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Monday 7 July 2014
Tallahassee Man Indicted for Scheme to Defraud Using Fraudulent State Court OrderRead the Press Release
TALLAHASSEE, FLORIDA– Pamela C. Marsh, United States Attorney for the Northern District of Florida, announced today that Frank William Johannissohn, 66, of Tallahassee, Florida, has been charged by a federal grand jury with mail fraud, possession of an authentication feature with intent to defraud the United States, making false statements to the United States Office of Personnel Management, and aggravated identity theft.
The indictment alleges that on or about July 26, 2013, Johannissohn mailed a fraudulent “Redress of Alimony” order bearing the forged signatures of a Wakulla County circuit court judge and a deputy clerk of the court to the United States Office of Personnel Management, as well as a certification stamp of the Wakulla County Clerk of the Court. According to the Indictment, Johannissohn mailed the fraudulent document in an attempt to obtain approximately $10,000 in additional retirement payments for every year of his retirement. Specifically, the fraudulent “Redress of Alimony” purportedly ordered the termination of Johannissohn’s obligation to provide health insurance for his former spouse, to pay for a survivor benefit under his federal retirement annuity for his former spouse, and to pay alimony to his former spouse.
If convicted on Count One of the Indictment charging mail fraud, Johannissohn faces a term of imprisonment of not more than 20 years, a period of supervised release of up to 3 years, a fine of up to $250,000, and a $100 special monetary assessment. If convicted on Counts Two (possession of an authentication feature with intent to defraud the United States) and Three (using a false writing and document) of the Indictment, Johannissohn faces on each of these counts a term of imprisonment of not more than 5 years, a period of supervised release of up to 3 years, a fine of up to $250,000, and a $100 special monetary assessment. If convicted on Count Four of the Indictment charging aggravated identity theft, Johannissohn faces a term of imprisonment of 2 years that must run consecutive to any term of imprisonment imposed for Counts One and Two, a period of supervised release of up to 1 year, a fine of up to $250,000, and a $100 special monetary assessment.
The Indictment results from an investigation by the United States Office of Personnel Management’s Office of Inspector General with the assistance of the Wakulla County Sheriff’s Office and the Leon County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Jason Beaton.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.
Summertime Tips for Keeping Kids Safe from PredatorsRead the Press Release
GRAND RAPIDS, MICHIGAN –Children around the country are spending more time online and unsupervised. The U.S. Attorney’s Office for the Western District of Michigan, the FBI, and the Michigan State Police recommend that this is the ideal time to talk to kids about the dangers of online predators, sex trafficking, and other risks that arise for kids with additional free time and access to the internet during the summer months.
The U.S. Attorney office puts a high priority on aggressively prosecuting those who produce and distribute internet child pornography and exploit children sexually. Despite significant potential federal sentences – for example, five to 20 years in prison for receiving and distributing child pornography – pedophiles and child predators still use social media and the internet as their primary child pornography marketplace.
Child predators will find any way they can to contact kids, gain their trust, and exploit them. Summer poses a particular risk because children spend more time unsupervised. Now that smart phones put the internet directly into kids’ hands, it is much harder for parents to exert the kind of supervision they once had over the shared family computer or house landline telephone.
"The danger posed by online predators has the potential to pose real-life harm toward adolescent victims,” said Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Those who attempt to exploit children online often use coercion, fear, and sometimes threats of violence to commit these crimes. As we enjoy the summer months, and our children spend more time outside of normal adult supervision, it is important for parents to remember that the children being victimized by online predators don’t live in some faraway place, outside of our everyday lives. Unfortunately, these are far too often our children—in our communities—and we must remain vigilant in our efforts to protect them from those who would do them harm."
Protecting Children from Online Predators:
Predators target children of every background. One in seven children reports receiving sexual solicitations online. Seventy percent of those are girls. Fifteen percent of teens ages 12-17 who own a cell phone say they have received sexually suggestive nude/semi-nude images of someone they know via text message. Four percent of teens ages 12-17 who own a cell phone admit to sending sexually suggestive nude/semi-nude images to others via text message. Parents should monitor children’s online activity closely, and although children feel that their online life is private, they need to know it is anything but and is more permanent than they think.
Some predators are in positions of trust and authority over kids, while others are strangers. Predators meet children on social media, chat rooms, and internet-based video games, among other places. All of these activities present opportunities for predators to gain children’s trust and groom them for eventual sexual conduct. Predators sometimes use a false identity, posing as other children or using a fake name to develop a friendship with a child. The predator may even establish social media accounts under that false identity to provide an additional sense of legitimacy. Predators often advance the relationship to text message or live video chat and encourage kids to send sexually explicit photos or videos. By that time, the child may have developed a certain level of trust in the offender that makes the child less likely to report the activity and more likely to keep the activity a secret at the request of the offender.
Here are a few internet safety tips to discuss with your children:
- Only “friend” and connect to people online that you know personally and delete those you do not know personally;
- Set social media security settings so that only confirmed friends and connections can see what you are posting;
- Never take a picture of yourself or write anything by text, email, or social media that you would not want everyone in the world to see;
- Immediately delete and never forward a picture of anyone doing something sexual;
- Choose screen names and usernames that are appropriate;
- Never post publicly or give anyone your phone number, email address, or home address unless you know them personally;
- Be aware that anyone you meet online may not be who they say they are; and
- Immediately tell a parent or trusted adult if you find yourself in an uncomfortable situation online, even if you are afraid that things have already gone too far.
Families may be in the best position to identify the warning signs of illicit computer use by adults and teens at home. Some warning signs include:
- an excessive amount of computer use, often when others are out of the house or sleeping;
- multiple computers, some of which are password protected or only used by one person in the home;
- peer-to-peer programs downloaded onto the desktop including Ares, Limewire, and others;
- cell phone security programs that hide a person’s photos from casual view by others;
- multiple email addresses, including one using false names;
- various USB thumb drives and external hard drives, especially if the person hides them or is reluctant to leave them unattended;
- lack of desire or motivation to seek employment or activities outside the house or away from the computer; and
- unfamiliar or inexplicable contacts stored on video chat programs such as Skype or Face Time.
It is important to note that not everyone involved in child pornography establishes in-person relationships with children, so families should not rule out possible child pornography trading just because a person does not interact with children in daily life. Anyone who suspects illicit computer use should report the activity to law enforcement for further investigation.
Protecting Children from Sex Trafficking:Not all predators rely on the internet. Even in West Michigan, sex trafficking and child exploitation exist.
Families, teachers, hotel workers, convenience store employees, and students are in the best position to identify potential child sex trafficking activity. While children of every background can be lured into prostitution, some warning signs of child sex trafficking include:
- lack of organized afterschool/summer activities and supervision;
- running away (not necessarily overnight);
- recent friendship/attention between a teenager and an older adult who may drive the teen places or provide a place to stay overnight;
- tension and fighting at home;
- new clothing, nails, and hair styles (for girls) generally outside the financial reach of a teen;
- new cell phone not purchased by parent/guardian;
- checking in at a hotel with no luggage or sneaking into a hotel through a side door;
- drug/alcohol dependency; and
- low self-esteem.
As part of the Innocence Lost Initiative – a collaboration among the National Center for Missing and Exploited Children, the FBI, and the Department of Justice – 3,100 child victims of sex trafficking were recovered nationwide from 2003 to 2013. The youngest was nine years old. In a 2013 national sting on child sex trafficking, Detroit ranked second-highest out of 76 cities in the number of child victims recovered.
Project Safe Childhood:
To address the growing concerns about child sexual exploitation in the digital age, the Department of Justice launched Project Safe Childhood in 2006. Project Safe Childhood expanded in 2011 to include sex trafficking of minors, crimes against children committed in Indian country, and failure to register as a sex offender.
The national initiative relies on partnerships with organizations including U.S. Attorneys’ Offices; federal investigative agencies; and state, local, tribal, and military law enforcement officials. Approximately 70 Internet Crimes Against Children (ICAC) Task Forces operate around the country for federal, state, and local law enforcement officers to collaborate in investigating online child exploitation.Under Project Safe Childhood, the U.S. Attorney’s Office for the Western District of Michigan prosecutes people who create, download, share, possess, and view child pornography. Federal sentences for these crimes are steep: up to 20 years for viewing and possessing child pornography, a mandatory minimum of 5 years and up to 20 years for downloading and sharing child pornography, and a mandatory minimum of 15 years and up to 30 years for producing child pornography. The penalties increase for each of those charges if the defendant has a prior sex offense conviction.
The U.S. Attorney’s Office for the Western District of Michigan also prosecutes those who seek to exploit children sexually by chatting online or arranging to meet children for sexual encounters. Federal sentences for those crimes are significant: 10 years to life for coercing or enticing a child for sex, 10 years to life for causing a child to travel out of state for sex, and up to 30 years for traveling to another state to have sex with a child. Defendants who traffic minors for prostitution face a mandatory minimum of 10 years and up to life in prison.
In 2013 and 2014, the U.S. Attorneys’ Office for the Western District of Michigan successfully prosecuted the following cases, among others under Project Safe Childhood:
- sex trafficking of three girls ages 14-16 in Grand Rapids;
- online enticement of a 12-year-old by a man in California;
- producing sexually explicit photos of a teenage boy (resulting in forfeiture of the defendant’s house);
- sexually abusing a 12-year-old girl on Indian territory;
- distribution and possession of over 44,000 files of child pornography by a formerly licensed counselor;
- streaming live video over the internet of children being sexually abused;
- downloading and possessing child pornography;
- receiving child pornography;
- cyber-stalking of students at Michigan State University and committing child pornography offenses; and
- viewing child pornography online.
The FBI has recently formed the West Michigan Based Child Exploitation Task Force (WEBCHEX), a collaborative effort between the FBI and state and local law enforcement partners to combat the sexual exploitation of children across West Michigan. This task force will primarily focus on investigations of child abductions, child sex trafficking, interstate travelers for sex with minors, and producers and distributors of child pornography. The participating agencies include the Michigan State Police, Grand Rapids Police Department, Ionia County Sheriff’s Office, Allegan County Sheriff’s Office, and Ottawa County Sheriff’s Office. The task force also has the support of the United States Attorney’s Office and will coordinate prosecutions between federal and state prosecutors.
How to Report Child Exploitation:
If you suspect illegal activity involving child exploitation, contact law enforcement immediately. If a child is in imminent danger, call 911. Other resources for reporting these crimes include:
- West Michigan Based Child Exploitation Task Force (WEBCHEX) at 616-456-5489;
- Homeland Security Investigations, Grand Rapids, at 616-235-3936 (x. 2215); and
- CyberTipline (National Center for Missing and Exploited Children).
To report a child missing and gain immediate assistance in launching a campaign to locate the child, or if you think you have seen a missing child, call:
- 1-800-THE-LOST (1-800-843-5678).
END
Southern California Man Sentenced to 121 Months in Prison for Medicare Fraud and Identity TheftRead the Press Release
A Southern California man who was convicted at trial of conspiracy to commit health care fraud, six counts of health care fraud and six counts of aggravated identity theft was sentenced to serve 121 months in prison today in federal court in Los Angeles.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Los Angeles Region and Assistant Director in Charge Bill Lewis of the FBI’s Los Angeles Field Office made the announcement.
Vahe Tahmasian, 36, of Glendale, California, was found guilty by a federal jury on March 21, 2014, for his role in a $1.5 million Medicare fraud and identity theft scheme. In addition to his prison term of 121 months, he was sentenced to serve three years of supervised release and ordered to pay $994,036 in restitution to the Medicare program.
The evidence at trial showed that between April 2009 and February 2011, Tahmasian operated a Medicare fraud scheme at Orthomed Appliance Inc. (Orthomed), a DME supply company in West Hollywood, California. Tahmasian and his co-conspirator, Eric Mkhitarian, purchased Orthomed from the previous owners and put the company in the name of a “straw” owner. The defendant and his co-conspirator then stole the personal identifying information of Medicare beneficiaries and doctors in the company’s patient files, and used that information to submit a large volume of fraudulent claims to Medicare. The evidence showed that during a three-month period in late 2010, Tahmasian submitted more than $1.2 million in fraudulent claims to Medicare for services that were never prescribed by a physician and never provided to the Medicare beneficiaries. Tahmasian and his co-conspirator then took out more than $622,000 in cash from the company over a six-week period in early 2011. The evidence also showed that Tahmasian used a fake California driver’s license to further the fraud scheme. Tahmasian submitted a total of $1,584,640 in claims to Medicare and received approximately $994,036 on those claims.
The case was investigated by the FBI and the Los Angeles Region of HHS-OIG. The case was prosecuted by Assistant Chief Benton Curtis and Trial Attorney Alexander Porter of the Criminal Division’s Fraud Section.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is 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 .Sacramento Man Sentenced to Prison for Drug ConspiracyRead the Press Release
Anchorage, Alaska-United States Attorney Karen L. Loeffler announced today, July 7, 2014, that John Joseph Brennan III, of Sacramento, California was sentenced in federal court in Anchorage for his role in a drug conspiracy to distribute and to possess with the intent to distribute oxycodone.
Brennan, 61, was sentenced to 68 months imprisonment and 3 years of supervised release by United States Chief District Judge Ralph R. Beistline, for his role in the drug conspiracy involving the distribution of oxycodone in Fairbanks and Juneau, Alaska between the dates of September 2008 to September 2010.
According to information presented to the court by Assistant United States Attorney Jack S. Schmidt, the defendant was a member of a large scale drug conspiracy where oxycodone was delivered to Fairbanks and Juneau, Alaska supplied by the defendant and others who were located in Sacramento, California through commercial package delivery services and drug couriers flying on commercial flights. Oxycodone was delivered to other members of the conspiracy in Fairbanks and Juneau for subsequent distribution and the other members of the conspiracy funneled drug proceeds back to other co-conspirators located in Sacramento, California via bank deposits, wire remittance services, or drug couriers. These drug proceeds were used to purchase additional oxycodone from Brennan, who acted as a source of supply for the conspiracy by obtaining oxycodone from physicians located in Sacramento, California and distributing the pills to other co-defendants, specifically Dante Whitley, Wilbert Barber, Deandre Dantzler, Michael Miller and Milan Thomas who distributed the pills in Alaska. Members of the conspiracy laundered the drug proceeds using bank transactions and wire transfers in order to conceal the nature of the drug proceeds, and structure deposited the drug proceeds in a manner to avoid federal reporting requirements.
Prior to imposing sentence, Judge Beistline indicated the extreme seriousness of the offense prior to imposing the defendant sentence and stated that “members of the community were sick and tired of what drugs do to their community,” and that deterrence of the defendant and others were important aspects in fashioning an appropriate sentence. Judge Beistline further stated Brennan had made a significant turnaround in his life after his contact with law enforcement by immediately seeking and successfully completing drug treatment and becoming a drug counselor to others while out on release awaiting sentencing, as reasons for the sentence he imposed.
Ms. Loeffler commended the Drug Enforcement Agency (DEA), Port of Seattle Police Department, and the Juneau Police Department-Drug Metro Unit for the investigation leading to the successful prosecution of the above listed defendants.Russian Hacker Arrested for Computer Hacking Scheme that Victimized Thousands of Credit Card CustomersRead the Press Release
A Russian man, indicted in the Western District of Washington for hacking into point of sale systems at retailers throughout the United States was arrested this weekend and transported to Guam for an initial appearance, announced U.S. Attorney Jenny A. Durkan. ROMAN VALEREVICH SELEZNEV, 30, of Vladivostok, also known as “Track2” in the criminal carding underground, was indicted in March 2011, for operating several carding forums that engaged in the distribution of stolen credit card information. At his first appearance in Guam today, SELEZNEV was ordered detained pending a further hearing scheduled for July 22, 2014.
“Cyber crooks should take heed: you cannot hide behind distant keyboards. We will bring you to face justice,” said U.S. Attorney Jenny A. Durkan, who leads the Justice Department’s Cybercrime and Intellectual Property Enforcement Subcommittee of the Attorney General’s Advisory Committee. “I want to thank the U.S. Secret Service for their work in investigating this case and in apprehending the defendant. I also want to give credit to the work of the Electronic Crimes Task Force, and Seattle Police Department in particular, and our partners in the United States Attorney’s Office in Guam, the Department of Justice’s Office of International Affairs, and the Computer Crime and Intellectual Property section of the Department of Justice’s Criminal Division.”
The indictment, unsealed today following his arrest on July 5, 2014, details a bank fraud scheme in which SELEZNEV is charged with hacking into retail point of sale systems and installing malicious software on the systems to steal credit card numbers. The illegal hacking outlined in the indictment occurred between October 2009, and February 2011. The indictment alleges that SELEZNEV created and operated infrastructure to facilitate the theft and sales of credit card data and used servers located all over the world to facilitate the operation. This infrastructure included servers that hosted carding forum websites where cybercriminals gathered to sell stolen credit card numbers. The charges in the indictment include five counts of bank fraud, eight counts of intentionally causing damage to a protected computer, eight counts of obtaining information from a protected computer, one count of possession of fifteen or more unauthorized access devices (stolen credit card numbers), two counts of trafficking in unauthorized access devices and five counts of aggravated identity theft.
“The arrest of Roman Seleznev is yet another example of how the Secret Service continues to successfully combat data theft and financial crimes,” said Robert Kierstead, Special Agent in Charge of the U.S. Secret Service Seattle Field Office. “The Secret Service utilized state-of-the-art investigative techniques to dismantle this criminal network. Our success in this case and other similar investigations is a result of the extraordinary work of our investigators and our close work with our network of law enforcement partners.”
Bank Fraud is punishable by up to thirty years in prison and a $2 million fine. Intentionally causing damage to a protected computer resulting with a loss of more than $5,000 is punishable by up to ten years in prison and a $250,000 fine. Obtaining information from a protected computer is punishable by up to five years in prison and a $250,000 fine. Possession of more than 15 unauthorized access devices is punishable by up to ten years in prison and a $250,000 fine. Trafficking in unauthorized access devices is punishable by up to 10 years in prison and a $250,000 fine. Aggravated identity theft is punishable by an additional two years in prison on top of any sentence for the underlying crimes. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
SELEZNEV is also charged in a separate indictment in the District of Nevada with participating in a racketeer influenced corrupt organization (RICO) and conspiracy to engage in a racketeer influenced corrupt organization as well as two counts of possession of fifteen or more counterfeit and unauthorized access devices. Those charges carry maximum penalties of up to 20 years in prison for RICO and RICO conspiracy and up to 10 years in prison for possession of fifteen or more counterfeit and unauthorized access devices.
Credit card fraud costs financial institutions $40 billion annually. In the Western District of Washington more than 180,000 stolen credit card numbers have been identified in recent cyber cases.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the U.S. Secret Service Electronic Crimes Task Force which includes detectives from the Seattle Police Department. The Office of International Affairs, the Computer Crime and Intellectual Property Section of the Department of Justice’s Criminal Division and the U.S. Attorney’s Office for the District of Guam provided substantial assistance. Assistant United States Attorney Norman M. Barbosa is prosecuting the case in the Western District of Washington.
For additional information please contact Todd Greenberg, Assistant United States Attorney for the United States Attorney’s Office, at (206) 553-7970.
Owner of N.J. Accounting Business Charged with Nearly $1 Million Fraud on Her Clients and the U.S. GovernmentRead the Press Release
CAMDEN, N.J. – An accountant from Toms River, N.J., was arrested today by special agents of IRS – Criminal Investigation and the Social Security Administration, Office of the Inspector General (SSA OIG), on charges she allegedly stole $905,000 from client tax refunds and social security benefits, U.S. Attorney Paul J. Fishman announced.
Doreen Gentile, 59, was indicted by a grand jury, charged with 14 counts of mail fraud, nine counts of forging endorsements on treasury checks of the United States, two counts of aggravated identity theft and two counts of filing false income tax returns. Gentile is scheduled to make her initial appearance this afternoon before Magistrate Judge Ann Marie Donio in Camden federal court.
According to the indictment unsealed today:
Gentile, owned and operated Doreen A. Gentile & Associates, LLC (“DAG & Associates”), an accounting practice based in Toms River. Gentile maintained clients throughout central and southern New Jersey. In addition to preparing federal and state income tax returns, she also managed property for clients in Salem County.
As part of her scheme, Gentile would show her clients a tax return that indicated that they had no tax or refund due, owed a minimal amount of tax (generally under $40) or were due a refund that was far less then what they were entitled. Gentile then prepared a second set of tax returns, signed without her clients’ permission, that she submitted to the IRS for the full tax refund. Based on the second set of returns, the IRS or the New Jersey issued tax refund checks care of DAG & Associates and mailed them to the DAG & Associates post office box in Toms River. Gentile then deposited the tax refund checks into the DAG & Associates bank account without her clients’ permission.
Gentile also directed clients to make payments to the IRS to pay for various tax liabilities. After the payments were made, Gentile, without the victims’ knowledge, applied for refunds and had the checks mailed to her. Once she received the refund checks she forged the victims’ signatures and deposited the refunds into her account.
In addition, when one of her clients died in September 2005, Gentile did not inform the SSA. Instead, Gentile allowed the SSA to continue sending retirement benefits, which she accessed through the deceased victim’s bank account and used for her personal expenses at clothing and jewelry stores.
On her personal individual tax return, Gentile failed to report the income generated by her theft of her clients’ refund checks and the money she embezzled from the deceased victim’s estate.
The 14 counts of mail fraud alleged in the indictment each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The nine counts of forging endorsements on treasury checks of the United States and one count of theft of government funds each carry a maximum potential penalty of 10 years in prison and a $250,000 fine. The two counts of filing false income tax returns each carry a maximum potential penalty of three years in prison and a $100,000 fine. The two counts of aggravated identity theft each carry a maximum potential consecutive sentence of two years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and special agents of SSA OIG under the direction of Special Agent in Charge Edward J. Ryan, with the investigation.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.
The charge and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.14-239
Defense counsel: Robert Weir Esq., Red Bank, N.J.
Gentile, Doreen Indictment
Overland Park Hotel Owners Plead Guilty to Employing Undocumented WorkersRead the Press Release
KANSAS CITY, KAN. - Theowners of an Overland Park hotel pleaded guilty Monday to a federal charge of employing undocumented workers, who they paid less than other employees, U.S. Attorney Barry Grissom said.
Munir Ahmad Chaudary, 53, and his wife, Rhonda R. Bridge, 41, both of Overland Park, Kan., pleaded guilty to one count of conspiracy to harbor undocumented aliens for personal gain. In their pleas, they admitted employing undocumented workers at two hotels they owned: A Clarion Hotel at 7000 W. 108th in Overland Park, and a Clarion Hotel at 11828 NW Plaza Circle in Kansas City, Mo. Chaudary and Bridge lowered their hotels’ operating costs and put themselves at a competitive advantage by not paying Social Security, Workers Compensation and unemployment insurance for the undocumented workers.
“Unscrupulous employers are the driving force behind illegal immigration,” U.S. Attorney Barry Grissom. “This case should send a message that they are not above the law.”
According to court records, the investigation began in December 2011 when the U.S. Department of Homeland Security (DHS) and the Kansas Department of Revenue (KDOR) received information that the owners of the hotels were employing foreign nationals who not lawfully present in the United States. In June 2012, an undercover agent posing as an undocumented worker got a job at the Overland Park Hotel. He was hired even though he told his employers he was not authorized to work in the United States.
In 2011 and 2012 the defendants filed false and fraudulent Quarterly Wage Reports and Unemployment Tax Returns with the Kansas Department of Labor in which they under-reported the number of employees at the Overland Park hotel, the amount of total wages paid and the amount of unemployment taxes due.
Sentencing will be set for a later date. The defendants face a maximum penalty of five years in federal prison without parole and a fine up to $250,000. In addition, the government is seeking the forfeiture of any funds or property derived from the defendants’ illegal activities.
Grissom commended Homeland Security Investigations (HSI), the Kansas Department of Revenue (KDOR), the Overland Park Police Department, the U.S. Department of Labor and Assistant U.S. Attorney Brent Anderson for their work on the case.
Oklahoma City Doctor Pays $40,000 to Settle Civil Penalty Claims Involving Violations of Controlled Substances ActRead the Press Release
Oklahoma City, Oklahoma -- STANLEY K. ROGERS, D.O., who practices in Oklahoma City, Oklahoma, has agreed to pay $40,000 to the United States to settle civil penalty claims stemming from allegations that he violated the Controlled Substances Act, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The Controlled Substances Act, 21 U.S.C. Sections 801 et seq. ("CSA"), was passed by Congress to combat the illegal distribution and abuse of controlled substances, including prescription medications. The CSA is enforced by the Drug Enforcement Administration's (DEA) Office of Diversion Control, with a mission to prevent, detect, and investigate the diversion of controlled pharmaceuticals and listed chemicals from legitimate sources while ensuring an adequate and uninterrupted supply for legitimate medical, commercial, and scientific needs. Under the CSA, medical providers registered with the DEA who purchase, distribute, dispense, transfer, or sell controlled substances must comply with inventory and documentation requirements. Regulations promulgated under the CSA require that each DEA registrant, maintain complete and accurate records of each substance manufactured, received, sold, delivered, dispensed or otherwise disposed of by the registrant. These requirements play a vital role in ensuring the appropriate handling, accounting, and distribution of controlled substances. Violations of the record-keeping requirements subject DEA registrants to civil monetary penalties.
The United States alleged that between January 1, 2012, and February 4, 2014, at least one employee in Dr. Rogers’ office used his DEA registration number in order to obtain over 20,000 dosage units of Schedules III and IV controlled substances which were not for legitimate medical purposes. It was alleged that Dr. Rogers failed to provide effective controls and procedures against theft and diversion, failed to maintain and review records of the dates, quantities received, dispensation, or inventories of controlled substances purchased using his DEA registration number.
In order to resolve the civil penalty claims against by the United States, Dr. Rogers agreed to pay $40,000 to the government In reaching this settlement, Dr. Rogers did not admit liability and the government did not make any concession regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Drug Enforcement Administration’s Oklahoma City District Office Diversion Group and was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
New York State Man Sentenced to Prison and Must Forfeit $275,000 for Money Laundering ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 29-year-old Vestal, New York, resident was sentenced to serve 20 months in prison and to forfeit $275,000 today by Senior U.S. District Court Judge A. Richard Caputo for his role in a money laundering conspiracy involving proceeds from the unlawful sale of synthetic marijuana.
According to United States Attorney Peter Smith, the defendant, Jaswinder Singh, previously admitted to conspiring with others to commit money laundering related to synthetic marijuana distribution in northeastern Pennsylvania and New York State.
Singh was charged in January 2014, as a result of an investigation by the Drug Enforcement Administration, Internal Revenue Service criminal investigators, and the Pennsylvania State Police. He pleaded guilty on January 30, 2014.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
****New York City Man Sentenced to More Than 8 Years for Drug ConspiracyRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that
Kenneth Robinson, a/k/a “Kill”, 46, of New York, New York, was sentenced today to 100
months in prison and three years of supervised release for conspiracy to possess with intent to
distribute and to distribute oxycodone and cocaine. He pled guilty to the charge in March 2013.His conviction stems from his involvement in a large drug trafficking conspiracy
operated by Maurice McCray in Central Maine. Court records reveal that between May 2009
and May 2012, Robinson supplied oxycodone to McCray for distribution by a network of
conspirators. The conspiracy was dismantled following a three month investigation that revealed
the details of McCray’s drug distribution operation and its membership.The investigation was conducted by the U.S. Drug Enforcement Administration and the
Maine Drug Enforcement Agency.Modesto Man Sentenced to Federal Prison for Conspiring to Commit Postal CrimesRead the Press Release
FRESNO, Calif. —Michael Chase Stafford, 29, of Modesto, was sentenced today by U.S. District Judge Lawrence J. O’Neill to two years and nine months in prison for conspiring to commit postal crimes, according to United States Attorney Benjamin Wagner.
According to court documents, Stafford conspired with others to steal mail from authorized U.S. mail receptacles and to possess stolen U.S. mail. From the stolen mail, they acquired credit cards, merchant cards and convenience checks, in addition to account numbers and personal identifiers of victims. They used these items to buy merchandise for themselves without authorization from the true account holders.
Co-defendant Dawn Renee Wessling was sentenced to 18 months in prison on January 22, 2013, for her role in the conspiracy.
This case is the product of an investigation by the United States Postal Inspection Service. Assistant United States Attorney Grant B. Rabenn is prosecuting the case.
Miami Jury Convicts Four Defendants of Conspiracy and Bank Fraud Offenses Arising from $49.6 Million Mortgage Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Jason T. Moran, Special Agent in Charge, Federal Deposit Insurance Corporation (FDIC), Office of Inspector General, Atlanta Regional Office, announce the convictions of Domenico “Dom” Rabuffo, 77 of Miami, Mae Rabuffo, 75, of Fort Lauderdale, and Williston Park, New York, Raymond E. Olivier, 52, of Land O’ Lakes, and Curtis Allen Davis, 51, of Tampa. The defendants were convicted after an eleven day-jury trial before Chief United States District Judge Kevin Michael Moore. The jury found each defendant guilty of conspiracy to commit bank fraud and wire fraud affecting a financial institution, in violation of Title 18, United States Code, Section 1349. The jury also convicted Domenico Rabuffo, Olivier, and Davis of multiple counts of bank fraud, in violation of Title 18, United States Code, Section 1344.
Domenico Rabuffo, Mae Rabuffo, Olivier, and Davis are scheduled to be sentenced by Chief Judge Moore on September 25, 2014. The defendants face a maximum sentence of 30 years in prison for each count of conviction.
According to the indictment and evidence at trial, from 2003 to 2008, the defendants conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders, including Bank of America, Regions Bank, SunTrust Bank, and Wachovia Bank. Domenico Rabuffo and Mae Rabuffo used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, located in Cashiers, North Carolina. Then, Domenico Rabuffo, Olivier, and Davis recruited numerous straw borrowers to purchase building lots in the development. Several of the straw borrowers testified at the trial. According to their testimony and other evidence, Domenico Rabuffo paid the borrowers to obtain lot purchase loans and construction loans for building lots in Hampton Springs. To obtain the loans, Domenico Rabuffo, Mae Rabuffo, Olivier, Davis, and other conspirators, submitted fraudulent loan applications and related documents to the lenders and the lenders’ closing agents.
Among other things, the loan applications and settlement statements for the lot loans contained fraudulent statements that the borrowers paid earnest money deposits and cash due at the closing. In fact, the deposits and cash-to-close were paid by Domenico Rabuffo and Mae Rabuffo using proceeds from the fraudulent scheme. Further, Domenico Rabuffo and Mae Rabuffo sent fraudulent correspondence to the closing agents, including letters bearing the forged signatures of borrowers, to create the false impression that the deposits and cash due at closing had been supplied by the borrowers from their own funds.
Olivier and Davis recruited straw borrowers for the fraud scheme and submitted fraudulent loan applications to the lenders. Further, Olivier and Davis caused their private companies to be disclosed as the employers of straw borrowers whose actual employment was inconsistent with the inflated income stated on their loan applications. Then, when they were contacted by the lenders, Olivier and Davis provided fraudulent verifications of employment for those borrowers.
Three other defendants, Diane M. Hayduk, 64, of Miami, Victor Miguel Vidal, 49, of Miami, and Lazaro Jesus Perez, 44, of Miami Springs, pled guilty to the charged conspiracy. Hayduk assisted Domenico Rabuffo and Mae Rabuffo with the misappropriation of loan proceeds and the transmission of fraudulent correspondence to the lenders and the closing agents. Vidal served as a loan officer at SunTrust Mortgage, where he sponsored fraudulent loan applications for lots in Hampton Springs, including fraudulent applications for $33 million in construction loans. Perez furnished fictitious accountant’s letters to Vidal, in support of fraudulent loan applications submitted to SunTrust Mortgage. Hayduk, Vidal, and Perez are awaiting sentencing by Chief Judge Moore.
Mr. Ferrer commends the investigative efforts of the FBI and FDIC, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Dwayne E. Williams and Jerrob Duffy.
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.
Local Tax Return Preparer ConvictedRead the Press Release
HOUSTON - Diane Caldwell Larry has entered a plea of guilty for falsifying client tax returns, announced United States Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service-Criminal Investigation (IRS-CI).
During her plea hearing today, Larry admitted that while operating a tax return preparation service under the name Paradise South Tax Services, she prepared 33 materially false client tax returns for tax years 2007 through 2010. Those returns generated excessive refunds and caused aggregate losses to the IRS totaling approximately $168,792. Larry acknowledged she had included in these client tax returns fraudulent “side business” losses and false and excessive itemized deductions and credits in order to generate excessive refunds. When some of these tax returns were audited, Larry made up false documents to create an illusion of legitimacy for some of the false and excessive itemized deductions and credits.
Specifically, Larry admitted she knowingly and willfully included a false $84,215 business loss deduction for a non-existent “side business” as well as false deductions for uniforms upkeep, toll bridge fees, job-related tools and employee business expenses totaling $10,644 in a client’s 2009 tax return. This tax return alone caused a loss to the U.S. Treasury of approximately $18,382.
The plea agreement requires Larry to make full restitution to the IRS for all of the fraudulent refunds.
U.S. District Judge Vanessa Gilmore, who accepted the guilty plea today, has set a sentencing date of Oct. 20, 2014, at which time Larry faces up to three years in prison and $250,000 fine. Larry has been permitted to remain on bond pending that hearing.
The case, investigated by IRS-CI, is being prosecuted by Assistant United States Attorney Jimmy Sledge Jr.
Junction City Man Sentenced on Child Porn ChargeRead the Press Release
TOPEKA, KAN. A Junction City man was sentenced Monday to 63 months in prison on a federal child pornography charge, U.S. Attorney Barry Grissom said.
Scott Deppish, 43, Junction City, Kan., pleaded guilty to one count of accessing child pornography with intent to view. In his plea, he admitted that that on Feb. 12, 2013, investigators served a search warrant and seized his desktop computer and two lose hard drives. They found images depicting prepubescent children engaged in sexual conduct. They also found images of a known victim in what is referred to as the “Abby” series, which were taken in the state of Idaho. They depict a very young prepubescent female engaged in sexual conduct with an adult male.
Grissom commended the Junction City Police Department, Homeland Security Investigation and Assistant U.S. Attorney Christine Kenney for their work on the case.
Illegal Alien Convicted of Using Deceased Boy’s IdentityRead the Press Release
HOUSTON – Jesus Duenas-Barajas, 53, a Mexican National illegally residing in Houston, has entered a plea of guilty to submitting a false statement on a U.S. passport application and aggravated identity theft, announced United States Attorney Kenneth Magidson.
On or about Feb. 10, 2012, Duenas-Barajas completed a DS-11 U.S. Passport application at the Westfield Post Office in Houston, using the identity of a boy who had died in 1978. On that application, he represented he was that person and provided the deceased victim’s date of birth, Social Security number and birth certificate.
Evidence indicates Duenas-Barajas had been using the deceased boy’s identity since as early as 1986. During that time, he had also been able to obtain a driver’s license using the deceased boy’s identifiers.
U.S. District Judge Vanessa Gilmore, who accepted the plea, has set sentencing for Oct. 14, 2014. At that time, he faces up to 10 years in federal prison and a possible $250,000 fine for the false statement conviction. For aggravated identity theft, he will also face a mandatory two-year-term of federal imprisonment which must be served consecutively to any other sentence imposed. He is expected to face deportation proceedings after he serves his sentence.
The investigation was conducted by the Department of State and Social Security Administration. Assistant U.S. Attorney Julie Searle is prosecuting.
Huntington Woman Sentenced for Role in Heroin ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A Huntington woman was sentenced today to 12 months and 1 day in federal prison for her role in a heroin distribution conspiracy, announced U.S. Attorney Booth Goodwin. Alanna Lynn Mattison, 32, previously pleaded guilty in January 2014 to making an apartment available for use for storing and distributing heroin and oxycodone before Chief United States District Judge Robert C. Chambers in Huntington.
Between February 2013 and August 15, 2013, Mattison rented an apartment located at 522 14th Street West, in Huntington, and permitted Bobby Nelson Gulley to utilize her apartment to store and distribute heroin and oxycodone. As part of her plea agreement, Mattison admitted her involvement in a conspiracy with Gulley and Helen Louise Adkins which resulted in the transportation of heroin and oxycodone from Detroit, Michigan, to Huntington for distribution. Mattison also admitted to distributing heroin on behalf of Gulley during the conspiracy.
In August 2013, agents executed search warrants at multiple locations tied to Gulley and Mattison, recovering over 140 grams of heroin, 974 oxycodone tablets and $12,000 cash. Gulley previously pleaded guilty in connection with his involvement in the conspiracy and was sentenced in May 2014 to 63 months in federal prison.
The Drug Enforcement Administration and Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Huntington Woman Sentenced for Role in Heroin ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A Huntington woman was sentenced today to 12 months and 1 day in federal prison for her role in a heroin distribution conspiracy, announced U.S. Attorney Booth Goodwin. Alanna Lynn Mattison, 32, previously pleaded guilty in January 2014 to making an apartment available for use for storing and distributing heroin and oxycodone before Chief United States District Judge Robert C. Chambers in Huntington.
Between February 2013 and August 15, 2013, Mattison rented an apartment located at 522 14th Street West, in Huntington, and permitted Bobby Nelson Gulley to utilize her apartment to store and distribute heroin and oxycodone. As part of her plea agreement, Mattison admitted her involvement in a conspiracy with Gulley and Helen Louise Adkins which resulted in the transportation of heroin and oxycodone from Detroit, Michigan, to Huntington for distribution. Mattison also admitted to distributing heroin on behalf of Gulley during the conspiracy.
In August 2013, agents executed search warrants at multiple locations tied to Gulley and Mattison, recovering over 140 grams of heroin, 974 oxycodone tablets and $12,000 cash. Gulley previously pleaded guilty in connection with his involvement in the conspiracy and was sentenced in May 2014 to 63 months in federal prison.
The Drug Enforcement Administration and Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Huntington Man Who Shot Six Gets 12 Years in Federal PrisonRead the Press Release
HUNTINGTON, W.Va. – A Huntington man was sentenced today to 12 years in federal prison for being a felon in possession of firearms and distributing heroin, United States Attorney Booth Goodwin announced today. Antonio Smith, 32, will also serve three years’ supervised release after his prison term, under a sentence imposed by Chief United States District Judge Robert C. Chambers. Smith previously pleaded guilty to the two charges on March 31, 2014.
On September 24, 2013, Smith used two firearms to shoot six individuals in the Northcott neighborhood of Huntington. Smith had previously been convicted of two violent felonies and thus could not legally possess the firearms that he used in the shootings. Separately, Smith sold heroin in Huntington to a confidential informant who, unbeknownst to Smith, was cooperating with investigators. Smith was later arrested in New York and returned to West Virginia for prosecution.
The case was investigated by the Federal Bureau of Investigation’s Huntington Violent Crime/Drug Task Force, the Drug Enforcement Agency and the Huntington Police Department. Special Assistant United States Attorney Sharon M. Frazier handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiates, including heroin, in communities across the Southern District.
Huntington Man Who Shot Six Gets 12 Years in Federal PrisonRead the Press Release
HUNTINGTON, W.Va. – A Huntington man was sentenced today to 12 years in federal prison for being a felon in possession of firearms and distributing heroin, United States Attorney Booth Goodwin announced today. Antonio Smith, 32, will also serve three years’ supervised release after his prison term, under a sentence imposed by Chief United States District Judge Robert C. Chambers. Smith previously pleaded guilty to the two charges on March 31, 2014.
On September 24, 2013, Smith used two firearms to shoot six individuals in the Northcott neighborhood of Huntington. Smith had previously been convicted of two violent felonies and thus could not legally possess the firearms that he used in the shootings. Separately, Smith sold heroin in Huntington to a confidential informant who, unbeknownst to Smith, was cooperating with investigators. Smith was later arrested in New York and returned to West Virginia for prosecution.
The case was investigated by the Federal Bureau of Investigation’s Huntington Violent Crime/Drug Task Force, the Drug Enforcement Agency and the Huntington Police Department. Special Assistant United States Attorney Sharon M. Frazier handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiates, including heroin, in communities across the Southern District.
Garden City Man Sentenced to 13 Years on Federal Gun ChargeRead the Press Release
GARDEN CITY, KAN. A Garden City man was sentenced Monday to 13 years in federal prison on a federal firearms charge, U.S. Attorney Barry Grissom said.
Anthony J. Reyna, 24, Garden City, Kan., pleaded guilty to one count of unlawful possession of a firearm following a felony conviction. In his plea, he admitted that on Nov. 13, 2012, he sold a handgun to an agent of the Bureau of Alcohol, Tobacco, Firearms and Explosives who was working undercover. The two met near a Home Depot store in Garden City. Because Reyna had a prior felony conviction he was prohibited by federal law from possessing a firearm.
Grissom commended the Garden City Police Department, the ATF and Assistant U.S. Attorney Lanny Welch for their work on the case.
Former State Secretary of Transportation Charged with Filing False Tax ReturnsRead the Press Release
BOSTON – The former Massachusetts Secretary of Transportation was charged today with filing false tax returns.
James J. Kerasiotes, 60, of Wrentham, was charged in an information with filing false personal income tax returns for the years 2010 and 2011.
The information alleges that Kerasiotes was a self-employed consultant providing strategy and business origination services to clients in the transportation and construction industries. For the calendar years 2010 and 2011, Kerasiotes filed Forms 1040, U.S. Individual Income Tax Returns, with the IRS reflecting only a portion of the income he earned from his consulting business during those years. By underreporting his total business income for 2010 and 2011, Kerasiotes evaded the payment of income taxes to the IRS.
The charging statute provides a sentence of no greater than three years in prison, one year of supervised release, and a fine of $100,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the Federal Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office, made the announcement today. The case is being prosecuted by Kristina E. Barclay of Ortiz’s Public Corruption Unit.
The details contained in the information are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former N.J. Lawyer Admits $40.8 Million Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – A former N.J. lawyer today admitted he conspired to participate in a scheme that caused lenders to release $40.8 million based on fraudulent mortgage loan applications and conspired to launder the proceeds of the fraud, U.S. Attorney Paul J. Fishman announced.
Joseph W. Witkowski, 68, of Flemington, N.J., pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to an indictment charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. Witkowski, a former attorney, was released on bail.
According to documents filed in this case and statements made in court:
Witkowski and his conspirators located oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, N.,J.; premier real estate in vacation destinations in Georgia and South Carolina; and properties in New Jersey owned by financially distressed homeowners facing foreclosure. They then recruited “straw buyers” – people with good credit scores but lacking the financial resources to qualify for mortgage loans – to purchase those properties.
Witkowski and his conspirators created false documents, including fake W-2 forms, income tax returns, investment statements, and rental agreements, to make the straw buyers appear more creditworthy than they actually were. They also established numerous telephone lines for companies owned by some of the conspirators so that when a lender contacted the telephone number, the conspirators could falsely verify that a straw buyer was employed by the company listed on his or her fraudulent loan application.
Witkowski also caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents, which attributed to the straw buyers inflated income and assets, to be submitted to mortgage lenders. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators had some of the funds wired or checks deposited into various accounts that he and his conspirators controlled.
To date, 10 of Witkowski’s conspirators have pleaded guilty to participating in this mortgage fraud conspiracy, including Charles Harvath, Stephen F. Corba Jr., John Siuszko, Michael Williams, William Brown, Mark Kreischer, Crystal Brame, Aku I. Muhammad, George Lachenmayr Jr. and Robert Serao.
The wire fraud conspiracy charge to which Witkowski pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Witkowski has agreed to forfeit $2,412,899, representing the proceeds of the fraud. Sentencing is scheduled for Nov. 14, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
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: Maggie Moy Esq., Assistant Federal Public Defender, Camden
Witkowski, Joseph et. al. Indictment
Former Mingo Prosecuting Attorney Sentenced to Federal PrisonRead the Press Release
CHARLESTON, W.Va. – Former Mingo County prosecuting attorney C. Michael Sparks was sentenced today to a year in federal prison, United States Attorney Booth Goodwin announced. The sentence comes after Sparks admitted his role in a scheme to coerce a Mingo County drug defendant, George White, into firing his defense counsel. According to Sparks, he and other Mingo officials, including former county commissioner David Baisden and former sheriff Eugene Crum, learned that White was prepared to testify that then-Sheriff Crum had been involved in criminal activity. In order to protect Crum from the impact of White’s allegations, including possible investigation, Baisden, Sparks, Crum, and former Mingo circuit judge Michael Thornsbury carried out a plan to pressure White into firing his defense attorney and replacing him with another attorney handpicked by the conspirators. After switching lawyers, White dropped his allegations against Crum and was sentenced to up to fifteen years in state prison.
The United States Constitution entitles criminal defendants to counsel of their choosing. By using their official authority to coerce White into firing his chosen lawyer and replacing him with the lawyer that they wanted, Sparks and the others involved violated that right. Using public authority to violate a person’s constitutional rights is a federal crime.
In the midst of the White scheme, federal investigators approached Sparks for information about wrongdoing by him and other Mingo officials. Sparks agreed to cooperate with authorities, becoming the first of a group of corrupt Mingo officeholders to assist federal agents. The information that Sparks provided laid the groundwork for a successful investigation of wrongdoing among those officials. To date, that investigation has led to federal prison terms for former Mingo County circuit judge Michael Thornsbury, former Mingo County commissioner David Baisden, and former Mingo County chief magistrate Dallas “Big Dal” Toler. In addition to their prison sentences, each of those officials has resigned his office as a result of the federal investigation, and Thornsbury and Sparks have lost their licenses to practice law.
Because of Sparks’ early and valuable participation in the investigation, Goodwin’s office sought a one-year prison sentence in Sparks’ case—significantly shorter than the sentences imposed on his fellow former officials.
“This sentence strikes an appropriate balance,” said U.S. Attorney Goodwin. “It punishes wrongdoing while encouraging officials involved in public corruption to come forward, admit what they’ve done, and help federal authorities. What Sparks did was indefensible, and he deserves prison time. But his early cooperation was vital to our investigation in Mingo County. This sentence underscores that telling the truth at the beginning of an investigation is always a wise decision.”
Today’s sentence was imposed by United States District Judge Thomas E. Johnston, who last month sentenced Thornsbury to 50 months in prison for his role in the same scheme in which Sparks was involved and in March sentenced Toler to 27 months in prison for election fraud. In sentencing Sparks, Judge Johnston focused on the importance of Sparks’ early and truthful cooperation with federal officials.
In January, after pleading guilty in an extortion scheme, Baisden was sentenced to 20 months’ imprisonment by United States District Judge John T. Copenhaver, Jr.
The investigation of corruption in Mingo County is being conducted by the Federal Bureau of Investigation and the West Virginia State Police. Counsel to the United States Attorney Steven R. Ruby and Assistant United States Attorney C. Haley Bunn are in charge of the prosecutions.
Former Mingo Prosecuting Attorney Sentenced to Federal PrisonRead the Press Release
CHARLESTON, W.Va. – Former Mingo County prosecuting attorney C. Michael Sparks was sentenced today to a year in federal prison, United States Attorney Booth Goodwin announced. The sentence comes after Sparks admitted his role in a scheme to coerce a Mingo County drug defendant, George White, into firing his defense counsel. According to Sparks, he and other Mingo officials, including former county commissioner David Baisden and former sheriff Eugene Crum, learned that White was prepared to testify that then-Sheriff Crum had been involved in criminal activity. In order to protect Crum from the impact of White’s allegations, including possible investigation, Baisden, Sparks, Crum, and former Mingo circuit judge Michael Thornsbury carried out a plan to pressure White into firing his defense attorney and replacing him with another attorney handpicked by the conspirators. After switching lawyers, White dropped his allegations against Crum and was sentenced to up to fifteen years in state prison.
The United States Constitution entitles criminal defendants to counsel of their choosing. By using their official authority to coerce White into firing his chosen lawyer and replacing him with the lawyer that they wanted, Sparks and the others involved violated that right. Using public authority to violate a person’s constitutional rights is a federal crime.
In the midst of the White scheme, federal investigators approached Sparks for information about wrongdoing by him and other Mingo officials. Sparks agreed to cooperate with authorities, becoming the first of a group of corrupt Mingo officeholders to assist federal agents. The information that Sparks provided laid the groundwork for a successful investigation of wrongdoing among those officials. To date, that investigation has led to federal prison terms for former Mingo County circuit judge Michael Thornsbury, former Mingo County commissioner David Baisden, and former Mingo County chief magistrate Dallas “Big Dal” Toler. In addition to their prison sentences, each of those officials has resigned his office as a result of the federal investigation, and Thornsbury and Sparks have lost their licenses to practice law.
Because of Sparks’ early and valuable participation in the investigation, Goodwin’s office sought a one-year prison sentence in Sparks’ case—significantly shorter than the sentences imposed on his fellow former officials.
“This sentence strikes an appropriate balance,” said U.S. Attorney Goodwin. “It punishes wrongdoing while encouraging officials involved in public corruption to come forward, admit what they’ve done, and help federal authorities. What Sparks did was indefensible, and he deserves prison time. But his early cooperation was vital to our investigation in Mingo County. This sentence underscores that telling the truth at the beginning of an investigation is always a wise decision.”
Today’s sentence was imposed by United States District Judge Thomas E. Johnston, who last month sentenced Thornsbury to 50 months in prison for his role in the same scheme in which Sparks was involved and in March sentenced Toler to 27 months in prison for election fraud. In sentencing Sparks, Judge Johnston focused on the importance of Sparks’ early and truthful cooperation with federal officials.
In January, after pleading guilty in an extortion scheme, Baisden was sentenced to 20 months’ imprisonment by United States District Judge John T. Copenhaver, Jr.
The investigation of corruption in Mingo County is being conducted by the Federal Bureau of Investigation and the West Virginia State Police. Counsel to the United States Attorney Steven R. Ruby and Assistant United States Attorney C. Haley Bunn are in charge of the prosecutions.
Former East Carroll Parish Sheriff Sentenced to Three Years ProbationRead the Press Release
MONROE, La. – The former sheriff of East Carroll Parish was sentenced to three years of probation for hunting with a convicted felon who was sentenced prior to 2014 and barred from possessing a firearm, U.S. Attorney Stephanie A. Finley announced today.
Former East Carroll Parish Sheriff Mark Wayne Shumate, 52, of Lake Providence, La., was sentenced by U.S. District Judge Robert G. James for one count aiding and abetting a felon in the possession of a firearm. According to evidence presented at the guilty plea, on April 1, 2014, Shumate and the convicted felon went hunting on January 8, 2014. Shumate had full knowledge that the person accompanying him was barred from possessing and firing a firearm.
The FBI and ATF conducted the investigation. Assistant U.S. Attorney Joseph G. Jarzabek prosecuted the case.
Federal Marijuana Case UpdateRead the Press Release
FRESNO, Calif. — One marijuana cultivator pleaded guilty and one was sentenced today for cultivation operations in Kern and Stanislaus Counties, United States Attorney Benjamin B. Wagner announced.
8,876 Marijuana Plants and Illegal Pesticides Seized from Sequoia National Forest
(1:12-cr-184 AWI)Hernan Cortez Villaseñor (Cortez), 40, of Michoacàn, Mexico, pleaded guilty to conspiring to manufacture, distribute and possess with intent to distribute marijuana, and distributing unregistered pesticides, in violation of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). In pleading guilty, Cortez also agreed to pay $3,328 to the U.S. Forest Service for the damage caused by his marijuana cultivation operation in the Greenhorn Creek area of the Sequoia National Forest.
According to court documents, the Greenhorn Creek site sustained extensive damage as a result of the cultivation activities. Native oak trees and other vegetation were cut down or otherwise killed to make room for the 8,876 marijuana plants planted there. The soil was tilled, and fertilizers and pesticides, including Fosfuro de Zinc, a common Mexican rat poison containing zinc phosphide, were spread throughout the site. Law enforcement officers also found 30 containers of Fosfuro de Zinc at Cortez’s residence in Arvin, Calif. after Cortez delivered supplies to the cultivation operation.The EPA has designated zinc phosphide as a restricted use pesticide, which means that it may only be purchased and used by, or under the supervision of, a certified applicator. Zinc phosphide is banned for residential sale due to its acute toxicity. A single swallow can be fatal to a small child.Cortez is scheduled for sentencing on September 22, 2014. He faces a mandatory minimum prison term of 10 years and a maximum prison term of life for the drug conspiracy. The pesticide charge carries a maximum penalty of one year in prison and a fine of $100,000. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables. Upon completion of any prison term imposed, Cortez is subject to deportation to Mexico.
This case is the product of an investigation by the U.S. Forest Service, U.S. Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Environmental Protection Agency Criminal Investigation Division (EPA-CID), and the Kern County Sheriff’s Office.
907 Marijuana Plants Seized in Newman River Case (1:12-cr-342 AWI)
Symery Saykganya, 58, of Modesto, was sentenced to two years in prison for conspiring to manufacture, distribute and possess with intent to distribute marijuana following his guilty plea earlier this year. According to his plea agreement, Saykganya was found at a marijuana grow site in a rural area along the San Joaquin River in the vicinity of Newman. Drug agents also found and eradicated 907 marijuana plants that were irrigated by water diverted from the river. Agents also found purported medical marijuana recommendations posted at the site, along with a firearm.
The case was the product of an investigation by federal agents from the DEA and Stanislaus Drug Enforcement Agency, a multi-agency drug task force in Modesto.
Assistant United States Attorney Karen Escobar handled the above prosecutions.
Erie Teen Sentenced to 3 Years in Prison for RobberyRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, has been sentenced in federal court to 37 months in prison and ordered to pay $5,000.70 in restitution on his conviction of robbery of a person in possession of property of the United States, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Elijah Devon Sherrod, 19.
According to information presented to the court, on or about July 16, 2013, the defendant, along with a co-defendant, displayed a handgun, threatened, and robbed an individual of money and property that was under the control of the United States.
Prior to imposing sentence, Judge Cercone commented on the seriousness of the offense and determined that Sherrod and his co-defendant who planned the robbery, Latisha Marie Palochak, were equally culpable for the crime.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the EAGLE task force, which is comprised of members of the Federal Bureau of Investigation, the Erie Police Department and the Pennsylvania Office of Attorney General Bureau of Narcotics Investigation for the investigation leading to the successful prosecution of Sherrod.
Erie Man Sentenced for Violating Sexual Exploitation of Children LawsRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, has been sentenced in federal court to 33 months in jail and 6 years supervised release on his conviction of violating federal laws relating to the sexual exploitation of children, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Joshua Michael Falk, 22.
According to information presented to the court, Falk possessed computer images and movies depicting minors engaging in sexually explicit conduct.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Pennsylvania State Police for the investigation leading to the successful prosecution of Falk.
Launched in February 2006, Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys' Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Elk County Man Sentenced to Probation for Helping Felon Acquire WeaponsRead the Press Release
ERIE, Pa. - A resident of Johnsonburg, Pennsylvania, has been sentenced in federal court to 18 months probation on his conviction of conspiracy to possess firearms by a convicted felon, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on David Arthur Blashaw, 57.
According to information presented to the court, Blashaw entered into a conspiracy with Francis Anthony Milliard in order for Milliard to possess firearms while being a convicted felon.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pennsylvania State Police for the investigation leading to the successful prosecution of Blashaw.
Delaware Man Charged with Investment FraudRead the Press Release
Kevin N. Boardman, 45, of Wilmington, DE, was charged by indictment, filed on June 26, 2014, with multiple counts of mail fraud, announced United States Attorney Zane David Memeger. Boardman is a pilot who served as Director of Aviation and Chief Pilot at a family-owned investment management company (“Company A”), in its Aviation Department located in Delaware County. It is alleged that between 2006 and 2013, Boardman devised numerous methods to embezzle money from his employer, eventually stealing over $2.7 million from Company A.
The indictment alleges that among his methods to steal from his employer was a false invoicing scam. Boardman allegedly established two companies, Optical Axes, Inc. (“Optical Axes”) and Airside Monitor LLC (“Airside”), which were front companies that supplied no goods and provided no services. Optical Axes purportedly operated from Lakewood, New York, and Airside from Dover and Wilmington, Delaware. The indictment alleges that Boardman caused approximately 50 invoices from these front companies to be issued to Company A, which paid the invoices by mailing checks to the phony business addresses.
If convicted, the defendant faces a maximum possible sentence of 20 years of imprisonment on each of the ten counts in the indictment, threeyears of supervised release, a $2.5 million fine, a $1,000 special assessment, and criminal forfeiture.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Nancy E. Potts.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Citizen of Mexico Sentenced to 30 Months in Federal Prison for Illegally Reentering U.S. After DeportationRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MARCOS MARTINEZ-GUTIERREZ, 43, a citizen of Mexico last residing in Norwalk, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 30 months of imprisonment for illegally reentering the U.S. after he was deported.
According to court documents and statements made in court, MARTINEZ-GUTIERREZ has never held legal status in the U.S. and has been removed from the U.S. to his native Mexico on three separate occasions, most recently in June 2011.
While unlawfully in the U.S. since at least 1990, MARTINEZ-GUTIERREZ has amassed a criminal history that includes four convictions for driving while intoxicated, three convictions for possession of narcotics, two convictions for assault against his then-girlfriend, one conviction for patronizing a prostitute, one conviction for criminal impersonation and two convictions for illegal entry.
MARTINEZ-GUTIERREZ has been in custody since March 3, 2013. In July 2013, he was sentenced in Connecticut state court to three years of incarceration for possession of narcotics and criminal impersonation.
On April 14, 2014, MARTINEZ-GUTIERREZ pleaded guilty in federal court to one count of illegal reentry of a removed alien. Judge Thompson ordered MARTINEZ-GUTIERREZ to serve his 30-month federal sentence after he is released from state custody.
This matter was investigated by U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations. The case was prosecuted by Assistant U.S. Attorneys Krishna R. Patel and Carolyn A. Ikari.
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U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Ceredo Woman Sentenced for Role in Heroin ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A Ceredo woman was sentenced today to 18 months in federal prison for her role in a heroin distribution conspiracy, announced U.S. Attorney Booth Goodwin. Helen Louise Adkins, 43, previously pleaded guilty in January 2014 to distribution of heroin before Chief United States District Judge Robert C. Chambers in Huntington.
On January 18, 2013, Adkins met with an undercover agent in the parking lot of a grocery store in Huntington and distributed approximately two grams of heroin. As part of her plea agreement, Adkins admitted her involvement in a conspiracy with Bobby Nelson Gulley and Alanna Lynn Mattison that resulted in the transportation of heroin and oxycodone from Detroit, Michigan, to Huntington for distribution. Between January and August 2013, Adkins rented an apartment located at 522 14th Street West, in Huntington, from which she permitted Gulley to conduct drug distributions. Adkins also made heroin distributions at Gulley’s direction.
In August 2013, agents executed search warrants at multiple locations tied to Gulley and Adkins, recovering over 140 grams of heroin, 974 oxycodone tablets and $12,000 in cash. Gulley previously pleaded guilty in connection with his involvement in the conspiracy and was sentenced in May 2014 to 63 months in federal prison.
The Drug Enforcement Administration and Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Ceredo Woman Sentenced for Role in Heroin ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A Ceredo woman was sentenced today to 18 months in federal prison for her role in a heroin distribution conspiracy, announced U.S. Attorney Booth Goodwin. Helen Louise Adkins, 43, previously pleaded guilty in January 2014 to distribution of heroin before Chief United States District Judge Robert C. Chambers in Huntington.
On January 18, 2013, Adkins met with an undercover agent in the parking lot of a grocery store in Huntington and distributed approximately two grams of heroin. As part of her plea agreement, Adkins admitted her involvement in a conspiracy with Bobby Nelson Gulley and Alanna Lynn Mattison that resulted in the transportation of heroin and oxycodone from Detroit, Michigan, to Huntington for distribution. Between January and August 2013, Adkins rented an apartment located at 522 14th Street West, in Huntington, from which she permitted Gulley to conduct drug distributions. Adkins also made heroin distributions at Gulley’s direction.
In August 2013, agents executed search warrants at multiple locations tied to Gulley and Adkins, recovering over 140 grams of heroin, 974 oxycodone tablets and $12,000 in cash. Gulley previously pleaded guilty in connection with his involvement in the conspiracy and was sentenced in May 2014 to 63 months in federal prison.
The Drug Enforcement Administration and Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Cedar Grove, N.J. Doctor Sentenced to Two Years in Prison for Accepting Bribes for Test Referrals to Clinical LaboratoryRead the Press Release
NEWARK, N.J. – A Cedar Grove, N.J., doctor was sentenced today to 24 months in prison for accepting tens of thousands of dollars in bribes from Parsippany, N.J.,-based Biodiagnostic Laboratory Services LLC (BLS) as part of a long-running scheme operated by the lab, its president, and numerous associates, U.S. Attorney Paul J. Fishman announced.
Dennis Aponte, 46, previously pleaded guilty U.S. District Judge Stanley R. Chesler to violating the Federal Travel Act. Judge Chesler imposed Aponte’s sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. Authorities also arrested New Jersey physician Frank Santangelo, 43, of Boonton, N.J.
On June 10, 2013, David Nicoll, Scott Nicoll, Nordman, and four other associates of BLS pleaded guilty to informations charging them with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. On July 24, 2013, Santangelo pleaded guilty to an information charging him with violating the Travel Act, money laundering and failing to file tax returns. The sentences for the BLS employees and Santangelo are pending.
Aponte admitted that he and David Nicoll agreed that BLS would pay Aponte bribes to refer to BLS blood specimens from the patients of his West New York, N.J., medical practice. From October 2012 to March 2013, Nordman, acting at David Nicoll’s direction, paid Aponte approximately $3,000 per month in cash in return for blood specimens referred to BLS. The lab made more than $175,000 through testing on blood specimens referred by Aponte.
In addition to the prison term, Judge Chesler sentenced Aponte to one year of supervised release, fined him $50,000 and ordered forfeiture of $235,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Joseph Minish, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
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Defense counsel: John Vazquez Esq. & Michael Critchley Esq., Roseland, N.J.
Campbellsville, Kentucky Man Pleads Guilty to Bank Robbery ChargesRead the Press Release
LOUISVILLE, Ky. – A Campbellsville, Kentucky man pleaded guilty today in United States District Court, before Senior District Judge John G. Heyburn II, to two counts of bank robbery, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Joshua Riley Spangler, age 28, admitted in court to robbing through force, violence and intimidation, the Cecilian Bank, located at 235 East Western Avenue in Sonora, Kentucky of $1,019. on January 15, 2013.
Further, defendant Spangler admitted to robbing through force, violence and intimidation, the Bank of Buffalo, located at 2441 Greensburg Road in Buffalo, Kentucky of $9,125. on February 27, 2013. Spangler was charged by federal grand jury indictment on November 20, 2013.
If convicted at trial, Spangler faces no more than 20 years in prison, a fine of $500,000 and a three year period of supervised release. His sentencing is scheduled before Senior Judge Heyburn on October 10, 2014 at 1:45 in Louisville.
This case is being prosecuted by Assistant United States Attorney Randy Ream, and is being investigated by the Kentucky State Police and the Federal Bureau of Investigation (FBI).
Baltimore School Police Officer Pleads Guilty to Drug Trafficking ConspiracyRead the Press Release
Baltimore, Maryland – Napoleon McLain, Jr., age 31, of Randallstown, Maryland pleaded guilty today to conspiring to distribute and possess with intent to distribute cocaine base.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea agreement, McLain is an officer with the Baltimore City School Police Force (BCSPF). BCSPF officers are granted police privileges to carry firearms and conduct arrests within the City of Baltimore.From no later than December 2012 to August 2013, while he was employed as a BCSPF officer, McLain was a member of a conspiracy to distribute cocaine base. McLain bought multiple ounces of cocaine base at a time from his suppliers, which he sold to others. On four occasions between December 2012 and August 2013, McLain sold a total of approximately 150 grams of cocaine base to a confidential source for $9,800. .
McLain faces a maximum sentence of 40 years in prison. U.S. District Judge Catherine C. Blake scheduled sentencing for October 15, 2014 at 9:15 a.m.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant U.S. Attorney David I. Sharfstein, who is prosecuting the case.Austin Man Pleads Guilty in Laser Strike IncidentRead the Press Release
In Austin today, 25–year-old Gabriel Soza Ruedas, Jr., pled guilty to pointing a laser at an aircraft flying overhead announced United States Attorney Robert Pitman and FBI Special Agent in Charge Christopher Combs, San Antonio Division. Ruedas faces up to five years in federal prison and a maximum $250,000 fine for the offense.
Appearing before United States Magistrate Judge Andrew W. Austin, Ruedas admitted that on February 15, 2014, he knowingly aimed the beam of a laser pointer at an Austin Police Department helicopter (Air1) that was on approach to land at Austin Bergstrom International Airport (ABIA). All of this occurred after Air1 had been cleared by air traffic control to land. Air1 delayed its landing to investigate the source of the laser. Austin Air Traffic Control issued a general warning to all pilots in the area where the laser incident occurred, which was the flight path of arriving aircraft on short final approach to ABIA.
The laser Ruedas used was strong enough to reflect inside the cockpit of Air1 causing the pilot to turn his head and avert his eyes from the laser, distracting him from normal flight operations.
The crew of Air1 communicated to ground units from the Austin Police Department (APD) information about the source of the laser strikes, enabling APD units to identify and apprehend Ruedas. Ruedas was found with the laser pointer in his sweatshirt pocket.
Ruedas remains in custody pending sentencing before United States District Judge Lee Yeakel.
This case resulted from an investigation conducted by agents with the Federal Bureau of Investigation together with the Austin Police Department and the Texas Attorney General’s Office. Assistant United States Attorney Gregg Sofer is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Thursday 3 July 2014
Week in Review - South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEA
- Jeremy L. Hall, 38, of Warsaw, Indiana pled guilty to the felony offense of possession and distribution of child pornography. The magistrate is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation and the Michigan City Police Department. Sentencing has been set for 10/2/2014. This case is being prosecuted by Assistant United States Attorney John Maciejczyk.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS
- Keon Lovelady, 25, of South Bend, Indiana was sentenced to 12 months and a day imprisonment and 2 years supervised release after pleading guilty to the felony offense of lying during the attempted acquisition of a firearm. According to documents filed in this case, in July 2012, defendant agreed to make a “straw purchase” of a .40 caliber pistol firearm from Midwest Gun Exchange for another person. On July 13, 2012, Lovelady went to a firearms store, falsely filled out the 4473 form that was required for the purchase of the pistol and paid for the pistol. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation and the South Bend Police Department. This case was prosecuted by Assistant United States Attorney Donald J. Schmid.
- Joseph H Golden, 27, of Fort Wayne, Indiana was sentenced to 24 months imprisonment and 2 years supervised release after pleading guilty to the felony offense of bank robbery and conspiracy to commit bank robbery. According to documents filed in this case, in late 2013, Golden was released from Indiana State Prison. On December 11, 2013, the defendant called a bank teller in Goshen, Indiana, and stated he had gotten the teller’s name from an inmate friend. Golden indicated he wanted to commit a bank robbery at the bank where the teller worked. Over the next several weeks, Golden discussed with the teller (who was cooperating with law enforcement after the initial call) plans for an armed bank robbery. The plan eventually evolved into a plan to commit larceny inside the bank. The two exchanged subsequent conversations of Golden’s preparation to rob the bank. As he left his residence and approached Goshen, Indiana, law enforcement officers conducted a traffic stop on Golden’s vehicle and arrested him. This case was the result of an investigation by the Federal Bureau of Investigation and Goshen Police Department. This case was prosecuted by Assistant United States Attorney Donald Schmid.
- Marcelino Ruiz-Robles, 36, of South Bend, Indiana was sentenced to 27 months imprisonment with 3 years supervised release after pleading guilty to the felony offense of possession with intent to distribute cocaine. According to documents filed in this case, on September 25, 2013, Ruiz-Robles sold a package of cocaine to an individual he did not know was working for law enforcement. This illegal drug transaction occurred in St. Joseph County, Indiana. This case was the result of an investigation by the Drug Enforcement Administration. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Week in Review - Fort WayneRead the Press Release
PLEA
- Bruce T. King, 36, of Fort Wayne, Indiana pled guilty to the felony offense of being a felon in possession of a firearm. The magistrate is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department. Sentencing will be set after the district court judge accepts the recommendation of the magistrate judge. This case is being prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITION
- Nathan Arnold, 30, of Berne, Indiana was sentenced to 2 years probation and ordered to pay $78.00 in restitution after pleading guilty to the felony offense of theft or receipt of stolen mail matter. According to documents filed in this case, beginning on or about October 9, 2012, and continuing to on or about August 12, 2013, Arnold had stolen mail from mailboxes around the town of Berne. This case was the result of an investigation by United States Postal Inspection Service and the Berne Police Department. This case was prosecuted by Assistant United States Attorney Tina L. Nommay.
Three District Men Plead Guilty to Charges in 2013 Shooting That Left 13 People Wounded on North Capitol StreetShots Fired from Two Cars in Drive-By Shootings; Violence Followed Incident at NightclubRead the Press Release
WASHINGTON – Three men, all from Washington, D.C., pled guilty today to 16 felony charges stemming from their roles in a drive-by shooting on North Capitol Street early March 11, 2013, that injured a total of 13 people, announced U.S. Attorney Ronald C. Machen Jr. and Cathy L. Lanier, Chief of the Metropolitan Police Department.
Andrew D. Allen, 20, Keith D. Bobb, 22, and Arnell L. Smith, 21, pled guilty in the Superior Court of the District of Columbia to 13 counts of assault with intent to kill and one count each of conspiracy to commit a crime of violence, possession of a firearm during a crime of violence and tampering with physical evidence. Their plea agreements, which are contingent upon the Court’s approval, call for Allen to be sentenced to 25 years of incarceration and for Bobb and Smith each to be sentenced to 20 years in prison.
The Honorable John Ramsey Johnson scheduled sentencing for Oct. 10, 2014.
“Today three men confessed to their active participation in a caravan of carnage that resulted in 13 people being shot on a sidewalk outside an apartment building in Northwest D.C.,” said U.S. Attorney Machen. “It is a miracle that no one perished in this senseless drive-by attack on a crowd of innocent people. The young men who plotted and carried out this cowardly assault will now spend decades in prison for their heinous actions.”
“This was a brazen act, in which the defendants fired upon a crowd of people with no regard for who or how many people would be injured,” said Police Chief Lanier. “I applaud the MPD members who investigated and quickly made arrests in this case, so that these criminals will be held accountable.”
According to the government’s evidence, the violence stemmed from a longstanding conflict between rival groups. The defendants, who had ties to a Northeast Washington neighborhood, were engaged in disputes with a group of individuals associated with the Sursum Corda neighborhood near where the shootings occurred, and also with the area near 10th and G Streets NE. Over the years, various violent crimes between members of the two groups were committed. Specifically, soon before the shootings, a dispute took place at the Fur Nightclub.
Allen, Smith, and other individuals were among those at the nightclub late March 10, 2013 and early March 11, 2013, when the dispute took place. Afterward, Allen, Smith, and a third individual met with Bobb and, armed, they traveled in two cars to the Sursum Corda neighborhood in search of retaliation. A fifth individual, not responsible for the shootings, also was in one of the cars.
Shortly after 2 a.m., driving in caravan-style, one car behind the other, they traveled to the 1200 block of North Capitol Street NW, near the Tyler House Apartments, adjacent to the Sursum Corda neighborhood. Smith drove one car, Allen’s black 1999 Mercedes Benz, and Allen fired a Taurus 9 mm semi-automatic pistol, with an extended magazine, from the front passenger seat of the vehicle. Bobb drove the other car, a light blue 1999 Mercedes Benz, close behind Smith and Allen, and his passenger likewise opened fire, using a Glock 9 mm semi-automatic pistol, which also had an extended magazine.
After Allen began to shoot, some individuals, using .40-caliber semi-automatic firearms, shot back at the two cars. The defendants fled the area at a high rate of speed, turning right on H Street NW and running a red light. Red light cameras at the intersection of North Capitol and H Streets NW photographed the license tags of both cars.
On the afternoon of March 11, 2013, Allen grew concerned and agitated about televised news accounts of the shootings. The newscasts had footage from the crime scene in which Allen could recognize his car. He decided that he needed to “torch” his vehicle, which had been damaged by gunfire, because it could be identified by law enforcement. He and other defendants headed to the 3000 block of Stanton Road SE, where the vehicle was set on fire to devalue or destroy it as evidence. Following a series of 9-1-1 calls reporting the blaze, District of Columbia emergency personnel responded to the burning car. The remains of the car were seized by law enforcement, and evidence was recovered that later tied the vehicle to Allen’s family.
In the late afternoon of March 11, 2013, after the car had been destroyed, Allen, Bobb, and Smith resolved to get rid of the guns used in the shootings on North Capitol Street. The three received a ride to an apartment complex in Northeast, Washington, D.C. There, Allen and Bobb met with another individual and traded away the Taurus and Glock pistols used in the North Capitol Street shootings in return for two Ruger semi-automatic pistols.
The defendants have been in custody since their arrests in 2013.
In announcing the pleas, U.S. Attorney Machen and Chief Lanier commended the work of the detectives, mobile crime scene officers, intelligence officers, and others who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the assistance provided by the District of Columbia Department of Forensic Sciences. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Christopher Brophy, Tommy Miller, Derek Starliper, Durand Odom, Steve Cohen, Melissa Matthews, Mark Crawford, John Marsh, Nelson Rhone, Juan Juarez, and Matthew Kutz, all of the Criminal Investigation Unit; Jelahn Stewart, Michael Hailey, Wanda Queen, Jennifer Clark, and James Brennan, all of the Victim Witness Assistance Unit; former Victim/Witness Advocate Kristina Rose, and Paralegal Specialist Debra Joyner. They also commended the work of Assistant U.S. Attorneys Kevin Flynn and Jocelyn Ballantine, and former Assistant U.S. Attorneys Thomas A. Bednar and James E. Smith, who assisted in the investigation.
Finally, they commended the work of Assistant U.S. Attorney Michael Brittin, who is prosecuting the case.
14-159Three Defendants Sentenced in the District Court of GuamRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that three more defendants who were witnesses in the U.S. v. Mateo B. Sardoma, Jr. aka “Mat”, Rudy P.H. Sablan, Maria C. Edrosa aka “Cristina”, et al. trial were sentenced this week by Chief Judge Frances Tydingco-Gatewood, as follows:
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Defendant CORY LEE BOND, age 27, was sentenced on July 1, 2014, to a sentence of time served, and followed by three years of supervised release. Defendant BOND pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 846. Defendant BOND had assisted co-defendant Brian San Agustin in shipping methamphetamine to Guam for Defendant Mateo B. Sardoma, Jr.
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Defendant BENNY BENAVIDEZ, age 33, was sentenced on July 2, 2014, to time served and five years of supervised release. Defendant BENAVIDEZ pleaded guilty to Conspiracy to Distribute Methamphetamine in relation to the two Express Mail Packages he had received, in violation of 21 U.S.C. §§ 841 and 846.
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Defendant DEBORAH ARBES, age 49, was sentenced on July 3, 2014, to 36 months imprisonment and five years of supervised release. Defendant ARBES pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841 and 846. ARBES testified she was a user and sold methamphetamine on Guam. ARBES also received a shipment of methamphetamine on behalf of Defendant Mateo B. Sardoma, Jr.
U.S. Attorney Limtiaco stated, “Our community is not immune from the poison of methamphetamine. These cases illustrate the hard work our partners in law enforcement do every day to stop the distribution of methamphetamine into Guam.” These three defendants were witnesses in the U.S. v. Mateo B. Sardoma, Jr. aka “Mat”, Rudy P.H. Sablan, Maria C. Edrosa aka “Cristina”, et al., which is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
The investigations were conducted by Special Agents and Task Force Officers at the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI) and the Drug Enforcement Administration (DEA). The cases against Defendants BOND and BENAVIDEZ were prosecuted by Assistant U.S. Attorney Clyde Lemons. The case against Defendant ARBES was prosecuted by Assistant U.S. Attorney Fred Black.
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Terlingua Woman Pleads Guilty to Stealing Social Security Benefits Issued to Her Dead FatherRead the Press Release
In Pecos this morning, 49-year-old JUDITH MARIA BROUGHTON, a Terlingua Ranch resident, pleaded guilty to stealing Social Security benefits payable to her dead father, Luther D. Broughton, announced Robert Pitman, United States Attorney for the Western District of Texas, and Robert Feldt, Special Agent in Charge, Social Security Administration - Office of Inspector General (SSA-OIG) in Dallas. She faces up to 10 years in federal prison for the offense.
Appearing before United States Magistrate Judge B. Dwight Goains, Broughton admitted that between June 1990 and August 2011, she stole Social Security Retirement Insurance benefits made payable to her father in the amount of $245,226.00.
During the plea hearing Broughton acknowledged that on or about June 5, 1990, her father died and after his death, she leased a storage unit in his name at Econo Self Storage in Lexington, Kentucky. Broughton continued to make monthly payments on the storage unit in her father’s name from June 1990 through March 2014. When officers searched the storage unit on January 8, 2014, the mummified remains of Luther D. Broughton were discovered.
Broughton also acknowledged she obtained a joint checking account in her father’s name and had his Social Security benefits electronically deposited into the account. When SSA-OIG sought written verification that Broughton’s father was still living, she responded with false statements that he was still alive. Broughton admitted that by taking the monthly Social Security payments intended for her father from July 1990 until August 2011, she stole money totaling $245,226.00 from the United States and converted those funds to her own use.
Prior to Defendant Broughton’s arrest, she had been residing with her mother, Mary Elizabeth Broughton, in Brewster County, Texas. Mary Elizabeth Broughton also was a beneficiary of Social Security payments and those benefits were deposited in a joint account with the Defendant through the Fort Davis State Bank. After Defendant’s arrest, a safety check for Mary Elizabeth Broughton was conducted and her whereabouts could not be determined at that time. Mary Elizabeth Broughton remains missing.
Defendant remains in custody pending sentencing before United States District Judge Robert Junell in Pecos. No sentencing date has been scheduled.
This case resulted from an investigation by the Social Security Administration – Office of the Inspector General in El Paso and Lexington, Kentucky, with the assistance of the U. S. Marshal Service, the Brewster County Sheriff’s Office, and the Lexington, Kentucky Police Department.
Assistant United States Attorney James J. Miller, Jr., is prosecuting this case on behalf of the government.An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Suntrust Mortgage Agrees to $320 Million SettlementRead the Press Release
WASHINGTON – The Department of Justice today announced an agreement with SunTrust Mortgage Inc. that resolves a criminal investigation of SunTrust’s administration of the Home Affordable Modification Program (HAMP).
As detailed in documents filed today, SunTrust misled numerous mortgage servicing customers who sought mortgage relief through HAMP. Specifically, SunTrust made material misrepresentations and omissions to borrowers in HAMP solicitations, and failed to process HAMP applications in a timely fashion. As a result of SunTrust’s mismanagement of HAMP, thousands of homeowners who applied for a HAMP modification with SunTrust suffered serious financial harms.
SunTrust has agreed to pay $320 million to resolve the criminal investigation into SunTrust’s HAMP Program. The money is divided as follows:
- Restitution – SunTrust will pay $179 million in restitution to compensate borrowers for damage caused by its mismanagement of HAMP. That money will be distributed to borrowers in eight pre-determined categories of harm. If more than $179 million is needed, the bank will also guarantee an additional $95 million for additional restitution. SunTrust will also pay $10 million in restitution directly to Fannie Mae and Freddie Mac.
- Forfeiture – SunTrust will pay $16 million in forfeiture. This money will be available to law enforcement agencies working on mortgage fraud and other matters related to the misuse of TARP funds.
- Prevention – SunTrust will pay $20 million to establish a fund for distribution to organizations providing counseling and other services to distressed homeowners. Specifically, SunTrust will pay this amount to a grant administrator selected by the government, which funds will in turn be awarded to housing counseling agencies and other non-profits devoted to consumer counseling and advocacy.
In addition to the significant payment, SunTrust has agreed to implement certain remedial measures aimed at preventing future problems like those that led to this investigation. Specifically, it will increase loss mitigation staff, monitor their mortgage modification process, and provide semi-annual reports regarding compliance with the agreement.
This settlement makes clear the Department’s commitment to supplementing its enforcement work with support for prevention programs. The grant fund established by this settlement will help distressed homeowners avoid the harms that befell SunTrust customers. This is real relief for housing agencies, which will compete for grants to increase their counseling and other services to homeowners across the country.“Instead of helping distressed homeowners, SunTrust’s mismanagement drove up foreclosures, disseminated individual credit and increased costs for hardworking men and women across our nation,” said Attorney General Eric Holder. “This resolution will provide much-needed restitution for victims. It will make available substantial funds to help other homeowners avoid foreclosure. And it will result in the kinds of systemic changes needed to ensure that this will not happen again. This outcome demonstrates yet again that the Justice Department will never waver in its ongoing pursuit of those whose reckless and willful actions harm the American people and undermine our financial markets.”
“The $320 million resolution of this long-running investigation requires SunTrust Mortgage to compensate its customers for the harm caused by the company’s false promises in administration of the Home Affordable Modification Program in 2009 and 2010 – conduct thoroughly described in the Statement of Facts that accompanies the settlement documents,” U.S. Attorney Timothy J. Heaphy said today. “Up to $284 million will be paid in restitution directly to the victims of SunTrust’s conduct. SunTrust will also establish a $20 million grant fund which will be distributed to agencies working with distressed homeowners and provide $16 million in asset forfeiture funds that will be used by law enforcement for future mortgage fraud investigations. The company has also agreed to make specific changes in its operations designed to prevent similar problems in the future.
“SunTrust has done the right thing by agreeing to this novel package of restitution, remediation, and prevention, which represents a significant victory not only for SunTrust customers, but also for Americans who will receive counseling and other assistance when faced with financial challenges,” U.S. Attorney Heaphy said. “This settlement demonstrates the commitment of the Department of Justice and the Special Inspector General for the Troubled Asset Relief Program to hold financial institutions accountable and provide restitution to those harmed by their conduct.”
“Today’s agreement with SunTrust underlines the importance of holding accountable those individuals and companies who pledge to ensure that homeowners are protected at all times; especially during times when the homeowner is seeking to save their home through a loan modification. SunTrust has conceded that their HAMP program had numerous deficiencies and has harmed a significant amount of homeowners. This behavior will not be tolerated. We are proud to have worked with our law enforcement partners on this case,” said Michael P. Stephens, Acting Inspector General of the Federal Housing Finance Agency Office of Inspector General.
“HAMP was designed to be a beacon of hope and opportunity for homeowners in dire straits, but TARP recipient SunTrust, rather than assist homeowners in need, financially ruined many through an utter dereliction of its HAMP program,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “This criminal investigation uncovered that SunTrust so bungled its administration of the program, that many homeowners would have been exponentially better off having never applied through the bank in the first place. Unwilling to put resources into HAMP despite holding billions in TARP funds, SunTrust put piles of unopened homeowners’ HAMP applications in a room. SunTrust’s floor actually buckled under the sheer weight of unopened document packages. Documents and paperwork were lost. Homeowners were improperly foreclosed upon. Treasury was lied to. The negligence with which SunTrust administered its HAMP program is appalling, miserable, inexcusable, and repulsive. Real people lost their homes, and many others faced financial ruin. Ending this behavior and, where necessary, forcing institutions to change their culture through law enforcement by SIGTARP and our partners will help begin the process of restoring faith in financial institutions and healing public trust.”
The investigation of the case was conducted by the United States Attorney’s Office for the Western District of Virginia, the Office of the Special Inspector General for the Troubled Asset Relief Program, and the Office of the Inspector General for the Federal Housing Finance Agency (FHFA) and the United States Postal Inspection Service.
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SunTrust Mortgage Agrees to $320 Million SettlementRead the Press Release
The Department of Justice today announced an agreement with SunTrust Mortgage Inc. that resolves a criminal investigation of SunTrust’s administration of the Home Affordable Modification Program (HAMP).
As detailed in documents filed today, SunTrust misled numerous mortgage servicing customers who sought mortgage relief through HAMP. Specifically, SunTrust made material misrepresentations and omissions to borrowers in HAMP solicitations, and failed to process HAMP applications in a timely fashion. As a result of SunTrust’s mismanagement of HAMP, thousands of homeowners who applied for a HAMP modification with SunTrust suffered serious financial harms.
SunTrust has agreed to pay $320 million to resolve the criminal investigation into SunTrust’s HAMP Program. The money is divided as follows:- Restitution – SunTrust will pay $179 million in restitution to compensate borrowers for damage caused by its mismanagement of HAMP. That money will be distributed to borrowers in eight pre-determined categories of harm. If more than $179 million is needed, the bank will also guarantee an additional $95 million for additional restitution. SunTrust will also pay $10 million in restitution directly to Fannie Mae and Freddie Mac.
- Forfeiture – SunTrust will pay $16 million in forfeiture. This money will be available to law enforcement agencies working on mortgage fraud and other matters related to the misuse of TARP funds.
- Prevention – SunTrust will pay $20 million to establish a fund for distribution to organizations providing counseling and other services to distressed homeowners. Specifically, SunTrust will pay this amount to a grant administrator selected by the government, which funds will in turn be awarded to housing counseling agencies and other non-profits devoted to consumer counseling and advocacy.
In addition to the significant payment, SunTrust has agreed to implement certain remedial measures aimed at preventing future problems like those that led to this investigation. Specifically, it will increase loss mitigation staff, monitor their mortgage modification process, and provide semi-annual reports regarding compliance with the agreement.
This settlement makes clear the Department’s commitment to supplementing its enforcement work with support for prevention programs. The grant fund established by this settlement will help distressed homeowners avoid the harms that befell SunTrust customers. This is real relief for housing agencies, which will compete for grants to increase their counseling and other services to homeowners across the country.
“Instead of helping distressed homeowners, SunTrust’s mismanagement drove up foreclosures, decimated individual credit and increased costs for hardworking men and women across our nation,” said Attorney General Eric Holder. “This resolution will provide much-needed restitution for victims. It will make available substantial funds to help other homeowners avoid foreclosure. And it will result in the kinds of systemic changes needed to ensure that this will not happen again. This outcome demonstrates yet again that the Justice Department will never waver in its ongoing pursuit of those whose reckless and willful actions harm the American people and undermine our financial markets.”
“The $320 million resolution of this long-running investigation requires SunTrust Mortgage to compensate its customers for the harm caused by the company’s false promises in administration of the Home Affordable Modification Program in 2009 and 2010 – conduct thoroughly described in the Statement of Facts that accompanies the settlement documents,” U.S. Attorney Timothy J. Heaphy said today. “Up to $284 million will be paid in restitution directly to the victims of SunTrust’s conduct. SunTrust will also establish a $20 million grant fund which will be distributed to agencies working with distressed homeowners and provide $16 million in asset forfeiture funds that will be used by law enforcement for future mortgage fraud investigations. The company has also agreed to make specific changes in its operations designed to prevent similar problems in the future.
“SunTrust has done the right thing by agreeing to this novel package of restitution, remediation, and prevention, which represents a significant victory not only for SunTrust customers, but also for Americans who will receive counseling and other assistance when faced with financial challenges,” U.S. Attorney Heaphy said. “This settlement demonstrates the commitment of the Department of Justice and the Special Inspector General for the Troubled Asset Relief Program to hold financial institutions accountable and provide restitution to those harmed by their conduct.”
“Today’s agreement with SunTrust underlines the importance of holding accountable those individuals and companies who pledge to ensure that homeowners are protected at all times; especially during times when the homeowner is seeking to save their home through a loan modification. SunTrust has conceded that their HAMP program had numerous deficiencies and has harmed a significant amount of homeowners. This behavior will not be tolerated. We are proud to have worked with our law enforcement partners on this case,” said Michael P. Stephens, Acting Inspector General of the Federal Housing Finance Agency Office of Inspector General.
“HAMP was designed to be a beacon of hope and opportunity for homeowners in dire straits, but TARP recipient SunTrust, rather than assist homeowners in need, financially ruined many through an utter dereliction of its HAMP program,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “This criminal investigation uncovered that SunTrust so bungled its administration of the program, that many homeowners would have been exponentially better off having never applied through the bank in the first place. Unwilling to put resources into HAMP despite holding billions in TARP funds, SunTrust put piles of unopened homeowners’ HAMP applications in a room. SunTrust’s floor actually buckled under the sheer weight of unopened document packages. Documents and paperwork were lost. Homeowners were improperly foreclosed upon. Treasury was lied to. The negligence with which SunTrust administered its HAMP program is appalling, miserable, inexcusable, and repulsive. Real people lost their homes, and many others faced financial ruin. Ending this behavior and, where necessary, forcing institutions to change their culture through law enforcement by SIGTARP and our partners will help begin the process of restoring faith in financial institutions and healing public trust.”
The investigation of the case was conducted by the United States Attorney’s Office for the Western District of Virginia, the Office of the Special Inspector General for the Troubled Asset Relief Program, and the Office of the Inspector General for the Federal Housing Finance Agency (FHFA) and the United States Postal Inspection Service.Stockton Man Sentenced to 10 Years in Prison for Methamphetamine TraffickingRead the Press Release
SACRAMENTO, Calif. — Leo Martinez-Martinez, 36, of Stockton, was sentenced today by United States District Judge Troy L. Nunley to 10 years in prison for conspiracy to distribute and possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, between October 10, 2012, and January 15, 2013, undercover agents and officers conducted multiple separate buys of large quantities of methamphetamine from Martinez-Martinez in Stockton. Agents recovered approximately 1.5 pounds of methamphetamine during the course of the operation.
This case was the product of an investigation by the Stockton Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Olusere Olowoyeye prosecuted the case.
Stanislaus County Man Sentenced to over 19 Years in Prison for Cultivating Marijuana and Trafficking MethamphetamineRead the Press Release
SACRAMENTO, Calif. — Elias Alvarez-Ramirez, 53, of Turlock, was sentenced today by Chief United States District Judge Morrison C. England, Jr. to 19 years and seven months in prison for conspiring to manufacture more than 15,000 marijuana plants and distributing approximately 3.5 pounds of methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Alvarez-Ramirez was responsible for purchasing equipment and providing workers to plant and tend a 15,000 plant marijuana garden in Shasta County between April 28 and May 20, 2009. On May 14, 2009, Alvarez-Ramirez delivered a quarter pound sample of 100 percent pure methamphetamine to an undercover agent and a confidential informant. On May 20, 2009, Alvarez-Ramirez delivered approximately 3.5 pounds of 97.1 percent pure methamphetamine to an undercover agent.
This case was the product of an investigation by the US Drug Enforcement Administration, the North State Initiative Multi-jurisdictional Methamphetamine Team, California Department of Justice and the Shasta County Sheriff’s Office. Assistant United States Attorney Heiko P. Coppola s prosecuted the case.
St. Johns Man Sentenced to Six Years for Distribution of Child PornographyRead the Press Release
Jacksonville, Florida – U.S. District Judge Marcia Morales Howard yesterday sentenced Sean-Michael Smith (25, St. Johns) to 72 months in federal prison for distribution of child pornography, to be followed by a seven year term of supervised release. Smith, who was also ordered to register as a Sex Offender, pleaded guilty on February 24, 2014.
According to court records, on July 3, 2013, a detective from the St. Johns County Sheriff’s Office was actively investigating computer users who were distributing child pornography via a peer-to-peer file sharing network. On that date, the detective was able to successfully download three videos depicting minors engaging in sexually explicit conduct from an IP address registered to Smith. Based on this information, the Federal Bureau of Investigation obtained a search warrant for Smith’s residence. When the warrant was executed on August 2, 2013, Smith admitted to previously downloading and viewing child pornography, including one of the videos downloaded by the detective. Smith stated, among other things, that he had been viewing child pornography for ten years, and admitted that whenever the file sharing program on his computer was active, any downloaded content in the shared folder would be available for other users on the file sharing network to download.
This case was investigated by the Federal Bureau of Investigation, Florida Department of Law Enforcement and the St. Johns County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Diidri W. Robinson.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Several Laredoans Get Massive Sentences in Multi-Million Dollar Methamphetamine ConspiracyRead the Press Release
LAREDO, Texas – A total of six Laredoans and three others have been sentenced for their roles in a conspiracy to transport more than 100 kilograms of methamphetamine in 2011, announced United States Attorney Kenneth Magidson. Silvia Esther Flores, 56, Lilia Esther Garza, 53, Shirley Flores, 32, Gabriel Delafuente, 33, Flavio Lozano-Torres, 42, and Gabriel Gonzalez, 34, all of Laredo, and Roel Lopez-Cisneros, 38, Simon Alvarez-Rebolledo, 36, and Liborio Requena-Morales, 48, all of Nuevo Laredo, Tamaulipas, Mexico, pleaded guilty to conspiring to possess with the intent to distribute methamphetamine, cocaine and heroin.
Today, U.S. District Judge Diana Saldaña sentenced Silvia Flores to 327 months, while Garza, Shirley Flores and Delafuente were ordered to serve respective sentences of 168, 235 and 168 months in federal prison. Lozano-Torres will serve 294 months in federal prison. Lopez-Cisneros was ordered to serve a sentence of 198 months, while Alvarez-Rebolledo, Gonzalez and Requena-Morales were ordered to serve respective sentences of 121, 120 and 108 months of imprisonment. Lozano-Torres and Shirley Flores will also serve 10-year-terms of supervised release, while the others will serve five-year-terms following completion of their prison sentences. As non-U.S. citizens, Lopez-Cisneros, Alvarez-Rebolledo and Requena-Morales are expected to face deportation proceedings following their terms of federal imprisonment.
Silvia Flores coordinated the transportation of large drug loads from Nuevo Laredo into Laredo and onto Dallas as did Lozano-Torres and Lopez-Cisneros with the assistance of Alvarez-Rebolledo. Silvia Flores then transported drug proceeds back from Dallas into Mexico. She utilized Garza as a courier who brought the drugs from Mexico into the United States. Flores also sent her own daughter, Shirley Flores, along with her friend, Delafuente, to transport the drugs to Dallas.Requena-Morales admitted he transported one load of approximately 20 kilograms of methamphetamine from Mexico into the United States for the organization, while Gonzalez also attempted to transport a load from Laredo northbound through the IH-35 Checkpoint for the group. Upon detection at the checkpoint, Gonzalez fled in his vehicle until running into a fence and escaping on foot through the brush and left approximately 27 kilograms of the organization’s methamphetamine in the trunk of the vehicle. He was ultimately captured in Laredo during an enforcement action on April 20, 2012.
The case is the result of a two-year Organized Crime Drug Enforcement Task Force Investigation dubbed Operation Nemesis led by the Drug Enforcement Administration with the assistance of the FBI and Homeland Security Investigations. Assistant United States Attorney James Hepburn is prosecuting.Sentencing for July 1 - 2, 2014Read the Press Release
Jose Manuel Aldana-Madrid, aka Jose Ramos-Figueroa, 31, of Guatemala, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on July 2, 2014, for illegal re-entry of a previously deported alien into the United States. Aldana-Madrid was arrested in Douglas, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Robert Allen Davis, 50, of Casper, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on July 1, 2014, for escape. Davis was arrested in Lakewood, Washington. He received 12 months imprisonment, to be followed by three years of supervised release and was ordered to pay a $100.00 special assessment. This case was investigated by U.S. Marshals Service.
Randolph County Resident Sentenced for Government Energy Saving Program FraudRead the Press Release
GREENSBORO, N.C. – United States Attorney Ripley Rand of the Middle District of North Carolina announced today that Lisa Turner Wright, 51, of Franklinville, North Carolina, was sentenced to a 12 month prison term by the Honorable Catherine C. Eagles in federal court in Greensboro, North Carolina, on June 30, 2014.
Wright pleaded guilty to conspiring with Tiffanie Annette Wilson in a scheme to defraud a federally funded program designed to help low income North Carolinians save energy and reduce utility costs by making homes more energy efficient. Wilson was the weatherization director for Regional Consolidated Services (RCS), a nonprofit organization in Asheboro, North Carolina, which administered the energy program. Wilson awarded RCS contracts under the program to Wright’s company, New Age Concepts (NAC), and Wright paid money to Wilson once RCS paid program funds to NAC.
Lisa Turner Wright was also ordered to pay restitution of $324,651 and to serve three years of supervised release after completing her sentence. Tiffanie Annette Wilson, 39, of Randleman, North Carolina, was previously sentenced on March 11, 2014, to 24 months imprisonment for her involvement in the scheme.
The case was investigated by the Federal Bureau of Investigation, the Department of Energy/Office of Inspector General, and the State Bureau of Investigation. This case was prosecuted by Assistant United States Attorney Robert M. Hamilton.