting false and fictitious payroll records to conceal their conduct.
“The underlying False Claims Act lawsuit alleges that APL, Robertson and Piccione deliberately took advantage of workers, at a time when they were most vulnerable,” said United States Attorney Sally Quillian Yates. “The settlement reflects the reality that individuals and entities that exploit workers will be held accountable by the government.”
U.S. Department of Commerce Inspector General Todd Zinser commended the cooperative effort by the staffs of the U.S. Attorney’s for the Northern District of Georgia, the U.S. Department of Labor Office of Inspector General and the Commerce Department OIG to ensure APL was held accountable for funds it received under the American Recovery and Reinvestment Act of 2009. Zinser also noted the importance of Federal Whistleblower laws that led to the revelations of APL underpaying its workers.
Special Agent in Charge Richard L. Walker of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations stated, “This case is a great example of the OIG's work with its law enforcement partners to actively investigate fraud involving federal contracts, including the filing of false payroll records to facilitate cheating workers of their earned wages.”
The relevant conduct arose in connection with the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”), which was enacted to stimulate the economy and create jobs by funding infrastructure projects. Pursuant to a Recovery Act initiative known as the Broadband Technologies Opportunities Program (“BTOP”), the federal government provided the U.S. Department of Commerce with $4.7 billion to promote, through grants, the deployment of broadband infrastructure – e.g., miles of fiber-optic cable and supporting structures – throughout North Georgia.
To effectuate the Recovery Act’s goal of providing high wage jobs, contractors on BTOP projects were required to comply with the Davis-Bacon Act, which requires that workers be paid not less than the applicable prevailing wage, which is set by the U.S. Department of Labor, and can be fulfilled by providing the applicable wage in all cash, or through a combination of cash and bona fide fringe benefits.
In late 2010, APL was awarded a BTOP subcontract to assist with broadband projects in North Georgia, and the company repeatedly acknowledged – and promised to comply with – the projects’ Davis-Bacon Act requirements. The False Claims Act lawsuit alleges that, despite these repeated promises, in order to increase their own profit margins and/or bonuses, APL, Robertson and Piccione – over an extended period of time – deliberately underpaid certain workers by approximately $10.00 per hour.
The lawsuit further alleges that, to conceal the underpayments, APL, Robertson and Piccione submitted fictitious payroll documentation, which falsely represented that workers were receiving approximately $10.00 per hour in training and uniforms, which they erroneously characterized as fringe benefits. In truth, however, no such training or uniforms were provided to workers, and these items did not even qualify as fringe benefits under the criteria set forth by the Wage and Hour Division of the U.S. Department of Labor.
This civil settlement resolves a lawsuit filed by a former APL employee under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery obtained. The case, pending in the Northern District of Georgia, is filed under United States of America ex rel., v. Advanced Power & Lighting, Richard Lee Robertson and Greg Piccione, et. al., Civ. No. 1:12-cv-3825-AT (N.D. Ga. Nov. 1, 2012). The claims settled in the civil settlement are claims only, and there has been no determination of liability.
The case was investigated by the United States Attorney’s Office for the Northern District of Georgia; the U.S. Department of Labor, Office of the Inspector General; and the U.S. Department of Commerce, Office of the Inspector General.
This matter was handled for the United States by Assistant United States Attorney Paris A. Wynn.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.Child Care Center Owner Pleads Guilty to FraudRead the Press Release
PHILADELPHIA –Tianna Edwards, 32, of Philadelphia, Pennsylvania, pleaded guilty today to wire fraud in connection with a scheme to defraud the Pennsylvania Department of Public Welfare, announced United States Attorney Zane David Memeger.
In 2008, Edwards had a criminal record which would have prohibited her from obtaining a license to operate a child day care facility and receive state and federal child subsidy payments from the Department of Public Welfare (“DPW”). In order to circumvent the criminal history clearance requirements for a license and to become eligible for state and federal child care subsidy funds, in September 2008, defendant Tianna Edwards submitted the first of two separate applications to DPW containing the forged signatures of another individual, for licenses to operate facilities named “Tianna’s Terrific Tots.” Both applications were false because they listed a person who did not have a criminal record as the sole legal owner and operator of “Tianna’s Terrific Tots” when, in fact, defendant Tianna Edwards controlled and operated “Tianna’s Terrific Tots.” The facilities were located on Germantown Avenue and Rising Sun Avenue in Philadelphia. From December, 2008 through July 2012, Tianna Edwards received from DPW approximately $1,459,470.25 in fraudulent payments to Tianna’s Terrific Tots and spent the money on lifestyle expenses and gambling, as well as business expenses.
U.S. District Court Judge Juan R. Sanchez scheduled a sentencing hearing for October 10, 2014. Edwards faces a maximum possible sentence of 100 years in prison, three years of supervised release, a fine of up to $1.25 million, and a $500 special assessment.
The case was investigated by the United States Department of Health and Human Services and is being prosecuted by Assistant United States Attorney Joan E. Burnes.
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PATTY HARTMAN, Media Contact, 215-861-8525Caldwell Man Pleads Guilty to Tax EvasionRead the Press Release
BOISE – Rogelio Villasenor, 49, of Caldwell, Idaho, pleaded guilty today to conspiracy to attempt to evade and defeat tax, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, Villasenor and his unindicted co-conspirator owed more federal tax for the calendar years 2005, 2006, 2007, 2008, 2009, 2010, and 2011 than was declared due on their income tax return for those years. Beginning in 2005, and continuing to 2011, the defendant and his unindicted co-conspirator agreed to not report $1,176,506.91 in taxable income. In so doing, the defendant evaded paying taxes on his true income. The object of this conspiracy was to defraud the United States of money owed on taxes.
The charge of income tax evasion is punishable by up to five years in prison, a maximum fine of $250,000, or twice the defendant’s gain caused by the offense, a special assessment of $100, and up to three years of supervised release.
Sentencing is scheduled for October 6, 2014, in Boise before United States District Judge Edward J. Lodge.
The case was investigated by the Internal Revenue Service-Criminal Investigation.
Brothers from Brook Park Each Sentenced to 4 1/2 Years in Prison for Food Stamp FraudRead the Press Release
Two Brook Park men were sentenced to more than four years in prison for defrauding the Supplemental Nutrition Assistance Program (formerly the Food Stamp Program) from four Cleveland stores where they accepted food stamps for ineligible items such as beer and cigarettes, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Brothers Saed (Sam) Wahdan, 42, and Maher (Mario) Wahdan, 43, were each sentenced to 54 months in federal prison and ordered to pay $200,000 in restitution. They pleaded guilty last year to one count of conspiracy to commit food stamp fraud, one count of food stamp fraud and two counts of unlawful redemption of food stamps. Maher Wahdan also pleaded guilty to an additional count of theft of public funds.
“These defendants used a program designed to help hungry people to instead line their pockets,” Dettelbach said. “We will continue to work eradicate waste, fraud and abuse of government programs.”
Nidal Jaber, 46, also of Brook Park, was sentenced to 10 months of home confinement for his role in the conspiracy.
Between January 2008 and March 2012, the Wahdans and others conspired to commit food-stamp fraud through four of their businesses: One Stop Beverage, 5105 Franklin Blvd.; Bridge Deli and Beverage, 4700 Bridge Ave.; Franklin Beverage and Deli, 4719 Franklin Blvd., and Scott Food Mart, 951 Linn Drive, according to court documents.
The Wahdans owned and operated all four stores but put them in the names of other people to conceal the fact that Saed Wahdan had a prior conviction for food stamp trafficking and Maher Wahdan had a prior conviction for impersonating an officer – both of which precluded their participation in the food stamp program, according to court documents.
The defendants used their businesses to exchange customer food stamps for cash and other unauthorized items, including beer and cigarettes. They also purchased food stamp cards from customers and used them at other grocery locations to purchase inventory for their stores and for their personal use, according to court documents.
This case is being prosecuted by Assistant U.S. Attorneys Christos N. Georgalis, Vasile Katsaros and James Morford following an investigation by the U.S. Department of Agriculture, Office of Inspector General-Investigations and Department of Homeland Security, Homeland Security Investigations.
Broken Arrow Woman Sentenced to 24 Months Probation for Embezzlement of Mail by Postal EmployeeRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that MEGAN LEE McMAHAN, age 37, of Broken Arrow, Oklahoma, was sentenced to 2 years of probation for Embezzlement Of Mail By Postal Employee, in violation of Title 18, United States Code, Section 1709.
Charges arose from an investigation by the United States Postal Service, Office of Inspector General. The defendant was indicted in November 2013 and pled guilty in February 2014.
The Indictment alleged that on or about July 24, 2013, within the Eastern District of Oklahoma, the defendant, a United States Postal Service employee, did willfully, knowingly and unlawfully embezzle a package entrusted to her while performing her assigned duties as an employee of the United States Postal Service.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.
Assistant United States Attorney Chris Wilson represented the United States.
Bank Teller Sentenced to Prison for Stealing Money from Cd AccountsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MICHELLE LAUDATO, 36, of Farmington, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 12 months and one day of imprisonment, followed by three years of supervised release for stealing money from CD accounts at a bank where she was employed.
According to court documents and statements made in court, between July 2009 and June 2010, LAUDATO used her position as a teller supervisor at a branch of Webster Bank in Bristol to steal a total of $178,710.89 from the CD accounts of at least 18 bank customers. Thirteen of the 18 bank customers were between the ages of 79 and 99.
As part of the scheme, LAUDATO sometimes withdrew funds from certain CD accounts to replace funds in the CD accounts she had previously accessed. She also withdrew funds in increments of $10,000 or less to avoid currency transaction reporting requirements.
LAUDATO was ordered to pay full restitution to Webster Bank. In addition, Judge Thompson ordered LAUDATO to perform 100 hours of community service during her term of supervised release, in activities that specifically benefit the elderly.
On June 18, 2013, LAUDATO pleaded guilty to one count of bank fraud.
LAUDATO, who recently gave birth to a child, was ordered to report to prison on February 25, 2015.
This matter was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Felice M. Duffy.PUBLIC AFFAIRS CONTACT:
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[email protected]Attorney Sentenced to 51 Months in Federal Prison for Role in Extensive Insurance Fraud ConspiracyRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that JOSEPH P. HADDAD, 65, of Orange, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 51 months of imprisonment, followed by three years of supervised release, for his role in an extensive insurance fraud scheme. He was also ordered to pay a fine of $25,000.
This matter stems from “Operation Running Man,” a 14-month undercover fraud investigation headed by the Federal Bureau of Investigation. The investigation included the use of recordings of an undercover special agent meeting with HADDAD, various doctors and chiropractors in relation to auto-accident personal injury litigation.
According to court documents, statements made in court and the admissions of his co-conspirators, HADDAD, a Bridgeport-based personal injury attorney, conspired with chiropractors and others to defraud several insurance companies by exaggerating the auto accident injuries of HADDAD’s clients, and the cost of their medical care, to justify larger monetary settlements with the insurance companies. As part of the scheme, the co-conspirators fabricated medical records, prescribed unnecessary pain medication, performed unnecessary chiropractic treatment, ordered and billed for diagnostic tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents.
“Over the course of years and in hundreds of cases, this corrupt attorney used his law license as a license to steal from insurance carriers,” stated U.S. Attorney Daly. “Driven by greed, he illegally used runners to find highly questionable personal injury cases, convinced his clients to overstate treatment needs to inflate medical costs, pushed for doctors’ reports that falsely claimed permanent injury, all the while aware that his clients were improperly receiving prescriptions for narcotics to make them seem more injured than they actually were. Through this scheme, Haddad and he cohorts bilked insurance companies of over $1.7 million dollars. His crime both damages the reputation of all legal and medical professionals and inflates the cost of insurance for all of us. I commend the FBI for their excellent work during this undercover investigation.”
“For years, Attorney Haddad operated a well-oiled fraud machine designed to bilk millions of dollars from automobile insurance companies,” stated FBI Special Agent in Charge Ferrick. “Today, he learned that his long-running scheme has earned him 51 months in federal prison. Lawyers, doctors, chiropractors and other licensed health care professionals can earn substantial incomes without having to steal. Sadly, the criminal conduct of Haddad and the other defendants in Operation Running Man not only causes a loss of trust in lawyers and doctors, but also much higher insurance premiums for us all. As covert investigations like Operation Running Man suggest, the FBI and the U.S. Attorney’s Office are fully committed to investigating and prosecuting licensed professionals who commit similar frauds.”
Between December 2006 and February 2010, HADDAD conspired in the scheme with Francisco R. Carbone, who had been licensed to practice medicine until his license was revoked by the State of Connecticut in March 2005, and with Dr. Marc Kirshner, who owned and operated two chiropractor offices in Bridgeport and one in Stamford.
As part of the scheme, HADDAD paid “runners” to locate and deliver to him clients for his personal injury practice. Because state law barred attorneys from hiring runners in personal injury cases, HADDAD attempted to hide this practice by paying the runners in cash. Dr. Kirshner regularly met with HADDAD to provide him with thousands of dollars in cash and, in return, HADDAD reimbursed Kirshner with checks written from his business account. HADDAD often included on the checks false memo lines suggesting that the checks were for medical expenses incurred by his clients. During the course of the conspiracy, Kirshner gave HADDAD more than $100,000 in cash. HADDAD also paid runners with checks directly from his client trust account, often disguising these payments as “independent investigative services.”
HADDAD regularly instructed clients to see Carbone for purported medical treatment, even though HADDAD was aware that Carbone had lost his medical license. Carbone provided HADDAD’s clients with prescription pain medication, even if the medication was not needed and, in reports, fabricated the clients’ injuries, medical conditions and permanent partial disability ratings. In multiple instances, Carbone did no medical examination at all. Carbone billed the victim insurance carriers in his name or in the name of another physician for services he allegedly rendered, and provided prescriptions, bills, medical reports and final reports to HADDAD, who submitted the documents to the victim carriers to support requests for settlement.
HADDAD also referred clients to Dr. Kirshner’s Bridgeport chiropractor offices, which operated under the name Health First Medical, P.C. Kirshner often permitted HADDAD to influence the course of patients’ medical treatments by acquiescing to HADDAD’s instructions that a patient receive more treatment and diagnostic tests despite the questionable need for both. Kirshner and other chiropractors at Health First, including Jennifer Netter, established a protocol to treat patients in HADDAD’s cases for six months, regardless of medical need, and would not resolve treatment of patients unless instructed to do so by HADDAD. Netter and others at Health First often falsified medical records by indicating that they had examined the patients when they had not, and by misrepresenting that patients’ pain complaints and other symptoms continued. After the six-month period, each patient would receive a permanent partial disability rating, regardless of the permanence of the medical condition. If a patient had received a permanency rating for a prior accident, the protocol was to give a higher or different disability rating for the present accident.
Kirshner also owned a diagnostic testing company, Midas Medical LLC, and instructed his employees to conduct Nerve Conduction Velocity (NCV) tests whenever a patient’s symptoms could potentially implicate testing, even though he knew the test results would not change the course of treatment. HADDAD and Kirshner arranged for Carbone to order the tests, believing that, if ordered by a doctor, the tests would be given greater weight by the victim insurance companies and increase the likelihood of higher settlement payments. HADDAD summoned at least one chiropractor to his office so that Kirshner could explain that the chiropractor would receive a kickback of several hundred dollars for each referral of HADDAD’s clients for NCV testing. Kirshner’s office would provide to HADDAD a bill of approximately $2,000 for each NCV test, and HADDAD would submit the bills to the victim carriers as part of settlement discussions.
More than 10 insurance carriers lost a total of more than $1.7 million as a result of this fraud scheme. Judge Underhill ordered HADDAD to pay restitution in the amount of $1,758,368.
HADDAD was ordered to report to prison on September 24, 2014.
On January 3, 2014, HADDAD pleaded guilty to one count of conspiracy to commit mail fraud and one count of mail fraud. After his guilty plea, he resigned from the practice of law.
Carbone, Kirshner, Netter, two other chiropractors and a licensed doctor of osteopathic medicine also pleaded guilty to charges stemming from this scheme. On July 9, 2014, Netter was sentenced to two years of probation and ordered to perform 100 hours of community service. Carbone and Kirshner await sentencing.
This matter is being investigated by the Federal Bureau of Investigation, with the assistance of the National Insurance Crime Bureau, the Metropolitan Property and Casualty Insurance’s Special Investigation Unit and the Travelers Insurance Company.
The case is being prosecuted by Assistant U.S. Attorneys Christopher W. Schmeisser and David J. Sheldon.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Ardmore Woman Sentenced to 60 Months Probation, $32,600 Restitution for Theft of Government Funds, False StatementRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that ALLISON FAITH BATTLES, age 29, of Ardmore, Oklahoma, was sentenced to 5 years of probation, 3 months of home detention and $32,613.96 in restitution for Making A False Statement, in violation of Title 18, United States Code, Section 1001(a)(2) and Theft Of Government Funds, in violation of Title 18, United States Code, Section 641.
The charge arose from an investigation by the Oklahoma Department of Human Service, Office of Inspector General and the Social Security Administration, Office of Inspector General. The defendant was indicted in January 2014 and pled guilty in February 2014.
The Indictment alleged that on or about February 16, 2012, in the Eastern District of Oklahoma, the Defendant did knowingly make and cause to be made a materially false, fictitious, and fraudulent statement and representation in a matter within the jurisdiction of the Social Security Administration, an agency of the United States.
It further alleged that from in or about July 2009 to in or about April 2012, in the Eastern District of Oklahoma, the Defendant did willfully and knowingly embezzle, steal and convert to her own use, money and things of value from the Oklahoma Department of Human Services, an agency receiving and administering funds on behalf of the United States, which had been paid to the defendant as food stamps and medical benefits to which the defendant knew she was not entitled and having a value in excess of $1,000.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.
Assistant United States Attorney Chris Wilson represented the United States.
Anchorage Man Sentenced to 60 MonthsRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced today that a man from Anchorage, Alaska was sentenced in federal court in Anchorage for robbing two banks in February and March 2014.
Cameron Patrick Fergerson, age 25, from Anchorage, Alaska was sentenced on Thursday, July 10, 2014, by United States District Court Judge Sharon L. Gleason, at the United States District Courthouse in Anchorage. Fergerson received a sentence of 60 months in prison and 3 years of supervised release for his convictions of two counts of bank robbery.
On February 25, 2014, at the Credit Union 1 bank located on Abbot Road in Anchorage, Fergerson approached a bank teller and handed her a note demanding money. As the teller was counting out money, Fergerson snatched $1,600 from her and then ran out the door. On March 1, 2014, at the Alaska USA bank located on W. Dimond Blvd., Fergerson approached a bank teller and handed her a note demanding money. The bank teller handed Fergerson $2,078 that he then stuffed into his pockets before running out the door. During both robberies Fergerson was dressed in a similar fashion, wearing a black leather jacket with a hood pulled up, a baseball hat, and sunglasses.
Before imposing a sentence, Judge Gleason commented that the defendant has a long criminal history of theft related offenses and this was demonstrative of an individual that had shown a lack of respect for the law. Judge Gleason noted that it must have been a frightening experience for the bank tellers when the defendant approached them and handed them a note demanding money. Judge Gleason also commented about how the public needs to have confidence that when they go to or use financial institutions that there is a low likelihood of these types of crimes occurring.
Ms. Loeffler commended the Federal Bureau of Investigation and the Anchorage Police for the investigation leading to the successful prosecution of Mr. Fergerson.
Alleged Sinaloa Cartel Leader Extradited to the United States from the NetherlandsRead the Press Release
SAN DIEGO –Jose Rodrigo Arechiga-Gamboa, also known as “Chino Antrax,” was formally extradited to the United States by the Netherlands today.
Arechiga-Gamboa arrived at San Diego International airport about 2 p.m. under heavy security. He was flown in by the United States Marshals Service and the Drug Enforcement Administration from Amsterdam to San Diego. He was booked into federal custody and is scheduled to be arraigned on Friday, July 11, 2014, at 2:00 p.m. before U.S. Magistrate Judge Mitchell D. Dembin.
A federal grand jury in San Diego returned an indictment on December 20, 2013, charging Arechiga-Gamboa with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances. That same day, the Clerk of the Court issued a sealed warrant for his arrest.
Arechiga-Gamboa was arrested on December 30, 2013, at the Schiphol Airport in Amsterdam, Netherlands at the request of the United States. Arechiga-Gamboa was taken into custody at the airport traveling under a fraudulent name, “Norberto Sicairos-Garcia,” as he deplaned a KLM flight from Mexico City, Mexico to Amsterdam. The United States made formal requests for assistance from foreign authorities via a provisional arrest warrant and an Interpol Red Notice. The indictment was unsealed in San Diego a few days later, on January 3, 2014.
According to formal documents filed in support of Arechiga-Gamboa’s extradition from the Netherlands, Arechiga-Gamboa is alleged to have worked for the Sinaloa Cartel as a bodyguard and the leader of an enforcement group called “Los Antrax.” In this position, he allegedly assisted the Sinaloa Cartel by providing security for narcotics shipments and conducting enforcement operations.
According to extradition documents, Arechiga-Gamboa later rose to become one of the highest-level leaders of the Sinaloa Cartel. Despite traveling under a fraudulent Mexican passport by assuming the identity of a deceased individual, undergoing significant plastic surgery and attempting to alter his fingerprints, U.S. law enforcement officials were able to confirm Arechiga-Gamboa’s identity through forensic techniques. A Dutch Court considered the extradition request and, on May 28, 2014, ordered that Arechiga-Gamboa be extradited to the United States to stand trial on the narcotics trafficking offenses.
The Justice Department’s Criminal Division Office of International Affairs provided substantial assistance in the extradition of the defendant.
DEFENDANT Case Number: 13-CR-4517-DMSJose Rodrigo Arechiga-Gamboa, aka “Chino Antrax,”
CHARGES
aka “Norberto Sicairos-Garcia”Count 1: Title 21, United States Code, Sections 959, 960 and 963 – Conspiracy to Distribute Controlled Substances Intended for Importation
Count 2: Title 21, United States Code, Sections 952, 960 and 963 – Conspiracy to Import Controlled Substances
INVESTIGATING AGENCYDrug Enforcement Administration
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
San Diego Law Enforcement Coordination Center
Homeland Security Investigations
Internal Revenue Service
Interpol*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Albany Man Indicted on Mail Fraud ChargesRead the Press Release
Lottery Fraud Scheme Targeted Elderly Victims
ALBANY, NEW YORK – A federal grand jury returned an indictment yesterday charging DOUGLAS WATSON, 30, of Albany, NY, with three counts of mail fraud in connection with an “advance-fee scam” that targeted elderly victims, announced United States Attorney Richard S. Hartunian, United States Postal Inspection Service - Boston Division Inspector-in-Charge Shelly Binkowski, and Homeland Security Investigations Assistant Special Agent-in-Charge Nicholas DiNicola. If convicted, WATSON faces up to twenty years in prison and a fine of up to $250,000 on each count. WATSON was arraigned in Albany on Thursday, July 10, 2014, before United States Magistrate Judge Christian F. Hummel and was released on a $25,000 secured bond.
According to the indictment, WATSON received at least $25,000 from elderly victims in Massachusetts and Washington, D.C. who sent him money through the United States Mail after being told that they had won the lottery and needed to pay “taxes” and “fees” to claim their winnings. In reality, they had not won any lottery.
The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.
The indictment resulted from an investigation conducted by the United States Postal Inspection Service and Homeland Security Investigations, with the assistance of the Pittsfield, Massachusetts Police Department. The case is being prosecuted by Assistant United States Attorney Sean O’Dowd.
Adam Winters Enters Guilty Plea to Extortion of Babcock and Wilcox, Y-12, LLC.Read the Press Release
KNOXVILLE, Tenn. – On July 10, 2014, Adam Winters, 26, of Robins, Tenn., pleaded guilty to an information charging him with transmitting communications containing threats to injure the reputation of Babcock and Wilcox, Y-12, LLC., in interstate and foreign commerce with intent to extort money and other things of value from the corporation. Babcock and Wilcox, Y-12, LLC. (Babcock and Wilcox), is a corporation that manages and operates the Y-12 National Security Complex in Oak Ridge, Tenn.
Sentencing is set for 10:00 a.m., on Nov. 17, 2014, in U.S. District Court, Knoxville, before the Honorable Pamela L. Reeves, U.S. District Court Judge. Winters faces up to two years in prison, a fine of up to $250,000, up to one year of supervised release and a $100 special assessment.
According to the plea agreement on file with the U.S. District Court, Eastern District of Tennessee, on May 8, 2014, Winters emailed Babcock and Wilcox and attempted to email the Vice President of the United States, regarding copies of slides that the he possessed and that he alleged contained information he believed would injure the reputation of Babcock and Wilcox. Following the email, Winters used the internet and telephone, both of which are transmitted in interstate or foreign commerce, and communicated his threat to injure their reputation through the use of these slides.
On May 23, 2014, following his making these threats, Winters met with undercover law enforcement agents for the purpose of exchanging the slides for $2,500,000, that he had demanded from Babcock and Wilcox during his extortion attempt. During this exchange meeting, law enforcement officers revealed their identity and arrested Winters.
These charges are the result of an investigation by the U.S. Department of Energy, Office of Inspector General. Assistant U.S. Attorney Brooklyn Sawyers represents the United States.
Wednesday 9 July 2014
Youngstown Man Indicted for Having Firearm Despite Felony ConvictionsRead the Press Release
A federal grand jury returned a one-count indictment charging Marvin T. Howard, age 28, of Youngstown, Ohio, with being a felon in possession of a firearm, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that on or about May 17, 2014, Howard possessed a Glock, model 19, 9mm pistol, after having been convicted of robbery, in the Circuit Court of Lee County, Alabama, and of being a felon in possession of a firearm, in the U.S. District Court, Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Youngstown Police Department. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
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.
Woman Sentenced for Defrauding HSBC BankRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Nicole Pompey, 34, of Cheektowaga, N.Y., who was convicted of bank fraud, was sentenced to 12 months in prison by U.S. District Judge Richard J. Arcara. The defendant was also ordered to pay $42,000 in restitution to HSBC Bank.
Assistant U.S. Attorney MaryEllen Kresse, who handled the case, stated that the defendant was employed by HSBC Bank as an auditor. Between December 2008 and September 2010, Pompey used her position to manipulate teller accounts. The defendant transferred funds from the teller accounts to a personal bank account Pompey opened in her maiden name. The defendant transferred a total of $42,000 in HSBC funds to her personal account.
The sentencing is the culmination of an investigation on the part of Special Agents of the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast.Wilkinsburg Man Sentenced to 12+ Years in Prison for Violating Federal Firearms LawsRead the Press Release
PITTSBURGH - A Wilkinsburg resident has been sentenced in federal court to 12 years and 7 months in prison on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
Senior United States District Judge Gustave Diamond imposed the sentence yesterday on Alfred Collier, 34.
According to information presented to the Court, on June 27, 2013, Collier possessed a firearm with an obliterated serial number. Further, Collier admitted that he possessed that firearm during and in relation to a drug trafficking offense.
Prior to imposing sentence, Judge Diamond accepted the Rule 11 sentence negotiated by the two parties, but stated that given Mr. Collier’s significant criminal history, the sentence negotiated by the Government and the defense was “borderline,” meaning that it was on the low-end of what the Court considered reasonable.
Assistant United States Attorney Eric S. Rosen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives, Allegheny County Probation, and the Wilkinsburg Police Department for the investigation leading to the successful prosecution of Collier.
Warehouse Manager Sentenced for Conspiring to Steal $900,000 Worth of Merchandise in Return for CashRead the Press Release
LAFAYETTE, La. –A former warehouse manager was sentenced to 36 months in prison and three years of supervised release for stealing more than $900,000 worth of aircraft parts in return for cash, U.S. Attorney Stephanie A. Finley announced today.
Robert Michal Styron, 38, of Iowa, La., was also ordered by U.S. District Judge Richard T. Haik to pay restitution of $930,401. Styron pleaded guilty on July 11, 2013 to one count of conspiracy to commit wire fraud. According to evidence presented at the guilty plea, Styron used his position as warehouse manager of Aeroframe Services LLC in Lake Charles to steal merchandise and sell it to another party. He took part in the conspiracy from February 26, 2007 to June 10, 2009. Aeroframe was a Federal Aviation Administration (FAA)/European Aviation Safety Agency (EASA) certified Part 145 repair station and maintenance repair operations business.
The U.S. Secret Service and the Lake Charles Police Department conducted the investigation. Assistant U.S. Attorneys Richard A. Willis and Daniel J. McCoy prosecuted the case.
Wagoner Man Sentenced to 240 Months for Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that MAURICIO ORTIZ-VARGAS, a/k/a Mauricio Ortiz, a/k/a Mauricio Hernandez-Chavez, a/k/a Mauricio Hernandez, age 36, of Wagoner, Oklahoma, was sentenced to 240 months imprisonment, followed by 5 years of supervised release for Conspiracy to Possess with intent to Distribute and Distribute 500 grams or more of a methamphetamine mixture, in violation of Title 18, United States Code, Sections 846, 841(a)(1) and 841(b)(1)(A).
The charge is a result of an investigation by the Oklahoma Highway Patrol, the Drug Enforcement Administration and the Department of Homeland Security Investigations – Immigration and Customs Enforcement. The defendant was indicted in June 2013 and pled guilty in March 2013.
The Indictment alleged that beginning in or about 2009 until on or about April 18, 2013, the defendant conspired with others to possess with intent to distribute and distribute 500 grams or more of a methamphetamine mixture.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Chris Wilson represented the United States.
Union Worker Sentenced for Stealing Public FundsRead the Press Release
Follow @SDILNewsKenneth Loving, of East St. Louis, IL, was sentenced to 10 months in prison, to be followed by three years of supervised release, as a result of his conviction for Embezzlement of Public Funds administered by the Illinois Department of Employment Security, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Additionally, Loving was ordered to pay restitution in the amount of $200.00 per month.
While employed by the Midwest Service Group, Inc., Loving stole $25,575.00 in funds administered by the Illinois Department of Employment Security. The Illinois Department of Employment Security (IDES) operated the State of Illinois unemployment insurance program, which is an employer-funded program providing temporary income replacement for individual workers who lost their jobs through no fault of their own. Furthermore, the administrative costs of IDES are funded primarily by the federal government.
The case was investigated by the U.S. Department of Labor, Office of the Inspector General, and prosecuted by Assistant United States Attorney Stephen Weinhoeft and Special Assistant United States Attorney Michael Hallock.
To report suspicious activity to the F.B.I., call (217) 522-9675 or email [email protected]. To report public corruption, call (877) 884-7633 or (877) U-TIP-OFF. To report health care fraud, call (888) 557-9503.
Two Men Involved in Atlantic City Kidnapping and Murder Case Sentenced to PrisonRead the Press Release
CAMDEN, N.J. – Two Atlantic City, N.J., residents were sentenced to prison today for their roles in the kidnapping and death of a 20-year-old Atlantic City woman, U.S. Attorney Paul J. Fishman announced.
Aziz Sanders, 21, was sentenced to 30 years in prison and DeShawn Hicks, 22, was sentenced to 20 years in prison. Each previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to separate, one-count informations charging them with use of a firearm, and aiding and abetting the use of a firearm, in furtherance of a crime of violence – specifically, the Hobbs Act robbery and kidnapping that resulted in the death of Nadirah Ruffin, whose body was found in Philadelphia in April 2011. Judge Rodriguez imposed the sentences today in Camden federal court.Henry Ruffin (no relation to Nadirah Ruffin), 43, previously pleaded guilty before Judge Rodriguez to an information charging him with one count of misprision of a felony by concealing what he knew about several people allegedly involved in the home invasion and kidnapping of Nadirah Ruffin.
According to documents filed in this case and statements made in court:On March 23, 2011, D.H. met with Isiah Ruffin (no relation to the victim) in the courtyard area of a housing complex on North Maryland Avenue, a section of Atlantic City known as “Back Maryland,” to talk to Isiah Ruffin about a dispute between Isiah Ruffin and Victim One. After a brief conversation, D.H. viciously assaulted Isiah Ruffin, knocking Isiah Ruffin unconscious and robbing him of cash. When Isiah Ruffin regained consciousness, D.H. assaulted Isiah Ruffin again. As a result of the assault, Isiah Ruffin was treated at the Atlantic City Medical Center for a possible concussion and facial lacerations. After Isiah Ruffin was released from the hospital, Shamerria Smith, 27, and Sanders visited Isiah Ruffin, during which time Isiah Ruffin told Smith that D.H. had assaulted him.
To retaliate, Smith planned to enter Victim One’s house and assault and rob Victim One of illegal drugs and money. Sanders agreed to help Smith execute her plan and recruited Hicks to participate. Smith supplied the gun, duct-tape and handcuffs.
On March 26, 2011, Smith, Sanders and Hicks entered Victim One’s house and duct-taped Victim One and four other victims, including Nadirah Ruffin, who were present. While in the house, Sanders and Hicks took money from Victim One, some of which Victim One had earned from selling illegal drugs. They took money from another victim, as well as marijuana that the victim was planning to sell. Sanders and Hicks admitted to taking more than $500 dollars and 50 bags of marijuana from the house.
During the robbery, Nadirah Ruffin recognized Smith’s voice. Smith ordered Sanders to punch Nadirah Ruffin. After Sanders hit Nadirah Ruffin, Smith punched her because she did not think Sanders had hit her hard enough. As the defendants were leaving the residence, Smith told Sanders and Hicks to take Nadirah Ruffin from the residence. Smith, Sanders and Hicks then placed Nadirah Ruffin into a green van. They drove to the Clementon area and eventually to Philadelphia. Smith said that because she was a mother she could not kill Nadirah Ruffin. Smith placed the gun near Sanders and told him that they were not leaving until someone else killed Nadirah Ruffin. Sanders and Hicks took Nadirah Ruffin to the banks of the Schuylkill River, where Sanders shot her in the head, killing her. Her body was dumped in the river.
On June 17, 2014, Smith was sentenced to 35 years in prison for her role in the kidnapping and death of Nadirah Ruffin.
In addition to the prison terms, Judge Rodriguez sentenced Hicks and Sanders to five years each of supervised release and ordered them each to pay $1.5 million in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office and the Atlantic City Police Department, for the investigation leading to the sentencings.
The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden, assisted by Assistant U.S. Attorney David Feder of the U.S. Attorney’s Office Appeals Division in Newark, and Mark Coyne, Chief of the Appeals Division.
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Defense counsel:
Sanders: Edward Borden Esq. and Carl J. Herman Esq., Cherry Hill, N.J.
Hicks: Michael Huff Esq. and David Glazer Esq.. Livingston, N.J.Two Leaders of Sophisticated, Violent Fraudulent Document Ring Sentenced for Racketeering, Attempted Robbery, and Money LaunderingRead the Press Release
RICHMOND, Va. – On July 7, 2014, Ivan Patino Sanchez , 35, a Mexican National who resided in Richmond, Virginia was sentenced to 96 months’ imprisonment, and on July 8, 2014, Felipe Alvarado Gonzalez, 46, a Mexican National who resided in Pawtucket, Rhode Island, was sentenced to 60 months’ imprisonment for their respective roles in a violent criminal organization that specialized in manufacturing and distributing fraudulent identifications. Both Patino Sanchez and Alvarado Gonzalez previously pleaded guilty to Conspiracy to Engage in Racketeering and Conspiracy to Launder Money. Patino Sanchez had also pleaded guilty to Interference with Commerce by Robbery. Because both defendants are illegally within the United States, they face deportation following the service of their prison sentences.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), made the announcement after the sentences were handed down by Senior United States District Judge James R. Spencer. In both cases, Judge Spencer granted the United States’ request for an upward variance, and sentenced the defendants above the calculated guideline ranges.
According to court papers, these defendants were connected to a Fraudulent Document Enterprise (FDE) previously prosecuted in the Eastern District of Virginia in United States v. Israel Cruz Millan, Case No. 3:10CR308. The FDE originally operated in the United States beginning prior to 2008 and continuing through November 18, 2010, and had cells in Richmond, Norfolk, Virginia Beach, and Manassas, Virginia; Fayetteville and Little Rock, Arkansas; New Haven, Connecticut; Mishawaka, Indiana; Lexington and Louisville, Kentucky; Chelsea, Massachusetts; St. Louis, Missouri; Chapel Hill, Greensboro, Raleigh, and Wilmington, North Carolina; Cincinnati, Ohio; Providence, Rhode Island; and, Nashville, Tennessee. The criminal enterprise was dismantled within the United States on November 18, 2010.
On February 16, 2012, United States District Judge James R. Spencer sentenced the overall leader, Israel Cruz Millan, to 300 months’ imprisonment. On March 2, 2012, United States District Judge Henry E. Hudson sentenced Oliverez-Jiminez to two consecutive life terms in prison, for racketeering, murder, kidnapping, conspiracy to commit money laundering, and conspiracy to produce and transfer false identification documents.
In connection with their previous guilty pleas, Patino Sanchez and Alvarado Gonzalez admitted to their respective roles in helping the FDE restart its criminal activities in the United States following the 2010 arrests described above. Beginning at some point prior to February 2012, Manuel Hidalgo Flores, also known as “Chino,” “Chimuelo” and “Julio,” began managing the organization’s operations in the United States, supervising operations in Richmond, Virginia; Springdale, Arkansas; Boston, Massachusetts; Raleigh, North Carolina; Cincinnati, Ohio; and Pawtucket, Rhode Island. As in the previous case, the FDE produced high-quality false identification cards for distribution to illegal aliens. In most cities where the organization operated, Hidalgo Flores placed a cell manager to supervise a number of “runners,” the lower level members of the organization who distributed business cards advertising the organization’s services and helped facilitate transactions with customers.
Beneath Hidalgo Flores, Patino Sanchez served as the manager of the Richmond, Virginia cell, and Alvarado Gonzalez managed the Pawtucket, Rhode Island cell. In general, within each cell, the manager was responsible for distributing the fraudulent documents using information obtained from clients by “runners.” The runners would recruit illegal alien clients who wished to obtain false identification documents, including counterfeit Permanent Resident Alien Cards (also known as “Green Cards”), Social Security Cards, out-of-state identification cards, and various international documents. Upon identifying a specific client, a runner would relay identifying information and photographs from the client to the printer via cellular telephone or other method. The printer would, in turn, use a computer and printer to create fraudulent identification documents for the client, depending on the nature of the order received from the client. Once the documents were complete, the runner would usually provide the documents to the client in exchange for United States currency. A client would generally pay approximately $150 for a set of fraudulent identification documents (such as a Permanent Resident Alien Card and Social Security Card). Each cell maintained detailed sales records and divided the proceeds between the runner, the cell manager, and the upper level managers in Mexico. In addition, the FDE used Western Union and MoneyGram to funnel criminal proceeds to Mexico.
The evidence during the Oliverez-Jiminez trial detailed how members of the organization sought to drive competitors from their territory by posing as customers in search of fraudulent documents and then attacking the competitors when they arrived to make a sale. In the current case, Patino Sanchez admitted to his role in targeting a competitor in the Richmond, Virginia area on October 6, 2013. This defendant, along with others, identified a competitor (referred to as “L.G.”) who was selling fraudulent documents in competition with the Richmond cell. A co-defendant posed as a customer and contacted L.G. about setting up a fraudulent documents transaction. L.G. then met with the co-defendant at a designated location. At the same time, Patino Sanchez, along with other FDE members, was surveilling the transaction. The defendants planned to follow competitor L.G. after the transaction to find where he (L.G.) produced fraudulent identification documents. The group intended to assault L.G. and steal L.G.’s printing equipment by means of actual and threatened force, violence, and fear of injury. Through this planned conduct, FDE members hoped to stop L.G. from selling fraudulent identification documents and to enhance the FDE’s control of the Richmond area fraudulent document market. Unbeknownst to the FDE members, law enforcement officers were also surveilling the October 6, 2013 transaction. Due to law enforcement intervention, competitor L.G. was detained during a traffic stop and the FDE members fled the area. According to his plea documents, Patino Sanchez admitted that absent law enforcement intervention, he and his cohorts would have carried out their plan against L.G.
To date, 42 members of this organization charged in the Richmond, Virginia federal cases have been convicted. In the current case, 9 defendants are awaiting sentencing, with their hearings scheduled before Judge Spencer over the next two months.
The case was investigated by the Richmond and Norfolk offices of ICE’s Homeland Security Investigations (HSI), which falls under the Washington, D.C., office. ICE HSI received assistance from the Virginia State Police, Chesterfield County Police Department, and Henrico County Police Department. Assistant United States Attorney Michael Gill and Trial Attorney Maria Gonzalez Calvet, of the Criminal Division's Fraud Section, are prosecuting the case on behalf of the United States
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Tweet
Two Kansas City Men Indicted in Overland Park Bank RobberyRead the Press Release
KANSAS CITY, KAN. – Two Kansas City men were indicted today on a federal bank robbery charge, U.S. Attorney Barry Grissom said.
Dale Williamson, 34, Kansas City, Mo., and Robert Robinson, 40, Kansas City, Mo., were charged with one of count bank robbery in connection with the May 22, 2014, robbery of the Bank of America, 15811 Metcalf Avenue in Overland Park, Kan.
The men initially were charged in a criminal complaint filed June 14 in U.S. District Court in Kansas City, Kan. It is alleged that Robinson, wearing a baseball cap and a hoodie, walked into the bank holding a cellular telephone to his ear. He showed a clerk a note saying, “I have a gun. I will kill you.” He tucked the money from the robbery into a folder and walked out of the bank.
After investigators released surveillance photos from the robbery, they identified Robinson as the bank robber and Williamson as an accomplice who planned the robbery and drove the getaway car.
If convicted, they face a maximum penalty of 20 years in federal prison and a fine up to $250,000. The FBI and the Overland Park Police Dept. investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting .
OTHER INDICTMENTSGary A. Schutza, Jr., 56, Prairie Village, Kan., is charged with one count of possession of child pornography and one count of receiving child pornography. The crimes are alleged to have occurred in 2013 in Johnson County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000 on the possession charge, and a penalty of not less than five years and a fine up to $250,000 on the charge of receiving child pornography. Homeland Security Investigations investigated. Assistant U.S. Attorney Kim Martin is prosecuting.
Dacco Shane Muth, 27, Leavenworth, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction, one count of possession with intent to distribute methamphetamine and one count of unlawful possession of a sawed off shotgun. The crimes are alleged to have occurred March 15, 2014, in Bonner Springs, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000 on each of the firearms charges and a maximum penalty of 20 years and a fine up to $1 million on the drug charge. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Bonner Springs Police Department investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
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Two Defendants Appear in Federal Court in Beckley on Drug ChargesRead the Press Release
Pill Dealer Gets 12 Years in Federal Prison
Beckley, W.Va. – United States Attorney Booth Goodwin announced today that two defendants appeared before United States District Judge Irene C. Berger on drug charges in federal court in Beckley. Michael Harshaw, 38, of Hinton, was sentenced to 10 years in prison after previously pleading guilty to using a telephone on October 3, 2012 to set up a transaction in which he distributed five oxycodone pills to a person cooperating with authorities. He also admitted that on October 10, 2012, he possessed a quantity of pills containing alprazolam, also known as xanax. Both offenses occurred in Hinton. Harshaw received an additional 2 years in prison for violating the conditions of supervised release imposed in connection with a previous federal drug conviction. His case was investigated by the West Virginia State Police Bureau of Criminal Investigations and was prosecuted by Assistant United States Attorney John File.
Tiffany Rose Arbogast, 24, of Lewisburg, pled guilty to distributing heroin in Lewisburg to a person cooperating with authorities on December 15, 2012. Arborgast also admitted that she had distributed between five and ten grams of heroin over a period of time. She faces up to 20 years in prison and a fine of up to $1,000,000 when she is sentenced on October 23, 2014. This case was investigated by the Greenbrier Valley Drug and Violent Crime Task Force in connection with the Greenbrier County Heroin and Pill Initiative. The prosecution is being handled by Assistant United States Attorney John File.
These cases are part of an ongoing effort by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and the distribution of heroin in southern West Virginia.
Toray Chemical Korea Resolves Attempted Theft of Trade Secrets Investigation and Agrees to Pay over $2 Million PenaltyRead the Press Release
RICHMOND, Va. – Toray Chemical Korea, Inc., formerly doing business as Woongjin Chemical Co., Ltd., a South Korean chemical company, agreed to pay a criminal penalty of over $2 million to resolve an attempted theft of trade secrets investigation, announced Dana J. Boente, U.S. Attorney for the Eastern District of Virginia.
The U.S. Attorney’s Office filed a criminal information today against Toray Chemical and a two-year deferred prosecution agreement in the U.S. District Court for the Eastern District of Virginia. The one-count information charges Toray Chemical with attempted theft of trade secrets. As part of the deferred prosecution agreement, Toray Chemical agreed to pay a $2,058,000 penalty for its illegal activity, implement an enhanced compliance and ethics program, continue to cooperate with the government’s investigation and remediate past problems.
“These criminal charges reflect the Eastern District of Virginia’s continued commitment to protecting one of this country’s greatest assets—the innovation and ingenuity of the American people,” said U.S. Attorney Boente. “The terms of the deferred prosecution agreement in this case should send a strong message to businesses in the United States and around the world that substantial cooperation with law enforcement is one of the most effective ways to demonstrate that a company is truly committed to addressing the criminal conduct of its executives and ensuring that such conduct does not occur in the future.”
According to court documents, Toray Chemical, formerly doing business as Woongjin Chemical, endeavored to develop Arawin®, a meta-aramid fiber designed to compete with a product called Nomex®. Meta-aramid fibers are used in a variety of applications, including protective fabrics, electrical insulation and lightweight structural support for commercial aircraft. Nomex is produced by E. I. du Pont de Nemours and Company (DuPont), one of the largest chemical companies in the United States.
From January 2011 through November 2011, Woongjin Chemical sought to improve its Arawin product by hiring and attempting to hire as consultants former DuPont employees with knowledge of Nomex technology, in particular the process for manufacturing Nomex paper. To that end, two former DuPont employees met with Woongjin Chemical executives in South Korea. During this visit, Woongjin Chemical engineers repeatedly asked the former DuPont employees to disclose aspects of the Nomex manufacturing process, including details about the short-cut fiber, known as floc, used to make Nomex paper.
One of the former DuPont employees offered to confirm the specific length and conditions used to produce floc by speaking with a current DuPont employee when he returned to the United States. Although the former DuPont employee did not obtain the information Woongjin Chemical requested when he returned to the United States, the company continued to seek information about DuPont’s process for manufacturing Nomex paper. Indeed, a Woongjin Chemical executive directed another employee to obtain a sample of Nomex floc from a DuPont distributor or customer by legal or illegal means. Shortly thereafter, Woongjin Chemical executives learned that FBI agents interviewed the two former DuPont employees regarding the potential theft of DuPont trade secrets.
The deferred prosecution agreement acknowledges Toray Chemical’s extraordinary cooperation with the government’s investigation, including an extensive, thorough and swift internal investigation, producing relevant documents from outside the United States, and collecting, analyzing, organizing and, in many instances, translating voluminous evidence and information for the United States. In addition, the agreement highlights that Toray Chemical has already undertaken remedial measures, including suspension of and ultimate refusal to renew contracts with certain consultants and implementation of new policies and procedures for key employees.
This case was investigated by the FBI’s Richmond Field Office. Assistant U.S. Attorneys Katherine Lee Martin and Michael S. Dry are 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. 3:14-cr-93.Tweet