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21 August 2014
Two More DBSI Executives Sentenced in Idaho’s Largest Federal Fraud ProsecutionRead the Press Release
Former CEO and General Counsel Sentenced Yesterday
BOISE – Chief United States District Court Judge B. Lynn Winmill today sentenced the last two DBSI defendants convicted at trial to federal prison terms, announced Wendy J. Olson, U.S. Attorney for Idaho. David D. Swenson, 38, of Boise, Idaho, and Jeremy A. Swenson, 41, of Meridian, Idaho, were each sentenced to 36 months in prison, followed by three years of supervised release, and a $4,400 special assessment. Judge Winmill also ordered the pair to pay restitution in an amount to be determined later. David Swenson and Jeremy Swenson are the sons of DBSI founder and former CEO Douglas L. Swenson, 66, of Meridian Idaho. Yesterday, Judge Winmill sentenced Douglas Swenson to 240 months in federal prison. He also sentenced former DBSI general counsel Mark Ellision, 66, of Boise, Idaho to 60 months in federal prison.
All four men were convicted by a federal jury on April 14, 2014, of 44 counts of securities fraud. Douglas Swenson was convicted of an additional 34 counts of wire fraud. During the 42-day trial, the jury heard evidence that DBSI, founded in 1979 and headquartered in Meridian, Idaho, sold a range of security investments, including bonds, notes, and Tenant-in-Common interests (TIC investments) in both improved and unimproved real estate. Until DBSI’s bankruptcy in November 2008, the defendants represented to investors that DBSI was a highly profitable company with a net worth in excess of $105 million, and that it operated a successful business model that minimized risk to its investors and paid fixed returns as high as of 9.5%.
The United States presented evidence that at trial that these representations were false. DBSI’s various businesses were almost entirely unprofitable and dependent on new investor funds in order to continue operations. DBSI’s represented net worth of more than $105-million in 2007 and 2008, was the result of deliberate accounting decisions directed and approved by the defendants, all of whom have advanced degrees in accounting.
The jury heard evidence that although the defendants knew of DBSI’s true financial condition, they withheld accurate financial information and took steps to conceal DBSI’s insolvency from investors, financial advisors, broker dealers, due diligence officers, and DBSI employees. In Private Placement Memoranda and other disclosures provided to prospective investors, the defendants misrepresented DBSI Housing’s income and net worth through deceptive accounting practices; failed to disclose DBSI’s cash shortages and deteriorating finances; misrepresented the likelihood of repayment on large investments in technology start-up companies; and failed to disclose DBSI’s dependence on new investor money to meet its existing obligations.
The jury also heard evidence that DBSI collected monies from investors called “Accountable Reserves” which it explicitly represented belonged to its investors and would only be used for specific expenses. The defendants diverted at least $80 million in investor’s Accountable Reserves for purposes other than those disclosed, including payment of the promised fixed investment returns to existing investors, operation expenses, and investments in technology start-up companies.
Olson said that the DBSI prosecution involved the largest loss amount ever prosecuted in federal court in Idaho. “These significant prison terms for all four defendants should serve as a clear message for business executives and their corporate counsel,” said Olson. “Potential investors deserve to know the truth. Investment companies and their representatives who commit fraud and put individuals’ hard-earned money at risk will themselves pay a steep price in terms of their freedom, and they will be held responsible to repay those they have victimized.”
“This complex financial investigation shows that the appearance of success can be a disguise for a scheme of investment fraud," said Stephen Boyd, IRS Criminal Investigation Special Agent in Charge for the state of Idaho. "Investment schemes can thrive for a time on false claims, but in the end is simply a ‘house of cards’ which collapses. IRS Criminal Investigation, along with our law enforcement partners, will vigorously pursue corporate officers who victimize their investors and violate the public trust.”
Two Indicted with Impersonating Federal Agents in Immigration ScamRead the Press Release
BOSTON – Two men were charged today in federal court in Boston with impersonating federal agents in connection with a scheme to defraud persons trying to obtain legal resident status in the United States.
Francisco Soares, 44, of Foxborough and Paul Stein, 58, of Mashpee, were charged with conspiracy to impersonate a federal officer and falsely impersonating a federal agent.
According to the indictment, form October 2011 until July 2014, Soares posed as a U.S. Immigration and Customs Enforcement Special Agent and Stein posed as a Federal Bureau of Investigation employee. The men told persons who were present in the United States illegally that they could fix their immigration problems, remove any impediments including evidence of prior immigration arrests, and get them lawful permanent resident status – known as a “green card” – in exchange for as much as $10,500. Stein allegedly fingerprinted the aliens, for a fee of $50-$250, ostensibly to facilitate the process of “cleaning” the aliens’ records. The aliens were charged various amounts in incremental payments and the process often extended over a period of months or even years.
The charging statutes provide a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston, made the announcement today. The Massachusetts State Police, Woburn, Foxborough, and Mashpee Police Departments, and Bristol County Sheriff’s Office also assisted with the investigation. The case is being prosecuted by Thomas E. Kanwit of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Twenty-Six People Indicted for Heroin and Drug Trafficking in ToledoRead the Press Release
Twenty-six people were indicted for their roles in a conspiracy to bring large amounts of heroin, cocaine and marijuana to Toledo from Arizona, California, Illinois and Mexico, law enforcement officials said.
The 55-count federal indictment was announced by Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office, Toledo Police Chief William Moton and Lucas County Sheriff John Tharp.
“Heroin abuse is an epidemic in our community that takes lives and destroys families,” Dettelbach said. “We will continue to target drug traffickers while also working to reduce demand and get treatment for those who need it.”
“This is another example of the international drug trafficking connections that are plaguing our communities with danger and heroin,” Anthony said. “The FBI will continue collaborative law enforcement efforts to combat these violent organizations.”
“Through the working relationship that has been developed between the Toledo Police Metro Drug Task Force and the Federal Bureau of Investigation we have become more efficient in targeting the mid- and upper-level heroin dealers in Toledo and surrounding communities,” said Toledo Police Chief William Moton. “These arrests are a byproduct of this successful collaboration. The City of Toledo and surrounding areas are the benefactors of these efforts as the spread of heroin has the potential to deteriorate the standard of living in our community.”
Those indicted are from Toledo unless otherwise noted. They are: Alejandro Garcia, 44; Regina Navarro, 36; Osvaldo Perez, 60; Sean Machaterre, 31; Dicki Isom, 33; Federico Perez, 25; Daryl Mickles, Jr., 31; Keith Hubbell, 30; David Berrera, Jr., 40; Santos Flores, 34, of Oregon, Ohio; Juan Montano, 35; Daniel Montano, 26; Yousvani Gacita, 34; Davi Mata, 32; Willie Edward Smith, 38; Juan Rivera, 34; Paulo Gonzalez, 27; Abdul Shabazz, 39; Davalon Brown, 28; James Munoz, 37; Victoria Santellana, 31; Daniel Barboza, 38; Anthony Rudess, 42, of Curtice, Ohio; Eric Mays-Clausen, 41; Randolph Kemp, 53, and Jacqueline Jaquez, 40.
The defendants conspired between 2010 and this month to bring large shipments of heroin, cocaine and marijuana to Toledo for distribution. Garcia obtained the drugs from suppliers in Arizona, California, Illinois and Mexico and then distributed the drugs to mid-level dealers in the Toledo area. Those dealers, in turn, distributed the drugs to other dealers, according to the indictment.
The indictment details scores of transactions and drug sales that took place in Toledo, including locations at Ravine Park Village, Graham Street, Berry Street, North Ontario Street, Bronson Street, Sylvania Avenue, Westfield Park Mall, Main Street, Starr Avenue, Heatherdowns Road and other locations.
Three people – Garcia, Kemp and Isom – face additional charges of being felons in possession of firearms.
Prosecutors are also seeking to forfeit more than $6,800 in cash, six firearms, nine automobiles and homes at 1509 Navarre Avenue and 625 Parker Avenue in Toledo.This indictment is the result of an investigation by the FBI and the Metro Drug Task Force, made up of members of the Toledo Police Department and the Lucas County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorneys Thomas P. Weldon and Michael Freeman.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Suspended Catholic Priest Pleads GuiltyRead the Press Release
SAN JUAN, Puerto Rico – Israel Berríos-Berríos, a suspended Catholic priest, pleaded guilty today to transporting a minor with the intent to engage criminal sexual conduct, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Berríos-Berríos is facing a possible sentence of 10 to 12 years in prison.
The indictment charged that from on or about July 21, 2008, through on or about July 25, 2008, the defendant did knowingly transport an individual, who had not attained the age of 18 years, in interstate and foreign commerce, with the intent to engage in any sexual activity for which a person could be charged with a criminal offense. According to the Government’s version of facts, the defendant did transport a then 15 year-old male minor identified as “John Doe” to the City of Miami, Florida, where together they took a four-day cruise to the Bahamas aboard the vessel known as “Majesty of the Seas.” While on the cruise the defendant engaged in lewd acts with John Doe, which constitutes a violation of Title 18, USC, Section 2423(a).
“The USAO for the District of Puerto Rico is committed to taking full advantage of our investigative tools in order to protect our children from sexual predators,” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. “We commend our team of prosecutors and investigators who worked tirelessly in this case and today achieved this conviction. The public should be reminded to report all inappropriate behavior with children to their local authorities and together, local and federal law enforcement, will see that justice is carried out.”
The case was prosecuted by Assistant U.S. Attorney Marshal D. Morgan, Coordinator of the initiative Project Safe Childhood, and Assistant U.S. Attorney Elba Gorbea.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Store Owner Pleads Guilty to Snap FraudRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that an Anchorage store owner pled guilty to wire fraud and criminal forfeiture in connection with the SNAP federal food aid program that he was authorized to administer out of his store.
Ayub Yusef Eprahin, 44, pled guilty today, before United States District Court Judge Timothy M. Burgess, to two counts of wire fraud and one count of criminal forfeiture. According to a plea agreement, Eprahin faces a maximum of two years of imprisonment and a fine of up to $250,000. As part of his plea of guilty, Eprahin agreed to forfeit $42,489.44 to the United States as proceeds of the fraud.
According to Assistant U.S. Attorney Steve Skrocki, in November 2012, Eprahin was the owner of the Africa and Middle East Market and a participant in the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the “Food Stamp Program,” administered by the United States Department of Agriculture’s Food and Nutritional Service. The program is designed to provide authorized nutritional foods to low-income families. The federal government pays the full cost of the SNAP benefits and also shares with the states some of the administrative costs. Under the SNAP program, authorized recipients are issued a certain amount of benefits each month, which they may use to purchase eligible food items. SNAP recipients typically receive their benefits in the form of a credit on their personal electronic benefit transfer card. The rules of the program prohibit the purchase of items other than food, and the card benefits cannot be redeemed for cash. Eprahin and his store were authorized to accept payment for eligible purchases through SNAP. As a participant in the program, Eprahin was allowed to receive computer issued payments based on authorized purchases made by participants who shopped in his store. As part of the scheme, Eprahin permitted non-food items to be purchased and cash to be distributed to participants in the program using SNAP benefits. Eprahin represented to the SNAP program that the benefits were being redeemed to purchase eligible food items when in fact the purchases were not for eligible items. Eprahin improperly received federal program reimbursement for the ineligible items he sold and the cash he illegally distributed. Sentencing is set for November 7, 2014, in Anchorage.
Ms. Loeffler commends the Federal Bureau of Investigation, and United States Department of Agriculture, who administers the SNAP program, for their investigation of this case.Stockton Woman Sentenced to over 4 Years in Prison for Credit Application Fraud, Aggravated Identity Theft and Firearm ChargesRead the Press Release
SACRAMENTO, Calif. — Alisha Terese Rodriguez, 36, of Stockton, was sentenced on Thursday to four and a half years in prison for credit application fraud, identity theft, and for being a felon in possession of a firearm, United States Attorney Benjamin B. Wagner announced. U.S. District Court Judge Kimberly J. Mueller ordered Rodriguez to pay $60,010 in restitution.
This case was the product of an investigation by the Stockton Office of the United States Postal Inspection Service. Assistant United States Attorney Michelle Rodriguez prosecuted the case.
According to court documents, Rodriguez used stolen identity and credit information of victims to obtain unauthorized lines of credit. Subsequently, Rodriguez added her name to the unauthorized victim accounts and obtained credit cards to access the lines of credit. Rodriguez charged over $60,000 to the unauthorized lines of credit. She sustained the unauthorized lines of credit by paying monthly bills for the lines of credit with funds from other victims’ bank accounts. On May 9, 2013, federal search warrants were executed on Rodriguez's residence, her parents' residence, and her vehicles. Law enforcement found a loaded .40-caliber stolen pistol in Rodriguez’s handbag. Law enforcement recovered evidence that Rodriguez possessed personal and financial information for more than 300 victims.
Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service, San Francisco Division stated: “We work closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those who use the mail to engage in complex fraud schemes. With the support of local law enforcement and the U.S. Attorney’s Office, Postal Inspectors are focusing investigative efforts on these critical investigations."
San Antonio Tax Protester Sentenced to Federal Prison for Tax EvasionRead the Press Release
In San Antonio today, U.S. District Judge Orlando Garcia sentenced Daniel Isiah Thody to 90 months in federal prison followed by three years of supervised release and ordered him to pay $162,857.00 restitution to the Internal Revenue Service announced United States Attorney Robert Pitman, Internal Revenue Service--Criminal Investigation Special Agent in Charge Steven McCollough and Federal Bureau of Investigation Special Agent in Charge Christopher Combs.
On November 8, 2013, a jury convicted Thody on five counts of tax evasion. The jury found that Thody willfully evaded and failed to file income tax returns for calendar years 2006 through 2010. According to evidence presented at trial, Thody intentionally tried to conceal from the IRS his true income by using another individual’s bank account as well as the name of a nominee company--WET Publishing—a company created by his father to produce anti-government publications. During trial, Thody claimed that the IRS had no authority to tax him.
“Hard working taxpayers should not have to shoulder the burden for those such as Mr. Thody who willfully and deliberately neglect to meet their tax obligations as citizens of this great nation. Today’s sentencing should give pause to those that may be attracted to the illusive claim that there is no legal requirement to pay federal income tax,” stated IRS-CI Special Agent in Charge Steven McCollough. “The law is crystal clear on this matter, there is no gray area and the courts have consistently upheld the tax law. IRS Criminal Investigation continues its commitment to aggressively identify and pursue those taxpayers who willfully fail to file their tax returns.”
This case was investigated by the Internal Revenue Service—Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Mark Roomberg and William R. Harris prosecuted this case for the government.
Revised Syracuse Man Sentenced on Gun ChargeRead the Press Release
SYRACUSE, NEW YORK – Yesterday, Derrick Richards (42, of Syracuse, NY) was sentenced to 37 months imprisonment in U. S. District Court according to United States Attorney Richard S. Hartunian. In February, Richards pled guilty to possessing a firearm as a convicted felon, a felony under federal law. In addition to his term of incarceration, U.S. District Court Judge Glenn T. Suddaby ordered that Richards be placed on a 3 year term of federal supervised release.
In June 2013, Syracuse Police officers were called to a residence on W. Calthrop Avenue in Syracuse regarding a domestic dispute complaint involving a weapon. During their investigation police determined Richards was in possession of a 9mm Hi-Point rifle. Given that Richards had previously been convicted of Robbery in the First Degree, he was prohibited from possessing any firearms.
The case was investigated by the Syracuse Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Syracuse Resident Office and prosecuted by Assistant U.S. Attorney Richard Southwick.
Qualcomm Sales Director Guilty of Insider TradingRead the Press Release
SAN DIEGO – United States Attorney Laura E. Duffy announced today that Robert William Herman pled guilty to one count of insider trading. At the time of his illegal trade, Herman was a director in the North America Sales Department of Qualcomm, Inc. (QCOM).
According to Herman’s plea agreement, Herman and a co-defendant were part of an informal stock trading group, and occasionally shared tips and opinions about the stock market. By November 2010, Qualcomm was conducting a review of Atheros Communications, Inc., a technology company, to determine whether to acquire it.
Also according to Herman’s plea agreement, Herman and the co-defendant repeatedly heard from their immediate supervisor that Qualcomm was contemplating a major acquisition—emphasizing that the information was secret. As part of Herman’s plea, he admitted that, on January 4, 2013, he and his co-defendant learned that the acquisition target was Atheros, and they spoke to each other about it by telephone.
Shortly after the telephone call ended, Herman purchased 4,000 shares of Atheros at approximately $37.17 per share for a total price of more than $148,680. Later that day, after news of the acquisition became public, shares of Atheros increased in value. Herman then sold them all for a profit of $29,318.
FBI Special Agent in Charge, Daphne Hearn, said, “Today’s conviction sends a message, that insider trading results in only temporary gains that can lead to long-term losses, to include fines and prison time. The FBI will continue to aggressively pursue those cheaters who don't play by the same rules so the American public will have confidence in our economic system.”
United States Attorney Duffy commented: “Insider trading is a serious offense. This office will continue to work closely with the FBI and other law enforcement partners to protect our nation’s financial markets.”
Herman’s sentencing is currently set for November 21, 2014 at 9:00 a.m. before the Honorable Janis L. Sammartino.
DEFENDANT Robert William Herman Age: 52 City: San Diego, CA CHARGESTitle 15, U.S.C., Secs. 78j(b), 78ff – Securities Fraud (Insider Trading). Maximum penalties include 20 years in prison, $5 million fine and three years of supervised release.
INVESTIGATING AGENCYFederal Bureau of Investigation
*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Quad Cities Area Couple Sentenced for Fraud on the Social Security AdministrationRead the Press Release
DAVENPORT, IA – On August 20, 2014, Robert Dale Alexander, age 45, and Maureen Louise Alexander, age 38, both of Eldridge, Iowa, were sentenced by United States District Judge James E. Gritzner on charges related to defrauding the Social Security Administration, announced United States Attorney Nicholas A. Klinefeldt. Robert was sentenced for his conviction for conspiracy to defraud the Social Security Administration. He was sentenced to 10 months imprisonment, ordered to serve 3 years supervised release following the imprisonment, and pay $100 towards the Crime Victims Fund. Maureen was sentenced to 5 years probation for social security fraud, and she was ordered to pay $25 towards the Crime Victims Fund. Robert and Maureen, jointly and severally, were also ordered to repay $25,297.62 to the United States Government and $22,432.01 to the State of Iowa for benefits overpayments.
On December 21, 2010, Robert Alexander submitted an application for disability insurance benefits (SSD) to the Social Security Administration (SSA) in which he, among other things, falsely reported that he had not worked since 2008. In early 2012, Robert began a relationship with Maureen. For the purpose of obtaining SSD benefits for which he was not entitled, he and Maureen agreed to conceal from the SSA the fact that Robert had been working since 2008. Up through the fall of 2013 Robert and Maureen made additional material false statements including to an investigator with the SSA Office of Inspector General in September 2012 and in other SSA proceedings related to Robert obtaining SSD benefits to which he was not entitled.
This case was investigated by the Social Security Administration (SSA); the SSA Office of the Inspector General; and the Iowa Department of Inspections and Appeals. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Providence Resident Sentenced to Federal Prison for Conspiring to Possess and Distribute HeroinRead the Press Release
PROVIDENCE, R.I. – Ramon Lugo Rentas, 50, of Providence, was sentenced today to 46 months in federal prison for possessing heroin with the intent to distribute, announced United States Attorney Peter F. Neronha, United States Marshal Jamie A. Hainsworth and Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police.
Rentas, who was sought by the U.S. Marshals Service and the Rhode Island State Police Violent Fugitive Task Force on outstanding warrants out of Massachusetts, was charged with trafficking heroin when U.S. Marshals and Task Force members discovered him hiding inside a Providence residence where he stored and sold heroin.
At sentencing, U.S. District Court Judge John J. McConnell, Jr. also ordered Rentas to serve three years supervised release upon completion of his prison term. Rentas pleaded guilty in May 2014, to possession with the intent to distribute heroin.
According to information presented to the court, prior to the date of his arrest, Rentas had been observed by law enforcement at a residence in the Smith Hill section of Providence. On April 18, 2013, as members of the U.S. Marshals Service and the State Police Violent Fugitive Task Force entered the residence, other members of the law enforcement team who had maintained a perimeter outside the building saw Rentas discard an object into a pail on a second floor porch, and then reenter the building. Rentas was located hiding on a second floor landing, where law enforcement also seized a scale and other items used in the packaging and distribution of heroin.
A court authorized search warrant for a 3rd floor apartment Rentas was staying in was obtained. A search by law enforcement resulted in the seizure of three bags of heroin, $6,565 in cash and additional items used in the packaging and distribution of heroin. Rentas admitted to law enforcement and to the court that the items seized belonged to him and that he engaged in the sale of heroin.
The case was prosecuted by Assistant U.S. Attorney Paul F. Daly, Jr.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Postal Worker Pleads Guilty to TheftRead the Press Release
SHREVEPORT, La. –A U.S. Postal Service mail carrier from Shreveport pleaded guilty to stealing Netflix DVDs and money, U.S. Attorney Stephanie A. Finley announced today.
Frankey Savannah, 30, of Shreveport, pleaded guilty before U.S. District Judge S. Maurice Hicks Jr. to one count of theft of mail matter. According to evidence presented at the guilty plea, Netflix contacted the U.S. Postal Service about DVD movie losses occurring from July 2013 to October 2013 along a Bossier Parish route. Upon further investigation, law enforcement agents discovered that Savannah, a postal carrier, had been taking the DVDs from the envelopes while conducting his mail carrier route rather than returning them to Netflix as the customers intended. He is responsible for taking a total of 69 DVDs. Savannah was also observed taking cash from some of the mail.
Savannah faces a maximum penalty of five years in prison, three years of supervised release, a $250,000 fine and restitution. A sentencing date of December 10, 2014 was set.
The U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan is prosecuting the case.
Pill Mill Owner Sentenced to 39 Years in PrisonRead the Press Release
KNOXVILLE, Tenn. – On Aug. 18, 2014, Sandra Kincaid, 63, of Maryville, Tenn., was sentenced to serve 470 months in prison by the Honorable Thomas A. Varlan, Chief U.S. District Judge.
After a jury trial in October 2013, Kincaid was convicted of drug and money laundering offenses in conjunction with Breakthrough Pain Therapy Center in Maryville. Kincaid’s husband and co-owner of Breakthrough, Randy Kincaid, along with her son, Dustin Morgan, were also convicted and previously sentenced. Kincaid’s daughter, Wendi Henry, was convicted and is in custody awaiting sentencing.
These charges and subsequent conviction of Kincaid and co-defendants resulted from a lengthy investigation by the Internal Revenue Service – Criminal Investigation, Fifth Judicial Drug Task Force, and Drug Enforcement Administration. The pain clinic ceased operations when it was raided by federal and local law enforcement agents in December 2010, where agents seized significant quantities of prescription narcotic pain pills, firearms, and nearly $700,000 in cash.
“The Federal Sentencing Guidelines provide suggested ranges of incarceration for those who are found guilty of violating federal law, including the most serious offenders. Kincaid disbursed highly addictive drugs to many people over a long period of time. Thanks to the intense and cooperative work of the federal, state and local agencies who investigated this case, she received a lengthy sentence for her criminal conduct,” said U.S. Attorney Bill Killian.
Assistant U.S. Attorneys Jennifer Kolman and Frank M. Dale, Jr. represented the United States during the trial and sentencing.
Picayune Woman Sentenced to Twenty One Months in Prison for Social Security FraudRead the Press Release
Gulfport, Miss. – Virginia Ann Edelman a/k/a Ginger Edelman, 49, of Picayune, Mississippi, was sentenced by U.S. District Judge Sul Ozerden to 21 months in federal prison followed by three years of supervised release for theft of government funds, U.S. Attorney Gregory K. Davis announced today. She was also ordered to pay $75,325.00 in restitution to the U. S. Social Security Administration and to perform 120 hours of community service.
In May, 2014, a jury found Edelman guilty of stealing $75,325.00 of her deceased mother’s Social Security Survivor’s Insurance Benefits Program (“SIB”) benefit payments. The investigation revealed the theft occurred from May of 2000 through October of 2011.
This case was investigated by agents of the Social Security Administration Office of the Inspector General - Office of Investigations. It was prosecuted by Assistant U.S. Attorney Andrea Jones.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Philadelphia Resident Charged with Illegal ReentryRead the Press Release
Jose Guadalupe Pacheco-Ramirez, a/k/a “Jose Ramirez,” 39, of Philadelphia, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about July 21, 2014, Pacheco-Ramirez, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about May 24, 2005 and August 24, 2010.
If convicted the defendant faces a maximum possible sentence of 10 years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Andrea Foulkes.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to view the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Owner of Financial Services Company Pleads Guilty to Securities and Tax FraudRead the Press Release
BOSTON – The former owner of a Lawrence-based financial services company pleaded guilty today to charges that he defrauded investors, filed false tax returns on behalf of certain clients, and then filed his own false tax returns.
Robert Burton, 37, the former Managing Director of Pinnacle Financial Consulting LLC, Pinnacle Strategic Investments LLC, and the Pinnacle Asset and Capital Management Group LLC, pleaded guilty before U.S. District Court Judge Mark L. Wolf to securities fraud and tax fraud. Sentencing is scheduled for Nov.13, 2014 at 3:00 pm.
Burton acted as an investment advisor and promised to invest some clients’ money in various securities, including stocks, mutual funds, and in a debt portfolio allegedly managed by Pinnacle. In some instances, he promised to return the principal invested within approximately 30 days, along with an interest payment equal to 100% of the amount invested. Burton did not invest the money as promised, did not make the promised payments and, in some instances, provided investors with checks that ultimately bounced.
Through Pinnacle, Burton also provided tax preparation services and, in at least two instances, prepared and filed false tax returns on behalf of his clients. Finally, although Burton derived substantial income through the operation of Pinnacle, he failed to identify that income on his own tax returns and admitted to filing false tax returns for the 2008, 2009, 2010 and 2011 tax years.
If the plea agreement is accepted by the Court, Burton will be sentenced to no more than two years in prison and not less than 12 months confinement, three years of supervised release, and restitution to the victims.United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the U.S. Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The Massachusetts Attorney General’s Office, which has a civil case pending against Burton, cooperated with the investigation. The case is being prosecuted by Assistant U.S. Attorney Sarah E. Walters of Ortiz’s Economic Crimes Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
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Owner of Connecticut Financial Services Company Pleads Guilty to Making False Statements Regarding Military Pension BenefitsRead the Press Release
The U.S. Attorney's Office for the Middle District of Pennsylvania announced today that Richard A. Ullmann, age 50, of Westport, Connecticut, pleaded guilty to making false statements to the Defense Finance Accounting Service (DFAS) in federal court in Harrisburg before Chief United States District Court Judge Christopher C. Conner. Ullmann faces up to five years' imprisonment and/or $250,000 in fines as a result of the guilty plea. Ullmann was released pending sentencing, which is scheduled for November 28, 2014.
According to U.S. Attorney Peter Smith, Ullmann owned and operated a financial services company based in Westport, Connecticut, called Donnell Financial Group (Donnell), that made short-term loans to members of the U.S. Armed Forces, military retirees and their survivors, and others. In exchange for the loans, Donnell's customers assigned their future pension payments to Mr. Ullmann as collateral. Federal law prohibits the assignment of pension benefits as collateral for members of the armed forces and military retirees. DFAS also prohibits anyone but the account holder to make changes to their account, including where the payments shall be deposited and who should receive the funds.
In March 2009, DFAS warned Mr. Ullmann that his practice of impersonating the account holder in order to direct payments into bank accounts he controlled could subject him to prosecution. Ullmann admitted today that despite that warning, he continued to impersonate numerous individuals and direct their pension payments into bank accounts he controlled until February 2014, when federal agents executed a search warrant at Donnell.
The case was investigated by the Department of Defense, Office of Inspector General, and is assigned to Senior Litigation Counsel Bruce Brandler for prosecution.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
****Oregon Couple Indicted for Trafficking Methamphetamine and CocaineRead the Press Release
FRESNO, Calif. — Lucio Cruz-Sanchez, 35, resident of Portland, Oregon and his wife Jamie Lyne Sanchez 23, of Gresham, Oregon, were charged today with conspiracy to distribute and possession with intent to distribute methamphetamine and cocaine and with possession with intent to distribute methamphetamine and cocaine, United States Attorney Benjamin B. Wagner announced.
The defendants were arrested on August 7, 2014, by a California Highway Patrol officer on northbound I-5 near the Buttonwillow exit. They possessed over 40 pounds of methamphetamine and over two pounds of cocaine and $2,233 cash.
This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Highway Patrol. Assistant United States Attorney Brian K. Delaney is prosecuting the case.
If convicted, Lucio Cruz-Sanchez faces a sentence of 10 years to life in prison, and Jamie Lyne Sanchez faces a sentence of five to 40 years in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Northern Cambria Woman Sentenced to Prison for Conspiring to Distribute HeroinRead the Press Release
JOHNSTOWN, Pa. - A resident of Northern Cambria, Pa., has been sentenced in federal court to one year and one day in prison and four years supervised release on her conviction of conspiracy to distribute heroin, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Casey Lex, 29.
According to information presented to the court, from April 2012 to March 8, 2013, Lex conspired with others to possess and distribute 100 grams or more of heroin.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation leading to the successful prosecution of Lex.
North Carolina Man, Robert Beckmann, Pleads Guilty to Creating and Selling Fake Mercedes-benz Automotive EquipmentRead the Press Release
U.S. Attorney Kenneth Allen Polite, Jr. announced that ROBERT BECKMANN, age 52, of Durham, North Carolina, pleaded guilty as charged yesterday before U.S. District Judge Kurt D. Engelhardt, to criminal infringement of a copyright, a misdemeanor, and his company, BECKMANN TECHNOLOGIES, INC., pleaded guilty to creating and selling non-authentic Mercedes-Benz diagnostic equipment.
According to court documents, BECKMANN owned BECKMANN TECHNOLOGIES, INC., a company that, among other things, sold remanufactured parts for Mercedes-Benz automobiles. Between about 2001 and July 2012, BECKMANN TECHNOLOGIES, INC., in conjunction with “Company A,” located in Harahan, Louisiana, “Company B,” located in Rancho Palos Verdes, California, and an individual in the United Kingdom, “J.C.,” produced and sold unauthorized, non-authentic versions of the Mercedes-Benz Star Diagnostic System (SDS), a hand-held computer containing proprietary, confidential software. The SDS is used by mechanics to diagnose problems with and assure the safety of Mercedes-Benz vehicles employing electronic control systems.
BECKMANN TECHNOLOGIES, INC. was responsible for creating hardware for the fake SDS units, including a “black box,” while Company A, with assistance from BECKMANN TECHNOLOGIES, INC. and others, obtained, modified, and duplicated the authentic SDS software so that it would operate on ordinary laptop computers and without Mercedes-Benz’s authorization or license. After learning that Mercedes-Benz had notified J.C. that his conduct was in violation of civil and/or criminal laws, representatives of BECKMANN TECHNOLOGIES, INC., Company A, and Company B discussed a plan to have J.C. “go underground and off the radar” and continue working on making fake SDS.
The “real” SDS sold for between $8,300 and $22,000 each, while the fake SDS sold for up to $11,000, depending on market factors. In total, Company A and Company B sold at least 795 fake SDS.
BECKMANN faces a maximum term of imprisonment of one (1) year and a $100,000 fine. BECKMANN TECHNOLOGIES, INC. faces a maximum fine of $500,000. Sentencing before Judge Engelhardt has been scheduled for December 10, 2014, at 9:00 a.m.
This case was investigated by agents from the Federal Bureau of Investigation. The prosecution of this case was handled by Assistant United States Attorney Jordan Ginsberg and Computer Crime and Intellectual Property Section (CCIPS) Senior Counsel Evan Williams.
(Download Factual Basis )
Newark Man Charged with Additional Counts of Producing Child Pornography for Recording His Sexual Abuse of GirlRead the Press Release
NEWARK, N.J. – A Newark man was indicted by a federal grand jury today on three additional counts of producing images of child sexual abuse for allegedly abusing a prepubescent girl repeatedly and filming the abuse, U.S. Attorney Paul J. Fishman announced.
Pedro Rios, 58, was charged in a superseding indictment with a total of five counts of production of child pornography and one count each of possession and distribution of child pornography. The case has been assigned to U.S. District Judge Stanley R. Chesler. An arraignment will be scheduled.
According to the documents filed in this case and statements made in court:Law enforcement officers executed a search warrant at Rios’s home in Newark on Feb. 5, 2013. A forensic review of the computer equipment seized revealed several video files of child pornography which appear to be self-produced and allegedly depict Rios on camera engaging in sexually explicit conduct with a prepubescent female in the rear of a cab of a tractor trailer truck.
Law enforcement officers identified and interviewed the female, who allegedly said Rios would periodically drive her to his tractor trailer truck in Union County, N.J., where he would undress her and have sexual contact and sexual relations with her and record the encounters. Rios allegedly threatened to hurt the victim’s family if she told anyone.
Each charge of sexual exploitation of a child carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. Rios remains detained.
U.S. Attorney Fishman credited special agents of the FBI Newark Division’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark, the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, and the N.J. Regional Computer Forensics Laboratory with the investigation leading to these charges.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.The charges and allegations contained in the indictment are merely accusations and the defendant is considered innocent unless and until proven guilty.
14-297
Defense counsel: Brian J. Neary Esq., Hackensack, N.J.
Rios, Pedro Superseding Indictment
Native of Guatemala Charged with Illegal ReentryRead the Press Release
Francisco Hernandez-Sintung, a/k/a “Gabriel Munoz,” a/k/a “Gavino Hernandez,” 47, of Reading, PA, was charged today by indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about April 1, 2014, Hernandez-Sintung, an alien, and native and citizen of Guatemala, was found in the United States after having been deported from the United States on or about January 7, 2006, June 14, 2007, November 2, 2007, March 17, 2008, and February 13, 2009.
If convicted the defendant faces a maximum possible sentence of two years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney M. Beth Leahy.An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Click here to view the indictment.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Morrisville Woman Charged with Defrauding Government AgenciesRead the Press Release
Revonia Jones, 54, of Morrisville, was charged today by information with one count of theft of government funds and one count of false statements, announced United States Attorney Zane David Memeger. According to the information, the defendant applied for and received Federal Emergency Management Agency (“FEMA”) benefits due to displacement from her home resulting from Tropical Storm Lee. However, Jones failed to report her receipt of Housing Choice Voucher payments from the U.S. Department of Housing and Urban Development (“HUD”). The information further alleges that Jones failed to tell HUD that she was receiving FEMA benefits. The defendant’s alleged actions resulted in a loss to the government of approximately $11,843.
If convicted, Jones faces a maximum possible sentence of 15 years in prison, a three year period of supervised release, restitution to the government of $11,843, a $500,000 fine, and a $200 special assessment.
The case was investigated by the Department of Homeland Security Office of Inspector General, and the United States Department of Housing and Urban Development Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
Click here to view the indictment
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, 215-861-8525Montgomery County Man Indicted on Charges Related to A Scheme to Defraud Elderly Individuals of More Than $1.1 MillionRead the Press Release
Conspirators Targeted Elderly Men and Women Found on Online Dating Websites
Greenbelt, Maryland - A federal grand jury has indicted Krist Koranteng, age 32, of Burtonsville and Laurel, Maryland, on conspiracy, mail fraud, wire fraud and money laundering charges, in connection with a scheme to defraud elderly individuals which involved the conspirators pretending to be romantically interested in the victims in order to cause the victims to wire, deposit, and mail money to Koranteng. The total losses to the victims as a result of the scheme are alleged to be over $1.1 million. The indictment was returned on August 11, 2014, and unsealed today upon the arrest of the defendant.The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kathy A. Michalko of the United States Secret Service - Washington Field Office; and Chief J. Thomas Manger of the Montgomery County Police Department.
The 11 count indictment alleges that between September 2012 and February 2014, Koranteng and others executed a scheme in which the conspirators searched online dating websites, such as Chemistry.com and Match.com, to initiate romantic relationships with elderly men and women, in order to obtain money from those individuals. Members of the conspiracy used phone calls, emails, and text messages to form romantic relationships with the victims.
According to the indictment, the conspirators used a number of false stories and promises to convince the victims to give money to the members of the conspiracy, including: stories about investing in fake gold that required payments for shipping and storage; fictitious sick family members who needed money; fake hospital bills; and fake plane trips to visit the victims. Koranteng and members of the conspiracy convinced the victims to wire money into accounts controlled by Koranteng, or to mail checks to a corporation created and controlled by Koranteng.
To conceal the scheme from the victims, the conspirators created false documents, including false certificates of origin certifying the existence of gold bars, and false documentation creating the impression that the gold bars were being stored at a safe house for a fee.
Koranteng and other members of the conspiracy disbursed the money received from the victims by transferring money to other accounts, by withdrawing sums of money, and by writing checks to other individuals.
Koranteng faces a maximum sentence of 20 years in prison for each of eight counts of mail and wire fraud; and a maximum of 10 years in prison for each of three counts of money laundering. Koranteng had his initial appearance at 2:00 p.m. today in U.S. District Court in Greenbelt. Koranteng is detained pending a detention hearing scheduled for August 25, 2014, at 11:30 a.m.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the U.S. Secret Service and Montgomery County Police Department for their work in the investigation, and thanked the Ohio Attorney General’s Office for its assistance. Mr. Rosenstein thanked Assistant United States Attorneys Leah J. Bressack and David I. Salem, who are prosecuting the case.
Man Sentenced to 8.5 Years in Prison for Child Abuse Occuring Within Gila River Indian CommunityRead the Press Release
PHOENIX - Today, Christopher Earl Terry, 41, a member of the Gila River Indian Community, was sentenced by U.S. District Judge Diane J. Humetewa to 8.5 years in prison followed by three years of supervised release. Terry previously pleaded guilty to one count of child abuse.
Documents contained within the public record indicate that Terry seriously injured the victim, a small infant, while babysitting him at a residence within the Gila River Indian Community. The victim suffered significant physical injuries.
In deciding the sentence, Judge Humetewa rejected Terry’s contention that he injured the child during rough play, and instead noted his “egregious” conduct.
The investigation in this case was conducted by the Gila River Police Department. The prosecution was handled by Christine Keller, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-14-00242-PHX-DJH
RELEASE NUMBER: 2014-048_TerryFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Man Sentenced for Illegal Re-EntryRead the Press Release
Edgar Garay-Vasquez, 39, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on August 15, 2014, for illegal re-entry of a previously deported alien into the United States. Garay-Vasquez was arrested in Worland, 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.
Man Charged with Selling Drugs Out of Candy StoreRead the Press Release
Dwayne Howard, 35, from Dubuque, Iowa, has been charged with four counts of distributing crack cocaine near a school or playground. The charges are contained in an Indictment unsealed on August 18, 2014, in the United States District Court in Cedar Rapids.
The Indictment alleges that, on four different dates in January and February 2014, Howard sold crack cocaine to another person. Court records indicate that the person who purchased the crack cocaine was an undercover police officer. Three of the sales are alleged to have occurred inside “Wayne’s Candy,” a candy store operated by Howard in Dubuque, Iowa. The candy store is now closed.If convicted, Howard faces a mandatory minimum sentence of one year imprisonment without the possibility of parole, and a possible maximum sentence of 160 years’ imprisonment, an $8,000,000 fine, $400 in special assessments, and a term of supervised release of at least six years and up to life, following any imprisonment.
Howard appeared on August 18 and 20, 2014, in federal court in Cedar Rapids and was held without bond. Howard’s next appearance for a status hearing is set for September 24, 2014. Trial is scheduled for October 20, 2014.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Justin Lightfoot and was investigated by the Iowa Division of Narcotics Enforcement and the Dubuque Drug Task Force, which is comprised of officers from the Dubuque Police Department and the Dubuque County Sheriff’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/ login.pl. The case file number is 14-CR-1013.
Los Angeles Women Sentenced to Prison for $2M Mortgage FraudRead the Press Release
LOS ANGELES – A Los Angeles woman was sentenced today to three years in federal prison for orchestrating a scheme that led to the fraudulent purchase of four properties worth more than $2 million.
Soo Kyung Hong, who also used the name “Maria Hong,” 48, a resident of the Miracle Mile section of Los Angeles, was sentenced today by United States District Judge John F. Walter. In addition to the 36-month prison term, Judge Walter ordered Hong to pay approximately $2 million in restitution, which includes losses from four additional properties fraudulently purchased in a related scheme.
Hong pleaded guilty in April to conspiracy to commit wire fraud, admitting that she falsified income and employment information to fraudulently obtain mortgages to purchase four properties in Hesperia, Laguna Niguel, and Hacienda Heights.
To further the scheme, Hong engaged a co-conspirator to allow Hong to falsely list the co-conspirator’s company as a place of employment on the fraudulent mortgage applications that were filed under the name of a person who did not know their name was being used. Hong instructed the co-conspirator to direct calls seeking employment verification to Hong. As part of the scheme, banks funded mortgages on four properties, all of which fell into foreclosure and caused losses of more than $1 million.
This case is being investigated by the Federal Housing Finance Agency, Office of Inspector General; the Federal Bureau of Investigation; IRS – Criminal Investigation; and the Los Angeles Sheriff’s Department. The case was prosecuted by the Fraud Section in the Criminal Division of the Department of Justice and the United States Attorney’s Office in Los Angeles.
Release No. 14-109
Leader of Guatemalan Drug Trafficking Organization Indicted for Conspiring to Import and Distribute Heroin and CocaineRead the Press Release
ALEXANDRIA, Va. – A leader of a drug trafficking organization based in Guatemala, along with a U.S.-based associate, were indicted by a federal grand jury today for participating in a conspiracy to import and distribute multiple kilograms of heroin and cocaine into the United States.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations Washington (HSI), made the announcement.
Lelo Sandoval, 47, of Jalapa, Guatemala, and Cesar Duran, 55, of Chicago, Illinois, were indicted on four counts of conspiracy to import and distribute one kilogram or more of heroin and at least five kilograms of cocaine. Sandoval and Duran each face a maximum penalty of life in prison if convicted.
According to the indictment, from late 2009 until September 2013, Sandoval served as a leader of a drug trafficking organization in Guatemala that imported heroin and cocaine from Guatemala and Honduras into the United States through the use of human couriers. The couriers often traveled on commercial airliners that landed in various U.S. airports, including Dulles, JFK and O’Hare, and they smuggled the drugs within their luggage in containers marked as containing food and drinks—for example, juice boxes, refried beans and powdered milk. The couriers also drove vehicles carrying concealed heroin and cocaine over the U.S.-Mexico border, while other packages were delivered through the U.S. mail system.
After importation, the heroin and cocaine would be distributed and sold in the United States by members of the drug trafficking organization. The indictment identifies ten occasions from late 2009 through March 2013 in which members of the conspiracy smuggled or attempted to smuggle at least 28 kilograms of heroin and 13 kilograms of cocaine. In September 2013, Sandoval and Duran were arrested together in Guatemala while in possession of several kilograms of heroin.
This case was investigated by ICE-HSI, with assistance from the Drug Enforcement Administration and Customs and Border Protection. Special Assistant U.S. Attorney Catherine S. Ahn and Assistant U.S. Attorney Jonathan Fahey are prosecuting the case.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-289.
Jury Convicts KC Man of Illegal Drugs, FirearmsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was convicted in federal court today of illegally possessing a controlled substance and firearms.
Rashawn Long, 33, of Kansas City, was found guilty of both counts contained in a Nov. 15, 2013, federal indictment. Long was convicted of one count of possessing Buphedrone (also known as bath salts, a controlled substance similar to methamphetamine) with the intent to distribute and one count of being a felon in possession of firearms.
Kansas City, Mo., police officers responded to a call about a suspicious person on Oct. 26, 2013. Officers contacted a homeowner, who stated that a man she didn’t know had been knocking on her door. She also told officers that he parked his 2013 Dodge Avenger in her back yard area and left. She had no idea who the vehicle belonged to or why it was parked in her back yard.
Officers noticed that the vehicle had a strong brake pad odor, which was consistent with it having been recently driven at a high rate of speed with the brakes repeatedly engaged. One of the officers requested a tow truck to come pick up the vehicle. When the resident went to move her own vehicle so that the tow truck could get into her back yard, she found a note from Long, but addressed to another person, thanking that person for letting him park the vehicle in her yard.
A few minutes later, Long came running up the hill, waving his arms and yelling at the officers. He told the officers that he knew the owner of the residence and that he parked vehicles there before. Long also told officers that he was trying to hide his car from his fiancé while he visited another woman who lived down the block, and did not want anyone to see him. Long, who had two active arrest warrants, was taken into custody.
When officers searched Long’s vehicle, they found a backpack that contained a stun gun, a can of pepper spray, a digital scale with residue, a digital video camera and a Coke can. Inside the Coke can was a false compartment that contained 5.67 grams of Buphedrone.
When officers reviewed the contents of the digital video camera, they found at least two images in which Long flashed a Glock semi-automatic handgun.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Long has prior felony convictions for second degree murder, armed criminal action, unlawful use of a weapon and trafficking drugs.
Under federal statutes, Long is subject to a sentence of up to 40 years in federal prison without parole, plus a fine up to $1,250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for about two hours before returning the guilty verdict to U.S. District Judge Brian C. Wimes, ending a trial that began Tuesday, Aug. 19, 2014.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez and Special Assistant U.S. Attorney Jeffrey Q. McCarther. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Investment Broker, Aaron Ortloff, Pleads Guilty to Wire Fraud Scheme Which Netted over $190,000Read the Press Release
U.S. Attorney Kenneth Allen Polite, Jr. announced that AARON ORTLOFF, age 42, of Kenner, Louisiana, plead guilty as charged yesterday before U.S. District Judge Stanwood R. Duval, Jr. to a one-count Bill of Information alleging a wire fraud investment scheme.
According to documents filed in court, ORTLOFF was an investment broker doing business as Ortloff Trading, L.L.C. ORTLOFF used a “gmail” email address to conduct business. Gmail servers are all located outside of the State of Louisiana, which gives federal authorities jurisdiction of interstate electronic transmissions.
From August 2007 through May 2012, ORTLOFF defrauded a victim of $191,000 by emailing monthly statements that represented that the victim’s investments were making a profit, when in reality Ortloff was stealing the money.
ORTLOFF faces a maximum of twenty years incarceration, a $250,000 fine, restitution and three years supervised release. Sentencing before Judge Duval has been scheduled for December 10, 2014.
This case was investigated by agents from the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Carter K.D. Guice, Jr. of the Fraud Unit.
(Download Factual Basis )
International “Con Man” Sentenced for Scamming Investors and Dodging TaxesRead the Press Release
Svein Erik Ulsteen, a former executive and shareholder of Anturion Limited, a company formed in the Channel Islands, was sentenced today to 46 months in custody for bilking investors of more than $2 million by selling them counterfeit and forged Anturion securities. Ulsteen used the investor funds to pay for his personal entertainment and living expenses—such as yacht and BMW payments—rather than to operate Anturion. Ulsteen was also sentenced in a separate case with corruptly preventing the Internal Revenue Service from determining his true tax liability, and attempting to cheat the IRS out of almost $400,000 in lawfully owed taxes. Ulsteen has been in custody since December 16, 2013, when he attempted to board a plane leaving for his home country of Norway. United States District Judge M. James Lorenz rejected Ulsteen’s request to be released from custody today, commenting that Ulsteen’s sole motivation to commit his crimes was to benefit himself, and “there are too many victims out there that have lost everything because of your greed. Now it’s time to make the defrauded public whole.” District Judge Lorenz also rejected Ulsteen’s attempt to characterize himself as a credible businessman, and instead commented, “You’re just a con man.”
According to court records and admissions by Ulsteen, between October 2011 and June 2013 Ulsteen solicited investors by pretending to either: (1) sell them shares of Anturion stock; or (2) borrow money on behalf of Anturion, which would be paid back with interest. In fact, however, Ulsteen was neither authorized to sell company stock nor borrow money on its behalf. To support his deceptive solicitations, Ulsteen created fake “subscription agreements” and phony “loan” documents that purported to be authentic securities of Anturion. Using these counterfeit securities, Ulsteen convinced investors throughout the United States to send more than $2 million to Ulsteen’s nominee accounts.
Personal Luxury Expenditures
Ulsteen admitted that instead of transferring these investments and loans to Anturion, he took the money for himself. For example, from a $300,000 loan one victim thought was going to Anturion, Ulsteen spent over $8,500 on his 82-foot yacht moored in Florida, over $42,000 paying personal credit card expenses, $5,000 in payments to his then-spouse, more than $4,600 in BMW car payments, over $66,650 in insurance premiums, as well as numerous other personal expenditures such as cell phone service, health care premiums and on-line dating services.Investors Received Nothing, or Worthless Shares
Multiple investors who thought they were purchasing stock in Anturion received nothing. Other investors eventually received shares, but by that time the price of Anturion stock had dramatically declined. This stock came from Ulsteen’s own personal holdings (and not directly from the company as Ulsteen had promised) and could not be sold through any investment firm in the United States. Indeed, trading in Anturion is presently suspended on London’s ISDX Growth Market, so there is no way to reliably value any of the shares Ulsteen eventually provided to his victims. And those individual victims who thought they were loaning money to Anturion were never repaid as promised.Tax Evasion
In addition to selling forged securities, Ulsteen admitted to corruptly obstructing the IRS’s attempts to assess his true tax liability. Between 2010 and 2012, Ulsteen earned over $1 million from various activities, including the sale of his Anturion stock. Although the IRS notified Ulsteen that he needed to file federal income tax returns as he owed taxes, penalties and interest, Ulsteen refused to file for any of these years, and took several steps to prevent the IRS from learning how much income he had earned. These steps included depositing investor funds into the nominee accounts he controlled and paying his personal expenses out of these company accounts.Ulsteen was ordered to return to court on December 11, 2014, for a hearing to determine how much restitution he owes to his victims.
Today’s sentencing was announced by United States Attorney for the Southern District of California Laura E. Duffy, who commended and thanked her colleague Benjamin B. Wagner, the United States Attorney for the Eastern District of California, for his Office’s excellent work on the case before Ulsteen’s arrest in San Diego late last year. That arrest and the prompt conviction of these fraud and tax charges was the result of coordinated investigations by the San Francisco and San Diego Divisions of the Federal Bureau of Investigation, and the San Diego Division of the Internal Revenue Service, Criminal Investigation.
DEFENDANT Case Numbers: 14CR0923-L (S.D. Cal.),
14CR0924-L (S.D. Cal.), and
3:14-CR-0067-WHA (N.D. Cal.) Svein Erik Ulsteen Age: 50 San Diego, CA CHARGESCounterfeit and Forged Securities, in violation of 18 U.S.C. § 513.
Maximum Penalties: 10 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.Obstruction of Internal Revenue Laws, in violation of 26 U.S.C. § 7212(a).
INVESTIGATING AGENCY
Maximum Penalties: 3 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.Federal Bureau of Investigation – San Francisco Division and San Diego Division
Internal Revenue Service, Criminal Investigation*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office today announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Strong in Great Falls on August 21, 2014, and entering pleas of Not Guilty were:
ERIN ELLIOT HOLCOMB, an 18-year-old resident of Great Falls, appeared on charges of possession of an unregistered firearm and transfer of an unregistered firearm. If convicted of the most serious charge contained in the indictment, HOLCOMB faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco and Firearms. PACER Case Reference: 14-59
JANA NYGARD, a 28-year-old resident of Brockton, appeared on charges of embezzlement of government property and theft of mail by an officer or employee. If convicted of the most serious charges contained in the indictment, NYGARD faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the United States Postal Service. PACER Case Reference: 14-60
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court's calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Houston Man Pleads Guilty to Using Fake Credit Cards and Other Devices to Illegally Access Cash While at Louisiana CasinosRead the Press Release
LAKE CHARLES, La. –A Houston man pleaded guilty to charges that he used counterfeit credit cards and other financial access devices to steal thousands of dollars from Louisiana casinos, U.S. Attorney Stephanie A. Finley announced today.
Derick Demon Caples, 31, of Houston, pleaded guilty before U.S. District Judge Patricia Minaldi for one count of use of counterfeit access devices. According to evidence presented at the guilty plea, Caples used counterfeit credit cards and other access devices starting in November 11, 2012 to secure cash advances totaling $14,505.05 at Louisiana casinos such as the Isle of Capri, L’Auberge, Horseshoe, El Dorado, and Harrah’s Louisiana Downs. These access devices included Green Dot Visa cards, 123 Rewards cards, Chase cards, Wells Fargo cards, and Bank of America cards, among others. He presented false identifications with the credit cards to secure the cash advances.
Caples faces up to 10 years in prison, three years supervised release, a $250,000 fine and restitution. A sentencing date of November 20, 2014 was set.The U.S. Secret Service investigated the case. Assistant U.S. Attorney Howard C. Parker is prosecuting the case.
Gulfport Man Arrested for Sexual Activity with MinorsRead the Press Release
Gulfport, Miss - William Richard Pryor, 68, of Gulfport, was arrested by FBI agents pursuant to a criminal complaint charging him with transportation of minors with intent to engage in criminal sexual activity, announced U.S. Attorney Gregory K. Davis and Acting FBI Special Agent in Charge Johnnie Sharp.
William Richard Pryor was formerly employed as a math teacher at Bayou View Junior High School in Gulfport. According to the criminal complaint, beginning in approximately September, 1973 and continuing through the present, Pryor traveled and transported minor children in interstate commerce with the intent that the minor children would engage in sexual activity.
Pryor appeared today before U.S. Magistrate Judge John C. Gargiulo for an initial appearance. He remains in custody pending a preliminary and detention hearing on Tuesday, August 26, 2014.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Greenbrier County Man Pleads Guilty to Federal Drug ChargeRead the Press Release
Beckley, W.Va. – United States Attorney Booth Goodwin announced that a Greenbrier county man pled guilty to a federal drug charge in Beckley today. Seth Allen Carr, 24, of Alderson, admitted that on April 9, 2014, he used a telephone to facilitate a drug transaction. When he used the telephone he was in Lewisburg. Following the telephone conversation, Carr sold heroin to a confidential informant. Carr faces up to 4 years in prison and a $250,000 fine. United States District Judge Irene Berger scheduled his sentencing for January 8, 2015.
This case was investigated by the Greenbrier Valley Drug and Violent Crime Task Force and is being prosecuted by Assistant United States Attorney John File.
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 United States 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 and heroin.
Fredericksburg Tax Preparer Sentenced to 37 Months in $598,000 Tax FraudRead the Press Release
RICHMOND, Va. – Daniel L. Jones, age 56, of Fredericksburg, Virginia was sentenced today to 37 months’ imprisonment for aiding in the preparation of fraudulent tax returns for his clients and making a false statement to the Internal Revenue Service.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Special Agent in Charge Thomas J. Kelly, of the Internal Revenue Service, Washington Field Office; and Special Agent in Charge Robert M. Geary of the Treasury Inspector General for Tax Administration, Washington Field Office, made the announcement after the sentencing before United States District Judge Robert E. Payne.
According to court documents, Jones ran a tax preparation service for many years in Fredericksburg called the Tax Doctor Plus. To increase refunds for his clients, Jones regularly prepared and electronically filed tax returns that contained false entries and items. These included: (a) improperly splitting married couples into incorrect filings statuses in order to place both taxpayers into lower tax brackets and create earned income credit opportunities for both; (b) filing false Schedules C, Business Income or Loss, with enough false deductions so that the client would qualify for the earned income tax credit; (c) submitting false Schedule A expenses and education credits when there was no basis to claim such deductions or credits; and (d) false income with false W-2’s to qualify the taxpayers for the maximum amount of government credits, such as the earned income credit, various education credits, and the making work pay credit.In addition, in order to represent his clients before the Internal Revenue Service, Jones submitted to the IRS false Forms 2848 (Power of Attorney and Declaration of Representative) on which he falsely claimed he was a certified public accountant. He has agreed that the total tax loss from 2009 to 2012 is approximately $598,000. This amount was based on approximately 630 returns containing false educational credits.
This case was the product of an investigation by the Internal Revenue Service, Treasury Inspector General for Tax Administration and the United States Attorney’s Office. Assistant United States Attorney David T. Maguire is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14-cr-049.
Former VA Contractor Arrested in Connection with Stolen Identity Refund FraudRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Willie Streater with five counts of wrongful disclosure of health information, two counts of access device fraud, and one count of aggravated identity theft. If convicted, Streater faces a maximum penalty of 10 years in federal prison on each count of wrongful disclosure of health information and access device fraud, to be followed by two additional years’ imprisonment on the aggravated identity theft charge. The indictment also notifies Streater that the United States is seeking a money judgment in the amount of $1,146,745.35, the proceeds of the charged criminal conduct.
According to the indictment and information presented in court, Streater is a former employee of a shredding company that had a contract with the U.S. Department of Veterans Affairs to shred documents at the James A. Haley Tampa VA Hospital. Streater stole documents intended for shredding that contained the personal identifying information of U.S. veterans. Streater then sold the stolen documents to individuals engaged in filing fraudulent tax returns in order to steal tax refunds from the U.S. Treasury.
“Today’s arrest was the result of a three-year multiagency investigation involving local, state, and federal offices,” said Special Agent in Charge Monty Stokes, U.S. Department of Veterans Affairs Office of Inspector General – Southeast Field Office. “It is representative of the cooperative efforts of law enforcement to protect veterans’ personally identifiable information and hold those accountable who engage in fraud against veterans.”
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Department of Veterans Affairs, Office of Inspector General, the Internal Revenue Service Criminal Investigation, and the Tampa Police Department. It will be prosecuted by Assistant United States Attorney Sara C. Sweeney.
Former San Antonio Business Comptroller Sentenced to Federal PrisonRead the Press Release
In San Antonio today, former Watermark Group comptroller Monica R. Richardson, age 39, was sentenced to 37 months in federal prison followed by three years of supervised release in connection with an embezzlement scheme underlying her failure to remit company withholding taxes announced United States Attorney Robert Pitman and Internal Revenue Service--Criminal Investigation Special Agent in Charge Steven McCollough.
In addition to the prison term, United States District Judge Orlando Garcia ordered that Richardson pay $65,551.34 restitution to the Internal Revenue Service—the amount of personal tax due based on her embezzled income. Judge Garcia also ordered Richardson to report to federal authorities on or before October 15, 2014, to begin serving her prison term.
In July 2013, Richardson pleaded guilty to one count of failure to account for and pay payroll taxes. By pleading guilty, Richardson admitted that she stole over $287,000 from Watermark and caused Watermark to fail to account for and pay the Internal Revenue Service payroll taxes due.
This case was investigated by the Internal Revenue Service-Criminal Investigation and prosecuted by Assistant United States Attorney William R. Harris.
Former Montana Federal Prosecutor Receives Atf AwardRead the Press Release
HELENA - The United States Bureau of Alcohol, Tobacco and Firearms (ATF) has awarded a former Montana federal prosecutor the ATF Honor Award for her work on a multi-defendant operation that convicted 22 defendants in federal court in 2012 and 2013. Marcia Hurd, a former United States Assistant Attorney in Billings, Montana, prosecuted a series of cases as part of "Operation Billings Area Criminals (BAC)," a one-year, multi-agency covert investigation focusing on identifying and investigating the criminal activity of violent offenders in the Billings area. BAC was a collaborative effort between the ATF, Drug Enforcement Administration, United States Marshal's Service, Montana Division of Criminal Investigation, Billings Department and Yellowstone County Attorney's Office.
Following several 2009 and 2010 shootings in the Billings area associated with illegal narcotic and firearm activity, the ATF launched operation BAC. ATF personnel planned and executed a long-term undercover operation at a business in Billings. During the operation, undercover personnel infiltrated criminal organizations in the Billings community, stopped planned criminal activity from being commenced, stopped the distribution of methamphetamine, cocaine, marijuana, ecstasy and prescription pills, and took 52 unlawfully-possessed guns off the streets.
In addition to the federal prosecutions, the work of the undercover personnel involved in BAC resulted in the capture of Cleveland Boyer, a suspect in the murder of Danny Valenzuela. Valenzuela was shot outside a downtown Billings convenient store in 2010. Within 24 hours of the homicide, ATF personnel were able to put a plan in place, execute the plan, and take Boyer into custody in Bozeman, Montana. Boyer was charged with the murder of Danny Valenzuela in Yellowstone County District Court. ATF agents assisted in the trial by providing testimony. Boyer was ultimately convicted of the murder and sentenced to life imprisonment.
Operation BAC is a testament to the profound power of agency collaboration," said Michael Cotter, U.S. Attorney in the District of Montana. "Law enforcement identified a dangerous and escalating situation in our community and battled it head on. This award is a distinct honor for Ms. Hurd and the U.S. Attorney's Office for the District of Montana."
She worked tirelessly prosecuting and managing the legal aspects of this long-term and complex investigation," said Ken Bray, Resident Agent in Charge of ATF in Montana. "Ms. Hurd's substantial efforts have made the Billings area a safer place to live. We are proud to present her with this award."
Hurd is currently working in D.C. serving as Counsel to the Director in the Office of Tribal Justice at the U.S. Department of Justice. She received the award during the 18th Annual ATF Awards Ceremony on Thursday, August 21, 2014 at ATF National Headquarters in Washington, DC.
Former Belgrade Resident Convicted of Preparing False Tax ReturnsRead the Press Release
BUTTE - A former Belgrade woman was convicted on August 20, 2014 of five counts of aiding or advising a false tax return. Francis Bercaw faces 3 years in prison, $250,000 in fines, and 1 year supervised release for each count. Bercaw has been released pending sentencing on December 4, 2014, in Missoula.
During a three-day trial at the U.S. District Court in Butte, the government presented evidence that Frances Bercaw prepared false tax returns in order to boost clientele for her tax preparation business, Fran's Tax Service. Clients would patronize her business, and Bercaw would fabricate numbers on the clients' tax returns in order to maximize their refunds. Five former clients testified that Bercaw created false business expenses on their tax returns. Bercaw's scheme was revealed when the clients were audited by the IRS and the Montana Department of Revenue.
Bercaw started Fran's Tax Service in Virginia in 1974 before moving it to Montana in the early 2000s. In 2007, Bercaw's daughter-in-law Michelle Caudle joined her in Bozeman. Bercaw and Caudle consistently prepared false returns in order to increase their clients' refunds. Bercaw would create a Schedule C (Profit or Loss from a Sole Proprietorship) for her clients even though they did not own a business. Bercaw did not review the returns with the taxpayers prior to filing. They eventually discovered the false Schedules C after being audited.
Agents testified they interviewed Bercaw on April 14, 2010. When asked about the returns she prepared, Bercaw stated that all the mileage from the taxpayer's home to his or her work was treated a commuting, and she did not intentionally include commuting mileage as a business expense. According to Bercaw, if a person was trying to make a profit, it would be considered a Schedule C business. It would not be a business if someone was just engaged in a hobby. Bercaw also stated she tried to review all tax returns with her clients upon completion. She also stated that a taxpayer had to provide a receipt to get an expense. In fact, Bercaw previously told Caudle that driving back and forth to work is considered a deductible expense. Bercaw also told Caudle to create a Schedule C if someone hunts or fishes. Bercaw also stated it was okay to create a Schedule C for a hobby.
Caudle previously pleaded guilty to aiding or advising a false tax return and is scheduled to be sentenced on December 4, 2014 in Missoula.
The case was investigated by the Internal Revenue Service, Criminal Investigations Division. Assistant U.S. Attorney Chad Spraker prosecuted the case for the government.
Foreign National Indicted for Growing 3,724 Marijuana Plants in the Plumas National ForestRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Mexican national Alejandro Soto-Silva, 21, charging him with conspiracy to cultivate marijuana, cultivation of marijuana, and depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, on July 30, 2014, United States Forest Service agents and Plumas County Sheriff’s deputies entered a large marijuana cultivation site on the Plumas National Forest near the Soda Creek drainage. Officers located more than 3,700 marijuana plants at the site. Soto-Silva was arrested after attempting to flee from approaching law enforcement. He is in custody. The marijuana cultivation caused significant damage to the land and natural resources of the Plumas National Forest. Law enforcement observed irrigation piping running from a water source to man-made reservoirs used to water the thousands of marijuana plants under cultivation. The cultivation site sits within an area that provides habitat for several threatened or endangered animals, including Delta smelt, Chinook salmon, and the California red-legged frog.
This case is the product of an investigation by the United States Forest Service and the Plumas County Sheriff’s Office. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.
If convicted, Soto-Silva faces a maximum statutory penalty of 20 years in prison and a $1 million fine for the marijuana cultivation charges and 10 years in prison and a $250,000 fine for the depredation of public lands and resources charge. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Five Charged with Fraud in Wilkes-Barre City Employees Federal Credit Union InvestigationRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced that a Grand Jury in Scranton returned indictments Tuesday charging five members of the Wilkes-Barre City Employees Federal Credit Union with conspiracy and bank fraud. The indictments were sealed pending the arrests and/or voluntary surrender of the defendants today.
According to United States Attorney Peter Smith, Tino Ninotti, age 35, Jason Anthony, age 34, Leo Glodzik, age 43, Amanda Magda, age 30, and Jeffrey Serafin, age 35, were charged in three separate indictments related to activities of the credit union. Glodzik is also charged with tampering with a witness. Magda was the assistant manager at the Credit Union; Jason Anthony is a Wilkes-Barre City Police Officer; Ninotti is a former Wilkes-Barre City Police officer; Glodzik is a contractor whose company had a towing contract with the City of Wilkes-Barre.
Four of the defendants appeared today before Magistrate Judge Karoline Mehalchick in federal court in Wilkes-Barre. Ninotti, Anthony and Glodzik were released from custody and ordered to report to pretrial services. Glodzik was ordered to surrender his passport. Serafin was released on his own recognizance. The hearing for Magda is expected to take place later today.
The indictments, unsealed today, allege that the defendants, during 2014, individually or by aiding and abetting one another, secured loans from the Credit Union by means of false and fraudulent pretenses, including the use of false collateral, the stolen identities of others who were not aware of loans in their names, and forgery. Magda and Anthony are charged in one indictment; Ninotti, Glodzik and Magda in a second indictment; and Serafin alone in the third indictment.
If convicted, the defendants face up to 30 years in prison and fines in the amount of $1,000,000.
According to the U.S. Attorney the charges are a significant step in an ongoing corruption investigation by the FBI. The case represents the pursuit of allegations against individuals; the FBI and the U.S. Attorney’s Office value the close working relationships they have with local police departments, including Wilkes-Barre’s, and with honest police officers. These relationships will continue.
The prosecution is the result of a joint investigation by the Federal Bureau of Investigation (FBI), and the Pennsylvania State Police (PSP) which plays an integral role in investigations of fraud and public corruption. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
Luzerne County citizens, as well as employees and officials of local government are urged to come forward and provide relevant information about this case and others involving corruption in local government by contacting the Scranton FBI Office at 570-344-2404.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Federal Jury Finds San Felipe Pueblo Man Guilty on Sexual Abuse ChargesRead the Press Release
ALBUQUERQUE – A federal jury sitting in Albuquerque, N.M., returned a guilty verdict today against Daniel Phillip Tenorio on sexual abuse charges after a four-day trial, announced U.S. Attorney Damon P. Martinez and DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of BIA’s Office of Justice Services.
Tenorio, 55, a member and resident of San Felipe Pueblo in Sandoval County, N.M., was indicted in Sept. 2013, and charged with two counts of abusive sexual contact. According to the indictment, Tenorio had unlawful sexual contact with the victim between Jan. 2011 and Dec. 2011, in locations with San Felipe Pueblo in Sandoval County, N.M.
Trial of the case commenced on Aug. 18, 2014 and concluded this afternoon when the jury returned a verdict of guilty on both counts of the indictment.
The evidence at trial established that on Jan. 24, 2012, the BIA initiated an investigation into Tenorio after receiving a referral from a school counselor reporting that a 16-year-old San Felipe Pueblo girl had disclosed possible sexual abuse. According to the referral, the victim reported that Tenorio had sexually abused her by touching her in inappropriate ways and directing sexual comments at her. The victim testified about Tenorio’s practice of grabbing and fondling her breasts and bottom and making sexually explicit comments about what he wanted to do to her. Witnesses testified that they observed Tenorio grab and fondle the victim and direct sexually explicit remarks to her.
The evidence before the jury included two audio-taped interviews of Tenorio. During the first interview, Tenorio initially denied the victim’s allegations, but later admitted touching the victim in inappropriate ways and discussing sex in front of her. During the second interview, Tenorio admitted grabbing and fondling the victim’s chest and bottom and saying that he wanted to engage in sexual acts with her. He also admitted lying to the law enforcement officers when he initially denied the victim’s allegations. The evidence also included a handwritten statement by Tenorio in which he admitted having lied to the BIA and FBI when he denied the victim’s allegations, apologized for the way he treated the victim, and expressed remorse for his improper conduct.
Tenorio testified in his own defense and claimed that he was coerced into admitting that he had improper sexual contact with the victim.
Tenorio was remanded into federal custody after the jury returned its verdict and will remain detained pending his sentencing hearing, which has yet to be scheduled. Tenorio faces a statutory maximum of ten years in prison. He will be required to register as a sex offender after completing his prison sentence.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services with assistance from the Albuquerque office of the FBI, and is being prosecuted by Assistant U.S. Attorneys Kyle T. Nayback and Novaline D. Wilson.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Federal Court Sentences Muscatine Man on Illegal Re-entry ChargeRead the Press Release
DAVENPORT, IA - On August 20, 2014, Jose Rodriguez Paz, age 31, a citizen of Mexico, was sentenced by United States District Court Chief Judge James E. Gritzner to 27 months imprisonment, after pleading guilty to illegal re-entry into the United States, announced United States Attorney Nicholas A. Klinefeldt. Rodriguez Paz was also ordered to serve one year of supervised release following imprisonment, and to pay $100 towards the Crime Victims Fund. After serving his sentence, Rodriguez Paz will be turned over to Immigration authorities for removal proceedings.
Rodriguez Paz was given an enhanced sentence based on a 2011 Iowa aggravated felony conviction for possession with intent to deliver cocaine, and after this State drug conviction was deported. Rodriguez Paz was most recently found in the United States on February 24, 2014, when he was turned over to federal authorities after a Muscatine arrest.
This case was investigated by the United States Department of Homeland Security Investigations, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Federal Court Bars Missouri Man from Preparing Federal Tax ReturnsRead the Press Release
A federal court has permanently barred William Naes of St. Charles, Missouri, from preparing federal tax returns for others, the Justice Department announced today. The permanent injunction order, to which Naes consented, was entered by U.S. District Judge E. Richard Webber of the U.S. District Court for the Eastern District of Missouri.
The government alleged that Naes prepared returns that fraudulently claimed tax deductions for his customers, including bogus deductions for charitable contributions and unreimbursed employee business expenses. According to the complaint, Naes also fabricated business expenses on Schedules C-Profit or Loss From Business, concocted a fake business for at least one customer and failed to properly identify himself as the paid preparer on many of the returns he prepared. As a result of his conduct, many of Naes’ customers paid less in taxes than they owed or improperly received tax refunds.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the department’s Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers. Information about these cases is available on the department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. William Naes
Stipulated Order for Permanent Injunction Against William NaesEufaula Man Sentenced to 46 Months for ConspiracyRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that JON PAUL SHROPSHIRE, age 54, of Eufaula, Oklahoma, was sentenced to 46 months imprisonment, followed by 3 years of supervised release for Conspiracy, in Violation of Title 18, United States Code, Section 371.
The charge is a result of an investigation by the Oklahoma Bureau of Narcotics. The defendant was indicted in April, 2013 and pled guilty in May, 2014.
The Information alleged that from in or about September, 2011, until on or about September 26, 2012, within the Eastern District of Oklahoma and elsewhere, the defendant, did knowingly and intentionally conspire, confederate and agree with others both known and unknown to commit offenses against the United States.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal facility at which he will serve his nonparolable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Dias Kadyrbayev Pleads Guilty to Impeding Boston Marathon Bombing InvestigationRead the Press Release
BOSTON – Dias Kadyrbayev, 20, a close friend of alleged Boston Marathon bomber, Dzhokhar Tsarnaev, pleaded guilty today in federal court in Boston, to impeding the bombing investigation. Kadyrbayev pleaded guilty to conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation.
The terms of the plea agreement provide that the U.S. Attorney will recommend a sentence of seven years in prison. Kadyrbayev has agreed to be deported from the United States after serving his sentence. U.S. District Judge Douglas P. Woodlock scheduled sentencing for Nov. 18, 2014.
In August 2013, Kadyrbayev was indicted with Azamat Tazhayakov for obstructing the investigation of the Marathon bombings. Kadyrbayev and Tazhayakov are both nationals of Kazakhstan who were temporarily living in the United States on student visas while attending the University of Massachusetts Dartmouth (UMass). However, at the time of their arrests on May 1, 2013, their visas had been revoked.
At today’s hearing, Kadyrbayev admitted that on the evening of April 18, 2013, after he viewed images of the suspected Boston Marathon bombers released by the FBI, he exchanged text messages with Dzhokhar Tsarnaev. He then went with Azamat Tazhayakov to the University of Massachusetts at Dartmouth campus. At approximately 10:00 pm, Kadrybayev, Tazhaykaov and a third individual entered Dzhokhar Tsarnaev’s dormitory room at UMass.
While inside Tsarnaev’s dormitory room, Kadyrbayev searched it and found a backpack containing fireworks and a jar of Vaseline. The fireworks appeared to have been opened, manipulated, and some of the explosive powder appeared to have been removed. After finding this backpack and the fireworks, Kadyrbayev showed them to Tazhayakov and they both agreed to remove the backpack from Tsarnaev’s dormitory room. Kadyrbayev also found Tsarnaev’s laptop computer. At approximately 10:30 p.m., Kadrybayev, Tazhayakov and a third individual left Tsarnaev’s dormitory room. When they left, Kadyrbayev removed several items from Tsarnaev’s room, including Tsarnaev’s laptop computer and his backpack and its contents. Kadyrbayev, accompanied by Tazhayakov and the third individual, then brought the items back to the apartment he shared with Tazhayakov in New Bedford.
Kadyrbayev also admitted that, after returning to their apartment, on the evening of April 18, 2013 and the morning of April 19, 2013, he and Tazhayakov watched television news reports and read Internet news articles about the bombing investigation and the manhunt for the two suspected Boston Marathon bombers whom they believed were Dzhokhar and Tamerlan Tsarnaev. During the early morning hours of April 19, 2013, Kadrybayev and Tazhayakov discussed getting rid of Tsarnaev’s backpack and the fireworks. They both agreed that they should get rid of Tsarnaev’s backpack and as a result of their agreement, Kadyrbayev placed the backpack and its contents, including the fireworks, into a large black trash bag and threw the entire bag into the garbage dumpster in his apartment complex. After discarding the backpack in the garbage, Kadyrbayev decided to keep Tsarnaev’s laptop computer and continue to conceal it. He did not attempt to return it to Tsarnaev’s dormitory room, nor did he notify law enforcement that he had Tsarnaev’s computer.
On April 26, 2013, after 25 federal agents searched a landfill in New Bedford for two days, Tsarnaev’s backpack, containing fireworks, a jar of Vaseline, and a thumb drive, was found. Although these items were found, the condition of the backpack and its contents had been altered by the actions of Kadyrbayev and Tazhayakov.If the plea agreement is accepted by the Court, Kadyrbayev will be sentenced to no more than seven years in jail and three years of supervised release. Kadrybayev will also be deported after serving any sentence that the Court imposes.
In July 2014, Azamat Tazhayakov was found guilty by a federal jury in Boston of conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation. Sentencing is set for sentencing for Oct. 16, 2014.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division, made the announcement today. This investigation was conducted by the FBI’s Boston Division and member agencies of the Boston Joint Terrorism Task Force (JTTF) which is comprised of more than 30 federal, state and local enforcement agencies. Homeland Security Investigations in Boston, Massachusetts State Police, University of Massachusetts Dartmouth Department of Public Safety, New Bedford Police Department, Dartmouth Police Department, U.S. Department of Transportation – Office of Inspector General, U.S. Treasury Inspector General for Tax Administration (TIGTA), Essex County Sheriff’s Office, and Internal Revenue Service’s Criminal Investigations in Boston, provided assistance to this investigation.
The case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit.D.C. Heroin Dealer Convicted at TrialRead the Press Release
ALEXANDRIA, Va. – Antowan Thorne, also known as “Smooth,” 37, of Washington, D.C., was convicted yesterday of conspiracy to distribute 100 grams or more of heroin following a bench trial before U.S. District Judge Leonie M. Brinkema. At least one individual died in Fairfax County, Virginia after using heroin provided by Thorne.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement.
According to the evidence presented at trial, during 2012 and 2013, Thorne conspired with others to distribute extremely potent heroin, largely to customers from northern Virginia. On Aug. 21, 2013, four individuals from northern Virginia, including 16-year-old Emily Lonczak and Kyle Alifom, traveled to Washington, D.C. to purchase heroin from Thorne. After using the heroin, Lonczak became unconscious and later died of a heroin overdose.
Alifom previously pleaded guilty to tampering with evidence for hiding Lonczak’s body after her overdose death. Alifom was sentenced to 80 months in prison. Thorne will be sentenced on Nov. 14, 2014.
This case was investigated by the DEA’s Washington Field Division and the Fairfax County Police Department. Assistant U.S. Attorney Michael P. Ben’Ary and Virginia Assistant Attorney General and Special Assistant U.S. Attorney Marc J. Birnbaum are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-165.
Cypress Man Convicted of Distributing Child PornographyRead the Press Release
HOUSTON - Jimmy Ortiz, 33, of Cypress, has entered a guilty plea to one count of distribution of child pornography, announced United States Attorney Kenneth Magidson.
Indicted Jan. 30, 2014, Ortiz later appeared for a detention hearing before U.S. Magistrate Judge George C. Hanks Jr. who found Ortiz to be a danger to the community and ordered he be detained.
The investigation revealed Ortiz was making child pornography available to others through the use of peer-to-peer software over the Internet. An FBI agent downloaded a video of child pornography from the files Ortiz was making available online. The video included two minor female children under the age of 12 performing oral sex on each other. Additionally, a FBI agent in Oklahoma also downloaded videos that contained child pornography from Ortiz.
A search warrant was executed Sept. 27, 2013. At that time, agents seized computer media including external hard drives which led to the discovery of more than 1500 digital images and approximately 49 videos containing child pornography.
U.S. District Judge Keith P. Ellison, who accepted the plea today, has set sentencing for Nov. 12, 2014. At that time, Ortiz faces a minimum of five and up to 20 years imprisonment as well as a possible $250,000 fine. He will also face a maximum of life on supervised release during which the court can impose a number of special conditions designed to protect children. He will also have to register as a sex offender.
These charges were the result of an investigation conducted by the FBI Innocent Images Task Force.
This case, prosecuted by Assistant United States Attorney Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."