Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Thursday 5 June 2014
Georgia Man Pleads Guilty to Federal Charges for Discharging Waste into Potomac River- Defendant Managed Clean-Up of Storm Sewer System at National Mall -Read the Press Release
WASHINGTON - Patrick Brightwell, 48, of Bogart, Ga., pled guilty today to federal charges that he orchestrated the discharge of waste into the Potomac River at East Potomac Park from 2009 through 2011, during the same period he managed the company hired by the National Park Service to clean out the storm water sewer system on the National Mall.
The guilty plea was announced by Acting Assistant Attorney General Sam Hirsch of the Environment and Natural Resources Division of the Department of Justice; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, David G. McLeod, Jr. Special Agent in Charge of the Environmental Protection Agency’s criminal enforcement program for the Middle Atlantic States, and Robert D. MacLean, Acting Chief, United States Park Police.
Brightwell pled guilty in the U.S. District Court for the District of Columbia to one count of violating the Clean Water Act by knowingly discharging a pollutant without a permit and one count of presenting false claims to the United States. The Honorable James E. Boasberg scheduled sentencing for September 3, 2014. Under federal sentencing guidelines, Brightwell faces a likely range of 46 to 57 months in prison and a fine of up to $75,000. Brightwell also has agreed to pay $270,667 in restitution to the National Park Service, representing the losses for the work that was not properly performed. He also must pay a forfeiture money judgment totaling $230,899.
An eight-count indictment of Brightwell was unsealed following his arrest in Georgia on Dec. 5, 2013. The remaining charges will be dismissed as part of the guilty plea.
“Patrick Brightwell harmed the U.S. taxpayer and our nation’s capital by directing his workers to dump waste in the Potomac River,” said U.S. Attorney Machen. “Instead of fulfilling a contract to take waste from the National Mall to a disposal facility, Brightwell polluted our water by telling his employees to cut corners regardless of the damage to our environment. The prison time that Brightwell now faces is an indication of how serious we are about enforcing the Clean Water Act.”
“While he was supposed to be helping to keep the National Mall – a treasure of our national park system – clean and free of trash, Brightwell was actually directing the dumping of debris and wastewater into the Potomac River,” said Acting Assistant Attorney General Hirsch. “He now faces a stiff penalty for his callous and egregious violation of the Clean Water Act.”
“The defendant dumped untreated wastewater and debris into one of our nation’s most treasured rivers, the Potomac,” said Special Agent in Charge McLeod. “Businesses and their contractors who flout the nation's environmental laws will be held accountable. EPA and its partner agencies are committed to vigorously working together to protect the public from this type of illegal and dangerous action.”
“The guilty pleas in this case shall serve as a reminder that environmental crimes will not be tolerated by the National Park Service, law enforcement, the criminal justice system, and the community," said Acting Chief MacLean. “I applaud the collaborative efforts of every agency involved as a testament to the inherent dedication to protecting our nation's natural resources.”
According to a statement of offense signed by the government and defendant, from in or about 2007 through 2011, Brightwell was a manager of a company that had a contract with the National Park Service to clean the storm water sewer system on the National Mall. The contract required that waste removed from the Mall’s storm drains and oil-water separators be disposed of at a proper disposal facility in compliance with District of Columbia regulations and federal law.
Brightwell hired employees and subcontractors to perform work under the contract and oversaw their work from 2008 to 2011. To clean the structures, Brightwell and his company used a vacuum truck, a vehicle designed to gather, store, and transport such waste. When the storage compartment in the vacuum truck became full, workers would have to discharge waste from the truck prior to continuing the cleaning.
In 2009, 2010, and 2011, according to the statement of offense, Brightwell directed his employees and subcontractors to discharge waste from the vacuum truck at a storm drain near a parking lot in East Potomac Park, across Ohio Drive from the Potomac River. Brightwell concealed these discharges from the National Park Service and police. Workers also discharged waste at a manhole near Fort McNair in the District of Columbia.
During this period, Brightwell continued to invoice the National Park Service for cleaning services, but concealed and did not disclose that the waste was not being properly disposed, as required by the contract. From 2009 through 2011, Brightwell’s company received approximately $406,000 in payments from the National Park Service related to the contract.
According to the statement of offense, the employees and subcontractors illegally dumped waste at the parking lot approximately two-thirds of the time, and dumped the waste at a proper disposal facility in Fort Washington, Md., about one-third of the time.
The subcontractor, B&P Environmental LLC, and a B&P employee working on June 6, 2011, both pled guilty in November 2014 to violations of the Clean Water Act before the U.S. District Court. As part of their pleas, both the company and employee agreed to cooperate with the government’s investigation. Both the company and employee are awaiting sentencing.
The case was investigated by Special Agent S. Christopher Michael of the EPA and Detective Jon Crichfield of the U.S. Park Police and supported by Environmental Protection Specialists Jerry Crutchley and Justin Young. It is being prosecuted by Senior Trial Attorney Lana Pettus of the Department of Justice’s Environmental Crimes Section and Assistant U.S. Attorney Jonathan P. Hooks of the U.S. Attorney’s Office for the District of Columbia. Assistant U.S. Attorneys Anthony Saler and Catherine Connelly of the Asset Forfeiture and Money Laundering Section assisted with the case. Further assistance was provided by Paralegal Specialist Ashleigh Nye of DOJ’s Environmental Crimes Section and Paralegal Specialists Krishawn Graham and Donna Galindo of the U.S. Attorney’s Office.
14-131Four Charged in $22 Million Movie Investment SchemeRead the Press Release
LOS ANGELES – Three men were arrested today for their roles in a scheme involving a company called Gigapix that allegedly defrauded hundreds of victims by promising large returns on movie investments and a production company’s imminent public offering, announced United States Attorney André Birotte Jr. and Bill L. Lewis, Assistant Director in Charge of the FBI in Los Angeles.
Two defendants were arrested this morning – Gregory Pusateri, 49, of Woodland Hills, and David Pritchard, 66, of Malibu, who has recently been staying with a friend in Hollywood – and are scheduled to be arraigned this afternoon in United States District Court.
A third defendant in the case – Christopher Blauvelt, 58, of Woodland Hills – was arrested this afternoon in Goleta, California. He is expected to be arraigned tomorrow in federal court in Los Angeles.
The fourth defendant in the case – Cheri Brown, 65, of Studio City – has agreed to surrender to authorities.
The four defendants were charged in a 36-count indictment returned under seal by a federal grand jury on May 15th. The indictment, which was unsealed this morning, accuses the defendants of mail fraud, wire fraud, attempted wire fraud and offering for sale unregistered securities.
The case centers on a company called Gigapix that was founded by Blauvelt in 2002 and took on Pritchard as a partner in 2006. The indictment alleges that between 2006 and 2012, Blauvelt and Pritchard hired telemarketers to solicit potential investors, who were told that Gigpix was an animation company similar to Pixar Animation Studios, and that Gigapix was developing projects expected to generate large profits when the company went public. Brown and Pusateri were among the top salespeople for Gigapix, according to the indictment.
The indictment alleges that telemarketers – known as “fronters” – used lead lists purchased by the defendants to find potential investors and then used scripts touting the supposed merits of Gigapix. When investors expressed an interest, materials about the investment were mailed to them. At that time, the potential investor was turned over to Brown and Pusateri – who were known as “closers” – to collect their money.
In or around 2008, the defendants allegedly shifted their focus to raise funds to produce a movie titled “OZ3D,” while continuing to solicit funds for Gigapix. In soliciting money for Gigapix and “OZ3D,” the indictment alleges that the defendants made numerous misrepresentations to potential investors and withheld material facts. For example, the indictment alleges that investors were told that Gigapix was a financially successful company, that they would receive high returns on their investments in less than 18 months, and that the investments carried little or no risk. Investors were also told there was an urgency to invest in Gigapix and “OZ3D” because the window of opportunity to invest and the number of shares available were limited.
Investors were told that a minimum of 65 percent of the money investesd in “OZ3D” would be used to produce and distribute the movie, and that only a small percentage of investor money would be used to pay commissions and finder’s fees. However, the indictment alleges that less than 5 percent of the investors’ money was used to finance the film. The indictment alleges that of the millions raised for the Gigapix investment, less than 20 percent of those funds were spent on the production of movies or television shows. The majority of the money raised from investors was spent on salaries, commissions and overhead, according to the indictment.
Approximately 750 victims lost virtually all of the money – approximately $22.6 million – that they invested in Gigapix and “OZ3D,” according to the indictment.
If convicted, the defendants would face decades in federal prison. The mail fraud and wire fraud counts, for example, carry statutory maximum penalties of 20 years in prison for each count.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
This investigation was conducted by the Federal Bureau of Investigation.
Release No. 14-071
Former Top Executive of Japanese Automotive Parts <br /> Manufacturer Indicted for Role in Conspiracy to Fix PricesRead the Press Release
A Detroit federal grand jury returned a one-count indictment against a former top executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.
The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Gikou Nakajima, a former executive at Takata Corp., with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize and maintain the prices of, seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and/or certain of their subsidiaries, for installation in vehicles sold in the United States and elsewhere. Nakajima served as director of customer relations division at Takata, the highest-level global sales executive at the company, from June 2005 until at least June 2009.
“Today’s indictment demonstrates that the Antitrust Division continues to hold accountable executives who collude with their competitors,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division will not tolerate executives participating in – and directing their subordinates to participate in – conspiracies to raise the prices on automotive parts that are essential to the safety of U.S. consumers.”
The indictment alleges, among other things, that from at least as early as September 2005 and continuing until June 2009, Nakajima and others attended meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the prices of seatbelts sold to the automobile manufacturers. It alleges that Nakajima participated directly in the conspiratorial conduct, and that he directed, authorized and consented to his subordinates’ participation.
Takata is a Tokyo-based manufacturer of automotive parts, including seatbelts. Takata supplies automotive parts to automobile manufacturers in the United States, in part, through its U.S. subsidiary, TK Holdings Inc., located in Auburn Hills, Michigan. Takata pleaded guilty on Dec. 5, 2013, for its involvement in the conspiracy, and was sentenced to pay criminal fine of $71.3 million. Four other executives from Takata have pleaded guilty and have been sentenced to serve time in a U.S. prison and to pay criminal fines for their roles in the conspiracy.
Including Nakajima, 35 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry, 24 of whom have pleaded guilty or agreed to plead guilty. Of those, 22 have been sentenced to serve prison terms ranging from a year and one day to two years. Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.3 billion in fines.
Nakajima 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 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.
Today’s indictment is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by four of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and 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 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
Former Savannah-Chatham Metropolitan Police Chief Willie Lovett Indicted on Extortion, Gambling and Obstruction ChargesRead the Press Release
3 Others Charged For Their Roles in an Illegal Gambling Operation
SAVANNAH, GA – Former Savannah-Chatham Metropolitan Police (SCMPD) Chief Willie Clinton Lovett, 65, was indicted yesterday by a federal grand jury sitting in Savannah on charges of extortion, participating in an illegal gambling operation and conspiring to obstruct the enforcement of state criminal laws. Two other defendants, Randall Wayne Roach and Kenny Amos Blount, were also charged in the superseding indictment with running an illegal gambling business, and with conspiring with Lovett to obstruct the enforcement of Georgia gambling laws. A fourth defendant, Randall Wayne Roach, Jr., was charged with participating in an illegal gambling business.
According to the allegations contained in the superseding indictment, since 2004, Roach, Blount, Roach, Jr. and others would operate an illegal gambling business in Savannah during holiday celebrations, such as St. Patrick’s Day, and other events. The illegal gambling business would operate in violation of Georgia gambling laws, but free from law enforcement intervention. As a Major and then Chief of SCMPD (formerly the Savannah Police Department), Lovett extorted cash payments from Roach and others. In return, Lovett provided protection to the illegal gambling business against enforcement of Georgia gambling laws. The superseding indictment alleges that in 2013, Lovett received cash payments on five separate occasions in exchange for protection against the enforcement of the criminal gambling laws of the State of Georgia, which payments came from the proceeds of the illegal gambling business.
Roach, Roach, Jr., Blount and Lovett each face a maximum sentence of 5 years in prison, $250,000 fine and 3 years of supervised release on the commercial gambling charge. Lovett, Roach and Blount also face a maximum sentence of 5 years in prison, $250,000 fine and 3 years of supervised release on the conspiracy to obstruct the enforcement of state criminal laws charge. Lovett faces a maximum of 20 years in prison, a $250,000 fine and 3 years of supervised release on each of the 5 extortion charges. An indictment is only an accusation and is not evidence of guilt. The defendant is entitled to a fair trial, during which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by the FBI. First Assistant United States Attorney James D. Durham and Assistant United States Attorney R. Brian Tanner are prosecuting the case on behalf of the United States. Any questions should be directed to Mr. Durham at (912) 201-2547Former Postal Worker Sentenced for Stealing IPhones from MailRead the Press Release
BOSTON – A Roxbury man was sentenced today for stealing iPhones from the mail and making false statements.
Mark Dozier, 58, was sentenced by Senior U.S. District Judge Mark L. Wolf to two years in prison, three years of supervised release and $595 in restitution. In March of this year, he pleaded guilty to theft of mail by an employee of the postal service and making false statements. Dozier has been in custody since his arrest in 2012.
While working as an employee at the U.S. Postal Service, Dozier was caught stealing iPhones from the mail sorting machine. He confessed to stealing 12 iPhones over the course of several weeks and reselling them at a local barbershop. Dozier also lied about his identity on his application to become a Postal worker, using his brother’s name and date of birth rather than his own.
United States Attorney Carmen M. Ortiz and Rafael Medina, Special Agent in Charge of the U.S. Postal Service, Office of the Inspector General, Northeast Area Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz's Public Corruption and Special Prosecutions Unit.
Former IRS Employee Sentenced for Identity Theft and Tax Fraud SchemeRead the Press Release
ATLANTA - Missy A. Sledge has been sentenced to four years and nine months in prison for mail fraud and aggravated identity theft in connection with a fraud scheme she carried out using her position as an IRS employee.
“As an IRS employee for over twelve years, Sledge reviewed suspicious returns to protect the government from being victimized by fraud,” said United States Attorney Sally Quillian Yates. “Instead, she used her IRS access to victimize 60 taxpayers, and cost the government over $500,000.00 in losses. Citizens file their taxes expecting government employees to handle their returns and trust that their information will be safe. Identity theft is a growing problem, one we combat daily.”
“The misuse of public office for private gain, especially by those employees who are entrusted with the fair and honest administration of our Nation’s tax laws, is a particularly heinous crime,” said J. Russell George, the Treasury Inspector General for Tax Administration. “In carrying out our duty to safeguard the integrity of the tax administration system, our office will continue to investigate vigorously allegations of corruption and to ensure that those responsible for misconduct are held accountable.”
According to United States Attorney Yates, the charges and other information presented in court: Sledge used her position as an IRS employee to carry out the scheme, which also involved the assistance of other individuals. In general, the other individuals would file fraudulent tax returns using the stolen identities of real taxpayers. These individuals would then provide the Social Security numbers associated with the fraudulent returns to Sledge. If the returns in question were routed to Sledge for review as part of her job, she would make sure that the fraudulent return payment was released by the IRS.
The scheme also involved some tax returns that were not fraudulent. Sledge would look for large, valid tax refunds pending in the IRS computer systems, and then provide the other individuals with information needed to fraudulently change the address of those taxpayers in the IRS systems. The valid refund would then be mailed to the address controlled by the individuals working with Sledge, rather than to the taxpayers' actual addresses. The individuals working with Sledge paid her a share of the proceeds from these activities.
As a result of Sledge's misconduct, a total of 60 taxpayers either had fraudulent tax returns filed or released using their social security numbers, or had valid refunds they were lawfully due redirected to criminals waiting to steal those refunds. The total loss to the government was $501,048.40, with a larger loss of $2,378,678.35 having been attempted, but rejected by the IRS before refunds were issued. Sledge's conduct continued until she was arrested at her desk at work on November 26, 2013.
Sledge, 47, of Atlanta, Ga., has been sentenced to four years and nine months in prison to be followed by five years of supervised release, and ordered to pay restitution in the amount of $501,048.40. Sledge was convicted on these charges on February 18, 2014, after she pleaded guilty.
This case was investigated by the U.S. Treasury Inspector General for Tax Administration.
Assistant United States Attorney Alana R. Black prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Fokker Services B.V. Agrees to Forfeit $10.5 Million for Illegal Transactions with Iranian, Sudanese, and Burmese Entities-Company Will Pay Additional $10.5 Million in Parallel Civil Settlement-Read the Press Release
WASHINGTON – Fokker Services B.V., a Dutch aerospace services provider, has agreed to forfeit $10.5 million to the United States for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by engaging in illegal transactions involving the export of aircraft parts, technologies, and services to customers in Iran, Sudan, and Burma. The company has also entered into a parallel settlement agreement with the Commerce Department’s Bureau of Industry and Security (BIS) and the Treasury Department’s Office of Foreign Assets Control (OFAC).
The announcement was made by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia (USAO-DC); Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office (FBI-WFO); and Eric L. Hirschhorn, U.S. Department of Commerce Under Secretary for Industry and Security. Today’s announcement concludes a multi-year investigation led by BIS, OFAC, FBI-WFO, ICE’s Homeland Security Investigations, the Defense Criminal Investigative Service, and the U.S. Attorney’s Office for the District of Columbia.
A criminal Information was filed today in federal court in the District of Columbia charging Fokker Services B.V. with one count of knowingly and willfully conspiring to violate the IEEPA, in violation of 18 U.S.C. § 371. Fokker Services waived the requirement of being charged by way of federal Indictment, agreed to the filing of the Information, and has accepted responsibility for its criminal conduct and that of its employees. In addition, as part of the deferred prosecution agreement reached with the U.S. Attorney’s Office for the District of Columbia, Fokker Services agreed to forfeit $10.5 million within five days of the approval of the agreement by the Court.
According to court documents, starting on or about late 2005 and ending on or about late 2010, Fokker Services violated U.S. laws by engaging in illegal transactions involving the export and re-export of aircraft parts, technology, and services to customers located in U.S.-sanctioned countries, specifically, Iran, Sudan, and Burma. Throughout this period, Fokker Services knowingly and willfully engaged in this criminal conduct, fully aware of the application of U.S. export laws, an issue which was repeatedly raised internally with the company’s management. In June 2010, Fokker Services made a disclosure of potential violations to BIS and OFAC in which the company acknowledged and accepted responsibility for its unlawful conduct.
Fokker Services’ criminal conduct included knowingly initiating, either directly or indirectly, 1,153 shipments of aircraft spare, repaired, or exchanged parts with a U.S. nexus to Fokker Services’ customers in Iran, Sudan, or Burma. Among those illegal transactions were 99 transactions involving Fokker Services’ customer, Iran Air, which was the subject of a special order from the U.S. Department of Commerce prohibiting Fokker or any third party from exporting U.S.-origin commodities to Iran Air or providing services to Iran Air. Fokker Services’ gross revenue for the shipments in violation of U.S. export control laws amounted to approximately $21 million.
“For years, Fokker Services treated U.S. export laws as inconveniences to be ‘worked around’ through deceit and trickery,” said U.S. Attorney Machen. “Today’s prosecution sends a clear message that there will be consequences for those who seek to profit from violating and circumventing U.S. trade laws.”
“Fokker Services violated the IEEPA by knowingly ignoring U.S. sanctions and engaging in illegal transactions which undermined the integrity of our national security. Today, the company has taken responsibility for their unlawful actions,” said Assistant Director in Charge Parlave. “Together with our partners at the Departments of Commerce, Treasury and Justice, the FBI will continue our efforts to safeguard U.S. interests and ensure that goods do not end up in the wrong hands.”
“The scope of today’s global settlement with Fokker Services highlights the egregious nature of the violations and points to the commitment of OEE to pursue and prosecute those responsible no matter where they are located," said Under Secretary of Commerce Hirschhorn. “OEE and our partner law enforcement colleagues will continue to use all means available to ensure that U.S. technology does not fall into the wrong hands.”
The Scheme
According to court documents, Fokker Services used a number of schemes to evade U.S. sanctions and export laws while continuing its business with customers located in U.S.-sanctioned countries and specifically designed to continue the company’s profit earnings in the sanctioned countries’ markets. Internally, Fokker Services described these as “work-arounds.”
Some examples of the work-arounds used by Fokker Services and its employees include the following: deliberately withholding aircraft tail numbers to U.S.-based repair shops, providing false tail numbers to U.S. and U.K. companies and repair shops, and stating that the parts submitted for repair by U.S.-repair shops were to be used as “stock” parts. Fokker Services engaged in this conduct as an intentional effort to conceal the company’s affiliation with customers located in U.S. sanctioned countries. On one occasion, Fokker Services provided a U.S. aerospace company with a work order that falsely represented that the aircraft part belonged to an airplane owned by a Portuguese airline when, in reality, the part actually belonged to an Iran Air aircraft. The U.S. aerospace company fixed the part and returned it to Fokker Services, who then shipped the part to Iran.
Other work-arounds were designed by Fokker Services to further the company’s efforts of continuing to engage in transactions in violation of U.S. export laws while also avoiding detection of U.S. authorities, for example, the company constructed and constantly updated a chart it called “the black list” that tracked which U.S. companies were more vigilant about export controls, and directed its business to those U.S. companies that were not on “the black list.” The company also deleted references to Iran in materials sent to its U.S. subsidiaries and U.S. repair shops. It changed an internal database that tracked parts to delete fields related to ultimate end-user information, and directed employees to hide activities and documents related to Iranian transactions when inspectors from the U.S. Federal Aviation Administration audited Fokker Services’ Dutch warehouse.
According to court documents, this conduct occurred in various business units within Fokker Services and certain policies and practices in furtherance of Fokker Services’ criminal conduct were carried out with the knowledge and approval of the company’s senior corporate managers, as well as with the knowledge of the company’s Legal and Export Compliance departments.
The Investigation
The Justice Department’s investigation of Fokker Services arose out of the company’s disclosure of potential violations to BIS and OFAC in June 2010. In its initial disclosure, Fokker Services acknowledged and accepted responsibility for its unlawful conduct. Over the next two-and-a-half years, Fokker Services conducted a vast internal investigation through outside counsel and disclosed additional violations of U.S. export laws.
Since the submission of its 2010 disclosure to U.S. authorities, Fokker Services has taken steps to enhance and optimize its sanctions compliance programs, including stopping all new business with customers located in U.S.-sanctioned countries; launching an employee disciplinary review to investigate and address the conduct of all employees, including senior management, who were involved in the apparent violations; adopting a new Export Compliance Program; and terminating relationships with sanctioned banks and closing its Iranian representative office and branch.
Fokker Services’ forfeiture of $10.5 million to the United States will settle forfeiture claims by the Department of Justice. In light of the company’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the U.S. Attorney’s Office will recommend the dismissal of the Information in 18 months, provided Fokker Services fully cooperates with, and abides by, the terms of the deferred prosecution agreement.
In a related settlement announced today by the Commerce Department and the Treasury Department, Fokker Services has agreed to pay a $10.5 million civil penalty to settle charges by BIS and OFAC. The BIS settlement is subject to final review and approval by the Assistant Secretary of Commerce for Export Enforcement.
This investigation was conducted by the FBI’s Washington Field Office; the Boston and Miami offices of the BIS Office of Export Enforcement; the Washington, D.C. office of the BIS Office of Enforcement Analysis; the Boston field office of ICE’s Homeland Security Investigations; and the New Haven, Connecticut office of the Defense Criminal Investigative Service.
The prosecution is being handled by Assistant U.S. Attorney Maia L. Miller of the National Security Section of the U.S. Attorney’s Office for the District of Columbia. Former Assistant U.S. Attorneys Robert Bowman and Ann Petalas, along with Assistant U.S. Attorney George Varghese of the United States Attorney’s Office for the District of Massachusetts, also worked on the matter.
14-130Florida Man Sentenced in Manhattan Federal Court to 51 Months in Prison in Connection with $8 Million Investment Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that SETH BEOKU BETTS, a principal of Betts and Gambles Global Equities, LLC (“Betts and Gambles”), was sentenced today to 51 months in prison by the Honorable Shira A. Scheindlin in connection with his role in a scheme to defraud a public university (the “University”) in the Midwest of more than $8 million. BETTS solicited money from the University for the purposes of trading in collateralized mortgage obligations (“CMOs”). He then misappropriated the funds, including at least $2 million to purchase luxury automobiles and a personal residence in Florida. BETTS previously pled guilty to committing securities fraud before Magistrate Judge Gabriel W. Gorenstein on February 18, 2014.
Manhattan U.S. Attorney Preet Bharara said: “Seth Betts purported to invest more than $8 million of a public university’s money in mortgage-backed securities. Instead he invested the university’s money in his own extravagant lifestyle, including luxury Italian automobiles and a beachfront Florida residence. With today’s sentence, Betts will trade in his life of luxury for life in a federal prison.”
According to a Complaint filed in Manhattan federal court, the defendant’s guilty plea, and sentencing:
Between July 2008 and December 2008, BETTS presented himself to the University as a principal of Betts and Gambles. In that capacity, he solicited the University’s investment in CMOs, which he claimed he would then sell to third-party buyers in short order at predicted profits. CMOs are fixed income mortgage-backed securities, in which Betts claimed he had expertise. As a result of his solicitation, the University invested approximately $8.165 million dollars of the University’s money with BETTS. BETTS never delivered any CMOs to the University or returned any funds prior to his arrest. Instead, he converted millions of dollars to his own use to purchase beachfront property, pay personal expenses, and buy multiple high-end automobiles, including a Ferrari and a Maserati.
In addition the prison term BETTS, 38, of Boynton Beach, Florida, was sentenced to three years of supervised release. He was also ordered to pay $8,165,000 in forfeiture and restitution, and a $100 special assessment fee.
Mr. Bharara praised the work of the Criminal Investigators of the United States Attorney's Office and the Federal Bureau of Investigation, which jointly investigated this case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Michael A. Levy and Telemachus P. Kasulis are in charge of the prosecution.
Florida Man Admits Stalking Connecticut Victim, Planting Bottle Bombs Containing Hydrochloric AcidRead the Press Release
Follow @USAO_CT
Deirdre M, Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that FRANK MENDOZA, 53, formerly of Jacksonville, Fla., pleaded guilty today before U.S. District Judge Robert N. Chatigny in Hartford to one count of interstate stalking.
“First, this defendant abused, threatened and stalked his victim, a woman who had attempted to end her relationship with the defendant,” stated U.S. Attorney Daly. “The defendant then planted acid-filled bottle bombs in the victim’s car and came dangerously close to permanently disfiguring her. Under the federal Violence Against Women Act, the Department of Justice is empowered with tools to prosecute domestic violence and stalking crimes. We commend the FBI Joint Terrorism Task Forces in Connecticut and Florida, and all of our partner investigative agencies who investigated this heinous crime in an effort to secure justice and provide safety for the victim.”
“Civilized societies must have zero tolerance for criminals like Mendoza who terrorize not only their victims but the communities in which they reside,” stated FBI Special Agent in Charge Ferrick. “The thorough multi-agency investigation into Mendoza’s crimes is indicative of exceptional cooperation among investigators focused on protecting the victim from future harm and seeing to it that justice prevails.”
According to court documents and statements made in court, MENDOZA began a romantic relationship with a woman in Jacksonville, Fla, in 2008. MENDOZA then became emotionally and psychologically abusive toward the victim. The victim also learned that MENDOZA had a serious prior criminal history and claimed to be affiliated with a gang. She also observed MENDOZA carrying a firearm. MENDOZA’s abusive and threatening behavior caused the victim to attempt to end the relationship.
In approximately September 2010, as part of a ruse, the victim told MENDOZA that she was moving to Rhode Island for a work-related training program. The victim instead moved to Stamford, Conn. In October 2010, MENDOZA learned that the victim had moved to Connecticut and began to place numerous harassing and threatening phone calls to her, her friends and her work colleagues.
In early November 2010, MENDOZA traveled from Florida to Connecticut, visited the victim’s residence and place of work, and then returned to Florida. On December 8, 2010, MENDOZA flew from Florida to New York City, rented a car, drove to the victim’s Connecticut residence, and placed two, two-liter bottles in the victim’s car. The bottles contained hydrochloric acid and an aluminum foil wick.
At approximately 11:00 p.m. on December 8, 2010, the victim approached her car and observed that the car’s interior had been dampened by a liquid. She also observed a bottle on the driver’s side floor. When she picked the bottle up, it began to smoke and fizz. She then gently placed the bottle down and ran from the car. The bottle then exploded.
The investigation revealed that the first bottle had exploded before the victim had reached the car.
MENDOZA has been detained since his arrest in Jacksonville on August 17, 2012.
The charge of interstate stalking carries a maximum term of imprisonment of 10 years and a fine of up to $250,000. If the binding plea agreement filed today is accepted by the court, MENDOZA will be sentenced to at least 84 months of imprisonment.
Judge Chatigny scheduled sentencing for September 3, 2014.
This matter has been investigated by the FBI Joint Terrorism Task Forces in New Haven and Jacksonville, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Connecticut State Police, the New Haven Police Department, the Stamford Police Department, the Stamford Bomb Squad, the Stamford Fire Department and the Connecticut Department of Energy and Environmental Protection.
The case is being prosecuted by Assistant U.S. Attorneys Krishna Patel and Vanessa Richards.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Father and Son Sentenced for Shooting Federal AgentRead the Press Release
McALLEN, Texas – Two Hargill men have received significant sentences for the July 2012 aggravated assault on a Homeland Security Investigations agent, announced United States Attorney Kenneth Magidson. A federal jury in McAllen convicted Pedro Alvarado, 43, and his son Arnoldo Alvarado, 20, on March 21, 2014, following a four-day trial.
Today, U.S. District Judge Randy Crane sentenced Pedro Alvarado to 120 months for aggravated assault of a federal agent and 120 months for discharging a firearm during and in relation to a crime of violence. The court ordered that the sentences run consecutive for a total sentence of 240 months of federal imprisonment followed by a three-year-term of supervised release. Arnoldo Alvarado will serve 72 months for the aggravated assault and a consecutive 120 months for discharging a firearm for a total sentence of 192 months in federal prison followed by three years of supervised release.
At trial, the jury heard that in the early morning hours of July 3, 2012, Homeland Security Investigations (HSI) agents received information regarding a tractor-trailer located near Hargill that was going to be used to transport a large load of marijuana. Based on this information, agents traveled to Hargill and set up surveillance. One of those agents parked near the residence of Pedro Alvarado. Unbeknownst to the agents, another group of individuals were also conducting surveillance of the same tractor-trailer for the purpose of stealing the load of marijuana that they believed the tractor-trailer contained.
At approximately 3:30 a.m., one of those individuals noticed several vehicles in the area, specifically, a vehicle parked near Pedro Alvarado’s residence and notified him. Pedro Alvarado then told his sons, Arnoldo, and another 16-year-old minor, to get their guns and get into their pickup truck.
Pedro Alvarado then drove the truck with his sons as passengers, without his headlights, near the location the agent was parked. As the truck approached, the agent began to drive away, at which time the 16-year-old minor began shooting with a .22 caliber rifle.
The agent attempted to get away, but Pedro Alvarado continued to pursue him at a high rate of speed, while Arnoldo Alvarado began to shoot at him with a 9 mm firearm. Approximately one mile into the chase, a bullet struck the agent in the back. Although injured, he continued to flee, ultimately landing him in a brush where he got out of the vehicle and managed to run to avoid being detected by this assailants.
Sometime thereafter, other agents located the agent and transported him to the hospital where he underwent surgery to repair his lung which was pierced by the bullet.
The subsequent investigation lead agents to the residence of Pedro Alvarado where agents conducted a search and found both weapons used during the assault hidden in the attic.
Both men have been in custody since their arrests July 3, 2012, where they will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
FBI and HSI investigated. Assistant U.S. Attorneys Anibal J. Alaniz and James Sturgis prosecuted the case.
Elkton Man Sentenced to over 14 Years in Prison for Solicitation to Commit KidnappingRead the Press Release
Baltimore – U.S. District Judge William D. Quarles sentence Andres Dorantes Flores, age 43, of Elkton, Maryland today to 175 months in prison for soliciting others to kidnap a 10 year old boy.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Cecil County Sheriff Barry A. Janney, Sr.; and Cecil County State’s Attorney Ellis Rollins.According to Flores’ plea agreement, beginning in at least July 2012, Flores solicited others to kidnap a 10 year boy. The families of Flores and the boy had been friends. Flores approached an acquaintance and suggested kidnaping the boy and demanding a $300,000 ransom from the boy’s father. Flores continued to solicit the acquaintance to help with the kidnapping in subsequent meetings. Flores provided pictures of the boy and his family to the acquaintance.
On August 15, 2012 Flores arranged a meeting with the acquaintance and two men that Flores believed were from Philadelphia who had come to kidnap the victim as part of Flores’ plot. Flores told the men that he had thought the plan through and provided them with instructions to carry out the kidnapping. Flores arranged for the men take the boy from his home in Maryland to Philadelphia where Flores believed the men resided. Flores told the men that after they received the $300,000 ransom, they would each get $75,000. Flores was arrested following the meeting.
United States Attorney Rod J. Rosenstein praised the FBI, Cecil County Sheriff’s Office and Cecil County State’s Attorney’s Office for their work in the investigation and thanked the New Castle County, Delaware Police Department for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who prosecuted the case.
Eldorado, Illinois Couple Pleads Guilty to Bankruptcy FraudRead the Press Release
Follow @SDILNewsEarlier today, a couple from Eldorado, Illinois, pleaded guilty to bankruptcy fraud, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced. Lucy J. McGill, 62, pleaded guilty to two counts of making false statements under penalty of perjury in a bankruptcy case, three counts of making false statements under oath in a bankruptcy case, and one count of falsifying records in a bankruptcy case. Lucy McGill’s husband, Gary G. McGill, 69, pleaded guilty to two counts of making false statements under penalty of perjury in a bankruptcy case and two counts of making false statements under oath in a bankruptcy case.
The McGills filed a chapter 7 bankruptcy case on February 25, 2009. The case was filed in the United States Bankruptcy Court in Benton, Illinois.
Federal law requires that debtors who file for bankruptcy must disclose all of their assets. In addition, debtors are required to disclose certain financial transactions that they conducted prior to filing bankruptcy. The purpose of these disclosures is to ensure that all available funds can collected to pay the creditors as much as possible on the amounts they are owed.
In pleading guilty today, Lucy and Gary McGill both admitted that they lied on a Statement of Financial Affairs that they filed with the Bankruptcy Court. The McGills falsely stated that $22,000 in two accounts in Lucy McGill’s name at SIU Credit Union belonged to Lucy McGill’s sister. In fact, that $22,000 had recently been paid to Gary McGill in settlement of two lawsuits. The McGills further admitted that they again lied on their Statement of Financial Affairs when they concealed the fact that they had recently given their son cash gifts totaling $6,800. The McGills continued to lie about these topics when they gave sworn testimony at a bankruptcy proceeding on April 3, 2009. Finally, Lucy McGill also admitted that she created fake receipts, purportedly showing that the cash in the SIU Credit Union accounts belonged to her sister, and then provided those receipts to the attorney administering her bankruptcy case.
In commenting on today’s guilty pleas, United States Attorney Wigginton stated: “Bankruptcy fraud cheats creditors out of what they are owed. The United States Attorney’s Office for Southern Illinois is committed to prosecuting individuals who commit this type of fraud and protecting the integrity of the bankruptcy system.”
“Abuse of the bankruptcy system by concealing assets for personal gain threatens the integrity of the bankruptcy system and undermines public confidence in that system,” stated Nancy J. Gargula, United States Trustee for Southern Illinois, Central Illinois and Indiana (Region 10). “I am grateful to United States Attorney Wigginton and our law enforcement partners for their strong commitment to combating fraud and abuse in bankruptcy cases.” The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in South Bend, Ind., and Peoria, Ill. The charges resulted from a referral by the U.S. Trustee for Indiana and Central and Southern Illinois (Region 10) to the Southern District of Illinois Bankruptcy Fraud Working Group and U.S. Attorney.
The McGills will be sentenced on October 2, 2014, at the United States District Court in Benton, Illinois. The sentencing hearing will be conducted by United States District Judge J. Phil Gilbert. Each count of bankruptcy fraud is punishable by not more than 5 years’ imprisonment, and/or a $250,000 fine, and not more than three years of supervised release. The actual sentence will be determined by the court and will be guided by the United States Sentencing Guidelines.
The investigation is being conducted by the Federal Bureau of Investigation (“FBI”). The case is being prosecuted by Assistant United States Attorneys Scott A. Verseman.
EOIR's Office of the Chief Administrative Hearing Officer Announces Electronic Filing Pilot ProgramRead the Press Release
The Office of the Chief Administrative Hearing Officer (OCAHO), Executive Office for Immigration Review (EOIR), has launched a voluntary pilot program to test an electronic filing system in cases filed with OCAHO under 8 U.S.C. § 1324a and § 1324b. The pilot program will be in effect from May 30, 2014, until November 26, 2014. Parties who enroll in the pilot program with respect to a particular case within these dates will be permitted to continue utilizing electronic filing throughout the pendency of that case.
See more information about the Office of the Chief Administrative Hearing Officer Electronic Filing Pilot Program by visiting http://go.usa.gov/8wEP.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
EMT Sentenced for Role in Ambulance Fraud SchemeRead the Press Release
PHILADELPHIA – Khusen Akhmedov, 23, of Philadelphia, PA and Lancaster, PA, was sentenced today to 27 months in prison for his role in a health care fraud scheme involving Penn Choice Ambulance Inc., operating from Philadelphia, PA, Huntingdon Valley, PA and Camp Hill, PA. Akhmedov pleaded guilty on December 5, 2013, to conspiracy to commit health care fraud, false statements relating to health care matters, and paying kickbacks to patients, a total of 16 counts. Akhmedov, an EMT for Penn Choice, was indicted with Penn Choice owner Anna Mudrova and operators Yury Gerasyuk, Mikhail Vasserman, Irina Vasserman, Aleksandr Vasserman, and Valeriy Davydchik, all of whom have pleaded guilty.
The scheme involved more than $3.6 million in fraudulent claims submitted to Medicare. The defendants conspired to defraud Medicare by recruiting patients who were able to walk and could travel safely by means other than ambulance and who therefore were not eligible for ambulance transportation under Medicare requirements. The defendants, and others acting on their behalf, falsified reports to make it appear that the patients needed to be transported by ambulance when the defendants knew that the patients could be transported safely by other means and that many of them walked to the ambulance for transport. The defendants, themselves, or through others, paid illegal kickbacks to the patients as part of scheme. The defendants billed Medicare for these ambulance services as if those services were medically necessary and, as a result of the fraudulent billing, the Medicare program sustained losses of more than $1.5 million for this medically unnecessary method of transportation.
In addition to the prison term, U.S. District Court Judge Juan R. Sànchez ordered three years of supervised release, restitution in the amount of $582,665, joint and several with the co-defendants, a special assessment of $1,600 and forfeiture of any assets traceable to the offense.
In prior proceedings, defendants Valeriy Davydchik and Yury Gerasyuk, both ambulance drivers, were each sentenced to 24 months in prison; the corporation was ordered to pay restitution of $1,548,583.93 and ordered to cease all operations. The remaining defendants are awaiting sentencing.
The case was investigated by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, Office of the Inspector General. It is being prosecuted by Assistant United States Attorney M. Beth Leahy.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Drug Traffickers Plead Guilty on Eve of TrialRead the Press Release
BROWNSVILLE, Texas - Jose Angel Marichalar, 33, Phillip Cross, 56, and Yisnel Garcia Gonzalez, 30, have all entered guilty pleas in a trial set to begin today, announced United States Attorney Kenneth Magidson. Marichalar, from Mission, pleaded guilty shortly before the jury was empanelled this morning, while Cross, from Indianapolis, Ind., and Gonzalez, from Miami, Fla., entered their guilty pleas late yesterday.
Marichalar was convicted of conspiracy to possess with intent to distribute more than 1,000 kilograms of marijuana and conspiracy to launder money. He is also forfeiting his interest in several properties and numerous personal items, including tractors, trailers and jewelry, valued at more than $1 million. Additionally, as part of his plea agreement, Marichalar has also agreed to a $10 million money judgment against him.
Cross also pleaded guilty to the marijuana conspiracy, while Garcia pleaded guilty to possession with intent to distribute approximately 1,141 kilograms of marijuana that occurred during a traffic stop in Zapata County on July 12, 2012.
Evidence presented in support of the pleas, demonstrated that Marichalar, Cross, Garcia and others were part of a multi-state drug trafficking and money laundering organization that had existed since 2010. The drug trafficking organization, based out of the Rio Grande Valley, would hire out of state truck drivers to haul loads of produce with ton quantities of marijuana hidden in false compartments. Drug proceeds would then be transported back to the Rio Grande Valley. The conspiracy extended to Indiana, Kentucky, Illinois, North Carolina and Tennessee.
All three men will remain in custody pending their sentencings. Cross and Garcia will be sentenced before U.S. District Judge Hilda G. Tagle on Sept. 10, 2014, while Marichalar will be sentenced Sept. 14, 2014. At their hearings, they will all face a mandatory minimum of 10 years and up to life in federal prison as well as a maximum $10 million fine. Marichalar also faces a maximum of 20 years in prison and another $500,000 fine for the money laundering conspiracy.
The case was investigated by the Drug Enforcement Administration Internal Revenue Service-Criminal Investigation, Homeland Security Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives, FBI, Sheriff’s Offices in Cameron and Zapata Counties, Hildalgo County High Intensity Drug Trafficking Area task force, Border Patrol and the Brownsville Police Department. Assistant United States Attorneys Angel Castro and Jody Young are prosecuting.Donahoo Pleds Guilty to Wire Fraud, Money Laundering, and Failure to File Tax Return in Investment Scheme; Loss to Victims is more than $2.5 MillionRead the Press Release
SALT LAKE CITY - James Ronald Donahoo, II, age 36, of St. George, Utah, entered guilty pleas to wire fraud, money laundering, and failure to file a tax return in U.S. District Court in Salt Lake City Thursday afternoon in connection with a scheme to defraud individuals and companies he recruited to invest in Paradigm Investing, Inc., a Utah corporation he exercised control over.
Sentencing is set for Oct. 7, 2014, at 2 p.m. before U.S. District Judge Dee Benson. The plea agreement includes a stipulated sentence of 48 months and supervised release of three years after Donahoo completes his prison sentence. Donahoo also agreed to pay restitution in the approximate amount of $2,793,501.17 to victims of the fraud. Donahoo is in custody.
As a part of the plea agreement, Donahoo admitted that he misrepresented to investors that if they would invest in Paradigm, they would make a 1 percent to 3 percent return on their investment, which would be paid out monthly. Paradigm never earned any revenues on any of its purported investments from which interest payments could have been made.
Donahoo admitted he told investors that Paradigm was in the business of making bridge loans or “hard money loans” to small businesses. According to the plea agreement, Paradigm did invest approximately $1.5 million in various businesses. However, the investments were not used to fund bridge loans or hard money loans as Paradigm’s investors were told. Instead, businesses run by Donahoo’s friends, associates, or family members received the money, according to the plea agreement.
He created false bank statements for Paradigm that he showed to investors to convince them that the investment was safe, low risk, and a good investment. He also told investors that the risk was mitigated by the fact that for every dollar invested, he had a dollar in the bank.
Donahoo made payments to investors totaling more than $267,000 out of investor funds in furtherance of what was a Ponzi scheme.
Donahoo admitted that on or about Dec. 5, 2008, he caused two investors to send a $100,000 wire transfer from California to Utah as an investment in Paradigm. On about December 11, 2008, he purchased fur coats in Park City in excess of $10,000. He admitted in the plea agreement that he knew this transaction involved money obtained from his criminal scheme.
He also admitted that he did not file a tax return for 2008, even though he transferred funds from the Paradigm bank account to his personal bank account totaling $335,000. He used those funds for personal purposes.
The case was investigated by special agents of IRS-Criminal Investigation and prosecuted by the U.S. Attorney’s Office in Salt Lake City.
District Court Approves Selection of Arnaldo Claudio as Technical Compliance Advisor to Oversee Critical Reforms of Puerto Rico Police DepartmentRead the Press Release
Today, U.S. District Judge Gustavo A. Gelpí approved the selection of Arnaldo Claudio to serve as Technical Compliance Advisor (TCA), overseeing the implementation of sweeping civil rights reforms under the Agreement for Sustainable Reform of the Puerto Rico Police Department. The agreement resolved a civil action filed by the Department of Justice in 2012 to protect individuals from the use of excessive force, unconstitutional searches and seizures and discriminatory policing by officers of the Puerto Rico Police Department (PRPD). According to the order of appointment, Claudio will begin his term on June 6, 2014.
Under the agreement, the department and the Commonwealth of Puerto Rico agreed to jointly select a TCA to assist the court and the public in determining whether critical reforms are implemented fully and in a timely manner. The reforms cover 11 core areas, including use of force, searches and seizures, bias-free policing, recruitment, promotions, training, supervision, discipline, community engagement and information technology. The TCA will serve a vital role in promoting compliance and the sustainability of reforms. The TCA will also provide substantive expertise and technical assistance to guide PRPD in its implementation efforts and assures the public that PRPD’s progress is evaluated in a reliable, independent and transparent manner.
The department and the commonwealth selected Claudio after an exhaustive review of potential candidates based on numerous objective factors. These factors included relevant experience with institutional reform, subject-matter expertise, Spanish language proficiency, impartiality, an ability to interact effectively with diverse communities and a strong commitment to civil rights and effective policing. Claudio’s proven record of outstanding performance and achievement demonstrate that he possesses the necessary skills and abilities to effectively carry out the TCA’s duties.
Claudio has the Spanish language proficiency that is contemplated by the agreement and is necessary to communicate effectively in Puerto Rico. He is firmly committed to meaningful community engagement and maintaining a consistent presence in Puerto Rico throughout the reform process. His exceptional work with police departments and criminal justice systems in the United States and around the world will assist in promoting compliance with critical structural and systemic reforms that are necessary to restoring public confidence and achieving effective and constitutional policing in Puerto Rico.
Claudio was born and raised in Puerto Rico. He attended the University of Puerto Rico and was commissioned a Second Lieutenant in the U.S. Army Military Police Corps. He earned a Master of Science Degree in Education from Jacksonville State University and is a graduate of the Inter-American Defense College. During his 30 years of military service, Claudio has held numerous highly sensitive positions culminating as Chief of Staff and Chief of Police of Joint Force Headquarters for the National Capital Region in Washington, D.C. In his current position as Interagency Program Director of the Joint Force Headquarters National Capital Region, he coordinates directly with local, state and federal law enforcement agencies and other national security partners. He also leads critical relationships with governmental and non-governmental agencies to ensure regional safety and security. Many of Claudio’s assignments have allowed him to work closely with police agencies and communities domestically, such as Washington, D.C. and Hawaii, and abroad, including Peru, Bolivia, Colombia and El Salvador. He served as Provost Marshal and Chief of Police of the Multinational Coalition Forces in Iraq, working tirelessly to promote democratic policing and human rights. He also served as Chief of Staff and Operations with the Peace Corps where he oversaw volunteer recruitment, selection and placement. Claudio’s remarkable skill, performance and dedication have been recognized with numerous military and civilian awards and decorations.
“Mr. Claudio’s extraordinary career and service to our nation has been marked by an unwavering commitment to basic principles of human dignity and safety for all people, both here and abroad,” said Associate Attorney General Tony West. “He now brings his exceptional skill and talent home to Puerto Rico to embark in the critical task of transforming the second largest law enforcement agency in the country into a modern, professional agency that serves and protects all residents with respect and fairness.”
“Reforming the Puerto Rico Police Department will take a collaborative and sustained effort over the course of many years, and Mr. Claudio has enthusiastically embraced that challenge to help restore public confidence and public safety to the people of Puerto Rico,” said Acting Assistant Attorney General Jocelyn Samuels for the department’s Civil Rights Division. “We look forward to working closely with Mr. Claudio, the court, the commonwealth government, police officers and all of the communities that make up Puerto Rico to ensure the full implementation of fundamental civil rights reforms.”
In the coming days and weeks, the department will work with the commonwealth to assist the TCA in building a cohesive team of subject-matter experts to oversee all areas of the agreement and to engage broadly with PRPD and the community. With the start of his term, Claudio will work to evaluate PRPD’s efforts over the last year and will oversee the development of action plans that will guide implementation during the initial capacity-building phase of the agreement. The TCA’s assessments will include a thorough review of PRPD’s policies, training curricula, standard operating procedures, plans, protocols and other operational documents related to the agreement. The TCA will also assess whether the implementation of the agreement results in constitutional policing, increased community trust and the professional treatment of individuals by PRPD officers. To this end, the TCA will engage with a broad cross-section of community stakeholders, including representatives of civic and community organizations, minority communities, lesbian, gay, bisexual, transgender communities, student and labor groups, civil rights organizations, women’s advocacy groups and police officers to ensure they have a voice in the reform process.
District Judge Gelpí entered the agreement as an order in July 2013, following extensive negotiations and a thorough investigation by the Civil Rights Division. The investigation focused on allegations of use of excessive force, unconstitutional searches and seizures and discriminatory policing by officers of the PRPD. The department issued findings of violations and serious deficiencies in September 2011 and filed a civil action to remedy the violations in December 2012. The case was brought under the Violent Crime Control and Law Enforcement Act of 1994, which authorizes the Attorney General to file suit against government authorities to eliminate a pattern or practice of misconduct by state and local law enforcement officers.
A copy of the complaint, the final agreement and the September 2011 findings letter can be found at the department website Additional information about the Civil Rights Division and its enforcement of civil rights laws involving law enforcement agencies can be found on the division website .
Detroit Tax Return Preparer Pleads Guilty to Role in Conspiracy to File False Tax ReturnsRead the Press Release
A resident of Detroit, Michigan, pleaded guilty today to her involvement in a conspiracy to file fraudulent tax returns with the Internal Revenue Service, United States Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Tiffiny Coleman, 35, entered the guilty plea before U.S. District Judge John Corbett O’Meara.
According to court records, Coleman was employed as a tax return preparer in Detroit. In 2010, she conspired with others to prepare and electronically file federal income tax returns for the 2009 tax year that were false and fraudulent. The conspiracy involved approximately 100 tax returns that stated that the taxpayers were employed by various businesses and had part of their wages withheld for federal income taxes when, in fact, Coleman and the others knew that the taxpayers were not employed and that the Forms W-2 were completely false. In total, the tax returns caused approximately $482,977 in tax refunds to be paid out.
Coleman’s sentencing was set for October 7, 2014 at 10:15 am. She faces a maximum term of imprisonment of ten years and a fine of $250,000. In addition, she will be required to pay restitution to the IRS in the amount of $482,977.
The case was investigated by special agents of the IRS Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Stephen Hiyama.
Detroit Tax Preparer, Previously Convicted on Tax Charges, Found Guilty of Failing to Appear at 2013 Bond HearingRead the Press Release
The Justice Department, the Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) announced that Matthew Bender, of Detroit, was convicted yesterday following a jury trial in the U.S. District Court for the Eastern District of Michigan of failing to appear at a bond hearing on July 2, 2013. The bond hearing had been set to adjudicate Bender's noncompliance with the conditions of his pretrial release on federal tax charges.
The evidence at trial showed that Bender attended a family reunion in Ohio and flew to Texas in the summer of 2013 after a warrant was issued for his arrest. Bender was apprehended by the U.S. Marshals Service on Aug. 13, 2013.
Bender was previously convicted by another Detroit jury in March 2014 of obstructing the IRS and nine counts of aiding and assisting in the preparation of false federal income tax returns. According to court documents and evidence produced at the March 2014 trial, Bender prepared over 3,000 tax returns between 2006 and 2011 and earned over $500,000 in tax preparation fees. However, Bender failed to report his own income to the IRS, either by filing false tax returns for himself or by failing to file his own tax returns at all. The evidence showed that Bender caused his customer’s tax refunds to be inflated by placing false deductions on their returns.
Following the most recent conviction, Bender remains detained pending sentencing for his convictions.
The case was investigated by special agents of IRS–Criminal Investigation and TIGTA. Trial Attorneys Kenneth Vert and Jeffrey McLellan for the Justice Department’s Tax Division prosecuted the case.
Criminal Complaint Filed Today in Federal Court Charges St. Paul Man with Sex Trafficking of MinorsRead the Press Release
MINNEAPOLIS—Today in federal court, a 25-year-old St. Paul man was charged by Complaint with sex trafficking of a minor and conspiracy to commit sex trafficking of a minor. Dontre D’Sean McHenry made his initial appearance this afternoon before United States Magistrate Judge Jeanne J. Graham. McHenry was temporarily detained and a final detention hearing is scheduled for tomorrow before Judge Graham.
According to allegations in the Criminal Complaint, between February 25, 2014 and June 4, 2014, McHenry engaged in criminal sex trafficking by exploiting three minor females and causing them to engage in commercial sex acts by force, threats of force, fraud, or coercion for the defendant’s profit.
A law enforcement affidavit filed in the case alleges that McHenry would communicate with “johns” or potential “johns” via text messages and online chat rooms to arrange commercial sex with three minor females.
On March 12, 2014, officers responded to a Backpage.com advertisement thought to be that of a juvenile sex trafficking victim. The information from the advertisement led investigators to the Motel 6 in Roseville where McHenry was found inside a hotel room with a 17-year-old female. Further investigation revealed that McHenry had also recruited a 15-year old female and a 16-year-old female for the purpose of engaging in commercial sex acts.
United States Attorney Andrew M. Luger stated that, “the allegations in the Complaint set forth a sophisticated, ongoing criminal sex trafficking business run by McHenry. The exploitation of minors for commercial sex will not be tolerated by this Office or our law enforcement partners.”
“Protecting our communities from those who engage in human trafficking is a top priority for Homeland Security Investigations,” said Special Agent in Charge J. Michael Netherland of the HSI St. Paul Division Office. “HSI is committed to working with our federal, state, and local law enforcement partners to investigate human trafficking, as well as working with community and faith-based organizations to identify, rescue, and assist victims of trafficking."
If convicted, McHenry faces a potential minimum sentence of 10 years in federal prison and a maximum of life imprisonment. All sentences are ultimately determined by a federal district court judge.
This case is the result of an investigation by Homeland Security Investigations, the St. Paul Police Department, the Minneapolis Police Department, the Rochester Police Department, and the Roseville Police Department. This case is being prosecuted by Assistant United States Attorney Laura M. Provinzino.
In 2012, Yuri Fedotov, the head of the United Nations’ Office on Drugs and Crime reported to those attending a U.N. General Assembly meeting that an estimated 2.4 million people worldwide are victims of human trafficking at any one time, with 80 percent of them being exploited as sex slaves. He also said approximately $32 billion is earned collectively every year by the criminals who operate human trafficking networks. The U.S. Department of Justice reports that an estimated 14,500 to 17,500 people are trafficked within the U.S. alone each year.
For more information, visit http://www.ice.gov/human-trafficking/The charges contained in a criminal complaint are mere allegations and defendants are presumed innocent unless and until proven guilty.
Crawford Sentenced in the District of Montana for One of First Strangulation Convictions in the CountryRead the Press Release
The United States Attorney's Office announced that ZACKARIA JULY CRAWFORD, 22, of Browning, Montana, was sentenced to a term of 30 months imprisonment, three years supervised release, and a special assessment of $100 during a federal court hearing in Great Falls, Montana, on March 18, 2014, before U.S. District Judge Brian Morris.
This is the first case in the District of Montana that a defendant has been sentenced for Strangulation since the inception of the statute. It is also one of the first such cases in the entire country.
U.S. Attorney Mike Cotter said the conviction and sentence of CRAWFORD represents the office's dedication to working with reservations to ensure that Native American women and families are protected from domestic violence. "The strangulation statute and VAWA offers the U.S. Attorney's Office another tool to fight crimes of domestic violence that are inflicted against women and children on Indian reservations. Victims of one episode of strangulation are six times more likely to be a victim of attempted homicide by the same partner. These same victims are seven times more likely to actually die at the hands of their loved ones. It is this type of violence that tears apart families, damages children, and can have lethal consequences. The ability to now charge crimes of strangulation will help in stopping violence before it escalates any further."
On March 7, 2013, President Obama signed into law the reauthorization of the Violence Against Women Act (VAWA). This law contains provisions that significantly improve the safety of Native women and that importantly allow federal and tribal law enforcement agencies to hold more perpetrators of domestic violence accountable for their crimes. Many of these critical provisions were drawn from the U.S. Department of Justice's July 2011 proposal for new Federal legislation to combat violence against native women.
The tribal provisions in VAWA address three significant legal gaps by: (1) recognizing certain tribes' power to exercise concurrent criminal jurisdiction over domestic violence cases, regardless of whether the defendant is Indian or non-Indian; (2) clarifying that tribal courts have full civil jurisdiction to enforce protection orders involving any person, Indian or non-Indian; and (3) creating new federal statutes to address crimes of violence, such as strangulation, committed against a spouse or intimate partner and providing more robust federal sentences for certain acts of domestic violence in Indian country.
These steps have been taken, at least in part, because a recent Center for Disease Control and Prevention survey found that 46% of Native American women have experienced rape, physical violence, or stalking by an intimate partner in their lifetime.
CRAWFORD was indicted on December of 2013 by a federal grand jury. He filed a motion to change his plea in January of 2014. That plea was accepted by Judge Morris on March 14, 2014.
In an Offer of Proof filed by Assistant U.S. Attorney Ryan G. Weldon, the government stated it would have proved that CRAWFORD strangled his victim until she lost consciousness and urinated in her pants. The beating continued for approximately twenty minutes. The victim ultimately escaped the house, but CRAWFORD jumped onto the vehicle hood as the victim drove away. CRAWFORD eventually fell off the hood, and the victim went to the hospital where she was treated for strangulation. At sentencing, Weldon stated, "Deterrence of these crimes in society, as well as the Blackfeet Indian Reservation, is critical. To deter these crimes will help to save future lives, properly punish defendants who engage in such conduct, will protect women from future abuse by the defendant, and will help end the cycle of violence that currently exists in and around Montana."
Unfortunately, the impacts of strangulation do not only exist in Montana. They are widespread across the United States. Victims of strangulation have testified before the United States Sentencing Commission, explaining the circumstances behind strangulation and the impacts that such acts leave. One victim explained her experience as follows:
I write to provide the Commission my experience as a crime victim who experienced strangling and suffocation.
After two years of marriage filled with verbal abuse, shoving, and other physical abuse, one night my husband threw me down on the bed and began strangling me. Unlike any other way that he had attacked me in the past, this horror instantly sent me to a level of terror and trauma I had never known in my whole life. I knew I was seconds away from dying. This was a fear unlike anything I had ever known. Everything was suddenly different in my whole consciousness. I was going to die. The unthinking rage in his eyes made that clear.
He had even pulled a gun on me once, slapped me black and blue, but nothing felt as scary as this. There was that first part of the attack that so utterly terrified me as I anticipated my imminent death, panicking with what I could do. The fighting for freedom, the pain of his hands around my neck. Then as I began to suffocate, I could feel myself dying. Gasping for breath, desperate for air. Feeling myself slipping away, so fully conscious and hyper aware. And watching him-how personal the rage was. How he was using his bare hands to kill me-it was so intimate, he was so close to me. His skin on my skin. Like drowning, trapped in the water beneath the ice, the panic, the desperation to breathe, yet not being able to.
He felt me going limp and thankfully let go. I coughed myself back to life. What I learned in the days and the weeks after was the on-going and constant re-traumatization of the aftermath of the strangulation. For weeks, every time I moved my head, I was grabbed with pain. I couldn't sleep, I couldn't eat or drink well. Every move was a painful reminder. I had to take time off work without pay to cover up the worst of it, then I had to lie to deal with answering questions about the bruises, etc., at my teaching job. The aftermath was a constant reminder of what had happened. [Twenty] years later it is as vivid to me as any moment of my life.
The neck is so easy to grab, so vulnerable, so vital to all life, connecting breathing and heart to mind. The viciousness and harm of this terroristic act is far different than mere broken bone or a physical injury. I have suffered the range of these injuries and
Because there is no parole in the federal system, the truth in sentencing guidelines mandate that CRAWFORD will likely serve all of the time imposed by the court. In the federal system, CRAWFORD does have the opportunity to shorten the term of custody by earning credit for good behavior. However, this reduction will not exceed 15% of the overall sentence.
The CRAWFORD investigation was conducted by the Federal Bureau of Investigation.
Conspirator in Stolen Identity Refund Fraud Conspiracy Involving More Than 150 Victims Is Sentenced to Nearly Five Years in Federal PrisonRead the Press Release
DALLAS — At a sentencing hearing held this morning before Chief U.S. District Judge Sidney A. Fitzwater, Selemani Hakizimana was sentenced to 57 months in federal prison and ordered to pay approximately $362,000 in restitution, following his guilty plea in February 2014 to one count of conspiracy to commit theft of public money, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Hakizimana has been in custody since his arrest in August 2013 at Hartsfield-Jackson Atlanta International Airport, according to information presented when he made his initial appearance in federal court in the Northern District of Georgia. Hakizimana’s indicted co-conspirator, Dizzy Kisonga, remains a fugitive.
According to the factual resume filed in the case, Hakizimana and Kisonga made an agreement to steal, and convert for their own use, income tax refunds by submitting fraudulent tax returns. In fact, according to information presented at today’s sentencing hearing, the scheme involved 154 victims.
The investigation began in March 2012 when Kisonga attempted to deposit five Refundo, Rush Tax Inc. checks at an Irving, Texas branch of Bank of America, according to the factual resume. Refundo, however, had placed a stop payment on each of the checks. Believing the checks were forged, bank officials notified the Irving Police Department.
An Irving Police Department officer arrived at the bank and met with Kisonga, who claimed to have prepared tax returns for the people named on the refund checks. Kisonga advised, according to the factual resume, that he had loaned the customers money while their tax returns were processed, and once the refunds were issued, the customers endorsed the checks and gave them to Kisonga. After depositing the refund checks, Kisonga advised he planned to give the customers the leftover funds, minus their initial loan amount.
Kisonga, according to the factual resume, admitted to having additional refund checks in his car. The officer determined that each of the seven checks located in the vehicle was already endorsed and made payable to a different person. The officer also found and seized a handwritten note from the car that contained the names of the five individuals listed on the Refundo tax return checks, and next to each name were the last four digits of the individual’s social security number.
Law enforcement executed a search at Kisonga’s house in April 2012 and learned that the five Refundo checks and the other checks found by the Irving Police Department belonged to an acquaintance named Selemani Hakizimana. According to Kisonga, Hakizimana game him the refund checks, already endorsed, while at a nightclub in Addison, Texas. According to their agreement, Kisonga kept a percentage of the checks’ value and gave the remainder to Hakizimana.
Forensic evidence established, according to the factual resume, that Hakizimana and Kisonga communicated via text messaging. These texts contained personal identifying information of several individuals as well as messages from Hakizimana instructing Kisonga to wire transfer money to domestic and foreign bank accounts. A review of Kisonga’s bank statements revealed that in 2012, he sent $275,000 in wire transfers to Hakizimana’s bank account.
Internal Revenue Service Criminal Investigation and the Irving Police Department investigated. Assistant U.S Attorney Aaron Wiley prosecuted.
Chicago Man Sentenced to 6 Years in Prison for Heroin Conspiracy in Fox Valley and Northeast WisconsinRead the Press Release
James L. Santelle, United States Attorney for the Eastern District of Wisconsin, announced that on June 3, 2014, Lamarcus J. Cargill (age: 27) of Chicago, Illinois, was sentenced to 72 months in federal prison by Chief United States District Judge William C. Griesbach. Cargill had previously entered a guilty plea to a single count of conspiracy to distribute heroin.
According to the plea agreement and other documents filed with the court, Cargill was recruited to come to the Fox Valley area by his brother-in-law and co-conspirator, Sherman M. Threets, to act as the “muscle” in Threets’ heroin distribution business. In this role, Cargill was expected to collect drug debts, deliver heroin, and on one occasion, commit the arson of a vehicle of an individual who owed the drug conspiracy money.
In pronouncing sentence, Chief Judge Griesbach noted the devastating effect that heroin has had throughout northeast Wisconsin, as well as the highly dangerous nature of the arson carried out by Cargill in his attempt to collect on a drug debt. Chief Judge Griesbach concluded that a “just result” could only be achieved through a considerable prison sentence. In addition to the prison sentence, Cargill was ordered to spend an additional 72 months on Supervised Release.
The case was investigated by the Lake Winnebago Area Metropolitan Enforcement Group, the Winnebago County Sheriff’s Office and the Oshkosh Police Department. The case was prosecuted by Assistant United States Attorney Daniel R. Humble.Certified Public Accountant Associated with Cadillac Ranch Restaurants Pleads Guilty to Tax ChargesRead the Press Release
Larry Couchot, 59, a certified public accountant (CPA) from Dayton, Ohio, who is the president and part owner of an accounting firm in Centerville, Ohio, and prepared the tax returns of businessmen associated with Cadillac Ranch restaurants, pleaded guilty today to tax charges, the Justice Department and Internal Revenue Service (IRS) announced.
According to documents filed with the court, Couchot admitted that for tax years 2006 through 2010, he assisted in the preparation of false individual income tax returns for a group of individuals associated with the Cadillac Ranch restaurants, which caused a tax loss of over $191,000 to the IRS. On May 15, 2014, Jon Field from Dublin, Ohio, along with Eric Schilder, of Marion, Ohio, and Paul Butler, also from Dublin, pleaded guilty to tax charges related to Cadillac Ranch.
According to documents filed with the court, during the period 2006 through 2010, Couchot was aware that these individuals used a substantial amount of company funds to pay for personal expenses, including payments for their personal cars, car insurance, country club dues, personal credit card charges and their individual income tax liabilities. Couchot also admitted that he was aware that one individual used company funds to pay for other personal expenses, including lawn services, repairs and maintenance to personal residences, granite counter tops and TV and audio systems.
Couchot admitted that he prepared false federal income tax returns that failed to report these items as income on two individuals’ income tax returns. Couchot pleaded guilty to aiding and assisting in the preparation of a false income tax return for the year 2009 for Jon Field and to preparing a false income tax return for Eric Schilder for the year 2007, which reported only $68,000 of income. In contrast, the business records of the company indicated Schilder earned over $129,000 in income in that year. Couchot admitted that after the false return was filed with the IRS on behalf of Schilder, he created a false summary that he retained in his records to support the false income reported on that return.
At sentencing, Couchot faces a statutory maximum sentence of three years in prison, a $250,000 fine and one year of supervised release for each of the two charges.
The case was investigated by IRS-Criminal Investigation, and is being prosecuted by Trial Attorney Richard M. Rolwing and Senior Litigation Counsel John E. Sullivan of the Justice Department’s Tax Division. Additional information about the Tax Division and its enforcement efforts can be found at the division website Additional information about tax fraud schemes can be found on the IRS-Criminal Investigation website
Campaign Worker Pleads Guilty to Buying Votes in Donna School Board ElectionRead the Press Release
McALLEN, Texas – A campaign worker pleaded guilty today for paying voters to vote in the November 2012 Donna school board election, announced U.S. Attorney Kenneth Magidson and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Guadalupe Escamilla, 72, of Weslaco, pleaded guilty to one count of vote-buying before Chief U.S. District Judge Ricardo Hinojosa. She faces a maximum penalty of five years in prison and a $10,000 fine. Sentencing is set for Aug. 29, 2014.
According to a factual statement read during the plea hearing, a general election was held on or about Nov. 6, 2012, in Donna, which included candidates for the presidential election, as well as various state, county and local offices, including the members of the Donna School Board. Escamilla assisted in the campaign to elect candidates to the Donna School Board. In the course of that work, Escamilla knowingly and willfully paid and offered to pay voters for voting in this election. In addition, she indicated during the plea hearing that at least two candidates gave her money to pay to voters for voting in the election.
Two other campaign workers, Rebecca Gonzalez, 44, and Diana Balderas Castaneda, 48, of Donna, have pleaded guilty to the same charge. They are awaiting sentencing.
This case was investigated by the FBI. Assistant U.S. Attorney Leo J. Leo and Trial Attorneys Monique Abrishami and Jennifer Blackwell of the Public Integrity Section in the Justice Department’s Criminal Division are prosecuting the case.
Camden Man Sentenced to 37 Months in Prison for Exchanging More Than $2.5 Million in Snap/Food Stamp Benefits for CashRead the Press Release
CAMDEN, N.J. – A Camden man was sentenced today to 37 months in prison for stealing more than $2.5 million dollars from the U.S. Government through a food stamps scheme, U.S. Attorney Paul J. Fishman announced.
Alexander D. Vargas, 35, previously pleaded guilty before U.S. District Court Judge Joseph H. Rodriguez to an information charging him with stealing U.S. Government monies during a scheme in which he purchased Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps) for approximately 50 cents on the dollar at the local grocery store he managed in Camden. Vargas was detained after his arrest on May 16, 2013, and his detention was continued.
According to documents filed in this case and statements made in court:
From January 2012 through December 2012 Vargas managed Eddie’s Grocery Store, a small store in Camden that was authorized to accept SNAP benefits. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for food stamp benefits. However, they may not exchange food stamp benefits for cash.
Every food stamp recipient receives an Electronic Benefits Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept food stamp benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a secret Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied. If the transaction is authorized, the amount of the purchase is then deducted electronically from the food stamp benefits reserved for the customer, and the amount is credited to the retailer’s designated bank account.
Eddie’s Grocery designated a bank account at Sovereign Bank to receive the reimbursements for SNAP benefits. Bank records listed Vargas and another individual as managers of Eddie’s Grocery.Eddie’s Grocery was first approved to participate in the SNAP program in 2007. In his application to participate in SNAP, the owner estimated that Eddie’s Grocery would generate receipts of approximately $280,000 annually, or an average of $23,333 per month. The volume of SNAP benefits reimbursement received at Eddie’s Grocery substantially exceeded those estimates, indicating large scale food stamp fraud. From February 2012 through November 2012 the SNAP redemptions were more than $2.8 million greater than the estimates.
In addition to the high volume of SNAP benefits redemptions, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of a cooperating witness and an undercover law enforcement officer. During a series of five transactions from June 7, 2012, through Oct. 4, 2012, law enforcement agents directed a cooperating witness and an undercover law enforcement officer to go into Eddie’s Grocery and exchange $1,359.75 in SNAP benefits for $650 cash.
A review of the bank records for the Eddie’s Grocery account showed total cash withdrawals of $3,109,776 for the 2012 calendar year. Records from Feb. 15, 2012, (when defendant Alexander Vargas was added as an authorized cosigner on the account) through December 2012, showed $2,548,510 in cash withdrawals – of which Vargas’ name was on 40 withdrawals totaling $1,869,266.
In addition to the prison term, Judge Rodriguez sentenced Vargas to three years of supervised release and ordered him to pay $2,791,430 in restitution.
U.S. Attorney Fishman credited special agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires Jr. in New York; the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
14-203
Defense counsel: Jeffrey C. Zucker Esq., CamdenCamden Accountant Found Guilty of TheftRead the Press Release
Contact Person: Winston Holliday (803) 929-3000
Columbia, South Carolina ----- United States Attorney Bill Nettles stated today that former C.P.A. Joseph Glenn Folsom, Jr., age 61, of Camden, has been convicted of four counts of Interstate Transportation of Stolen Money, a violation of 18 U.S.C. § 2314, after a three-day trial in Columbia that concluded Wednesday. United States District Judge Joseph F. Anderson, Jr., of Columbia presided over the trial and will sentence Folsom at a later date.
Evidence presented at the trial established that Glenn Folsom prepared the taxes for “E.F.” and her husband for thirty years. E.F. requested Folsom to draft her will in December 2006. He did so, naming himself as the executor. When she died ten months later, Folsom used his power as executor to steal funds from the estate and buy classic cars, an airplane, and lake property for himself. In all, he stole approximately $580,000.
“The United States Attorney’s Office will continue to prosecute those who abuse the trust placed in them by our most vulnerable citizens, in this case, an elderly woman and her family. We are grateful for a system of justice that holds Glenn Folsom and those like him accountable for their actions,” said Mr. Nettles.
David A. Thomas, Special Agent in Charge of the F.B.I., said, “We are pleased by the resolution of this matter. This individual betrayed the confidence and trust placed in him, and the financial losses in this case were staggering. We will continue working with our partners to identify and stop those who line their own pockets at the expense of others.”
Mr. Nettles stated the maximum penalty for Interstate Transportation of Stolen Money is imprisonment for 10 years and/or a fine of $250,000.
The case was investigated by agents of the Federal Bureau of Investigation. Assistant United States Attorney Winston Holliday of the Columbia office is prosecuting the case.California Man Sentenced to 10 Years in Prison for Conspiring to Distribute MethamphetamineRead the Press Release
PITTSBURGH - A resident of Elk Grove, Calif., has been sentenced in federal court to 10 years imprisonment, to be followed by five years of supervised release, on his conviction of violating the federal narcotics laws, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on Joseph Rojas, 28.
According to information presented to the court, Rojas conspired to distribute in excess of 50 grams of methamphetamine. Rojas acknowledged that he was responsible for distributing one pound of “ice,” a pure form of methamphetamine. The “ice” seized in this case was over 90% pure.
Assistant United States Attorney Stephen R. Kaufman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Drug Enforcement Administration and the Pennsylvania State Police for the investigation leading to the successful prosecution of Rojas.
Business Pleads Guilty to $3 Million Scheme to Sell Foreign Versions of BotoxRead the Press Release
KANSAS CITY, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Alton, Ill., business owner and his company pleaded guilty in federal court today to distributing more than $3 million worth of foreign Botox and Juvederm in the United States.
Christopher Carstens, 49, of Alton, and his company, Orthopaedic Solutions, Inc., pleaded guilty before U.S. district Judge Howard F. Sachs to violations of the Federal Food, Drug and Cosmetic Act. Orthopaedic Solutions pleaded guilty to the felony charge of introducing a misbranded drug into interstate commerce. Carstens pleaded guilty to a misdemeanor charge.
Carstens and Orthopaedic Solutions pleaded guilty to introducing foreign Botox into interstate commerce (by shipping it across state lines via FedEx) in August 2009. The Botox was not approved by the FDA for distribution in the United States; rather, it was labeled for use in Great Britain. Other Botox was labeled for use in the United Arab Emirates, Bahrain, Kuwait, Lebanon, Oman and Palestine. The foreign Botox was misbranded in that its labeling failed to bear adequate directions for use, failed to bear adequate “black box” warnings and failed to bear the symbol “Rx only.”
Carstens admitted that approximately 5,879 units of foreign Botox, Juvederm 2, and Juvederm 3 were distributed by Orthopaedic Solutions to doctors or other health care professionals in the United States between 2008 and 2011, at a retail value of approximately $3,058,183. (Juvederm is a clear, biodegradable gel implant that is injected into the skin to correct wrinkles and folds.)
Undercover FDA agents purchased the foreign and mislabeled Botox and Juvederm from Orthopaedic Solutions from June 22, 2009, through Dec. 21, 2010.
Under the terms of today’s plea agreement, Orthopaedic Solutions must forfeit $374,476 to the government (with $80,000 due at the time of sentencing and $3,505 paid each month, until paid in full). Carstens must pay a $50,000 fine (with $10,000 due at the time of sentencing and $667 paid each month thereafter until paid in full). A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Jane Pansing Brown and Lucinda S. Woolery. It was investigated by the U.S. Food and Drug Administration, Office of Criminal Investigation.
Bucks County Man Indicted on Child Porn ChargesRead the Press Release
Thomas Silber, 50, of Yardley, PA, was charged today, by indictment with 10 counts of knowingly receiving, and attempting to receive, visual depictions, that is, DVD movies, depicting child pornography. According to the indictment, between February 2007 and October 2010, Silber received 10 DVD movies, using the internet, which were shipped and transported in interstate and foreign commerce, and contained materials that had been shipped and transported in interstate and foreign commerce. The producing of these visual depictions involved the use of minors engaging in sexually explicit conduct, and such visual depictions were of minors engaging in sexually explicit conduct.
If convicted the defendant faces a maximum possible sentence of 200 years in prison, a lifetime of supervised release, and a $1,000 special assessment.
The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations and the U.S. Postal Inspection Service. It and is being prosecuted by Assistant United States Attorney Michelle Morgan.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Boise Woman Pleads Guilty to Delivery of A Controlled SubstanceRead the Press Release
BOISE – Brittany Nicole Tillema, 25, of Boise, Idaho, pleaded guilty today in federal court to one count of distributing a controlled substance, U.S. Attorney Wendy J. Olson announced. Sentencing is set before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise on August 25, 2014.
According to court documents, on or about October 18, 2012, Tillema knowingly and intentionally distributed to an undercover police officer, 32 pills of 80 mg Oxycontin, which contains oxycodone, a Schedule II narcotic and controlled substance.
This investigation was initiated by the Meridian Police Department and investigated by the Drug Enforcement Administration (DEA) led Tactical Diversion Squad which is comprised of law enforcement personnel from the DEA, Ada County Sheriff’s Office, Boise Police Department, Idaho State Police, Meridian Police Department, Nampa Police Department and U.S. Department of Health and Human Service’s Office of Inspector General.
Board-Certified New Jersey Pediatrician and Internist Sentenced to 20 Months in Prison for Taking KickbacksRead the Press Release
NEWARK, N.J. – A board-certified pediatrician and internist from Morris County, N.J., was sentenced today to 20 months in prison for soliciting and taking cash and rental payments as kickbacks for his patients’ diagnostic testing referrals, U.S. Attorney Paul J. Fishman announced.
Chikezie Onyenso, 55, of Randolph, N.J., was convicted on Oct. 15, 2013, after a three-week trial before U.S. District Judge Claire C. Cecchi, of conspiracy to solicit and receive kickbacks from a diagnostic testing facility called Orange Community MRI LLC (Orange MRI), and of soliciting and taking such kickbacks from Orange MRI. Judge Cecchi imposed the sentence today in Newark federal court.
Including Onyenso, 18 defendants – including 16 doctors – have been convicted in connection with the government’s ongoing investigation of illegal payments made by Orange MRI.
According to documents filed in this case and the evidence at trial:
Onyenso was a licensed and board-certified pediatrician and internist who owned his own medical practice, Total Support Medical Group, in Irvington, N.J. From the summer of 2010 through December 2011 he conspired to take illegal kickbacks in exchange for sending his patients to Orange MRI. Onyenso sought and accepted thousands of dollars of cash in envelopes in exchange for referring his Medicare and Medicaid patients to Orange MRI for MRIs and CAT scans. For his ultrasound referrals, Onyenso received from Orange MRI more than $25,000 in kickback payments disguised as rental payments and documented by a bogus, $1,000-per-square-foot lease. He was recorded taking cash kickbacks in his Irvington office on Oct. 11, 2011, and Nov. 22, 2011.
In addition to the prison term, Judge Cecchi sentenced Onyenso to two years of supervised release, fined him $40,000 and ordered him to forfeit $42,176.Ashokkumar Babaria, 64, of Moorestown, N.J., Orange MRI’s former medical director, has been ordered to forfeit $2 million in revenue from corrupt referrals. Chirag Patel, 38, of Warren, N.J., Orange MRI’s former executive director, awaits sentencing and has agreed to forfeit $89,180 in corrupt gains. In addition, health care providers, including Onyenso, have agreed to or been ordered to forfeit a total of $429,666 in illegal cash kickbacks.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, and criminal investigators from the U.S. Attorney’s Office, with the investigation leading to today’s sentencing.The government is represented by Assistant U.S. Attorneys Scott B. McBride, deputy chief of the Economic Crimes Unit, and Joseph G. Mack, deputy chief of the Health Care and Government Fraud Unit, in Newark.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $500 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Alan L. Zegas Esq., Chatham, NJ
14-204Bank Manager Admits Stealing Tens of Thousands of Dollars from J.P. Morgan ChaseRead the Press Release
San Diego bank manager Mark Masiglat pleaded guilty in federal court today, admitting that he secretly siphoned $36,000 from J.P. Morgan Chase’s general ledger through dozens of unauthorized cash withdrawals.
In entering his plea, Masiglat acknowledged that he embezzled the funds between January 2011 and August 2012, while employed as the Assistant Branch Manager at a J.P. Morgan Chase branch in Point Loma. The bank’s deposits are insured by the Federal Deposit Insurance Corporation.
“Corrupt bankers cannot be allowed to treat federally-insured accounts as their own personal piggy bank,” said U.S. Attorney Laura Duffy. “My office will not tolerate abuse of the public’s trust in our financial institutions. I want to thank the FBI for its commitment to ensuring the integrity of our local banks.”
Masiglat is scheduled to be sentenced by Judge Battaglia on August 22, 2014 at 9:00 a.m.
DEFENDANT Mark Masiglat CHARGESEmbezzlement by a Bank Employee – Title 18, U.S.C., Section 656
INVESTIGATING AGENCY
Maximum penalty: 30 years’ imprisonment and $1 million fineFederal Bureau of Investigation
*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Baltimore Man Sentenced to 17 Years in Prison for Armed Robbery SpreeRead the Press Release
Committed 22 Armed Robberies of Stores and Businesses
Baltimore, Maryland - U.S. District Judge Marvin J. Garbis sentenced Quindell Ryeshawn Gardner, age 22, of Baltimore, Maryland today to 17 years in prison, followed by five years of supervised release, for a commercial robbery conspiracy and possession of a firearm in furtherance of a crime of violence. Judge Garbis also ordered Gardner to pay restitution of $4,291.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; Chief James W. Johnson of the Baltimore County Police Department; and Anne Arundel County Police Chief Kevin Davis.
According to his plea agreement, Gardner, Tavon McPhaul and others robbed stores in the Baltimore area. After deciding which place to rob, the conspirators would steal a car to use during the robbery. They also used a gun during the robberies to steal cash and cigarettes.
Gardner admitted that he committed approximately 22 armed robberies and co-conspirator McPhaul participated in 12 of those robberies, with Gardner going into the store to commit the robbery and McPhaul driving the getaway vehicle. Between June 28 and July 4, 2012, Gardner and McPhaul robbed five Baltimore area convenience stores, including a convenience store in the 6300 block of Eastern Avenue in Baltimore on July 4, 2012. Gardner used a short-barreled shotgun in each of the robberies.
Gardner was arrested following two convenience store robberies on July 4, 2012, after a car chase. Gardner’s clothing matched that of the individual who participated in both robberies that day. McPhaul, who was driving the getaway car, escaped on foot. While running, McPhaul attempted to wipe the firearm clean with a blanket. A sawed-off shotgun was recovered along the path of McPhaul’s escape. The vehicle driven by McPhaul during the robbery was found to be stolen.
Tavon McPhaul, also age 22, of Baltimore, previously pleaded guilty to the same charge and was sentenced to 145 months in prison and was also ordered to pay restitution of $4,291.
United States Attorney Rod J. Rosenstein praised the FBI, the Baltimore City and Baltimore County Police Departments and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Benjamin M. Block, who prosecuted the case.
Bakersfield Owner of Catholic Website Indicted for Tax EvasionRead the Press Release
FRESNO, Calif. — The owner of a Catholic-interest news and information website was arrested at his home in Bakersfield this morning charged with tax evasion, United States Attorney Benjamin B. Wagner announced. A federal grand jury brought the four-count indictment last week, and it was unsealed today after the arrest.
Michael Galloway, 59, of Bakersfield, owns and operates the website for Catholic Online. According to court documents, Galloway generated revenue by selling advertising and hosting to faith-based businesses.
For tax years 2003 through 2006, the indictment alleges that Galloway improperly deducted personal expenses as business expenses, including his homeowner’s association fees for his personal residence, car payments and insurance, utilities and cable service for his personal residence, department store credit card bills, tile work, and personal legal fees. In addition, Galloway deducted payroll expenses for his employees including federal and FICA withholdings, but kept the withholdings and failed to remit them to the IRS.
For the four charged years, Galloway reported an income of $13,241 (2003); $28,846 (2004); -$60,438 (2005); and -$37,438 (2006), yet paid personal bills during those years of $167,318 (2003); $170,004 (2004); $135,941 (2005); and $178,458 (2006). Cumulatively, the indictment alleges that he underreported his and his spouse’s taxable income during those years by $1,006,167, resulting in an additional tax due and owing of $234,473. The indictment also alleges that he made false statements to IRS agents in 2010 when they interviewed him about his income, in an attempt to evade assessment of income taxes.
Galloway was arraigned in federal court in Bakersfield this afternoon. He pleaded not guilty and was released on his own recognizance. His next court appearance will be in federal court in Fresno on June 23, 2014 at 1:00 p.m.
This case is the product of an investigation by IRS Criminal Investigation. Assistant United States Attorney Megan A. S. Richards is prosecuting the case.
If convicted, Michael Galloway faces a maximum statutory penalty of five years in prison on each count and a $100,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Authorities Make Arrests in Connection with Odessa-Based Methamphetamine Distribution OperationRead the Press Release
Federal, state and local authorities have arrested 29 individuals--24 who face federal and five who face state charges--in connection with an Odessa-based methamphetamine distribution operation announced United States Attorney Robert Pitman, Drug Enforcement Administration Special Agent in Charge Will Glaspy and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist. Authorities are still searching for nine defendants charged in connection with this methamphetamine distribution operation. A list of federal defendants is below.
On May 28, 2014, a federal grand jury in Midland returned 14 sealed indictments charging 22 of those arrested with conspiracy to possess with intent to distribute methamphetamine. Seven of the indicted defendants--Fuller, Rendon, Harless, Crosson, Merritt, Powell and Daniels--are also charged with one substantive count of possession with intent to distribute methamphetamine. Those indictments were unsealed earlier today. In addition, defendants Smith, Simes and Tolbert, who were already in custody prior to today, were indicted by the federal grand jury prior to last month for possession with intent to distribute a controlled substance.
Authorities allege that under the direction of ringleader 41–year-old Shawn Allen Niece of Odessa, the defendants participated in a methamphetamine distribution scheme since September 2013 that included the supply of methamphetamine from San Diego, CA; Las Vegas, NV; and, Dallas, TX, to Niece and others in Odessa for distribution throughout the Permian Basin.
In addition to the indicted defendants, authorities arrested six other individuals this morning—one charged by a federal criminal complaint for possession with intent to distribute “crack” cocaine; the other five were arrested based on state parole violations or outstanding warrants.
During this investigation, authorities seized over eleven pounds of methamphetamine, several firearms, over $62,000 in United States Currency and other assets.
“Methamphetamine is a destructive poison that has horrific consequences to the quality of life in any community,” said Drug Enforcement Administration Special Agent in Charge Will Glaspy. “Together with our local and federal law enforcement partners, DEA is holding meth traffickers accountable. We are seizing their profits, shutting down their distribution networks, and putting these dealers where they belong, behind bars.”
Upon conviction, the defendants face between ten years and life in federal prison; between five and 40 years in federal prison; or, up to 20 years in federal prison.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are innocent unless proven guilty in a court of law.
This case resulted from a joint Organized Crime Drug Enforcement Task Force (OCDETF) investigation conducted by the Drug Enforcement Administration, Federal Bureau of Investigation, Homeland Security Investigations (HSI) and the U.S. Marshals Service together with the Ector County Sheriff’s Office, Midland County Sheriff’s Office, Midland Police Department, Odessa Police Department, and the Texas Department of Public Safety. Assistant United States Attorney V. LaTawn Warsaw is prosecuting this case on behalf of the Government.
DEFENDANTS ARRESTED TODAY (16)
NAME AGE RESIDENCE STATUTORY PENALTY
Jonathan Leelind Hensley (aka GG) 26 Las Vegas, NV 10 years to life imprisonment
Shawn Allen Niece 41 Odessa, TX 10 years to life imprisonment
Shonda Tennille Crosson 37 Odessa, TX From 5 to 40 years in prison
Christina Gayle Collier 26 Odessa, TX From 5 to 40 years in prison
Jarrett Tate Fuller 34 Amarillo, TX Up to 20 years imprisonment
Jason Mac Rendon 37 Amarillo, TX Up to 20 years imprisonment
David Lane McGill (aka Doughboy) 31 Odessa, TX Up to 20 years imprisonment
Dustin Alan Richey 23 Odessa, TX Up to 20 years imprisonment
Sean David Luna 34 Odessa, TX 10 years to life imprisonment
Gabriel Coca 22 Odessa, TX 10 years to life imprisonment
Annette Jessica Brown 31 Odessa, TX 10 years to life imprisonment
Manuel Urbina 35 Odessa, TX From 5 to 40 years in prison
Cristopher Jedidiah Perdue 29 Odessa, TX From 5 to 40 years in prison
Erica Marie Mitchell 33 Odessa, TX From 5 to 40 years in prison
Brandy Leeann Zaliauskas 39 Midland, TX Up to 20 years imprisonment
(aka Brandy Leeann Carson)
** Charles Eugene Anderson, Jr. 30 Odessa, TX Up to 20 years imprisonmentALREADY IN CUSTODY PRIOR TO TODAY (8)
NAME AGE RESIDENCE STATUTORY PENALTY
Michael James Brewer (aka Levi) 43 Odessa, TX 10 years to life imprisonment
Phillip Ray Powell 24 Odessa, TX From 5 to 40 years in prison
Joseph Ray Collier 33 Odessa, TX Up to 20 years imprisonment
Trey Matthew Lopez 23 Odessa, TX 10 years to life imprisonment
Raymond Earl Mims 43 Odessa, TX Up to 20 years imprisonment
Clyde Smith, Jr. 54 Odessa, TX From 5 to 40 years in prison
Walter Simes 31 Odessa, TX From 5 to 40 years in prison
Cheryl Tolbert 34 Odessa, TX From 5 to 40 years in prisonFUGITIVES (9)
NAME AGE RESIDENCE STATUTORY PENALTY
***J. Weslee Dan Harless 36 Odessa, TX Up to 20 years imprisonment
***Joshua Lynn Merritt 32 Odessa, TX From 5 to 40 years in prison
***Angelee Danielle Daniels 32 Odessa, TX From 5 to 40 years in prison
***Dylan James Holloway 22 Odessa, TX Up to 20 years imprisonment
***Kaycie Ray Lewis 27 Odessa, TX Up to 20 years imprisonment
Omar Addimm Hensley 23 Las Vegas, NV 10 years to life imprisonment
James Louis Crutcher (aka Seven) 28 San Diego, CA 10 years to life imprisonment
Abrea Ebony Ponce 20 San Diego, CA 10 years to life imprisonment
Dionna Nadine Horton 23 San Diego, CA 10 years to life imprisonmentCharles Anderson was arrested this morning and charged by criminal complaint with possession with intent to distribute “crack” cocaine.
*** Defendants have since been apprehended and are no longer considered fugitives.
Aubrey Lee Price, Former Bank Director Who Faked His Own Death, Pleads Guilty to Bank, Wire and Securities FraudRead the Press Release
STATESBORO, GA – Earlier today, Aubrey Lee Price, 47, pleaded guilty to bank, securities and wire fraud to resolve charges brought in the Southern District of Georgia and the Eastern District of New York relating to a multi-million dollar fraud scheme that Price executed to defraud dozens of investors and a federally insured bank. Based upon his guilty pleas, Price now faces up to 30 years in prison, millions of dollars in fines, and millions of dollars in restitution to the victims of his fraud. Today’s guilty plea took place before the Honorable B. Avant Edenfield, Senior United States District Judge for the Southern District of Georgia.
Southern District of Georgia United States Attorney Edward J. Tarver and Eastern District of New York United States Attorney Loretta E. Lynch announced the guilty pleas.
According to court filings and evidence presented at the guilty plea hearing, in 2010, an investment group controlled by Price invested approximately $10 million in the failing Montgomery Bank & Trust (“MB&T”), an FDIC-insured financial institution in Ailey, Georgia. Price was then made a director of MB&T and put in charge of investing the bank’s capital. Price told MB&T officials that he would invest the bank’s capital in U. S. Treasury securities, but instead, over the next eighteen months, Price embezzled over $21 million in capital from MB&T, and lost much of it by investing in risky equity securities and options. To cover up his fraud, Price provided MB&T officials with bogus account statements and other false documents which falsely indicated the bank’s capital was safely held in an account at a financial services firm, when in truth, most of the money was gone.A further investigation of Price revealed that between June 2009 and June 2012, Price also defrauded numerous individuals who had invested in two investment funds Price managed, PFG LLC (“PFG”) and the Montgomery Growth Fund (“Montgomery Growth”). Price raised approximately $51 million from approximately 115 investors from across the country, and unsuccessfully invested funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price posted fake account statements on a secure PFG web site that fraudulently reflected fictitious assets and fabricated investment returns.
In mid-June 2012, Price sent acquaintances “suicide letters” in which he admitted he had defrauded MB&T Bank and his PFG investors, and suggested that he planned to kill himself by throwing himself off a high-speed ferry boat after it left the coast of Florida. As a result of the suicide claim, the United States Coast Guard searched to no avail for Price’s body. Shortly after sending the letters, Price disappeared. After a several-month search, on December 31, 2013, Price was arrested after he presented a false identification to a member of the Glynn County Georgia Sheriff’s Department office during a routine traffic stop in Brunswick, Georgia.
U. S. Attorneys Tarver and Lynch credited the Federal Bureau of Investigation (FBI) in Georgia, under the direction of Special Agent in Charge Britt Johnson, and in New York, under the direction of Assistant Director in Charge George Venizelos, with the investigation leading to today’s guilty pleas. They also thanked the United States Attorney’s Office for the Southern District of Florida; the United States Attorney’s Office for the Northern District of Georgia; the Securities and Exchange Commission (SEC), Atlanta Regional Office; the Federal Deposit Insurance Corporation (FDIC); the Federal Reserve Board; the Office of Inspector General; the United States Coast Guard; the United States Department of Labor; the Lowndes County Georgia Sheriff’s Department; the Glynn County Georgia Sheriff’s Department; the Toombs County Georgia Sheriff’s Department; and the Marion County Florida Sheriff’s Department for their cooperation and assistance in the investigation and prosecution of Price.
The Government is represented by Assistant United States Attorneys Brian T. Rafferty, T. Shane Mayes, and First Assistant United States Attorney James D. Durham of the U. S. Attorney’s Office for the Southern District of Georgia, and Assistant United States Attorneys Shannon C. Jones and Brian Morris of the U. S. Attorney’s Office for the Eastern District of New York.
This prosecution was the result of efforts by President Barack 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.The Defendant:
AUBREY LEE PRICE
Age: 47
Valdosta, GeorgiaS.D.G.A. Docket No. 612-CR-10
E.D.N.Y. Docket No. 13-CR-058Aubrey Lee Price, Former Bank Director Who Faked His Own Death, Pleads Guilty to Bank, Wire and Securities FraudRead the Press Release
STATESBORO, GA – Earlier today, Aubrey Lee Price, 47, pleaded guilty to bank, securities and wire fraud to resolve charges brought in the Southern District of Georgia and the Eastern District of New York relating to a multi-million dollar fraud scheme that Price executed to defraud dozens of investors and a federally insured bank. Based upon his guilty pleas, Price now faces up to 30 years in prison, millions of dollars in fines, and millions of dollars in restitution to the victims of his fraud. Today’s guilty plea took place before the Honorable B. Avant Edenfield, Senior United States District Judge for the Southern District of Georgia.
Southern District of Georgia United States Attorney Edward J. Tarver and Eastern District of New York United States Attorney Loretta E. Lynch announced the guilty pleas.
According to court filings and evidence presented at the guilty plea hearing, in 2010, an investment group controlled by Price invested approximately $10 million in the failing Montgomery Bank & Trust (“MB&T”), an FDIC-insured financial institution in Ailey, Georgia. Price was then made a director of MB&T and put in charge of investing the bank’s capital. Price told MB&T officials that he would invest the bank’s capital in U. S. Treasury securities, but instead, over the next eighteen months, Price embezzled over $21 million in capital from MB&T, and lost much of it by investing in risky equity securities and options. To cover up his fraud, Price provided MB&T officials with bogus account statements and other false documents which falsely indicated the bank’s capital was safely held in an account at a financial services firm, when in truth, most of the money was gone.
A further investigation of Price revealed that between June 2009 and June 2012, Price also defrauded numerous individuals who had invested in two investment funds Price managed, PFG LLC (“PFG”) and the Montgomery Growth Fund (“Montgomery Growth”). Price raised approximately $51 million from approximately 115 investors from across the country, and unsuccessfully invested funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price posted fake account statements on a secure PFG web site that fraudulently reflected fictitious assets and fabricated investment returns.
In mid-June 2012, Price sent acquaintances “suicide letters” in which he admitted he had defrauded MB&T Bank and his PFG investors, and suggested that he planned to kill himself by throwing himself off a high-speed ferry boat after it left the coast of Florida. As a result of the suicide claim, the United States Coast Guard searched to no avail for Price’s body. Shortly after sending the letters, Price disappeared. After a several-month search, on December 31, 2013, Price was arrested after he presented a false identification to a member of the Glynn County Georgia Sheriff’s Department office during a routine traffic stop in Brunswick, Georgia.
U. S. Attorneys Tarver and Lynch credited the Federal Bureau of Investigation (FBI) in Georgia, under the direction of Special Agent in Charge Britt Johnson, and in New York, under the direction of Assistant Director in Charge George Venizelos, with the investigation leading to today’s guilty pleas. They also thanked the United States Attorney’s Office for the Southern District of Florida; the United States Attorney’s Office for the Northern District of Georgia; the Securities and Exchange Commission (SEC), Atlanta Regional Office; the Federal Deposit Insurance Corporation (FDIC); the Federal Reserve Board; the Office of Inspector General; the United States Coast Guard; the United States Department of Labor; the Lowndes County Georgia Sheriff’s Department; the Glynn County Georgia Sheriff’s Department; the Toombs County Georgia Sheriff’s Department; and the Marion County Florida Sheriff’s Department for their cooperation and assistance in the investigation and prosecution of Price.
The Government is represented by Assistant United States Attorneys Brian T. Rafferty, T. Shane Mayes, and First Assistant United States Attorney James D. Durham of the U. S. Attorney’s Office for the Southern District of Georgia, and Assistant United States Attorneys Shannon C. Jones and Brian Morris of the U. S. Attorney’s Office for the Eastern District of New York.
This prosecution was the result of efforts by President Barack 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
AUBREY LEE PRICE
Age: 47
Valdosta, Georgia
S.D.G.A. Docket No. 612-CR-10
E.D.N.Y. Docket No. 13-CR-058
Allenwood Inmate Charged with Filing False Liens Against Bureau of Prisons OfficialsRead the Press Release
The United States Attorney for the Middle District of Pennsylvania, announced that charges have been filed against Marc E. Barrett of Stamford, Connecticut.
According to United States Attorney, Peter Smith, Barrett, age 39, is charged in a one-count information with filing false liens in Connecticut and North Carolina state courts against several Bureau of Prisons officials, while incarcerated at the FCC-Allenwood Medium.
The investigation was conducted by the Federal Bureau of Prisons Special Investigative Services, and the Federal Bureau of Investigation, Williamsport Resident Agency. Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statues and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is ten years imprisonment, and a fine of $250,000. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.Albuquerque Construction Company Owner Sentenced to Prison for Defrauding Federal Program for Service-Disabled VeteransRead the Press Release
ALBUQUERQUE – Max R. Tafoya, 64, the owner of an Albuquerque-area construction company, and his son-in-law, Tyler Cole, 41, of Los Ranchos de Albuquerque, N.M., were sentenced this afternoon for defrauding a federal program that sets aside federal contracts for businesses owned by service-disabled veterans.
Tafoya was sentenced to 57 months in federal prison to be followed by a year of supervised release while Cole was sentenced to a 37-month term of imprisonment followed by a year of release. Tafoya was ordered to pay $1,350,000, the proceeds fraudulently obtained as the result of the criminal activity, to the United States, with Cole being jointly liable for $500,000 of that amount.
“Today Max Tafoya and Tyler Cole were held accountable for abusing a program that seeks to fulfill our obligation to provide disabled veterans with benefits designed to ease the losses and disadvantages they have incurred as a consequence of disabilities they sustained while serving our country,” said U.S. Attorney Damon P. Martinez. “This prosecution is part of a nationwide effort to protect service-disabled veterans who own small businesses by tightening controls to prevent fraud and abuse.”
“Our agency remains committed to protecting the integrity of the programs that provide business opportunities to those who have struggled and sacrificed for our freedom. Today, individuals who seek to follow in the footsteps of Tafoya and Cole are on notice that justice will be served,” said Acting Inspector General of the VA, Richard J. Griffin.
Tafoya and Cole were charged in Feb. 2012, in an indictment alleging that the two men obtained almost $11 million in federal contracts by falsely claiming that Tafoya’s company, M.R. Tafoya Construction, Incorporated (Tafoya Construction), was qualified to participate in the U.S. Department of Veterans Affairs’ (VA) Service-Disabled Veteran Owned Small Business (SDVOSB) Program. A superseding indictment filed in March 2013, added charges of witness tampering and obstruction of justice against Tafoya.
The SDVOSB Program was established pursuant to the Veterans Entrepreneurship and Small Business Development Act of 1999, to achieve a government-wide goal to increase the number of government contracts awarded to small businesses owned and operated by service-disabled veterans. The Veterans Benefits, Health Care, and Information Technology Act of 2006 gave SDVOSBs the highest priority in contracting preferences for VA contracts awarded to small businesses. A small business must be both owned and controlled by one or more service-disabled veterans to qualify as an SDVOSB. Generally, a small business is owned and controlled by a service-disabled veteran when the veteran directly owns at least 51% of the business, holds the highest officer position in the business, and manages and administers the business’s day-to-day operations.
On Nov. 12, 2013, Tafoya and Cole each entered guilty pleas to Counts 1 and 2 of the superseding indictment charging them with conspiracy and committing a major fraud against the United States.
In entering his guilty plea, Tafoya admitted that between 2009 and 2010, Tafoya Construction was awarded five contracts valued at an aggregate amount of $10,984,189 that required the company to hold SDVOSB status. During that period, Tafoya, a veteran without any service-connected disability, owned 100% of Tafoya Construction stock. Tafoya admitted obtaining the lucrative contracts by paying his step-brother Andrew Castillo, a service-disabled veteran who works and resides in Florida, a $600 weekly fee to allow Tafoya Construction to use Castillo’s name and service-disabled status in its bids for SDVOSB contracts. Tafoya acknowledged asking Cole to complete certifications stating that Tafoya Construction was a SDVOSB and submit them to the VA so that Tafoya Construction could obtain SDVOSB contracts. Tafoya also admitted that he drew up a number of false documents designed to create the appearance that Castillo was the majority owner and controller of Tafoya Construction, when in fact he did not own or operate the company, and that Cole forged Castillo’s signature on the documents.
Tafoya also admitted that in Feb. 2011, he lied to a VA investigator to support the fraudulent claim that Tafoya Construction was a SDVOSB. Tafoya made the following false statements to the investigator: (1) that Castillo paid $100,000 to purchase 51% of Tafoya Construction; (2) that Castillo worked in Tafoya Construction’s Albuquerque office; (3) that Castillo was working at a VA construction site in Santa Fe that day; and (4) that Castillo personally signed the VA contracts and bonding paperwork on the SDVOSB contracts awarded to Tafoya Construction. Tafoya also admitted traveling to Florida later in Feb. 2011, to meet with Castillo for the purpose of creating fraudulent documents in an attempt to cover up their fraudulent scheme. Tafoya subsequently submitted these fraudulent documents to a federal grand jury in July 2011.
In his plea agreement, Cole admitted serving as manager of Tafoya Construction from 2008 to 2011, and participating in Tafoya’s illegal scheme to defraud the United States by falsely claiming that Tafoya Construction was a SDVOSB. Cole admitted to filling out and submitting certifications to the VA that falsely claimed that Tafoya Construction was owned by Castillo, a service-disabled veteran. Cole further admitted signing Castillo’s signature on bids and other paper work submitted to the VA and on documents created to make it appear that Castillo was the 51% owner of Tafoya Construction.
As a result of Tafoya’s and Cole’s fraudulent scheme, from 2009 to 2010, the VA awarded Tafoya Construction five contracts in the aggregate amount of $11,568,999 for work at the Fort Bliss National Cemetery, the Santa Fe National Cemetery, the Fort Logan National Cemetery, and the Jefferson Barracks National Cemetery.
Castillo entered a guilty plea in Oct. 2011, to a conspiracy charge. He remains on conditions of release pending his sentencing hearing, which is scheduled for June 19, 2014.
This case was investigated by the Office of Inspector General of the U.S. Department of Veterans Affairs and is being prosecuted by Assistant U.S. Attorneys C. Paige Messec and Tara C. Neda. Assistant U.S. Attorney Cynthia L. Weisman assisted with the forfeiture proceedings in this case.
"Home Alone 3"Read the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, and Gerald Roy, Special Agent in Charge, United States Department of Health and Human Services, Office of Inspector General, Office of Investigations for Region 7 (Kansas City office), announced today indictments arising out of Operation Home Alone 3. The indictments constitute a third wave of charges that targets the abuse of a Medicaid program in Illinois that provides personal assistants to Medicaid recipients to assist them with general household activities and personal care. The program is intended for recipients under 60 years of age and is designed to reduce Medicaid expenditures by avoiding more expensive institutional care, including nursing home care.
In May of 2012 and again in July of 2013, during the first two phases of Operation Home Alone, 29 defendants, including both Medicaid beneficiaries and the personal assistants, who claimed to have been providing personal assistant services, were charged with fraud. In this third round announced today, fourteen additional defendants have been indicted, bringing the total number of defendants to 43. The fourteen individuals named today reside throughout southern Illinois and have been charged in twelve separate indictments by a Federal Grand Jury in Benton, Illinois, with the offense of Health Care Program Fraud. The charges carry a maximum penalty of 10 years imprisonment, a $250,000 fine, and up to 3 years of supervised release.
In all cases, the false claims were submitted to the program after the first round of prosecutions. Four of the defendants made false claims against the program after the second round of indictments and widespread media coverage. One of the four specifically admitted having seen news reports of our crackdown on this type of fraud but went ahead and submitted the false claims anyway.
"Many of these individuals just don’t get it - they either don’t care or don’t believe me when I say we will continue to investigate and root out those defrauding the program," said U.S. Attorney Stephen R. Wigginton. "Federal and state law enforcement in Illinois have spoken forcefully and with one voice against the abuse of a program vital to the health of Illinoisans, but those who are abusing this needed program just don't seem to be listening. Ignore us at your peril." Wigginton added.
"The Office of Inspector General of the Department of Health and Human Services is determined to get the attention of these program abusers" said Special Agent in Charge Gerald Roy. “With the adverse impact on this state’s budget and the larger issue of patient abuse, personal care service fraud will continue to be the focus of my office. Working together with our law enforcement partners at the Illinois State Police-Medicaid Fraud Control Bureau and the FBI, we will continue to investigate these cases and submit them for prosecution until this widespread abuse stops," said Roy.
“These cases are critical to ensuring the integrity of the home-care program that provides vital services for many of our most vulnerable residents,” said Attorney General Lisa Madigan.
Due to numerous complaints concerning the Home Services Program, law enforcement agencies in southern Illinois originally initiated Operation Home Alone to investigate and hold accountable individuals perpetrating fraud against the Home Services Program. As was true of the charges brought in rounds one and two, these indictments allege that the charged individuals exploited the Home Services Program and received Medicaid funds to which they were not entitled. Those charged in this wave of indictments include four defendants where the personal assistant or customer were in jail or prison during the times the services were supposed to be performed, six defendants where the personal assistant or the customer was in the hospital, three cases where the defendant was working full time jobs while the services were supposed to be performed and one case where the customer was dead and the personal assistant continued billing for months after the death of the customer.
The persons charged in this wave, their ages, and their last known city of residence are:
Connie D. Evans, age 50, Belleville, Illinois
Quincy O. Gamble, age 39, Cahokia, Illinois
Jody R. Wooters, age 46, Centralia, Illinois
Felicia M. Gibson, age 47, East St. Louis, Illinois
Beatrice L. Randall, age 59, East St. Louis, Illinois
Charlietta M. Lee, age 51, Marion, Illinois
Tamekia L. Hall, age 39, East St. Louis, Illinois
Maurice L. Burks, age 43, East St. Louis, Illinois
Christopher W. Spivey, age 30, Olney, Illinois
Angel D. Jones, age 50, Collinsville, Illinois
Lawrence M. Thigpen, 53, Collinsville, Illinois
Lakeshia W. White, age 23, Centreville, Illinois
Margaret R. Teriet, age 31, Mount Vernon, Illinois
Maketa N. Davis, age 33, East St. LouisAn Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
The purpose of the program is laudable - keep Medicaid recipients in their home and out of more costly institutional settings. These prosecutions show that there are individuals who, by their actions, take money from the thousands of deserving customers and harm the reputation of those personal assistants who are doing everything right. Cases in this round of indictments include the following:
• Personal assistant boyfriend claimed to be providing services for his girlfriend, first while she, the customer, was in the hospital and then continued filing claims for 560 hours of services for six months after she had passed away.
• Personal assistant claimed to be providing personal assistant services to her boyfriend while she was in jail and prison. Together, they claimed over one thousand hours of personal assistant services during the periods where she was incarcerated.
• Personal assistant claimed that she performed over 450 hours of personal assistant services for the customer during times that she was employed at a full time job and over 140 hours where she was not only working a job at another location, but the customer was also receiving kidney dialysis.
• Medicaid recipient who agreed to split the proceeds with the personal assistant who performed little or no services.
We have seen dozens of instances in which the State of Illinois paid for ghost employees and fictitious services, hence the reason why we are calling this initiative "Home Alone."
Nationwide, one of the biggest fraud problems in the Medicaid program has been these personal assistant programs, particularly in cases that allow the Medicaid recipient to control the selection and payment of personal care attendants. In most of these cases, the personal care assistant is a relative or family friend, who often is a ghost employee. In a typical fraud scenario, the scam payments made by the State of Illinois are split between the Medicaid recipient and the ghost employee.
According to an Office of Inspector General report released in December, 2012, Medicaid costs for personal care services in 2011 totaled $12.7 billion, a thirty five percent increase since 2005. The U.S. Department of Labor projects that the employment of personal assistants and home health care workers will grow by 46 percent by 2018. U.S Department of Health and Human Services, Office of Inspector General: Personal Care Services, Trends, Vulnerabilities, and Recommendations for Improvement, OIG-12-12-01 (November 2012). Home personal care is one of the fastest growing job categories in the country. However, the OIG’s report points to numerous problems in Medicaid personal care services that leave it vulnerable to improper payments, abuse, and fraud, including lack of training standards, uneven oversight of services provided, and failure to implement prepayment controls to prevent improper or fraudulent payments.
Operation Home Alone 3 investigations were conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation, and the Illinois State Police Medicaid Fraud Control Bureau Collinsville, DuQuoin and Sterling Offices. The cases are being prosecuted by Assistant United States Attorneys Ranley R. Killian and William E. Coonan and Special Assistant United States Attorney Michael J. Hallock.
Wednesday 4 June 2014
West Virginia Pharmacy Pays $2 Million for Improper Dispensing of PainkillersRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Matthew Lyman, Public Affairs Specialist/Community Outreach CoordinatorWHEELING, WEST VIRGINA – A West Virginia pharmacy and several of its employees have paid $2 million to end a Federal investigation into its operation.
United States Attorney William J. Ihlenfeld, II announced today a $2 million civil settlement with Judy’s Drug Store, Inc., Darin Judy, Emily Judy, Kimberly Arbaugh and Casey Watts.
Judy’s Drug Store is a privately owned pharmacy located in Petersburg, Grant County, West Virginia. Darin Judy is a manager of the Drug Store. Emily Judy is the president of Judy’s Drug Store, Inc. and works as a pharmacist. Arbaugh and Watts both work there as pharmacists.
As part of the settlement Judy’s Drug Store and the identified individuals have paid $2 million to the United States to settle accusations the Drug Store repeatedly filled prescriptions for controlled substances, such as oxycodone and hydromorphone, not written for legitimate medical purposes. The pharmacists filled these prescriptions outside the scope of professional practice.
“This is another important step in our efforts to prevent prescription painkillers from being diverted and used for improper purposes,” said U.S. Attorney Ihlenfeld. “We used both our criminal and civil authority to accomplish our mission in this case, and we would have sought criminal charges against one of the pharmacists involved had he not passed away.”
The federal investigation into Judy’s Drug Store arose after the U.S. Attorney’s Office prosecuted and obtained a conviction against Hardy County, West Virginia physician, Rajan Masih, in 2011. Dr. Masih was convicted of distributing controlled substances for other than legitimate medical purposes and outside the scope of professional practice. Dr. Masih wrote many of the prescriptions for controlled substances improperly filled by Judy’s Drug Store.
“Today’s settlement serves as a warning to those who are driven by greed that distracts them from their responsibilities to the very communities in which they live and work. The citizens of Grant County should be able to walk their streets and go about daily activities with their families without fear or exposure to drug related activity resulting from suspect dispensing of controlled substance pharmaceuticals,” said Karl C. Colder, Special Agent in Charge of the U.S. Drug Enforcement Administration, Washington, D.C. Field Division.
Assistant United States Attorney Alan G. McGonigal handled this matter, in coordination with the Office of the Inspector General of the U.S. Drug Enforcement Agency.
WNY Muslim Community Leader Receives National Attorney General AwardRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. was in Washington, D.C. today as Dr. Khalid Qazi received the Attorney General’s Citizen Volunteer Service Award for Community Service for his outstanding volunteer contributions to the mission of the Justice Department.
Dr. Qazi, a local physician and past president of the Muslim Public Affairs Council in Western New York, received the award during the 28th Annual Attorney General’s Volunteer Awards ceremony in Washington. He was honored for his work to establish a positive, working relationship between Federal, State and local law enforcement and the Muslim Community.
“In a post 9/11 world, Dr. Qazi has been instrumental in helping to build bridges between local law enforcement agencies and leaders and members of the Muslim Community,” said U.S. Attorney Hochul. “Dr. Qazi has helped to break down walls that often prevented meaningful communication and forge a relationship of trust and hope.”
Dr. Qazi has been working with the United States Attorney’s Office for several years, serving as a liaison between the USAO and the local Muslim Community. For instance, Dr. Qazi works closely with U.S. Attorney Hochul on the BRIDGES Program which was established to build better relationships between the Muslim Community in Western New York and the law enforcement community.
U.S. Attorney Hochul cited the following accomplishments in his nomination of Dr. Qazi for the award:
A job fair for youth in the local Muslim community.
The Citizen Volunteer Service Award was established to honor citizen volunteers who assist the Justice Department in serving the public interest.
A commemoration of the 10th Anniversary of September 11, 2001.
Sensitivity training for local Customs and Border Protection officers.
A panel discussion for members of the Muslim Community regarding surveillance conducted by the New York City Police Department in the local Muslim community.Violent Felon Sentenced to over 22 Years in PrisonRead the Press Release
BATON ROUGE, LA –U.S. Attorney Walt Green announced that U.S. District Judge Shelly D. Dick sentenced CHRISTOPHER L. BROWN, age 35, of Baton Rouge, Louisiana, today to 270 months imprisonment and 5 years of supervised release following imprisonment for his role in a home invasion conspiracy aimed at stealing 12 kilograms of cocaine and killing anyone that stood in the way.
The defendant’s sentence arises from his guilty pleas in January 2014 for conspiring to possess with the intent to distribute five (5) kilograms or more of cocaine, in violation of Title 21, United States Code, Section 846; possessing firearms in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A); and possessing a firearm while a convicted felon, in violation of Title 18, United States Code, Section 922(g)(1).
BROWN’s co-defendant, CHRIS E. WILLIAMS, was previously sentenced on April 30, 2014, to 270 months also.
U.S. Attorney Green praised the hard work of the Bureau of Alcohol, Tobacco and Firearms (ATF) and the East Baton Rouge Violent Crimes Unit. He also stated: “The U.S. Attorney’s Office and our federal, state, and local partners will continue to devote whatever resources are necessary to aggressively identify, investigate, and prosecute those violent career offenders who plague our streets, threaten our families, and destroy our neighborhoods.”
This investigation was conducted by the ATF and the East Baton Rouge Violent Crimes Unit which includes the Baton Rouge Police Department, East Baton Rouge Parish Sheriff’s Office, and Louisiana State Police. The matter is being prosecuted by Assistant United States Attorney Jennifer Kleinpeter who also serves as a Deputy Chief in the Criminal Division.
United States Attorney Wigginton Announces Press EventRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that there will be a press event held tomorrow, Thursday, June 5, 2014, at 2:00 p.m., at the Office of the United States Attorney for the Southern District of Illinois, located at Nine Executive Drive, Fairview Heights, IL, 62208-1344, concerning the announcement of new charges in the continuing investigation of fraud in the Personal Assistant Program previously identified as “Operation Home Alone.”
Media are advised to have press credentials and to arrive in sufficient time to allow for security screening prior to the event.
United States Attorney Announces Sentencing of Investment Advisorwho Defrauded Carmel, Indiana VictimsRead the Press Release
Ohio man sentenced to prison for operating a fictitious investment company which bilked over $650,000 from investors
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced today the sentencing of an Ohio resident, to 58 months (nearly 5 years) in federal prison by U.S. District Judge Tanya Walton Pratt. David Bridges, 37, admitted guilt to charges that he devised a scheme to fraudulently obtain money from investors in order to enrich himself. He used his position as an investment advisor to solicit investors with promises that money they invested would be used for the purchase of investment and insurance products. The losses incurred by all victims total over $650,000. Several of the victims of this scheme have been long-time residents of Hamilton County, specifically, Carmel, Indiana.
This matter began in November, 2012, when Carmel Police were notified of alleged irregularities. Carmel Police then contacted representatives of the Federal Bureau of Investigation, who have led the investigation since that time.
“The United States Attorney’s Office will aggressively pursue the prosecution of those individuals who bilk Hoosier out of their hard-earned retirement funds through fraud,” said Hogsett. “Stealing the hard-earned money that Hoosiers plan to retire on is inexcusable.”
Bridges admitted that he created a bogus company, SD Capital LLC, to convince investors to purchase annuity contracts at SD Capital and/or roll over their IRA accounts maintained elsewhere to a purported IRA account managed by SD Capital. From December 2009 through April 2012, the investors, on the advice of Bridges, wrote checks to SD Capital for the investment products. Bridges deposited these checks into his own bank account.
Bridges represented to his investors that he had purchased the investment products with their money. However, Bridges instead used the money he received for his personal benefit, including the payment of personal expenses incurred through gambling and purchases at grocery stores, gas stations, and retail shops.
According to Assistant U.S. Attorney MaryAnn T. Mindrum, who prosecuted the case for the government, Bridges was also sentenced to three (3) years of supervised release at the end of his prison term, and must pay over $500,000 in restitution to the victims.
This case is the result of a collaborative investigation by the FBI and Carmel Police Department.
Unemployed Middle River Woman Sentenced to Prison in $546,785 Fraudulent Tax Refund SchemeRead the Press Release
Recruited Individuals Who Did Not Owe Taxes Because They Had Little Or No Earned Income
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Tonia Patrice Lawson, age 43, of Middle River, Maryland, today to 10 months in prison, followed by three years of supervised release, for her role in a conspiracy to obtain fraudulent tax refunds. Judge Bennett also ordered Lawson to pay restitution of $546,785.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein, Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Kathryn Jones, U.S. Department of Transportation, Office of Inspector General, Washington Regional Office.
“Criminal conspiracies involving fraudulent refund identity theft schemes damage the integrity of the U.S. financial system and can seriously impact the lives of those victimized. We as taxpayers ultimately pay the price for the greed of these unscrupulous criminals,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “IRS-CI, along with our law enforcement partners and the Maryland United States Attorney's Office, will continue to utilize every tool available to investigate those who conspire to victimize members of our community for their own personal gain.”
According to Lawson’s plea agreement, from February 2010 through April 2013, Lawson, who was unemployed, conspired with her daughters Kiara Skipwith and Jasmine Thomas and with Sheila Anderson-Cloude, to prepare fraudulent tax returns. The defendants recruited individuals who did not owe taxes because they had little or no earned income, and convinced these individuals that they could obtain a substantial refund and therefore should file a federal individual income tax return. Generally, Lawson, Skipwith and Thomas recruited prospects for the scheme, using a variety of methods, including paying referral fees to those who brought recruits to them.
Lawson, Skipwith and Thomas provided the recruits’ personal information to Anderson-Cloude, who would prepare the fraudulent return. The recruits did not provide any income information. False wages and educational expenses were used to falsely claim tax credits. Lawson, Anderson-Cloude, Skipwith, and Thomas misled the recruits by telling them that the refunds they had received were smaller than the refund amounts Anderson-Cloude had actually listed on the fraudulent returns. The “profit” for Lawson and her co-conspirators was the difference between the refund claimed on each tax return and the smaller amount actually paid to the recruit.
Over the course of the scheme, Lawson conspired in the filing of 84 fraudulent tax returns with a resulting loss to the government of $546,785.
Sheila Anderson-Cloude, age 34, of Notthingham, Maryland, Jasmine L. Thomas, age 26, of Baltimore; and Kiara A. Skipwith, age 24, of Parkville, Maryland, previously pleaded guilty to their roles in the scheme. Thomas and Skipwith were each sentenced to three years’ probation and ordered to pay restitution of $90,579 and $199,722, respectively. Anderson-Cloude is scheduled to be sentenced on July 29, 2014.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised IRS Criminal Investigation and DOT-OIG for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory R. Bockin, who prosecuted the case.
Two Guilty of Racketeering in Chinese Restaurant Employment Referral ConspiracyRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A man and woman have pleaded guilty to racketeering violations in connection with an employment referral conspiracy in the Eastern District of Texas, announced U.S. Attorney John M. Bales and Brian M. Moskowitz, special agent in charge of Homeland Security Investigations in Houston today.
Lina Sun, 54, and Chenglun Ma, 57, both of Houston, pleaded guilty to RICO conspiracy on June 3, 2014 before U.S. Magistrate Judge Keith Giblin.
According to court documents, two employment referral businesses operating out of Houston recruited unauthorized aliens, mostly from Mexico and Central America, for work in the Chinese restaurant industry. These workers routinely worked 12 hours a day, six days a week, they were not paid overtime, not permitted to receive tips or gratuities, and were paid in cash by the restaurants. The restaurants profited by avoiding payment of employment taxes and did not provide any benefits such as health insurance, vacation or sick time. Workers were paid far less than minimum wage, did not receive health examinations, food safety training, or any job training at any time while employed.
Additionally, these workers were subject to unfavorable living arrangements provided by the restaurant operators, either at the operator’s residence or at another off-site residential location. Living arrangements were overcrowded and sometimes consisted of air mattresses or floors for sleeping. For instance, 18 people were found to be housed in a 2000 square foot house.
Federal indictments were returned on Nov. 7, 2013, charging 32 individuals with RICO conspiracy and conspiracy to transport, harbor, and encourage and induce aliens to reside in the United States.
Sun and Ma each face up to 20 years in federal prison at sentencing. Sentencing dates have not been set.
"I congratulate the investigative team on what is surely a signature accomplishment,” said U.S. Attorney Bales. “The defendants abused the aliens who came looking for work and they abused our nation's immigration laws. Now they will be held accountable under the law and then what good will their ill-gotten riches be?" We will continue to be vigilant."
"Those who think that they can build their businesses on a foundation of corrupt and illegal activities will eventually see those enterprises crumble," said SAC Moskowitz. "Today's pleas cap a multi-year investigation of the Hong Li Job Agency and the Tai Shan Employment Agency by HSI and our partners in the Eastern District of Texas that weakened the business foundations and brought down these two enterprises."This case is being investigated by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) offices in: Houston, Dallas, San Antonio and New Orleans; U.S. Customs and Border Protection, Office of Air and Marine; U.S. Marshals Service; and Police Department’s in Houston, Port Author and Beaumont. This case is being prosecuted by Assistant U.S. Attorneys in Beaumont.
#######Two Defendants Sentenced to Prison for Different Fraud Schemes Involving Car Sales and the InternetRead the Press Release
In two separate cases, federal defendants have been sentenced to prison terms for conducting fraudulent car sales over the internet, announced U.S. Attorney Jenny A. Durkan. The two cases involve the theft and sale of stolen cars, and the sale of non-existent vehicles by using various websites.
JUAN CARLOS DE LA CRUZ PIOTE, 48, a native of Spain, was sentenced Tuesday June 3, 2014, to 32 months in prison. DE LA CRUZ PIOTE was a member of a scheme to scam prospective purchasers of cars, boats, and RVs by using false internet postings and fake payment processing programs. He was arrested in New York on July 22, 2013, when he tried to enter the U.S. from Romania. DE LA CRUZ PIOTE and his co-schemers opened multiple bank accounts in the Western District of Washington, which were used to accept more than $700,000 from victims who thought they were using a secure payment method to purchase vehicles advertised on the internet. In fact, the advertised vehicles were never delivered, and the money was quickly wired out of the country or withdrawn from the accounts as cash. The conspirators set up the accounts with business names such as GMC AUTOS, LLC, CARS CONSULTANTS, LLC, AUTO FINANCIAL, LLC and MGA ENGINES, LLC, and would advertise various vehicles on legitimate websites such as Craig’s List or Autotrader.com. The conspirators created counterfeit PayPal paperwork and web pages, or would have the victims make the payment through a service they created and called “Amazon Payments” – but the service was in no way associated with Amazon.com. The use of these names was a way to lull the purchasers into thinking they were dealing with a legitimate online seller.
On Friday, May 30, 2014, DUC LONG TRAN VU, 26, of Vancouver, Washington was sentenced to nine months in prison for his role in a scheme to steal cars in Oregon, create fake title documents, and sell them to unsuspecting customers in Washington State after advertising them on Craigslist or other internet sites. VU, a former engineering student at the University of Washington, was involved in at least two sales of stolen cars. A 2007 Volvo XC 90 was stolen right out of the driveway of a Portland home and sold via Craigslist to a couple in Tacoma. The couple took precautions – examining the title, checking the VIN number and getting VU’s identification when they met him in a public place. Still, when they went to transfer title they discovered the car had been reported stolen. The couple was out $15,000.
In a second incident, two Seattle brothers were stopped by Kent police in a 1998 Honda Civic that had been stolen in Oregon and advertised on Craigslist. Not knowing whether the brothers were involved in the theft, police did a felony stop – ordering the men out of the car with guns drawn. Fortunately, the brothers had made a cell phone video of the man who sold them the car and took a photo of his identification. Police were able to identify VU even though the identification used a fake name. The stolen car was returned to the owner.
The case against DE LA CRUZ PIOTE and his co-schemers was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the FBI. The VU case was investigated by the FBI, the Washington State Patrol and the Kent Police Department.
Both cases were prosecuted by Assistant United States Attorney David Reese Jennings.
Toledo Man Faces Drug and Firearms ChargesRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced an indictment was filed against Michael J. McDuffey, age 31, of Toledo, Ohio.
The indictment charges McDuffey with possession of a firearm in furtherance of a drug trafficking crime and being a felon in possession of a firearm on April 4, 2014. The indictment also charges McDuffey with three counts of possession with intent to distribute a controlled substance on April 1, 2014 and April 4, 2014.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agencies in this case are the Federal Bureau of Investigation, Toledo, Ohio, and the Toledo Metro Drug Task Force. The case is being handled by Assistant United States Attorney Noah P. Hood.
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.