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31 July 2014
Greenleaf Co-owner Sentenced for Multi-million-dollar Mortgage Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Nixa, Mo., man who was a co-owner of Greenleaf Companies has been sentenced in federal court for aiding and abetting a bank fraud conspiracy that was part of a multi-million-dollar mortgage investment scheme.
Eric Gagnepain, 41, of Nixa, was sentenced by U.S. District Judge Greg Kays on Wednesday, July 30, 2014, to four years in federal prison without parole. The court also ordered Gagnepain to pay $2,911,214 restitution.
On Jan. 9, 2014, Gagnepain pleaded guilty to conspiracy to commit bank fraud. Gagnepain co-owned and operated Greenleaf Companies and all of its subsidiaries, along with Scott Dasal, 47, of Republic, Mo., from 2006 through May 2008. During this time, Greenleaf sponsored real estate investment seminars that were designed to recruit potential investors to apply for mortgage loans for the construction and sale of residential homes in southwest Missouri and northwest Arkansas.
Gagnepain admitted that he aided and abetted others in the creation and submission of fraudulent mortgage loan documents. These mortgage loan documents contained false statements regarding the true source of monies provided at the time of closing, as well as fraudulently omitting the payment of monies obtained from the sale of the real estate properties.
Dasal was sentenced on Nov. 21, 2013, to three years in federal prison without parole and ordered to pay $2,911,209 in restitution. Dasal pleaded guilty to aiding and abetting a bank fraud.
Gagnepain derived more than $1 million in gross receipts from his criminal conduct. The total loss amount resulting from the bank fraud conspiracy is between $2.5 million and $7 million.
Gagnepain’s plea agreement cites a specific instance of such fraud that occurred on March 12, 2008. Gagnepain and others created false mortgage loan documents that were submitted to Flagstar Bank. The loan documents fraudulently stated that the borrower had provided their own monies at the time of the closing; in reality, however, Greenleaf provided monies that were falsely identified as “cash from borrower.” Additionally, the loan documents omitted the fact that Greenleaf would receive monies from the sale of the real estate property from the seller. If Flagstar Bank had known the true source of the monies provided on behalf of the borrower, or that Greenleaf was receiving monies from the sale of this real estate property, the bank would have denied the mortgage loan application.
Under the terms of his plea agreement, Gagnepain was required to also plead guilty to state charges (State of Missouri vs. Eric Christian Gagnepain). The sentence in the state case will be served concurrently with the federal sentence.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and IRS-Criminal Investigation.Georgia Man Sentenced on Wire Fraud ChargeRead the Press Release
ROCHESTER, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that George Eric Brumfield, 48, of Atlanta, Georgia, who was convicted of conspiring to commit wire fraud, was sentenced to six months in prison to be followed by six months of home detention by U.S. District Judge Frank P. Geraci. The defendant was also ordered to pay restitution of approximately $190,000.
Assistant U.S. Attorney John J. Field, who handled the case, stated that Brumfield worked for Kenneth Griffin in Rochester at Cambridge Personnel in 2007 and 2008. While working there, the defendant agreed to participate in a scheme to defraud factoring companies. Factoring is a transaction in which a financing company agrees to purchase the accounts receivable of another company, in this case Cambridge Personnel. The fraud involved the sale of fake accounts receivable, and Brumfield agreed to participate in the fraud by having third parties that he knew “verify” the validity of the fake accounts receivable.
Kenneth Griffin, the owner of Cambridge Personnel and leader of the fraud, was previously sentenced to 46 months for his role in the matter.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Acting Special Agent in Charge Shantelle Kitchen, and the Federal Bureau of Investigation.G.S. Electech Inc. Executive Pleads Guilty to Bid Rigging and Price Fixing on Automobile Parts Installed in U.S. Cars<br />Read the Press Release
An executive of Japanese auto parts maker G.S. Electech Inc. pleaded guilty and was sentenced today to serve 13 months in a U.S. prison for his role in an international conspiracy to rig bids and fix prices on auto parts used on antilock brake systems installed in U.S. cars, the Department of Justice announced.
Shingo Okuda, the former Engineering and Sales Division Manager for G.S. Electech, pleaded guilty today in the U.S. District Court for the Eastern District of Kentucky in Covington, to a one count charge of bid rigging and price fixing.
As part of his plea agreement, Okuda also agreed to cooperate with the department’s ongoing investigation and to pay a $20,000 criminal fine.
On Sept. 11, 2013, a federal grand jury in Covington, Kentucky, returned an indictment against Okuda, charging him with conspiring to rig bids and fix prices of speed sensor wire assemblies, which are installed in automobiles with an antilock brake system (ABS), sold to Toyota Motor Corp. and Toyota Motor Engineering and Manufacturing North America Inc., in the United States and elsewhere.
According to the indictment, Okuda and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids and fix prices of automotive parts submitted to Toyota. The indictment charged Okuda with participating in the conspiracy beginning at least as early as January 2003 until at least February 2010.
“Today’s guilty plea is a victory for consumers, who deserve to know that the essential parts used in their automobiles are not subject to anticompetitive agreements,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The Antitrust Division remains committed to holding executives accountable for behavior that undermines the competitive marketplace.”
G.S. Electech manufactures, assembles and sells a variety of automotive electrical parts, including speed sensor wire assemblies. The speed sensor wire assemblies connect a sensor on each wheel to the ABS to instruct it when to engage. On May 16, 2012, G.S. Electech pleaded guilty to the conspiracy and agreed to pay a $2.75 million criminal fine.
Okuda is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Okuda, 36 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Okuda is the first individual in the investigation to plead guilty following an indictment. Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of nearly $2.3 billion in fines.Today’s guilty plea arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s guilty plea was brought by the Antitrust Division’s Washington Criminal I Section, with the assistance of the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
Fulton County Investment Advisor Sentenced to 262 Months' ImprisonmentRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Robert G. Bard, age 47, of Warfordsburg, Pennsylvania, was sentenced by Senior U.S. District Court Judge Sylvia H. Rambo to 262 months’ imprisonment, ordered to pay $4.2 million in restitution to 66 victims, and was placed on two years supervised release after release from prison.
In handing down her sentence, Judge Rambo stated “Bard’s actions had a devastating impact on his victims and the lengthy sentence was appropriate under the circumstances.” Judge Rambo ordered that Bard be immediately taken into custody to commence serving his sentence. A number of victims were present in the courtroom and applauded as Bard was taken into custody.
Bard was convicted of 21 counts of securities fraud, mail fraud, wire fraud, bank fraud, and making false statements after a seven-day jury trial in August 2013. The evidence at trial proved that Bard was a registered investment advisor and was the owner and operator of Vision Specialist Group (VSG) between December 2004 and August 2009. The jury convicted Bard of defrauding numerous investors by, among other things, misrepresenting the value and make-up of their investment portfolios.
Bard executed the scheme by creating phony account statements which significantly inflated the value of the investors’ accounts and included securities that were not owned by the investor. Bard created the phony account statements to conceal over $5.8 million in losses his clients sustained between 2006 and 2009 as a result of risky and speculative stocks he purchased on their behalf.
Bard also failed to inform his clients that he was terminated from his prior employment as a stock broker for forging customer signatures on financial documents, had received a lifetime ban from the National Association of Securities Dealers and had declared personal bankruptcy in 2005.
The case was investigated by the FBI with assistance from the U.S. Securities and Exchange Commission. Senior Litigation Counsel Bruce Brandler handled the prosecution.
Fresno Women Including A Mother and Daughter Indicted for Trafficking MethamphetamineRead the Press Release
FRESNO, Calif. — A federal grand jury returned a four-count indictment charging Marisela Rico-Tzintzun, 38, her daughter Vanessa Garcia, 23, and friend Brenda Ruiz-Tovar, 26, all of Fresno, with conspiring to distribute and possess with the intent to distribute methamphetamine, distributing methamphetamine, and possessing methamphetamine with the intent to distribute, United States Attorney Benjamin B. Wagner announced.
According to court documents, the three had been working together since April 2013 to sell methamphetamine in the Fresno area. On September 4, 2013, the three sold approximately one pound of methamphetamine, and on April 7, 2014, Rico-Tzintzun sold approximately one ounce. On July 17, 2014, a search warrant for Rico-Tzintun’s residence was issued and nearly two pounds of methamphetamine was found there.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Central Valley Marijuana Investigation Team that is composed of officers from the Drug Enforcement Administration, California Department of Justice, and the Fresno County Sheriff’s Office. Assistant United States Attorney Laurel J. Montoya is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of 10 years to life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Fourteen Indicted in Heroin Trafficking ConspiracyRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A Baltimore man is alleged to be the leader of a drug trafficking ring that led to large quantities of heroin being distributed in the Eastern Panhandle.
United States Attorney William J. Ihlenfeld, II announced that 9 arrests were made on charges contained in a 24-count Indictment returned by a Federal Grand Jury. According to Ihlenfeld, the Indictment alleges that the defendants were involved in a conspiracy to distribute heroin from 2008 to July 22, 2014, in the Berkeley, Jefferson, Grant and Hardy County areas.
Thus far, of the 14 defendants, nine were arrested this week; three are in custody on related charges; and, the agents are still looking for two defendants.
The names of those arrested are:
1) Tavon Darrell Moore, also known as “Frank”, also known as “Lodo”, age 30, of Baltimore, Maryland
2) Aaron Daniel Rose a/k/a “Fat Boy,” age 29, of Kearneysville, West Virginia
3) Courtney Danielle McDonald, age 24, of Martinsburg
4) Crystalin Nicole Holliday, age 24, of Martinsburg
5) Susan Renee Underwood, age 31, of Martinsburg
6) Melissa Bailey, age 25, of Petersburg, West Virginia
7) Kimberly Michelle Bailey, age 32, of Petersburg
8) Pamela Jean Bailey, age 30, of Petersburg
9) Thomas Richard Greenfield, Jr., age 57, of MartinsburgThose in custody on related charges
1) Stephanie Lee Butts, also known as “Stephanie Zavala,” also known as Tater, age 37
2) Christian Nicole Pierce, age 21
3) Brandy Netz, age 29The names of those still wanted are
1) Tony Calvin Collins, age 29, of Petersburg
2) Brenda Michelle Sams, age 34, of Brandywine, MarylandThe 24-count Indictment charges the defendants with conspiracy to distribute heroin; possession with intent to distribute heroin; attempted distribution of heroin; distribution of heroin, crack cocaine, oxycodone, morphine and methamphetamine; using the telephone to distribute drugs; and, interstate transportation to aid in the distribution of heroin. Specifically: Moore is named in the conspiracy count alleging he was responsible for the distribution of more than 1 kilogram of heroin, two counts for the illegal use of a telephone to distribute drugs and two counts of interstate transportation. Moore has prior felony convictions in the State of Maryland for possession with intent to distribution, carjacking and possession of a firearm.
Rose is named in the conspiracy count alleging he was responsible for the distribution of more than 100 grams of heroin and five additional counts of distribution of heroin.
Butts is named in the conspiracy count alleges she was responsible for the distribution of more than 100 grams of heroin, one count of distribution of heroin and one count of possession with intent to distribute heroin.Pierce is named in the conspiracy count alleging the distribution of less than 100 grams of heroin.
Collins, Sams, Holliday and Underwood are named in the conspiracy count alleging the distribution of less than 100 grams of heroin and one count of possession with intent to distribute heroin.
McDonald is named in the conspiracy count alleging the distribution of less than 100 grams of heroin, four counts of distribution of heroin, one count of distribution of oxycodone, three counts of distribution of morphine and one count of attempted distribution of heroin.Netz is named in the conspiracy count alleging the distribution of less than 100 grams of heroin, one count of distribution of crack cocaine and one count of distribution of heroin.
Melissa Bailey is named in the conspiracy count alleging the distribution of less than 100 grams of heroin, three counts of distribution of methamphetamine and two counts of distribution of heroin.Kimberly Bailey is named in the conspiracy count alleging the distribution of less than 100 grams of heroin, one count of distribution of hydrocodone, one count of distribution of methamphetamine and two counts of distribution of heroin.
Pamela Bailey is named in one count of distribution of methamphetamine
Greenfield is named in one count of distribution of oxycodone and one count of distribution of morphine.
The United States is also seeking the forfeiture of a $208,500 money judgment which constitutes the proceeds of the illegal activity.
If convicted, Moore faces a mandatory 20 years to life in prison, Rose and McDonald face up to 40 years and the other defendants face up to 20 years on the conspiracy charge, up to 10 years on the morphine distribution charge, up to 20 years on the other possession and distribution charges; up to 4 years on the illegal use of a communication facility charges and up to 5 years on the interstate transportation charges.
The case will be prosecuted by Assistant U.S. Attorney Jarod J. Douglas and was investigated by the Eastern Panhandle Drug Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, the Berkeley County Sheriff’s Department, and the Jefferson County Sheriff’s Department; and, the Potomac Highlands Drug & Violent Crime Task Force, consisting of officers from the Federal Bureau of Investigation, and the West Virginia State Police - Bureau of Criminal Investigations.Former Postmaster Sentenced for Robbery ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former Eagle Rock, Mo., postmaster was sentenced in federal court today for conspiring to rob or burglarize a convenience store.
Michael Joe Stubblefield, 51, of Cassville, Mo., sentenced by U.S. District Judge Gary A. Fenner to three years and eight months in federal prison without parole.
On Dec. 18, 2013, Stubblefield pleaded guilty to participating in a conspiracy to commit robbery and to transporting stolen goods.
On multiple occasions in March 2012, Stubblefield – who was then employed as the postmaster at the U.S. Postal Service office in Eagle Rock – met with confidential informants, who were cooperating with law enforcement, to coordinate a staged robbery or burglary at Uncle Roy’s Convenience Store. Several of those conversations were recorded.
Stubblefield asked one of the informants, who was an employee of the store, to provide detailed information about the location of cameras, closing operations and employee schedules, location of storage areas for valuable liquor, and other specific details regarding the operation of the store. Both confidential informants believed the purpose of Stubblefield’s inquiries were his desire to conduct a robbery when the confidential informant was on duty at the convenience store or possibly a burglary of the facility, utilizing the employee’s access information to carry out the plan after the store was closed.
When that employee was terminated from the store, Stubblefield abandoned the plan of a staged robbery and turned his attention toward a possible take-over robbery. In addition to discussing the planned robbery, Stubblefield also described how those taking part in the robbery could place cash, masks and other items related to the robbery in Postal Service packaging that Stubblefield would provide. After the robbery, co-conspirators would drop these items at the USPS drop box in front of the USPS facility in Eagle Rock. As Stubblefield was the only individual with access to this box, he would be able to retrieve the cash and other items from the drop box.
Stubblefield planned to create a diversion for law enforcement officers by having co-conspirators make a false 911 call while other co-conspirators robbed the store.
During the continuing investigation, it was determined that Stubblefield had also intercepted and stole at least two shipments of precious metals bound for THR Associates, a company that buys gold and silver items. Stubblefield referred to these thefts during his contact with the confidential informants. The gold and silver items were sold for a total of $6,480.
This case was prosecuted by Supervisory Assistant U.S. Attorney Michael Oliver and Assistant U.S. Attorney James Kelleher. It was investigated by the FBI, the United States Postal Service – Office of Inspector General, and the Barry County, Mo., Sheriff’s Department.Former Non-Profit Executives Charged with Stealing Funds Intended to Help the HomelessRead the Press Release
An information and a separate indictment, filed today, charge Erica N. Brown, 38, of Glenolden, PA, and Nathaniel E. Robinson, 62, of Philadelphia, of using funds intended to help the homeless to pay for their own personal and living expenses. The charges were announced by United States Attorney Zane David Memeger and Philadelphia Inspector General Amy Kurland.
Brown was the Chief Operating Officer at SELF, Inc., and Robinson was the Chief Program Officer. They are each charged with theft from a program receiving federal funds. According to the charges, between approximately 2005 and 2010, Brown used her corporate American Express credit card at SELF to charge approximately $198,628 of personal expenses. She reimbursed a total of $4,867 before her employment ended. Between 2006 and 2010, Robinson allegedly used his corporate American Express credit card at SELF to charge approximately $154,309 of personal expenses. Robinson reimbursed a total of $2,594.30 before his employment was terminated.
“Every organization that receives taxpayer funding must act as responsible stewards of that money. That duty is even more important in a case like this, where funds were designated to help some of Philadelphia’s residents who are most in need,” said City of Philadelphia Inspector General Amy Kurland. “This case sends a strong message that misappropriating taxpayer money will not be tolerated. I would like to also thank our federal law enforcement partners for their close cooperation in this investigation.”
According to the information, Brown charged personal travel and lodging expenses in places such as the Caribbean, Orlando, and Cape May; personal dining expenses, from groceries and purchases at Wawa’s to meals at the Four Seasons; personal automobile repairs and insurance payments; vehicle rentals, including a Hummer rental; children’s toys; clothing, including five pair of Ugg boots; a gym membership with the services of a personal trainer; and pet medical services, among many other expenses. In total, Brown charged approximately $198,628 of personal expenses to her corporate American Express card between approximately April 2005 and November 2010.
According to the indictment, Robinson used the corporate American Express card to pay for car rental charges, in Philadelphia and elsewhere; repairs to his personal car; dining charges in Philadelphia, Disney World, Orlando, and numerous other cities; lodging charges, including charges at hotels on weekends in the Philadelphia area as well as charges for lodging in the Dominican Republic and in Mobile, Alabama, where Robinson has family; travel expenses, including airfare for himself and a family member; charges at a variety of stores including DSW Shoe Warehouse, the Boot Barn, Boot City, Nike, Foot Locker, Modell’s, Maron Chocolates, World Embroidery, Disney’s Ear Port, Circuit City, Best Buy, IKEA, Sears, and Walmart; parking tickets; legal fees; and entertainment charges at places such as Morey’s Pier, Clementon Park, and Six Flags Great Adventure.
If convicted, each defendant faces a maximum possible sentence of 10 years in prison, restitution, up to three years of supervised release, and a $250,000 fine.
The case was initiated by a tip to the Philadelphia Office of the Inspector General and was also investigated by the FBI. It is being prosecuted by Assistant United States Attorney Karen L. Grigsby.
Information.pdf | Indictment.pdf
An Indictment or Information 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, 215-861-8525Former Heber Springs Gymnastics Studio Owner Pleads Guilty to Child Pornography ChargeRead the Press Release
Little Rock – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, along with Special Agent in Charge Raymond R. Parmer, Jr., of the New Orleans Field Office for Homeland Security Investigations, announced today that Matthew Tinkle, age 27, of Heber Springs, Arkansas, entered a plea of guilty to receipt of child pornography.
“This case illustrates the necessity of keeping lines of communication open and active with your children,” stated Thyer. “We place our children in the care of others with the intent that their lives are safe and their innocence protected. The vast majority of the time, that is the case. When it is not, it is often a parent who discovers the violation. Thankfully, law enforcement was contacted and the end result is that this child predator will be serving federal time as well as state time. We take the safety and security of our children seriously. Together, we will work to ensure that those who seek to prey on our children are not given the opportunity to abuse our sons and daughters.”
“Child predators who use a position of trust in order to groom and abuse their victims are truly the worst of the worst,” said Raymond R. Parmer Jr., Special Agent in Charge of ICE Homeland Security Investigations (HSI) in New Orleans. “The victims of heartless degenerates like this defendant are exploited through their faith, trust and innocence: values we hold dear in our children that can be damaged beyond repair by the perversions these monsters subject them to. This case serves as an unfortunate reminder to parents that child predators are often hidden in plain sight, seeking access to their victims by any means available.”
The indictment charged Tinkle with two counts of receipt of child pornography and one count of possession of child pornography. Pursuant to the plea agreement, Tinkle pled guilty to Count One of the Indictment which charged receipt of child pornography. In exchange for his guilty plea, the United States dismissed the remaining counts in the Indictment. Stipulations in the plea agreement included enhancements for use of a computer, for abuse of a position of trust, and for engaging in a pattern of activity involving the sexual abuse or exploitation of a minor. Tinkle will be required to register as a sex offender.
The charges in the Indictment were based on an investigation that began on December 20, 2012, when the Heber Springs Police Department was called to a residence in Heber Springs, concerning a 13 year old minor that had been molested. The investigation revealed that Tinkle, who was 25 at the time, had molested the minor on at least two occasions.
At all times relevant to the investigation, Tinkle was the owner of Tink’s Tumblers, a gymnastics studio in Heber Springs. The minor met Tinkle after attending "open gym" at Tinkle's gymnastics studio. The minor said that she and other kids would hang out with Tinkle at the gym and, on occasion, Tinkle would also give the minor and other kids rides to and from home.
During the investigation, the minor stated that she told Tinkle on multiple occasions that she was 13 years old. The minor also revealed that Tinkle did not charge her for using the gymnastics studio. The minor then informed Investigators that she had sent nude photographs of herself to Tinkle via text message.
An iPhone seized from Tinkle revealed images of the minor that met the federal definition of child pornography. The minor also stated that Tinkle sent her photographs of himself nude.
On February 27, 2014, Tinkle pled no contest in the Circuit Court of Cleburne County, Arkansas, to Rape. In exchange for his plea, the prosecuting attorney agreed to recommend that the court sentence Tinkle to a term of incarceration for a period of 120 months.
Tinkle faces not less than five years imprisonment to not more than 20 years imprisonment, five years to life of supervised release, and up to a $250,000 fine. The actual sentence will be decided by the Court at a later date.
The investigation was conducted by the Little Rock Office of Homeland Security Investigations Heber Springs Police Department, and the Arkansas State Police Crimes Against Children Division.
This case was prosecuted by Assistant United States Attorney Kristin Bryant.
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, including resources for parents, please visit www.projectsafechildhood.gov.
Former Folsom Swim Coach Sentenced to 12 Years in Prison for Attempted Enticement of A MinorRead the Press Release
SACRAMENTO, Calif. — Eric Johnston, 23, of Folsom, was sentenced today by United States District Judge Morrison C. England Jr. to 12 years in prison, to be followed by 20 years of supervised release, for attempted enticement of a minor, United States Attorney Benjamin B. Wagner announced.
According to the plea agreements filed in the case, Johnston arranged to meet what he thought to be a 13-year-old at a hotel. Johnston was arrested when he arrived at the designated meeting. Following his arrest, Johnston allowed law enforcement to assume his identity and they then sent a message to Nicholas Perry telling him that he was at the hotel. Perry arrived approximately 45 minutes later and was arrested. Both defendants have been in federal custody since their arrest.
Subsequent investigation identified a minor with whom Johnston was engaged in a sexual relationship. Johnston was sentenced in Sacramento Superior Court based on that conduct to two years in prison to be served concurrently with his federal sentence. The Sacramento case number is 12F04917.
Perry is scheduled to be sentenced by Judge England on April 3, 2014. He faces a statutory penalty of 10 years to life in prison and a $250,000 fine. 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.
This case was investigated by the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant United States Attorney Kyle Reardon is prosecuting the case.
Former Credit Suisse Vice President 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 SALMAAN SIDDIQUI, a former Vice President in the Investment Banking Division of Credit Suisse Group (“Credit Suisse”), was sentenced yesterday 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, SIDDIQUI 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. Siddiqui was sentenced by U.S. District Judge Paul A. Crotty.
According to the Information to which Siddiqui pled guilty, and statements made during court proceedings:
SIDDIQUI was employed at Credit Suisse as a Vice President in the bank’s New York office. He reported to David Higgs, a Managing Director, who in turn 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. SIDDIQUI was a trader and had, on occasion, responsibility for marking the securities in 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, SIDDIQUI and his co-conspirators were aware that the market for mortgage-backed securities had declined enormously. On November 28, 2007, Serageldin told SIDDIQUI, Higgs, 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., the mortgage-backed bonds in ABN1. As they recognized, “[t]hose bonds are going to start trading worse than the [ABX] Index.” SIDDIQUI and his 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, SIDDIQUI and his 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 SIDDIQUI and his co-conspirators manipulated and inflated in connection with his scheme.
Judge Crotty also ordered SIDDIQUI to pay forfeiture in the amount of $150,000, 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.
Yesterday’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.
U.S. v. Salmaan Siddiqui Information
Former California News Helicopter Pilot Pleads Guilty to ID TheftRead the Press Release
SACRAMENTO, Calif. — John Michael Dial, 58, of Skaneateles, New York, pleaded guilty today to aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
According to court documents, Dial used the names of actual persons to commit violations of federal law such as false statements to the FAA and forgery of a U.S. passport.
According to the plea agreement, from December 16, 2009, to August 4, 2010, Dial was hired as a television news helicopter pilot and operated news helicopters in the Bay Area without a pilot’s license. On one occasion, flight records from Dial’s employer show him operating a news helicopter in the Eastern District of California.
In June 2011, in order to work for an air ambulance service in Susanville, Dial provided numerous false identification documents and knowingly and willfully made material false statements about his true identity. These statements concerned matters within the jurisdiction of the FAA, and were relevant because they prevented the FAA from knowing the true identity of a pilot operating an aircraft within the United States. Had the FAA known Dial’s true identity, it would have known that Dial had previously been convicted of making false statements to the FAA regarding his medical certificate and student pilot certificate. From July 3, 2011, to November 7, 2011, Dial operated a helicopter approximately 63 times, without having a valid pilot certificate.
On March 15, 2012, Dial was hired under his real name to work as a television news helicopter pilot in Sacramento. Dial submitted a fraudulent FAA Temporary Airman Certificate under his real name, and an FAA Medical Second Class Certificate under his real name. Dial flew for the television station two times without having a valid pilot certificate.
According to the plea agreement, Dial used the identity of a former co-worker to gain employment with an air ambulance service in New York. Dial also created a fraudulent United States passport using that person’s identity.
On April 8, 2012, Dial was stopped by a Cascade, Idaho police officer and gave police a fraudulent Vermont driver’s license. He was cited for driving without a license and told to not drive his vehicle. Shortly thereafter, Dial was observed driving away from the scene. When Dial was stopped again, police learned that his true name was likely John M. Dial and that he had two outstanding felony warrants in the state of Washington.
During a Mirandized statement, Dial admitted that his name was John Michael Dial, and that he obtained the Vermont driver’s license approximately 12 years ago by providing fictitious information. He said that he did this in order to avoid apprehension for the two outstanding felony warrants. During a search of Dial’s vehicle, two wallets were located. In one wallet was information relating to John M. Dial, including a California driver’s license; in the other wallet were documents relating to the identity theft victim and second fraudulent Vermont driver’s license.
This case is the product of an investigation by the U.S. Department of Transportation, Office of Inspector General, the United States Secret Service, and the Federal Bureau of Investigation with the assistance of the Cascade, Idaho, and McCall, Idaho Police Departments. Assistant United States Attorney Kyle Reardon is prosecuting the case.
Dial is scheduled to be sentenced by United States District Judge Morrison C. England Jr. on August 14, 2014. Dial faces a mandatory statutory penalty of two years in prison and a $250,000 fine.
Former Bank Employee Pleads Guilty to Bank FraudRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Patricia Margaret Drake (24, Jacksonville) today pleaded guilty to three counts of bank fraud. She faces a maximum penalty of 30 years in federal prison for each count. A sentencing date has not yet been set. Drake was indicted on May 7, 2014.
According to court documents, on December 5, 2013, a Wells Fargo Bank customer in Jacksonville contacted the bank in order to discuss his concerns regarding unauthorized withdrawals from his bank account. After an internal review of the matter, Wells Fargo Bank identified a series of fraudulent withdrawals from the victim’s bank account. Drake, a Wells Fargo Bank employee, was identified as the teller who had handled every fraudulent withdrawal. The investigation revealed that the victim was not present in the bank branch on the days when the withdrawals took place, including days when withdrawals were made by counter withdrawal slips.
U.S. Secret Service agents later interviewed Drake about the fraudulent bank withdrawals. Drake stated that while using the victim’s bank account number, she made multiple unauthorized withdrawals from the victim’s bank account. Drake also stated that she was not sure how many transactions were completed or the total amount of money stolen from the victim’s account. She did not think the victim would notice the withdrawals quickly because he had a larger account balance.
This case was investigated by United States Secret Service. It is being prosecuted by Assistant United States Attorney Kevin C. Frein.
Former Bank Branch Manager Sentenced for Bank Fraud, False Tax ReturnRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former bank branch manager has been sentenced in federal court for stealing more than $316,000 from several elderly customers’ accounts and failing to report the embezzled income on her taxes.
Jennifer A. Gunter, 34, of Republic, Mo., was sentenced by U.S. District Judge Greg Kays on Wednesday, July 30, 2014, to three years and 10 months in federal prison without parole. The court also ordered Gunter to pay a total of $547,897 in restitution.
Gunter pleaded guilty on Sept. 12, 2013, to bank fraud and filing a false tax return. Gunter was the branch manager at the Guaranty Bank at 291 Highway CC in Nixa, Mo., (and earlier at the Guaranty Bank at 1341 W. Battlefield, Springfield, Mo.) from August 2005 until her termination in November 2012.
Gunter’s fraud was detected when she issued and authorized three checks on the bank account of a victim who had died the previous day. Gunter admitted that, from December 2006 until November 2012, she repeatedly accessed the bank accounts of four elderly bank customers. Gunter embezzled a total of $316,598 from those accounts.
Gunter submitted transaction tickets, withdrawal slips, and cashier’s checks on which she forged the names of the account holders in order to withdraw money from the bank accounts. She used the money for personal matters and expenses. Gunter set the customer accounts to “do not mail” status in order to keep the customers from receiving their bank statements and detecting the theft from their bank accounts.
Gunter failed to report this embezzled income on her Form 1040, U.S. Individual Income Tax Return. Gunter did not report the additional income of $45,002 for 2009, $70,481 for 2010, $107,119 for 2011, and $35,000 for 2012. Gunter’s actions resulted in an additional tax due and owing of $7,642 in 2009, $13,305 in 2010, $22,935 in 2011, and $6,258 in 2012. The total tax loss is $50,140.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Secret Service, FDIC – Office of Inspector General, IRS-Criminal Investigation and the Christian County, Mo., Sheriff’s Department.
Former Army Contracting Official Pleads Guilty in Bribery and Kickback SchemeDefendant Admits Accepting over $490,000 in Benefits from Companies He Helped Win Favorable Treatment, Government ContractsRead the Press Release
WASHINGTON – In Seon Lim, a former contracting official for the U.S. Department of the Army, pled guilty today to federal charges stemming from a scheme in which he accepted over $490,000 worth of benefits, including cash payments and vacations, from favored contractors. In return, he helped these businesses obtain millions of dollars in federal contracts.
The guilty plea was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS), and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
Lim, 48, of Fairfax Station, Va., also known as InSeon Lim, pled guilty in the U.S. District Court for the Eastern District of Virginia to three offenses: conspiracy to commit bribery and honest services wire fraud; bribery; and attempting to interfere with and impede tax laws. The conspiracy charge carries a statutory maximum of five years in prison, the bribery charge carries up to 15 years, and the tax charge carries up to three years of incarceration. The charges also carry potential financial penalties. The plea agreement calls for Lim to pay restitution, including $250,000 to the Department of Defense and nearly $125,000 to the IRS. In addition, the plea agreement requires Lim to pay a forfeiture money judgment of $490,262. The Honorable Leonie M. Brinkema scheduled sentencing for Oct. 17, 2014.
Lim is the latest person to plead guilty in an investigation into domestic bribery, bid-rigging, and federal contracting. He has agreed to cooperate in an ongoing investigation. In addition to Lim, a total of 17 other individuals and one corporation, Nova Datacom, LLC, have pled guilty to federal charges.
“In Seon Lim, a former Army contracting officer, procured a half-million dollars in bribes in exchange for steering millions of dollars in Army contracts to corrupt businessmen,” said U.S. Attorney Machen. “Lim sold out the public trust for cash, vacations, and a Lexus. Today he joined 17 other individuals who have also pled guilty as part of this far-reaching bribery and bid-rigging scheme. The breadth of this investigation and prosecution demonstrates our unwavering commitment to holding crooked public officials and contractors accountable for crimes which threaten the very integrity of our system of government. I want to commend the outstanding work of the investigating agents and prosecutors who have worked so tirelessly on this matter.”
“Abusing one’s position for personal gain is a blatant disregard to the oath that every government employee takes, especially those whose job it is to manage the procurement needs of our government,” said Assistant Director in Charge Parlave. “Working together to protect federal funds, the FBI and our law enforcement partners will continue to ensure those who commit fraud and corruption are brought to justice.”
“There is no place in our society for corrupt public officials, and the betrayal of the trust placed in them is an egregious act. Anyone, including government contracting officials such as Mr. Lim, who promotes fraudulent schemes against the United States, will be held accountable for their blatant disregard of the duties and responsibilities of their official government position,” said Special Agent in Charge Kelly of IRS-CI. “These individuals face severe consequences, including imprisonment and substantial fines.”
“Government employees who abuse their office to enrich themselves are not only guilty of criminal wrongdoing, but tarnish the reputation of all honest public servants and lessen citizens’ faith in our system. We will continue to aggressively investigate these crimes and seek justice for the victims, the American taxpayers,” said SBA Inspector General Gustafson. “I want to thank the U.S. Attorney's Office for its dedicated leadership and professionalism throughout this investigation.”
“We are glad to see that justice has been served and Mr. Lim has been sentenced for his selfish criminal activities,” said Director Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit. “Identifying and vigorously investigating contracting fraud remains a top priority for our special agents and we will continue to work seamlessly with our fellow law enforcement agencies to see that people who defraud the American taxpayer are brought to justice.”
“Today's plea demonstrates the Defense Criminal Investigative Service's ongoing commitment to combating fraud and corruption that impacts the DoD procurement process,” said Special Agent in Charge Craig. “DCIS, with our partner agencies, will continue to work tirelessly to identify and prosecute corruption of this nature."
According to a Statement of Offense signed by Lim as well as the government, Lim was a public official until April 2012. The charges involve his activities as an assistant project manager and product director with the Program Executive Office Enterprise Information Systems, a part of the Army that provides infrastructure and informational management systems.
Until June 2010, Lim resided and worked in Seoul, South Korea. While in South Korea, his primary duties were to oversee and implement communications systems upgrades for the U.S. forces there, which included approximately 10 communications centers and various other special projects at military sites throughout the country. Among other things, Lim coordinated work on a major contract, which, in turn, had numerous sub-contracts.
From June 2010 until his resignation in April 2012, Lim worked as a product director at Fort Belvoir, Va.
In the statement of offense, Lim admits that he secretly used his official position to enrich himself by soliciting and accepting gifts, payments and other things of value from government contractors – totaling more than $490,000 -- in return for favorable official action. Among other things, the statement of offense notes, Lim received payments personally and to accounts that he controlled; payments for travel, vacation, vehicles, cellphones and cellular service for himself and family members; ownership interests in two companies, and other benefits.
In exchange, Lim now admits, he provided favorable official action on subcontracts obtained and retained by the favored government contractors as requested and as opportunities arose. He also disclosed confidential bid information to the favored government contractors.
The indictment provides details about numerous contracts and payments. For example:
-Nova Datacom: According to the statement of offense, two former employees of the Northern Virginia company - Alex N. Cho, also known as Young N. Cho, and Nick Park - paid Lim $40,000 in cash in 2007. In addition, Park paid for Lim’s travel, lodging, meals and entertainment during a trip to the Philippines in 2007, and Cho paid for lodging and a $1,000 casino chip during a trip later that year to Las Vegas. Lim, meanwhile, agreed to use his official position to recommend the company for a contract valued at nearly $330,000.
-Avenciatech: According to the statement of offense, former officials of Avenciatech, Inc., a government contractor based in Annandale, Va., provided Lim with cash payments; payments for hotel stays for Lim and family members, including a trip to the Atlantis resort in the Bahamas; payments to finance the purchase of a 2010 Lexus automobile, and payments for other things of value. One of the officials, Oh Song Kwon, also known as Thomas Kwon, also assisted Lim in obtaining financing for the purchase of a home in Fairfax Station, Va., where Lim resided following his reassignment in 2010 to a position at Fort Belvoir. Lim, meanwhile, assisted the company in obtaining more than $3 million in contracts.
-UEI:Nick Park left Nova Datacom in 2007 and co-founded another government contractor, Unisource Enterprise Inc. (UEI), based in Annandale, Va. According to the statement of offense, in exchange for favorable treatment, Lim was given a secret ownership in UEI. Among other things, Lim provided Park with sensitive procurement information. He also assisted the company in obtaining a government sub-contract worth over $1.1 million.
Cho, Park, and Kwon are among those who earlier pled guilty to charges in the case.
In addition to pleading guilty to the conspiracy and bribery charges, Lim admitted that he failed to report the bribes he received on tax returns for the years 2007 through 2011. He also failed to keep records that would allow him to file accurate records for 2012 and 2013.
This investigation is being conducted by the FBI’s Washington Field Office; the Washington Field Office of the Internal Revenue Service-Criminal Investigation, the Office of the Inspector General for the Small Business Administration; the Department of Defense’s Defense Criminal Investigative Service; the Defense Contract Audit Agency, and the Army Criminal Investigation Command. It is being prosecuted by Assistant U.S. Attorneys Michael K. Atkinson and Bryan Seeley of the Fraud and Public Corruption Section and Assistant U.S. Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section, all of the U.S. Attorney’s Office for the District of Columbia, and Assistant U.S. Attorney Jack Hanly, of the U.S. Attorney’s Office for the Eastern District of Virginia.
14-175Federal Jury Convicts El Paso Man in Laser Strike IncidentRead the Press Release
El Paso resident Don Ray Dorsett, age 28, faces up to five years in federal prison after a jury convicted him of pointing a laser at an aircraft flying overhead announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.
In February 2012, President Barrack Obama signed the “FAA Modernization and Reform Act of 2012” and added a new provision that makes it a federal crime to aim a laser pointer at an aircraft. Yesterday afternoon, jurors convicted Dorsett of violating that provision (Title 18 United States Code Section 39A—Aiming a Laser Pointer at an Aircraft). Evidence presented during trial revealed that on January 4, 2014, Dorsett knowingly aimed the beam of a laser pointer at a helicopter flying overhead. The aircraft belonged to the Texas Department of Public Safety.
Sentencing is scheduled for October 2, 2014, before United States District Judge David C. Guaderrama in El Paso.
This indictment resulted from an investigation conducted by agents with the Federal Bureau of Investigation together with the Texas Department of Public Safety and the El Paso Police Department. Assistant United States Attorney Stanley Serwatka is prosecuting this case on behalf of the Government
Reported incidents of laser strikes are on the rise. Since the FBI and the Federal Aviation Administration (FAA) began tracking laser strikes in 2005, statistics reflect a more than 1,100% increase in the deliberate targeting of aircraft by people with handheld lasers. In 2013, there were a total of 3,960 laser strikes reported – an average of almost 11 incidents per day.
Earlier this year, the FBI announced the inception of the Laser Threat Awareness Campaign, a nationwide effort led by the FBI in collaboration with the Air Line Pilots Association, Int’l (ALPA) and the FAA to raise awareness of aircraft laser illumination threats. If you have information about a lasing incident, contact the El Paso FBI at 915-832-5000. If you see someone pointing a laser at an aircraft, call the nearest local law enforcement agency immediately by dialing 911. Tips can also be submitted online at https://tips.fbi.gov.
Elgin Mining Company Pays $3,221,292 to Settle Alleged Violations of the Clean Water Act at Former Mining Sites in Western KentuckyRead the Press Release
LOUISVILLE, Ky. – Elgin Mining Company of Vancouver, British Columbia, has agreed to settle non-compliance issues, associated with the Clean Water Act, for failure to perform mitigation requirements at former mining sites in Kentucky’s Muhlenberg and Crittenden counties in Kentucky. As a result, Elgin Mining and its subsidiaries have agreed to pay a $3,221,292 settlement announced David J. Hale, United States Attorney for the Western District of Kentucky and the U.S. Army Corps of Engineers.
Between 2005 and 2009, the Army Corps of Engineers Louisville Division (USACE) issued four permits or authorizations pursuant to Section 404 of the Clean Water Act, to three companies which at the time were wholly owned subsidiaries of Phoenix Coal Corporation, which is owned by Elgin Mining. Those permits were issued to Charolais Coal No. 1,LLC; C&R Coal Company, Inc. (2 permits); and Crittenden County Coal, Inc. (the “Permits”). The Permits allowed these companies to discharge dredged or fill material into waters of the United States in conjunction with their surface mining operations located in Muhlenberg and Crittenden counties. The Permits provided that the companies had to comply with certain conditions specified in the Permits. Among the conditions were requirements that the permit holders provide mitigation by restoring or establishing additional streams and wetlands to replace the streams and wetlands lost as a result of the mining activities. The United States alleged that the current permit holders, all wholly owned subsidiaries of Elgin Mining, failed to perform the required on-site mitigation which resulted in the loss of aquatic resources. Specifically, streams, wetlands and open waters were filled in with soil and mining overburden, and mitigation to replace the lost aquatic resources was never completed.
All parties agreed that Elgin Mining would pay $3,071,292.00 to the Kentucky Department of Fish and Wildlife Resources’ (KDFWR) Wetland and Stream Mitigation In-Lieu-Fee Program, which provides mitigation credits for impacts to Kentucky’s wetlands and streams associated with discharges of dredged or fill material. Elgin Mining is also required to pay a civil penalty of $150,000 to the United States.
The KDFWR Wetland and Stream Mitigation Program administers funds to provide a consistent and successful approach to fulfill compensatory mitigation obligations required under Department of the Army permits issued pursuant to Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act. A Section 404 permit from the USACE is required for activities resulting in the discharge of dredged or fill material into waters of the United States, which include streams, wetlands and open waters. The purpose of the mitigation is to compensate for the loss of aquatic functions within a defined watershed or regional area. The Kentucky Wetland and Stream Mitigation Fund is supported by sales of mitigation credits to permittees to satisfy regulatory requirements. The monies generated are used to implement projects to restore (rehabilitate or reestablish), establish, enhance, and preserve aquatic resources in Kentucky for the benefit of its citizens.
This agreement constitutes a compete and final settlement of all civil claims for injunctive relief and civil penalties against Elgin Mining under Section 404 of the Clean Water Act concerning the mitigation requirements of the Permits.
This case was prosecuted by Assistant United States Attorney Benjamin S. Schecter, Trial Attorney Paul Cirino with the U.S. Department of Justice’s Environmental Defense Section, and was investigated by the Regulatory Branch and Office of Counsel of the Army Corps of Engineers Louisville District.
Drug Trafficker Sentenced to Prison on Money Laundering Conspiracy ChargesRead the Press Release
Six Others Have Been Sentenced For Their Roles In The Conspiracy
CHARLOTTE, N.C. – On Wednesday, July 30, 2014, U.S. District Judge Max O. Cogburn, Jr. ordered Jesus Ibarra-Quen, 30, of Calif., to serve 30 months in prison for his role in a cocaine trafficking and money laundering conspiracy, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Ibarra-Quen previously pleaded guilty to conspiracy to commit money laundering for his participation in a 2012 bulk money pick-up of $430,874 in cocaine proceeds.
Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office joins U.S. Attorney Tompkins in making today’s announcement.
Ibarra-Quen is one of seven defendants prosecuted in connection with an Organized Crime Drug Enforcement Task Force (OCDETF) investigation code-named “Biscoe Kidd.” According to court records, the investigation began in December of 2011 and was led by DEA’s High Intensity Drug Trafficking Areas Task Force. Court records indicate that the multi-jurisdictional, multi-agency operation focused on a cocaine trafficking and money laundering organization that was selling large quantities of cocaine in the Western District and transferring the drug proceeds back to Mexico. The local group was part of international money laundering organization involved in the collection, transportation, and delivery of drug proceeds in bulk cash and wire transfers to Mexico, court records show.
To date, six other defendants have charged and sentenced:
• Ruben Perez-Ruiz a/k/a Sarco, 32, of Greensboro, N.C. was sentenced on July 2, 2014 to 200 months in prison, followed by five years of supervised release. Perez-Ruiz was the local cell leader in the organization.
• Isidoro Ochoa, 33, of Jackson Springs, N.C. was sentenced on July 2, 2014 to 150 months in prison followed by five years of supervised release.
• Nancy Sanchez, 32, of Greensboro was sentenced on July 2, 2014 to 24 months in prison followed by one year of supervised release.
• Joaquin Tostado-Barraza, 40, of Ellervee, N.C. was sentenced on June 25, 2014, to 120 months in prison, followed by five years of supervised release.
• Ysrael Ayalla-Garcia, 43, of Monroe, N.C. was sentenced on June 5, 2014 to 30 months in prison.
• Macario Leal, 47, of Monroe was sentenced on April 10, 2014 to 60 months in prison, followed by four years of supervised release.According to information contained in court documents and the defendants’ sentencing hearings, from about 2011 to February 2013, Perez-Ruiz was the local cell leader of the Mexican-based organization responsible for trafficking more than 150 kilograms of cocaine from Mexico to the United States, with a total street value of over $5,000,000. According to evidence presented at court proceedings, the cocaine was driven to the Charlotte area hidden in car parts.
Court records show that Perez-Ruiz was responsible for distributing the cocaine to mid-level distributors, including Leal and Ayalla-Garcia. According to court records, Perez-Ruiz was also responsible for collecting and arranging the bulk pick-ups of the drug proceeds to be delivered back to Mexico. For example, court records show that in 2012 Sanchez participated in a bulk money pick-up of $700,000 in cocaine trafficking proceeds. Just in the month of January 2012, the drug ring coordinated the bulk money transfer of over $1,000,000 of cocaine proceeds.
The defendants will serve their sentences without the possibility of parole. The investigation was led by the DEA, assisted by the Charlotte-Mecklenburg Police Department, the North Carolina State Bureau of Investigation, the Monroe Police Department, the Union County Sheriff’s Office, the Gastonia Police Department, the Matthews Police Department, the Montgomery County Sheriff’s Office and the North Carolina Highway Patrol.
The prosecution for the government was handled by Assistant U.S. Attorney Elizabeth F. Greene of the U.S. Attorney’s Office in Charlotte.
OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Drug Trafficker Convicted for Narcotics and Firearms OffensesRead the Press Release
Kelvin L. Brown, aka “Doom,” 34, of Newport News, Virginia, was convicted yesterday by a federal jury of participating in a drug conspiracy in the Newport News area, from the early 2000’s through September 2013. Brown was also convicted of distribution of cocaine, possession with intent to distribute cocaine, two counts of possession of firearms in furtherance of a drug trafficking crime and felon in possession of a firearm.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Chief Richard W. Myers of the Newport News Police made the announcement after the verdict was accepted by U.S. District Judge Robert G. Doumar of the Eastern District of Virginia.
During trial, evidence was presented of various drug transactions and firearms possession by Brown and co-conspirators to protect the drug conspiracy and its proceeds, and threats made by Brown against a cooperating witness during the course of the case. On Sept. 13, 2013, officers of the Newport News Police Department seized a firearm, a scale and cocaine in a barricaded apartment occupied by Brown.
This investigation was led by FBI and the Safe Streets Task Force, with assistance from the Newport News Police, the Virginia State Police and the Newport News Commonwealth Attorney’s Office. This case was prosecuted by Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section and Managing Assistant U.S. Attorney Howard J. Zlotnick of the Eastern District of Virginia.Department of Justice and the International Association of Chiefs of Police Release Groundbreaking Model PolicyRead the Press Release
The Department of Justice’s Office of Justice Programs (OJP), in partnership with the International Association of Chiefs of Police (IACP), today released a seminal model policy regarding police interaction with children who are impacted when a parent is arrested and law enforcement carries out its investigative and arrest responsibilities. Reflecting the collective input of a wide range of subject-matter experts and stakeholders, and understanding that interactions between children and law enforcement create lasting impressions, the resulting model policy, Safeguarding Children of Arrested Parents , provides strategies for law enforcement to improve their procedures and positively impact the communities they serve.
“Limiting a child’s exposure to potentially traumatic events is an operationally sound and necessary law enforcement strategy,” said Deputy Attorney General James Cole. “It is also consistent with law enforcement’s duty to serve the community as a whole. It is an important part of the principles of community policing, problem solving, and conflict resolution.”
Funded through OJP’s Bureau of Justice Assistance (BJA), Safeguarding Children of Arrested Parents is an important resource for law enforcement. Law enforcement agencies will find the information contained in this document highly instructive as they seek to enhance their policies and procedures and gain understanding about the trauma children experience when law enforcement carries out its investigative and arrest responsibilities.
“Trauma associated with the arrest of a parent can have devastating and long term effects on the life of a child,” said Cecilia Muñoz, director of the White House Domestic Policy Council. “This administration is committed to advancing policies and programs that support the children of incarcerated parents and ensure that their futures remain bright with possibility. Implementation of this new protocol, first announced in 2013 during a White House Champions of Change event, will help limit these children's exposure to trauma and encourage positive interactions between members of law enforcement and the communities that they serve.”
In addition to the development of the model policy, IACP is developing a training curriculum that will be delivered through webinars and a number of training sessions at conferences around the country.
“Police officers are confronted with significant challenges and responsibilities when children are present or in need of care and supervision following the arrest of a parent,” said BJA Director Denise E. O’Donnell. “We are pleased to partner with IACP on a new model policy that provides sound, practical, and child-focused guidance on how police can join with their community partners to best meet the needs of children in these difficult circumstances.”
A copy of the report can be found by visiting the BJA website at www.bja.gov/Publications/IACP-SafeguardingChildren.pdf
Delaware Woman Sentenced to 12 Months for $350,000 Embezzlement Against Discover BankRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kimberly Y. Drummond, age 47, of Middletown, Delaware, was sentenced yesterday to 12 months and full restitution for her years-long embezzlement from Discover Financial Services, a federally insured financial institution, in New Castle, Delaware.
Ms. Drummond had worked for Discover for nearly 20 years in a check processing role. In or around November 2008, Drummond began falsifying entries in Discover’s books and records, resulting in the issuance of duplicate checks from Discover Bank. Drummond deposited these duplicate checks into her personal bank accounts, and she used the checks to pay her mortgage lender and purchase luxury consumer items for herself and her family. She continued until her fraud until it was discovered, in August 2012. During the course of her almost four year scheme, Drummond embezzled more than $350,000 from Discover.
U.S. Attorney Oberly commented, “While defense counsel argued for a probationary sentence and the government requested a guideline sentence of 27 months, the Court’s sentence sends a clear message that incarceration is appropriate in situations where individuals abuse their positions of trust within the local banking community.”
This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Lauren Paxton.Defendants Sentenced on Theft of Firearms ChargeRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces today that Tyree Arvell Monroe, Trayon Alphonse Caulton and Walter J. Porter of Mobile were sentenced following April 2014, guilty pleas to a charge of theft of firearms from a federally licensed firearm dealer.
On September 20, 2013, Monroe, Caulton and Porter, along with a juvenile, entered the Quik Pawn on Cottage Hill Road and committed an armed robbery in which they stole elven (11) firearms from the store’s inventory.
Theft from a federal firearms licensee is a violation of Title 18, United States Code Section 922(u). Chief United States District Court Judge William H. Steele imposed the following sentences of imprisonment: Monroe received a sentence of 70 months; Caulton received a sentence of 57 months; and, Porter received a sentence of 63 months. The sentences of imprisonment will be followed by a 3 year term of supervised release.
This case was investigated by Special Agent Wade Vittitow of the Bureau of Alcohol, Tobacco, Firearms & Explosives, following a referral of the case for federal prosecution by the Mobile Police Department.
Defendant Who Sold Homes He Did Not Own Gets 70 Month Prison TermRead the Press Release
PHILADELPHIA – Eric Tubbs, 54, of Philadelphia, was sentenced yesterday to 70 months in prison for fraudulently selling properties he did not own. Tubbs found vacant properties, created phony deeds which falsely transferred the properties from the legitimate owners to individuals recruited by him, and sold properties owned by estates by having others pose as the executors. Tubbs then sold the properties to unsuspecting buyers. He pleaded guilty on April 22, 2014 to seven counts that included wire and mail fraud, bank fraud, aggravated identity theft, and transactional money laundering.
In the case of the property at 1122 Carpenter Street, Tubbs recruited another person, codefendant Douglas Fields, to sign a forged deed which transferred the property to Fields for $1 as the “son” of the owners. Tubbs subsequently sold the property on March 18, 2010, for $140,000, and obtained approximately $120,000 of the proceeds from the settlement.
In the case of 2047 St. Albans Street and 2022 Titan Street, two other vacant properties, Tubbs had other individuals pose as the executors for the estates that owned the properties. He sold the St. Albans Street property on June 16, 2009 for $130,000, and received $100,000 of the proceeds. On October 28, 2011, he sold the Titan Street property for $22,000. Because there were several mortgages and liens on the property, he received only $877 as a result of the transaction. Tubbs altered the check, however, to change the amount payable from $877 to $8,077 and deposited it into an account he opened using someone else’s identity.
In addition to the prison term, U.S. District Court Judge Quinones ordered restitution in the amount of $271,146, a forfeiture money judgment of $227,857, and three years of supervised release.
The case was investigated by the Federal Bureau of Investigation with assistance from the Philadelphia Office of the Inspector General. It was prosecuted by Assistant United States Attorney Frank Costello.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Defendant Sentenced for Prohibited Possession of FirearmRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces today that Shawn Ephisian Taylor of Mobile was recently sentenced following an April 2014 guilty plea to a charge of being an illegal drug user in possession of a firearm.
Possession of a firearm by an illegal drug user is a violation of Title 18, United States Code Section 922(g)(3). Taking into account the Defendant’s criminal history and the circumstances of the offense, Chief United States District Court Judge William H. Steele imposed a sentence of 70 months. The sentence of imprisonment will be followed by a three year term of supervised release.
This case was investigated by Sgt. Louis Screws of the Mobile Police Department and is assigned as a Task Force Officer with the Bureau of Alcohol, Tobacco, Firearms & Explosives.
Defendant Extradited to Face Charges in Border Patrol Agent Brian Terry Murder CaseRead the Press Release
Ivan Soto-Barraza, who is charged with the first degree murder of United States Border Patrol Agent Brian Terry, was extradited to the United States from Mexico today, announced Attorney General Eric Holder and U.S. Attorney Laura E. Duffy of the Southern District of California.
Agent Terry was fatally shot on Dec. 14, 2010, when he and other Border Patrol agents encountered Soto-Barraza and others in a rural area north of Nogales, Arizona. Of six defendants charged so far, two have pleaded guilty and two are awaiting trial.
“This marks another step forward in our aggressive pursuit of those responsible for the murder of Agent Brian Terry, who made the ultimate sacrifice while serving his country,” said Attorney General Holder. "We will never stop seeking justice against those who do harm to our best and bravest."
“This extradition is another major development in the pursuit of justice for Agent Terry and his family,” said U.S. Attorney Laura Duffy. “As we continue to make significant progress in this case, we are constantly motivated by the memory of Agent Terry and his sacrifice for our country.”
Soto-Barraza is scheduled to be arraigned in federal district court in Tucson, Arizona, on August 1, 2014. The indictment charges Soto-Barraza and others with first degree murder, second degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence and assault on a federal officer. In addition to the murder of Agent Terry, the indictment alleges that the defendants assaulted Border Patrol Agents William Castano, Gabriel Fragoza and Timothy Keller, who were with Agent Terry during the firefight.
On July 20, 2012, in order to seek the public’s assistance, Department of Justice officials announced a reward of up to $1 million for information leading to the arrest of four fugitives: Jesus Rosario Favela-Astorga, Heraclio Osorio-Arellanes, Lionel Portillo-Meza and Soto-Barraza. Portillo-Meza was captured in Mexico in September 2012 and extradited to the U.S. from Mexico on June 17, 2014. Soto-Barraza was captured in Mexico in September 2013. Favela-Astorga and Osorio-Arellanes are fugitives.
A fifth defendant, Manuel Osorio-Arellanes, pleaded guilty to first degree murder and was sentenced to 30 years in prison in February 2014. A sixth defendant, Rito Osorio-Arellanes, who was in custody at the time of Agent Terry’s murder, pleaded guilty to conspiracy to interfere with commerce by robbery and was sentenced to eight years in prison in January 2013.
This case is being prosecuted in federal court in Tucson by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson, David D. Leshner, and Fred Sheppard. The U.S. Attorney’s Office for the District of Arizona is recused. This case is being investigated by the FBI. The Justice Department’s Office of International Affairs provided assistance with the extradition.
The public is reminded that an indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
Defendant Extradited to Face Charges in Border Patrol Agent Brian Terry Murder CaseRead the Press Release
SAN DIEGO, CA – Ivan Soto-Barraza, who is charged with the first degree murder of United States Border Patrol Agent Brian Terry, was extradited to the United States from Mexico today, announced Attorney General Eric Holder and U.S. Attorney Laura E. Duffy of the Southern District of California.
Agent Terry was fatally shot on Dec. 14, 2010, when he and other Border Patrol agents encountered Soto-Barraza and others in a rural area north of Nogales, Arizona. Of six defendants charged so far, two have pleaded guilty and two are awaiting trial.
“This marks another step forward in our aggressive pursuit of those responsible for the murder of Agent Brian Terry, who made the ultimate sacrifice while serving his country,” said Attorney General Holder. “We will never stop seeking justice against those who do harm to our best and bravest.”
“This extradition is another major development in the pursuit of justice for Agent Terry and his family,” said U.S. Attorney Laura Duffy. “As we continue to make significant progress in this case, we are constantly motivated by the memory of Agent Terry and his sacrifice for our country.”
Soto-Barraza is scheduled to be arraigned in federal district court in Tucson, Arizona, on August 1, 2014. The indictment charges Soto-Barraza and others with first degree murder, second degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence and assault on a federal officer. In addition to the murder of Agent Terry, the indictment alleges that the defendants assaulted Border Patrol Agents William Castano, Gabriel Fragoza, and Timothy Keller, who were with Agent Terry during the firefight.
On July 20, 2012, in order to seek the public’s assistance, Department of Justice officials announced a reward of up to $1 million for information leading to the arrest of four fugitives: Jesus Rosario Favela-Astorga, Heraclio Osorio-Arellanes, Lionel Portillo-Meza and Soto-Barraza. Portillo-Meza was captured in Mexico in September 2012 and extradited to the U.S. on June 17, 2014. Soto-Barraza was captured in Mexico in September 2013. Favela-Astorga and Osorio-Arellanes are fugitives.
A fifth defendant, Manuel Osorio-Arellanes, pleaded guilty to first degree murder and was sentenced to 30 years in prison in February 2014. A sixth defendant, Rito Osorio-Arellanes, who was in custody at the time of Agent Terry’s murder, pleaded guilty to conspiracy to interfere with commerce by robbery and was sentenced to eight years in prison in January 2013.
This case is being prosecuted in federal court in Tucson by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson, David D. Leshner, and Fred Sheppard. The U.S. Attorney’s Office for the District of Arizona is recused. This case is being investigated by the FBI. The Justice Department’s Office of International Affairs provided assistance with the extradition.
The public is reminded that an indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
###Coos Bay Man Pleads Guilty in Federal Court to Being an Armed Career CriminalRead the Press Release
EUGENE, Ore. – Christopher Michael Morgan, 41, a resident of Coos County, Oregon, appeared before United States District Court Chief Judge Ann Aiken on July 29, 2014 and pled guilty to being an armed career criminal. Morgan, a felon, admitted possessing a loaded .45 caliber pistol in a woman’s restroom at Mingus Park in Coos Bay, Oregon, at 1:30 am on June 18, 2013.
After accepting the guilty plea, Chief Judge Aiken scheduled Morgan’s sentencing hearing for November 12, 2014. Morgan faces a 15-year mandatory minimum prison term and five years of post-prison supervision. Morgan qualifies to be sentenced as an armed career criminal because he possessed the pistol after being previously convicted of four residential burglaries and a felony assault. Morgan has been convicted six times for possessing methamphetamine and once for being a felon in possession of a firearm.
According to court documents and statements made in court, Morgan and a woman were inside the women’s restroom at the park. A Coos Bay police officer confronted Morgan outside the bathroom and attempted to arrest him for violating his parole. Morgan fought the officer and during the struggle held the pistol, then tossed it away. Morgan was subdued and methamphetamine was located in his pocket. He was charged in state court with firearm and drug offenses, and resisting arrest. Coos County’s District Attorney Paul Frasier requested the assistance of the United States Attorney’s office in prosecuting Morgan. Morgan’s guilty plea and admissions were part of a global resolution of his federal and state charges.
This case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearms, and the Coos Bay Police Department. Assistant U.S. Attorney Frank R. Papagni, Jr., with the assistance of Coos County Deputy District Attorney Steven Petty, prosecuted the case.
Collin County Man Convicted for Failing to Register as A Sex OffenderRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – A 77-year-old McKinney, Texas man was found guilty for failing to register as a sex offender in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
A jury found Larry Wayne Thompson guilty on July 30, 2014, for failure to register as a sex offender before U.S. District Judge Richard Schell. Thompson faces up to two years in federal prison at sentencing. A sentencing date has not been scheduled.According to information presented in court, Thompson was convicted of possession of child pornography in U.S. District Court for the Northern District of Oklahoma in 2000. As a result of this conviction, Thompson is required to register under the Sex Offender Registration and Notification Act. In 2011, Thompson moved to Corpus Christi, Texas, and then in 2013, he moved from Corpus Christi to McKinney, Texas. Thompson failed to register and update his registration to reflect his move to McKinney, Texas. Thompson was previously convicted for failing to register as a sex offender in the U.S. District Court for the Southern District of Texas in Corpus Christi in 2011.
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 United States Marshals Service and prosecuted by Assistant U.S. Attorneys William R. Tatum and Stevan A. Buys.Cartersville Man Sentenced in Sextortion CaseRead the Press Release
ROME, Ga., - Joshua James Geer has been sentenced to 30 years in federal prison for child pornography production, coercion of minors to engage in unlawful sex acts, and possession of child pornography.
“This defendant coerced children into engaging in sexual activity and forced them to send him photos of that activity,” said United States Attorney Sally Quillian Yates. “He is the type of predatory monster parents fear when their children are on the internet. He deserves every day of the sentence the court imposed.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Having this disturbing child predator off of our streets is not only a tremendous victory for those investigators and prosecutors working this matter, but for the victims involved and for those who would have become victims had Mr. Geer been allowed to continue with his cyber based criminal exploitation of minors. The FBI will continue to provide significant investigative resources toward the investigation and apprehension of individuals such as Mr. Geer who choose to exploit and prey on children.”
According to United States Attorney Yates, the charges, and other information presented in court: on or about February 18, 2013, Geer contacted N.B., a 17-year-old boy living in Illinois, through an on-line communication service. Initially, Geer befriended the boy during their online chats. But then Geer coerced N.B. to use a cellular telephone to take photographs of N.B. and his 11-year-old sister engaged in graphic sex acts. Geer threatened to expose N.B. to others if the boy refused to send the images to Geer; so N.B. transmitted the images to Geer using an iPod computer device. Investigators identified Geer through his chats with N.B., which revealed Geer’s telephone number.
Several months later, on June 20, 2013, Pinellas County, Fla., Sheriff’s Office Detective Jennifer Zinge (“Det. Zinge”) received a complaint made by V.O., a 16 year old girl. V.O. told Det. Zinge that on June 19, 2013, she began chatting on line with a person who initially identified himself as a girl using the online profile “TNT.” Federal agents subsequently identified “TNT” as Geer.
During their online exchanges, Geer sent a photograph of a child who appeared to be a girl of about 4 years old to V.O. The photograph depicted the child nude above her waist. V.O. then attempted to end her online chats with Geer. But when V.O. tried to terminate her contact with Geer, he sent a text message to V.O. in which he claimed that V.O. was in possession of child pornography. In his message, Geer stated that if V.O. did not comply with his demands that he would report her to the police. Geer forced V.O. to send him nude photographs of her using her cellular telephone. V.O. did so. The photographs depict V.O.’s pubic area and V.O. posed in various lascivious positions under Geer’s written instructions.
Investigators were able to identify Geer as the person corresponding with V.O. using an internet account, as well as his cellular telephone number. FBI agents in Atlanta, Ga., learned that Geer had used the same telephone number to contact and demand pornographic images from N.B., the boy in Illinois.
On June 20, 2013, FBI agents obtained an arrest warrant for Geer, as well as a warrant to search his home in Cartersville, Ga. Federal agents seized an iPhone from Geer at the time of his arrest. An examination of the device revealed that it contained more than 300 images of child pornography, including graphic images depicting infants. Additionally, federal agents discovered more instances of Geer coercing minors to produce child pornography that he forced the victims to send him via the Internet, and that he distributed to others online. During a search of Geer’s closet, federal agents also found a handwritten note detailing how to commit a rape, along with various items bearing the description, “kidnapping kit.”
Geer, 22, of Cartersville, Ga., was sentenced to 30 years in federal prison, to be followed by supervised release for life. He must also register as a sex offender as a condition of his supervised release. Geer pleaded guilty on May 22, 2014.
This case was investigated by the Federal Bureau of Investigations.
Assistant United States Attorney Richard S. Moultrie, Jr. prosecuted the case.
This case is a part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Cannonball Man Pleads Guilty to Assault with a Dangerous WeaponRead the Press Release
BISMARCK - U. S. Attorney Timothy Q. Purdon announced that on July 31, 2014, Dustin Lester, 40, Cannonball, N.D., pleaded guilty before U. S. District Judge Daniel L. Hovland to a charge of assault with a dangerous weapon.
On Dec. 27, 2013, Lester assaulted a female victim by kicking her with the shoes he was wearing, causing bodily injury.
Sentencing for Lester has been scheduled for Oct. 31, 2014, in U.S. District Court in Bismarck, N.D., at 9:00 a.m.
The charge of assault with a dangerous weapon carries a statutory maximum of 10 years in federal prison and a $250,000 fine.
The case was investigated by Bureau of Indian Affairs – Standing Rock Agency.
Assistant U. S. Attorney Gary Delorme is prosecuting the case.
CEO of Steel Contractor on World Trade Center Site Charged in Manhattan Federal Court Wth Fraud in Connection with Program Designed to Encourage Participation of Minority and Women-Owned BusinessesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Michael Nestor, Acting Inspector General of the Port Authority of New York and New Jersey (the “Port Authority”), Shantelle P. Kitchen, the Acting Special Agent-in-Charge of the New York Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Douglas Shoemaker, Regional Special Agent-in-Charge of the U.S. Department of Transportation’s Office of the Inspector General (“DOT-OIG”), and Cheryl Garcia, the Special Agent-in-Charge for the New York Regional Office of the U.S. Department of Labor’s Office of the Inspector General (“DOL-OIG”), Office of Labor Racketeering and Fraud Investigations announced that LARRY DAVIS, President and Chief Executive Officer of DCM Erectors, Inc. (“DCM”) was charged today with engaging in a fraudulent scheme to violate the Port Authority’s Minority and Women-Owned Business Enterprise Program (“M/WBE Program”), which is designed to increase the role of minority and women-owned businesses working on its projects. In addition, the principals of the MBE and WBE previously pled guilty before U.S. District Judge Robert P. Patterson for their roles in the fraudulent scheme and agreed to forfeit their crime proceeds. DAVIS surrendered today to a Complaint and was presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Freeman.
Manhattan U.S. Attorney Preet Bharara said: “Larry Davis and his company had the special privilege of working on the World Trade Center Project, which is not only a major project, but is also one that holds a special place in New Yorkers’ hearts. Davis gained contracts for his company worth almost $1 billion for construction work at the World Trade Center. These contracts came with the responsibility to increase the role of minority and women-owned businesses in the project, which are important to both the community and the economy. Instead, as alleged in the Complaint, Davis committed fraud by claiming that work was going to minority and women-owned businesses when it was not. Davis allegedly tried to cheat the system and deserving businesses out of work.”
Port Authority Acting Inspector General Michael Nestor said: “The Port Authority made a commitment to prevent fraud from occurring in the rebuilding of the WTC site and implemented a robust Fraud Prevention Program, including the use of integrity monitors. Unfortunately, the defendant, despite holding nearly $1 Billion in WTC contracts, seized upon the opportunity to engage in fraudulent activity undermining the role of minority and women-owned businesses at the WTC site. His activity was detected by the Inspector General’s integrity monitor on the 1 WTC project, and then working with the US Attorney’s Office and our law enforcement partners, was thoroughly investigated making today’s announcement possible. I want to thank the Port Authority’s World Trade Center Construction Department for their assistance. The Port Authority OIG will continue to work diligently to prevent and detect fraud at the WTC site and on other Port Authority projects.”
IRS-CI Acting Special Agent-in-Charge Shantelle P. Kitchen said: “This investigation uncovered schemes that, for years, exploited a program designed to encourage minority and women-owned business to participate in Port Authority projects. IRS-Criminal Investigation is committed to using its financial investigative expertise to unravel complex frauds. We are proud to be part of the collective law enforcement effort on this investigation; it demonstrates the government’s resolve to protect public funds and its commitment to ensure the public’s trust.”
DOT-OIG Regional Special Agent-in-Charge Douglas Shoemaker said: “Fraud harms the integrity of Port Authority’s M/WBE program and hurts law-abiding, small business contractors trying to compete on a level playing field. Working with our Federal, State, and local law enforcement and prosecutorial partners, we will continue our vigorous efforts to pursue those who violate the law, and expose and shut down fraud schemes that illegally take advantage of minority and women-owned business enterprises.”
According to the Complaint, Informations, other documents filed in the case, and statements made today in Manhattan federal court:
DCM specializes in steel erection for large construction projects. Since at least March 1999, DAVIS has owned DCM and served as its President and Chief Executive Officer. In 2007, DCM was awarded an approximately $256 million trade contract for work to be performed on One World Trade Center and in 2009, DCM was awarded an approximately $330 million trade contract for work to be performed on the World Trade Center Port Authority Trans-Hudson (PATH) Transportation Hub (collectively, the “World Trade Center Project”).
The work to be performed by DCM for the World Trade Center Project included, but was not limited to, drafting and engineering, surveying, structural steel supply and erection, and supply and installation of metal decking. As a result of change orders and changes in the scope of work, among other things, DCM’s contracts for the World Trade Center Project increased during the course of the Project to almost $1 billion.
The Port Authority’s M/WBE Program is designed to ensure that M/WBEs receive work on its projects and applies to the World Trade Center Project. Pursuant to the M/WBE Program, all contractors, including trade contractors such as DCM, are obligated to make good faith efforts to enter into subcontracts with M/WBEs, the total value of which must equal at least 17 percent of the overall contract amount (12 percent for MBEs and five percent for WBEs).
In order to satisfy the M/WBE Program, DAVIS engaged in a fraudulent scheme in which he caused DCM to claim that certain work was performed by a minority-owned business, Solera/DCM Joint Venture LLC (ASolera/DCM@), and a woman-owned business, GLS Enterprises, Inc. (“GLS”), when, in truth and in fact, DCM itself performed such work or arranged for such work to be performed by other non-M/WBE subcontractors and GLS was not an independent WBE.
Solera/DCM is a joint venture between DCM and a minority owned business, Solera Construction, Inc. (“Solera”), which is owned by JOHNNY GARCIA (“GARCIA”), a qualified minority business owner who previously pled guilty for his role in the fraudulent scheme. Solera/DCM is owned 60 percent by Solera and 40 percent by DCM. DCM and DAVIS established Solera/DCM as a joint venture majority owned by Solera with the express purpose of using it to satisfy MBE requirements on public construction projects.
From 2009 through in or about August 2012, DAVIS caused DCM to misrepresent to the Port Authority that Solera/DCM performed certain work on the World Trade Center Project when, in truth and in fact, the work, including metal decking and steel procurement, was performed by a non-minority contractor or by DCM itself, respectively. To facilitate the fraud, DAVIS directed Solera/DCM to place laborers who worked for a non-minority contractor performing metal decking on Solera/DCM’s payroll and then invoice DCM for such laborers= time and also created certain invoices and directed GARCIA to sign them to make it appear as if Solera/DCM procured steel, when, in truth and in fact, DCM did so. DCM claimed MBE credit for work purportedly performed by Solera/DCM on the World Trade Center Project in the total amount of approximately $70 million. As part of the fraudulent scheme, DCM paid GARCIA a total of at least $2 million ($150,000 in annual salary and additional monthly payments).
The owner of GLS is GALE D’ALOIA (“D’ALOIA”), who served as GLS’s Chairwoman and Chief Executive Officer and previously pled guilty for her role in the fraudulent scheme. Even though GLS was nominally independent from DCM and DAVIS, GLS=s only client and source of revenue was DCM (and its affiliates) and D’ALOIA performed the same payroll management duties under the name GLS that she previously had performed in her role as an employee of DCM. D’ALOIA also reported to DAVIS whose approval was required for any major expenditures and which were paid for by DCM. Accordingly, under the WBE program, GLS was not a bona fide independent business because its viability depends on its relationship with another firm or firms, namely DCM.
From 2009 through in or about September 2012, DAVIS caused DCM to fraudulently claim WBE credit for GLS’s payroll management work and also misrepresented to the Port Authority that GLS performed surveying work on the World Trade Center Project when, in truth and in fact, the surveying work was performed by DCM itself. To facilitate the fraud, DAVIS directed GLS to place unionized surveyors who had been on DCM=s payroll on its payroll and then to certify such payroll and invoiced DCM for the workers even though DCM continued to actually supervise them. As compensation for engaging in the fraudulent scheme, DAVIS paid GLS 10 percent of each week’s total payroll for the surveyors, which totaled approximately $575,000.
DAVIS, 63, of Mississauga, Ontario, Canada, is charged in two counts with wire fraud and a conspiracy to commit wire fraud. He faces a maximum sentencing on each charge of 20 years in prison, three years of supervised release, and a $100 special assessment.
GARCIA, 48, of Ossining, New York, is charged in two counts with wire fraud and a conspiracy to commit wire fraud. He faces a maximum sentence on each charge of 20 years in prison, three years of supervised release, and a $100 special assessment. As part of GARCIA’s plea agreement, he has agreed to forfeit $669,000. A sentencing hearing date for GARCIA has not yet been scheduled.
D’ALOIA, 66, of Charleston, South Carolina, is charged in two counts with wire fraud and a conspiracy to commit wire fraud. She faces a maximum sentence on each charge of 20 years in prison, three years of supervised release, and a $100 special assessment. As part of D’ALOIA’s plea agreement, she has agreed to forfeit $575,000. A sentencing hearing date for D’ALOIA has not yet been scheduled.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the Port Authority’s Office of Inspector General, IRS-CI, DOT-OIG, and DOL-OIG.
This case is being prosecuted by the Office’s Public Corruption Unit. Assistant United States Attorney Carrie H. Cohen is in charge of the prosecutions.
U.S. v. Larry Davis Complaint
Berkeley Psychologist Sentenced to More Than Two Years in Prison for Tax Evasion and Theft of Government PropertyRead the Press Release
OAKLAND – Hugh Leslie Baras, was sentenced today to thirty months in prison and ordered to pay restitution of $593,513 to the Internal Revenue Service and the Social Security Administration for tax evasion and theft of government property, United States Attorney Melinda Haag, and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez announced.
On Feb. 3, 2014, Baras, 70, a Berkeley psychologist, was convicted by a jury of five counts of tax evasion, in violation of Title 26, U.S.C. § 7201, and one count of theft of government property, in violation of Title 18, U.S.C. § 641. The evidence presented during the seven-day trial, showed that Baras, who formerly worked as a psychologist at Kaiser Permanente, and as an Adjunct Clinical Assistant Professor in the Department of Psychiatry and Behavioral Sciences at Stanford University School of Medicine, started a solo, private practice in Palo Alto, Calif., in late 2002. At his private practice, Baras provided clinical psychotherapy services to clients. During the years 2005 through 2009, Baras’s private practice generated over $1,000,000 of income. Although he filed timely federal income tax returns for each of these years, Baras omitted all of the income produced by his private practice from those returns. In addition, although he was self-employed and earning substantial income, Baras continued to collect Disability Insurance Benefits from the Social Security Administration. Between 2006 and 2009, Baras received Disability Insurance Benefits payments to which he was not entitled totaling $80,615. Also during this period, Baras sold nearly $600,000 worth of gold and silver coins to a coin-broker in Oakland. These sales created capital gains which Baras also failed to report on his tax returns.
The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, United States District Court Judge, in Oakland. Judge Gonzalez Rogers also sentenced Baras to a three-year period of supervised release, ordered him to forfeit $80,615, and to pay a fine of $7,500. Baras was ordered to self-surrender for service of his sentence on Sept. 29, 2014.
Michael G. Pitman is the Assistant United States Attorney prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation, and the United States Social Security Administration, Office of Inspector General.
(Baras superseding indictment )
Bedford County Man Gets Prison Time for Helping Transport Stolen Guns from PA to MarylandRead the Press Release
JOHNSTOWN, Pa. - A resident of Saxton, Pa., has been sentenced in federal court to 35 months in prison, three years supervised release and ordered to pay $6,399 in restitution on his conviction of interstate transportation of stolen firearms, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Joshua M. Faircloth, 27.
According to information presented to the court, on Jan. 28, 2013, Faircloth aided in transporting 31 firearms stolen from Saxton Outdoor Supply, Inc., from Pennsylvania to Maryland.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pennsylvania State Police-Bedford Barracks for the investigation leading to the successful prosecution of Faircloth.
According to Mr. Hickton, Faircloth was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.
Bankrupt Developer of Algonquin Project Sentenced to 15 Months in Federal Prison for $1 Million Bank FraudRead the Press Release
CHICAGO — The former owner of an area home building company that went bankrupt in 2008, leaving unfinished a commercial and residential property development in northwest suburban Algonquin, was sentenced today to 15 months in federal prison for bank fraud related to the collapse of the project, known as Riverside Square.
The defendant, BRUCE HAWKINS, 64, of Denver and formerly of Algonquin, who owned Aspen Homebuilders, Inc., was also ordered to pay $1,017,183 in restitution by U.S. District Judge Robert M. Dow, Jr. Hawkins, who pleaded guilty in January, was ordered to surrender to begin serving his sentence on Oct. 14.
“It is important that developers and general contractors know that if they commit fraud in the financing of their projects, their conduct will be met with serious consequences,” Assistant U.S. Attorney Sunil Harjani argued in a government sentencing memo. “It is important that developers know they will go to jail if they lie in bank documents in order to steal funds from financial institutions.”
Hawkins admitted defrauding Amcore Bank of more than $1 million from the proceeds of $13.5 million line of credit to finance the project. In September 2006, acting through Riverside Square, LLC, Hawkins obtained the bank loan to finance the construction of Riverside Square, located at 1100 West Algonquin Rd. Between January 2007 and June 2008, Hawkins fraudulently obtained slightly more than $1 million in loan proceeds from the bank by submitting false contractor statements, waiver of liens, and contract invoices that requested funds purportedly for village permits, construction work, and consulting work for the development.
To obtain funds from the bank loan, Hawkins submitted false contractor statements to the bank in which he verified that subcontractors and his company were owed funds for work performed on Riverside Square. Hawkins submitted, and caused the submission of, false lien waivers and invoices for work performed to the title company, which was designated by Amcore Bank to keep and disburse funds for the project. After these documents were submitted, the bank authorized the title company to disburse funds to Hawkins and the subcontractors.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and John Lucas, Special Agent-in-Charge of the Federal Deposit Insurance Corporation Office of Inspector General in Chicago.
Auburn Man Indicted for Sex Trafficking Women in Western Washington and OregonRead the Press Release
A 33-year-old Auburn, Washington man was indicted today by a federal grand jury in Seattle on four federal counts involving the sex trafficking of two female victims, announced U.S. Attorney Jenny A. Durkan. JOHN HENRY CYPRIAN, JR., aka “Lucky,” was arrested and booked into state custody in June 2014. The arrest followed a Bellevue Police Department investigation into CYPRIAN’s sex trafficking of two different women, both in Western Washington and in Portland, Oregon. CYPRIAN was indicted on two counts of sex trafficking through force, fraud, and coercion and two counts of Transportation for the Purpose of Prostitution Through Coercion and Enticement. CYPRIAN will be transferred to federal custody with arraignment on the indictment scheduled in about two weeks.
CYPRIAN was arrested at a condominium he had rented in Auburn, but the investigation revealed that between April 2013 and his arrest in June 2014, he had rented hotel rooms throughout the greater Seattle area as part of his prostitution scheme. According to records filed in the case, CYPRIAN forced the women to work as prostitutes at hotels in SeaTac, Bellevue, Mountlake Terrace, and Portland. CYPRIAN posted ads on Backpage.com and other adult sexual services websites advertising the women. CYPRIAN allegedly controlled the women with beatings and threats, and forced them to give him all the money they earned as prostitutes.
“Traffickers prey upon vulnerable women – convincing them that they have nowhere to go and even less value. It takes courage to break the bonds an abusive pimp uses to keep his victims under control,” said U.S. Attorney Jenny A. Durkan. “We will continue to work closely with state prosecutors to ensure that violent sex traffickers cannot prey on the most vulnerable in our communities – whether they are juveniles or adults.”
“This case is yet another example of the Bellevue Police Department working with Federal prosecutors to address the issue of human sex trafficking,” said Bellevue Police Chief Jim Montgomery. “We will continue to work hand in hand with our partners, both at the federal level as well as locally, to address this important issue.”
Sex trafficking through force, fraud, or coercion is punishable by a mandatory minimum term of 15 years and up to life in prison and at least five years and up to life of supervised release. Transportation for the Purpose of Prostitution through Coercion and Enticement is punishable by up to twenty years in prison and up to three years of supervised release.
The charges contained in the Indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the Bellevue Police Department with assistance from the King County Prosecuting Attorney's Office, the Mountlake Terrace Police Department and the FBI. The case is being prosecuted by Assistant United States Attorney Kate Crisham.
Attorney General Holder Announces Plans for Federal Law Enforcement Personnel to Begin Carrying NaloxoneRead the Press Release
In a new memorandum released Friday, Attorney General Eric Holder urged federal law enforcement agencies to identify, train and equip personnel who may interact with a victim of a heroin overdose with the drug naloxone. This latest step by the Attorney General will pave the way for certain federal agents -- such as emergency medical personnel -- to begin carrying the potentially life-saving drug known for effectively restoring breathing to a victim in the midst of a heroin or opioid overdose.
According to the most recent study, 110 Americans on average die from drug overdoses every day, outnumbering even deaths from gunshot wounds or motor vehicle crashes. More than half of these drug overdose deaths involve opioids such as heroin and prescription pain relievers. Between 2006 and 2010, heroin overdose deaths dramatically increased by 45 percent.
“The shocking increase in overdose deaths illustrates that addiction to heroin and other opioids, including some prescription painkillers, represents nothing less than a public health crisis,” said Attorney General Holder. “I am confident that expanding the availability of naloxone has the potential to save the lives, families and futures of countless people across the nation.”
The Justice Department wants federal law enforcement agencies, as well as their state and local partners, to review their policies and procedures to determine whether personnel in those agencies should be equipped and trained to recognize and respond to opioid overdose by various methods, including the use of naloxone. Seventeen states and the District of Columbia have amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001.
“ The heroin and prescription painkiller epidemic knows no boundaries--anyone can be affected, and we have already lost far too many lives,” said Acting Director of the Office of National Drug Control Policy Michael Botticelli. “We have moved aggressively against this epidemic and we know that the actions of law enforcement officers at the scene of an overdose can mean the difference between life and death. Attorney General Holder's leadership in this arena will help prevent future overdose deaths and we look forward to working closely with his office and other partners to get naloxone to law enforcement professionals across the nation. ”
As the department continues to address escalating and rapidly-evolving challenges that lead to opioid abuse and drug trafficking, the Attorney General cautioned members of Congress to protect critical enforcement tools like Immediate Suspension Orders (ISOs). A recently passed House bill would “severely undermine” a critical component of our efforts to prevent communities and families from falling prey to dangerous drugs.
The Attorney General announced the new memorandum at a day-long conference on law enforcement and naloxone convened by the Justice Department’s Bureau of Justice Assistance in partnership with the Drug Enforcement Administration, the Office of Community Oriented Policing Services and the Office of National Drug Control Policy. Today’s announcement follows up on the Attorney General’s call to action in March, when he urged local law enforcement authorities, who are often the first to respond to possible overdoses, to routinely carry naloxone.
The Attorney General’s full remarks to the law enforcement conference, as prepared for delivery appear below:
“Thank you, Mary Lou Leary, for those kind words – and thank you all for being here today. I’d particularly like to thank Director Denise O’Donnell, Deputy Director Kristen Mahoney, and their colleagues from the Bureau of Justice Assistance – as well as Acting Director of the Office of National Drug Control Policy Michael Botticelli, Administrator Michele Leonhart, Deputy Assistant Administrator Joe Rannazzisi, and the dedicated men and women of the Drug Enforcement Administration – for bringing us together this morning. And I want to recognize all of the distinguished panelists – representing fields ranging from law enforcement, to public policy, to public health and drug treatment – who have taken the time to lend their voices to this important discussion. Every day, you stand on the front lines of our fight to confront an urgent – and growing – threat to our nation and its citizens. And we’re proud to count you as colleagues and partners.
“As the leaders in this room know all too well, in the five years between 2006 and 2010, this country witnessed a dramatic, 45-percent increase in heroin-related deaths. And 110 people die every day from overdoses, primarily driven by prescription drugs. The shocking increase in overdose deaths illustrates that addiction to heroin and other opioids, including some prescription painkillers, represents nothing less than a public health crisis. It’s also a public safety crisis. And every day, this crisis touches – and devastates – the lives of Americans from every state, in every region, and from every background and walk of life.
“That’s why this Administration, and this Department of Justice in particular, have taken aggressive steps to fight back at every point of intervention – and with every tool at our disposal. In recent years, we have worked to prevent opioid diversion and abuse by targeting the illegal supply chain, by disrupting pill mills, and by thwarting doctor-shopping attempts by drug users and distributors. We have developed innovative public health programs to educate the public, to monitor the problem, and to rigorously enforce applicable federal laws. And we have stepped up our investigatory efforts – opening more than 4,500 heroin-related investigations since 2011 and increasing the amount of heroin seized along America’s southwest border by 320 percent between 2008 and 2013.
“From our rigorous scrutiny of new pharmacy applications to prevent illicit storefront drug trafficking – to our sponsorship of “Drug Take Back” events that provide opportunities for safe and responsible prescription drug disposal – with your help and expert guidance, the department has pursued a comprehensive strategy to keep pharmaceutical controlled substances from falling into the hands of non-medical users. We can all be proud of the steps forward we’ve taken, and the considerable results we’ve achieved, over the last few years alone. But we continue to face escalating and rapidly-evolving challenges in our efforts to prevent opioid abuse and intercept illicit drugs.
“These challenges illustrate the need to preserve important law enforcement tools like Immediate Suspension Orders, which allow DEA to immediately shut down irresponsible distributors, pharmacies, and rogue pain clinics that flood the market with pills prescribed by unethical or irresponsible doctors. These Immediate Suspension Orders, or ISOs, are used to take action in instances where irresponsible behavior places the public at risk - and do so without interrupting the legitimate flow of prescription drugs or preventing patients from receiving necessary medications.
“Particularly now – at a time when our nation is facing a heroin and prescription drug abuse crisis – law enforcement tools like ISOs could not be more important. And if Congress were to take them away, or weaken our ability to use them successfully, it would severely undermine a critical component of our efforts to prevent communities and families from falling prey to dangerous drugs.
“Of course, I recognize – as you do – that we cannot prevent every individual instance of heroin or prescription painkiller abuse. And that is why, beyond these efforts, we must also take additional steps to ensure that we can respond quickly and effectively in the event of acute heroin- or prescription drug-related emergencies that are encountered in the field.
“In March, I urged local law enforcement authorities, who are often the first to respond to possible overdoses, to routinely carry naloxone – a drug that’s extremely effective at restoring breathing to a victim in the midst of a heroin or other opioid overdose. At that time, seventeen states and the District of Columbia had amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001. During one of my regular meetings with the leaders of national law enforcement organizations – many of whom I see here today – they identified the need for technical assistance so that jurisdictions with an interest in equipping officers and first responders may do so effectively. Today’s meeting fulfills that request. The result of this convening will be a set of guidelines to assist law enforcement and public health providers who wish to be equipped and trained in the use of this potentially life-saving remedy.
“In addition, this morning, I can announce that, for the first time ever, I have issued a memorandum urging federal law enforcement agencies – including the DEA, the ATF, the FBI and the U.S. Marshals Service – to review their policies and procedures to determine whether personnel within their agencies should be equipped and trained to recognize and respond to opioid overdose, including with the use of naloxone. In the coming days, I expect each of these critical agencies to determine whether and which members of their teams should be trained to use and carry naloxone in the performance of their duties.
“Although, like you, I recognize that there are numerous challenges involved in naloxone implementation – from acquisition and replenishment, to training, medical oversight and liability issues – I am confident that expanding the availability of this tool has the potential to save the lives, families, and futures of countless people across the nation. I am certain that the leaders in this room – together with our colleagues and counterparts far beyond it – possess the knowledge, the skill, and the determination to forge workable solutions to these pressing concerns. The ultimate goal of today’s conference is to harness your insights, to channel your expertise, and to mine your collective experience in order to make real and lasting progress on behalf of those who are in desperate need of our assistance. Through extensive collaboration and shared wisdom, we can overcome persistent challenges and set a new course for the future.
“So long as I have the privilege of serving as Attorney General, I am determined to keep working with you – and with leaders and stakeholders from around the country – to help break new ground, to develop new solutions, and to forge new paths to the safer, brighter, and more just futures that all Americans deserve. I want to thank each of you, once again, for your commitment to this initiative; for your devotion to this cause; and for your partnership in the considerable work that lies before us. I look forward to all that we must, and surely will, accomplish together in the months and years to come. And I wish you all a most productive conference.”
Attorney General Holder Announces Plans for Federal Law Enforcement Personnel to Begin Carrying NaloxoneRead the Press Release
WASHINGTON — In a new memorandum released Friday, Attorney General Eric Holder urged federal law enforcement agencies to identify, train and equip personnel who may interact with a victim of a heroin overdose with the drug naloxone. This latest step by the Attorney General will pave the way for certain federal agents -- such as emergency medical personnel -- to begin carrying the potentially life-saving drug known for effectively restoring breathing to a victim in the midst of a heroin or opioid overdose.
According to the most recent study, 110 Americans on average die from drug overdoses every day, outnumbering even deaths from gunshot wounds or motor vehicle crashes. More than half of these drug overdose deaths involve opioids such as heroin and prescription pain relievers. Between 2006 and 2010, heroin overdose deaths dramatically increased by 45 percent.
“The shocking increase in overdose deaths illustrates that addiction to heroin and other opioids, including some prescription painkillers, represents nothing less than a public health crisis,” said Attorney General Holder. “I am confident that expanding the availability of naloxone has the potential to save the lives, families and futures of countless people across the nation.”
The Justice Department wants federal law enforcement agencies, as well as their state and local partners, to review their policies and procedures to determine whether personnel in those agencies should be equipped and trained to recognize and respond to opioid overdose by various methods, including the use of naloxone. Seventeen states and the District of Columbia have amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001.
"The heroin and prescription painkiller epidemic knows no boundaries--anyone can be affected, and we have already lost far too many lives,” said Acting Director of the Office of National Drug Control Policy Michael Botticelli. “We have moved aggressively against this epidemic and we know that the actions of law enforcement officers at the scene of an overdose can mean the difference between life and death. Attorney General Holder's leadership in this arena will help prevent future overdose deaths and we look forward to working closely with his office and other partners to get naloxone to law enforcement professionals across the nation."
As the department continues to address escalating and rapidly-evolving challenges that lead to opioid abuse and drug trafficking, the Attorney General cautioned members of Congress to protect critical enforcement tools like Immediate Suspension Orders (ISOs). A recently passed House bill would “severely undermine” a critical component of our efforts to prevent communities and families from falling prey to dangerous drugs.
The Attorney General announced the new memorandum at a day-long conference on law enforcement and naloxone convened by the Justice Department’s Bureau of Justice Assistance in partnership with the Drug Enforcement Administration, the Office of Community Oriented Policing Services and the Office of National Drug Control Policy. Today’s announcement follows up on the Attorney General’s call to action in March, when he urged local law enforcement authorities, who are often the first to respond to possible overdoses, to routinely carry naloxone.
The Attorney General’s full remarks to the law enforcement conference, as prepared for delivery appear below:
“Thank you, Mary Lou Leary, for those kind words – and thank you all for being here today. I’d particularly like to thank Director Denise O’Donnell, Deputy Director Kristen Mahoney, and their colleagues from the Bureau of Justice Assistance – as well as Acting Director of the Office of National Drug Control Policy Michael Botticelli, Administrator Michele Leonhart, Deputy Assistant Administrator Joe Rannazzisi, and the dedicated men and women of the Drug Enforcement Administration – for bringing us together this morning. And I want to recognize all of the distinguished panelists – representing fields ranging from law enforcement, to public policy, to public health and drug treatment – who have taken the time to lend their voices to this important discussion. Every day, you stand on the front lines of our fight to confront an urgent – and growing – threat to our nation and its citizens. And we’re proud to count you as colleagues and partners.
“As the leaders in this room know all too well, in the five years between 2006 and 2010, this country witnessed a dramatic, 45-percent increase in heroin-related deaths. And 110 people die every day from overdoses, primarily driven by prescription drugs. The shocking increase in overdose deaths illustrates that addiction to heroin and other opioids, including some prescription painkillers, represents nothing less than a public health crisis. It’s also a public safety crisis. And every day, this crisis touches – and devastates – the lives of Americans from every state, in every region, and from every background and walk of life.
“That’s why this Administration, and this Department of Justice in particular, have taken aggressive steps to fight back at every point of intervention – and with every tool at our disposal. In recent years, we have worked to prevent opioid diversion and abuse by targeting the illegal supply chain, by disrupting pill mills, and by thwarting doctor-shopping attempts by drug users and distributors. We have developed innovative public health programs to educate the public, to monitor the problem, and to rigorously enforce applicable federal laws. And we have stepped up our investigatory efforts – opening more than 4,500 heroin-related investigations since 2011 and increasing the amount of heroin seized along America’s southwest border by 320 percent between 2008 and 2013.
“From our rigorous scrutiny of new pharmacy applications to prevent illicit storefront drug trafficking – to our sponsorship of “Drug Take Back” events that provide opportunities for safe and responsible prescription drug disposal – with your help and expert guidance, the department has pursued a comprehensive strategy to keep pharmaceutical controlled substances from falling into the hands of non-medical users. We can all be proud of the steps forward we’ve taken, and the considerable results we’ve achieved, over the last few years alone. But we continue to face escalating and rapidly-evolving challenges in our efforts to prevent opioid abuse and intercept illicit drugs.
“These challenges illustrate the need to preserve important law enforcement tools like Immediate Suspension Orders, which allow DEA to immediately shut down irresponsible distributors, pharmacies, and rogue pain clinics that flood the market with pills prescribed by unethical or irresponsible doctors. These Immediate Suspension Orders, or ISOs, are used to take action in instances where irresponsible behavior places the public at risk - and do so without interrupting the legitimate flow of prescription drugs or preventing patients from receiving necessary medications.
“Particularly now – at a time when our nation is facing a heroin and prescription drug abuse crisis – law enforcement tools like ISOs could not be more important. And if Congress were to take them away, or weaken our ability to use them successfully, it would severely undermine a critical component of our efforts to prevent communities and families from falling prey to dangerous drugs.
“Of course, I recognize – as you do – that we cannot prevent every individual instance of heroin or prescription painkiller abuse. And that is why, beyond these efforts, we must also take additional steps to ensure that we can respond quickly and effectively in the event of acute heroin- or prescription drug-related emergencies that are encountered in the field.
“In March, I urged local law enforcement authorities, who are often the first to respond to possible overdoses, to routinely carry naloxone – a drug that’s extremely effective at restoring breathing to a victim in the midst of a heroin or other opioid overdose. At that time, seventeen states and the District of Columbia had amended their laws to increase access to naloxone, resulting in over 10,000 overdose reversals since 2001. During one of my regular meetings with the leaders of national law enforcement organizations – many of whom I see here today – they identified the need for technical assistance so that jurisdictions with an interest in equipping officers and first responders may do so effectively. Today’s meeting fulfills that request. The result of this convening will be a set of guidelines to assist law enforcement and public health providers who wish to be equipped and trained in the use of this potentially life-saving remedy.
“In addition, this morning, I can announce that, for the first time ever, I have issued a memorandum urging federal law enforcement agencies – including the DEA, the ATF, the FBI and the U.S. Marshals Service – to review their policies and procedures to determine whether personnel within their agencies should be equipped and trained to recognize and respond to opioid overdose, including with the use of naloxone. In the coming days, I expect each of these critical agencies to determine whether and which members of their teams should be trained to use and carry naloxone in the performance of their duties.
“Although, like you, I recognize that there are numerous challenges involved in naloxone implementation – from acquisition and replenishment, to training, medical oversight and liability issues – I am confident that expanding the availability of this tool has the potential to save the lives, families, and futures of countless people across the nation. I am certain that the leaders in this room – together with our colleagues and counterparts far beyond it – possess the knowledge, the skill, and the determination to forge workable solutions to these pressing concerns. The ultimate goal of today’s conference is to harness your insights, to channel your expertise, and to mine your collective experience in order to make real and lasting progress on behalf of those who are in desperate need of our assistance. Through extensive collaboration and shared wisdom, we can overcome persistent challenges and set a new course for the future.
“So long as I have the privilege of serving as Attorney General, I am determined to keep working with you – and with leaders and stakeholders from around the country – to help break new ground, to develop new solutions, and to forge new paths to the safer, brighter, and more just futures that all Americans deserve. I want to thank each of you, once again, for your commitment to this initiative; for your devotion to this cause; and for your partnership in the considerable work that lies before us. I look forward to all that we must, and surely will, accomplish together in the months and years to come. And I wish you all a most productive conference.”
Bay Area Prescription Drug Abuse Summit
VIDEO: Beyond the Headlines: Prescription Drug Abuse - ABC7 News
Atlanta-Area Woman Charged for Operating $4.8 Million Fraud That Involved Nearly 1,000 People from Northeast OhioRead the Press Release
An Atlanta-area woman was charged in a two-count criminal information for operating a $4.8 million fraud conspiracy involving nearly 1,000 people who resided in Northeast Ohio, said Steven M. Dettelbach and Kathy Enstrom, IRS-Criminal Investigation Special Agent in Charge.
Zinara M. Highsmith, 35, of Fayetteville, Georgia, was charged with one count of conspiracy to commit wire fraud and one count of wire fraud. She is accused of filing approximately 2,750 false tax returns containing false refund claims of more than $4.8 million.
Approximately 964 false claims were made on behalf of people living in Northeast Ohio, resulting in false claims of nearly $1.7 million, according to the information.
“This defendant took advantage of programs designed to give people a hand up and instead used them to make herself rich,” Dettelbach said.
“The American tax system is designed to provide vital government services to our people. It is not a slush fund for thieves and fraudsters,” Enstrom said. “IRS will vigorously pursue those who illegally target our nation’s tax dollars for personal financial gain.”
Highsmith formed the Atlanta-based tax-preparation business WE XL LLC in 2010. From March 2011 through July 2011, Highsmith partnered with a minister in Arkansas – identified in the charges only as Minister ADM – in a scheme to file false tax returns.
Minister ADM’s role in the scheme was to recruit and obtain personal identification information from claimants and to provide that information to Highsmith, who was responsible for the preparation of the false returns. Minister ADM did this in large part by inducing other ministers and church leaders in various states, including Ohio, to solicit members of their congregations to apply for benefits under the so-called government stimulus program, according to the information.
Some of the claimants were residents of Northeast Ohio who provided their personal identification information to a pastor in Canton, Ohio, and to a relative of the Canton pastor. They, in turn, forwarded the information to Minister ADM, according to the information.
As instructed by Minister ADM, the claimants were told they could receive their “stimulus” payment by direct deposit or on a debit card. ADM told pastors to request a $50 “donation” from each claimant, according to the information.
ADM, in turn, forwarded the claimants’ personal identification information to Highsmith to use in preparing false tax returns. Highsmith never had any contact with a claimant or any of the other pastors used by ADM to recruit or enlist claimants, according to the information.
Highsmith instructed associates how to prepare false income tax returns using Turbo Tax software, which they did by reporting false occupations and wage income, and by falsely claiming a variety of tax credits, including the AOC Education Credit, the Making Work Pay Credit and the Earned Income Credit, according to the information.
All of the returns requested that $125 be deposited into a bank account controlled by ADM and $275 be deposited into a bank account controlled by Highsmith, according to the information.
Based on the false claims, the IRS issued refunds totaling more than $3.9 million, with more than $500,000 from those refunds going to bank accounts controlled by Highsmith, according to the information.
This case is being prosecuted by Assistant U.S. Attorney Justin J. Roberts following an investigation by the Internal Revenue Service.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Activity for July 31, 2014Read the Press Release
Burlington, Wyoming Man Convicted for Bank Fraud
U.S. Attorney Christopher A. Crofts announced today that Burlington, Wyoming resident Marvin Iverson has been convicted in federal court. Iverson was charged in a Superseding Indictment on March 21, 2013, for violating 18 U.S.C. § 1344, bank fraud. A jury found Iverson guilty after a three-day jury trial in the U.S. District Court in Cheyenne. Iverson executed a scheme to defraud federally insured financial institutions (including Big Horn County Savings Bank) by passing checks on a closed account to pay off large debts. Iverson is scheduled to be sentenced by Federal District Court Judge Alan B. Johnson on October 8, 2014.
The investigation in this case was conducted by the Federal Bureau of Investigation, assisted by the Big Horn County Sheriff and Cody Police Department.
30 July 2014
two Men Sentenced to 15 1/2 Years and 8 Years in Prison for Armed Robbery of Milwaukee Grocery StoreRead the Press Release
United States Attorney James L. Santelle announced today that Joshua Mueller, age 23, was sentenced on July 30, 2014, to 186 months (15 ½ years) of imprisonment, followed by 5 years of supervised release for his involvement in the January 28, 2014 armed robbery of Mother’s Foods (formerly Magic Foods) in Milwaukee. The sentence was the result of Mueller’s guilty plea to one count of interference with commerce by robbery pursuant to the Hobbs Act and one count of discharging a firearm in furtherance of a crime of violence. Co-defendant Sedrick Brown, age 27, was sentenced on July 29, 2014, to 96 months (8 years) of imprisonment after his guilty plea to one count of aiding and abetting the discharge of a firearm in furtherance of a crime of violence. Co-defendant Steven Bugni remains a fugitive.
The investigation revealed that on January 28, 2014, defendants Mueller and Bugni, both armed with firearms, stole U.S. currency from the Mother’s Foods store at 2879 N. 16th Street in Milwaukee, Wisconsin. Brown served as a lookout. During the robbery, Mueller shot a store employee in the leg, causing life-threatening bodily injury.
At the sentencing hearing, one victim spoke regarding the effect of the robbery on himself, the other store employees, and the business. He mentioned that several customers were in the store at the time of the robbery, including two young children.
The Hobbs Act, passed by Congress in 1946, provides federal jurisdiction for cases involving violent, habitual criminals who commit armed robbery of businesses involved in interstate commerce. Federal prosecution of these offenders is sometimes beneficial since the penalties may be tougher than under state law. To that end, the U.S. Attorney’s Office and its County Attorney partners are working together to ensure that violent offenders are effectively prosecuted, making our communities safer for all.
This matter was investigated by the Federal Bureau of Investigation and the Milwaukee Police Department. It was prosecuted by Assistant United States Attorney Margaret B. Honrath.
Two Sons of Woman Linked to Mexican Drug Cartel Plead Guilty to Federal Drug ConspiracyRead the Press Release
Little Rock – Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, along with David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI) announced that two men with ties to the Gulf Cartel have pleaded guilty for their roles in a conspiracy to transport cocaine from Mexico to Little Rock for distribution in the Central Arkansas area. Mohammed Kazam Martinez, a/k/a “Mo,” pleaded guilty earlier today before the Honorable Susan Webber Wright to conspiring to possess with intent to distribute 5 kilograms or more of cocaine hydrochloride. Martinez’s brother, Homar Martinez, was indicted in the same case - along with sixteen (16) other defendants - and pleaded guilty to the same charge on Monday, July 28, 2014, in the Southern District of Texas (SDTX), where he is being held by the United States Marshal Service in Brownsville, Texas, on a separate federal drug case. As a result of their pleas, both men face a sentence of not less than 10 years to life imprisonment.
Mohammed and Homar Martinez are the sons of Idalia Ramos Rangel, a/k/a La Tia or Big Momma, a known close associate of high-ranking members of the Gulf Cartel, who directs a drug trafficking organization based in Matamoros, Mexico. That organization is responsible for the distribution of multiple hundreds of kilograms of cocaine in the United States. According to the indictment, Mohammed Martinez was a federal inmate in the Bureau of Prisons when he recruited inmates in the Federal Correctional Complex at Forrest City, Arkansas, to distribute Rangel’s Gulf Cartel cocaine upon their release from prison. Mohammed Martinez communicated with members of the drug trafficking organization using the prison telephone and e-mail systems to coordinate the distribution of cocaine to, and the collection of drug proceeds from, former federal inmates and others, including Homar Martinez and other members of Rangel’s family.
The investigation was conducted by the FBI, with substantial assistance from the Federal Bureau of Prisons and the Little Rock Police Department. The case is being prosecuted by Assistant United States Attorneys Michael Gordon and Chris Givens.
Two More Defendants Plead Guilty in Identity Theft Fraud Scheme Involving Personal Identifying Information from AT&T Customer FilesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Jacqueline Nicole Lee Warrick, 26, of Miami, and Tracy Delva, 27, of Deerfield Beach, pled guilty today for their participation in a conspiracy to unjustly enrich themselves by stealing personal identifying information and using the information to make unauthorized wire transfers from the victims’ bank accounts and obtain unauthorized credit or debit cards.
Specifically, Warrick and Delva each pled guilty today to one count of using an authorized access device and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1029(a)(2) and 1028A. Sentencing for both defendants is scheduled for October 15, 2014, before U.S. District Court Judge Marcia G. Cooke.
Co-defendant Chouman Emily Syrilien, 25, of Lauderdale Lakes, pled guilty on May 19, 2014, to one count of possession of 15 or more unauthorized access devices and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1029(a)(3) and 1028A. Syrilien’s sentencing is scheduled for August 6, 2014, at 1:30 p.m.
Co-defendant Carlos Antonio Alexander, 24, of Orlando, pled guilty on July 16, 2014 to one count of using an unauthorized access device and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1029(a)(2) and 1028A. Alexander’s sentencing is scheduled for October 1, 2014, at 10:00 a.m.
Co-defendant Angel Arcos, 23, of Pompano Beach, pled guilty on May 15, 2014 to one count conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 1349. Arcos’ sentencing is scheduled for September 3, 2014, at 2:00 p.m.
Change of plea hearings are scheduled on September 3, 2014 for Monique Smith, 31, of Pompano Beach, and Shantegra La’Shae Godfrey, 23, of Deerfield Beach.
Trial is scheduled on September 22, 2014 for Arrington Basil Segu, 28, of Miami.
According to court documents, defendant Syrilien was employed by Interactive Response Technologies, Inc. (IRT) located in Margate. IRT provides staffing for call centers to handle direct sales and customer inquiries for AT&T. Syrilien unlawfully provided a co-conspirator with the personal identifying information from multiple AT&T customer files. Defendant Segu also unlawfully provided personal identifying information of numerous individuals to the co-conspirator.
Defendants Alexander, Delva, Godfrey, Smith and Warrick were added as “authorized users” on victims’ credit or debit card accounts or bank accounts to access the accounts of persons whose personal identifying information had been stolen. Once a co-conspirator’s name was added as an “authorized user,” the bank and/or credit card company was directed to mail additional debit or credit cards bearing the names of these newly added “authorized users” to their addresses or addresses under their control, all without the true account holder's knowledge or consent. The defendants used these credit and debit cards to make purchases or obtain money.
Defendants Delva and Warrick both utilized fraudulently obtained debit and credit cards that bore their names as additional “authorized users” on victims’ accounts to make both retail purchases as well as cash advances in excess of $28,000. Defendants Alexander, Smith and Godfrey each made both retail purchases as well as cash advances in excess of $24,000, $12,000 and $8,200, respectively.
Defendant Arcos allowed his personal information to be used to open a bank account to further the fraudulent activity. From September 16 to 18, 2013, five withdrawals totaling $13,000, were made from the fraudulent account and deposited into Arcos’ checking account.
The defendants face a maximum of thirty years in prison for the conspiracy charge, a maximum of ten years in prison for the access device fraud charge, and a mandatory term of two years in prison for the aggravated identity theft charge.
Mr. Ferrer commended the investigative efforts of IRS-CI and FBI. The case is being prosecuted by Assistant U.S. Attorney Cynthia R. Wood.
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.
Two Mexican Nationals Indicted for Illegally Re-entering U.S.Read the Press Release
BIRMINGHAM -- A federal grand jury today indicted two Mexican nationals for illegally re-entering the United States after previously having been deported, announced U.S. Attorney Joyce White Vance and U.S. Immigration and Customs Enforcement's Enforcement and Removal Operations Field Office Director David Rivera.
Separate indictments filed in U.S. District Court charge JOSE ANIVAL-RIVERA, 29, and JOSE ADAN PAVON-RODRIGUEZ, 33, with being in the United States illegally, having previously been removed following a felony conviction. Anival-Rivera was living in Decatur, and Pavon-Rodriguez was living in Oxford.
Anival-Rivera, also known as Jose Anibal-Rivera, Paulino Balderas, and Wan Camacho, was deported in March 2011, and again in January 2013, February 2013, and July 2013, after a felony conviction, according to his indictment. Pavon-Rodriguez was deported in December 2011, and again in August 2013, following an aggravated felony conviction, according to his indictment. Neither indictment states the nature of the prior convictions.
The maximum prison sentence for illegal re-entry following a felony conviction is 10 years. The maximum for illegal re-entry following an aggravated felony conviction is 20 years.
ICE ERO investigated both cases. Assistant U.S. Attorney Erica Williamson Barnes is prosecuting Anival-Rivera. Assistant U.S. Attorney Daniel M. Murdock is prosecuting Pavon-Rodriguez.
The public is reminded that an indictment is only a charge. A defendant is presumed innocent unless and until proven guilty.
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Two Convicted of Distributing MethamphetamineRead the Press Release
McALLEN, Texas – Francisco Calderon, 27, and Jorge Alejandro Galvan-Ibarra, 30, have entered a guilty plea to possession with intent to distribute more than one kilogram of methamphetamine, announced United States Attorney Kenneth Magidson. Calderon entered his plea just a short time ago, while Galvan-Ibarra pleaded yesterday.
Calderon, a naturalized citizen originally from Mexico residing in McAllen, and Galvan-Ibarra, an illegal alien residing in the Dallas area, were arrested June 3, 2014, as they attempted to distribute the methamphetamine.
Calderon brokered the transaction out of McAllen, while Galvan-Ibarra was to deliver the drugs in Dallas.
Prior to the June 2014 arrest, Calderon admitted to negotiating two additional transactions totaling more than 500 grams of methamphetamine. Galvan-Ibarra handled the delivery of the methamphetamine in one of the transactions.
U.S. District Judge Micaela Alvarez, who accepted the pleas, has set sentencing for Oct. 22, 2014. At that time, they face a minimum o f10 years and up to life in federal prison as well as a possible $10 million fine. Both were ordered to remain in custody pending that hearing.
The charges are the result of an Organized Crime Drug Enforcement Task Force investigation dubbed Operation Sword Fight conducted by the Drug Enforcement Administration, Homeland Security Investigations and FBI. Assistant United States Attorney Juan F. Alanis is prosecuting.Three Sent to Prison in Massive Stash House CaseRead the Press Release
HOUSTON – Three of the five men arrested in connection with the March discovery of more than 100 illegal aliens in an area stash house have been ordered to federal prison, announced United States Attorney Kenneth Magidson along with Brian Moskowitz, special agent in charge of Homeland Security Investigations (HSI). Jonathan Solorzano-Tavila, 30, Jose Cesmas-Borja, 26, and Eugenio Sesmas-Borja, 20, pleaded guilty just one month after their arrest as did Jose Aviles-Villa, 32, and Antonio Barruquet-Hildeberta, 46. All are from Michoacan, Mexico.
They were all convicted of conspiracy to harbor and transport ilegal aliens and use of a firearm during and in relation to a crime of violence.
Today, U.S. District Judge Lee Rosenthal, handed Solorzano-Tavila, Sesmas-Borja and Cesmas-Borja respective sentences of 60, 54 and 51 months in federal prison for the conspiracy charge. Each were also ordered to serve consecutive 60-month sentences for the use of a firearm, resulting in total sentences ranging from 120 to 111 months in prison. As illegal aliens, they are all expected to face deportation proceedings following release from prison. Aviles-Villa and Barruquet-Hildeberta will be sentenced Sept. 4, 2014.
The five men were arrested March 19, 2014. On that date, 115 illegal aliens were discovered in a stash house on Almeda School Road in Houston.
The convicted smugglers admitted they obtained substantial profits as a result of the conspiracy. They had established networks who brought the aliens into the U.S. illegally across the Southwest border. The illegal aliens were then held in stash houses while the smugglers arranged payment of remaining smuggling fees from their families.
While in the stash house, the conspirators seized the victim aliens’ clothes, shoes, phones and other possessions. The conspirators used guns, paddles, tasers and other equipment to control and prevent the illegal aliens from escaping from the stash house. They guarded the aliens with guns displayed in plain view and threatened to kill them by shooting them in the back of the head if they tried to escape.
In one specific instance, the conspirators contacted the mother of one of the stashed aliens and told her to pay an additional $13,000 for the victim and her two children. She was advised that if she did not pay, they would “make her family disappear and make her family pay.”
They will all remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by HSI with the assistance of the Houston Police Department. Assistant United States Attorney (AUSA) Julie Searle and Special AUSA Rick Bennett are prosecuting.
Three Insurance Agents Sentenced in Manhattan Federal Court for Elaborate Multimillion-Dollar Life Insurance SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL BINDAY, the president and owner of a Scarsdale-based insurance agency, JAMES KEVIN KERGIL, an insurance agent based in Peekskill, New York, and MARK RESNICK, an insurance agent based in Orlando, Florida, were sentenced today to prison terms of 12 years, nine years, and six years, respectively, for their involvement in a massive scheme to defraud life insurance companies in connection with the issuance of stranger-originated life insurance (“STOLI”) policies. BINDAY, KERGIL, and RESNICK were found guilty of mail fraud, wire fraud, and conspiracy to commit mail and wire fraud in October 2013, following a 12-day jury trial before U.S. District Judge Colleen McMahon, who also imposed today’s sentences. KERGIL and RESNICK were also found guilty of conspiring to obstruct justice.
Manhattan U.S. Attorney Preet Bharara said: “For several years, the defendants carried out an elaborate scheme to deceive life insurance providers and trick them into issuing policies for unintended beneficiaries. Based on the defendants’ web of lies, the insurance companies were misled to believe they were issuing policies for wealthy senior citizens when in reality, those seniors were straw applicants who had no ability to pay the premiums and had been recruited by the defendants who were seeking big commissions for themselves. The defendants now will have to forfeit the proceeds of their scheme and, more importantly, their liberty.”
According to the evidence at trial, documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:
BINDAY ran a business in Scarsdale, New York called R. Binday Plans and Concepts, Ltd. (“R. Binday”). R. Binday purported to be a general agency that secured high face-value life insurance policies for wealthy “clients.” In truth, from 2006 through early 2009, BINDAY and his company were engaged almost exclusively in procuring STOLI policies – policies on the lives of seniors for the benefit of investors who were strangers to them – by means of false and fraudulent applications.
The various life insurance companies on whose behalf R. Binday claimed to act as agent (the “Insurers”) expressly prohibited their agents from soliciting and submitting STOLI business. In pricing and underwriting universal life insurance, the Insurers relied on the basic premise that the people applying for the policies – rather than professional investors – were the ones seeking and planning to pay for these high-face-value policies. These assumptions permitted the Insurers to offer lower prices than they could have without the assumptions. Accordingly, the Insurers asked questions on their universal life applications specifically designed to identify STOLI policies and to prevent such policies from being issued. The Insurers also required their agents to certify that all information in the life insurance applications – including the answers to these questions and the applicants’ financial information – was accurate.
BINDAY, with the help of R. Binday office workers and independent insurance agents, including KERGIL and RESNICK, prepared and submitted applications for life insurance that were riddled with lies to conceal from the Insurers that the applications were for STOLI policies and to trick the Insurers into issuing those policies. The insurance applications were designed to falsely make it appear to the Insurers that the senior citizens purportedly applying for life insurance were wealthy individuals who wanted insurance for their “estate planning” needs. In fact, unbeknownst to the Insurers, most of the seniors could not possibly afford these policies, and the financial information included in the applications was completely fabricated. In reality, the seniors were people of modest means who had been recruited by the defendants to serve as straw insureds so that investors could insure the seniors’ lives, pay the premiums until death, and then reap what BINDAY and his associates had projected would be massive profits – at the expense of the Insurers. Yet BINDAY, KERGIL, RESNICK, and others certified to the Insurers, over and over, that these were not applications for STOLI policies, and that the information on the applications was accurate to the best of their knowledge.
In addition to preparing and submitting blatantly false insurance applications, BINDAY, KERGIL, and RESNICK supported their fraud with bogus back-up documentation and supposedly “independent” verification papers, all predicated on false financial figures and other lies. And once a policy had been issued based on these falsehoods, the defendants arranged elaborate bank transactions to create the false impression that the seniors – rather than investors – were the ones paying the premiums on the policies. The defendants also instructed insureds to refuse to speak to Insurer representatives and, if conversation could not be avoided, to lie.
For every stealth STOLI policy issued, the Insurers paid out a substantial commission, usually in the six figures. The defendants split these commissions with the investors on whose behalf they were secretly operating, generally pocketing about half for themselves. Collectively, the defendants made millions in commissions over just a few years from their fraudulent STOLI applications.
To cover up and perpetuate their fraud, the defendants lied to governmental authorities and conspired to destroy evidence. First, in 2009, during sworn testimony before the New York State Insurance Department, BINDAY falsely claimed he was not involved in procuring STOLI policies and that he would never submit a life insurance application knowing it to be for a STOLI policy. Later, in 2010, after FBI agents approached RESNICK with questions about stealth STOLI policies he had submitted, all three defendants and another insurance agent conspired to destroy documents and electronic records related to their fraud.
In addition to their prison sentences, BINDAY, 50, of New York, New York, KERGIL, 59, of Peekskill, New York, and RESNICK, 58, of Orlando, Florida, were ordered to pay $39,308,305.63 in restitution, an amount for which they are jointly and severally liable. Additionally, BINDAY was ordered to forfeit $13,522,424.64; KERGIL was ordered to forfeit $15,623,737.64; and RESNICK was ordered to forfeit $14,315.868. Portions of the forfeiture judgments carry joint and several liability.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. McCallum and Eun Young Choi are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is handling the forfeiture aspects of the prosecution.
Three Hudson County, New Jersey, Men Admit Racketeering Conspiracy Related to Illegal Online Gambling EnterpriseRead the Press Release
NEWARK, N.J. – Three men from Hudson County, New Jersey, today admitted conspiring with a criminal enterprise that engaged in illegal online sports betting in New Jersey and elsewhere, U.S. Attorney Paul J. Fishman announced.
Mark A. Sanzo, 56, Robert J. Scerbo, 56, and William A. Bruder, 44, all of Bayonne, New Jersey, each pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to separate informations charging them with one count of racketeering conspiracy.
According to documents filed in this case and statements made in court:
Joseph Lascala, 80, of Monroe, New Jersey, was the alleged “capo” and a made member of the Genovese family operating in northern New Jersey. He directed the criminal activities of a smaller group of associates, referred to as a crew, whose activities included illegal gambling and the collection of unlawful debt.
Joseph Graziano, 77, of Springfield, New Jersey, was the principal owner of Beteagle.com, a website located in Costa Rica and used to facilitate illegal online sports betting. Dominick J. Barone, 44, also of Springfield, New Jersey, worked with Graziano in carrying out the daily activities of the website. Both men conspired with the Genovese Crime Family of La Cosa Nostra in the operation of Beteagle. Graziano and Barone pleaded guilty on July 29, 2014, to their roles in the racketeering conspiracy, each admitting that they were associates of the Genovese Crime Family. Beteagle, through the individuals that owned, operated, and controlled it, was a “criminal enterprise” that operated in interstate and foreign commerce.Lascala’s organized crime crew and the criminal enterprise joined forces to allow traditional organized crime members and associates to use the Internet and current technology to conduct traditional organized crime by engaging in and profiting from illegal sports betting through the website. Associates of the crew were given access to Beteagle and were considered “agents.” Before the advent of computerized betting, these agents would have been referred to as “bookmakers” or “bookies.” The agents had the ability to track the “sub-agents,” or bookies, under them and the wagers placed by their bettors. The agent or sub-agent maintained a group of bettors (the “package”) and were responsible for those bettors.
To place bets online, the agent or sub-agent issued the bettor a username and password to access Beteagle. This access was not given online and no money or credits were made or transferred through the website. Associates of the crew paid out winnings or collected losses in person. If a bettor failed to pay his gambling losses, the crew used their LCN status and threats of violence to collect on these debts.The agent or sub-agent paid a fee to the website for each bettor added to a package. Barone and others made weekly collections of cash in furtherance of the scheme.
Sanzo, Scerbo, and Bruder each admitted that they conspired with the criminal enterprise to commit racketeering acts, namely, the illegal sports betting operation, and that they and their conspirators profited through this criminal venture.
In addition to Graziano and Barone, John Breheney, a/k/a “Johnny Fugazi, Fu, Johnny Fu,” 49, and Salvatore Turchio, 48, both of Little Egg Harbor, New Jersey; Patsy Pirozzi, a/k/a “Uncle Patsy,” 75, Suffern, New York; and Jose Gotay, 76, New Milford, New Jersey have pleaded guilty to their role in this racketeering conspiracy and await sentencing.
As to the remaining defendants, the charges and allegations contained in a criminal complaint sworn in May 2012 are merely accusations and they are presumed innocent unless and until proven guilty.
At sentencing, Sanzo, Scerbo and Bruder each face a maximum potential punishment of 20 years in prison and a fine of $250,000. Sentencing for Sanzo is scheduled for Sept. 19, 2014; for Scerbo, Sept. 20, 2014; and for Bruder, Nov. 13, 2014. All defendants were previously released on bail.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Bayonne Police Department, Special Investigations Unit, under the direction of Chief Drew Niekrasz; IRS-Criminal Investigation under the direction of Acting Special Agent in Charge Jonathan D. Larsen; the N.J. State Police, under the direction of Superintendent Rick Fuentes; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant United States Attorneys Serina M. Vash and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Sanzo: Christopher L. Patella Esq., Bayonne, New Jersey
Scerbo: Thomas J. Cammarata Esq., Jersey City, New Jersey
Bruder: Daniel J. Welsh Esq., Jersey City, New JerseySanzo, Mark Information
Scerbo, Robert Information
Bruder, William InformationThirteen Rockford Area Residents Facing Federal Gun And/Or Drug ChargesRead the Press Release
ROCKFORD — Thirteen Rockford area residents are facing federal gun and/or narcotics charges, federal and local law enforcement officials announced today. The indictments stem from a year-long investigation into firearms and cocaine trafficking in the Rockford area led by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rockford Police Department. ATF agents, together with local police and other authorities, began executing arrest warrants this morning.
Zachary T. Fardon, United States Attorney for the Northern District of Illinois, praised the teamwork of the ATF and Rockford Police Department. Mr. Fardon announced the charges with Carl J. Vasilko, Special Agent-in-Charge of ATF in Chicago, and Chet Epperson, Rockford Police Chief. Also participating in the investigation and arrests were the Belvidere Police Department, Winnebago County Sheriff’s Office and the Illinois State Police.
Ten of the thirteen defendants were arrested today; one defendant was already in custody; and one defendant was previously arraigned. Those arrested today will appear before U.S. Magistrate Judge Iain D. Johnston and will remain in federal custody pending detention hearings.
Everardo Rodriguez, 28, Oscar Pina, 38, and Gabriel Rodriguez, 38, are each charged separately with selling cocaine. Mallek Sanchez, 28, is charged alone with selling cocaine, being a felon in possession of a firearm, and possessing a firearm with an obliterated serial number. Teovonni Cunningham, 29, Darrell Reed, 26, and Michael Schaffer, 31, are all charged together with conspiring to possess and sell stolen firearms. Cunningham is also charged with possession of 21 stolen firearms and numerous rounds of stolen ammunition, with being a felon in possession of those stolen firearms and ammunition, and with selling one of the stolen firearms and the stolen ammunition. Reed is also charged with possessing and selling four of the stolen firearms.
Daniel Guajardo, 24, is charged separately with being a felon in possession of a firearm and possession of a short-barreled shotgun. Jose G. Pagan, 37, is charged alone with being a felon in possession of a firearm and possessing a firearm with an obliterated serial number. Mario A. Guerra, 33, and Rosario Pillado, 21, are each charged separately with being a felon in possession of a firearm. Sergio Cazares, 20, and Jose M. Martinez, 26, are each charged separately with possessing a firearm with an obliterated serial number.
All of the defendants are Rockford residents, except for Darrell Reed who is a resident of Byron, Ill., and Mallek Sanchez, who is a resident of Belvidere, Ill.
Each drug distribution charge carries a maximum sentence of 20 years in prison and a $1 million fine. Each charge of a felon possessing a firearm, of possessing or selling a stolen firearm, or of possessing of a short-barreled firearm carries a maximum sentence of 10 years in prison and a maximum fine of $250,000. Each charge of possessing a firearm that has an obliterated serial number carries a maximum sentence of 5 years in prison and a maximum fine of $250,000. The charge of conspiring to possess and sell stolen firearms carries a maximum sentence of 5 years in prison and a maximum fine of $250,000. Upon conviction, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorney John G. McKenzie.
The public is reminded that an indictment contains only a charge and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government will have the burden of proving guilt beyond a reasonable doubt.
Superseding Indictment Handed Down in Sex Trafficking and Transportation CaseRead the Press Release
ROCHESTER, N.Y.— U.S. Attorney William J. Hochul, Jr., announced today that a federal grand jury in Rochester, NY has returned a six-count superseding indictment charging Jodia Campbell, 32, Laree Greggs, 37, and Jennifer Miller, 26, all of Rochester, N.Y., with various felonies including conspiracy to commit sex trafficking of a minor, sex trafficking of a minor, transportation of a minor across state lines with intent that the minor engage in prostitution, and transportation of an individual across state lines with intent that the individual engage in prostitution. Conspiracy to commit sex trafficking of a minor carries a maximum penalty of life in prison and a fine of $250,000. Sex trafficking of a minor and transportation of a minor across state lines each carries a mandatory minimum penalty of 10 years in prison and a maximum of life and a fine of $250,000. Transportation of an individual across state lines carries a maximum penalty of 10 years in prison and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that according to the complaint, in April 2013, Rochester Police began investigating the alleged prostitution of a 16 year old female from Rochester using the name “Cherry Red” on Backpage.com in Pennsylvania. The 16-year-old alleged that she was recruited by a woman named Jennifer Miller and taken to New Jersey and Pennsylvania to engage in prostitution by Jodia Campbell along with Jennifer Miller and Laree Greggs. Other individuals also alleged having been transported by Greggs, Miller and Campbell at various times, out of state, to prostitute. Investigators reviewed backpage.com ads and found contact information associated with Miller, Campbell and Greggs.
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.
The indictment is the culmination of an investigation on the part of the FBI's Cyber Task Force, which includes the Rochester Police Department under the direction of Chief Michael Ciminelli, the Monroe County Sheriff’s Office under the direction of Chief Patrick O’Flynn and Special Agents of the Federal Bureau of Investigation.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Statement of Manhattan U.S. Attorney Preet Bharara on the Penalties Imposed by the Court on Countrywide, Bank of America, and Rebecca Mairone for Engaging in Mortgage Fraud Totaling in Excess of One Billion DollarsRead the Press Release
“Today, Judge Rakoff imposed stiff penalties in a case brought by this Office to punish and deter the fraudulent and reckless lending activities of a financial institution leading up to the financial crisis in 2008.
On October 23, 2013, after a four-week trial, a jury sent a loud and clear message to Wall Street that this kind of conduct will not be tolerated, finding that Countrywide and its former executive, Rebecca Mairone, committed mail and wire fraud by selling thousands of toxic mortgages to Fannie Mae and Freddie Mac with lies that they were quality investments.
Today that message was reinforced through the imposition of tough civil penalties against Countrywide, Bank of America, which purchased Countrywide in 2008, and Mairone. Judge Rakoff ordered Countrywide and Bank of America to pay $1,267,491,770, based on the amount that Countrywide falsely induced the victims, Fannie Mae and Freddie Mac, to pay for fraudulently misrepresented loans and ordered Mairone to pay a civil penalty to the Government of $1,000,000. In determining the penalty amounts, the Court highlighted the egregious nature of the fraud, stating that ‘[the bank’s] HSSL [loan] process . . .was from start to finish the vehicle for a brazen fraud by the defendants, driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system as a whole.’
Throughout a year-long litigation and month-long trial, Bank of America claimed that the Government had no case. After the jury said otherwise, Bank of America claimed that it should pay no penalty at all, arguing that the victims were not harmed and that the bank did not profit from this massive fraud. Judge Rakoff’s opinion squarely and emphatically rejects the bank’s claims which, besides ignoring the victims’ out-of-pocket losses, also ignored that the fraudulent conduct required penalties to be paid for punitive and deterrence purposes as well.
This is the first case in which a bank or any of its executives has been found liable under FIRREA for mortgage fraud leading up to the financial crisis, and now it is the first case in which civil penalties have been imposed upon a bank or any of its executives following such a finding. The jury verdict and subsequent imposition of penalties make clear that mortgage fraud cannot be viewed as simply another cost of doing business in the financial world. This Office will continue to investigate and vigorously prosecute mortgage fraud in all of its forms using all of the civil and criminal tools at its disposal.”
U.S. v. Countrywide, et al. (Bank of America) Opinion and Order