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Thursday 29 May 2014
Tax Charge Filed Against Delaware County ManRead the Press Release
Richard Lee, 55, of Swarthmore, PA, was charged today by Information with willfully failing to file a tax return, announced United States Attorney Zane David Memeger. The Information alleges that Lee had approximately $90,371 in gross income in 2010, which required him to file a federal 2010 tax return. The Information alleged that he willfully failed to file the return.
If convicted, the defendant faces a maximum possible sentence of one year of imprisonment.
The case was investigated by Internal Revenue Service, Criminal Investigation, and is being prosecuted by Assistant United States Attorney Sarah L. Grieb.
Click here to view the indictment
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Sisters, Postal Employees Plead Guilty in Seperate CasesRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that in separate and unrelated cases, Amanda Elliott, 35, of Ellington, N.Y., and Tamara Elliott, 30, of Falconer, N.Y., pleaded guilty to misappropriation of postal service funds by postal service employee before U.S. Magistrate Judge Leslie G. Foschio. The charge carries a maximum sentence 10 years in prison, a fine of $250,000 or both.
The defendants will be sentenced by the Chief U.S. District Judge William M. Skretny at a later date.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the case, stated that Amanda Elliott was the Postmaster Relief at the post office located in Lily Dale, N.Y. between December 2012 and September 5, 2013. During that time, the defendant accepted cash payments from customers for the purchase of postage stamps. Instead of depositing the cash in the cash register, Elliott kept the cash for personal use. The total loss to the USPS was $5,579.48.
In the second case, Tamara Elliott was the Postmaster Relief at the post office located in Ellington, N.Y. Between December 2012 and September 5, 2013, Tamara Elliott accepted cash payments from customers for the purchase of postage stamps. Instead of depositing the cash in the cash register, the defendant kept the cash for her own purposes. Tamara Elliott also rented post office boxes and sold money orders to customers and kept the cash payments. The total loss to the USPS was $11,326.86.
The pleas are the culmination of an investigation by the U.S. Postal Service, Office of Inspector General, Eastern Area Field Office, under the direction of Special Agent in Charge Monica Weyler.Sex Offender Pleads Guilty to Violating Sex Offender Registration and Notification ActRead the Press Release
PROVIDENCE, R.I. – Luis Ortiz, 42, formerly of Providence, pleaded guilty in federal court in Providence today to failing to register as a sex offender as required by the Sex Offender Registration and Notification Act (SORNA), announced United States Attorney Peter F. Neronha and United States Marshal Jamie A. Hainsworth.
Ortiz, convicted in Rhode Island state court in 2000 of second degree sexual assault, admitted to the court that he failed to register in any jurisdiction that he resided in after notifying Providence Police in November 2012 that he was moving from Providence to Pennsylvania.
SORNA provides a comprehensive set of federal standards for sex offender registration and notification in the United States through the nationwide network of sex offender registration and notification programs. Additionally, SORNA requires registered sex offenders to register and keep their registration current in each jurisdiction in which they reside, work, or go to school, and to make periodic in-person appearances to verify and update their registration information.
According to information presented to the court, in November 2012, after notifying Providence Police that he was moving from Providence to Pennsylvania, Ortiz moved in with his mother in Brockton, Mass., and also resided at a homeless medical shelter in Boston.
In January 2013 he moved back to Rhode Island, but eventually traveled to Columbia, South Carolina, where he was located by the U.S. Marshals Service living in a hotel with a girlfriend and her two young children.
Ortiz is scheduled to be sentenced by U.S. District Court Judge John J. McConnell, Jr., on August 27, 2014.
Failure to register under the Sex Offender Registration and Notification Act is punishable by a statutory penalty up to 10 years in federal prison and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorney Richard W. Rose.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Seventh Adams Produce Official Charged with FraudRead the Press Release
BIRMINGHAM – A federal grand jury today indicted the former chief operating officer of Adams Produce Company in connection with fraud at the bankrupt Birmingham distributor of fresh fruits and vegetables, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
STEVEN CRAIG FINBERG, 45, of Texas, is the seventh Adams Produce official charged in relation to a scheme to defraud the federal government of several hundred thousand dollars by creating false invoices and purchase orders in connection with government contracts.
In April, a grand jury indicted JOHN STEVEN ALEXANDER, 50, of Mountain Brook, for conspiracy and wire fraud. Alexander is the company's former chief financial officer. Five other Adams Produce officials have pleaded guilty and been sentenced on charges related to the fraud scheme. Four of the men have been ordered, jointly, to pay $481,000 in restitution the government. Adams' former chief executive officer, Scott David Grinstead, was ordered to pay restitution to the bankruptcy estate of Adams Produce to benefit the company's employees, who were not fully paid when Adams closed abruptly in 2012.
Finberg is charged with conspiring to defraud the government with Alexander, Grinstead, and the four other defendants -- David Andrew Kirkland, director of purchasing, Michael John O'Brien, general manager at an Adams' distribution center in Pensacola, Fla., Stanley Joel Butler, an Adams' purchasing agent, and Christopher Alan Pfahl, a purchasing program specialist. Finberg also faces 32 counts of wire fraud in connection with the scheme.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams’ customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records. The price paid by the government depended, in large part, on the cost to Adams Produce to purchase fruits and vegetables.
According to the indictment, Finberg engaged in a scheme to create false records that reflected an inflated cost to Adams Produce for fruits and vegetables it purchased from a national distributor. The higher costs were then presented to the U.S. Government.
According to today's indictment, Finberg met with the other officers and employees of Adams' Produce in July 2011 and they discussed ways to increase the company's profit margins on government contracts, including conducting transactions designed to create fraudulent purchase orders.
Finberg also was included in an Aug. 1, 2011, e-mail exchange with other Adams' officials, including Kirkland, about naming a company being created within Adams Produce to keep track of the fraudulent transactions, according to the indictment. O'Brien "suggested naming the company 'dsf (Dave's slush fund)... gbm (guranteed bonus maker).'," the indictment charges.
The FBI investigated the case, which Assistant U.S. Attorney George A. Martin Jr. is prosecuting.
Seven Involved with Online Pharmacy Based in Florida Indicted for Internet Pharmacy and Money Laundering ConspiracyRead the Press Release
A federal grand jury in the Western District of Washington indicted seven people late yesterday for an illegal drug distribution scheme involving an internet pharmacy, announced U.S. Attorney Jenny A. Durkan. The originator of the scheme, JUAN GALLINAL, 41, of Pembroke Pines, Florida will be summoned to appear for arraignment in Seattle. The internet pharmacy distributed drugs to some 200 customers in Washington State between 2009 and 2012. The indictment alleges that the pharmacy shipped hundreds of thousands of pills of hydrocodone, phentermine, alprazolam (Xanax) and codeine (Tylenol 4) to people across the country who did not have valid prescriptions for the narcotics. The group is alleged to have brought in more than $9 million in revenue from the sale of pills during the three year scheme. The pharmacy operated four internet sites through which they solicited customers and allowed customers in Washington State to order drugs, including the website www.frontierpharmacies.com. The conspirators allegedly laundered the proceeds of their sales through a brick-and-mortar pharmacy in Florida called Discount Pharmacy of Pines. In June 2012, the DEA shut down the operation by seizing the conspiracy’s websites, computers, and drug inventory.
“These criminal conspirators harnessed the power of the internet to become virtual drug dealers. They lined their pockets by feeding the devastating addictions in our communities,” said U.S. Attorney Jenny A. Durkan. “They shipped drugs to hundreds of customers in Washington State, most of whom did not have a valid prescription, had never seen a doctor, and had no legitimate medical purpose. Once these criminals knew that Western Washington law enforcement agents were on to their scheme, they tried to simply shift their criminal conduct to other regions of the country. I commend the dedicated DEA and FDA agents and prosecutors who continue to investigate this case.”
“Pill mills and rogue internet pharmacies are set up to sell addiction,” said DEA Special Agent in Charge Matthew G. Barnes. “These defendants raked in over $9 million in illicit drug proceeds and contributed to the nationwide prescription drug and heroin epidemic. I appreciate the ongoing commitment and cooperation of our federal, state and local partners.”
GALLINAL, a former police officer from Virginia, is charged in all five counts of the indictment: conspiracy to distribute controlled substances by means of the internet; conspiracy to distribute controlled substances; conspiracy to introduce misbranded prescription drugs into interstate commerce; conspiracy to commit money laundering; and destruction, alteration, and concealment of records. In addition to GALLINAL, six other conspirators are charged in some of the counts:
JORDAN TRUXELL, 25, of Davie, Florida served as the registered agent for Discount Pharmacy dba frontierpharmacies.com. He is charged in four counts of the indictment.
ALI LOVINS, 41, of Cooper City, Florida is a registered nurse and was the office manager for Discount Pharmacy. She is charged in four counts of the indictment.
THOMAS BROOKE, 52, of Cooper City, Florida was the bookkeeper for Discount Pharmacy. He is charged in four counts of the indictment.
CRAIG GREER, 40, of Hollywood, Florida, a former police officer, worked to promote the internet pharmacy scheme. He is charged in four counts of the indictment.
KEVIN KOGAN, 44, of Cedar Park, Texas, set up the websites and servers for the online pharmacy, and attempted to hide the conspiracies databases from investigators. He is charged in four counts of the indictment.
JERRY DELMAN, 81, of Miami, Florida, a pharmacist who ostensibly oversaw the prescriptions going out the door to customers.According to the indictment, the conspiracy would continue to refill prescriptions even if no valid prescription existed. In some instances the conspirators simply looked for a physician in the same geographic area as the customer with a similar name and filled the prescription using the physician’s DEA number without his or her knowledge. The pharmacy charged as much as ten times the usual price for the medications.
The conspirators are alleged to have engaged in a money laundering conspiracy to hide their ill-gotten gains. The destruction of evidence count alleges GALLINAL and KOGAN destroyed records after the first search warrants were served in the case in June 2012. After the execution of the search warrants, the conspirators attempted to continue the internet pharmacy scheme until the Drug Enforcement Administration ordered them to cease in August 2012. The conspirators made additional efforts to resume their online pharmacy scheme under alternative names, but refused to take any orders from or make any shipments to Washington or Oregon.
If convicted the defendants face up to 20 years in prison.
This is the first case brought in Western Washington using the Ryan Haight Act. You can learn more about the Act here.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The case was investigated by the Portland Tactical Diversion Squad which is comprised of the Drug Enforcement Administration (DEA) and the Portland Police Bureau. Substantial investigative assistance was provided by the Food and Drug and Administration (FDA) – Florida, and DEA Miami Field Division.
The case is being prosecuted by Assistant United States Attorneys Mike Lang and Francis Franze-Nakamura.
Second Baton Rouge Man Sentenced in Connection with Fraudulent Scheme to Develop Fitness FacilityRead the Press Release
BATON ROUGE, LA –United States Attorney Walt Green announced that RONALD JOSEPH OLAH, JR., age 35, of Baton Rouge, Louisiana, was sentenced today by U.S. District Judge James J. Brady to serve eight (8) months incarceration in a halfway house and two (2) years of probation for his role in a fraudulent scheme to secure financing for a new fitness facility in Baton Rouge.
The sentence arises from an investigation into fraud in connection with an effort by OLAH and others to develop a new gym in Baton Rouge, to be called Powerhouse Gym of Baton Rouge. On May 30, 2013, OLAH and a co-defendant, Matthew Scott Bernard, were charged by a federal grand jury with bank fraud, making false statements to a bank, and wire fraud. The indictment alleged that in 2011, while attempting to secure financing for a new gym that they sought to develop, OLAH and Bernard made numerous false representations to two local banks regarding their personal financial resources, their incomes, and the financial condition of an existing gym that OLAH was operating at the time. The indictment alleged that the defendants obtained loans from two different banks, and an out-of-state investor, based on their false statements. Bernard pled guilty to bank fraud on August 14, 2013, and OLAH pled guilty to wire fraud on November 5, 2013.
OLAH appeared before Judge Brady today for sentencing, and was sentenced to serve eight (8) months incarceration in a halfway house, two (2) years of probation, to pay restitution in the amount of $575,242.82, and to pay a special assessment of $100. Finally, as part of his sentence, OLAH has been ordered to forfeit an additional $325,343 in proceeds from the fraudulent scheme.
OLAH’s co-defendant, Bernard, was previously sentenced to serve forty-one (41) months in federal prison for his role in the scheme.
The investigation of this matter was conducted by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Alan A. Stevens, who serves as a Deputy Criminal Chief of the Criminal Division.
Seattle Man Pleads Guilty to Voter Intimidation and Identification Fraud <br /> for Letters Sent to Florida Residents in Conjunction with the <br /> 2012 Federal ElectionsRead the Press Release
James Webb Baker Jr., 58, of Seattle, pleaded guilty today to one count of voter intimidation and one count of identification fraud in the U.S. District Court for the Middle District of Florida. Prior to the 2012 federal elections, Baker created and sent 200 fake voter eligibility letters to Republican Party donors across Florida that questioned the recipients’ citizenship status. During the plea hearing, Baker admitted that he intended the letters to look as if they were written by county elections officials and that his purpose in sending the letters was to intimidate the recipients and interfere with their right to vote.According to the evidence presented in court proceedings and documents, in October 2012, Baker read about the efforts of the Florida Governor and the Florida Secretary of State to remove the names of voters from the official Florida county lists of eligible voters. Angered by what he believed to be an attempt to suppress voter turnout, specifically of Hispanic voters who would vote for candidates of the Democratic Party, Baker created “false” or “copycat” voter eligibility letters of the actual letters sent by county officials. Baker sent his letters, which questioned the recipient’s eligibility to vote, to 200 Republican Party donors. The letters required the recipients to complete a voter eligibility form within 15 days or else their name would be removed from the voter registration rolls. Baker inserted a line of text in bold stating that a nonregistered voter who casts a vote may be subject to criminal sanctions.
The letters looked almost identical to official county Supervisor of Elections letters, and included the county official’s name, letterhead, address and contact information. During the plea proceedings, Baker admitted to making several changes to the original official letters in order to stress the threats that the recipients would lose their right to vote and/or be imprisoned if they did not first document their citizenship and right to vote in person to the registrar.
“Protecting the right to vote is one of the department’s top priorities,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Civil Rights Division is strongly committed to comprehensive and vigorous enforcement of laws that protect the rights of every American to vote free from intimidation, coercion, or threats.”
“My office is committed to aggressively protecting the integrity of the election process,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida. “Each citizen must be able to vote without intimidation or discrimination and to have that vote counted. It is imperative that those who have specific information about intimidation, discrimination or election fraud make that information available immediately to my office, the FBI or the Civil Rights Division.”
“This joint investigative effort is yet another example of the fortitude and commitment of our collective agencies to protect our citizen’s individual and constitutional rights,” said FBI Special Agent in Charge Paul Wysopal for the FBI Tampa Field Office.
“This case was complex,” said Florida Department of Law Enforcement Commissioner Gerald Bailey. “It required the expertise and dedication of FDLE Executive Investigations, crime lab analysts and intelligence analysts. Their efforts led to the identification and conviction of Baker. My thanks to each of them.”
“Using the U.S. Mail to threaten or intimidate voters will not be tolerated,” said Inspector in Charge Brad Kleinknecht with the Seattle Division of the U.S. Postal Inspection Service. “The Postal Inspection Service, along with its law enforcement partners, will continue to investigate all cases of this nature to ensure the U.S. Mail continues to play a key role our nation's election process.”This case was investigated by the FBI, U.S. Postal Inspection Service and the Florida Department of Law Enforcement. It is being prosecuted by Special Litigation Counsel Mark Blumburg and Trial Attorney William E. Nolan of the Civil Rights Division, and Assistant U.S. Attorney Robert A. Mosakowski of the U.S. Attorney’s Office for the Middle District of Florida.
Rural Vermilion County Man Arrested on Child Pornography ChargesRead the Press Release
Urbana, Ill. – A rural Vermilion county man, Robert Lee Garrison, 43, of the 10,000 block of 2750 N Road, Potomac, Ill., was arrested today on child pornography charges and appeared before U.S. Magistrate Judge David G. Bernthal, in Urbana. A federal grand jury in Peoria recently returned the indictment that charges Garrison with receipt and possession of child pornography, as announced by Jim Lewis, U.S. Attorney for the Central District of Illinois. The indictment had remained sealed pending Garrison’s arrest and arraignment.
Garrison has entered a plea of not guilty and the court scheduled trial for Aug. 4, 2014, before Chief U.S. District Judge James E. Shadid, in Peoria. Following today’s court appearance, Garrison was released on $10,000 unsecured bond with specific conditions including pre-trial monitoring and supervision.
The indictment alleges that from August 2006 to May 2011, Garrison received and possessed images and videos of minors engaged in sexually explicit conduct. The indictment also seeks forfeiture of computers and related materials allegedly used to commit or promote the offensesIf convicted, the statutory penalty for each count of receipt of child pornography is a mandatory minimum of five years in prison to 20 years in prison and a term of supervised release of up to life following any term of imprisonment. If a defendant has a prior child sex abuse or child pornography conviction, the statutory penalty is not less than 15 years and up to 40 years in prison. For possession of child pornography, the penalty is up to 10 years in prison.
The case is being prosecuted by Assistant U.S. Attorney Elly M. Peirson. The charges are the result of an investigation by the Federal Bureau of Investigation and the Vermilion County Sheriff’s Office.
Members of the public are reminded that an indictment is merely an accusation; each defendant is presumed innocent unless proven guilty.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys= Offices and the Criminal Division=s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
# # # #Rochester Woman Charged with Defrauding RG & ERead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Phally Suong, 34, of Rochester, N.Y., was arrested and charged by criminal complaint with committing mail fraud. The charge carries a maximum penalty of 20 years in prison, and a fine of up to $250,000.
Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that according to the complaint, Suong worked at Rochester Gas and Electric as a Customer Service Representative from 2005 until 2013. Between 2012 and 2013, the defendant used her position to access RG&E billing systems and unlawfully alter customer information for inactive accounts awaiting refunds. The defendant would change the information in the system from the actual customer’s name to her own, which would cause RG&E to issue refund checks to Suong instead of the actual account holder. As part of the scheme, the defendant caused fraudulent refund checks to be mailed out using the United States Postal Service.
Once these checks were received, Suong would cash them, and then go back into the billing system and change the account information back to the original customer’s name and address. RG&E became aware of the unlawful activity during an internal audit and began an immediate investigation to determine the scope of the activity. The company then notified the Federal Bureau of Investigation. As a result of this scheme to defraud, RG&E incurred a loss of over $199,000.
The criminal complaint is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation.
The defendant made an initial appearance this afternoon before U.S. Magistrate Judge Jonathan W. Feldman. Suong is due back in court on June 30, 2014 at 9:30 a.m.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until proven guilty in a court of law.Restaurant Owner Pleads Guilty to Tax EvasionRead the Press Release
PROVIDENCE, R.I. – Kenneth J. O’Brien, 47, of Portsmouth, R.I., owner of K&D Investments Inc., d/b/a The Beach House, a bar, restaurant and nightclub located in Portsmouth, pleaded guilty in federal court in Providence today to three counts of tax evasion, announced United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of IRS Criminal Investigation.
Appearing before U.S. District Court Judge John J. McConnell, Jr., O’Brien admitted to the court that he failed to report nearly one million dollars in income from his business. O’Brien admitted that he kept two sets of business bookkeeping records, pocketed the cash and ultimately falsified his personal tax returns.
According to information presented to the court, in July 2011 an IRS review discovered that The Beach House was listed for sale, and that Kenneth O’Brien was maintaining two sets of bookkeeping records. One set was the true record of the business’s income, the second was fictitious for the purpose of third party disclosures necessary to maintain and operate the business. During a meeting with an undercover agent, O’Brien explained that he skimmed cash from the business. The defendant told the agent, “… I steal five to ten thousand a month. On a slow month five, on a good month ten.”
According to information presented to the court, between 2007 and 2010, O’Brien failed to disclose $929,095 in income from the business and failed to pay to the IRS $171,990 in taxes, plus any interest and penalties.
O’Brien is scheduled to be sentenced onSeptember 2, 2014. Tax evasion is punishable by a statutory penalty up to 5 years in federal prison and a fine of up to $100,000.
The case is being prosecuted by Assistant U.S. Attorney Richard W. Rose, with the assistance of Assistant U.S. Attorney Terrence P. Donnelly.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Reed Springs Man Sentenced for Making False Tax ClaimsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Reed Springs, Mo., man was sentenced in federal court today for making more than $124,000 in fraudulent tax refund claims.
Michael R. Jett, 48, of Reed Springs, was sentenced by U.S. District Judge Beth Phillips to two years in federal prison without parole.
On Dec. 16, 2013, Jett pleaded guilty to making a false claim against the government. Jett admitted that he filed 22 false or fraudulent tax returns in order to obtain larger tax refunds between January 2009 and January 2012. Jett prepared tax returns for himself, his family and for other individuals using fraudulent W-2 forms issued by companies under his control, including Air1Assault, Creative Designs, Southwest Missouri Home Products and Corvette Specialist. Using the fraudulent W-2 forms, Jett prepared tax returns requesting tax refunds in amounts larger than actually owed. Those refunds were electronically deposited in bank accounts in his name, or the names of family members.
Jett requested a total of $124,493 in refunds on those 22 tax returns, which actually qualified for only $19,137 in legitimate refunds. The total loss for the scheme was $105,356.
This case was prosecuted by Assistant U.S. Attorney Gary Milligan. It was investigated by IRS-Criminal Investigation.
Puerto Rico Superior Court Judge and Local Businessman Indicted on Conspiracy and Federal Programs Bribery ChargesRead the Press Release
A current Puerto Rico Superior Court Judge and Puerto Rico businessman were charged with orchestrating a criminal scheme in which the businessman paid bribes to the judge presiding over the criminal case against the businessman according to an indictment unsealed today.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico, and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.
“The outcome of a criminal case should be determined by the evidence and the law, not by paid-for bias,” said Assistant Attorney General Caldwell. “When citizens can’t have faith in the very people who are sworn to uphold the law, confidence in the entire system is shaken. We are committed to restoring that faith by rooting out corruption wherever it may be found.”
“A fair and impartial criminal justice system is one of the cornerstones of our democracy,” said U.S. Attorney Rodríguez-Vélez. “Judges, in particular, are expected to protect the public’s trust in the fairness of the judicial system. Investigations such as the one leading to today’s indictment are crucial to deter corrupt officials influenced by greed from breaking their oath to uphold the rule of law. This case should serve as a strong warning to those who might consider similar behavior. No one is above the law and everyone is accountable for their misdeeds.”
“Rogue justice as the one allegedly imparted by Judge Manuel Acevedo-Hernández will not be tolerated by the FBI,” said Special Agent in Charge Cases. “The FBI will continue vigorously to investigate allegations of corruption at all levels.”
The indictment, returned yesterday by a federal grand jury in the District of Puerto Rico and unsealed today, charges Manuel Acevedo-Hernandez, 62, and Lutgardo Acevedo-Lopez, 39, with conspiracy to commit federal programs bribery. Acevedo-Hernandez was also charged with receipt of a bribe by an agent of an organization receiving federal funds, and Acevedo-Lopez was charged with paying a bribe to an agent of an organization receiving federal funds.
According to the indictment,Acevedo-Hernandez, a Supervisory Superior Court Judge in the Aguadilla judicial region of Puerto Rico, allegedly accepted bribes from AcevedoLopez and others, knowing that the payments were made so that Acevedo-Hernandez would use his official position as a Superior Court judge for Acevedo-Lopez’s benefit. In particular, Acevedo-Hernandez presided over a criminal trial of Acevedo-Lopez and acquitted Acevedo-Lopez of all charges pending against him, including vehicular homicide. In exchange for the acquittal, Acevedo-Lopez, through an intermediary, bribed Acevedo-Hernandez by paying taxes owed by Acevedo-Hernandez, paying for construction of a garage, and providing him with a motorcycle, clothing and accessories, including cufflinks and a watch.
The charges contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI’s San Juan Division and is being prosecuted by Trial Attorney Peter Mason of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Timothy Henwood and Jose Capo of the District of Puerto Rico.
Citizens of Puerto Rico who have allegations of public corruption are encouraged to contact the FBI’s San Juan Division at (787) 754-6000.Puerto Rico Superior Court Judge and Local Businessman Indicted on Conspiracy and Federal Programs Bribery ChargesRead the Press Release
WASHINGTON – A current Puerto Rico Superior Court Judge and Puerto Rico businessman were charged with orchestrating a criminal scheme in which the businessman paid bribes to the judge presiding over the criminal case against the businessman according to an indictment unsealed today.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico, and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.
“The outcome of a criminal case should be determined by the evidence and the law, not by paid-for bias,” said Assistant Attorney General Caldwell. “When citizens can’t have faith in the very people who are sworn to uphold the law, confidence in the entire system is shaken. We are committed to restoring that faith by rooting out corruption wherever it may be found.”
“A fair and impartial criminal justice system is one of the cornerstones of our democracy,” said U.S. Attorney Rodríguez-Vélez. “Judges, in particular, are expected to protect the public’s trust in the fairness of the judicial system. Investigations such as the one leading to today’s indictment are crucial to deter corrupt officials influenced by greed from breaking their oath to uphold the rule of law. This case should serve as a strong warning to those who might consider similar behavior. No one is above the law and everyone is accountable for their misdeeds.”
“Rogue justice as the one allegedly imparted by Judge Manuel Acevedo-Hernàndez will not be tolerated by the FBI,” said Special Agent in Charge Cases. “The FBI will continue vigorously to investigate allegations of corruption at all levels.”
The indictment, returned yesterday by a federal grand jury in the District of Puerto Rico and unsealed today, charges Manuel Acevedo-Hernandez, 62, and Lutgardo Acevedo-Lopez, 39, with conspiracy to commit federal programs bribery. Acevedo-Hernandez was also charged with receipt of a bribe by an agent of an organization receiving federal funds, and Acevedo-Lopez was charged with paying a bribe to an agent of an organization receiving federal funds.
According to the indictment,Acevedo-Hernandez, a Supervisory Superior Court Judge in the Aguadilla judicial region of Puerto Rico, allegedly accepted bribes from AcevedoLopez and others, knowing that the payments were made so that Acevedo-Hernandez would use his official position as a Superior Court judge for Acevedo-Lopez’s benefit. In particular, Acevedo-Hernandez presided over a criminal trial of Acevedo-Lopez and acquitted Acevedo-Lopez of all charges pending against him, including vehicular homicide. In exchange for the acquittal, Acevedo-Lopez, through an intermediary, bribed Acevedo-Hernandez by paying taxes owed by Acevedo-Hernandez, paying for construction of a garage, and providing him with a motorcycle, clothing and accessories, including cufflinks and a watch.
The charges contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI’s San Juan Division and is being prosecuted by Trial Attorney Peter Mason of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Timothy Henwood and Jose Capo of the District of Puerto Rico.
Citizens of Puerto Rico who have allegations of public corruption are encouraged to contact the FBI’s San Juan Division at (787) 754-6000.
Pontiac Woman Pleads Guilty to Making False Claims to the United StatesRead the Press Release
Najeebah Tanzil, of Pontiac, Michigan, pleaded guilty today for her involvement in a scheme to file fraudulent tax returns with the Internal Revenue Service, U.S. 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.
According to court records, from July 2009 through June 2010, Tanzil caused 15 fraudulent tax returns, which she knew to be fraudulent, to be filed with the Internal Revenue Service. These returns, filed in her name and the names of others, contained false W-2 wage and withholding information as well as claims for the First Time Homebuyer and Education credits to which the filers were not entitled to. In total, the tax returns requested refunds of approximately $168,500.
“Falsifying documents to obtain or increase Federal Income Tax refunds is a serious crime that undermines our tax system. Investigating these types of crimes is a priority for IRS-CI” said IRS Criminal Investigation Acting Special Agent in Charge Carolyn Weber.
The defendant faces a maximum term of imprisonment of five years, a fine of $250,000 and will be required to pay restitution to the IRS in the amount of $168,584.
The case was investigated by special agents of the IRS-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Ross MacKenzie.
Pharmacist Admits Attempting to Weaponize Deadly Toxins, Possessing Narcotics Manufacturing EquipmentRead the Press Release
TRENTON, N.J. - A licensed pharmacist pleaded guilty in federal court today to attempting to develop, produce and possess the potentially deadly toxins ricin and abrin for use as weapons and to possessing equipment for producing illegal narcotics, New Jersey U.S. Attorney Paul J. Fishman announced.
Jordan S. Gonzalez, 34, of New York and formerly of Jersey City, N.J., entered his guilty plea before U.S. District Judge Mary L. Cooper in Trenton federal court.
“Jordan Gonzalez admitted today that he worked to manufacture and deploy deadly toxins, stockpiled weapons and body armor and acquired manuals training him for violent confrontation,” said U.S. Attorney Fishman. “We all have seen the devastation possible when these behaviors go unchecked. With today’s guilty plea, Jordan Gonzalez will face justice and will not be a threat to society.”
“The overriding focus of the FBI’s WMD Directorate, and the primary focus of our overall efforts, is prevention,” said FBI Newark Division Special Agent in Charge Aaron T. Ford. “To make this happen we pull together various resources from the FBI and work closely with our law enforcement partners. In this case, the FBI worked swiftly and tirelessly with our partners to prevent and neutralize all threats posed by this defendant.”
Carl J. Kotowski, Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division, said, “The men and women of DEA are dedicated to protecting the citizens of this nation. This investigation reveals how DEA and its law enforcement partners worked together to prevent Mr. Gonzalez from doing harm to the citizens of our communities.”
According documents filed in this case and statements made in court:
From Sept. 18, 2011, through March 19, 2013, Gonzalez purchased thousands of seeds containing ricin and abrin, and materials to extract and administer those toxins to others, including filtering equipment, respirators, glass vials, a spraying device and projectile weapons including a crossbow pistol. Gonzalez also purchased materials for making RDX, an explosive compound used in military and commercial demolition applications. Gonzalez made the purchases through an online third-party vendor marketplace and all the items were delivered to him at his Jersey City apartment.
Gonzalez learned how to extract toxins from the seeds and about deployment methods from manuals he acquired. He also kept manuals teaching how to make improvised explosive devices and synthesize explosive compounds, including RDX.
On Nov. 8, 2013, while living in New York, Gonzalez purchased one kilogram of sodium azide, a toxic, gas-forming compound that can explode at high temperatures and is lethal if ingested or absorbed through the skin. Law enforcement officers intercepted the delivery during the investigation.
On Nov. 14, 2013, Gonzalez was arrested in Jersey City and search warrants were executed at three locations he used: apartments in Manhattan and Jersey City and a storage unit in Jersey City. Collectively, material collected through the searches included thousands of seeds containing ricin and abrin; explosive precursor chemicals; manuals related to toxins, explosives and improvised explosive devices; approximately one thousand rounds of ammunition, handguns, components for assault rifles, and high-capacity magazines; a bulletproof vest; and books and documents related to the collapse of social order and techniques for surviving in a lawless environment. Gonzalez has been in custody since his arrest.
Even small doses of ricin and abrin are potentially lethal to humans if ingested, inhaled or injected – causing death within 36 to 72 hours from the time of exposure.
During his guilty plea, Gonzalez admitted that acquiring this knowledge and these materials were substantial steps toward developing ricin and abrin as weapons and that he acquired all of the materials – including the firearms, ammunition and body armor – in anticipation of using them in confrontations with other people in the future.
Gonzalez also acquired manuals for synthesizing controlled substances, including methylenedioxyamphetamine (MDA) and methylenedioxymethamphetamine (MDMA), also known as “ecstasy.” He bought and had delivered to the Jersey City apartment a three-neck round-bottom flask, gel capsules and an encapsulating machine, as well as precursor chemicals used in the manufacture of MDA and MDMA. Possession of that type of flask is prohibited if intended for use in the manufacturing of controlled substances.
The toxin charge to which Gonzalez pleaded guilty carries a maximum potential penalty of any term of years or life in prison and a $250,000 fine. The narcotics charge carries a maximum potential penalty of four years in prison and a $250,000 fine. Sentencing is currently scheduled for Sept. 17, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford in Newark, and the DEA, under the direction of Special Agent in Charge Kotowski in New Jersey, with the investigation leading to today’s plea. He also thanked members of FBI Newark’s Joint Terrorism Task Force; FBI’s New York Office and Weapons of Mass Destruction Directorate Laboratory Division; DEA’s New York Division; and the New Jersey Office of Homeland Security and Preparedness for their work on the case; as well as the police and fire departments of Jersey City and the City of New York, as well as the New Jersey State Police for their assistance.
The government is represented by Assistant U.S. Attorney L. Judson Welle of the U.S. Attorney’s Office National Security Unit and Assistant U.S. Attorney Francisco J. Navarro of the Office’s Criminal Division, both in Newark. Valuable support was provided by attorneys of the Department of Justice’s National Security Division – Counterterrorism Section.14-198
Defense counsel: Steven Ross Esq., New York
Gonzalez, Jordan Information
Passport Office Worker Ordered to Prison for Passport FraudRead the Press Release
HOUSTON – Nyle Churchwell, 52, of Houston, has been sentenced to federal prison for his role in the issuance of passports for unqualified people, announced United States Attorney Kenneth Magidson. A jury convicted Churchwell Jan. 31, 2014, following four days of trial and approximately six hours of deliberation.
Today, U.S. District Judge David Hittner, who presided over the trial, handed Churchwell a 42- month sentence to be immediately followed by three years of supervised release. At the hearing, additional evidence was presented regarding Churchwell’s ongoing abuse of his position as a passport manager including his improper relationships with passport couriers and how his conduct was a breach to our national security. In handing down the sentence, Judge Hittner noted that Churchwell served a critical position in the scheme as a senior manager in the passport office and repeatedly abused his position. Hittner further noted that Churchwell’s conduct displayed a callous disregard of his responsibilities. The court cited a letter from a Department of State official who reported that a U.S. Passport is the most sought after travel document in the world and that Churchwell’s actions seriously undermined the integrity of that document.
Churchwell was a passport office adjudications manager at the Mickey Leland Federal Building in Houston. At trial, the jury heard that Churchwell used his knowledge and authority to conspire to falsely submit and approve passport applications with substandard documentation. He also falsely documented parental identification for a minor child. By Churchwell’s approval, the passports were issued to individuals under false identities and non-citizens of the United States.
Several passport employees provided testimony at trial that detailed how Jamaican applicants who were not U.S. citizens would come in to the office and use other person’s identification and photos of their birth certificate. One of those co-conspirators was Lorna Brown, whom Churchwell knew. He would accept the substandard documents without question and, due to his status in the office, the passports would be issued. Additional evidence demonstrated that Churchwell’s initials and signature were on all the applications and he was asked for by name.
Specifically, the trial evidence proved a non-U.S. citizen and minor child from Jamaica received a passport without the proper two-parent consent. Further, Jamaican criminals were issued valid and full passports under true U.S. citizen names when they were not entitled to them.
Temi Russell, an Internal Revenue Service tax examiner and co-conspirator who worked in the same building as Churchwell, also testified. She described how she would pick up the fraudulent passports from the will-call desk and deliver them to co-conspirators, knowing the true identities and immigration status of the co-conspirators.
Eventually, the fraud was uncovered when one employee came forward and confronted Churchwell.
At trial, Churchwell’s defense contended was he was guilty only for being a nice guy and did not commit any crimes. He further suggested he did not know that the applicants were fraudulent.
The jury ultimately did not believe all of his story and found him guilty on two counts of making false statements in the application and use of a passport.
Churchwell, who had worked for the Department of State for several years, was placed on indefinite suspension after his arrest in September 2012.
Judge Hittner remanded Churchwell to custody following the return of the verdicts where he will remain pending transfer to a to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by the Diplomatic Security Services with the Department of State and the Department of Treasury’s Inspector General for Tax Administration. Assistant U.S. Attorneys Suzanne Elmilady and Robert Stabe are prosecuting the case.
Palm Harbor Woman Sentenced to Federal Prison for Running Fraudulent Home Inspection BusinessRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington today sentenced Tammy Roaderick (40, Palm Harbor) to thirty-three months in federal prison for conspiracy to commit wire fraud. The court also entered a money judgment against Roaderick in the amount of $2,396,498.25, which are the proceeds traceable to the offense. Roaderick pleaded guilty on July 18, 2013.
According to court documents, Roaderick and her co-conspirator, Dean Counce, operated American Mortgage Field Services, LLC (AMFS). AMFS performed preservation and inspection work for homes in various phases of foreclosure, including homes that were owned by government entities such as Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA). The government entities paid servicing lenders, such as Bank of America, to protect and maintain their properties. Beginning in or around 2007, in order to protect the investments and to prevent unnecessary deterioration from neglect or vandalism, some of the servicing lenders retained AMFS to conduct periodic inspections of government-owned or insured properties.
Each month, the servicing lenders would send Counce, Roaderick, and AMFS a list of properties that required inspection. These inspections required Counce and other AMFS employees to visit a property, fill out an inspection report, and take photographs. Counce and others transmitted the inspections electronically to the servicing lender, and the servicing lenders then paid AMFS a fee per inspection.
As the real estate market declined, Counce, Roaderick, and AMFS began to receive an increasing number of requests for inspections on properties in foreclosure. Most or all of the mortgages on the properties were owned or insured by Fannie Mae, Freddie Mac, or FHA. The requests far exceeded AMFS’s capacity to deliver. As a result, Counce, Roaderick and other AMFS employees acting at their direction began fabricating inspection reports. AMFS employed individuals, many of whom were unskilled teenagers, to use previous months’ photographs to fabricate subsequent inspection reports on properties. Counce and Roaderick also instructed AMFS employees to fabricate inspection reports by using publicly-available websites, such as property appraiser sites, to obtain data about properties that were not inspected. Employees who produced large numbers of false inspection reports were often rewarded with cash bonuses. AMFS employees, acting under Counce’s and Roaderick’s direction, then submitted these falsified inspection reports to AMFS’s clients along with false claims for payments. The government estimates that from in or around March 2007, until Roaderick withdrew from the conspiracy on or about December 31, 2009, AMFS received approximately $2,396,498.25 from Countrywide/Bank of America based upon fraudulent inspections.
This case was investigated by the Federal Housing Finance Agency Office of Inspector General, Department of Housing and Urban Development Office of the Inspector General, and the United States Secret Service. It was prosecuted by Assistant United States Attorney Mandy Riedel.
New York Resident Indicted for Trafficking in Counterfeit GoodsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA — A New York man has been indicted for allegedly bringing counterfeit goods to Wheeling to sell at a Christmas show last November.
United States Attorney William J. Ihlenfeld, II, announced that Xian Chen CHEN, age 37, of New York, was named in a 9-count Indictment charging him with “Trafficking in Counterfeit Goods.” It is alleged that on November 13, 2013, CHEN attempted to traffic in goods containing counterfeit marks, including goods purported to be from Beats Electronics, LLC, Chanel, Inc., Coach Services, Inc., Gucci America, Inc., Louis Vuitton Malletier, Michael Kors, LLC, The North Face Apparel Corp., Tiffany (NJ) LLC, and Tory Burch L.L.C. The marks are and were registered for those goods on the principal register of the United States Patent and Trademark Office, the use of which being likely to cause confusion, mistake and to deceive.
CHEN faces up to 10 years in prison on each count. The U.S. Attorney’s Office is also seeking to forfeit all articles and property used to commit and facilitate the offense.
It was investigated by the Mountaineer Highway Interdiction Team (MHIT) and by U.S. Immigration and Customs Enforcement, Homeland Security Investigations. MHIT is comprised of officers and agents from the West Virginia State Police, the Ohio County Sheriff’s Department, the Wheeling Police Department, and the Drug Enforcement Administration. MHIT is a part of the Appalachia High Intensity Drug Trafficking Area (AHIDTA) initiative and as a result receives federal funding to support its efforts.
This case will be prosecuted by Assistant United States Attorney Randolph J. Bernard.
An indictment is merely an accusation and the defendant is presumed innocent unless and until proven guilty.
New Jersey Man Sentenced to Ten Years in Prison for Sexual Coercion of A Minor over the InternetRead the Press Release
OAKLAND – Alex Gonzalez was sentenced yesterday to 10 years in prison, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
According to court documents and information presented at court, Gonzalez convinced a fifteen year old freshman from a Bay Area high school to take several explicit nude photographs of herself, and to send them to Gonzalez using an online picture-sharing application. After the victim informed Gonzalez that she no longer wished to communicate with him, Gonzalez began a campaign to punish the victim by posting her nude photographs online. Gonzalez first posted the victim’s pictures on iMGSRC.ru, a free photo-sharing website hosted in Russia, and included the victim’s name, age, and phone number with the photographs. Gonzalez then created a fake Facebook account, “friended” many of the victim’s Facebook friends, and posted the nude photographs of the victim on his Facebook wall, “tagging” the victim in each of the pictures. Finally, Gonzalez posted the images on xHamster.com, a free-access pornography website. The FBI executed a search warrant at Gonzalez’s home and uncovered a laptop computer containing more than 2,500 images and 130 videos depicting minors engaging in sexually explicit conduct.
Gonzalez, 22, pleaded guilty on Nov. 6, 2013 to distribution of child pornography, in violation of 18 U.S.C. § 2252(a)(2), and possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B). The sentence was handed down by the Honorable Phyllis Hamilton, United States District Court Judge. Judge Hamilton also sentenced the defendant to a fifteen year period of supervised release. The defendant was immediately remanded into custody.
The case was prosecuted by Assistant U.S. Attorneys Randy Luskey and Rodney Villazor of the Northern District of California and was investigated by the Federal Bureau of Investigation.
(Gonzalez indictment )
New Jersey Man Charged in Identity Theft Fraud SchemeRead the Press Release
PHILADELPHIA - Damian Gasdaska, 37, of Phillipsburg, NJ, was charged today by Indictment with one count of conspiracy, six counts of wire fraud, seven counts of bank fraud, and one count of aggravated identity theft, announced United States Attorney Zane David Memeger.
The indictment alleges that Gasdaska and his co-conspirators, Randall McMahon, of Easton, PA, and John Cordero, of Breinigsville, PA, both charged elsewhere, obtained and used personal identifying information to create false identities which he then utilized in various ways, such as applying for credit cards and purchasing or renting vehicles. One way in which Gasdaska obtained the personal identifying information was from old court records. Gasdaska allegedly took steps to create favorable credit profiles for these false identities, and to improve the individuals’ credit profiles. These steps included obtaining reports on the individuals, requesting the modification of information in the reports, and engaging in transactions in the names of the false identities to improve their credit profiles. Gasdaska allegedly prepared or obtained false driver’s licenses, social security cards, college identifications, insurance cards, employment records, and bills and invoices. He allegedly provided some of the fraudulent credit cards he acquired to his co-conspirators and kept some for himself.
According to the indictment, during the conspiracy, Gasdaska used Post Offices boxes in the name of the false identities to receive mail for various purposes, such as in connection with credit card applications, and used computers at public libraries to further the conspiracy. After co-conspirators made their purchases, they often provided the purchased items to Gasdaska who then sold them and paid the co-conspirators for their illegal services.
If convicted the defendant faces a maximum possible sentence of 335 years in prison, a five-year period of supervised release, a $9million fine, a $1,500 special assessment, and restitution.
The case was investigated by United States Secret Service, the United States Postal Inspection Service, Immigration and Customs Enforcement Homeland Security Investigations, and the Lehigh County Auto Theft and Insurance Fraud Task Force. It is being prosecuted by Assistant United States Attorney Patrick J. Murray.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Nevada Man Pleads Guilty to Tax Refund Fraud Using False Home Buyer CreditsRead the Press Release
Assistant Attorney General Kathryn Keneally for the Tax Division and U.S. Attorney Daniel G. Bogden for the District of Nevada announced today that Damon Boswell of Las Vegas pleaded guilty to conspiracy to submit false federal income tax returns. Boswell was indicted on May 21, 2013.According to the court documents, from April 2009 to May 2009, Boswell and Cheryl Ramos conspired to defraud the United States by assisting in the filing of federal tax returns that falsely claimed refunds based on the First-Time Home Buyers Credit. Ramos pleaded guilty on Jan. 24, 2013, and is awaiting sentencing. Boswell obtained personal identifying information from individuals by falsely telling them that if they had not filed their 2008 federal income tax returns and did not owe back taxes, they were entitled to receive “Obama Stimulus” money. Boswell used the personal information, including names, dates of birth and Social Security numbers, to file federal income tax returns for tax year 2008 claiming refunds to which the individuals were not entitled. The individuals did not authorize Boswell or anyone else to file or cause the filing of these tax returns in their names. Boswell retained up to 71 percent of the proceeds as a “fee” for arranging taxpayers’ receipt of the money.
Boswell faces a statutory potential maximum prison term of 10 years and a maximum fine of $250,000. His sentencing is scheduled for Sept. 15, 2014.
Assistant Attorney General Keneally and U.S. Attorney Bogden thanked special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Christina Brown and Trial Attorney Sonia M. Owens for the Tax Division, who prosecuted the case.Nevada Man Pleads Guilty to Tax Refund Fraud Using False Home Buyer CreditsRead the Press Release
WASHINGTON – Assistant Attorney General Kathryn Keneally for the Tax Division and U.S. Attorney Daniel G. Bogden for the District of Nevada announced today that Damon Boswell of Las Vegas pleaded guilty to conspiracy to submit false federal income tax returns. Boswell was indicted on May 21, 2013.
According to the court documents, from April 2009 to May 2009, Boswell and Cheryl Ramos conspired to defraud the United States by assisting in the filing of federal tax returns that falsely claimed refunds based on the First-Time Home Buyers Credit. Ramos pleaded guilty on Jan. 24, 2013, and is awaiting sentencing. Boswell obtained personal identifying information from individuals by falsely telling them that if they had not filed their 2008 federal income tax returns and did not owe back taxes, they were entitled to receive "Obama Stimulus" money. Boswell used the personal information, including names, dates of birth and Social Security numbers, to file federal income tax returns for tax year 2008 claiming refunds to which the individuals were not entitled. The individuals did not authorize Boswell or anyone else to file or cause the filing of these tax returns in their names. Boswell retained up to 71 percent of the proceeds as a "fee" for arranging taxpayers' receipt of the money.
Boswell faces a statutory potential maximum prison term of 10 years and a maximum fine of $250,000. His sentencing is scheduled for Sept. 15, 2014.
Assistant Attorney General Keneally and U.S. Attorney Bogden thanked special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Christina Brown and Trial Attorney Sonia M. Owens for the Tax Division, who prosecuted the case.
Munhall Man Sentenced to Probation for Defrauding Federal Employees' Compensation FundRead the Press Release
PITTSBURGH – A resident of Munhall, Pa., was sentenced today in federal court to four years probation on his conviction of federal employees’ compensation fraud, United States Attorney David J. Hickton announced today.
Senior United States District Judge Maurice B. Cohill, Jr., imposed sentence upon William J. Miller, Jr., 52.
According to information presented to the court, Miller, in connection with the application and receipt of federal employees’ compensation moneys and benefits, concealed and covered up the fact that he was self-employed and involved in a business enterprise. Miller’s fraudulent conduct resulted in compensation checks totaling approximately $18,104.57 being issued to him during the period from March 13, 2011, to Nov. 19, 2011, checks Miller knew he was not entitled to.
Prior to imposing sentence, Judge Cohill took into consideration the defendant’s lack of criminal history and his acceptance of responsibility.
Assistant United States Attorney Mary McKeen Houghton prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Labor, Office of Inspector General, and the United States Postal Service, Office of Inspector General, for the investigation that led to the successful prosecution of Miller.
Michigan Woman Charged with Wire FraudRead the Press Release
A criminal information was filed charging Kimberly Meridieth, 45, of Temperance, Michigan, with wire fraud, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Meridieth fraudulently obtained a mortgage loan in the amount of $239,112 in 2009, according to the information.
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, 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 agency in this case is the United States Department of Housing and Urban Development. The case is being handled by Assistant United States Attorney Ava Dustin.
An information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Medway Man Sentenced for Fraud and Collecting Section 8 Housing FundsRead the Press Release
BOSTON – A Dominican national living in Medway was sentenced today for fraudulently receiving more than $120,000 in federal housing funds and identity fraud.
Samuel Stalin Lebreault Feliz, a/k/a Antonio Jose Rodriguez Rodriguez, was sentenced by U.S. District Court Judge Denise J. Casper to 33 months in prison, three years of supervised release, and $121,077 in restitution. In February 2014, Feliz was convicted following a four-day jury trial of two counts of passport fraud, false representations to the Social Security Administration, and theft of public money.During a ten year period, Feliz used numerous false identities and made repeated false representations including: pretending to be a US citizen; claiming to be a Venezuelan seeking political asylum in the United States; petitioning to be allowed to stay in the United States because he supposedly was a victim of domestic violence; applying for, and receiving, over $120,000 in Section 8 housing benefits to which he was not entitled.
Throughout this period, Feliz was actually a citizen of the Dominican Republic with no legal status in the United States.
United States Attorney Carmen M. Ortiz; David W. Hall, Special Agent in Charge of the U.S. Bureau of Diplomatic Security, Boston Field Office; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Office; and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement. The case was prosecuted by Assistant U.S. Attorneys Carlos A. López and David G. Tobin of Ortiz’s Major Crimes Unit.
Marathon Hearing Finally Results in Sentence for 13-Year Fugitive DoctorRead the Press Release
HOUSTON – A former doctor who was a fugitive for more than 13 years has been handed his sentence for filing a false income tax return, announced United States Attorney Kenneth Magidson. Steven Louis Price pleaded guilty Dec. 19, 2013.
Price became a fugitive when he failed to appear in court on this case on Dec. 16, 1999. He remained a fugitive until his surrender to the U.S. Marshals Service on March 20, 2013.
The sentencing concluded late yesterday following a total 15-hour hearing that transpired over the course of two days. During that time, U.S. District Judge Nancy F. Atlas heard testimony and evidence from the government detailing the level of criminal activity and fraud Price had perpetrated.
Former employees provided testimony about the criminal activity at his clinic but also spoke about his overall credibility and his level of deceit beyond the workplace. For example, one described an instance in which he had purchased tickets for her, a fellow employee and that employee’s children to travel to DisneyWorld as a bonus for work. However, he provided a letter to the airline prior to their flight, cited his medical license and described the children as having a growth disorder which made them appear older than they were so as to secure reduced rate tickets for them. He also repeated the claim at Disneyworld so as to get reduced rate admission tickets and further used his medical credentials to claim he was handicapped and needed a wheelchair while at DisneyWorld in order to proceed to the front of the lines while there.
Others also testified that he had several rental properties and would not accept anything other than cash in payments so as to avoid reporting the income to the Internal Revenue Service (IRS).
Even though Price had previously pleaded guilty to his criminal behavior, his defense contested the amount of money for which he should be held responsible and should not have to pay. The defense also contended he was absent from justice for so long because he had a panic attack on the day of his initial appearance in 1999, suffered from severe depression and had no recollection of the entire 13 years he was considered a fugitive. The defense provided a psychologist to testify on his behalf, but he could provide no verification for the information provided by Price which formed the basis for his conclusions nor confirmation of any suicide attempts or lack of memory.
The government also provided testimony from a woman who was with Price prior to his initial court appearance. She testified that he asked her to meet him at a local bank where he emerged with a large package. Upon questioning from the government, she stated she believed the package was full of money. Shortly thereafter, Price fled.
The government informed the court that the time had arrived to give Price “a dose of judicial medicine,” claiming he used his medical license “not to heal, but to steal and lie.”
Ultimately, after commenting about the extraordinary duration of the sentencing hearing, Judge Atlas handed Price a sentence of 24 months in federal prison to be immediately followed by a one year-term of supervised release. The sentence was enhanced after the court found he had obstructed the administration of justice and that his criminal activity involved workmen’s compensation fraud. He was further ordered to pay $80,603.32 in restitution to the IRS.
The investigation established Price willfully made materially false statements in his 1992 federal income tax return by understating gross income derived from his medical practice. The Investigation further determined Price willfully understated Schedule C gross receipts derived from his medical practice on his federal income tax return by at least $80,603.32. Price received the majority of this income from attorneys and insurance companies paying worker’s compensation or automobile accident claims. In order to conceal this income, Price cashed many of the checks and used the proceeds to purchase cashier’s checks.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by IRS-Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Daniel C. Rodriguez.
Man Who Committed Violent Carjacking at Las Vegas Apartment Complex Sentenced to 15 Years in Federal PrisonRead the Press Release
LAS VEGAS, Nev. – A man who violently assaulted a woman with a taser device at an apartment complex in Las Vegas and carjacked her vehicle, was sentenced this week to 15 years in federal prison and five years of supervised release, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Keith Michael Costa, 35, of Las Vegas, was sentenced on May 27, 2014, by U.S. District Judge Jennifer A. Dorsey. Costa pleaded guilty on March 20, 2014, to one count of carjacking resulting in serious bodily injury and one count of felon in possession of a firearm.
“When possible, we will use federal laws to prosecute recidivist offenders who are committing violent crimes in our Nevada communities,” said U.S. Attorney Bogden. “We work with our local police departments to regularly review violent crimes that occur in Nevada to determine whether they should be prosecuted federally.”
According to the court records, on July 2, 2013, Costa went to the office of an apartment complex on West Charleston Boulevard to inquire about renting several apartments. As Costa left the office, he encountered a female tenant and demanded her car keys. When she refused to turn them over, Costa pushed her to the ground and shocked her with the taser at least seven or eight times. Costa then tried to steal the victim’s 2009 Audi A4 sedan, but the keys were not in the car. The victim ran inside the office, and Costa chased after her and continued to attack her with the taser in the presence of the manager and another employee until she turned over the keys to her car. Costa then fled in the car. The victim, who was an exchange student from Thailand, had to be treated at the hospital for the injuries she sustained during the carjacking.
On July 23, 2013, a Las Vegas Metropolitan Police Department Officer stopped Costa in Las Vegas as he was driving a black BMW sedan with paper plates. Costa argued with the officer and fled in the BMW, leading the patrol officer and a backup unit on a high speed car chase on surface streets and on U.S.95. During the pursuit, Costa was driving over medians, going the opposite way in traffic, and traveling at speeds of up to 140 miles per hour. At one point, Costa almost struck a female pedestrian who was pushing a baby stroller. Costa was ultimately able to escape the police. Two days later, Las Vegas Metropolitan Police Department Officers located Costa at a motel on E. Tropicana and arrested him. Costa fought physically with police officers who were trying to arrest him, and reached for a firearm in his pant waistband, which turned out to be a stolen 9 millimeter handgun. Costa, who in 2002 had previously been convicted in Nevada of the federal felony offense of access device fraud, was prohibited from possessing the gun.
This case was investigated by the FBI and the Las Vegas Metropolitan Police Department, as part of the Safe Streets Task Force and Project Safe Neighborhoods program. The case was prosecuted by Assistant U.S. Attorney Phillip N. Smith, Jr.Man Sentenced to More Than 15 Years for Child Sex Trafficking in RichmondRead the Press Release
RICHMOND, Va. – Troy Parker, 41, was sentenced today to 188 months in prison, followed by 10 years of supervised release, for child sex trafficking.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge, Federal Bureau of Investigation’s Richmond Field Office; and Clark E. Settles, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), made the announcement after sentencing by United States District Judge Robert E. Payne.
Parker pleaded guilty on February 12, 2014, to one count of child sex trafficking. According to court documents, Parker met a minor in Richmond, Virginia and took her to the Travel Inn. He then used his cellular telephone to post an advertisement on Backpage.com containing pictures of the minor and offering her for sexual acts in exchange for money. Parker also provided transportation and a hotel room for the minor to perform those sexual acts. The minor then provided Parker with money she was paid by her customers. On May 28, 2013, an agent with the Federal Bureau of Investigation, acting in an undercover capacity, spoke to Parker and arranged through him to meet the minor for purported sexual activities. At the time of the meeting, agents were able to secure the minor and take Parker into custody.
This case was investigated by the Federal Bureau of Investigation, the Department of Homeland Security, and the Richmond Police Department. Assistant United States Attorney Heather L. Hart prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Knoxville Hotel Owner Indicted for Bank FraudRead the Press Release
GREENEVILLE, Tenn. – A federal grand jury in Greeneville returned an indictment on May 13, 2014, against Jayesh Dahyabhai Patel, 48, of Knoxville, Tenn., charging him with five counts of bank fraud.
Patel appeared in court on May 29, 2014, before U.S. Magistrate Judge Dennis Inman and pleaded not guilty. He was released pending trial, which has been set for July 23, 2014, in U.S. District Court, in Greeneville, Tennessee.
According to the indictment on file with the U.S. District Court, from January 2009 through August 2011, Patel engaged in a scheme to defraud First Community Bank of East Tennessee, Kingsport, in connection with a $5.8 million loan to his business, QIS Knoxville, LLC, to purchase and renovate a Knoxville hotel. The indictment alleges that Patel provided false income tax returns for himself and his businesses to induce First Community Bank to issue the loan. Patel then further schemed to defraud First Community Bank by providing false invoices to induce the bank to disburse loan funds and by providing additional false tax returns to obtain an increase in the amount of the loan and to obtain a six-month interest only payment period. The indictment also alleges that Patel fraudulently induced First Community Bank to make a second loan to finance the sale of a motel by Patel to a relative by providing false information as to the down payment on the purchase.
If convicted, Patel faces a term of 30 years in prison, a $1,000,000 fine, and five years of supervised release as to each count.
This indictment is the result of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Neil Smith will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
KC Business Owners Plead Guilty to Defrauding Debt-stressed ClientsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that the owners and operators of a Kansas City, Mo., firm that promised to help financially-strapped clients get out of debt have pleaded guilty to defrauding their clients.
John Lee Norris, 43, and Julie Tina Hatcher, 38, both of Kansas City, Mo., pleaded guilty before U.S. District Judge Brian C. Wimes on Wednesday, May 28, 2014, to the charges contained in an April 9, 2014, federal indictment.
Norris and Hatcher operated Reaper Investment Partners, LLC; they also did business as Hydra International. In August 2011 they formed Death Productions LP, which maintained an office in Mission, Kan., before moving to Kansas City, Mo.
Both Norris and Hatcher pleaded guilty to participating in a conspiracy to defraud homeowners and other debtors who were in financial distress (as well as their victims’ lenders and the Federal Housing Administration) from August 2010 to June 28, 2013.
In addition to the conspiracy, Norris and Hatcher each pleaded guilty to one count of mail fraud. Hatcher also pleaded guilty to one count of Social Security disability fraud.
Norris and Hatcher recruited and targeted homeowners and others who were in financial difficulties with promises that they would be rescued from their financial problems, including foreclosure. Norris and Hatcher made promises and assurances to homeowners and other debtors that in exchange for a monthly payment RIP would stop and/or prevent the debtor from losing his or her home.
Norris and Hatcher admitted that they spent the payments received from RIP’s clients for their personal use. Dozens of client victims, as well as lenders, suffered hundreds of thousands of dollars in losses as a result of the conspiracy, including the loss of homes and vehicles. The federal indictment refers to victims from Lee’s Summit, Mo., St. Joseph, Mo., Gardner, Kan., Paducah, Ken., and North Wales, Penn.
Even after learning of several lost homes, RIP continued to accept monthly payments for services and continued to accept new clients with promises that clients would not lose their homes.
Norris and Hatcher claimed that RIP would draft, serve, file, and record legal forms, pleadings, and other documents; and would conduct necessary legal processes, contact the relevant parties, and implement administrative procedures to stop its clients from losing their home or property. When their clients contacted them and told them they had received notice that their homes were being foreclosed and that they had received eviction notices, Norris and Hatcher reassured them. Norris and Hatcher told their clients not to worry because these notices were part of the process, and RIP continued accepting payments. After several clients lost their homes, Norris and Hatcher reassured them that RIP was preparing the appeal paperwork and would likely win on appeal. RIP continued to take payments from other homeowners.
After informing law enforcement that they were no longer doing business, Norris and Hatcher continued to accept payments from at least one client and reassured at least one client that they were still working on the homeowner’s behalf. After closing RIP, they continued to accept payments.
Hatcher pleaded guilty to one count of Social Security disability fraud. Hatcher admitted that she failed to report her work activities and income while she received Social Security disability insurance benefits from August 2010 through April 2012.
Under federal statutes, Norris is subject to a sentence of up to 60 years in federal prison without parole, plus a fine up to $2 million and an order of restitution. Hatcher is subject to a sentence of up to 65 years in federal prison without parole, plus a fine up to $2,250,000 and an order of restitution. A sentencing hearing will be held on Sept. 19, 2014.
This case is being prosecuted by Assistant U.S. Attorneys Linda Marshall and Brian P. Casey. It was investigated by the FBI, the U.S. Secret Service, the U.S. Department of Housing and Urban Development – Office of Inspector General, the Social Security Administration – Office of Inspector General, the Johnson County, Kan., District Attorney’s Office and the Kansas City, Mo., Police Department.Joint Law Enforcement Operation Arrested Six Indivduals on Drug Charges in the East Bay, One in FresnoRead the Press Release
OAKLAND – An eleven-count federal Indictment charging nine people with participation in a conspiracy to manufacture and distribute Xanax pills and other drugs was returned by the Grand Jury on May 22, 2014, and unsealed today in federal court, announced United States Attorney Melinda Haag, Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick, Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez, U.S. Postal Inspection Service, Inspector in Charge Rafael E. Nunez, U.S. Food and Drug Administration Office of Criminal Investigations, Special Agent In Charge Lisa Malinowski, and Tatum King, Acting Special Agent in Charge for U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Francisco.
The Defendants and the charges are set forth below:
Defendant
Offenses Charged
Jeremy Donagal, 35,
aka “Xanax King” aka “XK”Counts One and Two:
21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Counts Three, Four, and Five:
21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance
Count Six:
21 U.S.C. § 331(i)(3) – Sale of Counterfeit Drugs
Count Seven:
18 U.S.C. § 1956(a)(2)(A) – International Money Laundering
Count Eight:
18 U.S.C. § 1956(a)(2)(B)(ii) – International Money Laundering
Counts Nine, Ten, and Eleven:
31 U.S.C. § 5324(a)(3) – StructuringLaurence Lindberg, 42
Count One:
21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three:
21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled SubstanceAlicia Mitts, 30
31 U.S.C. § 5324(a)(3) – Structuring
Thomas Elliott, 39
Count One:
21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three:
21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled SubstanceMichael Tomada, 42
Count One:
21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three:
21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled SubstanceChristopher Neely
Count Two:
21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Five:
21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance
Count Eight:
18 U.S.C. § 1956(a)(2)(A) – International Money LaunderingKenneth Koskiniemi, 37
Count Four:
21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled SubstanceDuston Kirk, 38
Count One:
21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three:
21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled Substance
Count Eight:
18 U.S.C. § 1956(a)(2)(B)(ii) – International Money Laundering
Counts Nine, Ten, and Eleven:
31 U.S.C. § 5324(a)(3) – StructuringMichael Gonzalez, 41
Count One:
21 U.S.C. § 846 – Conspiracy to Manufacture, Distribute, and Possess with Intent to Distribute a Controlled Substance
Count Three:
21 U.S.C. § 841(a)(1) – Manufacture, Distribution, and Possession with Intent to Distribute a Controlled SubstanceAccording to the Indictment, Donagal, a/k/a “Xanax King,” of Martinez, Calif., is alleged to have manufactured, distributed, and possessed with intent to distribute counterfeit alprazolam (Xanax) pills and other drugs. The Xanax pills at issue were manufactured to resemble alprazolam pills made by Pfizer, Inc., including stamping the Pfizer “Xanax” trademark on the pills. Donagal is also charged with two counts of international money laundering related to wire transfers of cash to China, both to promote the drug operation and to avoid the reporting requirements associated with such wires. Finally, Donagal is charged with structuring those wires in a way to avoid the $3,000 reporting requirement for such transactions, such as by arranging for multiple wires of below $3,000 to be sent to China from different Western Union locations in the Bay Area, all on the same day.
Lindberg, Kirk, Gonzalez, Elliott, Tomada, and Neely are charged with aiding Donagal in that enterprise.
Donagal, Lindberg, Mitts, Elliott, Tomada, and Neely were arrested yesterday in a joint law enforcement operation that took place in Martinez, Concord, Pleasant Hill, San Pablo, Pinole, Pacheco, Oakley, and Pittsburg, Calif. One additional defendant, Koskiniemi, was arrested in Fresno. Defendant Kirk is still at large, and Gonzalez is in state custody on another charge. The defendants in federal custody made their initial appearance in federal court in Oakland this morning, with the exception of Koskiniemi, who appeared in federal court in Fresno yesterday afternoon. Donagal, Lindberg, Mitts, Elliott, Tomada, and Neely were arraigned before the Honorable Donna M. Ryu, United States Magistrate Court Judge. Defendants Donagal, Lindberg, Elliott, Tomada, and Neely are currently in custody at North County Jail in Oakland, while Mitts was released on a bond in the amount of $50,000.
Donagal’s next scheduled appearance is at 9:30 a.m. on June 5, 2014, for a detention hearing before the Honorable Kandis A. Westmore, United States Magistrate Judge. Mitts, Tomada, and Neely will appear before Judge Ryu tomorrow at 9:30 a.m. for identification of counsel. Elliott will appear before Judge Westmore on June 2, 2014, for identification of counsel, and Lindberg will appear before Judge Westmore on June 3, 2014, for a detention hearing.
An Indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face a maximum sentence of 20 years in prison and a fine of $1,000,000 on the drug charges, 20 years in prison and a $500,000 fine for the money laundering charges, and 10 years in prison and a $500,000 fine on the structuring charges. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Kevin Barry and Katie Medearis are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Assistant U.S. Attorney David Countryman of the Asset Forfeiture Unit. The prosecution is the result of an investigation by the DEA, assisted by IRS Criminal Investigations, the U.S. Postal Inspection Service, the U.S. Food and Drug Administration Office of Criminal Investigations, U.S. Customs and Border Protection, Homeland Security Investigations, the Concord Police Department, the Martinez Police Department, the Pittsburg Police Department, the Contra Costa County Sheriff’s Office, the South San Francisco Police Department, the Oakland Police Department, the Oakland School Police Department, the Livermore Police Department, the Walnut Creek Police Department, the San Ramon Police Department, and the Pleasant Hill Police Department.
This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
(Donagal et al indictment )
Indictment Returned Against Mexico-Based Drug Ring Operating in the Atlanta AreaRead the Press Release
ATLANTA – Seventeen members of a Mexico-based drug ring were indicted by a federal grand jury on May 28, 2014, on federal charges, including conspiracy to distribute methamphetamine, heroin and cocaine and conspiracy to commit money laundering.
“These defendants are charged with using the metropolitan Atlanta area as their hub for the importation and distribution of millions of dollars’ worth of illegal deadly drugs,” said United States Attorney Sally Quillian Yates. “As a result of the tremendous cooperation between federal agencies and local law enforcement partners, this drug ring is now out of business.”
“This investigation unmasked a massive smuggling conspiracy involving staggering amounts of heroin, cocaine and methamphetamine brought into Atlanta from the southwest border, and a significant amount of bulk cash destined for Mexico,” said Special Agent in Charge Brock D. Nicholson, head of Homeland Security Investigations in Atlanta. “Thanks to a complex and coordinated effort by more than a dozen federal, state and local law enforcement agencies, we have been able to dismantle this transnational criminal network and bring these perpetrators to justice.”
“The attack on money laundering is an essential front in the war on narcotics,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “We will continue to unite with our law enforcement partners at the local, county, state and federal levels, and utilize every tool available to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”
According to United States Attorney Yates, the charges, and other information presented in court: Atenogenes Alvarado-Delgado was the alleged Mexico-based leader of this drug trafficking organization, and allegedly conspired with his brother, Jose Alvarado-Delgado, and associates, Reberiano Arroyo-Santana and Manuel Arroyo-Delgado, Jr., to import large amounts of cocaine, methamphetamine, and heroin into the Atlanta area from Mexico. The investigation revealed that this organization used passenger buses, owned by Alejandro Carmona, to transport the drugs from Mexico, across the border into the United States, and directly to the Atlanta area.
After unloading the narcotics-laden buses in local warehouses, Jose Antonio Pineda-Maldanado, Enrique Arroyo, Blanca Hernandez, Rufino Pineda-Perez, and Miguel Salinas would allegedly distribute the drugs in the Atlanta, Ga., area, as well as in Florida. Jose Cardenas-Garcia allegedly off-loaded drugs and loaded drug proceeds into elaborate concealed compartments in the buses. Rubi Torres-Aguilar, Yarely Pineda, and Reynaldo Maldonado-Guipes also allegedly transported drug proceeds on the buses in their suitcases. Alan Arnold Lopez allegedly supervised the border crossings of the buses and also traveled to the Atlanta area aboard at least one drug-filled bus.
Since October 2013, law enforcement has seized approximately 644 pounds of methamphetamine, 37 kilograms of heroin, 27 kilograms of cocaine, and $680,000 in drug proceeds, which include the following seizures:
- 39 pounds of methamphetamine seized on October 8, 2013, from Miguel Salinas after a traffic stop in Doraville, Ga.;
- 165 pounds of methamphetamine seized on October 11, 2013, pursuant to a search warrant of an apartment on Cleburne Parkway in Hiram, Ga.;
- 178 pounds of cocaine and heroin seized on October 11, 2013, pursuant to a search warrant of an apartment on Cumberland Pkwy in Cobb County, Ga.;
- $386,000 in drug proceeds seized on December 7, 2013, in Cuba, Ala. from suitcases transported on a passenger bus. The bus had departed Atlanta, Ga., en-route to Mexico;
- 132 pounds of methamphetamine seized on January 3, 2014, from Jose Antonio Pineda-Maldanado after a traffic stop in Austell, Ga.;
- Eleven pounds of methamphetamine seized on January 3, 2014, from an apartment on Jameson Pass in Alpharetta, Ga., which was used by the organization as a methamphetamine laboratory. Law enforcement had discovered the methamphetamine after an explosion at the apartment;
- 26 kilograms of heroin seized off a passenger bus at the U.S.-Mexico border in Laredo, Texas on January 20, 2014. The bus was destined for the Atlanta area from Mexico; and
- $277,490 in drug proceeds seized on March 19, 2014, from a passenger bus in Douglasville, Ga. The drug proceeds were concealed in false compartments within the bus frame.
Each of the following defendants has been arrested or located and will have an initial appearance before a United States Magistrate Judge in Atlanta or in the district in which they were arrested: Atenogenes Alvarado-Delgado, 35, of Powder Springs, Ga.; Jose Alvarado-Delgado, 35, of Austell, Ga.; Reberiano Arroyo-Santana, 36, of Atlanta, Ga.; Jose Antonio Pineda-Maldanado, 22, of Smyrna, Ga.; Yarely Pineda, 22, of Smyrna, Ga.; Alejandro Carmona, 63, of Arlington, Texas; Jose Cardenas-Garcia, 48, of Kennesaw, Ga.; Alan Arnold Lopez, 24, of Mableton, Ga.; Blanca Hernandez, 41, of Alpharetta, Ga.; Ranferi Pineda, 24, of Norcross, Ga; Rufino Pineda-Perez, 48, of Lawrenceville, Ga.; and Miguel Salinas, 22, of Lawrenceville, Ga.
Law enforcement officers continue to search for Manuel Arroyo-Delgado, Jr., 23, of Sandy Springs, Ga.; Enrique Arroyo, 38, of Atlanta, Ga.; Reynaldo Maldonado-Guipes, 56, of Cumming, Ga.; Rubi Torres-Aguilar, 44, of Austell, Ga.; and one additional male known only as “Mocha.”
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
The investigation and prosecution of this case is a coordinated effort through the David G. Wilhelm OCDETF Strike Force, led by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and Internal Revenue Service Criminal Investigations. Valuable assistance was also provided by the Cobb County Police Department, Cobb County Sheriff’s Office, Marietta Police Department, Powder Springs Police Department, Henry County Police Department, Clayton County Sheriff’s Office, Georgia Bureau of Investigation, DeKalb County Police Department, Newnan Police Department, Conyers Police Department, Gwinnett County Judicial Task Force, United States Customs and Border Protection, and the Georgia State Patrol.
Assistant United States Attorney Michael Herskowitz is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
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/.
Home Health Worker Convicted of Aggravated Identity Theft for Victimizing Elderly PatientRead the Press Release
Follow @SDILNewsA former home health personal nursing assistant, Melissa Charlton, 36, of Valmeyer, Illinois, pleaded guilty to access device fraud and aggravated identity theft on May 29, 2014, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Documents filed in US District Court establish that Charlton exploited an 82 year old woman from O’Fallon, Illinois. Charlton obtained unauthorized access to the victim’s credit cards and her checking account to obtain money and goods valued at more than $5,000. The victim attempted to stop the fraud after she discovered fraudulent credit card purchases, but Charlton also stole her replacement credit cards and misused the victim’s social security number and date of birth to activate the replacement cards. She also used the victim’s personal information to apply for an additional credit card account without the victim’s knowledge or consent.
Access device fraud is punishable by not more than 10 years in prison, and/or a $250,000 fine, or both, and not more than three years of supervised release. Aggravated identity theft carries a mandatory consecutive two-year sentence of imprisonment that must be served in addition to the sentence imposed for access device fraud. The United States Sentencing Guidelines must be applied to the case and considered by the Court during sentencing. Charlton will be sentenced in US District Court on September 17, 2014.
The investigation was conducted by agents from the US Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
Hollister Resident Pleads Guilty to Wire Fraud Stemming from an Employee Embezzlement SchemeRead the Press Release
SAN JOSE – Briana Irene Roy pleaded guilty in federal court in San Jose today to wire fraud stemming from an employee embezzlement scheme, announced United States Attorney Melinda Haag.
In pleading guilty, Roy admitted that she had been employed in the marketing division of a local engineering company based in San Jose, Calif. She also admitted that she devised and implemented a scheme whereby she used a company credit card issued in the name of one of the company’s executives on approximately 80 separate occasions between March 2010 and February 2013. Using the company’s credit card, Roy made charges to her personal PayPal account for her personal benefit, and attempted to conceal these activities by generating fake invoices and receipts for products and services in the name of another San Jose business. Through this fraudulent scheme, Roy admitted that she attempted to gain funds to which she was not entitled in the amount of $247,387.45.
Roy, 38, of Hollister, Calif., was charged on Dec. 13, 2013, with one count of wire fraud, in violation of Title 18 United States Code Section, 1343. Under the plea agreement, Roy pleaded guilty to the single count and agreed to pay restitution for the full amount of the loss. Roy is currently released on bond. Bail was set previously at $50,000.
Roy’s sentencing hearing is scheduled for Oct. 23, 2014, at 10:00 a.m., before the Honorable D. Lowell Jensen, Senior United States District Court Judge, in San Jose. The maximum statutory penalty for the single count in violation of 18 U.S.C. § 1343 is 20 years in prison and a fine of $250,000 or twice the gross gain or loss, plus restitution in the agreed upon amount of $197,240.95. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Amie Rooney is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen. The prosecution is the result of an investigation by the United States Secret Service.
(Roy information )
Holland, Ohio, Man Charged with Transporting Minor Across State Lines to Engage in Illegal Sexual ActivityRead the Press Release
An indictment was filed charging Robert Pollard, 23, of Holland, Ohio, with transportation of a minor across a state line with intent to engage in prostitution or illegal sexual activity on April 16, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
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, 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 agency in this case is the Federal Bureau of Investigation. The case is being handled by Assistant United States Attorney Alissa M. Sterling.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Haverhill Woman Indicted for Using Paypal in Scheme to Embezzle Close to $1 MillionRead the Press Release
BOSTON – A Haverhill woman was charged yesterday with using PayPal as part of a scheme to embezzle close to $1 million from her employer, a privately-held information technology staffing company based in Massachusetts.
Anita Allen, 34, was indicted on wire fraud charges. Allen was previously arrested on a criminal complaint at the airport in Charleston, S.C., and has remained in custody since that time.
According to the indictment, Allen, who worked as an accounts payable specialist, defrauded the company over a period of more than five years by directing dozens of transfers of money from a dormant company PayPal account to a PayPal account in her own name. Allen then forwarded the money from her PayPal account to her personal bank account, and spent it on day-to-day living expenses, travel, and the purchase of several vintage automobiles.
In addition, Allen charged numerous personal purchases to a company credit card, including multiple cruises on Norwegian Caribbean Lines, and purchases at retailers including Amazon.com and The Disney Store. Allen succeeded in hiding the fraud scheme by doctoring monthly credit card statements and falsifying entries in the very accounting journals it was her responsibility to maintain. In total, the fraud resulted in a loss to the company approaching $1 million.
If convicted, Allen faces a maximum sentence under the statute of 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim. The government is also seeking forfeiture of classic cars purchased by the defendant with proceeds of the fraud, including a 1951 Chevrolet Fleetline sedan, a 1965 Factory Replica Cobra roadster, a 1967 Ford Mustang coupe, and a 1970 Dodge Challenger.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The case is being prosecuted by Stephen E. Frank of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Gregg County Man Sentenced in Counterfeit Silver SchemeRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 47-year-old Longview, Texas man has been sentenced to federal prison for violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
James Leroy Frattarola pleaded guilty on Mar. 5, 2014, to possessing counterfeit silver bars with the intent to defraud another and was sentenced to 21 months in federal prison today by U.S. District Judge Michael H. Schneider.
According to information presented in court, on Sep. 13, 2013, Frattarola possessed approximately 90 one-ounce silver bars, stamped with the impression, “.999 FINE SILVER” and “NORTHWEST TERRITORIAL MINT” with intent to defraud another. Frattarola admitted to possessing the counterfeit bars in Longview, Texas and to engaging in similar criminal conduct on other occasions involving a total of nine victims. Frattarola was indicted by a federal grand jury on Oct. 23, 2013.
Frattarola was also ordered to pay a total of $28,720.40 in restitution to be divided among nine victims.
This case was investigated by the U.S. Secret Service, Longview Police Department, Kingsville Police Department, Terrell Police Department, Grand Prairie Police Department, and the Brazoria County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney Jim Noble.
#######Government Files Complaint Against CA Inc. for False Claims on GSA ContractRead the Press Release
WASHINGTON - The government has filed a complaint against CA Inc. (CA) for violations of the False Claims Act in connection with a General Services Administration (GSA) contract, the Justice Department announced today. CA manufactures and sells information technology products and is headquartered in Islandia, New York.
“We expect companies that do business with the government to comply with their contractual obligations,” said Assistant Attorney General of the Justice Department’s Civil Division Stuart F. Delery. “As this case demonstrates, we will take action against those who seek to abuse the government’s procurement process.”
“Too many federal contractors think they can get away with overcharging the government,” said U.S. Attorney Ronald C. Machen Jr. “Our complaint alleges that CA broke its promise to give the government the discounts promised under the contract, as well as the same prices it was giving commercial customers. We look forward to vigorously pressing these claims in court and recovering every dollar that is owed to the American taxpayer.”
In September 2002, CA entered into a GSA contract to provide software licenses, software maintenance, training and consulting services to various government agencies. The government’s complaint alleges that, since at least 2006, CA knowingly overcharged the government for software licenses and maintenance in various ways. For example, the government alleges that CA provided incomplete and inaccurate information to GSA contracting officers during negotiation of contract extensions. At the time CA negotiated these extensions, applicable regulations and contract provisions required CA to fully and accurately disclose how it conducted business in the commercial marketplace, so GSA could use that information to negotiate a fair price for government customers. The government also alleges that CA failed to truthfully update its discounting practices during the life of the GSA contract. CA repeatedly certified to GSA that its discounting policies and practices had not changed, when in fact its discounts to commercial customers had increased.
The government’s complaint also alleges that, since 2002, CA failed to apply properly the contract’s price reduction clause. The contract required CA to monitor discounts to certain commercial customers, compare these discounts to the discounts given to the government and, if the commercial discounts were higher, pass on those higher discounts to the government. The government alleges that CA failed to make those comparisons or, when it did make such comparisons, failed to do so correctly, resulting in the government overpaying for CA’s information technology.
CA’s contract is a Multiple Award Schedule (MAS) contract. Under the MAS program, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies. Agencies that purchase under CA’s contract include the Department of Defense, the Department of Energy, the Department of Health and Human Services and the Department of Labor.
“Companies doing business with the federal government on a GSA schedule must disclose current, accurate, and complete commercial discounts, so that GSA can get the best prices on behalf of American taxpayers,” said GSA Acting Inspector General Robert C. Erickson. “We will continue to investigate all allegations indicating that the federal government may have been overcharged by a contractor.”
Some of the allegations that are the subject of the government’s complaint were filed in a lawsuit originally brought by Dani Shemesh, a former employee of CA Israel Ltd., under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government and to share in any recovery. The Act also authorizes the government to intervene and assume primary responsibility for litigating the lawsuit, as the government has done in this case. The government had previously notified the court that it intended to join in Shemesh’s lawsuit and file its own complaint.
This investigation reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and the GSA’s Office of Inspector General.
The qui tam case is captioned United States ex rel. Dani Shemesh v. CA Inc., No. 09-1600 (D.D.C.). The complaint filed by the government contains allegations only; there has been no determination of liability.
14-124Government Files Complaint Against CA Inc. <br /> for False Claims on GSA ContractRead the Press Release
The government has filed a complaint against CA Inc. (CA) for violations of the False Claims Act in connection with a General Services Administration (GSA) contract, the Justice Department announced today. CA manufactures and sells information technology products and is headquartered in Islandia, New York.
“We expect companies that do business with the government to comply with their contractual obligations,” said Assistant Attorney General of the Justice Department’s Civil Division Stuart F. Delery. “As this case demonstrates, we will take action against those who seek to abuse the government’s procurement process.”
“Too many federal contractors think they can get away with overcharging the government,” said U.S. Attorney for the District of Columbia Ronald C. Machen Jr. “Our complaint alleges that CA broke its promise to give the government the same prices it was giving commercial customers. We look forward to vigorously pressing these claims in court and recovering every dollar that is owed to the American taxpayer.”
In September 2002, CA entered into a GSA contract to provide software licenses, software maintenance, training and consulting services to various government agencies. The government’s complaint alleges that, since at least 2006, CA knowingly overcharged the government for software licenses and maintenance in various ways. For example, the government alleges that CA provided incomplete and inaccurate information to GSA contracting officers during negotiation of contract extensions. At the time CA negotiated these extensions, applicable regulations and contract provisions required CA to fully and accurately disclose how it conducted business in the commercial marketplace, so GSA could use that information to negotiate a fair price for government customers. The government also alleges that CA failed to truthfully update its discounting practices during the life of the GSA contract. CA repeatedly certified to GSA that its discounting policies and practices had not changed, when in fact its discounts to commercial customers had increased.
The government’s complaint also alleges that, since 2002, CA failed to apply properly the contract’s price reduction clause. The contract required CA to monitor discounts to certain commercial customers, compare these discounts to the discounts given to the government and, if the commercial discounts were higher, pass on those higher discounts to the government. The government alleges that CA failed to make those comparisons or, when it did make such comparisons, failed to do so correctly, resulting in the government overpaying for CA’s information technology.
CA’s contract is a Multiple Award Schedule (MAS) contract. Under the MAS program, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies. Agencies that purchase under CA’s contract include the Department of Defense, the Department of Energy, the Department of Health and Human Services and the Department of Labor.
“Companies doing business with the federal government on a GSA schedule must disclose current, accurate, and complete commercial discounts, so that GSA can get the best prices on behalf of American taxpayers,” said GSA Acting Inspector General Robert C. Erickson. “We will continue to investigate all allegations indicating that the federal government may have been overcharged by a contractor.”
Some of the allegations that are the subject of the government’s complaint were filed in a lawsuit originally brought by Dani Shemesh, a former employee of CA Israel Ltd., under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government and to share in any recovery. The Act also authorizes the government to intervene and assume primary responsibility for litigating the lawsuit, as the government has done in this case. The government had previously notified the court that it intended to join in Shemesh’s lawsuit and file its own complaint.
This investigation reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and the GSA’s Office of Inspector General.
The qui tam case is captioned United States ex rel. Dani Shemesh v. CA Inc., No. 09-1600 (D.D.C.). The complaint filed by the government contains allegations only; there has been no determination of liability.# # #
Frederick Investment Advisor Indicted for Stealing over $1.2 Million from A ClientRead the Press Release
Greenbelt, Maryland – A federal grand jury indicted Travis Wetzel, age 35, of Frederick, Maryland on charges arising from the illegal transfer of $1,282,224 from a client’s annuity account. The indictment was returned on May 28, 2014 and Wetzel was arrested today.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Wetzel was a financial advisor, employed with an investment advisory firm located in Rockville, Maryland. In 2009, Wetzel was promoted to branch operations manager. According to the 24 count indictment, from July 2010 to September 2012, Wetzel took a total of approximately $1,282,224 from an annuity account of a client without the client’s knowledge, and used the money for his personal benefit. Wetzel also allegedly laundered at least $376,444 of the money he took by transferring the money to other bank accounts he controlled.
Wetzel faces a maximum sentence of 20 years in prison and a $250,000 fine for wire fraud; and 10 years in prison for money laundering. An initial appearance was held for Wetzel this afternoon at 1:45 p.m. in the U.S. District Court in Greenbelt. Wetzel was released under the supervision of U.S. Pretrial Services.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
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 the FBI for its work in the investigation and thanked Assistant United States Attorney David Salem and Leah J. Bressack, who are prosecuting the case.
Fraudsters Involved in Gold Purchase Scheme Are SentencedRead the Press Release
One Defendant Arrested at JFK International Airport Just Prior to
Boarding Flight to GhanaDALLAS — Two individuals, who defrauded Dallas-area investors in a gold purchase scheme they were involved in during late 2010, have been sentenced, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Annetta Lou Smith, aka “Annette Crawford,” 49, was sentenced today by U.S. District Judge Reed C. O’Connor to 30 months in federal prison. Co-defendant Warren Michael Hills, 54, of New Orleans, Louisiana, was sentenced earlier this month to 13 months in federal prison. Judge O’Connor ordered each defendant to pay $464,035 in restitution, jointly and severally. Each pleaded guilty in January 2014 to one count of conspiracy to commit wire fraud.
According to documents filed in the case, on August 27, 2013, Smith was informed that an indictment charging her and Hills with fraud would be presented to a federal grand jury in Dallas the following week. On Sunday evening, September 1, 2013, Smith was arrested on a criminal complaint by FBI agents at JFK International Airport, where she was awaiting a flight to Ghana, West Africa, scheduled to depart later that evening. She has been in custody since that time. Hills was arrested in New Orleans the following month, and Judge O’Connor remanded him into custody after his sentencing on May 15, 2014.
According to plea papers filed in the case, Smith and Hills worked together to recruit investors to purchase gold from the country of Ghana, West Africa. Smith and Hills represented to two particular investors that if these investors wired their funds to a specific bank account in Ghana, then they would cause the promised (and paid for) gold to be shipped to the investors. These two investors suffered substantial financial losses as a direct result of the failure of Smith and Hills to cause all of the promised gold to be delivered to them.
Although both Smith and Hills knew that the investors had fully paid for all of their promised gold, they also knew that all of the promised gold was ultimately never going to be shipped to them. Rather than be truthful to the investors, Smith and Hills made false representations to them promising the remaining gold would be shipped.
Smith and Hills caused substantial monetary losses to investors, including approximate total net losses of $113,483 to investor P.G. and approximately total net losses of $325,000 to investor M.W.
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 is 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. For more information on the task force, visit www.stopfraud.gov.
The FBI investigated the case and Assistant U.S. Attorney David Jarvis prosecuted.
Four from Northeast Ohio Indicted for $2 Million Tax FraudRead the Press Release
Four people from Northeast Ohio were indicted for a conspiracy to use false identities, including those of people incarcerated, to file nearly $2 million worth of false tax claims, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, Special Agent in Charge of IRS Criminal Investigation, Cincinnati Field Office.
Named in the 11-count indictment are: Kenneth A. White, 47, Gwendolyn N. White, 31, Lacardaire M. Thedford, 47, all of Cleveland, and Lavelle G. Green, age unavailable, of Bedford Heights, Ohio.
“These defendants are charged with attempting to defraud the U.S. Treasury,” Dettelbach said. “They tried to take advantage of others to enrich themselves.”
“These individuals thought they had figured out a clever scheme to thwart the IRS and steal from the American taxpayers,” Enstrom said. “IRS will continue to vigorously pursue those who unjustly enrich themselves by preparing false claims for refunds. Protecting taxpayer money is a matter we take very seriously.”
Kenneth White recruited people to use as claimants on some false tax returns, often with the promise of substantial refunds. White and Green also obtained names, Social Security numbers and other personal identifiers of other people to use as claimants, including people in prison or jail. In some cases, this was done without the knowledge or consent of these other people, according to the indictment.
Gwendolyn N. White, at the direction of Kenneth White and for a fee, prepared and electronically filed 10 false income tax returns for the year 2008 in the name of the claimants. The total amount claimed in the returns was approximately $1,995,687, according to the indictment.
Greene and Thedford knew false returns were filed on their behalf, according to the indictment.
This case is being prosecuted by Assistant U.S. Attorney Vasile Katsaros following an investigation by the Internal Revenue Service – Criminal Investigations.
If convicted, the defendant’s sentences will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the 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.
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.
Former Joplin Teacher Sentenced to 28 Years for Sexual Exploitation of a ChildRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Joplin, Mo., middle school teacher was sentenced in federal court today for sexually exploiting a child victim to produce child pornography.
Charles D. Gastel, 40, of Carterville, Mo., was sentenced by U.S. District Judge Beth Phillips to 28 years in federal prison without parole. Following his prison term, Gastel must spend the rest of his life under supervised release.
Gastel was formerly a science teacher at South Middle School in Joplin. On Dec. 17, 2013, Gastel admitted that he sexually assaulted a teenage victim, identified in court documents as Jane Doe, over a period of approximately nine years. Gastel also admitted that he video-recorded some of the sexual assaults.
On July 13, 2013, a Carterville, Mo., police officer interviewed the 19-year-old victim at her home in Lamar, Mo. She reported that she had been sexually victimized by Gastel repeatedly, beginning when she was 10 years old. Jane Doe reported that during some of the assaults, Gastel used a digital video recorder to record them engaging in sexual acts.
On July 17, 2013, Gastel was interviewed at his residence by the investigators. He initially told the investigators that he did not have videos on his computer. When asked for consent to search his computer, Gastel replied that he wanted to talk to a lawyer because he had files on his computer that would end his teaching career. Gastel was then placed under arrest and officers obtained a search warrant for his residence. A forensic preview of the digital media seized by officers yielded the discovery of several video files that depicted Gaston sexually assaulting Jane Doe when she was 16 years old.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Carterville, Mo., Police Department, the Southwest Missouri Cybercrime Task Force and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Former Detroit Chief Administrative Officer Sentenced on Corruption and Tax OffensesRead the Press Release
Derrick Miller, former Chief Administrative Officer of the City of Detroit, was sentenced today to 12 months in a halfway house for corruption and tax offenses, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation, Carolyn Weber, Special Agent in Charge of the Internal Revenue Service, Criminal Investigations, Randall Ashe, Special Agent in Charge of the Environmental Protection Agency, Criminal Investigation Division, and Giovanni Tiano, Special Agent in Charge of the U.S. Department of Homeland Security, Office of Inspector General.
U.S. District Judge Nancy G. Edmunds also ordered that Miller, 44, of Vienna, Virginia, pay restitution and back taxes with penalties to the IRS.
According to court records, from 2005 to 2007, Miller, served as Chief Administrative Officer and Chief Information Officer for the City of Detroit. In these capacities, Miller had authority over the lease and sale of properties owned by the City of Detroit. During that period, Miller accepted $115,000 as corrupt rewards from a real estate broker who received commissions in connection with the lease or sale of city properties.
In October 2008, Miller filed an individual income tax return for the 2007 tax year in which he willfully made statements that he knew were false regarding the amount of income he received from two of his companies, Atrium Financial LLC and Citivest LLC, with the intent of concealing that income from the IRS. Miller intentionally failed to report on his return the $46,725 bribe he received that year from the real estate broker. Miller also intentionally failed to report on his tax return a total of $568,000 he received in 2007 for his assistance to a real estate company that entered into a purchase and leaseback of a portfolio of properties. The total amount of additional tax due and owing for tax year 2007 was $240,858.
The court departed from the advisory guidelines range of 70-87 months in prison because of Miller’s extraordinary assistance in the prosecution of a public corruption case of historic importance to this region. As a member of former Detroit Mayor Kwame Kilpatrick’s inner circle, Miller gave the jury a firsthand perspective of the illicit objectives and motivations of Kilpatrick, contractor Bobby Ferguson, and their associates.
McQuade said, “The court recognized that Miller’s cooperation was extraordinary and essential to bringing to justice other more serious wrongdoers. As a member of the inner circle of Kilpatrick’s criminal enterprise, Miller provided detailed and corroborated testimony about Kilpatrick’s fraud, bribery and extortion. Public officials should take note that early and extraordinary cooperation will yield a substantially lower sentence.”
United States Attorney McQuade thanked the agents of the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigations, the Environmental Protection Agency Criminal Investigations Division, and the U.S. Department of Homeland Security Office of Inspector General for their assistance in the successful investigation of the case.
The case was prosecuted by Assistant U.S. Attorneys Mark Chutkow, R. Michael Bullotta, Jennifer Blackwell and Eric Doeh.
Former Council Member Michael A. Brown Sentenced to 39 Months in Prison for Accepting $55,000 in BribesBrown Also Admitted Carrying Out Separate Schemes Involving Contributions to Two Council CampaignsRead the Press Release
WASHINGTON – Michael A. Brown, a former member of the Council of the District of Columbia, was sentenced today to 39 months in prison for carrying out a scheme in which he accepted a total of $55,000 in a series of meetings with undercover FBI agents posing as officials of a company that purportedly wanted to win government contracting opportunities.
The sentencing was announced by U.S. Attorney Ronald C. Machen Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Brown, 49, pled guilty to a federal bribery charge in June 2013 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Chief Judge Richard W. Roberts. The plea agreement called for Brown to pay a money judgment of $35,000 in forfeiture, covering the amount of money he collected before confronted by law enforcement. Upon completion of his prison term, Brown will be placed on two years of supervised release; during that time, Chief Judge Roberts ordered that he perform 200 hours of community service.
Brown was the third member of the Council of the District of Columbia to plead guilty within the past three years to federal charges involving crimes committed while they were in office. Harry L. Thomas Jr., who represented Ward 5, pled guilty in January 2012 to federal theft and tax charges in a scheme in which he used more than $350,000 in taxpayer money for his own personal benefit. Kwame R. Brown, the Council’s former Chairman, pled guilty in June 2012 to a federal charge of bank fraud, involving two personal loans, and a second criminal charge involving a violation of the District of Columbia’s campaign finance laws.
The charge against Michael A. Brown involved a scheme in which he admitted taking the cash payments in return for his assistance in winning the District of Columbia government’s approval for a company that was seeking to be classified as a Certified Business Enterprise, a designation that would create potentially lucrative business opportunities; Brown also agreed to help the company with government contracting opportunities.
Also, in two separate schemes, Brown admitted concealing the true source of $20,000 that was secretly contributed to his failed bid in 2007 for a seat on the District of Columbia Council and over $100,000 that was secretly contributed to his successful bid in 2008 for a seat on the District of Columbia Council. Under the plea agreement, Brown will not be criminally prosecuted for this conduct.
“Rather than wielding his political power to serve the citizens of the District of Columbia who voted for him, Michael Brown exerted his influence on behalf of purported contractors who were willing to line his pockets with hundred-dollar bills,”said U.S. Attorney Machen. “Brown’s decision to auction off the public trust was especially disappointing because of his enormous potential to stand as a bright light for the residents of this city. His term of incarceration will hopefully serve as an admonition to other public officials who are considering betraying their oath of office for fast cash.”
“In a shame to his oath of office and his duty to the District of Columbia, Mr. Brown took $55,000 in bribes and evaded campaign finance laws,” said Assistant Director in Charge Parlave. “Today’s sentence demonstrates that no one is above the law. Together with our law enforcement partners, the FBI will continue to investigate public officials who abuse the public trust and use their office to commit illegal acts.”
**Brown was elected as an At-large member of the District of Columbia Council in 2008 and took office in January 2009. He left office on Jan. 2, 2013, following his defeat last November for re-election. Brown then launched a bid to win another At-large Council seat in a special election scheduled for April 23, 2013. However, he withdrew his candidacy on April 2, 2013, less than three weeks after he was confronted by law enforcement in the bribery scheme.
Bribery Scheme:
According to a statement of offense signed by the government as well as the defendant, Brown’s At-large Council duties included acting as Chair of the Committee on Economic Development and Housing. The committee is responsible for matters related to economic, industrial and commercial development. The bribery scheme focused largely on a special program run by the District of Columbia government to help its small local businesses become economically viable: the Certified Business Enterprise (CBE) program.
Status as a CBE carries preferential procurement and contracting opportunities. To be eligible for this designation, businesses must meet certain requirements and be certified by the District of Columbia’s Department of Small and Local Business Development (DSLBD).
Prior to July 11, 2012, Brown had discussions about obtaining assistance of $50,000 to $75,000 for Brown from a government contractor. Brown expected to assist the government contractor with its business if the contractor provided such financial assistance to Brown.
These discussions led to a series of meetings with two undercover FBI agents, posing as employees of a Maryland company that wanted CBE approval and contracting opportunities. Between July 2012 and March 2013, Brown met in person with one or both of the undercover agents a total of eight times. He was in contact with one of the undercover agents on more than 30 separate days, in person, by phone, or by text, frequently seeking payment, in whole or in part, for the efforts he was making on the company’s behalf.
Over the months, Brown made calls on the company’s behalf to the director of the Department of Small and Local Business Development, introduced the undercover agents to a contractor at a symposium he sponsored, and took other actions meant to speed through the company’s attempts to win approval as a CBE. He continued these efforts even after his defeat in the November 2012 election. In January 2013, the Department of Small and Local Business Development did a site visit for the company’s application.
Brown accepted a total of $55,000 in five of the meetings. The final meeting was March 14, 2013, in which he accepted a $20,000 payment.
The company subsequently withdrew its CBE application.
Campaign Finance Scheme:In the spring of 2007, Brown was a candidate in a special election for the Ward 4 seat on the D.C. Council. Around that time, he met with business owner Jeffrey E. Thompson about obtaining funding for his campaign.
Thompson is the former chairman, chief executive officer, and majority owner of Thompson, Cobb, Bazilio and Associates (TCBA), a corporation that provided accounting, management, consulting, and tax services. He also is the former chairman, chief executive officer, and owner of D.C. Healthcare Systems, Inc. (DCHSI), an investment holding and for-profit corporation. Both companies generated millions of dollars in government contracts.
Thompson and six others have pled guilty to charges involving Thompson’s illegal contributions to numerous federal and District of Columbia campaigns.
In seeking the contribution in 2007, Brown understood that Thompson would not contribute in a public manner because certain business activities required support for other candidates, based on various political dynamics.
Brown understood that the contribution from Thompson would be publicly disclosed as having been contributed in the name of another person. He also understood from his discussion that it would exceed the limits on the amount that an individual could contribute to a political campaign committee. At the end of the meeting, “Thompson told Brown that Brown would hear from somebody to arrange the contribution.
Following this meeting, Brown was contacted by Eugenia C. Harris, another business owner, in the District of Columbia. Then, as agreed upon by Brown, Harris and Thompson a series of bank transfers began taking place. Brown understood that a total of $20,000 originated from Thompson. Harris sent two wire transfers, of $10,000 each, to Brown’s personal bank account. Brown, in turn, contributed the funds to his campaign.
Brown subsequently caused the campaign committee to file a form with the D.C. Office of Campaign Finance that publicly disclosed that Brown made an individual contribution of $25,000 to his political campaign committee, which Brown knew disguised the fact that Thompson was the source of most of this money.
Harris pled guilty in July 2012 to charges in the investigation.
Following Brown’s guilty plea, additional evidence was discovered about the extent of the contributions that Thompson secretly made to Brown’s successful campaign in 2008 for a seat on the District of Columbia Council. Brown admitted to this activity in an amended statement of offense filed in February 2014.
Among other things, Brown admitted that after losing the Ward 4 seat in 2007, he decided to enter the election for an At-large seat on the D.C. Council in 2008. Brown once again met with Thompson, who in October 2008 secretly channeled more than $100,000, through Harris, for a get-out-the-vote effort. Brown subsequently won the election for the Council seat.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge Kelly commended those who investigated the case for the FBI and IRS-CI.
They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Michael K. Atkinson, David A. Last, and Bryan Seeley of the Fraud and Public Corruption Section, and Assistant U.S. Attorney Anthony D. Saler, of the Asset Forfeiture and Money Laundering Section. Finally, they expressed thanks for assistance provided by Forensic Accountant Maria Boodoo; Paralegal Specialists Tasha Harris and Krishawn Graham, and Legal Assistant Angela Lawrence.
14-125Former APS Chief Information Officer Sentenced for Taking KickbacksRead the Press Release
ATLANTA - Former Atlanta Public Schools (APS) Chief Information Officer (CIO) Jerome Oberlton was sentenced to three years and five months in federal prison for conspiring to receive kickbacks in exchange for awarding a $780,000 contract to a computer vendor.
“Oberlton lined his own pockets at the expense of the APS students and teachers who depended on him,” said United States Attorney Sally Quillian Yates. “In a time when schools struggle to make the most of every dollar, Oberlton put his own greed before his obligation to protect scarce resources.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Oberlton’s sentence will afford him the opportunity to reflect upon his actions and should serve as a reminder to all who serve the public that manipulating the system for self-gain in this manner is not only wrong but criminal and that it will not be tolerated.”
“This sentence is a vital element in maintaining public confidence that this individual and others who commit similar crimes will be held accountable,” stated Special Agent in Charge, Veronica F. Hyman-Pillot. “IRS Criminal Investigation is committed to addressing financial fraud at every level and is proud to have worked with our law enforcement partners to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”
According to United States Attorney Yates, the charges and other information presented in court: Oberlton, as APS’ CIO, had overall management responsibility for the APS information technology program. In January 2007, the school system issued a request for proposal (RFP) for a Data Warehousing (DW) project. The DW project was intended to centralize information relating to APS operations, including student information, so that it was maintained digitally in a secure, easily-accessible manner.
From the start of the project in January 2007, co-defendant Mahendra Patel and Oberlton conspired to influence the RFP process and, ultimately, caused the winning bidder to be selected in exchange for kickbacks paid to both. In order to hide the bribes, Oberlton created Global Technology Partners (GTP) and, later, Global Technology Services (GTS), funneling the bribe payments through these shell companies. Oberlton concealed his ownership of GTP and GTS from the school system, even when questions arose in 2007.
In contrast, the kickbacks to Patel were disguised as sales commissions for non-existent consulting work he supposedly performed for the shell companies. In reality, Patel acted as an intermediary, helping to negotiate the kickbacks to Oberlton from the vendor. The computer vendor ultimately paid approximately $60,000 in bribes to Oberlton over almost six months and, in return, the company received $780,000 in APS project work.
Oberlton was APS’ CIO between June 2004 and August 2007 and, most recently, was the Chief of Staff for the Dallas Independent School District before he resigned in May 2013, shortly after he was indicted.
Oberlton was sentenced to three years and five months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $735,130. Oberlton was convicted on these charges on January 8, 2014, after he pleaded guilty.
This case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service.
Assistant United States Attorneys Kurt R. Erskine and Jill Steinberg 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/.
Florida Woman Sentenced in $24 Million Dollar Mortgage Fraud CaseRead the Press Release
BUFFALO, N.Y.– U.S. Attorney William J. Hochul, Jr. announced today that Michelle Vinas, 55, of Florida, who was convicted of financial institution fraud affecting M&T Bank, was sentenced to 18 months in prison and ordered to pay restitution totaling $423,434.98 by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorney Trini E. Ross, who handled the case, stated that Vinas was an employee of the Federal Guaranty Mortgage Company based in Florida, and was responsible for the underwriting of loans which included complete review of loan applications, including supporting documentation and verification of information placed on loan applications. Once the underwriting was completed by the defendant, the loan files were submitted to financial institutions for funding.
In just one instance which exemplified the fraud, the defendant was provided information to include on a loan application for 1081 SW 156th Avenue in Pembroke Pines, Florida. The information stated that an individual had a monthly income of $21,000 and had in excess of $800,000 on deposit at a financial institution but Vinas that information was false. The defendant nevertheless approved the loan application as the underwriter which allowed the loan to be funded.
As a result of the defendant's actions, M&T Bank was one of nine financial institutions to suffer a loss and specifically suffered a loss of $4,407,515.48. The parties estimated that the total fraud scheme amounted to approximately $24,000,000.
Frank Garcia, the owner of Federal Guaranty Mortgage Company, has also been convicted in this case and is awaiting sentencing.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation.Five Individuals Charged in Manhattan Federal Court with Participating in Student Visa and Financial Aid Fraud SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James T. Hayes, Jr., the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), Brian M. Hickey, the Special Agent-in-Charge of the U.S. Department of Education Office of Inspector General’s Eastern Regional Office (“ED-OIG”), and David J. Schnorbus, the Special Agent-in-Charge of the New York Field Office of the U.S. Department of State’s Diplomatic Security Service (“DSS”), announced charges today against five individuals for their participation in a scheme to fraudulently represent that their for-profit schools were complying with immigration and financial aid regulations. Defendants SURESH HIRANANDANEY, a/k/a “Sam Hiranandaney,” LALIT CHABRIA, ANITA CHABRIA, and SEEMA SHAH are charged with student visa fraud and wire fraud, and defendants SURESH HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and SAMIR HIRANANDANEY are charged with student financial aid fraud. All of the defendants were arrested today and presented before U.S. Magistrate Judge Gabriel W. Gorenstein in Manhattan federal court this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, through their for-profit schools, the defendants defrauded the government and exploited their students. For their personal financial gain, the defendants allegedly made false certifications about the schools’ compliance with visa and financial aid regulations when, in fact, they were not. I want to thank our law enforcement partners at ICE-HIS, the State Department and the Department of Education for their excellent work in investigating this case.”
ICE HSI Special Agent-in-Charge James T. Hayes, Jr., said: "The defendants arrested today allegedly orchestrated a wide ranging fraud scheme, which included the falsification of student and financial aid files and failure to report to the government students who were non-compliant with the terms of their student visas, that victimized American taxpayers. HSI leads the Document Benefit Task Force to protect the interests of legitimate educational institutions seeking to enrich our culture through the education of foreign students and to close vulnerabilities in the visa approval and school certification processes.”
ED-OIG Special Agent-in-Charge Brian Hickey said: “Federal student aid exists so that individuals can make their dream of a higher education a reality, it’s not a personal slush fund for corrupt school owners. Ensuring that anyone who steals student aid or games the system for their own selfish purposes, as today’s actions allege these individuals did, are stopped and held accountable for their criminal actions is a big part of our mission.”
DSS Special Agent-in-Charge David J. Schnorbus said: “The United States Department of State supports international education and welcomes foreign students. In situations where foreign students do not fulfill their responsibilities of properly maintaining their non-immigrant status or purposefully ignore their visa status regulations, and school owners place financial greed above education by exploiting the student exchange and visitor visa system, our national security becomes compromised. The Diplomatic Security Service works tirelessly, both domestically and overseas, to strengthen our national security and play a vital role in securing our nation’s borders through combatting this and other types of visa fraud.”
As alleged in the Complaint unsealed today in Manhattan federal court:
Each of the defendants was associated with the Micropower Career Institute (“MCI”), a for-profit school with five campuses in New York and New Jersey, or the Institute for Health Education (“IHE”), a for-profit school located in New Jersey. SURESH HIRANANDANEY, a/k/a “Sam Hiranandaney,” was MCI’s President; his sister, ANITA CHABRIA, was MCI’s Vice President; and his brother-in-law, LALIT CHABRIA, was MCI’s Vice President and IHE’s President. SURESH HIRANANDANEY’s son, SAMIR HIRANANDANEY, was the director of MCI’s Hauppauge campus. SEEMA SHAH was a high-level employee at MCI’s Manhattan campus.
Student Visa Fraud Conspiracy
(SURESH HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and SAMIR HIRANANDANEY)
(SURESH HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and SEEMA SHAH)
The named defendants are charged with failing to report to immigration authorities that foreign citizens were not attending classes at MCI and IHE, as required. Foreign citizens are granted F-1 student visas to remain in the United States as long as they are pursuing full courses of study at approved schools. If a student fails to attend classes as required, the school is required to inform immigration authorities, so that the authorities may terminate that student’s visa.
The defendants represented to immigration authorities that MCI and IHE were legitimate institutes of higher learning where foreign students carried full course loads. In reality, the majority of foreign students at MCI and IHE did not attend the required number of classes. Rather than reporting this to authorities, as required, the defendants remained silent and continued to collect approximately $10,000 in annual tuition from each of these students. When a campus of MCI came under regulatory scrutiny, the defendants would simply transfer students with delinquent attendance to an affiliated school (such as another MCI campus or IHE) that was not under scrutiny.
Wire Fraud Conspiracy
(SURESH HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and SEEMA SHAH)
The defendants named above are charged with using wire communications to commit the student visa fraud described above.
Student Financial Aid Fraud Conspiracy
(SURESH HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and SAMIR HIRANANDANEY)
The defendants named above are charged with fabricating and manipulating documents in student financial aid files at MCI to hide MCI’s widespread non-compliance with ED regulations. ED provides financial aid to eligible low-income post-high school students to assist them in affording higher education. MCI did not comply with federal laws and regulations governing the administration of such financial aid. When ED reviewed MCI’s administration of financial aid in 2011, rather than admit its non-compliance, the defendants instead “fixed” student files by altering documents in the files, or in some cases creating entirely fabricated documents. The defendants engaged in this manipulation so that ED would not terminate MCI’s eligibility for financial aid funds.
Attached are charts containing the charges against the defendants and the maximum penalties they face, as well as the defendants’ ages and residences. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of ICE HSI, ED-OIG, and DSS.
Assistant United States Attorneys Samson Enzer and Margaret Graham of the Office’s General Crimes Unit are in charge of the prosecution. Assistant United States Attorneys Andrew Adams and Christine Magdo of the Office’s Money Laundering and Asset Forfeiture Unit are handling the asset forfeiture portion of the case.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Click here to view chart(s)
U.S. v. Suresh Hiranandaney, et al., Complaint
Five Defendants Charged with Illegally Importing Male Enhancement ProductsRead the Press Release
ATLANTA - Five defendants have been indicted on federal charges of conspiring to illegally import into the United States male enhancement products that contained the active ingredient in Viagra.
“These defendants are charged with importing mislabeled products that contained the active ingredient in Viagra which can only be obtained in the United States after being prescribed by a licensed physician,” said United States Attorney Sally Quillian Yates. “According to the indictment, they then distributed the products to retail outlets throughout the United States. The laws the defendants are charged with violating are intended to protect consumers from unknowingly using products that might cause serious side effects. Along with our law enforcement partners we will vigorously prosecute individuals who violate the food and drug laws in the way these defendants allegedly did.”
“Today’s announcement demonstrates the continued commitment of the Food and Drug Administration’s Office of Criminal Investigations to aggressively pursue those who offer and sell unapproved and misbranded drugs,” said Special Agent in Charge David W. Bourne. “We will remain vigilant in our efforts to protect consumers from these fraudulent and potentially dangerous products.”
According to United States Attorney Yates, the charges, and other information presented in court: The defendants imported from China male enhancement products with names such as, “Maxman,” “Herb Viagra,” “Rock Hard Weekend,” “Stiff Nights,” “Happy Passengers,” “Hard Ten Days” “Zhen Gongfu,” to sell throughout the United States. These products contained the same drug that is the active ingredient in Viagra. Because the products contained a drug that is only available in the United States when prescribed by a licensed physician, if the products were properly labeled, the Food and Drug Administration and United States Customs and Border Protection would have stopped the products from entering the United States. In order to evade import restrictions on the products, the defendants directed their suppliers to mislabel the boxes containing the products to make it appear that the boxes contained items that can be legally imported into the United States, such as beauty products, pottery, coffee, and tea. By causing the shipments to be mislabeled, the defendants were able to import the products illegally.
The defendants received the illegally imported products at multiple addresses in the Atlanta area. They rented storage units at different locations where they repackaged the products for distribution to wholesale and retail locations in the Atlanta area and throughout the United States. In order to evade detection by law enforcement authorities, the defendants moved their illegal operations regularly, used aliases, false addresses, and fake business names, and misrepresented the nature of their business when renting storage units and mail boxes.
In the past three years the defendants wire transferred more than $2 million in United States currency to bank accounts in China to pay for the illegally imported merchandise.Ismail Ali Khan, 26, of Decatur, Ga.; Arbab Salim, 27, of Stone Mountain, Ga.; Hardik Kumar Desai, 24, of Stockbridge, Ga.; and Natenael Zeyid, 34, of Clarkston, Ga., were arraigned today before Janet F. King, United States Magistrate Judge, on federal charges of conspiring to illegally import into the United States male enhancement products that contained the active ingredient in Viagra. Ahmed Ali Khan, 37, of Alabaster, Ala., was arrested in Alabama and will make his initial appearance before a U.S. Magistrate Judge in Alabama. The defendants were indicted by a federal grand jury in Atlanta, Ga., on May 28, 2014.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Food and Drug Administration, Office of Investigations, with the assistance of Homeland Security Investigations.
Assistant United States Attorney William L. McKinnon, Jr. is prosecuting 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/.
First Call Ambulance Service, LLC. Settles False Claims Act AllegationsRead the Press Release
First Call Ambulance Service, LLC., will pay $500,000 to settle allegations that it violated the False Claims Act (“FCA”), announced David Rivera, United States Attorney for the Middle District of Tennessee. The settlement resolves allegations by the United States and Tennessee that First Call up coded billings for ambulance transports provided to patients covered by federal healthcare programs and TennCare, Tennessee’s joint state/federal Medicaid program.
Specifically, the United States and Tennessee alleged that First Call submitted false claims for payment covering advanced life support (“ALS”) services for its ambulance runs. For many transports billed as ALS, First Call’s provision of ALS services was medically unnecessary, or First Call did not actually provide ALS services. Instead, only basic life support (“BLS”) services were necessary, and in some cases were the only services provided. BLS services are billed to federal health insurance programs at a lower rate than ALS services.
“Enforcement of the False Claims Act remains a top priority of the Department of Justice and this office,” said U.S. Attorney Rivera. “The U.S. Attorney’s Office, working with our law enforcement partners, will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
In addition to the monetary payment, First Call has entered into a corporate integrity agreement with the U.S. Department of Health and Human Services. This agreement will require First Call to take certain compliance measures to reduce the likelihood of future violations of the FCA and other health care regulations.
The federal and state investigations corroborated conduct originally alleged in a qui tam complaint filed pursuant to the FCA. The United States and Tennessee declined to intervene with regard to other allegations in the qui tam complaint. The relator who filed the qui tam will receive a share of the settlement proceeds.
This matter was investigated by the United States Postal Service- Office of Inspector General, the Tennessee Bureau of Investigation, the Tennessee Attorney General’s Office, and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis.