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21 August 2014
Crack Cocaine Dealer Sentenced in Federal CourtRead the Press Release
Abraham Alfonia Malone, 58, of Mobile, was sentenced in federal court this morning on three counts of possession with intent to distribute crack cocaine. Malone had been convicted in 2003 for conspiracy to possess with intent to distribute crack cocaine and sentenced to 120 months custody. He was released in 2011 to an eight-year term of supervised released, and was arrested in February of 2014 on the new charges. Malone pled guilty to the three new counts in May of 2014.
United States District Court Judge William H. Steele conducted a hearing on the petition to revoke Malone’s supervised release term in connection with the sentencing hearing on the new charges. Judge Steele ordered Malone’s supervised release term revoked, and imposed a sentence of 51 months imprisonment. He also imposed a 24-month term of imprisonment on the new charges, but ordered that the sentences on the new charges would run consecutively to the sentence for the supervised release violation. Accordingly, Malone will serve a total of 75 months in custody. Judge Steele ordered that Malone serve another term of supervised release at the conclusion of his custody sentence, this time for six years. No fine was imposed, but the judge ordered that Malone would pay $300 in special mandatory assessments.
The case was investigated by the Mobile County Sheriff’s Office. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
Crab Orchard Man Sentenced for Distributing OxycodoneRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that a Crab Orchard man was sentenced in federal court in Beckley for distributing oxycodone. Gene James, also known as “Butch,” 44, was sentenced to six months’ imprisonment. James previously pled guilty in May of 2014, to distributing oxycodone to a person cooperating with law enforcement authorities. The drug deal took place on Hot Coal Road in Sophia, West Virginia.
This case was investigated by the Beckley Raleigh County Drug and Violent Crime Task Force and was prosecuted under the Beckley Pill Initiative directed by the United States Attorney’s Office.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
Correctional Officer, Michigan Women Charged with Conspiring to Smuggle Phone into Federal PrisonRead the Press Release
ALEXANDRIA, La. –A correctional officer at the U.S. Penitentiary in Pollock, La., along with a relative of an inmate, were charged with conspiring to introduce a cell phone into the prison, U.S. Attorney Stephanie A. Finley announced.
Maggie Kay Comeaux, 28, of Ball, La., and Paris Smith, 21, of Detroit, Mich., were indicted for the conspiracy by a federal grand jury and arraigned Wednesday, August 20, 2014, in federal court for one count of conspiracy, one count of bribing a public official, one count of receiving a bribe by a public official, and one count of providing contraband to a prisoner. According to the indictment, from January 2013 to April 2013, Comeaux accepted a $400 bribe from Smith and two other unnamed conspirators to smuggle a cell phone into the prison.
If convicted, they face a maximum of five years in prison and three years of supervised release for conspiracy; 15 years in prison and five years of supervised release for bribing a public official; 15 years in prison and five years of supervised release for receiving a bribe by a public official; and one year in prison and one year of supervised release for providing contraband to a prisoner. They also face up to a $250,000 fine.
The U.S. Department of Justice, Office of the Inspector General, investigated the case. Assistant U.S. Attorney Allison D. Bushnell is prosecuting the case.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
College Park Tax Preparer Pleads Guilty to Preparing and Filing False Tax ReturnsRead the Press Release
Also Used the Personal Information of Former Clients to Falsely Claim Them as Dependents on Current Clients’ Returns
Greenbelt, Maryland – Julius Valentine Williams, age 61, of College Park, Maryland pleaded guilty today to aiding and assisting in filing false tax returns, filing false tax returns, wire fraud and aggravated identity theft. Williams’ conduct resulted in a tax loss to the government of at least $1 million.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.“While most tax return preparers provide excellent service to their clients, a few dishonest return preparers give the industry a black eye. IRS-CI works year round to investigate dishonest return preparers and protect the American taxpayer’s money,” said Thomas J Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Return preparers must comply with the same tax obligations as the clients that they serve. No one is above the law.”
According to his plea agreement, Williams was a tax return preparer who owned and operated Julius Williams Tax Service out of his home in College Park. During tax years 2007 through 2010, William prepared and submitted to the IRS more than 5,000 client individual tax returns. Many of Williams’ clients were from Jamaica and resided in the United States under a temporary worker program. At the end of their employment, they were required to return to their home countries. Williams admitted that when preparing tax returns for these clients, he added false items, such as false Schedule C businesses, false deductions, false Earned Income tax credits, and false education credits, in order to fraudulently increase the size of the refund to the client.
In addition, Williams kept detailed lists of identification information of former clients who had returned to their home countries, including names, social security numbers and dates of birth. Williams then used that identification information, without the former clients’ knowledge or permission, to claim them as dependents on the income tax returns of current clients, in order to fraudulently increase the refunds on those returns.
Williams also filed false personal tax returns for tax years 2007 through 2010, in which Williams underreported his income from his tax business by a total of more than $1 million. As a result, the tax loss to the government was approximately $411,056, for those years. Williams also used the personal identification information of his former clients to fraudulently claim them as dependents on his personal income tax returns, which increased his refund and resulted in additional the taxes owed to the government.
As a result of the fraudulent tax returns prepared by Williams for his clients, and his own fraudulent returns, the total tax loss to the government is at least $1 million. As part of his plea agreement, Williams and the government have agreed to recommend that the Court order restitution in the amount of $1 million.
Williams faces a maximum sentence of three years in prison for aiding and assisting in filing false tax returns, and for filing false tax returns; a maximum of 20 years in prison for wire fraud; and two years in prison, consecutive to any other sentence, for aggravated identity theft. U.S. District Judge Paul W. Grimm scheduled sentencing for November 25, 2014 at 1:00 p.m.
United States Attorney Rod J. Rosenstein praised the IRS-CI for its work in the investigation and thanked Assistant U.S. Attorneys Kelly O. Hayes and Sean Delaney, who are prosecuting the case.Chicago Defense Attorney Indicted for Perjury and Conspiracy to Obstruct JusticeRead the Press Release
James L. Santelle the United States Attorney for the Eastern District of Wisconsin announced today the indictment in the Northern District of Illinois of Attorney Beau B. Brindley (age: 36) and Marina Collazo (age: 30) of Chicago in connection with a scheme to present perjured testimony in the 2009 trial of United States v. Alexander Vasquez, in federal district court in Chicago.
Although the crime is alleged to have occurred in Chicago, the United States Attorney’s Office there has recused itself in the matter and it has been transferred to the United States Attorney’s Office for the Eastern District of Wisconsin, in Milwaukee. However, all legal proceedings in this case will take place in Chicago.
The indictment is based upon allegations that Mr. Brindley, a Chicago criminal defense attorney, caused Ms. Collazo to commit perjury in the trial of Mr. Vasquez, a Brindley client. The indictment contains five counts:
- Count One charges both defendants with a conspiracy to obstruct justice through the presentation of false testimony, in violation of 18 U.S.C. § 371. The maximum possible penalty for this offense is a fine of not more than $250,000, imprisonment for not more than five years, or both, plus a mandatory $100 special assessment and up to three years of supervised release to follow any term of incarceration.
- Counts Two through Four charge both defendants with perjury, in violation of 18 U.S.C. § 1623(a). The maximum possible penalty for each of those counts is a fine of not more than $250,000, imprisonment for not more than five years, or both, plus a mandatory $100 special assessment and up to three years of supervised release to follow any term of incarceration.
- Count Five charges Mr. Brindley with obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2). The maximum possible penalty for this offense is a fine of not more than $250,000, imprisonment for not more than 20 years, or both, plus a mandatory $100 special assessment and up to three years of supervised release to follow any term of incarceration.
This case is being investigated by the Federal Bureau of Investigation. The case will be prosecuted by Assistant United States Attorneys Michael J. Chmelar and Mel S. Johnson.
The public is cautioned that an indictment is merely an accusation and the defendants are presumed innocent unless and until proven guilty.
# # # # #Cedar Rapids Fragrance Hut Owner Charged with Maintaining A Premises for Distributing Synthetic DrugsRead the Press Release
Matthew McCauley, age 39, from Cedar Rapids, Iowa, has been charged with one count of maintaining a drug-involved premises. The charges are contained in an Indictment filed on August 20, 2014, in United States District Court in Cedar Rapids.
The Indictment alleges that, between about February and August 2014, McCauley knowingly and intentionally used and maintained the Fragrance Hut located at 2902 First Avenue NE, Cedar Rapids, Iowa, for the purpose of distributing Schedule I controlled substances. An earlier Complaint filed on August 8, 2014, alleged McCauley told police in March 2014 that he opened the Fragrance Hut to sell “herbal incense.” According to the Complaint, the purported “incense” actually contained several synthetic cannabinoids, including Schedule I controlled substances UR-144, XLR-11, AM-2201, and AB-FUBINACA. The Complaint describes synthetic cannabinoid products as a mixture of an organic “carrier” medium, such as the herb-like substance Damiana, which is then typically sprayed or mixed with a synthetic compound chemically similar to THC (tetrahydrocannabinol), the psychoactive ingredient in marijuana.If convicted, McCauley faces a possible maximum sentence of 20 years’ imprisonment, a $1,000,000 fine, $100 in special assessments, and a lifetime of supervised release following any imprisonment.
McCauley first appeared on August 8, 2014, in federal court in Cedar Rapids. On August 20, 2014, he was ordered detained without bond. McCauley’s next appearance for an arraignment is set for August 22, 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 Dan Chatham and was investigated by as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Linn County Sheriff's Office; the Cedar Rapids Police Department; the Marion Police Department; the Iowa Division of Narcotics Enforcement; and the Sixth Judicial District Department of Correctional Services.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file numbers are CR14-94-LRR and 14-MJ-186.
Captured Fugitive Is Sentenced to 10 Years in Federal Prison for Role in Scheme to Launder Mortgage Fraud ProceedsRead the Press Release
DALLAS — Hong Jae Kim, aka “Randy Kim,” 45, was sentenced today by U.S. District Judge Jane J. Boyle to 10 years in federal prison and ordered to pay $1,795,125 in restitution for his nearly two-year role in a scheme to launder mortgage fraud proceeds, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
A felony information was filed in February 2013 charging Kim with one count of conspiracy to engage in monetary transactions in property derived from specified unlawful activity. He agreed to plead guilty to the offense, but failed to appear at an arraignment set for the following month. The Court issued a bench warrant, and special agents with IRS Criminal Investigation arrested Kim a few months later in California. He returned to the Northern District of Texas, where he entered his guilty plea in July 2013.
According to documents filed in the case, Kim, along with others, including Arlington, Texas, resident, David Joe Cano, a mortgage loan officer, conspired to engage in monetary transactions in property derived from specified unlawful activity. Cano was a mortgage loan officer at 1st Capital Investment located in Richardson, Texas. He pleaded guilty to the same offense and was sentenced in November 2013 to 87 months in federal prison and ordered to pay nearly $1.8 million in restitution.
From January 2006 to November 2007, Kim, Cano, along with other coconspirators, operated a scheme to obtain fraudulent loans from Bank of America and IndyMac Bank, as well as GreenPoint Mortgage Funding, Inc. and WMC Mortgage Corporation, both located in California, and Everett Financial Inc. dba Supreme Lending and America Homekey, Inc., both in Dallas. Kim, Cano and their co-conspirators then laundered the money from those loans back to themselves using shell corporations such as Comex International Korea Corporation, Eagle’s Marc Enterprises, Inc. and Sunko Construction.
To defraud the banks and mortgage lenders, Kim, Cano and their co-conspirators selected newly constructed or distressed properties whose value could be inflated without raising lenders’ suspicions. Kim, Cano and others then recruited individuals with good credit scores to act as loan applicants for the purchase of the properties and paid them to apply for loans using applications that falsely inflated the applicant’s income and assets. The applicants were deceitfully promised that the properties would be leased until they were sold at a profit and that the applicants would receive regular payments from the rental income that would be sufficient to repay their loans until the properties sold. In reality, the applicants were left with unpaid loans that ruined their credit scores.
As charged in the Information, the scheme focused on seven properties located at: St. George Place in DeSoto, Texas; Golden Pond Drive in Cedar Hill, Texas; Summerfield Court in Fairview, Texas; Tangleglen Drive in Dallas; Roma Court in Allen, Texas; Avondale Drive in Murphy, Texas; and Stephenville Drive in Frisco, Texas.
This law enforcement action is part of 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.
IRS Criminal Investigation investigated the case, with assistance from the U.S. Postal Inspection Service and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant U.S. Attorney Walt M. Junker prosecuted.
California Woman Sentenced to 5 Years in Prison for Distributing MethRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that KRISTEN LASCHOBER, 49, formerly of Laguna Niguel, Calif., was sentenced yesterday by Senior U.S. District Judge Alfred V. Covello in Hartford to 60 months of imprisonment, followed by five years of supervised release, for her role in a methamphetamine distribution ring.
According to court documents and statements made in court, this matter stems from a joint investigation by the Drug Enforcement Administration and the Connecticut State Police’s Statewide Narcotics Task Force. The investigation, which included the use of court-authorized wiretaps, controlled purchases of methamphetamine, physical surveillance an undercover officer, revealed that LASCHOBER and her boyfriend, Chad McCluskey, sent shipments of methamphetamine to Kevin Wallin of Waterbury for four years. After receiving the shipments, Wallin distributed the methamphetamine to other dealers as well as to his own customers. Some of the shipments were sent on consignment with the understanding that Wallin would pay LASCHOBER and McCluskey with proceeds generated from his distribution of the drug.
McCLUSKEY and Laschober were arrested in Las Vegas, Nev., on January 10, 2013. On April 23, 2013, LASCHOBER pleaded guilty to one count of conspiracy to distribute 500 grams or more of a mixture and substance containing methamphetamine.
Wallin was arrested on January 3, 2013. On April 2, 2013, he pleaded guilty to the same charge.
In June of this year, McCluskey was sentenced to 65 months of imprisonment. Wallin awaits sentencing.
This matter is being prosecuted by Assistant U.S. Attorneys Patrick Caruso and H. Gordon Hall.PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]California Man, Theodore Platanitis, Pleads Guilty to Bank Fraud, Conspiracy to Commit Bank Fraud, and Health Care FraudRead the Press Release
U.S. Attorney Kenneth Allen Polite, Jr. announced that THEODORE PLATANITIS, age 44, of Rancho Cordova, California, pleaded guilty as charged yesterday before U. S. District Judge Kurt D. Engelhardt, to Conspiracy to Commit Health Care Fraud and Bank Fraud.
According to court documents, PLATANITIS worked as a money mule in an organization that hacked into the e-mail accounts of victims and then used that access to cause sums of money to be wired out of the victim’s bank accounts. PLATANITIS was recruited by unknown individuals to open bank account(s) in the United States to receive fraudulent wire transfers from the bank accounts of victims.
On August 24, 2011, the office manager for a New Orleans physician (“Doctor A”) received an e-mail from Doctor A’s America Online e-mail account, requesting that the office manager wire $32,300 from Doctor A’s bank account to PLATANITIS’S bank account. In fact, it was not Doctor A who sent the email, but rather another individual had taken control of Doctor A’s e-mail account, and, without Doctor A’s authorization, drafted and sent the e-mail to Doctor A’s office manager purporting to be Doctor A. Doctor A’s office manager complied with the e-mail and the money was wired to PLATANITIS’S account.
Once the deposit in the amount of approximately $32,000 had been fraudulently deposited into PLATANITIS’S account, PLATANITIS withdrew approximately $16,150 in cash and, acting upon instructions given to him, took the cash to stores with the capability of wiring money via Western Union located in Rancho Cordova, California, and wired different amounts to different locations in Malaysia in amounts not more than $5,000. Shortly thereafter, PLATANITIS returned to a bank branch and attempted to withdraw the remainder of the funds he had fraudulently obtained from Doctor A from his Bank of America business account.
PLATANITIS faces a maximum term of imprisonment of five years. Sentencing has been scheduled for December 10, 2014 at 9:00 a.m.
This case was investigated by the Federal Bureau of Investigation. The prosecution was handled by Assistant United States Attorney Jordan Ginsberg.
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Broken Arrow Man Sentenced to 36 Months Probation, $19,000 Restitution for Theft of Government FundsRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that BOBBY GENE SMITH, age 43, of Broken Arrow, Oklahoma, was sentenced to 3 years of probation for Theft Of Government Funds, in violation of Title 18, United States Code, Section 641. As a condition of probation, SMITH was ordered to pay $19,076.00 in restitution.
The charge arose from an investigation by the United States Department of Labor, Office of Inspector General. SMITH pled guilty in March 2014.
The Information alleged that from on or about May 8, 2010 to on or about May 7, 2011, in the Eastern District of Oklahoma, the Defendant, did willfully and knowingly embezzle, steal and convert to his own use, money and things of value from the Oklahoma Employment Security Commission, an agency receiving and administering funds on behalf of the United States, which had been paid to the defendant as unemployment insurance compensation benefits to which the defendant knew he was not entitled, and having a value in excess of $1,000.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing.
Assistant United States Attorney Chris Wilson represented the United States.
Bloods Gang Member Sentenced to 10 Years in Prison for Racketeering Conspiracy in TennesseeRead the Press Release
A Tennessee Bloods gang member was sentenced today to serve 10 years in prison, to be followed by three years of supervised release for his role in a violent racketeering conspiracy.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney David Rivera of the Middle District of Tennessee and Special Agent in Charge Glenn N. Anderson of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Nashville Field Division made the announcement. The sentence was imposed by U.S. District Judge Aleta Trauger of the Middle District of Tennessee.
Kenneth Gaddie, aka “K.G.,” 24, of Nashville, Tennessee, pleaded guilty on May 23, 2014, and was the last of 37 gang members to be convicted in the Middle District of Tennessee for involvement in the Bloods gang.
According to court documents, from 2006 through December 2011, Gaddie was a member of the Bloods gang. He and other Bloods gang members committed multiple acts of murder, robbery and narcotics trafficking on behalf of the gang.
Gaddie and other Bloods gang members met at various locations in the Nashville area, including Shelby Park, Cedar Hill Park and the Galaxy Star Drug Awareness and Gang Prevention Center, on a regular basis to report on gang-related business, collect dues, commit disciplinary actions against fellow gang members, discuss acts of violence against rival gang members and initiate or “jump in” new members by beating them.
Further, according to court documents, on June 25, 2008, Gaddie shot and wounded an individual on behalf of the gang. Less than one month after this incident, on July 17, 2008, Gaddie and others shot at another individual.
The investigation was conducted by the ATF; the Metropolitan Nashville Police Department; the U.S. Marshals Service; the La Vergne, Tennessee, Police Department; and the Davidson County, Tennessee, Sheriff’s Office. The case was prosecuted by Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Scarlett S. Nokes of the Middle District of Tennessee.Bloods Gang Member Sentenced to Ten Years in Prison for Role in Racketeering ConspiracyRead the Press Release
Final Defendant Sentenced in Racketeering Case
More Than 30 Defendants Collectively Sentenced to Approximately 400 Years in PrisonNASHVILLE, Tenn. – August 21, 2014 – Kenneth Gaddie, 24, a/k/a “K.G.,” of Nashville, Tennessee, has been sentenced to ten years in prison for conspiring to participate in racketeering activity related to his membership in the Bloods criminal enterprise by U.S. District Judge Aleta Trauger, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Gaddie is the final defendant to be sentenced in the case and pleaded guilty to the racketeering conspiracy on May 23, 2014.
According to court documents, from approximately 2006 until December 2011, Bloods gang members committed and conspired to commit acts of murder, attempted murder, robbery and drug trafficking. Evidence at the 2012 trial of co-defendants Keairus Wilson and Rondarius Williamson showed that the Bloods gang members met regularly to plan and agree upon the crimes to commit, including murder; maintained and circulated a collection of firearms for use in criminal activity by Bloods members; distributed cocaine, cocaine base, marijuana and hydromorphone; and used the proceeds of those drug transactions to help finance the gang’s illegal activities. Bloods gang members committed murder and other acts of violence against rival gang members and others during the course of the conspiracy.
More than 30 individuals have pleaded to, or have been found guilty in the Middle District of Tennessee of various crimes related to their involvement in the Bloods gang.
Lonnie Greenlee, 54, of Nashville, co-founder of the Galaxy Star Drug Awareness and Gang Prevention Center in Nashville and father of lead defendant Lonnie Newsome, allowed Bloods gang members to use the facility to conduct gang meetings. According to evidence presented at trial, Greenlee provided numerous Bloods gang members with fraudulent documentation of court-ordered community service hours in exchange for money. Greenlee pleaded guilty in May 2011 to one count of racketeering conspiracy and was sentenced to 24 months’ in prison on April 2, 2012.
The remaining defendants and prior sentences imposed include:Rondarius Williamson of Nashville Life +60 years in prison; Keairus Wilson a/k/a “Key Thang,” of Nashville Life +35 years in prison; Montez Hall a/k/a “Tez,” 22, of Nashville, 360 months in prison; Anthony Brooks a/k/a “A.B.,” 25, of Nashville, 300 months in prison; Lonnie Newsome a/k/a “Big Lonnie,” 26, of Nashville, 240 months in prison; Kerry Pettus a/k/a “Lil Kerry,” 24, of Nashville, 240 months in prison; Tim Allen a/k/a “Lil Tim,” 22, of Nashville, 216 months in prison; Cedric Woods a/k/a “Lil Ced,” 23, of Nashville, 210 months in prison; Jeffrey Albea a/k/a “Lil Jeff,” 20, of Nashville, 120 months in prison; Aaron Gooch a/k/a “A-Ron,” 23, of Nashville, 120 months in prison; Deshaune Jones a/k/a “Mexico,” 23, of Nashville, 120 months in prison; William Walden a/k/a “Wild Bill,” 23, of Nashville, 120 months in prison; Anthony Lampkins a/k/a “Doo Daddy,” 23, of Nashville, 96 months in prison; Antonio Washington a/k/a “T.O.,” 23, of Nashville, 96 months in prison; William Bartlett a/k/a “Face Mob,” 29 of Gallatin, Tenn., 88 months in prison; Ricky Williams a/k/a “Big Rick,” 26, of Nashville, 85 months in prison; Jermaine Tate a/k/a “Maine Maine,” 23, of Nashville, 85 months in prison; Alonzo McLaurine a/k/a “Zo,” 22, of Nashville, 84 months in prison; Shayne Gibson, 20, of Nashville, 84 months in prison; Karlos Taylor a/k/a “Los,” 22, of Nashville, 80 months in prison;
Alexander McDonald a/k/a “Dominique,” 22, of Nashville, 60 months in prison; Anthony Campbell a/k/a “Dante,” 22, of Nashville, 57 months in prison; Jermaine Coward a/k/a “Maine Maine,” 21, of Nashville, 52 months in prison; Joedon Bradley a/k/a “Jo Jo,” 24, of Nashville, 48 months in prison; Adrian Montgomery, 21, of Nashville, 48 months in prison; Donald Dowell a/k/a “D-Dow,” 26, of Nashville, 47 months in prison; Torey Cohen Boseman, 26, of Nashville, 36 months in prison; James House a/k/a “Bam,” 39, of Nashville, 30 months in prison; Shawn Howell, 25, of Nashville, 27 months in prison; Rodney Britton, 24, of Nashville, 24 months in prison; Kaylon Cunningham, 26, of Nashville, 60 months’ probation; Corneilus Primm, 27, of Nashville, 36 months’ probation; Brandon Prince, 24, of Nashville, 36 months’ probation.
The investigation was a joint operation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Metropolitan Nashville Police Department; the U.S. Marshals Service; the LaVergne, Tennessee Police Department; and the Davidson County, Tennessee Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Scarlett S. Nokes for the Middle District of Tennessee, Trial Attorney Kevin Rosenberg, of the Criminal Division?s Organized Crime and Gang Section and Cody L. Skipper, formerly a Trial Attorney assigned to the Organized Crime and Gang Section.
Bergen County, N.J., Man and Disbarred New York Attorney Indicted for Real Estate Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – Two men were indicted by a federal grand jury today for allegedly using a real estate investment scheme to defraud 15 victims of more than $3 million, U.S. Attorney Paul J. Fishman announced.
Paul Mancuso, 46, of Glen Rock, New Jersey, is charged by indictment with one count of conspiracy to commit wire fraud and five counts of wire fraud. Pasquale Stiso, 52, of West Harrison, New York, is charged by indictment with one count of conspiracy to commit wire fraud and one count of wire fraud.
According to documents filed in this case: Since 2009, Mancuso posed as a real estate investor, broker and developer, as well as a “hard money” lender for other investments. Stiso, a disbarred attorney, held himself out as an individual working with Mancuso on various investment projects.
Mancuso and Stiso fraudulently obtained financing for projects that did not exist or in which they had no actual involvement. Some of the purported projects touted by Mancuso, Stiso, and other conspirators included investments in a phony ticket scam, the development of a pizzeria at a resort in the Bahamas, the development of a casino in Atlantic City, the development of a commercial shopping center, and the “flipping” of a piece of real estate in Matawan.
Victims lost all of their investments or life savings in Mancuso’s schemes. Instead of funding the purported projects, Mancuso and Stiso used the money for personal expenses and financing their involvement in illegal gambling pursuits.
The charge of wire fraud conspiracy and each substantive count of wire fraud carry a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greater. The indictment also includes a notice of forfeiture of $3,425,750, representing the fraudulent payments Mancuso and Stiso received from the scheme.
U.S. Attorney Fishman credited criminal investigators of the U.S. Attorney’s Office; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorneys Lisa M. Colone and Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
14-296Defense counsel: Mancuso: Mary Frances Palisano Esq., Newark
Stiso: Henry E. Klingeman Esq., NewarkMancuso, Paul, and Stiso, Pasquale Indictment
Beckley Man Pleads Guilty to Obtaining Oxycodone by FraudRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that a Beckley man pled guilty in federal court to obtaining oxycodone by fraud. Daniel Michael Koehler, 30, admitted that he coaxed his girlfriend, a former pharmacy technician at ByPass Pharmacy in Beckley, to steal oxycodone for him. Koehler and his girlfriend avoided detection by stealing the drugs beyond the view of security cameras in the area in which the drugs were stored. Koehler admitted that he sold some of the oxycodone and used the rest. Koehler faces up to four years in prison, a $250,000 fine, and a term of supervised release when he is sentenced on December 4, 2014.
This case was investigated by the United States Drug Enforcement Administration.
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.
Beckley Man Pleads Guilty to Heroin DistributionRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Michael J. Dow, 44, of Beckley, West Virginia, pled guilty in federal court in Beckley to distribution of heroin. Dow admitted that on March 2, 2014, he sold heroin to a person who was cooperating with law enforcement authorities. The drug deal took place on F Street in Beckley, West Virginia.
Dow faces up to 20 years in prison and a $1,000,000 fine. United States District Judge Irene C. Berger scheduled the sentencing for December 4, 2014.
The Beckley/Raleigh County Drug and Violent Crime Unit conducted the investigation.
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.
Bank of America to Pay $16.65 Billion in Historic Justice Department Settlement for Financial Fraud Leading up to and During the Financial CrisisRead the Press Release
Attorney General Eric Holder and Associate Attorney General Tony West announced today that the Department of Justice has reached a $16.65 billion settlement with Bank of America Corporation – the largest civil settlement with a single entity in American history — to resolve federal and state claims against Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch. As part of this global resolution, the bank has agreed to pay a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the largest FIRREA penalty ever – and provide billions of dollars of relief to struggling homeowners, including funds that will help defray tax liability as a result of mortgage modification, forbearance or forgiveness. The settlement does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution.
“This historic resolution - the largest such settlement on record - goes far beyond ‘the cost of doing business,’” said Attorney General Holder. "Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank’s conduct. This is appropriate given the size and scope of the wrongdoing at issue.”
This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force and its Residential Mortgage-Backed Securities (RMBS) Working Group, which has recovered $36.65 billion to date for American consumers and investors.
“At nearly $17 billion, today’s resolution with Bank of America is the largest the department has ever reached with a single entity in American history,” said Associate Attorney General West. “But the significance of this settlement lies not just in its size; this agreement is notable because it achieves real accountability for the American people and helps to rectify the harm caused by Bank of America’s conduct through a $7 billion consumer relief package that could benefit hundreds of thousands of Americans still struggling to pull themselves out from under the weight of the financial crisis.”
The Justice Department and the bank settled several of the department’s ongoing civil investigations related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations (CDOs), and the bank’s practices concerning the underwriting and origination of mortgage loans. The settlement includes a statement of facts, in which the bank has acknowledged that it sold billions of dollars of RMBS without disclosing to investors key facts about the quality of the securitized loans. When the RMBS collapsed, investors, including federally insured financial institutions, suffered billions of dollars in losses. The bank has also conceded that it originated risky mortgage loans and made misrepresentations about the quality of those loans to Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).
Of the record-breaking $16.65 billion resolution, almost $10 billion will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud. Bank of America will pay a $5 billion civil penalty to settle the Justice Department claims under FIRREA. Approximately $1.8 billion will be paid to settle federal fraud claims related to the bank’s origination and sale of mortgages, $1.03 billion will be paid to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $135.84 million will be paid to settle claims by the Securities and Exchange Commission. In addition, $300 million will be paid to settle claims by the state of California, $45 million to settle claims by the state of Delaware, $200 million to settle claims by the state of Illinois, $23 million to settle claims by the Commonwealth of Kentucky, $75 million to settle claims by the state of Maryland, and $300 million to settle claims by the state of New York.
Bank of America will provide the remaining $7 billion in the form of relief to aid hundreds of thousands of consumers harmed by the financial crisis precipitated by the unlawful conduct of Bank of America, Merrill Lynch and Countrywide. That relief will take various forms, including principal reduction loan modifications that result in numerous homeowners no longer being underwater on their mortgages and finally having substantial equity in their homes. It will also include new loans to credit worthy borrowers struggling to get a loan, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing. Finally, Bank of America has agreed to place over $490 million in a tax relief fund to be used to help defray some of the tax liability that will be incurred by consumers receiving certain types of relief if Congress fails to extend the tax relief coverage of the Mortgage Forgiveness Debt Relief Act of 2007.
An independent monitor will be appointed to determine whether Bank of America is satisfying its obligations. If Bank of America fails to live up to its agreement by Aug. 31, 2018, it must pay liquidated damages in the amount of the shortfall to organizations that will use the funds for state-based Interest on Lawyers’ Trust Account (IOLTA) organizations and NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development. The organizations will use the funds for foreclosure prevention and community redevelopment, legal assistance, housing counselling and neighborhood stabilization.
As part of the RMBS Working Group, the U.S. Attorney’s Office for the District of New Jersey conducted a FIRREA investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout 2006 and 2007. As the statement of facts describes, Merrill Lynch regularly told investors the loans it was securitizing were made to borrowers who were likely and able to repay their debts. Merrill Lynch made these representations even though it knew, based on the due diligence it had performed on samples of the loans, that a significant number of those loans had material underwriting and compliance defects - including as many as 55 percent in a single pool. In addition, Merrill Lynch rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools. Merrill Lynch also disregarded its own due diligence and securitized loans that the due diligence vendors had identified as defective. This practice led one Merrill Lynch consultant to “wonder why we have due diligence performed” if Merrill Lynch was going to securitize the loans “regardless of issues.”
“In the run-up to the financial crisis, Merrill Lynch bought more and more mortgage loans, packaged them together, and sold them off in securities – even when the bank knew a substantial number of those loans were defective,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “The failure to disclose known risks undermines investor confidence in our financial institutions. Today’s record-breaking settlement, which includes the resolution of our office’s imminent multibillion-dollar suit for FIRREA penalties, reflects the seriousness of the lapses that caused staggering losses and wider economic damage.”
This settlement also resolves the complaint filed against Bank of America in August 2013 by the U.S. Attorney’s Office for the Western District of North Carolina concerning an $850 million securitization. Bank of America acknowledges that it marketed this securitization as being backed by bank-originated “prime” mortgages that were underwritten in accordance with its underwriting guidelines. Yet, Bank of America knew that a significant number of loans in the security were “wholesale” mortgages originated through mortgage brokers and that based on its internal reporting, such loans were experiencing a marked increase in underwriting defects and a noticeable decrease in performance. Notwithstanding these red flags, the bank sold these RMBS to federally backed financial institutions without conducting any third party due diligence on the securitized loans and without disclosing key facts to investors in the offering documents filed with the SEC. A related case concerning the same securitization was filed by the SEC against Bank of America and is also being resolved as part of this settlement.
“Today’s settlement attests to the fact that fraud pervaded every level of the RMBS industry, including purportedly prime securities, which formed the basis of our filed complaint,” said U.S. Attorney Anne M. Tompkins for the Western District of North Carolina. “Even reputable institutions like Bank of America caved to the pernicious forces of greed and cut corners, putting profits ahead of their customers. As we deal with the aftermath of the financial meltdown and rebuild our economy, we will hold accountable firms that contributed to the economic crisis. Today’s settlement makes clear that my office will not sit idly while fraud occurs in our backyard.”
The U.S. Attorney’s Office for the Central District of California has been investigating the origination and securitization practices of Countrywide as part of the RMBS Working Group effort. The statement of facts describes how Countrywide typically represented to investors that it originated loans based on underwriting standards that were designed to ensure that borrowers could repay their loans, although Countrywide had information that certain borrowers had a high probability of defaulting on their loans. Countrywide also concealed from RMBS investors its use of “shadow guidelines” that permitted loans to riskier borrowers than Countrywide’s underwriting guidelines would otherwise permit. Countrywide’s origination arm was motivated by the “saleability” of loans and Countrywide was willing to originate “exception loans” (i.e., loans that fell outside of its underwriting guidelines) so long as the loans, and the attendant risk, could be sold. This led Countrywide to expand its loan offerings to include, for example, “Extreme Alt-A” loans, which one Countrywide executive described as a “hazardous product,” although Countrywide failed to tell RMBS investors that these loans were being originated outside of Countrywide’s underwriting guidelines. Countrywide knew that these exception loans were performing far worse than loans originated without exceptions, although it never disclosed this fact to investors.
“The Central District of California has taken the lead in the department’s investigation of Countrywide Financial Corporation,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Countrywide’s improper securitization practices resulted in billions of dollars of losses to federally-insured financial institutions. We are pleased that this investigation has resulted in a multibillion-dollar recovery to compensate the United States for the losses caused by Countrywide’s misconduct.”
In addition to the matters relating to the securitization of toxic mortgages, today’s settlement also resolves claims arising out of misrepresentations made to government entities concerning the origination of residential mortgages.
The U.S. Attorney’s Office for the Southern District of New York, along with the Federal Housing Finance Agency’s Office of Inspector General and the Special Inspector General for the Troubled Asset Relief Program, conducted investigations into the origination of defective residential mortgage loans by Countrywide’s Consumer Markets Division and Bank of America’s Retail Lending Division as well as the fraudulent sale of such loans to the government sponsored enterprises Fannie Mae and Freddie Mac (the “GSEs”). The investigation into these practices, as well as three private whistleblower lawsuits filed under seal pursuant to the False Claims Act, are resolved in connection with this settlement. As part of the settlement, Countrywide and Bank of America have agreed to pay $1 billion to resolve their liability under the False Claims Act. The FIRREA penalty to be paid by Bank of America as part of the settlement also resolves the government’s claims against Bank of America and Countrywide under FIRREA for loans fraudulently sold to Fannie Mae and Freddie Mac. In addition, Countrywide and Bank of America made admissions concerning their conduct, including that they were aware that many of the residential mortgage loans they had made to borrowers were defective, that many of the representations and warranties they made to the GSEs about the quality of the loans were inaccurate, and that they did not self-report to the GSEs mortgage loans they had internally identified as defective.
“For years, Countrywide and Bank of America unloaded toxic mortgage loans on the government sponsored enterprises Fannie Mae and Freddie Mac with false representations that the loans were quality investments,” said U.S. Attorney Preet Bharara for the Southern District of New York. “This office has already obtained a jury verdict of fraud and a judgment for over a billion dollars against Countrywide and Bank of America for engaging in similar conduct. Now, this settlement, which requires the bank to pay another billion dollars for false statements to the GSEs, continues to send a clear message to Wall Street that mortgage fraud cannot be a cost of doing business.”
The U.S. Attorney’s Office for the Eastern District of New York, together with its partners from the Department of Housing and Urban Development (HUD), conducted a two-year investigation into whether Bank of America knowingly made loans insured by the FHA in violation of applicable underwriting guidelines. The investigation established that the bank caused the FHA to insure loans that were not eligible for FHA mortgage insurance. As a result, HUD incurred hundreds of millions of dollars of losses. Moreover, many of Bank of America’s borrowers have defaulted on their FHA mortgage loans and have either lost or are in the process of losing their homes to foreclosure.
“As a Direct Endorser of FHA insured loans, Bank of America performs a critical role in home lending,” said U.S. Attorney Loretta E. Lynch for the Eastern District of New York. “It is a gatekeeper entrusted with the authority to commit government funds earmarked for facilitating mortgage lending to first-time and low-income homebuyers, senior citizen homeowners and others seeking or owning homes throughout the nation, including many who live in the Eastern District of New York. In obtaining a payment of $800 million and sweeping relief for troubled homeowners, we have not just secured a meaningful remedy for the bank’s conduct, but have sent a powerful message of deterrence.”
“Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark,” said Rhea Kemble Dignam, Regional Director of the SEC’s Atlanta Office. “Requiring an admission of wrongdoing as part of Bank of America’s agreement to resolve the SEC charges filed today provides an additional level of accountability for its violation of the federal securities laws.”
“Today’s settlement with Bank of America is another important step in the Obama Administration’s efforts to provide relief to American homeowners who were hurt during the housing crisis,” said U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro. “This global settlement will strengthen the FHA fund and Ginnie Mae, and it will provide $7 billion in consumer relief with a focus on helping borrowers in areas that were the hardest hit during the crisis. HUD will continue working with the Department of Justice, state attorneys general, and other partners to take appropriate action to hold financial institutions accountable and provide consumers with the relief they need to stay in their homes. HUD remains committed to solidifying the housing recovery and creating more opportunities for Americans to succeed.”
“Bank of America and the banks it bought securitized billions of dollars of defective mortgages,” said Acting Inspector General Michael P. Stephens of the FHFA-OIG. “Investors, including Fannie Mae and Freddie Mac, suffered enormous losses by purchasing RMBS from Bank of America, Countrywide and Merrill Lynch not knowing about those defects. Today’s settlement is a significant, but by no means final step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit.”
The attorneys general of California, Delaware, Illinois, Kentucky, Maryland and New York also conducted related investigations that were critical to bringing about this settlement. In addition, the settlement resolves investigations conducted by the Securities and Exchange Commission (SEC) and litigation filed by the Federal Deposit Insurance Company (FDIC).
The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state attorneys general offices around the country.
The RMBS Working Group is led by Director Geoffrey Graber and five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.
Investigations were led by Assistant U.S. Attorneys Leticia Vandehaar of the District of New Jersey; Dan Ryan and Mark Odulio of the Western District of North Carolina; George Cardona and Lee Weidman of the Central District of Carolina; Richard Hayes and Kenneth Abell of the Eastern District of New York; and Pierre Armand and Jaimie Nawaday of the Southern District of New York.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov
Related Materials:
Settlement Agreement
Annex 1 - Statement of Facts
Annex 2 - Consumer Relief
Annex 2 - Exhibit 1 - Loan List
Annex 2 - Exhibit 2 - Model VA Agreement
Annex 3 - Tax Fund
Annex 4 - Transaction List
Exhibit A--FDIC
Exhibit B - SEC Bank of America Settlement DocumentsBank of America to Pay $16.65 Billion in Historic Justice Department Settlement for Financial Fraud Leading up to and During the Financial CrisisRead the Press Release
WASHINGTON - Attorney General Eric Holder and Associate Attorney General Tony West announced today that the Department of Justice has reached a $16.65 billion settlement with Bank of America Corporation – the largest civil settlement with a single entity in American history ¬— to resolve federal and state claims against Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch. As part of this global resolution, the bank has agreed to pay a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the largest FIRREA penalty ever – and provide billions of dollars of relief to struggling homeowners, including funds that will help defray tax liability as a result of mortgage modification, forbearance or forgiveness. The settlement does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution.
“This historic resolution - the largest such settlement on record - goes far beyond ‘the cost of doing business,’” said Attorney General Holder. "Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank’s conduct. This is appropriate given the size and scope of the wrongdoing at issue.”
This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force and its Residential Mortgage-Backed Securities (RMBS) Working Group, which has recovered $36.65 billion to date for American consumers and investors.
“At nearly $17 billion, today’s resolution with Bank of America is the largest the department has ever reached with a single entity in American history,” said Associate Attorney General West. “But the significance of this settlement lies not just in its size; this agreement is notable because it achieves real accountability for the American people and helps to rectify the harm caused by Bank of America’s conduct through a $7 billion consumer relief package that could benefit hundreds of thousands of Americans still struggling to pull themselves out from under the weight of the financial crisis.”
The Justice Department and the bank settled several of the department’s ongoing civil investigations related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations (CDOs), and the bank’s practices concerning the underwriting and origination of mortgage loans. The settlement includes a statement of facts, in which the bank has acknowledged that it sold billions of dollars of RMBS without disclosing to investors key facts about the quality of the securitized loans. When the RMBS collapsed, investors, including federally insured financial institutions, suffered billions of dollars in losses. The bank has also conceded that it originated risky mortgage loans and made misrepresentations about the quality of those loans to Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).
Of the record-breaking $16.65 billion resolution, almost $10 billion will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud. Bank of America will pay a $5 billion civil penalty to settle the Justice Department claims under FIRREA. Approximately $1.8 billion will be paid to settle federal fraud claims related to the bank’s origination and sale of mortgages, $1.03 billion will be paid to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $135.84 million will be paid to settle claims by the Securities and Exchange Commission. In addition, $300 million will be paid to settle claims by the state of California, $45 million to settle claims by the state of Delaware, $200 million to settle claims by the state of Illinois, $23 million to settle claims by the Commonwealth of Kentucky, $75 million to settle claims by the state of Maryland, and $300 million to settle claims by the state of New York.
Bank of America will provide the remaining $7 billion in the form of relief to aid hundreds of thousands of consumers harmed by the financial crisis precipitated by the unlawful conduct of Bank of America, Merrill Lynch and Countrywide. That relief will take various forms, including principal reduction loan modifications that result in numerous homeowners no longer being underwater on their mortgages and finally having substantial equity in their homes. It will also include new loans to credit worthy borrowers struggling to get a loan, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing. Finally, Bank of America has agreed to place over $490 million in a tax relief fund to be used to help defray some of the tax liability that will be incurred by consumers receiving certain types of relief if Congress fails to extend the tax relief coverage of the Mortgage Forgiveness Debt Relief Act of 2007.
An independent monitor will be appointed to determine whether Bank of America is satisfying its obligations. If Bank of America fails to live up to its agreement by Aug. 31, 2018, it must pay liquidated damages in the amount of the shortfall to organizations that will use the funds for state-based Interest on Lawyers’ Trust Account (IOLTA) organizations and NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development. The organizations will use the funds for foreclosure prevention and community redevelopment, legal assistance, housing counselling and neighborhood stabilization.
As part of the RMBS Working Group, the U.S. Attorney’s Office for the District of New Jersey conducted a FIRREA investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout 2006 and 2007. As the statement of facts describes, Merrill Lynch regularly told investors the loans it was securitizing were made to borrowers who were likely and able to repay their debts. Merrill Lynch made these representations even though it knew, based on the due diligence it had performed on samples of the loans, that a significant number of those loans had material underwriting and compliance defects - including as many as 55 percent in a single pool. In addition, Merrill Lynch rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools. Merrill Lynch also disregarded its own due diligence and securitized loans that the due diligence vendors had identified as defective. This practice led one Merrill Lynch consultant to “wonder why we have due diligence performed” if Merrill Lynch was going to securitize the loans “regardless of issues.”
“In the run-up to the financial crisis, Merrill Lynch bought more and more mortgage loans, packaged them together, and sold them off in securities – even when the bank knew a substantial number of those loans were defective,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “The failure to disclose known risks undermines investor confidence in our financial institutions. Today’s record-breaking settlement, which includes the resolution of our office’s imminent multibillion-dollar suit for FIRREA penalties, reflects the seriousness of the lapses that caused staggering losses and wider economic damage.”
This settlement also resolves the complaint filed against Bank of America in August 2013 by the U.S. Attorney’s Office for the Western District of North Carolina concerning an $850 million securitization. Bank of America acknowledges that it marketed this securitization as being backed by bank-originated “prime” mortgages that were underwritten in accordance with its underwriting guidelines. Yet, Bank of America knew that a significant number of loans in the security were “wholesale” mortgages originated through mortgage brokers and that based on its internal reporting, such loans were experiencing a marked increase in underwriting defects and a noticeable decrease in performance. Notwithstanding these red flags, the bank sold these RMBS to federally backed financial institutions without conducting any third party due diligence on the securitized loans and without disclosing key facts to investors in the offering documents filed with the SEC. A related case concerning the same securitization was filed by the SEC against Bank of America and is also being resolved as part of this settlement.
“Today’s settlement attests to the fact that fraud pervaded every level of the RMBS industry, including purportedly prime securities, which formed the basis of our filed complaint,” said U.S. Attorney Anne M. Tompkins for the Western District of North Carolina. “Even reputable institutions like Bank of America caved to the pernicious forces of greed and cut corners, putting profits ahead of their customers. As we deal with the aftermath of the financial meltdown and rebuild our economy, we will hold accountable firms that contributed to the economic crisis. Today’s settlement makes clear that my office will not sit idly while fraud occurs in our backyard.”
The U.S. Attorney’s Office for the Central District of California has been investigating the origination and securitization practices of Countrywide as part of the RMBS Working Group effort. The statement of facts describes how Countrywide typically represented to investors that it originated loans based on underwriting standards that were designed to ensure that borrowers could repay their loans, although Countrywide had information that certain borrowers had a high probability of defaulting on their loans. Countrywide also concealed from RMBS investors its use of “shadow guidelines” that permitted loans to riskier borrowers than Countrywide’s underwriting guidelines would otherwise permit. Countrywide’s origination arm was motivated by the “saleability” of loans and Countrywide was willing to originate “exception loans” (i.e., loans that fell outside of its underwriting guidelines) so long as the loans, and the attendant risk, could be sold. This led Countrywide to expand its loan offerings to include, for example, “Extreme Alt-A” loans, which one Countrywide executive described as a “hazardous product,” although Countrywide failed to tell RMBS investors that these loans were being originated outside of Countrywide’s underwriting guidelines. Countrywide knew that these exception loans were performing far worse than loans originated without exceptions, although it never disclosed this fact to investors.
“The Central District of California has taken the lead in the department’s investigation of Countrywide Financial Corporation,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Countrywide’s improper securitization practices resulted in billions of dollars of losses to federally-insured financial institutions. We are pleased that this investigation has resulted in a multibillion-dollar recovery to compensate the United States for the losses caused by Countrywide’s misconduct.”
In addition to the matters relating to the securitization of toxic mortgages, today’s settlement also resolves claims arising out of misrepresentations made to government entities concerning the origination of residential mortgages.
The U.S. Attorney’s Office for the Southern District of New York, along with the Federal Housing Finance Agency’s Office of Inspector General and the Special Inspector General for the Troubled Asset Relief Program, conducted investigations into the origination of defective residential mortgage loans by Countrywide’s Consumer Markets Division and Bank of America’s Retail Lending Division as well as the fraudulent sale of such loans to the government sponsored enterprises Fannie Mae and Freddie Mac (the “GSEs”). The investigation into these practices, as well as three private whistleblower lawsuits filed under seal pursuant to the False Claims Act, are resolved in connection with this settlement. As part of the settlement, Countrywide and Bank of America have agreed to pay $1 billion to resolve their liability under the False Claims Act. The FIRREA penalty to be paid by Bank of America as part of the settlement also resolves the government’s claims against Bank of America and Countrywide under FIRREA for loans fraudulently sold to Fannie Mae and Freddie Mac. In addition, Countrywide and Bank of America made admissions concerning their conduct, including that they were aware that many of the residential mortgage loans they had made to borrowers were defective, that many of the representations and warranties they made to the GSEs about the quality of the loans were inaccurate, and that they did not self-report to the GSEs mortgage loans they had internally identified as defective.
“For years, Countrywide and Bank of America unloaded toxic mortgage loans on the government sponsored enterprises Fannie Mae and Freddie Mac with false representations that the loans were quality investments,” said U.S. Attorney Preet Bharara for the Southern District of New York. “This office has already obtained a jury verdict of fraud and a judgment for over a billion dollars against Countrywide and Bank of America for engaging in similar conduct. Now, this settlement, which requires the bank to pay another billion dollars for false statements to the GSEs, continues to send a clear message to Wall Street that mortgage fraud cannot be a cost of doing business.”
The U.S. Attorney’s Office for the Eastern District of New York, together with its partners from the Department of Housing and Urban Development (HUD), conducted a two-year investigation into whether Bank of America knowingly made loans insured by the FHA in violation of applicable underwriting guidelines. The investigation established that the bank caused the FHA to insure loans that were not eligible for FHA mortgage insurance. As a result, HUD incurred hundreds of millions of dollars of losses. Moreover, many of Bank of America’s borrowers have defaulted on their FHA mortgage loans and have either lost or are in the process of losing their homes to foreclosure.
“As a Direct Endorser of FHA insured loans, Bank of America performs a critical role in home lending,” said U.S. Attorney Loretta E. Lynch for the Eastern District of New York. “It is a gatekeeper entrusted with the authority to commit government funds earmarked for facilitating mortgage lending to first-time and low-income homebuyers, senior citizen homeowners and others seeking or owning homes throughout the nation, including many who live in the Eastern District of New York. In obtaining a payment of $800 million and sweeping relief for troubled homeowners, we have not just secured a meaningful remedy for the bank’s conduct, but have sent a powerful message of deterrence.”
“Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark,” said Rhea Kemble Dignam, Regional Director of the SEC’s Atlanta Office. “Requiring an admission of wrongdoing as part of Bank of America’s agreement to resolve the SEC charges filed today provides an additional level of accountability for its violation of the federal securities laws.”
“Today’s settlement with Bank of America is another important step in the Obama Administration’s efforts to provide relief to American homeowners who were hurt during the housing crisis,” said U.S. Department of Housing and Urban Development (HUD) Secretary Juliàn Castro. “This global settlement will strengthen the FHA fund and Ginnie Mae, and it will provide $7 billion in consumer relief with a focus on helping borrowers in areas that were the hardest hit during the crisis. HUD will continue working with the Department of Justice, state attorneys general, and other partners to take appropriate action to hold financial institutions accountable and provide consumers with the relief they need to stay in their homes. HUD remains committed to solidifying the housing recovery and creating more opportunities for Americans to succeed.” “Bank of America and the banks it bought securitized billions of dollars of defective mortgages,” said Acting Inspector General Michael P. Stephens of the FHFA-OIG. “Investors, including Fannie Mae and Freddie Mac, suffered enormous losses by purchasing RMBS from Bank of America, Countrywide and Merrill Lynch not knowing about those defects. Today’s settlement is a significant, but by no means final step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit.”
The attorneys general of California, Delaware, Illinois, Kentucky, Maryland and New York also conducted related investigations that were critical to bringing about this settlement. In addition, the settlement resolves investigations conducted by the Securities and Exchange Commission (SEC) and litigation filed by the Federal Deposit Insurance Company (FDIC).
The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state attorneys general offices around the country.
The RMBS Working Group is led by Director Geoffrey Graber and five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.
Investigations were led by Assistant U.S. Attorneys Leticia Vandehaar of the District of New Jersey; Dan Ryan and Mark Odulio of the Western District of North Carolina; George Cardona and Lee Weidman of the Central District of Carolina; Richard Hayes and Kenneth Abell of the Eastern District of New York; and Pierre Armand and Jaimie Nawaday of the Southern District of New York.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at:www.stopfraud.gov.
Related Material:
DV Conference Training Announcement & Registration Form
Settlement Agreement
Annex 1 - Statement of Facts
Annex 2 - Consumer Relief
Annex 3 - Tax Fund
Annex 3 - Transaction List
Exhibit A - FDIC
Exhibit B - SEC Documents
Bank of America to Pay $16.65 Billion in Historic Justice Department Settlement for Financial Fraud Leading up to and During the Financial CrisisRead the Press Release
Attorney General Eric Holder and Associate Attorney General Tony West announced today that the Department of Justice has reached a $16.65 billion settlement with Bank of America Corporation – the largest civil settlement with a single entity in American history — to resolve federal and state claims against Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch. As part of this global resolution, the bank has agreed to pay a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the largest FIRREA penalty ever – and provide billions of dollars of relief to struggling homeowners, including funds that will help defray tax liability as a result of mortgage modification, forbearance or forgiveness. The settlement does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution.
“This historic resolution - the largest such settlement on record - goes far beyond ‘the cost of doing business,’” said Attorney General Holder. "Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank’s conduct. This is appropriate given the size and scope of the wrongdoing at issue.”
This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force and its Residential Mortgage-Backed Securities (RMBS) Working Group, which has recovered $36.65 billion to date for American consumers and investors.
“At nearly $17 billion, today’s resolution with Bank of America is the largest the department has ever reached with a single entity in American history,” said Associate Attorney General West. “But the significance of this settlement lies not just in its size; this agreement is notable because it achieves real accountability for the American people and helps to rectify the harm caused by Bank of America’s conduct through a $7 billion consumer relief package that could benefit hundreds of thousands of Americans still struggling to pull themselves out from under the weight of the financial crisis.”
The Justice Department and the bank settled several of the department’s ongoing civil investigations related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations (CDOs), and the bank’s practices concerning the underwriting and origination of mortgage loans. The settlement includes a statement of facts, in which the bank has acknowledged that it sold billions of dollars of RMBS without disclosing to investors key facts about the quality of the securitized loans. When the RMBS collapsed, investors, including federally insured financial institutions, suffered billions of dollars in losses. The bank has also conceded that it originated risky mortgage loans and made misrepresentations about the quality of those loans to Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).
Of the record-breaking $16.65 billion resolution, almost $10 billion will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud. Bank of America will pay a $5 billion civil penalty to settle the Justice Department claims under FIRREA. Approximately $1.8 billion will be paid to settle federal fraud claims related to the bank’s origination and sale of mortgages, $1.03 billion will be paid to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $135.84 million will be paid to settle claims by the Securities and Exchange Commission. In addition, $300 million will be paid to settle claims by the state of California, $45 million to settle claims by the state of Delaware, $200 million to settle claims by the state of Illinois, $23 million to settle claims by the Commonwealth of Kentucky, $75 million to settle claims by the state of Maryland, and $300 million to settle claims by the state of New York.
Bank of America will provide the remaining $7 billion in the form of relief to aid hundreds of thousands of consumers harmed by the financial crisis precipitated by the unlawful conduct of Bank of America, Merrill Lynch and Countrywide. That relief will take various forms, including principal reduction loan modifications that result in numerous homeowners no longer being underwater on their mortgages and finally having substantial equity in their homes. It will also include new loans to credit worthy borrowers struggling to get a loan, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing. Finally, Bank of America has agreed to place over $490 million in a tax relief fund to be used to help defray some of the tax liability that will be incurred by consumers receiving certain types of relief if Congress fails to extend the tax relief coverage of the Mortgage Forgiveness Debt Relief Act of 2007.
An independent monitor will be appointed to determine whether Bank of America is satisfying its obligations. If Bank of America fails to live up to its agreement by Aug. 31, 2018, it must pay liquidated damages in the amount of the shortfall to organizations that will use the funds for state-based Interest on Lawyers’ Trust Account (IOLTA) organizations and NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development. The organizations will use the funds for foreclosure prevention and community redevelopment, legal assistance, housing counselling and neighborhood stabilization.
As part of the RMBS Working Group, the U.S. Attorney’s Office for the District of New Jersey conducted a FIRREA investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout 2006 and 2007. As the statement of facts describes, Merrill Lynch regularly told investors the loans it was securitizing were made to borrowers who were likely and able to repay their debts. Merrill Lynch made these representations even though it knew, based on the due diligence it had performed on samples of the loans, that a significant number of those loans had material underwriting and compliance defects - including as many as 55 percent in a single pool. In addition, Merrill Lynch rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools. Merrill Lynch also disregarded its own due diligence and securitized loans that the due diligence vendors had identified as defective. This practice led one Merrill Lynch consultant to “wonder why we have due diligence performed” if Merrill Lynch was going to securitize the loans “regardless of issues.”
“In the run-up to the financial crisis, Merrill Lynch bought more and more mortgage loans, packaged them together, and sold them off in securities – even when the bank knew a substantial number of those loans were defective,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “The failure to disclose known risks undermines investor confidence in our financial institutions. Today’s record-breaking settlement, which includes the resolution of our office’s imminent multibillion-dollar suit for FIRREA penalties, reflects the seriousness of the lapses that caused staggering losses and wider economic damage.”
This settlement also resolves the complaint filed against Bank of America in August 2013 by the U.S. Attorney’s Office for the Western District of North Carolina concerning an $850 million securitization. Bank of America acknowledges that it marketed this securitization as being backed by bank-originated “prime” mortgages that were underwritten in accordance with its underwriting guidelines. Yet, Bank of America knew that a significant number of loans in the security were “wholesale” mortgages originated through mortgage brokers and that based on its internal reporting, such loans were experiencing a marked increase in underwriting defects and a noticeable decrease in performance. Notwithstanding these red flags, the bank sold these RMBS to federally backed financial institutions without conducting any third party due diligence on the securitized loans and without disclosing key facts to investors in the offering documents filed with the SEC. A related case concerning the same securitization was filed by the SEC against Bank of America and is also being resolved as part of this settlement.
“Today’s settlement attests to the fact that fraud pervaded every level of the RMBS industry, including purportedly prime securities, which formed the basis of our filed complaint,” said U.S. Attorney Anne M. Tompkins for the Western District of North Carolina. “Even reputable institutions like Bank of America caved to the pernicious forces of greed and cut corners, putting profits ahead of their customers. As we deal with the aftermath of the financial meltdown and rebuild our economy, we will hold accountable firms that contributed to the economic crisis. Today’s settlement makes clear that my office will not sit idly while fraud occurs in our backyard.”
The U.S. Attorney’s Office for the Central District of California has been investigating the origination and securitization practices of Countrywide as part of the RMBS Working Group effort. The statement of facts describes how Countrywide typically represented to investors that it originated loans based on underwriting standards that were designed to ensure that borrowers could repay their loans, although Countrywide had information that certain borrowers had a high probability of defaulting on their loans. Countrywide also concealed from RMBS investors its use of “shadow guidelines” that permitted loans to riskier borrowers than Countrywide’s underwriting guidelines would otherwise permit. Countrywide’s origination arm was motivated by the “saleability” of loans and Countrywide was willing to originate “exception loans” (i.e., loans that fell outside of its underwriting guidelines) so long as the loans, and the attendant risk, could be sold. This led Countrywide to expand its loan offerings to include, for example, “Extreme Alt-A” loans, which one Countrywide executive described as a “hazardous product,” although Countrywide failed to tell RMBS investors that these loans were being originated outside of Countrywide’s underwriting guidelines. Countrywide knew that these exception loans were performing far worse than loans originated without exceptions, although it never disclosed this fact to investors.
“The Central District of California has taken the lead in the department’s investigation of Countrywide Financial Corporation,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Countrywide’s improper securitization practices resulted in billions of dollars of losses to federally-insured financial institutions. We are pleased that this investigation has resulted in a multibillion-dollar recovery to compensate the United States for the losses caused by Countrywide’s misconduct.”
In addition to the matters relating to the securitization of toxic mortgages, today’s settlement also resolves claims arising out of misrepresentations made to government entities concerning the origination of residential mortgages.
The U.S. Attorney’s Office for the Southern District of New York, along with the Federal Housing Finance Agency’s Office of Inspector General and the Special Inspector General for the Troubled Asset Relief Program, conducted investigations into the origination of defective residential mortgage loans by Countrywide’s Consumer Markets Division and Bank of America’s Retail Lending Division as well as the fraudulent sale of such loans to the government sponsored enterprises Fannie Mae and Freddie Mac (the “GSEs”). The investigation into these practices, as well as three private whistleblower lawsuits filed under seal pursuant to the False Claims Act, are resolved in connection with this settlement. As part of the settlement, Countrywide and Bank of America have agreed to pay $1 billion to resolve their liability under the False Claims Act. The FIRREA penalty to be paid by Bank of America as part of the settlement also resolves the government’s claims against Bank of America and Countrywide under FIRREA for loans fraudulently sold to Fannie Mae and Freddie Mac. In addition, Countrywide and Bank of America made admissions concerning their conduct, including that they were aware that many of the residential mortgage loans they had made to borrowers were defective, that many of the representations and warranties they made to the GSEs about the quality of the loans were inaccurate, and that they did not self-report to the GSEs mortgage loans they had internally identified as defective.
“For years, Countrywide and Bank of America unloaded toxic mortgage loans on the government sponsored enterprises Fannie Mae and Freddie Mac with false representations that the loans were quality investments,” said U.S. Attorney Preet Bharara for the Southern District of New York. “This office has already obtained a jury verdict of fraud and a judgment for over a billion dollars against Countrywide and Bank of America for engaging in similar conduct. Now, this settlement, which requires the bank to pay another billion dollars for false statements to the GSEs, continues to send a clear message to Wall Street that mortgage fraud cannot be a cost of doing business.”
The U.S. Attorney’s Office for the Eastern District of New York, together with its partners from the Department of Housing and Urban Development (HUD), conducted a two-year investigation into whether Bank of America knowingly made loans insured by the FHA in violation of applicable underwriting guidelines. The investigation established that the bank caused the FHA to insure loans that were not eligible for FHA mortgage insurance. As a result, HUD incurred hundreds of millions of dollars of losses. Moreover, many of Bank of America’s borrowers have defaulted on their FHA mortgage loans and have either lost or are in the process of losing their homes to foreclosure.
“As a Direct Endorser of FHA insured loans, Bank of America performs a critical role in home lending,” said U.S. Attorney Loretta E. Lynch for the Eastern District of New York. “It is a gatekeeper entrusted with the authority to commit government funds earmarked for facilitating mortgage lending to first-time and low-income homebuyers, senior citizen homeowners and others seeking or owning homes throughout the nation, including many who live in the Eastern District of New York. In obtaining a payment of $800 million and sweeping relief for troubled homeowners, we have not just secured a meaningful remedy for the bank’s conduct, but have sent a powerful message of deterrence.”
“Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark,” said Rhea Kemble Dignam, Regional Director of the SEC’s Atlanta Office. “Requiring an admission of wrongdoing as part of Bank of America’s agreement to resolve the SEC charges filed today provides an additional level of accountability for its violation of the federal securities laws.”
“Today’s settlement with Bank of America is another important step in the Obama Administration’s efforts to provide relief to American homeowners who were hurt during the housing crisis,” said U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro. “This global settlement will strengthen the FHA fund and Ginnie Mae, and it will provide $7 billion in consumer relief with a focus on helping borrowers in areas that were the hardest hit during the crisis. HUD will continue working with the Department of Justice, state attorneys general, and other partners to take appropriate action to hold financial institutions accountable and provide consumers with the relief they need to stay in their homes. HUD remains committed to solidifying the housing recovery and creating more opportunities for Americans to succeed.”
“Bank of America and the banks it bought securitized billions of dollars of defective mortgages,” said Acting Inspector General Michael P. Stephens of the FHFA-OIG. “Investors, including Fannie Mae and Freddie Mac, suffered enormous losses by purchasing RMBS from Bank of America, Countrywide and Merrill Lynch not knowing about those defects. Today’s settlement is a significant, but by no means final step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit.”
The attorneys general of California, Delaware, Illinois, Kentucky, Maryland and New York also conducted related investigations that were critical to bringing about this settlement. In addition, the settlement resolves investigations conducted by the Securities and Exchange Commission (SEC) and litigation filed by the Federal Deposit Insurance Company (FDIC).
The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state attorneys general offices around the country.
The RMBS Working Group is led by Director Geoffrey Graber and five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.
Investigations were led by Assistant U.S. Attorneys Leticia Vandehaar of the District of New Jersey; Dan Ryan and Mark Odulio of the Western District of North Carolina; George Cardona and Lee Weidman of the Central District of Carolina; Richard Hayes and Kenneth Abell of the Eastern District of New York; and Pierre Armand and Jaimie Nawaday of the Southern District of New York.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov .
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Baltimore Man Sentenced to Prison for Armed Commercial Burglaries and A Home Invasion RobberyRead the Press Release
Robbed Businesses and Homes in Maryland, Virginia, West Virginia and Pennsylvania
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced William Metcalf, age 39, of Baltimore, today to 30 months in prison, followed by three years of supervised release, for conspiracy to commit bank burglary. Judge Motz also entered an order requiring Metcalf to pay a money judgment of $75,000 as forfeiture.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Howard County Police Chief Gary Gardner; Chief James W. Johnson of the Baltimore County Police Department; Anne Arundel County Police Chief Kevin Davis; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Commissioner Anthony W. Batts of the Baltimore Police Department.
Metcalf admitted that he conspired with others to commit commercial burglaries in Maryland, Virginia, West Virginia, and Pennsylvania. The conspirators stole cash, money orders, stamps, silver bars, jewelry, cigarettes, lottery tickets, prescription drugs, food, beverages, safes, laptop computers, cell phones, electronics, vehicles and other valuable items from gas stations, convenience stores, banks, credit unions and other commercial establishments. The conspirators often stole or attempted to steal cash from ATMs.
The conspirators usually cut power lines, telephone lines, cables and other wires before entering a business. They used vise grips, sledgehammers, chopsaws, grinders and blow torches to enter the business, and then often waited – for several minutes or sometimes up to several hours – before ransacking the business of its valuable items. Metcalf agreed that he committed, or attempted to commit, commercial burglaries with one or more of his coconspirators, and that the loss to those businesses, in terms of both property damage and stolen items, exceeded $250,000. For example, Metcalf, along with at least one conspirator, participated in a commercial burglary at Steel & Wire Products Company, on West Patapsco Avenue in Baltimore. The conspirators drove a truck through the fence surrounding the lot. They then cut the telephone lines and pulled several cameras off the walls. Three safes were taken, inside of which were three handguns. The conspirators took approximately $22,256 in cash
Metcalf and at least one other conspirator robbed a residence in Greenbelt on January 31, 2012, stealing a five hundred pound floor safe which contained $1,300 cash. On June 15, 2012, Metcalf and at least one coconspirator committed a home invasion in Baltimore. One of the conspirators, holding roses and posing as a flower delivery man, knocked on the 62-year-old female victim’s front door. After the victim began opening the door, the conspirator forced his way into the residence and held a gun to her head. The conspirator then placed the victim’s hands in flex cuffs and took her to the upstairs office where her valuables were kept. The conspirator then put flex cuffs on the victim’s ankles and washed her wrists and ankles with water to remove identifiable prints. The conspirators stole jewelry, collectible coins, and approximately $15,000 in cash.
United States Attorney Rod J. Rosenstein commended the DEA, Howard County Police Department, Baltimore County Police Department; Anne Arundel County Department, ATF, Department of Health and Human Services - Office of Inspector General; Coast Guard Investigative Service and Baltimore Police Department for their work in the investigation. Mr. Rosenstein also praised the many local and state agencies in Virginia, West Virginia and Pennsylvania for their assistance in the investigation.
Mr. Rosenstein thanked Assistant United States Attorneys David I. Sharfstein and Andrea L. Smith, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
August Grand JuryRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned 26 indictments charging 31 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Paloma Aguirre, age 28, of Lexington, Nebraska, is charged in a two-count Indictment. Count I of the Indictment charges the defendant with distribution of a mixture containing methamphetamine on or about June 20, 2014. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Aguirre with possession with intent to distribute 50 grams or more of a mixture containing methamphetamine on or about June 4, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment.
* Amber Alvord, age 35 and Thomas Perez, age 32, both of Omaha are charged in a seven-count Indictment. Count I of the Indictment charges the defendants with conspiracy to distribute and possess with intent to distribute 50 grams or more of methamphetamine beginning on or about June 1, 2013, and continuing to on or about April 17, 2014. The maximum possible penalty if convicted is Life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment. Counts II and III of the Indictment charge Alvord with distribution of a mixture containing methamphetamine on or about June 12, 2013 and June 25, 2013. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count. Counts IV and VI of the Indictment charge Alvord and Perez with possession with intent to distribute 5 grams or more of methamphetamine on or about April 2, 2014 and April 17, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 SA for each count. Counts V and VII of the Indictment allege that on or about April 2, 2014 and April 17, 2014, the defendants used or carried a firearm during and in relation to, or possessed a firearm in furtherance of, the drug trafficking offense alleged in Count I. The maximum possible penalty if convicted is imprisonment of not less than 5 years and up to Life to be served consecutive to any other sentence imposed, a $250,000 fine, a 5 year term of supervised release and a $100 special assessment for each count. The indictment also alleges any and all property constituting or derived from any proceeds obtained directly or indirectly as a result of the violation alleged in Count I of the indictment, including but not limited to $2,500.00 in United States currency seized on April 2, 2014, and $1,520.00 in United States currency seized on April 17, 2014 should be forfeited to the United States.
* Jose Barraza, age 37, is charged with traveling in interstate commerce from beginning on or about January 2000, and continuing until on or about December 2012, to distribute the proceeds of an unlawful activity, namely a business enterprise involving distribution of methamphetamine and cocaine. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 years term of supervised release, and a $100 special assessment.
* Howard Barta, age 51, and Dennis Wood, age 58, both of Columbus, Nebraska , are charged in a twenty-four count Indictment. Count I of the Indictment charges both defendants with conspiracy to commit mail fraud and wire fraud from on or about January, 2010, and continuing through on or about March, 2011. The maximum possible penalty if convicted is 20years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Counts II thru XVI of the Indictment charge Barta and Wood with mail fraud from on or about January, 2010 through on or about March, 2011. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count. Counts XVII thru XXIV of the Indictment charge the defendants with wire fraud from on or about January, 2010 through on or about March, 2011. The maximum possible penalty if convicted is 20years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count. It is alleged Barta and Wood would contact people throughout the United States who had advertised items for sale on Craigslist and would agree to buy the item and send payment for it. The defendants would then send a counterfeit cashier’s check or money order to the victims that greatly exceeded the sale price of the Craigslist item. The victim would be instructed to deposit the counterfeit items into the victim’s bank account and send the extra money back to the defendants. Barta and Wood mailed out approximately 4,478 counterfeit money orders and cashier’s checks to approximately 1,896 victims and attempted to cause losses amounting to $4,633,476.
* Patrick Burden, age 31, is charged with distribution of 5 grams or more of methamphetamine on or about April 25, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment.
* Pedro Pani De La Cruz and Felipe Soto-Moncado are charged in a two-count Indictment. Count I of the Indictment charges the defendants with conspiracy to distribute counterfeit social security cards from on or about December 13, 2013, and continuing until on or about July 30, 2014. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Counts II and III of the Indictment charge Soto-Moncado with unlawful transfer of a false social security card on December 13, 2013 and January 9, 2014. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count. The indictment also alleges any and all property constituting or derived from any proceeds obtained directly or indirectly as a result of the violation alleged in Count I of the indictment should be forfeited to the United States.
* Dylan Donnell, age 22, of Auburn, Nebraska, is charged with five counts of bank fraud from on or about October 15, 2013 to on or about January 24, 2014. Donnell allegedly lied to the bank regarding the purpose for loans he obtained from the bank and regarding the existence of collateral for the loans. The total loss to the bank was approximately $92,452.00. The maximum possible penalty if convicted is 30 years imprisonment, a $1,000,000 fine, a 5 year term of supervised release, and a $100 special assessment for each count.
* Gualberto Flores-Saavedra, age 35, of Omaha, is charged with illegal reentry into the United States on or about August 1, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Rudy Gaoraldno, age 25, of Fremont, is charged with illegal reentry into the United States on or about July 23, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Abraham Garcia-Dominguez, age 32, of Omaha, is charged with illegal reentry into the United States on or about July 17, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Juan Jimenez-Campos, age 30, of Omaha, is charged with illegal reentry into the United States on or about July 9, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Richard Allen Knight, age 44, of Shenandoah, Iowa, is charged with failure to register as a sex offender in Nebraska from at least on or about March 28, 2014, to on or about May 26, 2014. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 5 year to Life term of supervised release, and a $100 special assessment.
* Jacque Little, age 28, of North Platte, Nebraska, is charged with conspiracy to distribute and possess with intent to distribute a mixture containing methamphetamine beginning on or about May, 2014, and continuing to on or about July, 2014. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Alberto Melgarejo-Cruz, age 46, of Omaha, is charged with illegal reentry into the United States on or about July 24, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Reynaldo Perez, Jr., age 34, and Jamie Perez, age 31 both of North Platte, Nebraska, are charged with conspiracy to distribute and possess with intent to distribute a mixture containing methamphetamine beginning on or about February, 2014, and continuing to on or about July, 2014. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Gabino Quintana-Escalera, age 54, of Omaha, is charged with illegal reentry into the United States on or about August 12, 2014, following deportation as a felon. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Danny Reed, age 59, of McCook, Nebraska, and Tammy Knight, age 38, are charged with possession with intent to distribute 50 grams or more of a mixture containing methamphetamine on or about July 11, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment.
* Jose Angel Reyes, age 36, of Lincoln, Nebraska, and Chelsey Skeahan, age 30, of Ceresco, Nebraska are charged in a two-count Indictment. Count I of the Indictment charges the defendants with conspiracy to distribute and possess with intent to distribute 50 grams or more of a mixture containing methamphetamine beginning on or about May, 2013, and continuing to on or about April 15, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Reyes and Skeahan with possession with intent to distribute a mixture containing marijuana on or about January 30, 2014. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 2 year term of supervised release, and a $100 special assessment. The indictment also alleges any and all property constituting or derived from any proceeds obtained directly or indirectly as a result of the violation alleged in Count I of the indictment, including but not limited to $2,080.00 in United States currency seized on January 30, 2014, and $1,999.00 in United States currency seized on April 15, 2014, should be forfeited to the United States.
* Ross Rivera, age 30, and Sheena Strand, age 27, of North Platte, Nebraska are charged with possession with intent to distribute 50 grams or more of a mixture containing methamphetamine on or about July 11, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment.
* Joel Ruiz-Rebollar, age 30, of Omaha, is charged with illegal reentry into the United States on or about July 22, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Domingo Tercero-Raymundo, also known as Joel Perez, also known as Mario Chavez, also known as Noe Pena Santos, age 36, is charged with illegal reentry into the United States on or about June 30, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Nicolas Urbieta, age 30, is charged in a four-count Indictment. Counts I thru III charge the defendant with distribution of methamphetamine on or about May 3, 2014, May 7, 2014 and May 9, 2014. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count IV of the Indictment charges Urbieta with distribution of 5 grams or more of methamphetamine on or about May 15, 2014. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment.
* Juan Velasquez-Salgado, age 32, of Omaha, is charged with illegal reentry into the United States on or about August 1, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Hendri Vicente Puac, age 33, of Grand Island, Nebraska, is charged with illegal reentry into the United States on or about May 12, 2014, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Kristine Warren, age 23, of LaVista, Nebraska, is charged with conspiracy to distribute and possess with intent to distribute hydrocodone beginning on or about January, 2014, and continuing to on or about May 28, 2014. The maximum possible penalty if convicted is 10 years imprisonment, a $500,000 fine, a 2 year term of supervised release, and a $100 special assessment.
* Brenda Warta, age 55, of Grand Island, Nebraska, is charged in a three-count Indictment. Count I of the Indictment charges the defendant with bank fraud resulting in a loss to Platte Valley State Bank and Trust Company of $431,952.00 from on or about September 13, 2005 through on or about September 16, 2006. The maximum possible penalty if convicted is 30 years imprisonment, a $1,000,000 fine, a 5 year term of supervised release, and a $100 special assessment. Counts II and III of the Indictment charge Warta with false statements on loan and credit applications regarding the existence of collateral for the loans. The maximum possible penalty if convicted is 30 years imprisonment, a $1,000,000 fine, a 5 year term of supervised release, and a $100 special assessment for each count.Ardmore Man Sentenced to 36 Months Probation for Delay or Destruction of MailRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that JUSTIN SLATE THRONEBERRY, age 32, of Ardmore, Oklahoma, was sentenced to 3 years of probation for Delay Or Destruction Of Mail By a Postal Employee, in violation of Title 18, United States Code, Section 1703.
The charge arose from an investigation by the United States Postal Inspection Service, Office of Inspector General. The defendant was indicted in March 2014 and pled guilty in May 2014.
The Indictment alleged that on or about December 19, 2013 in the Eastern District of Oklahoma, the Defendant, a United States Postal Service employee, did willfully, knowingly and unlawfully secrete, destroy, detain and open a package entrusted to him and which came into his possession to be conveyed by mail while performing his assigned duties as an employee of the United States Postal Service.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.
Assistant United States Attorney Chris Wilson represented the United States.
Allentown Man Pleads Guilty to Tax Refund SchemeRead the Press Release
PHILADELPHIA - Andy O. Rodriguez, 26, of Allentown, PA, pleaded guilty today to defrauding the IRS of $2,904,783.64 in fraudulent tax refunds. Rodriguez pleaded guilty to all 23 counts of making false claims against the United States. U.S. District Court Judge Lawrence F. Stengel scheduled a sentencing hearing for November 24, 2014. Rodriguez admitted today that between August 17, 2010 and January 31, 2012, he knowingly filed false tax returns with the IRS claiming refunds in the names of other individuals. The returns included W-2 forms falsely claiming that taxes were withheld by various employers. The IRS identified more than 600 false returns that were associated with this scheme. These returns, which were filed electronically, claimed refunds totaling $2,904,783.64.
Rodriguez faces a maximum possible sentence of 115 years in prison, restitution to the IRS of up to $2,904,783.64, up to three years of supervised release, a fine of up to $5.75 million, and a $2,300 special assessment.
The case was investigated by the Internal Revenue Service Criminal Investigations and is being prosecuted by Assistant United States David J. Ignall.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Albuquerque Man Sentenced to Eighteen Years for Conviction on Federal Carjacking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Raul Ortega, 21, of Albuquerque, N.M., was sentenced this afternoon to 18 years in federal prison for his conviction on carjacking and firearms charges. Ortega will be on supervised release for three years after completing his prison sentence. Ortega also was ordered, jointly with his co-defendant, to pay $2335.24 in restitution to the victims of his criminal conduct.
Ortega and his co-defendant, Joel Meeks, 21, also of Albuquerque, were arrested in April 2013, on an eight-count indictment charging the pair with offenses stemming from a series of armed robberies of commercial businesses and home invasions, including armed robbery and carjacking, occurring in Bernalillo County, N.M., from Dec. 6, 2012 to Jan. 17, 2013.
According to court filings, Meeks robbed a business called “Up in Smoke” at gunpoint on Dec. 6, 2012. Meeks also robbed a business called “PDQ” at gunpoint on Dec. 7, 2012, and discharged his firearm while committing the crime. Meeks and Ortega jointly committed two carjackings on Jan. 13, 2013 and Jan. 17, 2013, and brandished firearms while committing those crimes.
On Feb. 19, 2014, Ortega entered guilty pleas to Counts 5 and 7 of the indictment, which charged him with the Jan 13, 2013 and Jan. 27, 2013 carjackings. He also pled guilty to Count 6, which charged him with using a firearm during the Jan 13, 2013 carjacking.
On April 1, 2014, Meeks entered guilty pleas to Counts 3 and 4 of the indictment, which charged him with robbing the PDQ store on Dec. 7, 2012, and with discharging a firearm while robbing the store. He also pled guilty to Counts 5 and 7, which charged him with the Jan. 13, 2013 carjacking and Jan. 17, 2013 carjacking, respectively. Meeks remains in custody pending his sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, he faces a prison sentence within the range of 20 to 25 years.
This case was brought as part of a law enforcement initiative launched in July 2012, by the FBI’s Violent Crimes and Major Offender Squad and the Albuquerque Police Department’s Armed Robbery Unit that targets suspects implicated in commercial armed robberies. This initiative is part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under the worst of the worst anti-violence initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from our communities for as long as possible.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office and is being prosecuted by Assistant U.S. Attorney Jon K. Stanford.
25 Pounds of Methamphetamine Discovered in Vehicle’s Hidden CompartmentRead the Press Release
FRESNO, Calif. — A federal grand jury returned a one-count indictment today against Mario Farias Pineda, 22, of Calistoga, charging him with possession of methamphetamine with intent to distribute it, United States Attorney Benjamin B. Wagner announced.
According to court documents, Pineda was driving northbound on California State Highway 99 when he was pulled over by Fresno County Sheriff’s deputies for talking on his cellphone. The deputies obtained permission to search his vehicle and found approximately 25 pounds of methamphetamine in a hidden compartment behind the rear passenger seat.
This case is the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Fresno County Sheriff’s Office. Assistant United States Attorney Michael Frye is prosecuting the case.
If convicted, Pineda faces a statutory penalty of at least 10 years and up to life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
16 Individuals Indicted for Drug TraffickingRead the Press Release
SAN JUAN, Puerto Rico – On August 19, 2014, a federal grand jury in the District of Puerto Rico returned an indictment against 16 defendants charged with conspiracy to possess with intent to distribute controlled substances, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The Drug Enforcement Administration (DEA) is in charge of the investigation, with the collaboration of the United States Postal Inspection Service (USPIS) and the Federal Bureau of Investigation (FBI).
The indictment charges 16 individuals with conspiracy to knowingly and intentionally distribute, and cause the distribution of, in excess of 50 grams of methamphetamine, its salts, isomers, and salts of its isomers, and quantities of Gamma-butyrolactone (GBL) knowing that it was for human consumption, all for significant financial gain and profit. The defendants are: Javier Trujillo-Plumey, aka “Mother”; Ramón Antonio Torres-Gonzàlez, aka “Gabriel”; Armando Duran; José Aníbal Rivera-Fuentes, aka “Luis,” “La Negra”; Nicholson Silva-Hernàndez, aka “Nico”; Fernando Dàvila-Guadalupe, aka “Fernan”; Juan Medina-Mojica; Antonio Camacho-Espaillat; Elvyn García, aka “Vinny”; Pablo Ramos-Pabón, aka “PJ”; Waldemar Gonzàlez-Medina, aka “Wally”; Esteban Ortiz; Hommy Rosado-Rodríguez; Eduard Gonzàlez-Pérez, aka “Bacteria”; Joeing Navarro, aka “Joe,” “Hunterman”; and Peter Molina.
The indictment alleges that beginning in September 2013, the organization distributed wholesale and retail amounts of methamphetamine –also known by its street names of ICE, crystal ICE and meth– and GBL throughout Puerto Rico. The meth was supplied by defendants and co-conspirators residing in the State of California, and the GBL was supplied out of China.It was further part of the manner and means of the conspiracy that the controlled substances would be sent to defendants using commercial carriers such as United States Postal Service, UPS or FedEx. According to the indictment, the defendants used communication facilities, such as cellphones, to commit and facilitate the sales of meth and GBL.
“This is the first time that our District prosecutes a drug trafficking organization for distributing methamphetamines and GBL,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “This investigation and prosecution are significant because we have disrupted the supply of this dangerous drug, which is new in Puerto Rico, before its demand increases to levels seen in the US mainland.”
“Operation Ice Island is an investigation that began in September 2013, with the seizure of 14.4 grams of Crystal Methamphetamine (ICE) where members of the Javier Trujillo-Plumey Drug Trafficking Organization used as Modus Operandi the distribution of Crystal Meth imported from California to Puerto Rico. The DEA will continue to work with state and federal authorities to combat drug trafficking and new forms and methods used by drug traffickers to circumvent our monitoring,” said Vito Salvatore Guarino, Special Agent in Charge of the DEA Caribbean Division.
Eliezer Juliàn, Postal Inspector/Team Leader from the US Postal Inspection Service stated: “The US Postal Inspection Service has altered its strategy regarding the investigation, arrest, and prosecution of those who would use the U.S. Mails to transport illegal drugs and firearms. Our approach seeks to identify, disrupt, and dismantle drug trafficking organizations (DTO’s). In addition, we have strengthened our relationship with our federal and state law enforcement partners. This level of inter-agency cooperation has had an impact on DTO’s operating in Puerto Rico.”
Assistant U.S. Attorney Myriam Fernàndez is in charge of the prosecution of the case. If convicted the defendants face a minimum sentence of 10 years up to life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
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20 August 2014
“Cookie Stuffing" Internet Fraud Schemer Pleads GuiltyRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Jody Michael Smith, a resident of Oregon, entered a guilty plea today before United States District Court Judge Kristi DuBose to a one-count Information charging conspiracy to commit wire fraud.
Smithadmitted that he andothers operated a fraud scheme, commonly known as “cookie stuffing,” using affiliate marketing programs. They created “forced clicks” by unsuspecting web shoppers, which allowed Smith and members of the conspiracy to receive commissions for sales they did not generate, thus defrauding legitimate advertisers and the company paying for the advertising. 1. This was done primarily through Linkshare Corporation and Google, to victimize Fareportal, Inc.
Smith faces a maximum statutory penalty of 20 years in prison and a $250,000 fine.
The matter was investigated by the Mobile Field Office of the U.S. Secret Service and was prosecuted by AUSA Deborah Griffin.
1. Affiliate marketing is internet performance-based marketing which, by using an individual’s websites or advertisements, directs traffic to another website in the “network” and receives credit for either pay per click (PPC) or pay per action (PPA) if the user travels to the website.
Wisconsin Man Pleads Guilty to Transportation for ProstitutionRead the Press Release
United States Attorney Brendan V. Johnson announced that Thomas Alexander Roberts, age 34, of Milwaukee, Wisconsin, appeared before U.S. District Judge Karen E. Schreier on August 14, 2014, and pled guilty to one count of an Indictment that charged him with Transportation for Prostitution.
The maximum penalty upon conviction is 10 years in prison, a $250,000 fine, and restitution.
In November 2013, Roberts traveled from Milwaukee to Sioux Falls and brought two women with him to engage in prostitution. Police discovered Roberts’ involvement after he placed advertisements on the Internet for prostitution.
The investigation was conducted by the Sioux Falls Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Jeffrey C. Clapper.
A presentence investigation was ordered and a sentencing date was set for November 3, 2014. The defendant was remanded to the custody of the U.S. Marshals Service pending sentencing.
Wisconsin Man Arrested for Federal Drug and Money Trafficking ViolationsRead the Press Release
Department of Justice
Office of Public AffairsLUFKIN, Texas – A 40-year-old man from Milwaukee, Wisconsin has been arrested for federal drug and money trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Henry Korvett Bams, of Milwaukee, Wisconsin, was arrested Tuesday, pursuant to a criminal complaint issued by the U.S. District Court charginghim with conspiracy to possess with the intent to distribute over five kilograms of cocaine and engaging in interstate and foreign travel or transportation in aid of a Racketeering Enterprise. On Sunday, July 6, 2014, Bams was stopped for a traffic violation by the Texas Department of Public Safety while traveling southbound on US Highway 259 in Nacogdoches County, Texas. The officer eventually conducted a search of the vehicle and seized approximately $253,341 in cash and a small quantity of marijuana. Following an arrest on state charges, Bams was released when the charges were dismissed. In addition, the Nacogdoches County District Attorney’s office returned all but $100,000 of the seized currency to Bams. On Tuesday, July 22, 2014, Bams was stopped for a traffic violation by Arkansas State Police in Hot Springs County, Arkansas, on Interstate Highway 30. The officer received consent to search the vehicle and discovered approximately ten kilograms of suspected cocaine located inside a hidden compartment within the vehicle. Two bank deposit slips were also discovered within the vehicle. On Aug. 1, 2014, agents with the Internal Revenue Service and the Drug Enforcement Administration executed a seizure warrant on the bank account referenced in the deposit slips and seized approximately $135,015.14 in suspected drug proceeds.If convicted, Bams faces a minimum of 10 years to life in federal prison for the drug distribution violation and up to five years for the interstate transportation in aid of racketeering violation.
This case is being investigated by the Internal Revenue Service-Criminal Investigation, the U.S. Drug Enforcement Administration, the Federal Bureau of Investigation, the Texas Department of Public Safety, the Arkansas State Police, Milwaukee High Intensity Drug Trafficking Area Task Force and Homeland Security Investigations, and is being prosecuted by Assistant U.S. Attorney Baylor Wortham.
It is important to note that a complaint, arrest, or indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.
Washington Metropolitan Area Transit Authority Pays United States More Than $4.2 Million to Resolve False Claims Act AllegationsWhistleblower’s Lawsuit Alleged Transit Agency Violated Federal Contracting RulesRead the Press Release
WASHINGTON - The Washington Metropolitan Area Transit Authority (WMATA) has paid $4,240,341 to resolve allegations that it filed false claims in connection with using federal funds to impermissibly award a contract for a financial management information technology project without using competitive procurement procedures.
The settlement, in a lawsuit filed in the U.S. District Court for the District of Columbia, was announced today by U.S. Attorney Ronald C. Machen Jr. and Kathryn Jones, Regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General.
The conduct at issue involves a contract that WMATA awarded on or around July 10, 2010, to Metaformers, Inc., a Virginia-based business, to integrate the Authority’s financial and business systems. The total cost of this integration project was approximately $14 million. WMATA funded the project with approximately $9 million in grant funds from the Federal Transit Administration (FTA).
As a condition of receiving grant funds, WMATA certified that it would comply with statutes, regulations, and FTA rules mandating full and open competition when procuring goods and services using FTA grant funds. Also, as a condition of receiving the funds, WMATA certified that it would not award contracts in a manner that created a conflict of interest – for example, giving an unfair advantage to one bidder or contractor over others. WMATA allegedly violated both the competition requirement and avoidance of “conflict of interest” rule in awarding the financial management information technology contract.
“The American people have a right to know that their government is following rules and regulations in spending the taxpayers’ money,” said U.S. Attorney Machen. “Our office has targeted government contractors who fail to meet their obligations, and this settlement shows that we expect agencies that receive federal funding to honor the integrity of the contracting process as well.”
“This investigation and settlement agreement demonstrates our commitment to ensuring the integrity of the acquisition process and protecting taxpayer dollars from waste, fraud and abuse, which is a top priority for both the Office of Inspector General and the Department of Transportation,” said Special Agent-In-Charge Jones. “Working with the Department, as well as our law enforcement and prosecutorial partners, we will continue our efforts to prevent, detect, and prosecute the improper use of federal grant funds.”
In or around August 2009, WMATA awarded Metaformers, using full and open competition procedures, a relatively modest contract valued at approximately $256,000 to assess WMATA’s financial system. Less than one year later, in July 2010, WMATA awarded Metaformers the $14 million contract to integrate the Authority’s financial and business systems. WMATA awarded the contract non-competitively and allegedly without legitimate justification for doing so, foreclosing an opportunity for other contractors and companies to submit proposals for the lucrative project. WMATA’s conduct was allegedly in violation of its certification – and commitment - to administer the FTA grant funds using full and open competition.
In awarding the $14 million integration contract, WMATA also allegedly violated “conflict of interest rules” governing use of FTA grant funds. WMATA’s noncompetitive award to Metaformers was based, in part, on the work completed by Metaformers under the assessment contract. By competitively awarding the smaller assessment contract and then non-competitively awarding the far more lucrative integration project both to the same contractor, WMATA violated federal procurement conflict of interest rules by giving one contractor an advantage over others who might have been interested in competing for the integration project.
Because of WMATA’s conduct, contractors who might have been interested in submitting proposals or bids for the integration project never had the opportunity to do so. Thus, WMATA’s conduct was allegedly in violation of its certification and commitment to administer the FTA grant funds avoiding conflicts of interest in procurements.
The settlement resolves a qui tam, or whistleblower, lawsuit filed on behalf of the government by former WMATA employee Shahiq Khwaja, under the qui tam, or whistleblower provisions, of the False Claims Act. The False Claims Act is one of the government’s most powerful tools in the effort to combat fraud on federal programs. The Act allows private citizens to bring lawsuits on behalf of the United States and share in any recovery obtained by the government. Mr. Khwaja will receive approximately $996,480 as his share of the recovery.
Mr. Khwaja’s qui tam lawsuit also includes allegations on behalf of Virginia and the District of Columbia. The settlement with the federal government does not resolve the state and local allegations.
In February 2012, Mr. Khwaja also filed a separate complaint with the U.S. Department of Transportation against WMATA for violating the American Recovery and Reinvestment Act’s (ARRA) provisions protecting whistleblowers. Mr. Khwaja alleged that WMATA terminated him from his position as an information technology functional manager because he expressed concerns about the manner in which WMATA was financially and technically administering the integration project which was funded, in part, with ARRA funds. In or around August 2012, the U.S. Department of Transportation’s Office of Inspector General, based on its separate investigation of Mr. Khwaja’s ARRA-related claims, found that the weight of evidence indicated that Mr. Khwaja’s disclosures were a contributing factor in his termination and that WMATA failed to show by clear and convincing evidence that it would have terminated Mr. Khwaja notwithstanding his disclosures. As reflected in the settlement agreement, WMATA negotiated with Mr. Khwaja’s counsel to resolve Mr. Khwaja’s wrongful termination claim for $390,000.
In announcing the settlement, U.S. Attorney Machen commended the work of those who investigated the case from the Department of Transportation’s Office of Inspector General and the Federal Transit Administration. He also acknowledged the efforts of those who worked on the matter from the Commercial Litigation Branch of the Justice Department’s Civil Division, including Trial Attorneys Jennifer Koh and Elizabeth Young. Finally, he expressed appreciation for the work of those who handled the case from the U.S. Attorney’s Office, including Investigator Karen D. Caudill, Paralegal Specialist Cindy Parker, and Assistant U.S. Attorney Beverly M. Russell, who worked on the investigation and settlement of the matter.
The claims settled by the agreement are allegations only, and there has been no determination of liability. Additionally, the settlement agreement is not based on any allegation that the contractor, Metaformers, engaged in any wrongdoing.
The case is captioned United States, Virginia and the District of Columbia, ex rel. Shahiq Khwaja v. Washington Metropolitan Area Transit Authority, et al., Case No. 1:12-cv-00268-RJL (D.D.C.).
14-181Two Plead Guilty in Connection with Counterfeit and Money Laundering ConspiraciesRead the Press Release
Gulfport, Miss. – Brittany Ann Jackson, 26, of Biloxi, and Dontrelle Deshaun Sanford, 24, of Hattiesburg, pled guilty on Tuesday, August 19, 2014, to charges in an indictment filed against them earlier this year, announced U.S. Attorney Gregory K. Davis, Secret Service Resident Agent in Charge Mark McKee, and IRS Criminal Investigation Special Agent in Charge Gabriel L. Grchan.
Jackson pled guilty to one count of conspiracy (count 1) to pass counterfeit U.S. currency and Sanford pled guilty to one count of conspiracy to commit money laundering (count 13). The indictment alleged that as part of the conspiracies the defendants would purchase items, such as Dyson vacuum cleaners, with counterfeit money at Lowe’s stores in Mississippi, Alabama and Florida. The defendants would then return the items to the stores and receive genuine money for the refunds.
Their sentencings are scheduled for November 20, 2014, before United States District Judge Sul Ozerden. Jackson faces a maximum penalty of 5 years imprisonment and a $250,000 fine. Sanford faces a maximum penalty of 20 years imprisonment and a $500,000 fine.
IRS-Criminal Investigation Special Agent in Charge, Gabriel L. Grchan, stated: “Simply put, counterfeiting currency is a violation of the law; it also causes damage to the local economy and hurts the pocket books of all taxpayers by increasing the cost of goods and services. IRS – CI will continue to seek the prosecution of individuals, such as Brittany Jackson and Dontrelle Sanford, who engage in money laundering through counterfeiting and related financial transactions for illegal purposes.”
This case was investigated by the United States Secret Service and IRS-Criminal Investigation. It was prosecuted by Assistant U.S. Attorney Ruth Morgan.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:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Two Men Indicted for Defrauding 60 People Out of $6.5 Million Through Real Estate InvestmentRead the Press Release
Two men were indicted on charges they defrauded approximately 60 people out of more than $6.5 million through a fraudulent Arizona real-estate development investment, law enforcement officials said.
Stanley M. Paulic, 41, of Aurora, Ohio, and Steven R. Long, 45 of Mather, California, each face one count of conspiracy to commit mail fraud and wire fraud and one count of wire fraud.
“These individuals ripped off dozens of people, stealing life savings and creating real financial hardships,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
“These two individuals stole the hard earned money of others for their own greedy benefit,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office. “The FBI and our partners will continue efforts to root out such deceitful perpetrators.”
Paulic and Long co-founded Integrity Financial AZ, LLC, or IFAZ, which had regional offices near Cleveland, Chicago and Sacramento, California. Beginning around 2008, Paulic served as chief executive officer of the company while Long served as president.
Together, the two conspired to unlawfully enrich themselves through false pretenses, representations and other means to individuals seeking to invest money in a legitimate enterprise and instead converting that money to Paulic and Long’s personal use, according to the indictment.
IFAZ solicited investor funds for the purported development of residential real estate in Tonapah, Arizona. At no time during the periods mentioned in the indictment did Long, Paulic or IFAZ register with the U.S. Securities and Exchange Commission.
Paulic and Long represented to prospective investors and IFAZ owned land and built homes in Arizona. They represented to investors that they rented these homes to individuals who were unable to qualify for standard residential mortgages and then, once those renters improved their credit scores, IFAZ sold the homes to them at substantial profit, according to the indictment.
They made these representations in a variety of ways: through the IFAZ web site, holding seminars, including one in Beachwood, Ohio, in April 2009, mailing pamphlets to individuals, including a Richmond Heights resident in 2008, and buying advertisements, such as one purchased in a newspaper in Cleveland in 2009, according to the indictment.
Paulic, Long and IFAZ promised investors they would earn rates of return between 10 and 20 percent, with returns being distributed monthly. Investors were also told their investment would be secured by a deed of trust for a property in Arizona, and that not more than one deed would be associated with each parcel, according to the indictment.
In reality, Long recorded multiple deeds on single parcels and monthly payments made to investors came, at least in part, from other investor funds, according to the indictment.
Paulic and Long used IFAZ investment funds to pay for personal expenditures and expenditures of non-IFAZ corporate entities. For example, from March 2008 to August 2009, Paulic received approximately $586,225 in wire transfers from IFAZ, according to the indictment.
Overall, approximately 60 people invested approximately $8.1 million in IFAZ. Approximately $1.6 million was returned to investors, resulting in a loss to investors of approximately $6.5 million, according to the indictment.
The case is being prosecuted by Assistant U.S. Attorney M. Kendra Klump following an investigation by the Federal Bureau of Investigation and U.S. Postal Inspection Service.
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.
Tiverton Resident Sentenced to 5 Years in Federal Prison on Drug Trafficking, Firearm ChargesRead the Press Release
PROVIDENCE, R.I. – Ian D. Andrade, 37, of Tiverton, was sentenced today to 60 months in federal prison for trafficking cocaine and possessing a firearm in furtherance of his drug trafficking activities, announced United States Attorney Peter F. Neronha and Newport Police Chief Gary T. Silva.
At sentencing, U.S. District Court Judge John J. McConnell, Jr. also ordered Andrade to serve 3 years supervised release upon completion of his prison term. Andrade pleaded guilty on May 21, 2014, to one count each of possession with the intent to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime.
Andrade was arrested by Newport Police on November 8, 2013, after an investigation by members of the Newport Police Department’s Vice Unit led to the seizure of 366 grams of cocaine and a loaded handgun from a hide inside Andrade’s vehicle.
According to court documents and information presented to the court, in the fall of 2013, members of the Newport Police Department Vice Unit developed information into Andrade’s drug trafficking activities. Detectives determined that Andrade was using a vehicle with a hidden compartment inside to facilitate the trafficking of cocaine.
According to court documents and information presented to the court, on November 8, 2013, members of the Newport Police Department observed as Andrade and a juvenile female entered the vehicle outside a Newport residence and then drove away. A uniformed Newport Police officer stopped the vehicle a short distance away and advised Andrade of a court authorized search warrant for the vehicle. The vehicle was towed to the Newport Police Department and searched, during which time detectives seized from a secret compartment behind the front passenger seat a loaded .22 caliber handgun and a plastic container containing 366 grams of cocaine in 39 packages in quantities consistent with distribution. Andrade also turned over $4,435 in cash from his person.
At the time of his arrest and at the time of his guilty plea before the court, Andrade admitted to possessing the cocaine and the firearm seized from the vehicle, and that he used the firearm to protect his drugs. Andrade admitted that the $4,435 in cash seized was proceeds from his drug trafficking activities.
The case was prosecuted by Assistant U.S. Attorney Pamela E. Chin.
The Rhode Island DEA Drug Task Force assisted Newport Police in this matter.###
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]Three St. Croix Men Sentenced to 10 Years in Prison for Federal Firearms Offense and Robbery Third DegreeRead the Press Release
St. Croix, USVI – On Monday August 18, 2014, Chief District Court Judge Wilma A. Lewis sentenced defendants Francisco “Cisco” Hassell III, 29, Edwin Hendrickson, Jr., 28, and Rusiel “Romeo” Encarnacion, 33, to ten years in prison for their roles in two armed robberies. Each defendant received a three year prison sentence for robbery third degree. In addition, Judge Lewis imposed a consecutive 84- month prison term on each defendant for using and brandishing a firearm during and in relation to a crime of violence. Under federal law, any sentence for using a firearm during a crime of violence must be run consecutively to any term of imprisonment imposed for the crime of violence during which the gun was used.
Court records show that Hassell III, Hendrickson, Jr. and Encarnacion were arrested on January 13, 2013 by the VIPD after they robbed patrons at gunpoint at the Cool Out Bar in Peter’s Rest. Shortly after the robbery at the Cool Out Bar, Hassell III, Hendrickson, Jr. and Encarnacion saw two individuals walking on Hospital Street in the vicinity of the Virgin Islands Police Department Marine Unit and robbed them at gunpoint as well. The defendants were subsequently indicted by a federal grand jury and pled guilty on February 14, 2014. They have been detained since their arrest and were remanded to the custody of the U.S. Marshals Service at the conclusion of Monday’s sentencing.
"As these sentences show, those who use guns to engage in violent acts against the citizens of the Virgin Islands will be vigorously prosecuted and subject to stiff punishment, " U.S. Attorney Sharpe said.
The case was investigated by the Federal Bureau of Investigation and the Virgin Islands Police Department. The case was prosecuted by Assistant U.S. Attorneys Rhonda Williams-Henry and Alphonso Andrews.
Three Monroe Grocery Store Workers Plead Guilty to SNAP/WIC Benefits Fraud ConspiracyRead the Press Release
MONROE, La. –Three Monroe grocery store workers pleaded guilty this week for their roles in a scheme to exchange SNAP and WIC benefits to customers for cash and ineligible items, U.S.Attorney Stephanie A. Finley announced today.
Angela Woods, 27, of Monroe, pleaded guilty today to one count of criminal conspiracy before U.S. Magistrate Judge Karen L. Hayes. The plea will become final when accepted by U.S. District Court Judge Robert G. James. Willie Mae Woods-Jackson, 42, of Dallas, pleaded guilty to criminal conspiracy Monday, and Kimberlia Harris, 45, of Monroe, pleaded guilty to criminal conspiracy Tuesday. In a related matter, Juanita Woods, 36, of Monroe, pleaded guilty on July 24, 2014 to one count of theft of government property. According to evidence presented at the guilty pleas, the defendants conspired to provide customers cash and ineligible items for their Supplemental Nutrition Assistance Program (SNAP) benefits and Women Infant and Children (WIC) program benefits from August 2008 to early 2014 at Dee’s Grocery Store in Monroe where Harris was the owner, Angela Woods was a manager and cashier, Woods-Jackson was a cashier, and Juanita Woods was a cashier. During the time the scheme took place, they acquired approximately $7 million.
Harris, Angela Woods and Woods-Jackson face up to five years in prison for the conspiracy count. Juanita Woods faces up to 10 years in prison for theft of government money count. They all face up to three years of supervised release and a $250,000 fine. A sentencing date of December 8, 2014 was set for Harris, Angela Woods and Jackson-Woods. Sentencing date for Juanita Woods is November 4, 2014.
The U.S. Department of Agriculture, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Earl M. Campbell is prosecuting the case.
Three Illegal Aliens Charged with Immigration ViolationsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania and the U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations (ERO), announced today that separate criminal charges were filed this week against three illegal aliens.
Baltazar Lua-Garcia, also known as Ruben Garcia-Rodriguez, age 52, a native and citizen of Mexico, in the United States illegally, was charged in a one-count indictment by a federal grand jury in Harrisburg.
The indictment alleges that Lua-Garcia, an alien who was convicted before the Superior Court for King County, Washington on April 1, 1994, of Delivery of Cocaine, and had been previously arrested and deported from the United States on October 10, 2003, did knowingly and unlawfully reenter the United States. He was apprehended by federal immigration agents in York County, Pennsylvania.
If convicted, Lua-Garcia faces a maximum sentence of up to 20 years of imprisonment and a $250,000 fine.
Oscar Perez-Chavez, age 46, a native and citizen of Guatemala, in the United States illegally was charged in a one-count information filed with the Court in Harrisburg. The information alleges that Perez-Chavez, an illegal alien, entered the United States and was found in Franklin County, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, Oscar-Perez faces a maximum sentence of up to 6 months’ imprisonment and a $5,000 fine.
Agustin Hernandez-Rojas, age 40, a native and citizen of Mexico, in the United States illegally, was charged in a one-count information filed with the Court in Harrisburg. The information alleges that Hernandez-Rojas, an illegal alien, entered the United States and was found in Franklin County, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, Hernandez-Rojas a maximum sentence of up to 6 months’ imprisonment and a $5,000 fine.
The investigations were conducted by the U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations (ERO) and is being prosecuted by Special Assistant United States Attorney Brian G. McDonnell.
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.
Texas Man Sentenced to Four Years on Drug and Immigration ChargesRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Moises
Soto, 53, formerly of Corpus Christi, Texas, was sentenced yesterday to 4 years in prison for conspiracy to manufacture more than 1,000 marijuana plants and harboring an illegal alien. Soto pled guilty to the charges on July 30, 2013.Soto’s conviction stems from his involvement in large, sophisticated marijuana growing operations in Penobscot and Washington counties that operated between 2006 and 2009. In late
2007, just weeks after becoming a naturalized U.S. Citizen, Soto was asked by coconspirator
Malcolm French to obtain illegal alien migrant workers to process marijuana that had been harvested from Township 37 in Washington County. The defendant agreed to do so and located three migrant workers in Florida. The workers were told they would be planting Christmas trees. After they were brought to Maine, Soto told them that they would be processing marijuana. The migrant workers did not speak English. Soto periodically checked in on their work and translated instructions to them from other members of the conspiracy. In 2008 and
2009, the defendant obtained additional illegal alien migrant workers to grow and process marijuana, checked in on their work and translated for them.On September 22, 2009, law enforcement agents discovered the marijuana grow in
Township 37 with several of the migrant workers tending the plants. The workers and two
American coconspirators -- Rodney Russell and Scott MacPherson -- fled into the woods to avoid arrest. Investigators seized 2,943 marijuana plants. The workers were brought by Robert
Berg and Scott MacPherson to Berg’s residence in Corinna, Maine. Thereafter, Soto arranged for an alien smuggler, or “coyote,” to pick up the workers and drive them out of state. Soto then fled to Mexico where he remained until turning himself in to authorities in Texas in
2013. Agents located three of the workers three years later and they cooperated with the investigation.In January 2014, Malcolm French, Rodney Russell, Kendall Chase, and Haynes
Timberland, Inc., were convicted of related charges following a jury trial and await sentencing. Robert Berg, pleaded guilty to being an accessory after the fact to the operation of the marijuana grow in January 2014.The investigation was conducted by the Maine Drug Enforcement Agency with assistance from the Internal Revenue Service - Criminal Investigation Division and U.S.
Immigration and Customs Enforcement’s Homeland Security Investigations.Statement on the Manhattan U.S. Attorney’s Office Review of the Shooting of 18-Year-Old Ramarley GrahamRead the Press Release
“Last fall, this Office began an independent review of the evidence regarding the death of Ramarley Graham after the local authorities completed their investigation and ultimately were not able to bring any charges arising out of the shooting. Today we received a letter from the mother of Ramarley Graham and other materials, which we are reviewing. This Office is acutely aware of how painful it is to lose a child in an encounter with law enforcement under any circumstances. In addition to reviewing evidence obtained from local authorities, this Office has been conducting its own independent investigation of this tragic incident. There are many reasons that a federal civil rights investigation should be conducted confidentially, including grand jury secrecy rules, as well as prudential and other reasons, including fairness to all the parties involved. Above all, a proper investigation must be thorough, fair and independent so that in the end justice is done, and we are absolutely committed to that. Finally, it should be understood that this Office has repeatedly been in communication with the attorneys for the mother of Mr. Graham and we will continue to do so,” said James Margolin, a spokesman for the U.S. Attorney's Office for the Southern District of New York.
South Dakota Man Sentenced for Clean Air Act ViolationRead the Press Release
COEUR D'ALENE - John Wilhelm Myre, 55, of South Dakota, was sentenced yesterday to three years of supervised release and 90 hours of community service for negligent endangerment under the federal Clean Air Act, U.S. Attorney Wendy J. Olson announced. U.S. Magistrate Judge Candy W. Dale also ordered Myre to pay a $3,000 fine. Myre pleaded guilty to the charge on March 18, 2014.
According to the plea agreement, Myre admitted that in January 2013, when he was a supervisor for the Dakota Southern Railroad, the laborers working under him used acetylene cutting torches to cut apart steel beams from an old railroad trestle. The steel beams had been painted with lead-based paint, and when they were cut with the torches the lead vaporized and was released into the air. One of the workers became ill and had to be hospitalized with acute lead poisoning, and the other workers all had high levels of lead in their bloodstreams.
Judge Dale ordered Myre to attend and complete within six months an OSHA class on safety standards involving lead paint. In addition, the defendant is prohibited from using firearms during the term of his supervised release.
"This is an astonishing case of admitted negligence with tragic consequences," said Tyler Amon, Special Agent-in-Charge of the United States Environmental Protection Agency’s (EPA's) Criminal Investigation Division in Seattle. "Despite learning that one worker had to be hospitalized by the process, Mr. Myre’s workers continued their toxic task of cutting steel and breathing lead fumes. The result: five diagnosed cases of lead poisoning that were completely avoidable. We will investigate and prosecute criminal negligence that causes harm to the fullest extent of the Law."
The case was investigated by U.S. EPA Criminal Investigation Division.
South Dakota Man Sentenced for Aggravated Sexual Abuse of A ChildRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lake Andes, South Dakota, man convicted of Aggravated Sexual Abuse of a Child was sentenced on August 11, 2014, by U.S. District Judge Roberto A. Lange.
Sylvan Godfrey, age 51, was sentenced to 360 months of custody, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Godfrey was indicted by a federal grand jury on July 17, 2013. He was found guilty of the above charge as a result of a federal jury trial in Pierre, South Dakota, on May 28, 2014.
At some point between May 2006 and November 2007, Godfrey sexually abused a girl who was under 12 years of age.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Timothy M. Maher prosecuted the case.
Godfrey was immediately turned over to the custody of the U.S. Marshals Service.
Shrewsbury Man Sentenced for Social Security FraudRead the Press Release
BOSTON - A Shrewsbury man was sentenced in U.S. District Court in Worcester today for taking $57,948 in Social Security payments to which he was not entitled.
George Bergstrom, 60, was sentenced by U.S. District Court Judge Timothy S. Hillman to one year of probation and was ordered to pay $57,948 in restitution to the Social Security Administration, all of which he paid today. In May 2014, Bergstrom pleaded guilty to theft of public money.
In 2009, Bergstrom’s mother died, but her Social Security payments continued to be directly deposited into a joint bank account she held with Bergstrom. From 2009 to 2013, Bergstrom continued to receive and spend his deceased mother’s benefits of more than $1,100 per month. The payments should have ceased upon the death of Bergstrom’s mother and he was not entitled to receive this money.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations – Boston Field Division, made the announcement today. The case was prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
Selby Man Charged with Sexual Exploitation of A Child and Distribution of Material Involving the Sexual Exploitation of MinorsRead the Press Release
United States Attorney Brendan V. Johnson announced that a Selby, South Dakota, man has been indicted by a federal grand jury for Sexual Exploitation of a Child and Distribution of Material Involving the Sexual Exploitation of Minors.
Christopher R. Jansen, age 34, was indicted on August 13, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on August 19, 2014, and pled not guilty to the Indictment.
For Sexual Exploitation of a Child, Count 1, the maximum penalty upon conviction is up to 30 years in custody, with a mandatory minimum of 15 years in custody, and/or a $250,000 fine, up to life of supervised release, and $100 to the Federal Crime Victims Fund. For Distribution of Material Involving the Sexual Exploitation of Minors, Count 2, the maximum penalty upon conviction is up to 20 years in custody, with a mandatory minimum of 5 years in custody, and/or a $250,000 fine, up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Count 1 alleges that between June 2011 and December 2013, Jansen used a minor to produce visual depictions of sexually explicit conduct. Count 2 alleges that between December 2013 and July 2014, Jansen knowingly distributed visual depictions of a minor engaged in sexually explicit conduct.
The charges are merely accusations and Jansen is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, the South Dakota Division of Criminal Investigation, with assistance from the Walworth County Sheriff’s Office and the Mobridge Police Department. Assistant U.S. Attorney Tim Maher and Keith Becker, a Trial Attorney with the Child Exploitation and Obscenity Section of the Department of Justice, are prosecuting the case.
Jansen was remanded to the custody of the U.S. Marshals Service pending further hearings. A trial date has been sent for October 21, 2014.
Second Man Charged with Producing Child PornographyRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Jordan McCloud, 22, of Rochester, NY, has been charged in a criminal complaint with producing child pornography and possessing child pornography. The charges carry a mandatory minimum penalty of 15 years in prison, a maximum of 30 years, a fine of $250,000 or both.
“This Complaint, together with yesterday’s arrest of Shamell Robinson, should serve as a warning to anyone who would dare harm a child and daughter of this community,” said U.S. Attorney Hochul. “While the defendants stand accused of laughing during this particular rape, if convicted, they will learn there is nothing remotely amusing about the potential punishment for this crime. We will continue our pursuit of child predators until all are brought to justice, and so that no other innocent victim need endure the scars of such abuse.”
Assistant U.S. Attorney Marisa J. Miller, who is handling the case, stated that according to the complaint, the defendant used his cellular phone to film co-defendant Shahmell Robinson while Robinson raped a female child under the age of 16. The conduct occurred at a residence in Greece on August 8, 2014. The videos came to the attention of law enforcement when another individual posted them on Facebook.com.
McCloud has not been taken into police custody. Law enforcement officers are asking the public to be on the lookout for the defendant. If you have any information regarding his whereabouts, please call 911. McCloud is a black male, 22 years old, 6’1” tall, 140 pounds. Co-defendant Shahmell Robinson was arrested on August 19, 2014 and is being held in police custody.
The criminal complaint is the culmination of an investigation on the part of members of the Federal Bureau of Investigation’s Cyber Task Force, along with Task Force officers from the Rochester Police Department, under the direction of Chief Michael Ciminelli and members of the Greece Police Department, under the direction of Chief Patrick Phelan.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Sarasota Man Sentenced to Six Years for Possessing Firearms and AmmunitionRead the Press Release
Tampa, Florida – U.S. District Judge Mary S. Scriven yesterday sentenced Terrance Timmons (30, Sarasota) to six years in federal prison for possession of firearms and ammunition by a convicted felon. The court also ordered Timmons to forfeit two firearms and twenty rounds of ammunition. Timmons pleaded guilty on May 20, 2014.
According to court documents, on August 21, 2013, the Sarasota Police Department executed a search warrant at Timmons’ residence related to prior narcotics transactions that occurred there. When detectives searched the residence, they located a black diaper bag containing two loaded firearms and paperwork with Timmons’ name on it. Prior to possessing the firearms and ammunition, Timmons had been convicted of multiple felony offenses. As such, he was prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Sarasota Police Department. It is being prosecuted by Assistant United States Attorney Adam M. Saltzman.
It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program – a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Trevor Velinor, Acting Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is another example of ATF’s Frontline Strategy to impact violent crime within our communities.
Sanford Felon Sentenced to 15 Years in Federal Prison for Possessing A FirearmRead the Press Release
Orlando, Florida – Senior U.S. District Judge G. Kendall Sharp today sentenced Bobby Deon Horn (32, Sanford) to 15 years in federal prison for being a felon in possession of a firearm. Horn pleaded guilty on May 28, 2014.
According to court documents, on November 23, 2013, officers from the Orlando Police Department responded to a 911 call reporting that several males were smoking marijuana in the area of a closed Post Office on South Orange Blossom Trail in Orlando. Upon arriving at that location, the officers observed Horn and others standing near the closed Post Office. Horn was holding an open container of alcohol and the officers smelled the odor of marijuana on him. The officers eventually searched Horn and recovered from him a loaded semiautomatic pistol, narcotic pills, and $1,481 in cash. Prior to possessing the firearm and ammunition on November 23, 2013, Horn had previously been convicted of multiple felony offenses, including a serious drug offense and a violent felony. As such, Horn was prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Orlando Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). It was prosecuted by Assistant United States Attorney Andrew C. Searle.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Trevor Velinor, Acting Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
It is another example of ATF’s Frontline Strategy to impact violent crime within our communities.
San Francisco and Los Banos Doctor Sentenced to Two Years in Prison in $3.2M Medicare Fraud SchemeRead the Press Release
SAN FRANCISCO – Edna Calaustro was sentenced to 24 months in prison and Mele Saavedra was sentenced to 3 years’ probation yesterday for conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks involving the Medicare program, and health care fraud, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Special Agent in Charge for the Los Angeles Regional Office of Inspector General of the Department of Health and Human Services Glenn R. Ferry.
The evidence at trial showed that beginning in approximately December 2006 and continuing through July 2011, Patrick Sogbein, the owner of Debs Medical Distributors, a Van Nuys durable medical equipment company, and his wife, Adebola Adefunke Adebimpe, the owner of Dignity Medical Supply, a Santa Clarita durable medical equipment company, submitted over 400 false and fraudulent claims to Medicare using fraudulent prescriptions and medical records prepared by Calaustro. The evidence also showed that Sogbein and Adebimpe worked with Calaustro, then a San Francisco-based physician, and street level recruiters, including Eduardo Abad and Saavedra.
Abad and Saavedra recruited beneficiaries at locations in the Tenderloin and South of Market neighborhoods in San Francisco, including a fast food restaurant at the Powell Street cable car turnaround and a Tenderloin neighborhood senior center. After identifying beneficiaries, Calaustro, with Abad or Saavedra, went to the beneficiaries’ homes with a portable copy machine, copied their Medicare cards, and conducted sham examinations to obtain background information for the required Medicare paperwork. Calaustro gave the fraudulent paperwork and bogus prescriptions to Sogbein and Adebimpe. Sogbein and Adebimpe, in turn, created additional fraudulent paperwork in the names of their respective companies and submitted the claims to Medicare. Sogbein paid Calaustro a $100 kickback for each power wheelchair prescription. Sogbein paid Abad and Saavedra a $100 and $50 kickback, respectively, for each beneficiary they identified. From December 2006 through July 2011, Sogbein and Adebimpe were paid more than $1.6 million for over 400 fraudulent power wheelchair claims submitted to Medicare using the fraudulent prescriptions written by Calaustro. In mid-2011, Calaustro began working as a physician in Los Banos.
Calaustro, 71, of Daly City and Los Banos, and Saavedra, 49, of San Francisco, respectively, along with co-defendants Sogbein, Adebimpe, and Abad, were indicted by a federal grand jury on Jan. 26, 2012, for conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349, and health care fraud, in violation of 18 U.S.C. § 1343. Calaustro and Saavedra were arrested on Feb. 9, 2012, in Los Banos and San Francisco, respectively. After their initial appearances, Calaustro and Saavedra were released on bail. On Sept. 19, 2013, a grand jury returned a superseding indictment, charging Sogbein, Adebimpe, Calaustro, Abad, and Saavedra with conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349, and health care fraud, in violation of 18 U.S.C. § 1343. The indictment also charged Sogbein, Calaustro, Abad, and Saavedra with conspiracy to pay and received kickbacks involving the Medicare program, in violation of 18 U.S.C. § 371.
On Sept. 30, 2013 and Oct. 21, 2013, respectively, Calaustro and Saavedra pleaded guilty to conspiracy to commit health care fraud, conspiracy to receive kickbacks involving the Medicare program, and health care fraud. Calaustro and Saavedra both testified in November 2013 at the trial of co-defendants Sogbein, Adebimpe, and Abad.
The sentences for Calaustro and Saavedra were handed down yesterday by the Honorable Jeffrey S. White, United States District Court Judge. Judge White also sentenced Calaustro to a 3 year period of supervised release following her 24 month prison term and ordered forfeiture of $1,577,426 and restitution of the same amount to Medicare. Calaustro remains out of custody and is scheduled to begin serving her sentence on Nov. 17, 2014. Judge White sentenced Saavedra to perform 500 hours of community service during her 3 year term of probation and ordered forfeiture of $275,338 and restitution of the same amount to Medicare.
On June 17, 2014, co-defendants Sogbein, Adebimpe, and Abad, who were all convicted after trial, were sentenced to prison terms of 144 months, 51 months, and 12 months and 1 day, respectively. Sogbein is in custody. Adebimpe began serving her sentence yesterday. Abad remains out of custody pending his appeal.
Denise Marie Barton and Randy Luskey are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Assistant U.S. Attorney David Countryman, Beth Margen, and Bridget Kilkenny. The prosecution is the result of an investigation by the Federal Bureau of Investigation in San Francisco and Office of Inspector General, Department of Health and Human Services in Los Angeles.
(Calaustro and Saavedra superseding indictment )
Radric Davis, Aka Gucci Mane, Sentenced to Federal Prison for Illegal Gun PossessionRead the Press Release
ATLANTA - Radric Davis, a/k/a Gucci Mane, has been sentenced to three years and three months in federal prison on firearms charges.
“Davis has a long history of violence and of illegally possessing and using guns,” said United States Attorney Sally Quillian Yates. “One of our highest priorities is to remove violent repeat offenders from our streets so that our neighborhoods and cities are safer.”
“This sentence is a direct message to criminals that ATF and our law enforcement partners are observant and will not allow violations of our laws to go unpunished, regardless of celebrity status,” said Acting Special Agent in Charge Ray Brown. “ATF is committed to utilizing the frontline strategy and working with partners to prevent violent crime and ensure that violators are prosecuted and removed from our streets.”
“The proliferation and use of guns by criminals has wreaked havoc on the streets of Atlanta for far too long,” Atlanta Police Chief George Turner said. “I hope this sentence sends a strong message that we simply will not tolerate this type of irresponsible, criminal behavior from anyone, regardless of who they are.”
According to United States Attorney Yates, the charges and other information presented in court: On Sept. 14, 2013, the Atlanta Police Department received a call from a concerned citizen and acquaintance of Davis, who told police that the defendant was acting violent and had a handgun. When police arrived, they found Davis pacing the street, smelling strongly of marijuana, waving a loaded Glock 40 caliber handgun, and making threatening comments. Just two days earlier, police had been called to a different location in DeKalb County, where they found Davis with a different firearm, making threatening comments.
Radric Davis, 34, of Atlanta, Ga., was sentenced to three years, three months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,000. He was also ordered to forfeit all firearms listed in the indictment. Davis was convicted on these charges on May 13, 2014, after he pleaded guilty.
As part of the plea agreement and the Court’s sentence, Davis will seek mental health treatment once he is released from prison.This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Atlanta Police Department.
Assistant United States Attorney Kim S. Dammers prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Porcupine Woman Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Porcupine, South Dakota, woman convicted of Assault by Striking, Beating or Wounding was sentenced on August 4, 2014, by U.S. Magistrate Judge Veronica L. Duffy.
Cheryl Lynn Cross, age 24, was sentenced to 1 year of probation and was ordered to pay a $25 special assessment to the Federal Crime Victims Fund.
In August 2013, at Porcupine, Cross punched and scratched a minor child in the face.
The investigation was conducted by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. The case was prosecuted by Assistant U.S. Attorney Sarah B. Collins.
Pine Ridge Man Pleads Not Guilty to Abusive Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man has been indicted by a federal grand jury for Abusive Sexual Contact.
Edwin Grass, Sr., age 29, was indicted on January 22, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on August 6, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 2 years in custody and/or a $250,000 fine, 1 year of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Grass knowingly engaging in sexual contact with a female on June 2, 2013, at Pine Ridge, without the woman’s permission.
The charge is merely an accusation and Grass is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Kathryn N. Rich is prosecuting the case.
Grass was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for October 14, 2014.
Oxford Man Sentenced for Receiving Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Vance David Baumbach, 37, formerly of Oxford, Nebraska, was sentenced today in Lincoln, Nebraska, to 15 years in prison by United States Senior District Judge Richard G. Kopf, for receiving child pornography. After serving his prison term, Baumbach will be on supervised release for the remainder of his life and must continue to register as a sex offender. Baumbach must also pay $5,000 in restitution and the attorney fees for three of the identified victims in this case.
In August of 2013, investigators of the Nebraska Attorney General’s Office became aware of a computer IP address that was offering to participate in the sharing of files that had been flagged in an on-going child pornography investigation. Upon further investigation, it was found that other law enforcement agencies had also noted that the same computer IP address was using the Gnutella file sharing network. Investigators were also able to determine that between August 7, 2013, and August 19, 2013, that computer had offered to participate in the sharing of 812 different files. Of those, 172 had been classified as "notable" by law enforcement.Investigators found that the IP in question was assigned to a residence in Oxford, Nebraska, and subsequently determined that Baumbach resided at that same address. A search warrant was executed and a computer and numerous hard drives were seized. After examination, over 1,000 files affiliated with child sexual exploitation were located.
At the time of his arrest on the receipt charges, Baumbach was already a registered sex offender and was on parole out of Colorado. He was previously convicted of offenses relating to child sexual assault.
This case 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 visitwww.usdoj.gov/psc for more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
This case was investigated by the Nebraska Attorney General’s Office and the Nebraska State Patrol.