Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Tuesday 24 June 2014
Mission Woman Charged with Child AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, woman has been indicted by a federal grand jury for Child Abuse.
Terri Covey, age 41, was indicted on May 13, 2014. She appeared before U.S. Magistrate Judge Mark A. Moreno on June 20, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 15 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about between February 1, 2013, and February 16, 2013, in Mission, Covey did abuse, expose, torture, torment, and cruelly punish a child under 7 years of age.
The charges are merely accusations and Covey is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers is prosecuting the case.
Covey was released to a third party custodian pending trial. A trial date has not been set.
Minneapolis Man Sentenced to Ten Years for Conspiring to Distribute Marijuana and Money LaunderingRead the Press Release
MINNEAPOLIS— Yesterday in federal court, United States District Court Judge Donovan Frank sentenced a 35-year-old Minneapolis man to 120 months in federal prison, followed by five years of supervised release, for conspiring to distribute marijuana and money laundering. A United States grand jury indicted Irineo Serio Moreno on March 4, 2013, on the drug charge. On July 8, 2013, the United States Attorney filed an Information charging Moreno with the money laundering charge. On July 12, 2013, Moreno agreed to plead guilty to both charges.
In his plea agreement, Moreno admitted that from at least January 2009 through December 20, 2012, he conspired with Ryan Timothy Solon, Christopher David Schumacher, Shawn Andrew Withrow, Jeremy Allen Anderson, Corey William Johns, Arthur Eugene Johns, and Matthew Ryan Waste to distribute 1000 kilograms of marijuana from California to Minnesota. In addition, Moreno admitted that he owned land in Northern California where he operated a marijuana grow farm, hiring and paying others to tend to the marijuana plants. Some of the marijuana from that farm was distributed in Minnesota.
Moreno also admitted to laundering the proceeds from the sale of the marijuana by purchasing assets including a Polaris UTV (an off-road utility task vehicle) and a trailer for $17,442.
As part of his plea agreement, Moreno agreed to forfeit to the United States the land in California and a 1999 Chevrolet Tahoe.
This case was the result of an investigation by IRS- Criminal Investigation and the United States Drug Enforcement Administration. It was prosecuted by Assistant United States Attorney LeeAnn Bell.Mexican National Sentenced to Ten Years for Heroin Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Ernesto Garcia-Castro, 42, a Mexican national from Ayuquilia, Oaxaca, Mexico, illegally present in the United States, was sentenced this afternoon to ten years in federal prison for his heroin trafficking conviction. Garcia-Castro will be deported after he completes his prison sentence.
Garcia-Castro and his co-defendant Luis Arturo Plazola-Jara, 32, a Mexican national from La Palma, Nayarit, Mexico, were arrested on June 17, 2013, after law enforcement officers found more than four pounds of heroin and narcotics paraphernalia when they executed a search warrant at Garcia-Castro’s residence in southeast Albuquerque. The two subsequently were indicted and charged with conspiracy and possession of heroin with intent to distribute.
Garcia-Castro pled guilty to possession of heroin with intent to distribute on Feb. 18, 2014. Plazola-Jara entered a guilty plea to possession of heroin with intent to distribute on Feb. 6, 2014 and was sentenced to 37 months in federal prison. He will be deported after he completes his prison sentence.
This case was investigated by the Albuquerque office of the DEA and the Bernalillo County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney William J. Pflugrath.
Manhattan U.S. Attorney Announces Guilty Plea of New York Accountant in Connection with the Massive Fraud at Bernard L. Madoff Investment SecuritiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that PAUL J. KONIGSBERG – a lawyer and accountant who provided services to numerous clients of Bernard L. Madoff Investment Securities (“Madoff Securities”), and who was a personal tax and business adviser to Madoff – pleaded guilty in Manhattan federal court before United States District Judge Laura Taylor Swain. KONIGBSERG pleaded guilty to a three-count superseding information charging him with one count of conspiracy to falsify the books and records of Madoff Securities and to obstruct the administration of the tax laws, as well as two substantive books and records counts. In addition to pleading guilty, KONIGSBERG has agreed to cooperate with the Government in its ongoing investigation of the fraud at Madoff Securities.
According to the superseding information, the plea agreement, and other documents filed in connection with the case:
KONIGSBERG, a lawyer and Certified Public Accountant, was the senior tax partner of Konigsberg Wolf & Co., P.C. (“Konigsberg Wolf”) and a minority shareholder of Madoff Securities International Limited, Madoff’s London-based affiliate, making KONIGSBERG the only person outside of the Madoff family to hold an ownership interest in either Madoff Securities or Madoff International.
Beginning in at least the early 1990s, Madoff began to steer several of his investors towards KONIGSBERG’s accounting practice, particularly certain long-time investors in whose accounts Madoff executed the most glaringly fraudulent transactions. By December 2008, when the scheme collapsed, Konigsberg Wolf was providing accounting services for Madoff Securities clients who aggregately held over 300 investment advisory accounts.
For example, after the death of one long-time Madoff client – who had recruited investors and so had been promised by Madoff corresponding annual commission payments in the form of guaranteed returns and fictitious, back-dated trades – Madoff encouraged the client’s widow to use KONIGSBERG as her accountant. Madoff and Frank DiPascali, Jr. – who has previously pleaded guilty for his role in the fraud and is cooperating with the Government – devised an investment “strategy” for the widow’s account: her money would be “invested” in United States Treasury bonds and cash equivalents for the first 11 months of each year, and in December, DiPascali would fabricate back-dated options trades in order to generate the promised returns. So, for instance, one of the widow’s accounts was invested in Treasuries and money market funds in January through November of 2003, resulting in net equity at the end of November 2003 of approximately $860,000. In January 2004, however, DiPascali back-dated fake options trades purportedly executed in December 2003 to generate an additional approximately $825,000, nearly doubling the value of the account. Each December, over the course of several years, KONIGSBERG called DiPascali to ensure that the widow’s accounts reflected the promised returns.
From time to time, moreover, Madoff and certain of his employees “amended” the holdings of some of his oldest clients, replacing statements reflecting one set of securities with revised statements, for the exact same time period, reflecting entirely different holdings and values. Because the existence of multiple, vastly different account statements for the same time risked exposing the fraud, Madoff could only ask certain trusted clients to return their statements in favor of the “amended” ones. Because KONIGSBERG serviced certain of Madoff’s most important accounts, however, he frequently returned statements in favor of the “amended” ones.
For example, in early 2003, Annette Bongiorno – one of the five defendants recently convicted of participating in Madoff’s massive fraud after a nearly six-month trial – created a year’s worth of profitable, back-dated trades in the account of another Madoff Securities client, who was also a client of KONIGSBERG’s. That client had suffered losses in a number of different investments in 2002, causing the client’s net worth to decline dramatically. In order to restore the client’s wealth, KONIGSBERG and the client went to Bongiorno’s office at Madoff Securities, and sat with her as she created and back-dated an entire year’s worth of profitable securities transactions and corresponding account statements for the client’s investment advisory account at Madoff Securities. Bongiorno then instructed KONIGSBERG and his client to return the original statements before receiving the new, “amended” statements. KONIGSBERG later used these back-dated, “amended” statements to prepare his client’s tax returns. Likewise, in 2008, KONIGSBERG sent back several months’ worth of statements for a different client, in favor of new ones reflecting millions of dollars in new transactions.
In addition to being paid for his accounting services by the dozens of clients referred to him by Madoff, KONIGSBERG also received payments directly from Madoff Securities of approximately $15,000 to $25,000 per month for over a decade. In addition, beginning in approximately 1992, KONIGSBERG arranged for a relative to be put on Madoff Securities’ payroll, receiving salary and employee benefits, despite not working at the firm. KONIGSBERG arranged for the relative to be paid by Madoff in lieu of accepting payments himself, despite the fact that the payments were on account of customers that KONIGSBERG recruited to invest with Madoff.
KONIGSBERG also provided tax and business advice to Madoff personally. For example, Madoff consulted KONIGSBERG about establishing Madoff Securities, which had for years been a sole proprietorship, as a Limited Liability Company. Madoff also consulted KONIGSBERG concerning accounting and bookkeeping issues in connection with Madoff International, the firm’s London affiliate.
In or about the early 1990s, Madoff consulted KONIGSBERG about the tax consequences of transferring funds to two other employees of Madoff Securities (“CC-1” and “CC-2”). KONIGSBERG advised Madoff that if the transfers were structured as loans and if CC-1 and CC-2 paid interest on those loans and paid back the principal of the loans, no taxes would be due and owing by either Madoff or by CC-1 or CC-2. Thereafter, KONIGSBERG arranged for a lawyer he worked with to draft promissory notes documenting the loans, and KONIGSBERG provided some of the financial terms of the loans, such as the applicable interest rate. The promissory notes therefore appeared to conform to the tax law, as Madoff, CC-1, and CC-2 desired. On December 10, 2008 – the day before Madoff was arrested – Madoff called KONIGSBERG to ask whether the loans had been converted into gifts, which would have created a substantial tax liability for Madoff. In fact, Madoff and KONIGSBERG had never discussed the possibility of reclassifying the loans into gifts, and KONIGSBERG told Madoff so.
KONIGSBERG, 78, faces a total statutory maximum sentence of 30 years in prison. A chart identifying the maximum penalties for each of the charged offenses is attached to this release. The maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
KONIGSBERG is also subject to mandatory restitution and criminal forfeiture and faces criminal fines up to twice the gross gain or loss derived from the offense. Pursuant to the agreement entered into with the Government, KONIGSBERG has agreed to forfeit $4.4 million. To the extent not already paid to the ongoing Securities Investor Protection Act liquidation proceedings of Madoff Securities, the forfeited funds will be used to compensate victims of the fraud through the Madoff Victim Fund, which is the victim remission fund established by the Manhattan U.S. Attorney to compensate victims of the fraud at Madoff Securities, and which has collected approximately $4 billion to date.
Judge Swain set a sentencing date for KONIGSBERG of September 19, 2014, at 2:00 p.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigations, and the United States Department of Labor. He also thanked the U.S. Securities and Exchange Commission.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew L. Schwartz, John T. Zach, Randall W. Jackson, and Christopher D. Frey are in charge of the prosecution.
Click here to view chart(s)
Manhattan U.S. Attorney Announces Arrest of Amtrak Police Department Officer on Fraud, Embezzlement, and False Statement ChargesRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today the arrest of ERIC GIVENS, a police officer with the National Railroad Passenger Corporation (“Amtrak”), and the former treasurer of the national union for Amtrak police officers, on charges of wire fraud, embezzlement of union funds, and making a false statement to a federal investigator. GIVENS was arrested this morning in East Stroudsburg, Pennsylvania, and is expected to be presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Michael H. Dolinger.
According to the allegations contained in the Complaint unsealed today in Manhattan federal court:
GIVENS has been employed as a police officer with Amtrak since May 1997, and was most recently assigned to Penn Station, in New York, New York. GIVENS served as the elected treasurer of the Amtrak Police Lodge 189 Labor Committee (the “Labor Committee”), the national union for Amtrak police officers, from 2003 through January 2010. During the same period, and continuing until November 2013, GIVENS also served as the elected treasurer of Amtrak Police Lodge 189 Inc. (the “Lodge”), a fraternal organization affiliated with the Labor Committee.
Starting by at least 2008, GIVENS improperly took at least $100,000 in total from the Labor Committee and Lodge by fraudulently charging personal expenses to the Labor Committee and Lodge and by withdrawing cash for his own purposes, and took steps to hide what he had done. During this period, GIVENS used the debit card of the Labor Committee to pay for, among other things, gasoline and food, and used the debit card of the Lodge to pay for, among other things, travel, hotels in multiple cities, and entertainment in New York and New Jersey. GIVENS also withdrew thousands of dollars in cash from Labor Committee and Lodge bank accounts.
GIVENS, 52, of East Stroudsburg, Pennsylvania, is charged with one count of wire fraud, one count of embezzlement of union funds, and one count of making a false statement to a federal investigator. He faces a total maximum sentence of thirty years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding work of the U.S. Department of Labor’s Office of Labor-Management Standards and its Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations. Mr. Bharara also thanked the Amtrak Police Department’s Office of Internal Affairs for its assistance.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorney Daniel C. Richenthal is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Eric Givens Complaint 14 Mag 1299
Leader of Colombian Drug Trafficking Organization Sentenced to 27 Years in Federal PrisonRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew today sentenced Jose Samir Renteria-Cuero (51, Cali, Colombia), a/k/a “Jose Morfi,” to 27 years in federal prison for conspiring with others to distribute 5 kilograms or more of cocaine onboard a vessel subject to the jurisdiction of the United States. Renteria-Cuero pleaded guilty on February 6, 2014.
According to court documents, Renteria-Cuero was involved in maritime cocaine smuggling operations from the 1980s until at least 2009. He started out as a mechanic, servicing go-fast vessels (GFVs) and participating in GFV smuggling operations. Eventually, he acquired and built GFVs and self-propelled semi-submersible (SPSS) vessels and recruited mariners to participate in maritime cocaine smuggling operations. Renteria-Cuero worked with others to transport and store cocaine in Colombia, construct and repair GFVs and SPSS vessels, and dispatch those stateless vessels from Colombia. Renteria-Cuero acted as a “general contractor,” accepting contracts to build SPSS vessels from cocaine owners in Colombia. Renteria-Cuero provided maritime cocaine transportation services aboard stateless vessels that were used to smuggle the drugs from Colombia to Mexico, via the Pacific Ocean, in international waters - knowing and intending that the cocaine would ultimately be imported unlawfully into the United States. Many of these ventures involved at least 1,000 kilograms of cocaine.
Renteria-Cuero was arrested in Cali, Colombia in March 2012, and subsequently extradited to the United States, first arriving at a place in the Middle District of Florida.
This case was investigated by the Panama Express South Strike Force, a standing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation comprised of agents and analysts from the Federal Bureau of Investigation, the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Coast Guard Investigative Service, the Naval Criminal Investigative Service, and U.S. Southern Command's Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
The case was prosecuted by Assistant United States Attorney Christopher F. Murray. The Department of Justice’s Office of International Affairs assisted with extradition of the defendant from Colombia.
Kentucky Man Pleads Guilty to Robbing Old National Bank in HarrisburgRead the Press Release
Follow @SDILNewsCasey Allen Heflin, 28, of Boaz, Kentucky, pled guilty yesterday in United States District Court in East St. Louis to an indictment charging him with robbing the Old National Bank branch facility in Harrisburg, Illinois, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. The indictment, returned by a Federal Grand Jury on March 4, 2014, alleged that Heflin robbed the bank on October 17, 2013. As a part of his plea, Heflin admitted that he entered the bank with a loaded firearm, pointed it at a teller, and demanded money. A total of $4197 was taken.
Sentencing was set for September 24, 2014, at 11:00 a.m. at the United States District Courthouse in East St. Louis. At that time, Heflin faces up to 20 years in prison, a $250,000 fine, and 3 years of supervised release to follow his incarceration.
Heflin has been held without bond in the custody of the United States Marshal since his arrest on the federal charge in March. He was again remanded to the Marshal’s custody to await sentencing.
The on-going federal investigation into the robbery is being conducted by the Federal Bureau of Investigation, the Illinois State Police Zone 7 Investigations unit in Carmi, and the United States Attorney’s Office.
The case is being prosecuted by Assistant United States Attorney James M. Cutchin.
Johnstown Man Failed to Report Taxable Income to IRSRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., pleaded guilty in federal court to a charge of filing a false tax return, United States Attorney David J. Hickton announced today.
Keith D. Nash pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that Nash filed an individual income tax return for the calendar year 2009, whereby he failed to report $161,267 in taxable income, resulting in an underpayment of $52,466 in income tax owed to the United States.
Judge Gibson scheduled sentencing for Dec. 8, 2014, at 11 a.m. The law provides for a total sentence of three years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Internal Revenue Service/Criminal Investigation conducted the investigation that led to the prosecution of Nash.
Jacksonville Man Sentenced in Scheme to Defraud over $904,000Read the Press Release
Jacksonville, Florida – U.S. District Judge Timothy J. Corrigan today sentenced David Allen Dinsbeer (37, Jacksonville) to 33 months in federal prison for his role in defrauding Hickory Foods, a Jacksonville company. He was also sentenced to serve a 2-year term of supervision, following his incarceration, and ordered to pay $904,373 in restitution. Dinsbeer was allowed to remain free on bond pending designation by the Bureau of Prisons for the commencement of his sentence. Dinsbeer pleaded guilty to 16 counts of conspiracy to commit wire fraud and wire fraud on March 19, 2014.
According to court records, between January 2011 and May 2012, Dinsbeer defrauded the Hickory Foods group of companies out of approximately $904,000. The Hickory Foods companies are best known for Bubba Burgers. The investigation revealed that Dinsbeer used phony supplier companies to bill for supplies which were never delivered. He then deposited the checks, which were issued on false invoices, into bank accounts for the phony companies, which he controlled. An FBI forensic accountant determined that the companies had no legitimate business expenses and that Dinsbeer withdrew money from the accounts and used the accounts to pay his personal expenses. According to court records, Dinsbeer conspired with an employee of Hickory Foods companies in order to carry out the scheme.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Dale Campion.
Jacaman SentencedRead the Press Release
LAREDO,Texas – Robert Jacaman Sr., 60, former owner of Jacaman Guns and Ammo, has received his federal sentence for conspiring to smuggle firearm ammunition and magazines to Mexico, announced United States Attorney Kenneth Magidson along with Special Agent in Charge Janice Ayala of Homeland Security Investigations (HSI) in San Antonio and Special Agent in Charge Robert Elder of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Jacaman pleaded guilty Jan. 28, 2014. Now a convicted felon, he surrendered his federal firearms license, is no longer a firearms dealer and is prohibited from possessing firearms, ammunition and destructive devices.
“Today’s sentence is a direct result of the dedicated efforts of HSI, the U.S. Attorney's Office and our law enforcement partners in creating a safer community for the citizens of Laredo and the surrounding area,” said Ayala. “Seizing illicit weapons and proceeds, and arresting those who attempt to illegally use and smuggle weaponry is a priority for HSI.”
Today, visiting U.S. District Judge Keith P. Ellison handed Jacaman a total sentence of 60 months in federal prison to be immediately followed by three years of supervised release. He was further ordered to pay a $4,000 fine. At the hearing, Jacaman testified that he is currently blind and in constant physical pain due to a motorcycle injury in 1984 and requires around-the-clock attention. In handing down the sentence, Judge Ellison noted Jacaman had those ailments when he committed the crime and, although sympathetic to his ailments, believed the Bureau of Prisons could accommodate someone with his medical conditions.
“Enforcing the federal firearms laws through a cooperative effort with ATF Industry Operations, as well as Laredo Police Department and Border Patrol is paramount to our Frontline Strategy of utilizing our resources to have the greatest impact,” said Elder. “While 99% of federal firearms licensees abide by ATF regulations, it is paramount that we remain vigilant against the outlier who markets firearms illegally."
Jacaman had admitted to unlawfully conspiring with others to fraudulently and knowingly export .223 caliber and 7.62 mm ammunition and high capacity rifle magazines designed to fit AR 15-type and AK47-type firearms, contrary to the Arms Export Control Act. Several violations Jacaman committed as part of the conspiracy were discussed with federal U.S. Magistrate Judge Diana Song Quiroga, who presided over the guilty plea in January.
Jacaman admitted being in direct contact with Oswaldo Roberto Borrego-Ramos, 32, aka “Baldo,” of Nuevo Laredo, Tamaulipas, Mexico, during the conspiracy, who negotiated the purchase and delivery of the ammunition and firearm magazines with Jacaman. Borrego-Ramos would then send couriers to deliver cash to Jacaman and others to pick up the items to smuggle them into Mexico. In one instance, Jacaman even advised Borrego-Ramos of an outstanding balance which he had not paid for prior sales.
Another co-defendant, Alejandro Rivera-Ruiz, 39, of Laredo, admitted delivering more than $100,000 to Jacaman on behalf of Borrego-Ramos. According to court documents, Borrego-Ramos told agents he was working for “Los Zetas” Mexican criminal organization, supplying them with firearms, ammunition and firearm accessories such as firearm magazines from various sources, including Jacaman.
On March 14, 2012, authorities arrested Mexican nationals Abraham Garcia-Perguero, 41, and Maria Isabel Rodriguez-Olivio 38, who had just received 27,000 rounds of .223 caliber ammunition from Jacaman’s gun store. They admitted they were on their way to deliver the ammunition to an awaiting Mexican truck driver who would smuggle the ammunition to Mexico. They admitted working for Rivera-Ruiz and Borrego-Ramos.
Borrego-Ramos, Rivera-Ruiz and the two Mexican Nationals have all pleaded guilty and are serving their sentences in federal prison for their respective crimes.
Also sentenced today were Atanacio “None” Gonzalez-Torres, 45, Jose Luis Estrada, 25, who had all also pleaded guilty for their roles in this conspiracy. Jacaman’s wife, Veronica Jacaman, 43, who was convicted of the misdemeanor offense of failure to record a firearm transaction by a firearms dealer, will serve six months and pay a $1,000 fine, while Gonzalez-Torres and Estrada were ordered to serve 28 and 21 months, respectively for their conviction of smuggling goods from the U.S.
The ammunition and magazines referenced in this indictment were intercepted before being delivered to Mexico.
Jacaman, his wife and Estrada were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The case is being investigated by Homeland Security Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) with the assistance of the Laredo Police Department. Assistant United States Attorney Jose Homero Ramirez is prosecuting this case.
Inmate at USP Canaan Charged with Assault with Intent to Murder Another InmateRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a federal grand jury sitting in Scranton today indicted Joseph Wing, age 27, an inmate at the United States Penitentiary Canaan in Waymart, Pennsylvania, for assaulting another inmate with intent to commit murder.
According to United States Attorney Peter Smith, the grand jury alleges that Wing committed the assault on May 16, 2014, in the prison.
Wing is also charged with assault resulting in serious bodily injury.
The charges against Wing resulted from an investigation by the Federal Bureau of Investigation and Bureau of Prisons staff.
If convicted, Wing faces up to 20 years in prison and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
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.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office today announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Lynch in Missoula on June 24, 2014 and entering pleas of Not Guilty were:
- NYA BRACKETT, a 41-year-old resident of Missoula, appeared on charges of wire fraud, theft of government property and false statements. If convicted of the most serious charges contained in the indictment, BRACKETT faces 20 years imprisonment, $250,000 in fines and 3 years supervised release. The case was investigated by the Social Security Administration Office of Inspector General. PACER Case Reference: 14-34
- RY MARK FOX, a 47-year-old resident of Hamilton, appeared on charges of false statements, use of immigration documents by fraud. If convicted of the most serious charge contained in the indictment, FOX faces 10 years imprisonment, $250,000 in fines and 3 years supervised release. The case was investigated by Homeland Security Investigations. PACER Case Reference: 14-31
Appearing before U.S. Magistrate Judge Strong in Great Falls on June 24, 2014 and entering pleas of Not Guilty were:
- HN CHANCE HOULE, a 50-year-old resident of Box Elder, appeared on charges of bribery and obstruction of justice. If convicted of the most serious charges contained in the indictment, HOULE faces 20 years imprisonment, $250,000 in fines and 3 years supervised release. The case was investigated by U.S. Department of Interior Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service and Environmental Protection Agency. PACER Case Reference: 14-45
- HN CHANCE HOULE, a 50-year-old resident of Box Elder, appeared on charges of conspiracy to embezzle tribal funds, theft from an Indian tribal organization and theft. If convicted of the most serious charges contained in the indictment, HOULE faces 10 years imprisonment, $250,000 in fines and 3 years supervised release. The case was investigated by U.S. Department of Interior Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service and Environmental Protection Agency. PACER Case Reference: 14-49
- HN CHANCE HOULE, a 50-year-old resident of Box Elder, appeared on charges of bribery and obstruction of justice. If convicted of the most serious charges contained in the indictment, HOULE faces 20 years imprisonment, $250,000 in fines and 3 years supervised release. The case was investigated by U.S. Department of Interior Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service and Environmental Protection Agency. PACER Case Reference: 14-45
- HN CHANCE HOULE, a 50-year-old resident of Box Elder, appeared on charges of conspiracy to embezzle money from an Indian tribal organization, theft from an Indian tribal organization, bribery, theft and obstruction of justice. If convicted of the most serious charges contained in the indictment, HOULE faces 20 years imprisonment, $250,000 in fines and 3 years supervised release. The case was investigated by U.S. Department of Interior Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service and Environmental Protection Agency. PACER Case Reference: 14-50
- CHAEL A. MORRIS, 39-year-old resident of Choteau, appeared on charges of conversion of secured property and federal agricultural loan fraud. If convicted of the most serious charges contained in the indictment, MORRIS faces 5 years imprisonment, $250,000 in fines and 3 years supervised release. The case was investigated by U.S. Department of Agriculture Office of Inspector General.. PACER Case Reference: 14-43
- UCE HAROLD SUNCHILD, a 69-year-old resident of Box Elder, appeared on charges of conspiracy to embezzle money from an Indian tribal organization, theft from a Indian tribal organization, theft from Indian tribal government receiving federal funds. If convicted of the most serious charges contained in the indictment, SUNCHILD faces 10 years imprisonment, $250,000 in fines and 3 years supervised release. The case was investigated by U.S. Department of Interior Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service and Environmental Protection Agency. PACER Case Reference: 14-47
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court's calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Illegal Alien Gets Maximum Sentence for Distribution of Child PornographyRead the Press Release
HOUSTON – Carmen Hernandez has been sentenced to the statutory maximum of 20 years for distributing child pornography, announced U.S. Attorney Kenneth Magidson. Hernandez, 37, pleaded guilty to the charge March 31, 2014.
Today, U.S. District Judge David Hittner handed Hernandez the maximum 240 months in in federal prison to be followed by life on supervised release. He must also register as a sex offender. Due to his illegal status in the country, he is expected to face deportation proceedings following his release from prison.
Hernandez utilized peer-to-peer software to obtain and distribute child pornography images and videos via the Internet. A savvy computer user, he had provided technological assistance to his neighbor and used their wi-fi to facilitate his criminal behavior. This unsuspecting family was then subject of a search warrant executed at the location which authorities believed was traceable to Hernandez. The investigation revealed Hernandez had access to their Internet service provider. He later admitted to the illegal activity.
Forensic analysis resulted in the discovery of child pornography images/videos on computer media belonging to Hernandez. These images included those involving bondage and children under 12 being penetrated by adults and foreign objects.
The charges were the result of an investigation conducted by members of the Houston Area Cyber Crimes Task Force of the FBI which focuses its attention on, among other things, investigating offenses involving the exploitation of children via the Internet.
This case, prosecuted by Assistant U.S. Attorney Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Gulfport Man Pleads Guilty to Oil Spill FraudRead the Press Release
Gulfport, Miss. – Brian K. Lee, 40, of Gulfport, pled guilty on June 24, 2014 to one count of mail fraud in connection with the Deepwater Horizon oil spill, U.S. Attorney Gregory K. Davis announced.
Lee submitted a fraudulent claim to BP’s Gulf Coast Claims Facility for lost earnings and profits which he claimed he incurred as a result of the oil spill for his loss of employment as a customer service representative at Gulf South Seafood in Biloxi and Long Beach, Mississippi. An investigation revealed that the documents and claims submitted by Brian Lee were fraudulent, the named businesses did not exist, and Lee never worked at any such company. As a result of Lee’s fraudulent scheme, a check was mailed to him in the amount of $23,541.88.
Lee will be sentenced on Thursday, October 2, 2014, at 9:30 a.m., by U.S. District Judge Sul Ozerden and faces a maximum sentence of 20 years in prison and a $250,000 fine.
This case was investigated by the United States Secret Service and prosecuted by Assistant U.S. Attorney Andrea Jones. It was brought as part of this District’s partnership with the National Center for Disaster Fraud (NCDF), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected] or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.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.
Georgia Man Admits Defrauding Investors Out of More Than $800,000Read the Press Release
NEWARK, N.J. – A Georgia business owner who held himself out to be an investor and loan broker admitted his role in defrauding investors of more than $800,000, U.S. Attorney Paul J. Fishman announced.
Ronnie Singleton, 41, of Lithonia, Ga., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count One of an indictment charging him with conspiring to commit wire fraud.According to documents in this case and statements made in court:
Singleton owned and operated a business called Wonder World Inc. and held himself out to be a financier. Using the Internet and telephone, he met his codefendant, Michael Woodruff, 66, of Peeples Valley, Ariz., and the two agreed to work together to find investors. Singleton falsely represented that he would providing financing for real estate deals through a “European system of financing” that involved leasing financial instruments. Singleton received more than $800,000 in investors’ funds, $360,000 of which he wired to Woodruff. Instead of obtaining the promised financing for the real estate projects, Singleton instead used the investors’ money for his own personal benefit.
The count to which Singleton pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss from the offense. Sentencing is scheduled for Sept. 30, 2014. The charges against Woodruff are pending.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jenny Kramer of the Economic Crimes Unit and Assistant U.S. Attorney Charlton Rugg of the Criminal Division.
The charges and allegations against Woodruff are merely accusations and he remains innocent unless and until proven guilty.
14-232
Defense counsel: Paul Condon Esq., Jersey City, N.J.Singleton, Ronnie Indictment
Frederick Man Sentenced for Fraudulently Receiving at Least $110,000 in Disability BenefitsRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Charles David Jones, Sr., age 58, of Frederick, today to a year and a day in prison, followed by three years of supervised release, for theft of government property arising from his fraudulent receipt of disability benefits. Judge Quarles also ordered that Jones pay $110,000 in restitution.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division.
According to his plea agreement, in March 2002, Jones filed for disability benefits with the Social Security Administration (SSA), claiming that he could no longer work and was disabled. He agreed to notify SSA if he started to work as an employee or through self-employment.Starting sometime in July 2002, Jones began working as a cook at Lohr’s Family Restaurant in Frederick. Within a few months, he was promoted to manager and head chef. Witnesses stated that Jones supervised other employees and handled some of the cooking for the restaurant himself. Jones never reported this work to the SSA.
Instead, in November 2002, Jones requested a hearing on his application for disability and filed additional forms in support of his disability benefits application. He falsely claimed that he was not working and could not work. Wage and earnings reports confirm that Jones was receiving a salary from Lohr’s Family Restaurant at this time.
On October 13, 2003, Jones purchased Lohr’s Family Restaurant. Jones continued to manage and operate the restaurant. Witnesses also confirmed that through at least August 2011, Jones remained actively involved in managing the restaurant, supervising employees, cooking, developing the menu, and running the catering side of the business.
In February 2004, Jones was awarded disability benefits by SSA, retroactively to August 2002. Jones continued to receive benefits until they were suspended in 2011. Jones received at least $110,000 in benefits due to his false application for benefits.
In March 2010, Jones signed and submitted to SSA a report claiming that he was not working, and was not able to work. He described his activities for a typical day without mentioning the restaurant.
United States Attorney Rod J. Rosenstein praised the SSA - OIG for its work in the investigation and thanked Assistant U.S. Attorney Justin S. Herring, who prosecuted the case.
Four Face Public Corruption Charges in Connection with Operation of Dayton Charter SchoolRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, Ohio – A federal grand jury has indicted four people, alleging that they offered and accepted bribes and kickbacks as part of a public corruption conspiracy in their roles as managers and a consultant for Arise! Academy, a charter school in Dayton, Ohio.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Ohio Attorney General Mike DeWine whose office oversees the Ohio Bureau of Criminal Investigation (BCI) announced the indictment today.
The indictment charges Shane K. Floyd, 42, Strongsville, Ohio, who served as superintendent of Arise, Carl L. Robinson, 47, Durham, North Carolina, who operated an educational consulting business called Global Educational Consultants, and Arise board members Christopher D. Martin, 44, Springfield, Ohio and Kristal N. Screven, aka Kristal Allen, 38, Dayton, Ohio.
The indictment alleges that Floyd, Martin and Screven solicited and accepted bribes from Robinson in exchange for awarding a lucrative, unbid consulting contract to Global. The indictment says Arise paid Global $420,919 over 12 months starting in October 2008 at a time when Arise had difficulty making payments to other vendors and staff. In exchange for the consulting contract, Robinson paid Floyd more than $5,000 in cash, gave Martin cash and a trip to Las Vegas, and bribed Screven with cash and payments for a school security services company she and her husband owned.
All four are charged with conspiracy, a crime punishable by up to five years in prison, and with aiding and abetting federal programs bribery, which is punishable by up to ten years in prison. In addition, Floyd, Screven and Martin are each charged with one count of making false statements, punishable by up to five years imprisonment. Screven is also charged with one count of witness tampering for allegedly telling a witness to lie to the grand jury investigating the case. Witness tampering is punishable by up to 20 years in prison. All counts also carry potential fines of up to $250,000.
The indictment also seeks a total of $420,919 in forfeiture that the defendants will have to pay if they are convicted. The amount represents the money derived from the crimes.
Floyd, Robinson and Martin will be summoned to appear in federal court. Screven surrendered to members of the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and Ohio BCI, today. She will receive an initial appearance today before a federal magistrate in Dayton. Senior U.S. District Judge James L. Graham will preside over the case.
Arise! Academy was an Ohio Community School, commonly known as a charter school, which operated with federal funds provided through the state of Ohio.
U.S. Attorney Stewart commended the investigation by the FBI’s Central Ohio Public Corruption Task Force and Assistant U.S. Attorneys Doug Squires and Heather Hill, who are prosecuting the case.
An indictment merely contains allegations, and the defendants are presumed innocent unless proven guilty in a court of law.
Former Postmaster of Capitan Post Office Pleads Guilty to Federal Embezzlement ChargeRead the Press Release
ALBUQUERQUE – Kristi K. Sepkowitz, 55, of Alto, N.M., pleaded guilty this morning in federal court in Las Cruces, N.M., to a felony information charging her with embezzling money belonging to the United States. Sepkowitz was the Postmaster of the Capitan Post Office in Lincoln County, N.M., when she committed the offense to which she pled guilty.
In her plea agreement, Sepkowitz acknowledged that as Postmaster of the Capitan Post Office, she held a position of trust with respect to funds belonging to the U.S. Postal Service that came into her possession. Sepkowitz admitted that between Feb. 2012 and Dec. 2013, she betrayed that trust by engaging in an unlawful scheme pursuant to which she embezzled and converted funds, including cash and money orders, belonging to the U.S. Postal Service to her own use.
During the course of the scheme, Sepkowitz issued postal money orders to herself without making appropriate payment. She also took cash from daily postal deposits and used the cash for her own purposes. Sepkowitz attempted to pay back the postal funds she embezzled by writing checks on her personal bank account and depositing the checks with the daily postal deposits.
According to court filings, Sepkowitz embezzled and converted more than $450,000 in postal funds over the course of the scheme. She has fully repaid the U.S. Postal Service for the postal funds she embezzled and converted to her own use.
Under the terms of her plea agreement, Sepkowitz will be sentenced to three years of probation and required to pay a $1,000.00 fine. She remains on conditions of release pending her sentencing hearing, which has yet to be scheduled.
This case was investigated by the U.S. Postal Service, Office of Inspector General and is being prosecuted by Assistant U.S. Attorney Brock E. Taylor, of the U.S. Attorney’s Las Cruces Branch Office.
Former Louisiana State Corrections Official Pleads Guilty to Civil Rights ViolationsRead the Press Release
Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division and U.S. Attorney Walt Green for the Middle District of Louisiana announced today that a third former state corrections official has pleaded guilty to civil rights violations related to the beating of an inmate at the Louisiana State Penitentiary in Angola, Louisiana.
Mark Sharp, 33, of Amite, Louisiana, pleaded guilty today to one count of deprivation of rights under color of law and one count of making a false statement to the FBI.
Sharp’s charges were based on his conduct while employed as a captain at the Louisiana State Penitentiary. According to the factual basis filed in court in connection with his guilty plea, on Jan. 24, 2010, Sharp joined in a search to apprehend an inmate who had escaped from his assigned location. After the inmate was captured, Sharp and two other officers – Kevin Groom and C.B. – were ordered to escort the inmate, who was handcuffed behind his back, to the prison’s medical unit. The three officers got into the bed of a truck with the inmate. Sharp admitted that, during the drive to the medical unit, he repeatedly struck the inmate with a police baton. Sharp also saw C.B. kick the inmate in his head and shoulder area. Sharp then lied to the FBI during the federal civil rights investigation of the beating.
Two other former state corrections officials have been charged and convicted in connection with the attack on the inmate. Kevin Groom and Jason Giroir have both been charged and pleaded guilty to falsifying records in a federal investigation and making false statements to the FBI. Groom and Giroir await sentencing.
Sharp faces a statutory maximum sentence of 15 years in prison, a fine up to $500,000 and up to three years of supervised release following his prison term.
This matter is being handled by the the Civil Rights Division, the U.S. Attorney’s Office for the Middle District of Louisiana and the FBI. It is being prosecuted by Trial Attorney AeJean (Angie) Cha of the Civil Rights Division and Assistant U.S. Attorney Robert W. Piedrahita for the Middle District of Louisiana.
Former Lawrence Resident Sentenced for Child PornographyRead the Press Release
WICHITA, KAN. – A former resident of Lawrence was sentenced Tuesday to 87 months in federal prison for distributing child pornography, U.S. Attorney Barry Grissom said.
Christian Curtis, 27, Hays, Kan., pleaded guilty to receiving and distributing child pornography. In his plea, he admitted that investigators found more than 1,000 images of child pornography on his computer.The investigation began in March 2010 when an FBI agent in New York used a peer-to-peer file sharing network to downloaded child pornography from Curtis’ computer. Investigators followed an electronic trail to Curtis’ apartment in the 3100 block of Ousdahl Road in Lawrence. An examination of the computer showed Curtis had been chatting online, posing as a teenage girl. While posing as a girl, he solicited young boys to perform sexual acts.
His sentence will be followed by eight years on supervised release. He also was ordered to pay an $3,000 fine.
Grissom commended the FBI and Assistant U.S. Attorney Kim Martin for their work on the case.
Former Detroit Police Officer Sentenced to Prison for Leaking Information to A Drug TraffickerRead the Press Release
A former City of Detroit police officer was sentenced to prison today for leaking sensitive and confidential law enforcement information to a drug trafficker, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by FBI Special Agent in Charge Paul M. Abbate and DEA Special Agent in Charge James Allen.
During a hearing before U.S. District Judge John Corbett O’Meara, Lamar Coody, 35, of Detroit, Michigan, was sentenced to twelve months in prison and one year of supervised release on his plea of guilty to misprision of a felony. During an FBI and DEA investigation, Coody was captured over a court-authorized wiretap leaking confidential information to a Detroit-based multi-kilogram cocaine-trafficker. Coody leaked the information while he was a sworn City of Detroit police officer. Included among the information leaked by Coody to the cocaine dealer was the fact that a Detroit police narcotics squad was investigating the dealer, and that the police had an informant deep within the dealer’s organization. In addition, Coody fixed six traffic tickets for the drug dealer, helped identify police surveillance vehicles, and provided advice to the dealer about how to explain away cash proceeds from drug sales. In return, Coody borrowed the drug trafficker’s Corvette, Range Rover, and Cadillac Escalade, borrowed money, and was wined and dined by the dealer. Coody was not directly involved in transporting or dealing drugs or drug proceeds.
Deshon Catchings, the drug trafficker who received the leaked information from Coody, was previously sentenced by Judge O’Meara to 151 months in prison for his cocaine trafficking. Six other defendants who participated in Catchings’ drug trafficking organization also have pleaded guilty and been sentenced to prison.
“By leaking information to a drug dealer under investigation, this officer jeopardized the investigation and the safety of the investigators," McQuade said. "Officers who breach their duty to serve the public will be held accountable."
The case was investigated by agents of the FBI and the DEA. It is being prosecuted by Assistant United States Attorneys David A. Gardey, Steven Cares, and B. Michael Ortwein.
Former Credit Suisse Managing Director Sentenced in Manhattan Federal Court in Connection with Scheme to Hide Losses in Mortgage-Backed Securities Trading BookRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DAVID HIGGS, a former Managing Director in the Investment Banking Division of Credit Suisse Group (“Credit Suisse”), was sentenced today to time served in connection with a scheme to hide more than $100 million in losses in a mortgage-backed securities trading book at Credit Suisse. On February 1, 2012, HIGGS pled guilty, pursuant to a cooperation agreement, to the offense of conspiracy to falsify the books and records of the bank.
The bonds at issue were composed of subprime residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”). Once discovered, the manipulation of these bond prices contributed to Credit Suisse taking a $2.65 billion write-down of its 2007 year-end financial result. Higgs was sentenced by U.S. District Judge Alison J. Nathan.
According to the Information to which Higgs pled guilty, and statements made during court proceedings:
HIGGS was employed at Credit Suisse as a Managing Director in the bank’s London office. He reported to Kareem Serageldin, the Global Head of the Structured Credit Group in the Securities Department of Credit Suisse’s Investment Banking Division. The Structured Credit Group held and traded ABS (“Asset Backed Security”) cash bonds, which included RMBS and CMBS. HIGGS oversaw and managed a trading book known as “ABN1.” The ABN1 book was composed primarily of several thousand individual long and short subprime-related positions, and also included other securities. The long positions consisted of, among other things, various types of cash securities, including AAA-rated and non-AAA-rated cash bonds. Until March 2008, ABN1 had a net asset value of approximately $5.35 billion, approximately $3.71 billion of which consisted of ABS cash bonds, including RMBS and CMBS positions.
Pricing of Mortgage-Backed Securities
Credit Suisse traders were required at all relevant times to price securities they held at their fair value, that is, on a “mark-to-market” basis, which was determined by reference to either the current market price of the asset or liability, or the current price for a similar asset or liability. In the absence of a liquid market, Credit Suisse traders were required to look to other indicia in order to determine the fair value of the assets on their books. During this time, the ABX Index served as a benchmark for certain securities backed by home loans. It was widely understood within Credit Suisse that traders were to consult the corresponding ABX indices when pricing RMBS bonds and related products.
The Bond Pricing Scheme
The deterioration throughout 2007 of the real estate market in the United States, including the subprime housing market, led to significant reductions in valuations of mortgage-backed securities. As mortgage delinquencies increased across the country, the value of the securities backed by these mortgages decreased and the market for them became increasingly illiquid.
By late November 2007, HIGGS, Serageldin, and their co-conspirators were aware that the market for mortgage-backed securities had declined enormously. On November 28, 2007, Serageldin told HIGGS, a co-conspirator named Salmaan Siddiqui, and another co-conspirator that “the housing market [was] going down the tubes” and that they had to “find a way to sell these bonds,” i.e., mortgage-backed bonds in ABN1. As they recognized, “[t]hose bonds are going to start trading worse than the [ABX] Index.” Serageldin, Higgs, and their co-conspirators did not sell the bonds because the market prices for the bonds were substantially below the inflated value at which they marked the bonds.
From August 2007 through February 2008, Serageldin, HIGGS, Siddiqui, and their co-conspirators artificially increased the price of bonds in order to create the false appearance of profitability in the ABN1 trading book. Specifically, Serageldin directed HIGGS on numerous occasions to reach specific Profit & Loss (“P&L”) targets on a daily and month-end basis. HIGGS, in turn, instructed Siddiqui and another co-conspirator to mark the books so as to achieve the particular P&L targets specified by Serageldin, rather than to reflect the fair value of the bonds.
Credit Suisse’s ABN1 Trading Book Was Falsely Inflated as a Result of the Scheme
As a result of the scheme, there was a growing disparity between the values ascribed to the marks in the ABN1 book and the available external benchmarks, such as the ABX Index. From August 2007 through the end of that year, as ABX Index prices fell, bond prices in ABN1 that were supposed to reflect the ABX Index remained effectively stable, thereby giving the false impression to Credit Suisse senior management that the ABN1 book was profitable. On one occasion in January 2008, Serageldin expressed concern to HIGGS that the overpriced bonds were at risk of being discovered: “We should mark these down because someone is going to spot this,” he said.
The February 2008 Mark-Down
On March 20, 2008, Credit Suisse issued a press release which announced completion of its internal review and stated that the fair value reduction, or write-down, of the ABS positions – which included but was not limited to the ABNl book – was approximately $2.65 billion. Approximately $540 million of this write-down was attributable to the ABN1 trading book and included ABS cash bonds for the fourth quarter 2007 that Serageldin, HIGGS, and their co-conspirators manipulated and inflated in connection with his scheme.
Judge Nathan also sentenced HIGGS, a citizen of the United Kingdom, to no supervised release. HIGGS also was ordered to pay forfeiture in the amount of $900,000, a $50,000 fine, and a $100 special assessment.
Mr. Bharara praised the work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission for its assistance in the investigation of this case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Eugene Ingoglia is in charge of the prosecution.
Former Chesapeake, Virginia Subcontractor Sentenced for Conspiracy to Commit BriberyRead the Press Release
Roderic J. Smith, 50, the co-founder and former president of a government contracting company, was sentenced yesterday to 48 months in prison, followed by one year of supervised release, for conspiracy to bribe public officials. Smith was ordered to forfeit $175,000.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Dana J. Boente, for the Eastern District of Virginia, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, Acting Executive Assistant Director Charles T. May, Jr., of the Naval Criminal Investigative Service (NCIS) Atlantic Operations, and Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office made the announcement today after sentencing by United States District Judge Henry Coke Morgan, Jr. of the Eastern District of Virginia.
On March 5, 2014, Smith pleaded guilty to a criminal information. According to court documents, Smith was the co-founder and president of a contracting company located in Chesapeake, Virginia, that sought contracting business from the United States Navy Military Sealift Command. In approximately November 2004, Smith joined an extensive bribery conspiracy that spanned four years, involved multiple co-conspirators, including two different companies, and resulted in the payment of more than $265,000 in cash bribes, among other things of value, to two public officials performing work for the Military Sealift Command, Kenny E. Toy and Scott B. Miserendino, Sr. In exchange for the bribe payments, Smith’s business, referred to as Company A in court documents, received lucrative business from the Military Sealift Command that amounted to approximately $3 million in task orders during the time period of the conspiracy.
As part of his guilty plea, Smith also admitted to engaging in a scheme to conceal his criminal activity. According to the plea agreement, Smith admitted to paying more than $85,000 to his business partner, Dwayne A. Hardman, in an attempt to prevent Hardman from reporting the bribery scheme to law enforcement authorities.
Earlier this year, four other individuals pleaded guilty in connection with the bribery scheme. On Feb. 12, 2014, Kenny Toy, the former Afloat Programs Manager for the Military Sealift Command’s N6 Command, Control, Communication, and Computer Systems Directorate, pleaded guilty to accepting bribes from Smith and others. On Feb. 18, 2014, Smith’s business partner, Dwayne A. Hardman, pleaded guilty to bribery. On Feb. 19, 2014 and April 4, 2014, respectively, Smith’s associate, Michael P. McPhail, and another Smith associate, Adam C. White, pleaded guilty to conspiracy to commit bribery.
On May 23, 2014, a grand jury in the Eastern District of Virginia indicted two individuals in connection with the bribery scheme, Scott B. Miserendino, Sr., a former government contractor who performed work for the Military Sealift Command, and Timothy S. Miller, a businessman whose company sought contracting business from the Military Sealift Command. The indictment charges Miserendino with one count of conspiracy to commit bribery, one count of bribery, one count of conspiracy to obstruct a criminal investigation and to tamper with a witness, and one count of obstruction of a criminal investigation. The indictment charges Miller with one count of conspiracy to commit bribery and two counts of bribery. The trial on these charges is scheduled to begin on Sept. 30, 2014, before Chief Judge Rebecca Beach Smith. The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by the FBI, NCIS and DCIS. The case was prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the U.S. Attorney’s Office for the Eastern District of Virginia.Former Chesapeake, Virginia Subcontractor Sentenced for Conspiracy to Commit BriberyRead the Press Release
WASHINGTON– Roderic J. Smith, 50, the co-founder and former president of a government contracting company, was sentenced yesterday to 48 months in prison, followed by 1 year of supervised release, for conspiracy to bribe public officials. Smith was ordered to forfeit $175,000.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Dana J. Boente, for the Eastern District of Virginia, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, Acting Executive Assistant Director Charles T. May, Jr., of the Naval Criminal Investigative Service (NCIS) Atlantic Operations Royce E. Curtin and Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office made the announcement today after sentencing by Senior United States District Judge Henry Coke Morgan, Jr. of the Eastern District of Virginia.
On March 5, 2014, Smith pleaded guilty to a criminal information. According to court documents, Smith was the co-founder and the president of a contracting company located in Chesapeake, Virginia, that sought contracting business from the United States Navy Military Sealift Command. In approximately November 2004, Smith joined an extensive bribery conspiracy that spanned four years, involved multiple co-conspirators, including two different companies, and resulted in the payment of more than $265,000 in cash bribes, among other things of value, to two public officials performing work for the Military Sealift Command, Kenny E. Toy and Scott B. Miserendino, Sr. In exchange for the bribe payments, Smith’s business, referred to as Company A in court documents, received lucrative business from the Military Sealift Command that amounted to approximately $3 million in task orders during the time period of the conspiracy.As part of his guilty plea, Smith also admitted to engaging in a scheme to conceal his criminal activity that involved Smith and others paying a co-conspirator money. According to the plea agreement, Smith admitted to paying more than $85,000 to his business partner, Dwayne A. Hardman, in an attempt to prevent Hardman from reporting the bribery scheme to law enforcement authorities.
Earlier this year, four other individuals pleaded guilty in connection with the bribery scheme. On Feb. 12, 2014, Kenny Toy, the former Afloat Programs Manager for the Military Sealift Command’s N6 Command, Control, Communication, and Computer Systems Directorate, pleaded guilty to accepting bribes from Smith and others. On Feb. 18, 2014, Smith’s business partner, Dwayne A. Hardman, pleaded guilty to bribery. On Feb. 19, 2014, Smith’s associate, Michael P. McPhail, pleaded guilty to conspiracy to commit bribery. On April 4, 2014, Smith’s associate, Adam C. White, pleaded guilty to conspiracy to commit bribery.
On May 23, 2014, a grand jury in the Eastern District of Virginia indicted two defendants in connection with the bribery scheme, Scott B. Miserendino, Sr., a former government contractor who performed work for the Military Sealift Command and Timothy S. Miller, a businessman whose company sought contracting business from the Military Sealift Command. The indictment charges Miserendino with one count of conspiracy to commit bribery, one count of bribery, one count of conspiracy to commit obstruction of criminal investigations and to commit tampering with a witness, and one count of obstruction of criminal investigations. The indictment charges Miller with one count of conspiracy to commit bribery and two counts of bribery. Trial is set for Sept. 30, 2014, before Chief Judge Rebecca Beach Smith.
The case was investigated by the FBI, NCIS and DCIS. The case was prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the U.S. Attorney’s Office for the Eastern District of Virginia.Former Blackfeet Po’Ka Project Officials Sentenced for Massive Grant Fraud HHS Inspector General Claims $4.6 Million in Potential FraudRead the Press Release
GREAT FALLS -- The United States Attorney's Office announced today that former officials of the Blackfeet Tribe's Po'Ka Project, a multi-million dollar federally funded effort to address the needs of troubled youth on the reservation, were sentenced in federal court in Great Falls by U.S. District Court Judge Brian M. Morris.
FRANCIS KAY ONSTAD, 61, of Valier, the former Director of the Po'Ka Program, was sentenced to 38 months imprisonment, 3 years supervised release and $1,000,000 in restitution. Onstad had previously entered guilty pleas to Conspiracy to defraud the United States, Conspiracy to File False Claims against the United States, Theft from an Indian Tribal Government Receiving Federal Funding, and Tax Evasion.
DELYLE SHANNY AUGARE, 58, of Browning, the former Assistant Director of the Po'Ka Program, was sentenced to 44 months imprisonment, 3 years supervised release and $1,000,000 in restitution. Augare had previously entered guilty pleas to Conspiracy to defraud the United States, Conspiracy to File False Claims against the United States, Theft from an Indian Tribal Government Receiving Federal Funding, and Tax Evasion.
KATHERYN ELIZABETH SHERMAN, 67, of Browning, a former Po'Ka staffer who handled the In-Kind invoicing for the program starting in late 2010, was sentenced to 12 months imprisonment, 3 years supervised release, and $250,000 in restitution. Sherman had entered a guilty plea to a charge of Conspiracy to Submit False Claims against the United States.
DOROTHY MAY STILL SMOKING, 64, of Browning, was sentenced to 30 months' probation and $100,000 in restitution. Still Smoking had entered a guilty plea to a charge of Conspiracy to Submit False Claims against the United States.
Codefendant Charlotte New Breast entered a guilty plea and was sentenced in 2013. Dr. Gary Conti, formerly of Sand Springs, Oklahoma and a professor at Oklahoma State University, and now residing in Three Forks, was tried and convicted of bankruptcy fraud in March of 2014. That jury was unable to reach a unanimous verdict on 27 other counts and a mistrial was declared. In May of 2014, Conti was retried on the mistried counts and found guilty of 26 of 27 counts of corruption related offenses, including conspiracy, wire fraud, embezzlement and money laundering.
The Blackfeet Po'Ka Project was developed to help troubled Native American youth. Po'Ka was funded by a federal grant from 2005 through 2011 by the Substance Abuse and Mental Health Services Administration (SAMHSA) of the Department of Health and Human Services. Beginning in 2005 with a $1,000,000 federal disbursement, the grant ultimately became a $9.3 million program over a six year period (2005-2011). The Po'Ka Project was designed to become a self-sufficient program - entirely supported by the Tribe - by the end of the grant period. To achieve the goal of final self-sufficiency, the Tribe was required to provide in-kind or matching contributions to continue to secure federal payments with the idea that as federal participation declined tribal participation and investment would rise to fill the funding void left by the absence of federal dollars. It was the intent of the parties and SAMHSA that the Po'Ka Project would survive on its own once federal funding was no longer forthcoming.
An in-kind contribution is a non-cash contribution provided by non-federal third parties in support of the project funded by the grant, and its objectives. Third party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property, and the value of goods and services directly benefitting and specifically identifiable to the project or program.
Only if Po'Ka met the in-kind contribution targets could they receive the maximum amount of federal money from the grant. Consistent with the sustainability objective of the grant, the Tribe's in-kind contribution requirement was the highest in the later years of the grant. The Blackfeet Tribe was required to provide $7.0 million of in-kind contributions from FYs 2009 through 2011. That created an environment where the appearance of substantial in-kind contributions became paramount if the maximum flow of federal money from the grant was going to continue.
However, the in-kind commitment could never be honestly met, so the conspirators began making up facts and documents to try and satisfy SAMHSA and the auditors that the in-kind contributions represented on their reports to SAMHSA were legitimate. They did so by inflating the figures related to in-kind contributions, assigning values to non-existent and illegitimate "contributions," and manufacturing fraudulent invoices and records to support fictional or inflated contributions. The misrepresentations as to in-kind amounts were made in monthly reports to SAMHSA and the documents were generated to placate auditors conducting a required annual audit of the Tribe's operations. These annual audits are required of tribe's accepting federal grant funds to insure that the grant funds are being used for their intended purpose and that the requirements of the contract agreement are being met. If auditors make negative findings, those findings can result in action by the federal agency to rescind the contract, demand repayment, or make an offset, where the government deducts money from future payments.
Several witnesses, whose names were used as in-kind contributors, denied preparing or signing the invoice and denied contributing time or goods to the Po'Ka Project, at least in the amount claimed.
Based on email evidence and the statements of cooperating witnesses, Onstad, Augare, and Still Smoking, along with others, conspired to make the false representations as to the in-kind contributions made to the Po'Ka Project, and then actively managed the creation of false documentation to cover the representations so that the auditors would not question the contributions and the federal money would continue flowing unabated. The false representations were in effect false claims that resulted in the expenditure of federal grant money
An audit report from the Department of Health and Human Services, Office of Inspector General, determined that $4.6 million in claims for grant payments paid to the Tribe on the basis of Po'Ka' s in-kind contribution are unsupported, inflated, or completely falsified.
Onstad and Augare embezzled from the program in a myriad of relatively minor ways - travel fraud, misuse of Po'Ka credit cards, exorbitant claims of overtime, etc. - but the most significant embezzlement came in the agreement they appeared to reach with the grant's national evaluator. Certain federal grants require the participation of a national evaluator; an outside observer whose job is to monitor the progress of the project. Onstad and Augare reached an agreement with the national evaluator whereby they would approve significant payments to the evaluator who would in turn kick back a sizable portion of what was provided to him. Between August 2008 and August 2011, Onstad and Augare approved over $475,000 in Po'Ka grant monies for the national evaluator, then doing business under an alias business name. In turn, between August 2008, and September 2011, the national evaluator transferred $231,550 to the Child Family Advocacy Center (commonly referred to as the Child Family Advocacy Fund or CFAF) bank accounts at the Wells Fargo Bank in Cut Bank, Montana.
Between September 2008 and September 2011, Onstad and Augare withdrew $225,482 from the CFAF accounts. Much of that money went into their personal accounts at Stockman Bank and from those accounts much was spent on gambling and travel.
In 2009, Onstad and Augare both filed federal income tax returns for the calendar year 2008 in which they claimed a certain amount of taxable income based on their salaries from the Po'Ka Program. However, they had also taken significant sums from the CFAF accounts, all of which constituted unreported income. By concealing that income from the Internal Revenue Service, Onstad and Augare paid approximately half of what was owed to the IRS.
The case was pursued by the Federal Bureau of Investigation and the Department of Health and Human Services' Office of Inspector General. The FBI and the IG also received substantial assistance from the Internal Revenue Service's Criminal Investigation Division.
U.S. Attorney Mike Cotter lauded the work of the FBI and the Inspector General's Office in the Po'Ka case as well as the myriad other cases investigated and prosecuted since the Guardians Project was made public in 2013. He commented when guilty pleas were entered that:
Rarely does government produce such an effective anti-corruption team as has been created by the agents of the Guardians Project. Abandoning the traditional model of "You work your case and I'll work mine", these agencies have committed themselves to mutual cooperation. Working closely together-providing each other with time, resources, and expertise-has made these investigators the champions of Indian Country communities eager to rid themselves of corruption and the abuses of trust and power."
Fontana Man Pleads Guilty to Conspiring to Distribute over 30 Pounds of MethamphetamineRead the Press Release
FRESNO, Calif. — Marco Antonio Granados, 20, of Fontana, pleaded guilty Monday to conspiring to distribute and possess with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Granados admitted that on October 16, 2013, he and his cousin met with a confidential informant to negotiate the sale of 30 pounds of methamphetamine. After several minutes of negotiations, Granados and his cousin showed the informant their stash of methamphetamine that was in a large brown cardboard box in the rear cargo area of their vehicle. At this point, law enforcement personnel arrived on scene and arrested them. Officers searched the vehicle and recovered 31 individually brown wrapped and “food saver” sealed packages of methamphetamine.
This case is the product of an investigation by the Drug Enforcement Administration and the Kern County Sheriff’s Office. Assistant United States Attorney Brian K. Delaney is prosecuting the case.
Granados is scheduled to be sentenced by United States District Judge Anthony W. Ishii on September 15, 2014. Granados faces a statutory penalty of 10 years to life in prison. The actual sentence, however, will 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.
Fayette County Woman Pleads Guilty to Mail FraudRead the Press Release
Former Sheriff’s Department Employee Created False Records to Hide Theft
Charleston, W.Va. – A 44-year old Fayette County woman faces up to 20 years in prison after pleading guilty today to mail fraud, United States Attorney Booth Goodwin announced. Cheryl Gray of Hilltop, West Virginia, entered a guilty plea before United States District Court Judge John T. Copenhaver, Jr. in Charleston.
Gray is a former employee of the Fayette County Sheriff’s Department. While at the Sheriff’s Department, Gray was charged with collecting application fees for concealed weapon permits, recording fees paid, and transmitting a list to the West Virginia State Police of permits issued each month. For over six months, from October of 2012 through June of 2013, Gray kept cash payments for permits and failed to record the names of persons who paid cash on the State Police report. To disguise her theft, Gray created a false set of receipt books. The fraud resulted in losses to the State Police and Fayette County Sheriff’s Department of approximately $40,000.
Gray is scheduled to be sentenced on September 23, 2014 in Charleston.
The West Virginia State Police, Fayette County Sheriff’s Department, and the Federal Bureau of Investigation conducted the investigation. Assistant United States Attorney Blaire L. Malkin is in charge of the prosecution.
Fairview Park Man and Cleveland Company Indicted for Making Illegal Discharges into Sewer SystemRead the Press Release
An indictment was filed in federal court charging Thomas E. White, 49, of Fairview Park, and Kelly Plating Company with making illegal discharges with high concentrations of metals such as chrome and zinc into the sewer system, which in turn, after treatment, discharges to Lake Erie, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The Kelly Plating Company is a metal plating operation located in Cleveland. White was an employee at Kelly Plating and responsible for operating the equipment which reduced the amount of pollutants discharged into the sewer system to an acceptable level, according to the indictment.
Starting around January 28, 2012, White changed the way wastewater at the Kelly Plating facility was processed. During the weekdays, White ensured that the pollution control equipment was operated properly, according to the indictment.
However, on the weekends White bypassed the pollution control equipment and discharged partially treated wastewater and sludge directly into the sewer system. These discharges contained high concentrations of chrome and zinc. This practice ended on May 19, 2012, according to the indictment.
“Our greatest resource in Ohio is our clean water,” Dettelbach said. “We will aggressively investigate and prosecute cases in which people pollute Ohio’s streams, rivers and lakes.”
“Ohio EPA will not tolerate those who blatantly disregard the law, and don’t show consideration for the health of others or the environment,” Ohio EPA Director Craig W. Butler said. “We will continue to work with our partners at the local, state and federal level to be sure responsible parties are held accountable for their actions. Ohio EPA’s Office of Special Investigations worked hard to put an end to these illegal sewer system discharges, and I commend their efforts.”
“Our nation’s environmental laws are designed to protect human health and safety from those trying to cut costs illegally,” said Randall K. Ashe, Special Agent in Charge of U.S. EPA’s criminal enforcement program in Ohio. "The metals used in this case were especially harmful, requiring proper handling and disposal. Today’s indictment by a federal grand jury demonstrates how serious these offenses are and shows that EPA will take action to protect communities from pollution.”
“Whether it’s into sewers or directly into waterways, illegal dumping is always a threat to Ohioans,” said Ohio Attorney General Mike DeWine. “My office is committed to investigating and prosecuting the intentional dumping of chemicals and the attempts to cover up those actions.”
“It was through the continuous water quality monitoring of the Northeast Ohio Regional Sewer District that it identified rising levels of pollution at its Westerly Wastewater Treatment Plant. The Sewer District then took action and identified the source,” said Julius Ciaccia, NEORSD Executive Director. “The Sewer District worked with the US EPA, the Ohio EPA and the Ohio BCI to determine the extent of the wrongdoing by Kelly Plating. The Sewer District has made significant investments to improve water quality in our region, and will not tolerate actions that jeopardize that investment.”
This case is being prosecuted by Special Assistant U.S. Attorney Brad Beeson following an investigation by the Ohio EPA, U.S. EPA, the Ohio Bureau of Criminal Investigation, and Northeast Ohio Regional Sewer District.
The statutory maximum for violating the Clean Water Act for individuals is three years in prison, one year of supervised release and a fine of $50,000 per day of violation or $250,000, whichever is larger. For corporations the maximum penalty for violating the Clean Water Act is five years of probation and a fine of $50,000 per day of violation or $500,000, whichever is larger.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defendant’s role in the offenses and the characteristics of the violations. In all cases, the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Edcouch Woman Charged with Embezzling More Than $90K from Halfway HouseRead the Press Release
McALLEN, Texas – Ofelia Alvarado Vallejo, 44, of Edcouch, has made an initial appearance on charges she embezzled more than $90,000 from the Mid Valley House Residential Reentry Center while working there, announced U.S. Attorney Kenneth Magidson.
Vallejo appeared before U.S. Magistrate Judge Peter E. Ormsby this morning to hear the charges outlined in a criminal information filed June 9, 2014. Judge Ormsby ordered Vallejo released upon posting a $30,000 bond.
The criminal information alleges Vallejo embezzled $90,519.70 from March 2012 through February 2013 from the Mid Valley House Residential Reentry Center.
During the one-year period beginning on March 1, 2012, Mid Valley received more than $10,000 in federal funding.
If convicted, Vallejo could face up to 10 years in federal prison and a fine of up to $250,000.
This case was investigated by Department of Justice - Office of Inspector General, with the assistance of the Edinburg Police Department. Assistant U.S. Attorney Christopher Sully is prosecuting the case.
A defendant is presumed innocent unless convicted through due process of law.Defendant Sentenced on Federal Drug ChargesRead the Press Release
United States Attorney Kenyen Brown announces that Ricardo Cruz was sentenced today in Federal Court after pleading guilty to conspiracy to possess with intent to distribute cocaine. Cruz received a sentence of 35 months imprisonment, with 5 years of supervised release to follow.
The Federal Bureau of Investigation conducted the investigation, which involved a total of 14 defendants, with the assistance of the Mobile Police Department, the Foley Police Department, the Fairhope Police Department, the Gulf Shores Police Department and the Alabama State Port Authority. The FBI presented the case for prosecution to the United States Attorney=s Office, and Assistant United States Attorney Daryl Atchison handled the prosecution of the case on behalf of the United States.
Danville Business Owner Sentenced to 10 Years for Wire Fraud and Identity TheftRead the Press Release
FRANKFORT, KY - The owner of a children’s fun and gaming center in Danville, Ky., has been sentenced to 10 years in prison for defrauding investors in his business.
U.S. District Judge Gregory Van Tatenhove sentenced 50-year-old Paul Christopher Turner on Monday, for aggravated identity theft and wire fraud. Under federal law, Turner will have to serve at least 85 percent of his prison sentence.
According to court documents, Turner used the personal identifying information of some investors without their permission and forged signatures of a notary public, in order to obtain loans and open lines of credit for his business.
Turner previously pled guilty to an indictment that alleged from approximately 2004 through 2013 he raised millions of dollars from investors to promote his company. Turner improperly lured some of that money from investors through misrepresentations and falsehoods about how the investors’ money would be used. Turner then applied some of the funds toward his own living expenses.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Dugan Wong, Inspector in Charge, United States Postal Inspection Service, Pittsburgh Division; and Rodney Brewer, Commissioner, Kentucky State Police jointly made the announcement today.
The investigation was conducted by the United States Postal Inspection Service and the Kentucky State Police. The case was prosecuted by Assistant U.S. Attorney Kenneth R. Taylor.
Dallas Man Known as “Baja Bandit” Admits Committing Armed Robberies of Local Insurance BusinessesRead the Press Release
DALLAS — A Dallas man, who admitted committing the armed robberies of insurance companies in Dallas last year, has pleaded guilty to federal charges, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Michael Dewayne Cleveland, 31, pleaded guilty this morning, before U.S. Magistrate Judge David L. Horan, to four of seven counts charged in an indictment returned by a federal grand jury in Dallas in December 2013. Specifically, Cleveland pleaded guilty to two count of interference with commerce by robbery and two counts of carrying or possessing a firearm during and in relation to a crime of violence.
Cleveland faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine for each robbery conviction. For the first firearm conviction, he faces seven years in federal prison, because he brandished the weapon, which will run consecutively to all other charges. For the second firearm conviction, he faces 25 years in federal prison that will also run consecutively to all other charges. Sentencing is set for October 15, 2014, before U.S. District Judge Ed Kindeade.
According to plea documents filed in the case, Cleveland admitted entering a Baja Insurance company office in Dallas on September 3, 2013, approaching an employee with a gun drawn and demanding money. He admitted stating, “Tell me where it’s at or I’m gonna kill you.” The employee, in fear for her life, pointed to a desk drawer. Cleveland, later dubbed the “Baja Bandit,” took the money from the drawer and left the location.
Cleveland also admitted entering a State Farm Insurance company office in Dallas on September 18, 2013, pulling out a gun, pointing it at employees and demanding money. Two employees, in fear for their lives, complied with Cleveland’s demands. Cleveland took money and credit cards from the business and fled.
Baja Insurance lost money as a direct result of the robbery, temporarily closed its office and lost several employees who feared for their safety. The State Farm office also lost money as a direct result of the robbery, temporarily closed its office and the branch made less in overall monthly proceeds. The robberies had a direct effect on both company’s revenue and commerce.
The FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives and the Dallas Police Department investigated the case, and Assistant U.S. Attorney Taly Haffar is in charge of the prosecution.
Collin County Woman Guilty in Plano ISD Embezzlement SchemeRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – A 68-year-old Prosper, Texas woman has pleaded guilty in connection with her role in a conspiracy to embezzle millions from the Plano Independent School District, announced U.S. Attorney John M. Bales today.
Carol Ann LaRue pleaded guilty to an Information charging her with conspiracy to commit federal program fraud today before U.S. Magistrate Judge Don D. Bush.
According to information presented in court, LaRue owned and operated Fire Systems Specialists (FSS) and Digital Security Solutions (DSS), companies supposedly in the business of maintaining fire safety systems and security systems. Between May 2011 and December 2013, LaRue conspired with Plano Independent School District employee, Kris Wilson Gentz, to defraud Plano ISD by submitting fraudulent invoices for services that were not rendered and products that were not provided. When payment was made to FSS and DSS, LaRue and Gentz would split the profits between themselves. As a result of the fraudulent scheme, Plano ISD suffered a loss that did not exceed $7 million. LaRue is responsible for losses that do not exceed $2.5 million. Gentz pleaded guilty to the same charges on Apr. 1, 2014 and is awaiting sentencing.
"The other shoe has now dropped in the Kris Gentz-Carol LaRue fraud scheme,” said U.S. Attorney Bales. “These defendants not only cheated the taxpayers in Plano ISD, they robbed the children. I congratulate the investigative team for a job well done. This case also should serve as a warning to others who somehow believe that they can rip off the public and not be held accountable. There will always be a reckoning.”
LaRue faces up to five years in federal prison. A date for sentencing has not yet been set.
This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Christopher A. Eason.Chicago Man Surrenders After Being Indicted in Alleged Conspiracy to Illegally Traffic Guns from Indiana to ChicagoRead the Press Release
CHICAGO ― A Chicago man self-surrendered to law enforcement authorities today on federal charges alleging that he conspired with others to buy at least 43 firearms in Indiana and illegally transport those firearms to Chicago for sale. The new defendant, WINSTON GERALDS, allegedly conspired with previous defendant David Lewisbey and others in the interstate gun trafficking conspiracy.
Geralds, 24, also known as “Worm,” was indicted on one count each of conspiracy and dealing firearms without a federal license, and two counts each of illegally transporting firearms across state lines and interstate travel to sell guns without a license. He pleaded not guilty to the charges after presenting himself with his attorney for arraignment in U.S. District Court. He was taken into federal custody and a detention hearing was scheduled for 1:30 p.m. Friday before U.S. Magistrate Judge Geraldine Soat Brown in Federal Court.
Geralds was charged in a seven-count indictment returned by a federal grand jury on May 28. A co-defendant, MAURICE STRICKLAND, 26, of Chicago, was charged with one count of being a felon-in-possession of a firearm. Strickland, also known as “Reece,” was arrested on June 9, pleaded not guilty, and remains detained in federal custody.
The indictment alleges that Geralds accompanied Lewisbey on multiple trips to Crown Point, Ind., and Indianapolis between April 21-23, 2012, and purchased firearms at gun shows and other venues. It adds they illegally brought the firearms to Chicago, where they sold no fewer than 43 guns to previous defendants, who then sold the guns to an individual who was cooperating with ATF agents. All of those guns were recovered by law enforcement.
Lewisbey, 24, of South Holland; Levaine Tanksley, 29, of Chicago; and Charles Lemle, 28, of Chicago, were previously convicted of various firearms offenses and sentenced. Michael Hall, 29, of Chicago, is awaiting sentencing.
Geralds allegedly accompanied Lewisbey and participated in each of the gun transactions on April 21-23, 2012, and conspired with him in illegally selling the firearms across the state line. At the time, Strickland lived in a residence in the 6800 block of South Langley Avenue where Tanksley sold some of the guns he bought from Lewisbey. Strickland was charged with illegally possessing a firearm on April 22, 2012, because of a previous felony conviction.
The indictment against Geralds and Strickland was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Carl Vasilko, Special Agent-in- Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Chicago Office of the Federal Bureau of Investigation, the Chicago Police Department, and the Illinois State Police assisted in the investigation, which was conducted with the Chicago High Intensity Drug Trafficking Task Force (HIDTA).
Conspiracy and dealing firearms without a federal license each carry a maximum sentence of five years in prison, while each count of illegally transporting firearms across state lines, and interstate travel to sell guns without a license carry a maximum penalty of 10 years in prison. The felon-in-possession count against Strickland carries a maximum sentence of 10 years in prison. Each count carries a maximum fine of $250,000. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Christopher Parente and Bethany Biesenthal.
Indictment
Burlington County, N.J., Man Charged with Bank Fraud for Running Multi-Million Dollar Check-Kiting SchemeRead the Press Release
TRENTON, N.J. – A Burlington County, N.J., man was arrested this morning for allegedly orchestrating a large scale check-kiting scheme that caused $8.8 million in losses to three banks in New Jersey, U.S. Attorney Paul J. Fishman announced.
Luis G. Rogers Sr., 71, of Beverly, N.J., is charged by complaint with one count of bank fraud. He is scheduled to make his initial appearance today in Trenton federal court before U.S. Magistrate Judge Tonianne J. Bongiovanni.
According to the complaint:
Rogers was the chief executive officer of Lease Group Resources Inc. (LGR), an office equipment leasing company based in Mount Holly, N.J., and was also the principal of several other business entities (the LGR Entities). From November 2012 through April 2013, Rogers maintained and controlled numerous checking accounts in the names of the LGR Entities at three separate banks: Liberty Bell Bank, Roma Financial, and Susquehanna Bank.
Rogers allegedly engaged in what is known as a “check-kiting” scheme – creating artificial balances in his bank accounts by causing checks to be written against the accounts knowing the money was not there to cover them. Rogers would allegedly deposit the checks into other accounts he controlled to artificially inflate the balances of those accounts. Rogers, or others acting on his behalf, allegedly deposited hundreds of millions of dollars into the LGR Entities’ accounts, amounts that far exceeded LGR’s annual revenues. In April 2013, the banks discovered the scheme and either returned or dishonored many of the pending checks and charged back the amounts of the checks against the LGR Entities’ accounts. This resulted in the accounts being overdrawn and the banks sustaining millions of dollars in losses. Specifically, Liberty Bell lost $3.7 million, Roma Bank lost $2.1 million, and Susquehanna lost $3 million.
The charge of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations in the complaint are merely accusations, and the defendant is considered innocent unless proven guilty.14-230
Rogers, Luis Complaint
Buffalo Man Sentenced for Being an Accessory After the Fact to a False Statement Under the Clean Air Act Related to Kensington Towers ProjectRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul announced today that Henry Hawkins, 45, of Buffalo, N.Y., who was convicted of a misdemeanor charge of being an accessory after the fact to a false statement under the Clean Air Act, was sentenced to one year probation by U.S. Magistrate Judge Jeremiah J. McCarthy.
Assistant U. S. Attorney Aaron J. Mango, who handled the case, stated that the defendant was employed by JMD Environmental, Inc. (JMD) as an air sampling technician and a project monitor, and was certified by the New York State Department of Health to conduct asbestos project monitor and air sampling duties. From June 9, 2009 to January 11, 2010, co-defendants Johnson Contracting of WNY, Inc. (Johnson Contracting), Ernest Johnson, and Rai Johnson, conducted asbestos abatement activities at six buildings at the Kensington Towers Apartment Complex in Buffalo. During the abatement process, co-defendant Rai Johnson created daily project logs to document the progress at Kensington Towers. The logs are documents required to be maintained under the Clean Air Act.
At the conclusion of the abatement for building B-2 by Johnson Contracting, Rai Johnson wrote in his daily project log that all material containing asbestos had been removed from the boiler room, when in truth, all asbestos had not been removed. Thereafter, on August 25, 2009, the defendant conducted a visual inspection of the boiler room at building B-2 and issued a satisfactory visual inspection, when in truth, the defendant was aware that all asbestos had not been removed. In doing so, the defendant acted as an accessory after the fact to the false statement made by the Johnson defendants.
This is the first defendant to be sentenced as part of the Kensington Towers asbestos abatement project. In addition to Ernest and Rai Johnson, other defendants who have been convicted include JMD project monitors Evan Harnden, Chris Coseglia and Brian Scott; and current and former public officials responsible for certifying the project’s compliance with applicable laws and regulations, including Donald Grzebielucha, William Manuszewski, and Theodore Lehmann. The remaining defendants will be sentenced before U.S. District Court Judge Richard J. Arcara.
The plea is the culmination of an investigation on the part of Special Agents of the U.S. Environmental Protection Agency - Criminal Investigation Division, under the direction of Acting Special Agent-In-Charge, Vernesa Jones-Allen; Special Agents of the Federal Bureau of Investigation; Special Agents of the U.S. Department of Housing and Urban Development - Office of Inspector General, under the direction of Special Agent-In-Charge Christina Scaringi; and Investigators of the New York State Department of Environmental Conservation Police, BECI, under the direction of Captain Frank Lauricella. Additional assistance was provided by the New York State Department of Labor, Asbestos Control Bureau.Broward Resident Convicted in Social Security Theft SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Thomas Caul, Special Agent in Charge, Social Security Administration (SSA), Office of Inspector General, announce that Diana Cunningham, 56, of Pembroke Pines, pled guilty to two counts of theft of government funds, in violation of Title 18, United States Code, Section 641. The defendant faces up to ten years in prison, three years of supervised release, a $250,000 fine, and restitution as to each count. The defendant’s sentencing hearing is scheduled for September 2, 2014 at 1:30 p.m. in front of U.S. District Judge William P. Dimitrouleas.
According to information presented in court, from approximately May 2003 to August 2013, the defendant falsely represented to the Social Security Administration that she was caring for and providing housing for a disabled child in Florida. The defendant falsified numerous forms and attestations to the SSA regarding the child’s whereabouts and welfare. An investigation by the SSA’s Office of Inspector General revealed that the child was living in Massachusetts and not being cared for by the defendant. Further investigation revealed that the defendant did not provide any financial support for the disabled child. Over the years, the defendant received over approximately $80,000 in payments from the SSA.
Mr. Ferrer commended the investigative efforts of SSA’s Office of Inspector General. This case is being prosecuted by Assistant U.S. Attorney Randy Katz.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Blackfeet Law Enforcement Officer Sentenced to PrisonRead the Press Release
GREAT FALLS - The United States Attorney's Office announced that during a federal court session in Great Falls, Montana, on June 23, 2014, before U.S. District Judge Brian M. Morris, Michael Connelly, Sr., 57, of Browning, was sentenced to a term of 24 months imprisonment, three years supervised release, and a special assessment of $125.
U.S. Attorney Mike Cotter said the conviction and sentence of Blackfeet Law Enforcement Officer Connelly represents the office's dedication to ensuring that no defendant escapes justice. "Society bestows upon law enforcement officers a tremendous amount of power and trust. Officers are typically the best stock in which to invest such tools. But sometimes an officer abuses the power that society has so generously and graciously given to him. When that unfortunate step is taken, the justice system must ensure that the officer is prosecuted, punished, and no longer able to misuse his position."
Officer Connelly was sentenced for receiving oral sex in his patrol vehicle while armed and on duty. The victim reported that Officer Connelly took her to a secluded place and threatened her with jail if she did not provide oral sex. When interviewed about the encounter, Officer Connelly lied to the FBI, telling agents that he never told the victim that she could either provide oral sex or go to jail. In a second interview, Officer Connelly admitted that he made such a statement.
A jury convicted Officer Connelly of a Civil Rights Violation and False Statement to a Federal Agent. In a Sentencing Memorandum, Assistant U.S. Attorney Ryan G. Weldon stated "Officer Connelly was a law enforcement officer and tribal prosecutor for decades. He knows that he cannot extract oral sex from passengers in his patrol vehicle, abuse his power as a law enforcement officer, or lie to the FBI. Knowing all of those things, Officer Connelly still committed the crimes."
The Court sentenced Officer Connelly to 24 months of imprisonment, with three years of supervised release to follow. Because there is no parole in the federal system, the truth in sentencing guidelines mandate that Connelly will likely serve all of the time imposed by the court. In the federal system, Connelly does have the opportunity to shorten the term of custody by earning credit for good behavior. However, this reduction will not exceed 15% of the overall sentence.
This investigation was conducted by the Federal Bureau of Investigation.
Asherton Man Sentenced to 20 Years in Federal Prison for Receiving Child PornRead the Press Release
In Del Rio this afternoon, 60-year-old Abel De Leon of Asherton, TX, was sentenced to 20 years in federal prison followed by five years of supervised release for receiving child pornography announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala.
Court records reflect that HSI agents who were conducting an investigation into on-line exploitation of minors executed a search warrant at the defendant’s residence in November 2012 and seized several DVDs, a computer and related equipment. A subsequent forensics examination of the seized items revealed the presence of over 100 videos and images depicting sexual exploitation of pre-pubescent children.
On June 5, 2013, De Leon pleaded guilty to one count of receipt of child pornography. By pleading guilty, De Leon admitted to receiving child pornography since approximately 2012, including 48 videos via the Internet.
“This 20-year sentence sends a clear message that those who exploit children in any way will face serious consequences,” said Special Agent in Charge Janice Ayala, HSI San Antonio. “Preventing and investigating crimes against children is a high priority for HSI. We will continue to dedicate law enforcement resources to identify and bring to justice child predators who traumatize and victimize children.”
This case was investigated by special agents with HSI and prosecuted by Assistant United States Attorneys Matthew H. Watters, Katherine Nielsen, and Meghan McCalla.
Arlington Man Sentenced for Counterfeiting ViolationsRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 58-year-old Arlington, Texas, man has been sentenced for counterfeiting violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Cloyd Ray Knight, III pleaded guilty on May 9, 2013 to passing counterfeit bills and was sentenced to 69 months in federal prison today by U.S. District Judge Leonard Davis.
According to information presented in court, Knight began manufacturing counterfeit $100 United States Federal Reserve Notes at his home in Arlington sometime in 2004-2005. He developed a manufacturing process that included using newspaper print paper, painting the paper with acrylic, printing a simulated watermark on the paper, printing a simulated security thread on the paper, printing a front and rear image on the paper, and spraying the notes with a dulling coat. The process changed over time based on his experience and experimentation. After printing the counterfeit $100 bills, Knight would pass or use the counterfeit bills to purchase goods and then receive change in legitimate bills from retail stores located in east Texas and west Louisiana. Considered one of the largest digital counterfeiters in recent history, Knight successfully passed more than $400,000 in counterfeit $100 bills.
Knight was indicted by a federal grand jury on January 23, 2013. After pleading guilty in May 2013, he absconded. Knight was then rearrested in January 2014.
This case was investigated by the United States Secret Service and was prosecuted by Assistant U.S. Attorney Frank Coan.
Anderson County Man Sentenced for Child PornographyRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 50-year-old Palestine, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Alvin Westley pleaded guilty on Jan. 9, 2014 to possession of child pornography and was sentenced to 156 months in federal prison today by U.S. District Judge Leonard E. Davis.According to information presented in court, on Jan. 26, 2011, Westley knowingly possessed child pornography. At the time of the offense, Westley was a registered sex offender having been previously convicted of three counts of indecency with a child. Westley was indicted by a federal grand jury on Oct. 23, 2013, and charged with federal child pornography violations.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the U.S. Department of Homeland Security - Homeland Security Investigations (DHS-HSI), the Texas Department of Public Safety – Criminal Investigations Division, and the Anderson County Sheriff's Office. Assistant U.S. Attorney Nathaniel C. Kummerfeld prosecuted this case.Albuquerque Man Sentenced to Twelve Years for Violating the Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Timothy Patrick Shanks, 39, of Albuquerque, N.M., was sentenced this morning to 144 months in federal prison followed by three years of supervised release for his conviction on firearms charges. The sentence was announced by U.S. Attorney Damon P. Martinez, 2nd Judicial District Attorney Kari E. Brandenburg, Special Agent in Charge Bernard J. Zapor of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Bernalillo County Sheriff Dan Houston.
Shanks was arrested on July 3, 2013, on a criminal complaint charging him with being a felon unlawfully in possession of a firearm. According to the criminal complaint, on June 24, 2013, the Bernalillo County Sheriff’s Office and ATF executed a search warrant at Shanks’ residence and recovered a firearm believed to have been used in the armed robbery of a Dollar General store located at 3211 Coors Blvd. SW on June 22, 2013. On July 25, 2013, Shanks was indicted and charged with being a felon in possession of a firearm, violating the Hobbs Act by committing an armed robbery of a business engaged in interstate commerce, and brandishing a firearm in relation to a crime of violence.
Thereafter, Shanks was charged in a superseding indictment with the following six crimes: (1) being a felon in possession of a firearm and ammunition on June 22, 2013, (2) violating the Hobbs Act by committing an armed robbery of a business engaged in interstate commerce on June 22, 2013, (3) brandishing a firearm in relation to a crime of violence, (4) distributing methamphetamine on May 9, 2013, (5) being a felon in possession of a firearm on May 21, 2013, and (6) being a felon in possession of a firearm on June 3, 2013. The superseding indictment alleged that all six offenses were committed in Bernalillo County, N.M.
On Feb. 19, 2014, Shanks pleaded guilty to Counts 3 and 5 of the superseding indictment charging him with brandishing a firearm during a crime of violence and being a felon in possession of a firearm. In his plea agreement, Shanks admitted brandishing a revolver when he robbed the Dollar General store on June 22, 2013. He also admitted possessing a 9 mm caliber rifle on May 21, 2013. Shanks acknowledged that he was prohibited from possessing firearms or ammunition because he previously had been convicted of possession of a controlled substance with intent to distribute, and of possession of a controlled substance.
This case was investigated by the Albuquerque office of ATF and the Bernalillo County Sheriff’s Office with assistance from the 2nd Judicial District Attorney’s Office. It was prosecuted by Assistant U.S. Attorney David M. Walsh as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this 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 communities in New Mexico for as long as possible.
Air Conditioner Thief Pleads Guilty to Violating Clean Air ActRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO – Martin C. Eldridge III, 35, Columbus, pleaded guilty in U.S. District Court to violating the Clean Air Act when he cut the tubing on air conditioning units he was stealing and released a regulated refrigerant into the environment.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Randall K. Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency (U.S. EPA), Franklin County Prosecuting Attorney Ron O’Brien and Columbus Police Chief Kim Jacobs announced the plea entered today before U.S. Magistrate Judge Elizabeth Preston Deavers.
According to court documents, Eldridge and others stole at least 49 air conditioner units between August and October 2013 in order to sell the copper and parts from the units at scrap yards. When he cut the tubing that connected the air conditioner to the business or residence, a refrigerant known as HCFC-22 was released. The refrigerant is regulated under the Clean Air Act because it poses a significant threat to the Earth’s ozone layer. HCFC-22 is also known as R-22 and sold under the trade names of Freon, Genetron, Arcton and Forane.
Eldridge pleaded guilty to one count of knowingly venting HCFCs into the environment. Under terms of the plea agreement, Eldridge will serve 31 months in federal prison. The plea agreement recommends that Eldridge serve the federal sentence concurrent with his state sentence on the theft charges. Eldridge has been in state custody since October 2, 2013. Following prison time, Eldridge will be under court supervision for 12 months during which time he must perform 200 hours of community service. Senior U.S. District Judge James L. Graham will review the terms of the plea agreement before determining whether or not to accept the agreed-to sentence and schedule a date for sentencing.
“The release of ozone depleting substances can cause serious harm to public health, including skin cancer, cataracts, and suppression of the immune system,” said Randall K. Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Ohio. “The defendant’s continual theft of air conditioner parts was illegal and a clear violation of the Clean Air Act. As this defendant has learned, anyone who thinks that breaking the law is worth the risk should think again.”
U.S. Attorney Stewart said this is the first federal case of its kind in the Southern District of Ohio. He commended the cooperative investigation by the Columbus Division of Police and U.S. EPA and the scrap metal theft task force, as well as Assistant U.S. Attorney J. Michael Marous and Special Assistant U.S. Attorneys Heather B. Robinson with Franklin County Prosecutor O’Brien’s Office and Brad Beeson with the U.S. EPA, who prosecuted the case.
# # #Additional Tax Charges Filed Against Philadelphia ManRead the Press Release
PHILADELPHIA - William Bucci, 57, of Philadelphia, PA, was charged today by Superseding Indictment with four counts of making and subscribing false federal income tax returns, announced United States Attorney Zane David Memeger. The indictment alleges that Bucci underreported his income for the tax years 2007 through 2010.
If convicted the defendant faces a maximum possible sentence of 12 years in prison, a fine of up to $1 million, and up to three years of supervised release.
The case was investigated by the Internal Revenue Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David J. Ignall.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525
Monday 23 June 2014
Virginia Man Pleads Guilty to Using Facebook to Entice Minors from Across the Country to Produce Child PornographyRead the Press Release
RICHMOND, Va. – Cameron Scot Bivins-Breeden, 21, of King George County, Va., pleaded guilty today to production of child pornography and enticement of a minor.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after the plea was accepted by United States District Judge John A. Gibney.
Bivins-Breeden was indicted on April 15, 2014, by a federal grand jury on production of child pornography, in violation of 18 U.S.C. § 2251, and enticement of a minor, in violation of 18 U.S.C. § 2422. He faces a maximum penalty of life imprisonment when he is sentenced on September 22, 2014.
In a statement of facts filed with his plea agreement, Bivins-Breeden admitted to enticing 38 juvenile females located across the country, ranging from 11 to 17 years old, to produce child pornography. As part of the scheme, Bivins-Breeden contacted the victims via Facebook on his iPhone posing as a juvenile female and enticed them to produce child pornography. After the juvenile victims produced the pornographic images, they sent them to Bivins-Breeden over the internet. When the victims refused to produce additional child pornography images, Bivins-Breeden threatened to send the previously obtained images to the victims’ friends, family, and schoolmates on Facebook. In total, Bivins-Breeden admitted to sending 95 child pornography images in an effort to convince victims he was, in fact, a juvenile female and causing victims to produce 45 child pornography images.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Erik S. Siebert and Commonwealth of Virginia, Office of the Attorney General, Assistant Attorney General and Special United States Attorney Samuel Fishel are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Venezuelan Man Arrested for Threatening Newtown Residents After School Shooting TragedyRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that WILFRIDO A. CARDENAS HOFFMAN, 30, of El Hatillo, Venezuela, was arrested on June 21 in Miami on a federal criminal complaint charging him with making numerous threatening phone calls to residents of Newtown, Connecticut, shortly after the Sandy Hook Elementary School shooting tragedy in December 2012.
On May 20, 2013, CARDENAS HOFFMAN was charged in a criminal complaint with transmitting threats in interstate or foreign commerce to injure the person of another. According to the complaint, a redacted copy of which was unsealed today, CARDENAS HOFFMAN made numerous phone calls to residents of Newtown on December 16, 2012, two days after the shooting that claimed 26 lives at Sandy Hook Elementary School in Newtown. In one of the telephone calls, HOFFMAN allegedly stated: “This is Adam Lanza. I’m gonna [expletive] kill you. You’re dead. You’re dead. You hear me? You’re dead.” In another phone call, HOFFMAN allegedly stated: “This is Adam Lanza. I’m gonna kill you. You’re dead. With my machine gun. You’re dead [expletive].”
CARDENAS HOFFMAN was arrested on Saturday as he transitioned through Miami International Airport en route to Mexico from Venezuela. He made his initial appearance today before U.S. Magistrate Judge William C. Turnoff in the Southern District of Florida and is scheduled to return to court on Thursday at 10 a.m. for a detention hearing.
UPDATE: On July 16, 2014, CARDENAS HOFFMAN appeared before U.S. Magistrate Judge Joan G. Margolis in New Haven. He waived his right to a probable cause hearing for 60 days and was ordered to undergo a psychiatric evaluation. He has been detained since his arrest on June 21.
Newtown residents who believe that they received a threatening call are encouraged to call Lori Vernali, the Victim/Witness Coordinator for the U.S. Attorney’s Office, at 203-821-3818.
“This complaint charges that Cardenas Hoffman made dozens of threatening telephone calls to residents of Newtown when they were suffering from one of the worst tragedies in our nation’s history,” stated U.S. Attorney Daly. “Threatening such vulnerable people is reprehensible and inhuman criminal conduct. Further, it inappropriately stressed law enforcement resources at a critically demanding time. This case demonstrates the resolve of our office and the FBI to arrest individuals who believe that international boundaries will protect them from prosecution in the United States.”
“The motivation to catch criminals runs deep within the FBI, but the pursuit of criminals who prey on innocent victims motivates agents like nothing else,” stated FBI Special Agent in Charge Ferrick. “That someone can so callously prey on a community with such hate and vitriol is beyond comprehension. This arrest, a year and a half after the Newtown tragedy, speaks to the unrelenting commitment and compassion for victims and their families and sends an important warning to those inclined to commit similar crimes. The FBI’s reach is exceptionally far and wide and equally enduring.”
The charge of transmitting threats in interstate or foreign commerce carries a maximum term of imprisonment of five years and a fine of up to $250,000.
U.S. Attorney Daly stressed that the filing of a criminal complaint is not evidence of guilt. The charges in a criminal complaint are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Edward Chang and Krishna Patel, with the assistance of the U.S. Attorney’s Office for the Southern District of Florida and Assistant U.S. Attorney Sarah Schall.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Twenty-Two Springfield Men Indicted on Federal and State Drug and Firearm OffensesRead the Press Release
BOSTON – Twenty-two Springfield men were charged today in federal and state court with either distributing a controlled substance or unlawfully possessing a firearm and ammunition.
Separate federal indictments alleging the distribution of crack cocaine were returned against Alberto Correa-Martinez, 27, and Stephen Tavernier, 28; Sherad Therrien, 24; David Faust, 26; Richard Freedman, 29; Jayson Green, 35; Aaron Smith, 30; Theo Waldron, 39; Dimitri Major, 36; and one other individual known to law-enforcement. Therrien was also charged for being a felon in possession of a firearm and ammunition.
Luis Oppenheimer, 25, and Jose Vargas, 27, were charged with distributing and possessing with intent to distribute heroin.
If convicted on these charges, all of the above-listed individuals face a maximum of 20 years in prison, six years of supervised release and a $250,000 fine.Nagee Jones, 22 and Jason Patterson, 30, were charged in separate indictments for being felons in possession of firearms and ammunition. If convicted on these charges, Jones and Patterson face a maximum of a lifetime in prison, a lifetime of supervised release, and a $1 million fine.
Separate Hampden County Superior Court indictments were returned against Christian Paret, 20, and Ricarte Burgos, 35, who were indicted on drug trafficking charges; Paret was also indicted for unlawful possession and sale of firearms and ammunition. Christopher McCollough, 33, and one other individual known to law-enforcement who is a fugitive, were indicted for distributing narcotics. The fugitive is additionally charged with being a subsequent offender and habitual offender, which, if convicted, carries a potential penalty of 15 years in state prison.
Luis Reyes, Steve Hollowman, Jermain Davis, and Tarryl Green were all charged in Springfield District Court with distributing illegal narcotics, which, if convicted, carries a potential penalty of 10 years in state prison.“Today’s arrests are the result of our close collaborations with the Springfield Police, the Massachusetts State Police, and the Hampden County Sheriff’s Office,” said United States Attorney Carmen M. Ortiz. “We stand united with our local and state partners in this and future public-safety initiatives to ensure Springfield is the safe and vibrant community its citizens deserve.”
United States Attorney Ortiz; Hampden County District Attorney James Orenstein; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division; Michael Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Springfield Police Commissioner John Barbieri; Massachusetts State Police Superintendent Colonel Timothy P. Alben; Hampden County Sheriff Michael Ashe; and United States Marshal John Gibbons; made the announcement today.
The cases were investigated by the Federal Bureau of Investigation=s Western Massachusetts Gang Task Force; Bureau of Alcohol, Tobacco, Firearms and Explosives Task Force; Drug Enforcement Administration; Massachusetts State Police; Springfield Police Department; and Hampden County Sheriff’s Office; in a concerted effort to combat the illegal drug trafficking and violence in Springfield.
The details contained in the indictments are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Treasurer for Fire District, Road District Sentenced for Embezzling $1.5 MillionRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former treasurer of both the Wellington Napoleon Fire Protection District and Special Road District was sentenced in federal court today for a fraud scheme in which he embezzled more than $1.5 million from the two districts.
Leland Ray Kolkmeyer, 59, of Wellington, Mo., was sentenced by U.S. District Judge Gary A. Fenner to three years in federal prison without parole. Kolkmeyer must surrender to the Bureau of Prisons to begin serving his sentenced on Aug. 7, 2014. The court also ordered Kolkmeyer, who has already paid $1 million in restitution, to pay an additional $530,159 in restitution, which represents the total amount he embezzled from the two districts.
On Nov. 20, 2013, Kolkmeyer pleaded guilty to two counts of mail fraud. Kolkmeyer was elected treasurer of both the road district and the fire district in 1998. He resigned from both positions in February 2013. The offices of both the fire district and the road district are located in Wellington.
Kolkmeyer embezzled $939,485 from the Wellington Napoleon Special Road District and $590,674 the Wellington Napoleon Fire Protection District, for a total theft of $1,530,159.
According to court documents, Kolkmeyer told investigators that he used the money he had stolen by doing $50,000-$60,000 in remodeling of his house. Kolkmeyer also stated he purchased various vehicles over the course of the time that he would not have been able to purchase without the money. Kolkmeyer also stated he helped his daughter remodel her home for about $25,000-$30,000. Kolkmeyer stated he helped with his son's wedding expenses and estimated that each wedding for his children cost $40,000-$50,000.
Kolkmeyer also told investigators that he did not declare any of the stolen income to the IRS.
Road District Fraud Scheme
Kolkmeyer admitted that he stole approximately $900,000 from the road district from August 1998 to Feb. 12, 2013. Kolkmeyer made checks payable from the road district’s bank account to himself and others for his own benefit without the knowledge, authorization or consent of the road district. The government alleges that Kolkmeyer fraudulently transferred $939,485 from the road district’s bank account to his own bank account or to pay bills on his behalf.
Kolkmeyer, in his position as treasurer of the road district, made false statements and material omissions to the Special Road District Board concerning the checks that were made payable to himself and to others on his behalf.
Fire District Fraud Scheme
Kolkmeyer also admitted that he stole more than $500,000 from the fire district from August 1998 to Feb. 17, 2013. The government alleges that Kolkmeyer fraudulently transferred $590,674 from the fire district bank accounts to his own bank account or to pay bills on his behalf.
Kolkmeyer, in his position as treasurer of the fire district, made false statements and material omissions to the Fire Protection District Board concerning the checks that were made payable to himself and to others on his behalf.
This case was prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI.Three Former Georgia Correctional Officers Convicted for Offenses Related to Beating of Inmate and Ensuing Cover-UpRead the Press Release
The Justice Department announced that Christopher Hall, a former sergeant for the Correctional Emergency Response Team (CERT) at Macon State Prison (MSP) in Oglethorpe, Georgia, and two former CERT officers, Ronald Lach and Delton Rushin, were convicted on Friday night by a federal jury on federal offenses related to the beating of an MSP inmate in 2010 and the cover-up that followed. Three other defendants, James Hinton, Derrick Wimbush and Tyler Griffin, were acquitted of related charges.
Ronald Lach was one of several MSP officers who participated in a retaliatory beating against an inmate as their form of punishment for the inmate’s prior misconduct. Lach was convicted of violating the inmate’s rights, conspiring to obstruct justice after the assault and obstruction of justice. Hall and Rushin were convicted of conspiring to obstruct justice and obstruction of justice.
In related cases, five former MSP officers have pleaded guilty to various charges in connection with a series of beatings of inmates in 2010 at Macon State Prison, and the cover-up that followed.
“Eight former corrections officials from Macon State Prison now stand convicted for their involvement in beating inmates and in the coordinated cover-ups that followed each assault,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “These officers betrayed the public trust by using their official positions to commit violent civil rights abuses and then tried to cover up their crimes. The Department of Justice will continue to prosecute vigorously corrections officers who use their power to violate federal law.”
These cases were investigated by the Macon Resident Agency of the FBI, with the support of the Georgia Bureau of Investigation. The cases were prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd for the Civil Rights Division, with the assistance of the U.S. Attorney’s Office in Macon.
St. Louis Man Sentenced on Federal Drug ChargeRead the Press Release
St. Louis, MO – ELIJAH BOYKINS of St. Louis, Missouri, was sentenced to 33 months imprisonment for possession with the intent to distribute heroin. Boykins appeared before Judge Henry E. Autrey in U.S. District Court in St. Louis.
According to his March plea agreement, St. Louis police found approximately one ounce of heroin divided into more than 100 doses at Boykins’ home in St. Louis while executing a search warrant on February 10, 2014. Additionally, more than $3,000 in cash was found and was forfeited as part of the plea agreement. Boykins, who was on federal supervised release for a 2007 weapons offense, also had his supervision revoked in that case as a result of the new case.
The case was investigated by the St. Louis Metropolitan Police Department. Tom Albus handled the case for the U.S. Attorney’s Office.