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22 July 2014
Convenience Store Operator Pleads Guilty to Food Stamp Fraud on the First Day of TrialRead the Press Release
Baltimore, Maryland – Abdo Mohamed Nagi, age 54, a citizen of Yemen residing in Baltimore, pleaded guilty on July 21, 2014, to two counts of food stamp fraud and six counts of wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash. Nagi admitted that he obtained more than $1.2 million from the food stamp program, to which he was not entitled. Nagi entered his guilty plea on the first day of his trial.The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture’s Office of Inspector General, Northeast Region; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to the indictment to which he pleaded guilty, Nagi owned and operated New York Deli and Grocery, located at 1207 West Baltimore Street, in Baltimore. Through the store, Nagi participated in the Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources, then use the EBT card to purchase approved food items from participating retailers.
Nagi knew that it was a violation of SNAP regulations to trade cash for SNAP benefits. Nevertheless, from February 2011 through May 2013, Nagi exchanged SNAP benefits for cash at less than face value of the EBT benefits, in violation of the food stamp program rules. Typically, Nagi and kept up to 50 percent of the benefits for himself. To avoid detection, Nagi often debited funds in multiple transactions within minutes of each other. As a result of these illegal cash transactions, Nagi admitted that he obtained more than $1.2 million for food sales that never occurred.
Nagi faces a maximum sentence of 20 years in prison for each of the six counts of wire fraud and five years in prison for each of the two counts of food stamp fraud. U.S. District Judge J. Frederick Motz has scheduled sentencing for October 10, 2014 at 10:00 a.m.
Eight of the 10 convenience store owners or operators who were indicted in September 2013 in connection with schemes to illegally redeem food stamp benefits in exchange for cash have pleaded guilty to food stamp fraud and/or wire fraud. Abdullah Aljaradi, age 52, and Ahmed Ayedh Al-Jabrati, age 56, both citizens of Yemen residing in Baltimore, were each sentenced to two years in prison, and ordered to pay restitution of $1.2 million. Jung Kim, age 52, of Ellicott City, Maryland, was sentenced to 20 months in prison, and ordered to forfeit $95,453.50 and pay restitution of $205,000. Amara Cisse, age 51, of Windsor Mill, Maryland, was sentenced to 27 months in prison and ordered to pay restitution of $654,349.24, and his wife, Fanta Keita was sentenced to two months in prison. John Cunningham, age 55, of Baltimore, was sentenced to two years in prison. Retailer Hyung Cho, age 40, was sentenced to 38 months in prison, and his mother Dae Cho, age 67, was sentenced to 18 months in prison. The Chos were also ordered to forfeit $371,439.21 and pay restitution of $1.4 million. Two more retailers were indicted in January 2014.
United States Attorney Rod J. Rosenstein praised USDA’s Office of Inspector General and FBI for their work in the investigation. U.S. Attorney Rosenstein expressed appreciation to Secretary Ted Dallas and the Maryland Department of Human Resources, as well as U.S. Citizenship and Immigration Services - Office of Fraud Detection and National Security for their assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Leo J. Wise, who is prosecuting this case.
Columbus Man Charged with Tax ViolationRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced that a federal information has been filed charging David S. Owens aka D. Scott Owens, age 62, of Columbus, Ohio, with one count of failure to account for an pay over employment tax.
Between 2008 and 2009, Owens, through his Canfield, Ohio-based company, Advetech, Inc., made payroll tax withholdings from his employees’ paychecks, but failed to pay over those withholdings to the IRS in the approximate amount of $570,000, according to the information.
Rather, during this period, Owens transferred hundreds of thousands of Advetech, Inc. dollars to at least two other Canfield companies owned and operated by Owens, including Brixton Development Corporation and Preferred Communities, Inc., from where he took hundreds of thousands of dollars in income for himself, according to the information.
The information was filed by Assistant U.S. Attorney Christos N. Georgalis after an investigation by agents of the the Internal Revenue Service and the U.S. Department of Labor, Employee Benefits Security Administration.
If convicted, the defendant’s sentence will be determined by the court after a review of factors unique to the case, including defendant’s prior criminal record, if any, 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 information 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.
Coeur D´Alene Man Sentenced for Possessing Child PornographyRead the Press Release
COEUR D´ALENE – Wade Thomas Weingart, 39, of Coeur d´Alene, Idaho, was sentenced yesterday in United States District Court to 60 months in prison, followed by 5 years of supervised release for possession of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. United States District Judge Edward J. Lodge also ordered Weingart to pay $3,000 in restitution to an identified child found within his child pornography collection. Weingart pleaded guilty to the charge on January 30, 2014.
According to statements made in court, in July 2012, a police officer working with the Idaho Internet Crimes Against Children Task Force (ICAC) discovered that a computer in Coeur d´Alene was making child pornography available on the Internet. The officer was able to view several of the files that this computer made available and determined that they were images of minors being sexually abused by adults. Using information obtained from the Internet and an Internet Service Provider, the officer determined that the images were being made available from Weingart’s Coeur d’Alene residence.
In January 2013, a federal search warrant was served on Weingart’s residence. Weingart admitted to possessing the child pornography. A United States Secret Service Forensic Examiner reviewed Weingart’s computer and found over 60 videos of minors being sexually abused. Some of these children were identified and found to be from Washington, Georgia, Utah, Canada and Germany.
The case was investigated through the collaborative effort of the Federal Bureau of Investigation, Boise Police Department, Idaho Attorney General’s Office, Coeur d’Alene Police Department, and United States Secret Service. These agencies are members of the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icacidaho.org.
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.”
Co-Owner of St. Jude's Pharmacy in Cape Coral Sentenced to 3 Years for Structuring Bank DepositsRead the Press Release
Fort Myers, Florida - U.S. District Judge Sheri Polster Chappell yesterday sentenced Martha Otano (43, Cape Coral) to 3 years and 1 month in prison and $7,500 in fines for making structured cash deposits of proceeds of illegal activity in order to evade bank currency transaction reporting requirements. As part of her sentence, the court also entered a money judgment in the amount of $1,307,000, the amount of drug proceeds structured into various banks. Otano was also ordered to forfeit her interest in a 2013 Mercedes Benz, a 2012 Chevrolet truck, and approximately $860,376.79 in seized funds, in partial satisfaction of the money judgment. Law enforcement seized these assets and executed search warrants at St. Jude’s Pharmacy and at Otano’s home in Cape Coral, on November 15, 2012. Martha Otano was a registered pharmacy technician and co-owner of St. Jude’s Pharmacy in Cape Coral. She was indicted on June 26, 2013.
According to court documents, from at least April 2011 to at least November 15, 2012, in Lee County, Martha Otano and her husband (Jorge Otano) participated in a conspiracy involving repeated structured cash deposits into bank accounts for the purpose of evading bank transaction reporting requirements. Martha Otano admitted to conspiring to structure approximately $1,307,000.00 in cash deposits into three bank accounts that she controlled with her husband. Martha Otano also admitted that she and her husband made structured deposits from the proceeds of the distribution of Oxycodone outside the usual course of professional practice at St. Jude’s Pharmacy, which they owned and operated. Martha Otano and her husband did not deposit all of the cash that they had at the time of receipt. Rather, they acquired one sum of cash at one time, and divided it into amounts less than $10,000.00 so that it would not trigger the filing of a Currency Transaction Report (CTR). St. Jude’s Pharmacy made a significant profit through the illegal distribution and sale of Oxycodone as fraudulent prescriptions for Oxycodone were routinely filled at St. Jude's Pharmacy in exchange for cash. Martha Otano and her husband used the proceeds from the pharmacy to purchase two homes in Cape Coral and the two seized vehicles.
Jorge Otano has pleaded not guilty to the charges filed against him in this case. He is scheduled for trial during the November 2014 trial term.
An indictment is merely a formal charged that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the United States Secret Service and the Drug Enforcement Administration. It is being prosecuted by Assistant United States Attorneys David G. Lazarus and Yolande G. Viacava.
Chicago Resident Charged with Interstate Travel to Facilitate Drug TraffickingRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a criminal Information was filed today charging a Chicago resident with traveling in interstate commerce to promote and facilitate drug trafficking.
According to United States Attorney Peter Smith, the Information alleges that Maria Pina, age 44, a Mexican national who resided in Chicago, Illinois, at the time of her arrest, traveled from Illinois to Pennsylvania on February 11 and 12 of this year to further the efforts of a drug trafficking conspiracy operating in the Middle District of Pennsylvania and elsewhere.
The charge stems from an investigation by special agents of the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), the Pennsylvania State Police, and Berks County Detectives.
Pina faces a potential maximum sentence of five years in prison and a $250,000 fine if she is convicted of the charge.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
California Man Convicted in Federal Drug Trafficking ConspiracyRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a California man was convicted yesterday in a case involving the trafficking of methamphetamine in Anchorage. A federal trial jury found David Alan Gonzales guilty of drug trafficking conspiracy and possession of methamphetamine with intent to distribute.
Gonzales, 55, was tried before United States District Court Judge Sharon L. Gleason in Anchorage.
According to Special Assistant U.S. Attorney Erin Bradley and law student intern Lyubov Bartnitskaia, who prosecuted the case, the evidence presented at trial established that Gonzales conspired to possess with intent to distribute and to distribute 52 grams of actual methamphetamine. This case came to light when the U.S. Postal Inspection Service identified a suspicious package at their processing center on March 26, 2013. The package had been sent to Anchorage from Anaheim, California. Gonzales and his co-defendant, Albert Diaz Gumataotao, accepted delivery of the package on March 28, 2013. Investigation revealed that the package contained 52 grams of methamphetamine. A forensic chemist from the U.S. Postal Service Forensic Laboratory testified that the purity of the methamphetamine was 100%. Though Gonzales was residing in Anchorage at the time of this offense, he has significant ties to the State of California, where he has lived most of his life.
Gonzales remains in custody pending sentencing. His co-defendant, Albert Diaz Gumataotao, pled guilty on November 6, 2013, to one count of drug trafficking conspiracy. On February 12, 2014, Judge Gleason sentenced Gumataotao to imprisonment for 120 months.
Judge Gleason scheduled sentencing for Gonzales on October 9, 2014, at 1:30 p.m. Based on the charges of conviction, as well as Gonzales’ prior California convictions for possession of methamphetamine and possession of methamphetamine for sale, Gonzales faces a sentence of up to life in prison, a fine of Twenty Million Dollars, or both.
Ms. Loeffler commends the U.S. Postal Inspection Service and the Anchorage Police Department for the investigation leading to the successful prosecution of Gonzales and Gumataotao. SAUSA Bradley is a prosecutor in the U.S. Attorney’s Office who is funded by the Municipality of Anchorage for the purpose of prosecuting gang-related and violent crime cases.
Business Manager Sentenced to Prison for FraudRead the Press Release
United States Attorney Walt Green announced today the sentencing of RENEE ELISE BEARD, 50, of Addis, Louisiana. BEARD previously pled guilty on December 2, 2013 to wire fraud in violation of Title 18, United States Code, Section 1343.
BEARD was sentenced today by United States District Judge James J. Brady to 27 months imprisonment and a term of 2 years on supervised release following imprisonment. BEARD was also sentenced to pay restitution in the amount of $295,587 to the victim of her fraud. Additionally, BEARD was ordered to forfeit $251,596 to the United States, said funds being the property which was derived from her scheme to defraud.
BEARD was the manager of business operations for Campbell Companies, a local business engaged in the development and management of commercial real estate and multi-family residential properties. BEARD was responsible for bookkeeping, management of financial operations, and administration of the company's payroll. BEARD enjoyed unlimited access to Campbell’s accounting and payroll systems, bank accounts, and computer systems. During the years 2008 through 2012, BEARD was authorized to initiate and execute online banking transactions for the purpose of disbursing payroll to Campbell’s employees, including payments to herself. BEARD used her position as Campbell’s business manager to make numerous transfers from a Campbell Companies’ business bank account to her personal bank accounts which exceeded the salary to which she was entitled. As a result of making unauthorized transfers of funds from the bank account of Campbell to her personal bank accounts, BEARD fraudulently obtained approximately $251,596 to which she was not entitled. BEARD used wire communications in order to execute her scheme.
United States Attorney Green stated: “Corporate fraud is inexcusable and is too often perpetrated by insiders who abuse the trust afforded to them. It is often the honest employees who are left to feel the greatest financial brunt of such wrongdoing. Our office will continue to aggressively pursue such matters.”
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Rene I. Salomon.
Bucksport Woman Sentenced to More Than 8 Years for Bank Embezzlement and Tax FraudRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Lynn
M. Bowden, 63, of Bucksport, Maine, was sentenced today in U.S. District Court in Bangor to
97 months in prison and five years of supervised release for embezzlement by a bank employee and tax fraud. She was also ordered to pay $3,822,166.27 in restitution. The defendant pleaded guilty to the charges on February 19, 2014.According to court documents, Bowden was employed by Merrill Merchants Bank
(“Merrill”) in May 2004. Chittenden Corporation acquired Merrill in 2007. People’s United
Bank acquired Chittenden Corporation in 2008. Bowden maintained her employment through these acquisitions. In October 2012, she was working as a wealth management officer managing over 200 trust and investment management accounts when her embezzlement was discovered.
The investigation revealed that from April 4, 2005 to September 26, 2012, Bowden embezzled $2,990,429.65 from client accounts that she managed by transferring the funds into her personal accounts. She used all of the money for herself and family members. Bowden failed to report this income to the Internal Revenue Service on her tax returns causing a tax loss of more than $750,000 for the period from 2007 to 2011. On October 26, 2012, the bank terminated her employment, and ultimately reimbursed customers for their losses.
The case was investigated by the Federal Bureau of Investigation and the Internal
Revenue Service-Criminal Investigations.Brazoria County Drug Lord Sentenced to 22 Plus Years in Federal PrisonRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – The organizer and leader of a large scale drug trafficking ring responsible for moving multi-kilogram quantities of illegal drugs from Mexico to the United States has been sentenced to federal prison in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Alejandro “Alex” Gonzales, 36, of Alvin, Texas, pleaded guilty on Jan. 30, 2014 to conspiring to possess with the intent to distribute over 5 kilograms of cocaine, over 1,000 kilograms of marijuana, and over 500 grams of methamphetamine and was sentenced to 270 months in federal prison today by U.S. District Judge Thad Heartfield.
According to information presented in court, Gonzales began acquiring multi-kilogram quantities of cocaine, marijuana, and methamphetamine from drug cartel suppliers in Mexico sometime in the late 2000’s. Those narcotics were subsequently smuggled into the United States and transported to Alvin, Texas for distribution. Gonzales and other members of the drug ring coordinated the sale of those narcotics to customers located in Texas, Oklahoma, Louisiana, Alabama, Mississippi, Florida, North Carolina, New York, and New Jersey.
On Aug. 8, 2013, a federal grand jury returned a six-count second superseding indictment against Gonzales and 27 other codefendants, charging them with numerous federal drug trafficking conspiracy and firearm violations.
During the course of the investigation, state and federal agents successfully arrested 40 individuals and seized large quantities of cocaine, marijuana, methamphetamine, $766,577 in U.S. currency, 30 vehicles, a boat, three residences, and 25 firearms. This case was the result of an extensive two and a half year joint investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This investigation was conducted by the U.S. Drug Enforcement Administration Galveston Resident Office, the Miami and Houston Division Offices, the McAllen District Office, and the Dickinson Police Department, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, Federal Bureau of Investigation, Internal Revenue Service, U.S. Customs and Border Patrol, U.S. Immigration and Customs Enforcement/Homeland Security Investigations, U.S. Marshals Service, Marine Interdiction Agency, Texas Department of Public Safety, Brazoria, Galveston, Harris, and Jefferson County (Texas) Sheriff’s Offices, and the police departments of Alvin, Beaumont, Galveston, Houston, League City, Pasadena, and Pearland, Texas. This case is being prosecuted by Assistant U.S. Attorneys Baylor Wortham and Michelle Englade.
Bloomsburg Resident Charged with Bank LarcenyRead the Press Release
The United States Attorney for the Middle District of Pennsylvania announced that charges have been filed in U.S. District Court in Williamsport against Mary Ann Gillespie of Bloomsburg, Pennsylvania.
According to United States Attorney, Peter Smith, Gillespie, age 59, is charged in a one-count felony information with bank larceny during the period of November 2008 to September 2013. The offense is alleged to have occurred as a check kiting scheme carried out by the defendant involving accounts at the First Columbia Bank and Trust Company and Fulton National Bank in Bloomsburg.
The investigation was conducted by the Federal Bureau of Investigation, Williamsport Resident Agency. Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case.
The government also filed a plea agreement in the case which is subject to the approval of the assigned judge.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statues and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is ten years imprisonment, and a fine of $250,000. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Baton Rouge Tax Preparer Convicted for Her Role in Fraudulent Tax Return SchemeRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced Friday that MALETICA V. FERGUSON, age 37, of Geismar, Louisiana, pled guilty on Wednesday, July 16, 2014, before Chief U.S. District Judge Brian A. Jackson to a Bill of Information for aiding and assisting in the preparation of false tax returns. As a result of her conviction, FERGUSON faces a maximum term of imprisonment of three (3) years, a fine of up to $527,538, and the costs of prosecution.
This case was the result of an initiative by the United States Attorney’s Office, the Internal Revenue Service’s Criminal Investigations Division, and the United States Department of Justice’s Tax Division, to combat tax fraud schemes.
According to the factual basis presented in connection with her guilty plea, FERGUSON operated The Best Tax Service (BTS), an income tax preparation business in Baton Rouge, Louisiana. FERGUSON prepared and submitted twenty-six (26) false tax returns to the IRS for the 2010 and 2011 tax years. In the returns, by misrepresenting the taxpayers’ income and falsely claiming various credits and deductions, among other means, the defendant fraudulently claimed that the taxpayers were entitled to significant refunds from the IRS. As a result of her scheme, FERGUSON caused a loss $263,769 to the taxpayers of the United States.
U.S. Attorney Green stated: “Filing false tax returns is a serious crime that hurts innocent taxpayers. This office will continue to aggressively pursue criminals who intend to defraud the United States. The U.S. Attorney’s Office and the IRS are serious about investigating these crimes and prosecuting those who engage in this type of conduct.”
IRS Criminal Investigation Special Agent-in-Charge Gabriel Grchan stated: “Falsely claiming refundable tax credits that are established to help legitimate taxpayers is a crime and is punishable under the law. IRS Criminal Investigation will not stand by while individuals like FERGUSON use tax preparation businesses as a tool to defraud the government and victimize taxpayers.”
The case is being prosecuted by Assistant United States Attorney Cam T. Le.
Australian Man Pleads Guilty in Las Vegas to Biofuels Fraud SchemeRead the Press Release
Nathan Stoliar, 64, of Australia, pleaded guilty in federal court in Las Vegas today to five felonies for his role in multiple schemes, worth in excess of $41 million, to generate fraudulent biodiesel credits and to export biodiesel without providing biodiesel credits to the United States as required by law.
Stoliar and another defendant had been charged in January 2014 in a 57-count indictment alleging conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering. Following his indictment, Stoliar’s arrest was sought by the United States. Located in Poland, Stoliar returned in early February to the United States to surrender for arrest. Stoliar pleaded guilty Tuesday to one count of conspiracy, one count of conspiracy to engage in money laundering, two counts of wire fraud and one count of making false statements under the Clean Air Act. Stoliar is required by the plea to forfeit $4 million and pay $1 million in restitution. He faces a maximum sentence of 20 years in prison and a $500,000 fine for each count of conspiracy to engage in money laundering and wire fraud, five years in prison and a $250,000 fine for conspiracy, and two years in prison and a $250,000 fine for making false statements under the Clean Air Act.
“Stoliar and his co-conspirator perpetrated a massive fraud against a renewable fuels program created to protect our nation’s energy security and independence,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The Justice Department will continue to pursue fraudsters at home and abroad and protect the integrity of federal programs as it protects the environment.”
“By rooting out fraud, EPA is committed to achieving the environmental goals that Congress envisioned when it created the Renewable Fuel Standard,” said Cynthia Giles, the U.S. Environmental Protection Agency’s (EPA) Assistant Administrator for Enforcement and Compliance Assurance. “This case, like other recent ones, supports legitimate businesses and makes clear to potential violators that EPA and its partners will fight to protect the program’s integrity.”
“With this guilty plea, the defendant admitted that he participated in a conspiracy to defraud the United States government, specifically the EPA, and that he personally gained more than $7 million from the scheme,” said U.S. Attorney Dan Bogden for the District of Nevada. “These types of schemes are complex and require an enormous expenditure of resources to investigate and prosecute. Because of the tremendous work of the investigators and prosecutors on this case, we were also able to seize and forfeit from the defendant millions of dollars from bank accounts, as well as real property in Nevada and California, jewelry and other assets.”
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production and use of renewable fuels such as biodiesel in the United States. Biodiesel producers and importers can generate and attach credits known as “renewable identification numbers,” or RINs. to the gallons of biodiesel they produce or import. Because certain companies (such as companies that sell transportation fuel in the United States) need RINs to comply with regulatory obligations, RINs have significant market value. They are routinely bought and sold in the marketplace. In addition, to ensure that RINs are generated for renewable fuel used only in the United States, and in order to create an incentive for biodiesel in the United States to be used here, anyone who exports biodiesel is required to obtain these valuable RINs for all exported gallons and provide the RINs to EPA.
Stoliar admitted that beginning around September of 2009, he and co-defendant James Jariv operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that represented itself as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Stoliar and Jariv also formed a company called Canada Feedstock Supply – that represented itself as City Farm’s supplier of feedstocks necessary to produce biodiesel. Jariv operated and controlled a company based in Las Vegas called Global E Marketing (GEM). Using these three and other closely-held companies, Stoliar and his codefendants claimed to produce biodiesel at the City Farm facility and to import and sell biodiesel to GEM, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, no biodiesel produced at City Farm was ever imported and sold to GEM as claimed. Stoliar and his codefendants used GEM to claim to blend the biodiesel with petroleum diesel, allowing them to sell the RINs separately from any actual biodiesel. Using this scheme, Stoliar and his co-defendants falsely claimed to import, purchase and blend more than 4.2 million gallons of biodiesel. They then sold the RINs, and fraudulently generated more than $7 million.
The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, Stoliar and Jariv, using their company MJ Biodfuel, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel to form B-99. The defendants bought the B-99 from unrelated companies in the United States, and this B-99 had been used by other companies to generate and separate RINs from the fuel. Because B-99 cannot be used to again generate a RIN, and because it cannot be used for other tax-related incentives, B-99 sells for substantially less than 100 percent biodiesel (known as B-100). Stoliar sold some of this biodiesel to purchasers in the United States, claiming it was B-100 produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B-100 and not RIN-less B-99, Stoliar marketed the fuel as eligible to be used by purchasers to generate credits and incentives, and Stoliar was able to sell the fuel for as much as $2.30 per gallon more than he otherwise would have been able.
Stoliar and his co-defendants also exported significant amounts of the RIN-less B-99 they bought in the United States to Canada. Stoliar then sold the biodiesel in Canada, and conspired with his co-defendants to not acquire and provide RINs to the United States for these exports as they were required to do by law. In doing so, Stoliar and Jariv failed to give to the United States RINs worth in excess of $34 million, keeping this money for themselves instead.
Finally, Stoliar and Jariv conspired to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to promote their illegal schemes and distribute the proceeds of their crimes. Accounts were utilized in Canada, Nevada and Australia, and transactions between the defendants’ closely-held companies were described as other legitimate transactions involving biodiesel, when in reality they were not.
Sentencing for Stoliar has been set for Oct. 30,2014 in Las Vegas, Nevada. The investigation that led to today’s plea was the result of collaborative work by the EPA’s Criminal Investigation Division and the FBI, with assistance from the United States Secret Service, the Internal Revenue Service-Criminal Investigations and the Department of Homeland Security.
The case is being prosecuted by Assistant Chief Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division , Assistant U.S. Attorney’s Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office in Nevada, and Assistant Deputy Chief Darrin L. McCullough of the Justice Department’s Criminal Division, Asset Forfeiture and Money Laundering Section, with the assistance of the Justice Department’s Office of International Affairs and the United States Attorney’s Office for the Southern District of Texas .Australian Man Pleads Guilty in Las Vegas to Biofuels Fraud SchemeRead the Press Release
WASHINGTON – Nathan Stoliar, 64, of Australia, pleaded guilty in federal court in Las Vegas today to five felonies for his role in multiple schemes, worth in excess of $41 million, to generate fraudulent biodiesel credits and to export biodiesel without providing biodiesel credits to the United States as required by law.
Stoliar and another defendant had been charged in January 2014 in a 57-count indictment alleging conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering. Following his indictment, Stoliar’s arrest was sought by the United States. Located in Poland, Stoliar returned in early February to the United States to surrender for arrest. Stoliar pleaded guilty Tuesday to one count of conspiracy, one count of conspiracy to engage in money laundering, two counts of wire fraud and one count of making false statements under the Clean Air Act. Stoliar is required by the plea to forfeit $4 million and pay $1 million in restitution. He faces a maximum sentence of 20 years in prison and a $500,000 fine for each count of conspiracy to engage in money laundering and wire fraud, five years in prison and a $250,000 fine for conspiracy, and two years in prison and a $250,000 fine for making false statements under the Clean Air Act.
“Stoliar and his co-conspirator perpetrated a massive fraud against a renewable fuels program created to protect our nation’s energy security and independence,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The Justice Department will continue to pursue fraudsters at home and abroad and protect the integrity of federal programs as it protects the environment.”
“By rooting out fraud, EPA is committed to achieving the environmental goals that Congress envisioned when it created the Renewable Fuel Standard,” said Cynthia Giles, the U.S. Environmental Protection Agency’s (EPA) Assistant Administrator for Enforcement and Compliance Assurance. “This case, like other recent ones, supports legitimate businesses and makes clear to potential violators that EPA and its partners will fight to protect the program’s integrity.”
“With this guilty plea, the defendant admitted that he participated in a conspiracy to defraud the United States government, specifically the EPA, and that he personally gained more than $7 million from the scheme,” said Dan Bogden, U.S. Attorney for the District of Nevada. “These types of schemes are complex and require an enormous expenditure of resources to investigate and prosecute. Because of the tremendous work of the investigators and prosecutors on this case, we were also able to seize and forfeit from the defendant millions of dollars from bank accounts, as well as real property in Nevada and California, jewelry and other assets.”
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production and use of renewable fuels such as biodiesel in the United States. Biodiesel producers and importers can generate and attach credits known as “renewable identification numbers,” or RINs. to the gallons of biodiesel they produce or import. Because certain companies (such as companies that sell transportation fuel in the United States) need RINs to comply with regulatory obligations, RINs have significant market value. They are routinely bought and sold in the marketplace. In addition, to ensure that RINs are generated for renewable fuel used only in the United States, and in order to create an incentive for biodiesel in the United States to be used here, anyone who exports biodiesel is required to obtain these valuable RINs for all exported gallons and provide the RINs to EPA.
Stoliar admitted that beginning around September of 2009, he and co-defendant James Jariv operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that represented itself as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Stoliar and Jariv also formed a company called Canada Feedstock Supply – that represented itself as City Farm’s supplier of feedstocks necessary to produce biodiesel. Jariv operated and controlled a company based in Las Vegas called Global E Marketing (GEM). Using these three and other closely-held companies, Stoliar and his codefendants claimed to produce biodiesel at the City Farm facility and to import and sell biodiesel to GEM, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, no biodiesel produced at City Farm was ever imported and sold to GEM as claimed. Stoliar and his codefendants used GEM to claim to blend the biodiesel with petroleum diesel, allowing them to sell the RINs separately from any actual biodiesel. Using this scheme, Stoliar and his co-defendants falsely claimed to import, purchase and blend more than 4.2 million gallons of biodiesel. They then sold the RINs, and fraudulently generated more than $7 million.
The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, Stoliar and Jariv, using their company MJ Biodfuel, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel to form B-99. The defendants bought the B-99 from unrelated companies in the United States, and this B-99 had been used by other companies to generate and separate RINs from the fuel. Because B-99 cannot be used to again generate a RIN, and because it cannot be used for other tax-related incentives, B-99 sells for substantially less than 100 percent biodiesel (known as B-100). Stoliar sold some of this biodiesel to purchasers in the United States, claiming it was B-100 produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B-100 and not RIN-less B-99, Stoliar marketed the fuel as eligible to be used by purchasers to generate credits and incentives, and Stoliar was able to sell the fuel for as much as $2.30 per gallon more than he otherwise would have been able.
Stoliar and his co-defendants also exported significant amounts of the RIN-less B-99 they bought in the United States to Canada. Stoliar then sold the biodiesel in Canada, and conspired with his co-defendants to not acquire and provide RINs to the United States for these exports as they were required to do by law. In doing so, Stoliar and Jariv failed to give to the United States RINs worth in excess of $34 million, keeping this money for themselves instead.
Finally, Stoliar and Jariv conspired to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to promote their illegal schemes and distribute the proceeds of their crimes. Accounts were utilized in Canada, Nevada and Australia, and transactions between the defendants’ closely-held companies were described as other legitimate transactions involving biodiesel, when in reality they were not.
Sentencing for Stoliar has been set for is Oct. 30, 2014 in Las Vegas, Nevada. The investigation that led to today’s plea was the result of collaborative work by the EPA’s Criminal Investigation Division and the FBI, with assistance from the United States Secret Service, the Internal Revenue Service-Criminal Investigations and the Department of Homeland Security.
The case is being prosecuted by Assistant Chief Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, Assistant U.S. Attorney’s Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office in Nevada, and Assistant Deputy Chief Darrin L. McCullough of the Justice Department’s Criminal Division, Asset Forfeiture and Money Laundering Section, with the assistance of the Justice Department’s Office of International Affairs and the United States Attorney’s Office for the Southern District of Texas.Ashton Man Sentenced to 5 Years for Distributing Child PornographyRead the Press Release
A man who distributed child pornography was sentenced July 17, 2014, to five years in federal prison.
Todd Techen, age 22, of Ashton, Iowa, received the sentence after an April 17, 2014, guilty plea to one count of distribution of child pornography. At the guilty plea hearing, Techen admitted that, between 2012 and January 2013, he knowingly distributed child pornography.
Techen was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Techen was sentenced to 60 months’ imprisonment. A special assessment of $100 was imposed, and Techen must also serve a ten-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Iowa Division of Criminal Investigation, the Federal Bureau of Investigation, and the Lyon County Sheriff’s Office.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-4079.
Ashland Man Sentenced to 30 Years in Prison for Labor Trafficking ConspiracyRead the Press Release
An Ashland, Ohio, man was sentenced to 30 years in prison for holding a woman with cognitive disabilities and her child against their will and forcing the woman to perform manual labor for them, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
Jordie L. Callahan, 28, and Jessica L. Hunt, 33, were convicted in March following a three-week trial before U.S. District Judge Benita Y. Pearson. Callahan and Hunt were both convicted on one count each of conspiracy to violate laws; forced labor and acquiring a controlled substance by deception.
“Mr. Callahan, through his cruelty, sought to deprive the victims in this case of their dignity and their freedom,” U.S. Attorney Dettelbach said. “He failed in the former, and the victim’s strength ended up trumping his. As for the freedom part – now it is the defendant whose freedom will be taken, for a long time.”
“Hopefully this well-deserved lengthy sentence will provide a sense of justice that will assist the victims in their ongoing healing process,” Special Agent in Charge Anthony said.
Hunt is scheduled to be sentenced by Judge Pearson on July 24.
Daniel J. Brown, 35, and Dezerah L. McGuire (formerly Silsby), 33, also of Ashland, both previously pleaded guilty to related crimes are serving sentences in federal prison. Brown was sentenced to five years in prison and McGuire was sentenced to nearly four years in prison.
Callahan and Hunt used a combination of violence, threats, sexual assaults, humiliation, deprivation and monitoring to establish and continue a pattern of domination and control over their victims, identified only as S.E. and B.E., according to the court documents and trial testimony.
Their tactics included beating S.E., threating to beat to S.E. and B.E., taunting and threatening the victims with pit bulls and snakes, causing the victims to sleep in unsafe and unsanitary conditions, restricting B.E. and S.E.’s access to the bathroom, preventing them from eating regular and suitable meals and forcing S.E. to eat dog food and crawl on the floor while wearing a dog collar, according to the court documents and trial testimony.
According to court documents and trail testimony:
Callahan pointed a firearm at S.E.’s head and threatened to kill her if she did not perform the labor and services he and other conspirators commanded. Callahan also forced S.E. on multiple occasions to engage in sex acts with him and threatened that he and Hunt would kill S.E. if she told anyone about the forced sexual acts.
The conspiracy between Callahan, Hunt, McGuire and Brown took place between August 2010 and October 2012. The object of the conspiracy included holding S.E. in a condition of forced labor and involuntary servitude and intentionally causing painful injuries to S.E. so they could use the narcotic pain medications she was prescribed to satisfy their personal drug cravings.
Callahan and Hunt recruited S.E. and B.E. to live with them in their two-bedroom apartment in Ashland, knowing that S.E. suffered a traumatic brain injury that left her with a cognitive disability and that S.E. and B.E. received monthly public assistance payments.
In August 2011, McGuire, at the direction of Callahan and Hunt, smashed S.E.’s hand with a rock with such force that S.E. needed to go to the hospital emergency room. Callahan, Hunt and McGuire then forced S.E. to give them the narcotic pain pills and prescription for narcotic pain pills she obtained after being treated at the emergency room.
In December 2011, Callahan and Hunt injured S.E.’s back with such force that she needed medical treatment. Again, Callahan and Hunt forced S.E. to give them the narcotic pain pills and prescription for narcotic pain pills she obtained after being treated.
In March 2012, Callahan kicked S.E. in the hip with such force that she needed medical treatment. Callahan and Hunt forced S.E. to give them the narcotic pain pills and prescription for narcotic pain pills she obtained after being treated.
On multiple occasions between August 2010 and October 2012, Callahan and Hunt threatened S.E. and B.E. with serious physical harm, including death, if S.E. did not clean up the apartment, care for their numerous pit bull dogs, snakes and other reptiles, purchase items at the store and perform other labor and services ordered by the conspirators.
Callahan and Hunt used a video camera to monitor S.E. and B.E.’s activities and conversations in the apartment. They often forced S.E. to walk to the store to buy groceries, cigarettes, dog food and other items for Callahan, Hunt and Hunt’s four sons and to pay for these purchases with her public assistance card. They allotted S.E. only a brief time period to complete the shopping and warned her she was not allowed to speak with anyone while she was out. They frequently required B.E. to remain with them at the apartment while S.E. was out and threatened physical harm to B.E. and S.E. if S.E. broke any of their rules.
Callahan and Hunt also threatened to contact Ashland County Job and Family Services and have B.E. taken away if S.E. purchased any items at the store other than those they ordered or if she told anyone about their unlawful conduct.
In June 2011, after S.E. and B.E. had attempted to flee the apartment, Callahan and Hunt ordered Brown and McGuire to find S.E. and B.E. and bring them back to the apartment. Brown and McGuire lured S.E. and B.E. into their vehicle by promising to take them to Dairy Queen, only to deposit them afterwards back at the apartment.
On multiple occasions, Callahan and Brown locked S.E. and B.E. in a room with a window that was nailed shut and a door that had been locked from the outside.
In October 2011, Callahan and Hunt forced S.E. to hit her child while they recorded a video, and threatened to inflict much greater physical harm on both S.E. and B.E. if S.E. did not comply.
One month later, Callahan and Hunt again forced S.E. to strike B.E. while they captured a video recording of the staged incident on Callahan’s cell phone. Callahan and Hunt repeatedly threatened have B.E. taken away by showing the videos to authorities in order to secure S.E.’s compliance to the conspirators’ commands.
The case was prosecuted by Assistant U.S. Attorneys Chelsea Rice and Thomas E. Getz following an investigation by the FBI and Ashland Police Department, with assistance from the Ashland County Prosecutor’s Office.
Additional Charges Filed Against Stockbroker in Connection with Alleged Investment SchemeRead the Press Release
PHILADELPHIA – A second superseding indictment was filed today charging William Bucci, 57, of Philadelphia, PA, with running an investment fraud scheme that duped victims into turning over more than $3.2 million, announced United States Attorney Zane David Memeger. According to the indictment, Bucci told his victims he was starting a wine and high end olive oil import business. Among his one dozen victims was a Catholic Priest. The indictment charges securities fraud, four counts of mail fraud, one count of mortgage fraud, and an additional count of making and subscribing false federal income tax returns. A previous indictment charged Bucci with four counts of making and subscribing false federal income tax returns for underreporting his income for the tax years 2007 through 2010.
According to the indictment, beginning as early as 2004, Bucci represented to his brokerage clients-victims that he was starting a business to import high end olive oil and wine from Italy. But Bucci, who was a licensed stockbroker and a non-lawyer elector on the Pennsylvania Court of Judicial Discipline, never had an olive oil and wine business. He allegedly promised the clients a rate of return of at least 10% on their investment. He also falsely guaranteed to the investors that he would repay principal and interest. Bucci also allegedly solicited other individuals to loan him money for the purchase of real estate. According to the indictment, Bucci used funds from these individuals to support his lifestyle and to make payments to earlier victims. In total, the indictment alleges that victims entrusted in excess of $3.2 million to Bucci between November 2003 and December 2011.
The indictment further alleges that Bucci filed false federal income tax returns, underreporting his income, for the tax years 2007 through 2011. It is further alleged that, in 2012, Bucci provided false documents to Beneficial Mutual Savings Bank in connection with a mortgage that Beneficial held on a property that Bucci owned in Brigantine, New Jersey.
If convicted the defendant faces a maximum possible sentence of 145 years in prison, restitution, a fine of up to $8.25 million, and up to five years of supervised release.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations. It is being prosecuted by Assistant United States Attorney David J. Ignall.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-852510th Street Associate Pleads Guilty to Drug ChargeRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Chazity Fluellen, 27, of Buffalo, N.Y., pleaded guilty before U.S. District Judge Richard J. Arcara to maintaining a drug involved premises. The charge carries a maximum penalty of 20 years in prison, a fine of $500,000, or both.
Assistant U.S. Attorney Joseph M. Tripi, who handled the case, stated that the defendant and co-defendant, 10th Street Gang member Desmond Ford, used and maintained the premises at 23 10th Street in Buffalo for the purpose of storing and distributing cocaine and crack cocaine. During a search of the property on June 18, 2010, officers recovered quantities of cocaine and crack cocaine, packaging material, a scale, and cellular phones.
Fluellen is one of 40 members or associates of the 10th Street Gang who have been convicted as a part of this federal investigation. As a part of the plea, the defendant will forfeit the residence at 23 10th Street to federal authorities.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, the New York State Police, under the direction of Major Michael Cerretto, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Resident Agent in Charge Frank Christiano.
Sentencing is scheduled for October 27, 2014 at 1:00 p.m. before Judge Arcara.10 Individuals Indicted for Drug Trafficking and Money LaunderingRead the Press Release
SAN JUAN, Puerto Rico – On July 16, 2014, a federal grand jury in the District of Puerto Rico returned an indictment against 10 defendants charged with distribution of a controlled substance for purpose of unlawful importation, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Drug Enforcement Administration is in charge of the investigation.
The indictment charges 10 individuals with conspiracy to knowingly and intentionally distribute and cause the distribution of five kilograms or more of cocaine, intending and knowing that such cocaine would be unlawfully imported to the United States, all for significant financial gain and profit. The defendants are: Javier Carrillo, aka “Cara Ancha,” “Ojos Lindos;” Alex Rudolph Antonio Reed, aka “Feo;” José Ángel Burgos-Rodríguez, aka “Che,” “Dragoncito;” Héctor Manuel Pérez-Arizmendi, aka “Cachete;” José Miguel Rodríguez; Carlos Gilberto Miranda-Ríos, aka “El Gordo;” Delfin Robles-Álvarez, aka “El Indio;” Nelson Tomas Feliciano-Collazo, Wilfredo Eli Rivera-Zayas; and Julio Mejía-Leyva.
The indictment alleges that beginning in 2005, the organization distributed wholesale and retail amounts of cocaine throughout Puerto Rico and continental United States. The defendants would obtain large amounts of cocaine in Saint Martin, Netherlands Antilles, which was then transported to Puerto Rico on board maritime vessels, commercial cargo planes, and private aircraft. They would also transport large sums of U.S. currency via aircraft and motor vessel to Saint Martin for the purchase of large quantities of cocaine and use the blackberry messenger application as well as other means of communication to communicate with each other.According to the indictment, in or about the year 2010, the defendants conspired to transport more than $12,000,000 in United States currency from Puerto Rico to Saint Martin, Netherland Antilles, knowing that the monetary instruments of funds involved in the transportation represented the proceeds of dealing in controlled substances.
Some of the defendants also laundered drug proceeds through the Puerto Rico Lottery. As part of the manner and means of this money laundering conspiracy, the defendants and their co-conspirators had a point of contact within the Puerto Rico Lottery who would corruptly offer winning lottery tickets before they were claimed. Burgos-Rodríguez, Miranda-Ríos and Robles-Álvarez would purchase the winning lottery tickets with proceeds from the cocaine sales, for the price of the winning ticket plus a twenty percent commission. The defendants would redeem the winning ticket as though it had always been their own. The lottery would then issue a check for the winning amount to the co-conspirator who claimed the ticket, who could then deposit the check in their bank account as actual earned income, thereby laundering the underlying drug proceeds.In addition to the money judgment of 127 million dollars the defendants are facing, they have to forfeit a property located at Barrio Hato Tejas, Bayamón, PR; and two airplanes, an Aerostar-601 and a Cessna 340A.
“This drug trafficking organization was involved in a conspiracy to traffic massive quantities of illegal drugs into the United States,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “These arrests demonstrate the Justice Department’s commitment to hold ruthless cartel leaders responsible for importing narcotics into the United States – no matter where they conduct their illegal business. Along with our domestic and international law enforcement partners, we will ensure that cartel members and associates are brought to justice for the damage they inflict on both sides of the border.”
“DEA will continue to investigate, disrupt and dismantle drug trafficking organizations operating out of Colombian and other parts of South America using the Caribbean Region as a transshipment point to smuggle narcotics into the United States,” said Pedro Janer, Acting Special Agent in Charge of the DEA Caribbean Division.
Assistant U.S. Attorney Mariana Bauzà is in charge of the prosecution of the case. If convicted the defendants face a minimum sentence of 10 years up to life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.# # #
$343,000 Settlement with American International Biotechnology, LLC Resolves False Claims Act AllegationsRead the Press Release
PITTSBURGH – American International Biotechnology, LLC (“AIB”) has agreed to pay the United States $343,739.45 to settle False Claims Act allegations, United States Attorney David J. Hickton announced today.
The settlement resolves allegations that AIB violated the False Claims Act by obtaining improper referrals for genetic tests billed to the Medicare program. The United States alleged that AIB, acting through a contract sales agent, falsely marketed its genetic tests to a Pennsylvania medical practice as part of a free clinical research study for which patients and insurers would not be billed, and later billed those tests to Medicare. The United States further alleged that AIB’s contract sales agent offered payments to an employee of the Pennsylvania medical practice in exchange for referrals of genetic tests, in violation of the Anti-Kickback Statute, a law that prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The claims settled by this agreement are allegations only; there has been no determination of liability.
The settlement also resolves a civil lawsuit filed against AIB under the qui tam, or whistleblower, provisions of the False Claims Act. The lawsuit is captioned U.S. ex rel. Greentree Medical Center, PC v. American International Biotechnology, LLC et al., Civil Action No. 13-597 (W.D. Pa.).
This matter was investigated by the Office of Inspector General of the Department of Health and Human Services, the Federal Bureau of Investigation, and the United States Attorney’s Office for the Western District of Pennsylvania. Assistant United States Attorney David Lew handled this matter on behalf of the United States.
21 July 2014
Yucca Valley Man Who Worked at Area School Pleads Guilty to Federal Child Pornography ChargesRead the Press Release
RIVERSIDE, California – A school custodian who sexually abused a child over a period of several years and shared visual images of the molestations online pleaded guilty today to federal child pornography charges.
Matthew Frazer, 39, of Yucca Valley, pleaded guilty today to one count of distribution of child pornography and one count of possession of child pornography.
Frazer, who has been in custody since his arrest earlier this year, is scheduled to be sentenced by United States District Judge Virginia A. Phillips on October 6.
Prior to his arrest on January 31, Frazer was employed as a custodian with the Morongo Unified School District. The victim did not attend the schools where Frazer worked.
The investigation into Frazer was initiated last year after the National Center for Missing and Exploited Children provided to the FBI a series of pornographic images depicting a young female being abused by a white male. For several months, investigators attempted to identify the adult male in the images, and the FBI identified Frazier as the suspect earlier this year.
Frazer pleaded guilty to the two felony charges pursuant to a plea agreement, in which he admits filming sexual explicit images of the young female victim from 2008 through 2012. He specific admitted making a video in October 2009, when the victim was 6 years old, and again in 2010 when she was 7.
As a result of today’s guilty pleas, Frazer faces a mandatory minimum sentence of five years for the distribution charge and a statutory maximum sentence of 30 years in prison as a result of his guilty pleas to both counts.
The plea agreement calls for Judge Philips to impose a sentence of at least 10 years and up to 23 years, which will be followed by 10 years of supervised release.
This case is the result of an investigation by the FBI. The following agencies provided assistance during the investigation: the Riverside Police Department; the Riverside County Sheriff’s Department; the San Bernardino Police Department; the San Bernardino County Sheriff’s Department; and the San Bernardino County Probation Department.
Release No. 14-092
Worley Man Sentenced for StabbingRead the Press Release
COEUR D’ALENE – Andrew Hunter Peone, 25, of Worley, Idaho, was sentenced today in United States District Court to 33 months in prison, followed by three years of supervised release for assault with a dangerous weapon, U.S. Attorney Wendy J. Olson announced. Peone pleaded guilty on April 29, 2014.
According to the plea agreement, Peone, a Coeur d’Alene tribal member, admitted that on August 22, 2013, he assaulted a man with a knife with the intent to do bodily harm. Peone cut the man several times, resulting in small lacerations to the victim’s arms and hands. The assault occurred on the Coeur d’Alene Indian Reservation.
The case was investigated by the Federal Bureau of Investigation and Coeur d’Alene Tribal Police.
Wichita Chiropractor Pleads Guilty in Health Care Fraud CaseRead the Press Release
TOPEKA, KAN. – A Wichita chiropractor pleaded guilty Monday to defrauding health care insurers of more than $1.3 million, U.S. Attorney Barry Grissom.
Jeffrey D. Fenn, 33, Wichita, Kan., pleaded guilty to one count of health care fraud, two counts of aggravated identity theft and one count of tax evasion. In his plea, he admitted that from March 2011 to October 2013 he executed a health care fraud scheme through his businesses, including Wichita Health and Wellness, Fenn Chiropractic, P.A. and Wichita Pain Associates, P.A. Fenn submitted false claims to Medicare, Blue Cross/Blue Shield of Kansas and Coventry Health Care of Kansas, Inc., and the Federal Employees Health Benefits Program.
Chiropractors have a limited scope of practice. They are not allowed to perform injections, dispense drugs or supervise ARNPs and physicians. Fenn developed what he called an “integrated practice,” hiring physicians, advanced registered nurse practitioners and physical therapists and ostensibly having them perform procedures he was not qualified to perform. He misrepresented to the Kansas Board of Healing Arts that medical doctors had an ownership in his clinic. He used the names of physicians he employed to submit false claims for services.
Fenn fraudulently billed for nerve conduction tests, nerve block injections, subcutaneous infiltrate proceedings, fine needle aspirations and ultrasound procedures.
He also made fraudulent claims for business and personal income taxes. For example, he claimed a $9,400 business expense for purchasing a server. In fact, he spent the money to make a down payment on a residential lot in Wichita. He claimed a $15,100 expense for advertising. In fact he used the money to make a down payment on a ski boat.
Sentencing is set for Oct. 20. Both parties have agreed to recommend a sentence of five years in federal prison and restitution totaling more than $1.8 million.
Grissom commended Health and Human Services, Office of Inspector General, Office of Investigations, the FBI, Defense Criminal Investigative Service, the Food and Drug Administration, the Internal Revenue Service and Assistant U.S. Attorney Tanya Treadway for their work on the case.Washington Man Pleads Not Guilty to Drug ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that an Elma, Washington, man has been indicted by a federal grand jury for Conspiracy to Distribute and Possess with Intent to Distribute a Controlled Substance.
Bruce Gerald Cole, age 47, was indicted on August 22, 2012. He appeared before U.S. Magistrate Judge Mark A. Moreno on July 16, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
On or about between May 1, 2009, and June 5, 2009, in the District of South Dakota and elsewhere, Cole did conspire with others to distribute and possess marijuana.
The charge is merely an accusation and Cole is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Tim Maher is prosecuting the case.
Cole was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Unlicensed Trader Pleads Guilty in Los Angeles for Role in Fraudulent High Yield Investment Program SchemeRead the Press Release
An unlicensed trader who solicited $500,000 from undercover FBI agents to invest in a fraudulent high yield investment program pleaded guilty today in federal court in Los Angeles.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Bill Lewis of the FBI’s Los Angeles Field Office made the announcement.
Jessie Tolbert, 38, of Bastrop, Louisiana, pleaded guilty today to one count of conspiracy to commit wire fraud and one count of wire fraud. He is scheduled to be sentenced on Oct. 20, 2014.
According to court documents, in December 2011, Tolbert and his co-conspirators, including Eriq Brye and Greg Preston, placed an advertisement online for an investment opportunity. Undercover federal agents responded to this advertisement. During several weeks of email and telephone communications, Tolbert and his co-conspirators informed the agents that a spot recently had opened up on a high yield investment program they purportedly were running and that a $500,000 investment in their program would generate $30 million in 30 days. Tolbert did not actually run an investment program.
In an effort to induce the undercover agents to invest in the program, Tolbert and his co-conspirators made numerous material misrepresentations. Specifically, Tolbert falsely and repeatedly guaranteed the success of the proposed trade based on his purported past success in generating similar returns in comparable trades, as well as his success in other investments in the financial industry. Tolbert had never applied for, nor received, a license with any federal agency related to the financial industry.
Brye is a fugitive. Preston pleaded guilty in May 2013 for conduct including his role in this investment scheme. He is scheduled to be sentenced on December 19, 2014.
An indictment is merely an allegation, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was investigated by the FBI and prosecuted by Assistant Chief Benton Curtis and Trial Attorneys Kyle Maurer and Alex Porter of the Criminal Division’s Fraud Section.United States Attorney's Office and Law Enforcement Target "Molly" (Methylone) Importation and Distribution in the Washington County AreaRead the Press Release
United States Attorney James L. Santelle announced today that 12 defendants were indicted in federal court with Conspiracy to Import and Distribute Methylone, a Schedule I Controlled Substance in violation of Title 21, United States Code, Section 846.
Defendant Age and ResidencyKirk R.C. Mickelson aka “Kurt Cobain,” “Captain Kirk,” Captain”
25, Beloit
22, Beloit
Bryan F. Eason, aka “B,” “Unc,” “Uncle”
40, Illinois
Michael Miller
31, Minneapolis
Leanna Porter
26, Beloit
Connie Ketelsen
49, Beloit
Amy Ketelsen
25, Beloit
Wendell Thompson Eason
52, Hampton, NH
Allen Arthur Strzyzykowski
23, Janesville
Anthony Longtin, aka “Toby,” “Little Hitter"
23, Janesville
Martel Earl, aka “Tel”
24, Beloit
Scott Robert Beckwith, aka “Face”
31, Unknown
According to information released in court, in 2012, the Drug Enforcement Administration and the Washington County Sheriff’s Department began an investigation into a poly-drug group. One of the main drugs the group trafficked in was Methylone. Methylone is also known by the street names “Molly” or “M-1,” and is part of a family of synthetic, designer drugs commonly known as “bath salts.” Methylone is a Schedule I controlled substance.
The indictment alleges that from October 2011 through July 1, 2014, the defendants listed in the table above knowingly and intentionally conspired to import, distribute and possess with intent to distribute Methylone. If convicted each defendant faces up to 20 years imprisonment, a $250,000 fine and a minimum of 3 years supervised release.
In addition, Kirk R.C. Mickelson and Bryan F. Eason (B.F. Eason) were charged with Use and Brandishing of Firearms and Ammunition in furtherance of a Drug Conspiracy, in violation of Title 21, United States Code, Section 846. If convicted they will face an additional 7 years to life imprisonment. B.F. Eason was also charged with Intimidation of a Witness in violation of Title 18, United States Code, Sections 1512 (b)(1) and (2). If convicted B.F. Eason will face an additional 20 years imprisonment, a $250,000 fine and a minimum of 5 years supervised release.
In a separate but related indictment, a thirteenth defendant identified as Robert Bero (age: 21) formerly of West Bend was charged with Conspiracy to Distribute Methylone, in violation of Title 21, United States Code, Section 846 and Distribution of Methylone, a Schedule I Controlled Substance in violation of Title 21, United States Code, Section 841. If convicted he faces up to 20 years imprisonment, a $250,000 fine and a minimum of 3 years supervised release on each count.
The defendants were charged based on a lengthy joint investigation by the Drug Enforcement Administration and the Washington County Multi-jurisdictional Drug Task Force. Also assisting in the investigation were the Rock County Sheriff’s Department, Homeland Security Investigations, the U.S. Postal Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Wisconsin Department of Justice - Division of Criminal Investigations, and the Maui Police Department. The case is being prosecuted by Assistant United States Attorney Karine Moreno-Taxman.
In making this announcement, United States Attorney James L. Santelle stated: “This important law enforcement action—identifying, apprehending, and bringing to justice a group of people whose drug dealing and related criminal conduct has compromised the safety and security of communities in Washington County, throughout the Eastern District of Wisconsin, in Hawaii, Illinois, Minnesota, and elsewhere—reflects the continuing, targeted, and effective work that we pursue on behalf of all of the people of our nation. The result of that focused investigative and prosecution strategy is that thirteen defendants have been charged with engaging in a sophisticated conspiracy to distribute Methylone and to profit from the subsequent sale of it. The fact that virtually all of them are now in custody, facing significant prison terms and likely to lose the assets that they have acquired, is rightly viewed as the appropriate and anticipated response to this kind of destructive behavior. It is also representative of the sort of success that we have in combating the illegal acquisition, transfer, sale, and distribution of illegal drugs of all kinds.” Santelle specifically commended the professional work of all of the agencies participating in the investigation of the case and, in particular, the Drug Enforcement Administration and the Washington County Multi-jurisdictional Drug Task Force.
Jack Riley, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration, which includes Wisconsin, praised the dedication and teamwork of the agents, officers and prosecutors involved in this investigation. "The indictments of these 12 individuals, should serve as a notice to criminal networks that allegedly traffic in narcotics that the Drug Enforcement Administration and its law enforcement partners stand shoulder to shoulder in our commitment and we will use every legal avenue available to hold the leaders of those organizations accountable."
An indictment is a method of charging an individual and does not constitute inference of his or her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.
U.S. Attorney’s Office Says DNA Evidence Exonerates Man Convicted of 1982 Rape-Murder- Office Calls for Vacating Conviction on Grounds of Actual Innocence -Read the Press Release
WASHINGTON - The U.S. Attorney’s Office for the District of Columbia today joined in a motion to vacate the 1984 manslaughter conviction of Kevin Martin, based on the grounds of his actual innocence in the rape and murder of a woman in Southwest Washington.
Mr. Martin, now 50, pled guilty in March 1984 in the Superior Court of the District of Columbia to one count of manslaughter while armed in the Nov. 1, 1982 rape-murder of Ursula Brown. He also pled guilty at that time to two counts of armed robbery stemming from other incidents that took place a week later. Although Mr. Martin admitted in court to carrying out the latter armed robberies, he entered what is known as an Alford plea to the manslaughter charge. Under such a plea, the defendant does not admit the allegations, but agrees that the government has enough evidence to secure a conviction.
Mr. Martin was sentenced in July 1984 to a prison term of 15 years to life for manslaughter, and two consecutive terms of 10 years to life on the robbery charges, making his total sentence 35 years to life. He was paroled in 2009.
DNA testing has now led to Mr. Martin’s exoneration of the attack on Ms. Brown.
The U.S. Attorney’s Office joined Mr. Martin today in asking the Court to vacate his manslaughter conviction and issue a certificate of actual innocence for that conviction. The Honorable Robert I. Richter granted the motion at a hearing today.
“Thirty years ago, Kevin Martin was unjustly branded a rapist and murderer,” said U.S. Attorney Machen. “Although Mr. Martin had been justly convicted of a series of armed robberies, the system failed us all when he was wrongfully convicted of a brutal rape and murder and, as a result, spent far too long in prison. DNA analysis has now provided evidence that a serial rapist – not Mr. Martin – committed this outrageous attack. Mr. Martin has steadfastly declared his innocence for three decades, and today we joined him in asking the court to clear his name. This exoneration reinforces the importance of the task force we created in early 2010 to pore through old records to identify wrongful convictions. We continue to urge defense lawyers to come forward with any information about wrongful convictions where DNA testing or other evidence could remedy a wrong that was committed in the past. It is never too late to do justice.”
Ms. Brown, 19, was raped and murdered Nov. 1, 1982. According to the government’s evidence, early that morning, Ms. Brown was driving along Route 295 when her car was intentionally bumped from behind by a black Toyota. When she got out and confronted the driver, she was abducted and taken to the 4300 block of Martin Luther King Avenue SW. She was raped during this incident. When she attempted to escape from her attacker, Ms. Brown was shot in the head and stabbed with a serrated knife along her belly, neck, and arms. Her body was discarded by a dumpster near Chesapeake Street SE, next to an elementary school.
The murder was among a series of crimes committed in late October and November of 1982 in which motorists were bumped and then attacked after stopping their vehicles. A total of eight victims – seven women and one man – were robbed or assaulted in separate incidents between Oct. 31 and Nov. 8, 1982. Ms. Brown was the only victim to be murdered.
The Metropolitan Police Department (MPD) arrested three men in 1982 for taking part in one or more of the crimes. They included Mr. Martin, William Davidson, and Kevin Williams.
Mr. Martin spoke to the police after his arrest on Nov. 10, 1982, and admitted to being involved in three bump-and-rob incidents with Davidson, all on Nov. 8, 1982. The robbery charges stemmed from two of those attacks. He repeatedly denied killing Ms. Brown, however.
In the murder case, the government’s evidence against Mr. Martin included hair fragments removed from Ms. Brown’s shoes. The FBI Laboratory issued a report stating that the fragments exhibited the same microscopic characteristics as samples taken from Mr. Martin.
Davidson pled guilty in January 1984 to felony murder, rape, armed robbery and other charges. Consistent with the results of the hair analysis, Davidson claimed at his plea hearing that he acted as a look-out while Mr. Martin raped and killed Ms. Brown. Davidson is now serving a sentence of 65 years to life.
Williams pled guilty to one count of rape while armed for his role in the bump-and-run incidents with Davidson and an unrelated kidnaping charge; neither of the charges related to Ms. Brown’s murder. He was sentenced to 15 years to life for the crimes. He was paroled in 2004.
At Mr. Martin’s plea hearing, in March 1984, Mr. Martin’s lawyer said that Mr. Martin feared conviction of greater charges, citing the hair analysis. Mr. Martin stated, “I understand that I was wrong in committing the robberies, but I never took part in the murder.” Over the years, he continued to insist that he was innocent of the rape-murder.
In November 2001, Mr. Martin’s current defense counsel, Bernard Grimm, filed a motion seeking to withdraw the 1984 guilty plea and vacate the conviction. At the request of the government and the defense, the Metropolitan Police Department searched for the physical evidence without success. A hearing on Mr. Martin’s motion began in July 2006. Before its conclusion, the government and defense negotiated a resolution calling for Mr. Martin’s sentence to be reduced. Pursuant to that agreement, the Court re-sentenced Mr. Martin to a total of 20 to 60 years in prison. The re-sentencing made Mr. Martin immediately eligible for parole. The U.S. Parole Commission, however, did not parole Mr. Martin until September 2009.
Following the 2009 exoneration of another man convicted of a rape and murder, the U.S. Attorney’s Office for the District of Columbia began a review of older cases in which the FBI had made a positive hair or fiber association. This led to a re-examination of Mr. Martin’s case, and, in November 2013, the U.S. Attorney’s Office again attempted to locate the evidence.
By this time, MPD had performed a comprehensive inventory of all evidence in its possession as part of a transition to a new property warehouse. The hair sample still could not be located. However, through this search, in January 2014, the U.S. Attorney’s Office located semen-positive swabs taken from Ms. Brown’s body.
The office subsequently contacted Mr. Grimm and the Mid-Atlantic Innocence Project to determine if Mr. Martin wanted DNA testing performed. Upon learning that Mr. Martin was interested in DNA testing, the office obtained DNA samples from Mr. Martin as well as Davidson. The DNA testing took place in March and April 2014. The evidence excluded Mr. Martin, but matched the sample provided by Davidson.
DNA testing was not available to the prosecution or defense in 1982. The results now establish that Davidson, not Martin, raped Ms. Brown. The results also undermine Davidson’s claim that he acted as only a look-out at the time of the murder. There is no other credible evidence connecting Mr. Martin to the murder.
This is the first time that a U.S. Attorney’s Office has also resolved all civil claims against the United States simultaneously with a request for a certificate of actual innocence.
14-168Three Pine Ridge Men Indicted on Multiple ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that three Pine Ridge, South Dakota, men were indicted by a federal grand jury on robbery, assault, and abusive sexual contact charges.
Wesley Running Shield, age 28; Michael Alford, age 32; and Lesley Running Shield, age 28, were indicted for offenses that occurred on two seperate occasions at Pine Ridge.
The Running Shields and Alford were indicted for Robbery, Assault with a Dangerous Weapon, and Abusive Sexual Contact. On June 10, 2014, the three stole cell phones from two individuals and assaulted them. Wesley Running Shield and Alford also sexually assaulted a woman at that time.
Wesley Running Shield and Michael Alford were also indicted for Robbery, Assault with a Dangerous
Weapon, and Assault Resulting in Serious Bodily Injury relating to an incident occurring on June 12, 2014, when they assaulted a man and stole his car and money.
The charges are merely accusations and the Defendants are presumed innocent until and unless proven guilty.All three Defendants have appeared before U.S. Magistrate Judge Veronica L. Duffy and pled not guilty to the Indictments. The maximum penalty upon conviction is 15 years’ imprisonment and/or a $250,000 fine, 5 years’ supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The investigations were conducted by the Bureau of Indian Affairs Office of Justice Services. Assistant U.S. Attorney Sarah B. Collins is prosecuting the cases.
The Running Shields and Alford were remanded to the custody of the U.S. Marshals Service pending trial, which has been set for September 16, 2014.
Three Operators of ATM Servicing Business Sentenced to Prison Terms Between 20 and 51 Months for $1.7 Million Frauid SchemeRead the Press Release
CHICAGO ― Three Chicago men are facing federal prison sentences ranging from 20 to 51 months for their roles in a seven-year fraud scheme that caused client banks of their ATM servicing business to lose more than $1.7 million. The last of the three defendants was sentenced today while the other two were sentenced last month.
The defendants, JAMES CARLSON, JOSEPH CABELLO, and THOMAS O’MALLEY, owned and operated ATS Uptime, Inc., from approximately 1999 through 2013, with offices in Chicago and Oswego. ATS had about a dozen clients and serviced approximately 800 ATMs, which included replenishing cash, collecting deposits, and maintain the banking machines.
Carlson, 46, was the president of ATS and beginning in the summer of 2010 was primarily responsible for the company’s vault, and loading cash into and repairing ATMs, including some he owned personally. As the fraud scheme was collapsing, Carlson voluntarily reported it to the FBI in September 2013 and cooperated extensively with the investigation, including recording conversations with Cabello and O’Malley. Carlson was sentenced today to 20 months in prison, beginning Sept. 19, and ordered to pay $658,572 in restitution.
“You cannot steal millions of dollars and not pay a substantial price,” U.S. District Judge Ronald Guzman said today in noting Carlson’s cooperation but rejecting his request for probation.
O’Malley, 42, was the chief financial officer, office manager, bookkeeper, and at times, responsible for the vault in Chicago. He was sentenced last month to 33 months in prison, beginning July 30, and ordered to pay $1,758,572 in restitution.
Cabello, 41, who personally owned some of the ATMs serviced by ATS, ran the Oswego office and was responsible for servicing ATMs. He was sentenced last month to 51 months in prison and ordered to pay $1,758,572 in restitution.
All three men pleaded guilty to one count of wire fraud after they were charged in September 2013.
According to court records, in 2005, Carlson discovered that approximately $200,000 of funds belonging to clients was missing. Around the same time, O’Malley said that he needed to use clients’ funds from the vault to pay for some of ATS’ moving expenses, and Carlson instructed Cabello and O’Malley to return the client funds and was assured they would be returned. In October 2010, shortly after Carlson began working in ATS’ Chicago vault, Carlson learned that ATS was missing approximately $1.1 million and did not have enough money to repay all of its clients. Prior to that time, Cabello and O’Malley had access to the cash in ATS’ Chicago vault.
O’Malley admitted that he stole at least $200,000 of clients’ funds for business purposes and his own personal use. Cabello admitted that he used clients’ funds for his own ATMs, and did not keep track of the amount he took or the amount he repaid.
Between 2007 and 2012, O’Malley and Cabello, and after October 2010, Carlson, used funds belonging to certain clients, which were stored in the vault, to fill ATMs that belonged to other clients, and to repay money owed to other clients, without authorization from the owners of those funds to use their money in that manner. As part of the fraud scheme, the defendants emailed account balance statements to their clients, falsely representing the amount of cash that ATS actually had on hand for them, both because of their thefts and commingling of client funds. They also deceived bank auditors into believing that ATS was properly handling client funds by moving the cash they had available from one owner to another.
The sentences were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Jacqueline Stern.
Three Individuals Charged with Stealing and Illegally Selling GunsRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Douglas Church, Zachary Smith, and Brianna Lowe, all of Elmira, N.Y., have been arrested and charged by criminal complaint with conspiring to deal firearms without a license and possession of stolen firearms. In addition, defendants Church and Smith are charged with dealing firearms without a license. The conspiracy charge carries a penalty of five years in prison and a $250,000 fine. Possession of stolen firearms and dealing firearms without a license carry a penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that according to the complaint, on October 16, 2013 at approximately 3:05 a.m., the owner of “Scott’s Guns” on Watkins Drive in Horseheads, N.Y. received a telephone call from his security alarm company. The owner alerted police and then went to the store. Upon entering the store, the owner realized he had been burglarized. The owner determined that 49 handguns of various makes and models had been stolen.
As part of their investigation, law enforcement officers reviewed footage from a security camera inside the store which revealed two individuals inside the store during regular business hours the day before, October 15, 2013. Officers recognized the two individuals to be Zachary Smith and Douglas Church. The complaint further states that additional investigation revealed that Church and Zachary Smith burglarized the store by having Church climb through a hole in the wall of the building, with Church handing the weapons to Smith. The two men left the guns in backpacks in a swamp behind the building the night of the burglary, with Smith and his girlfriend, Brianna Lowe, retrieving the guns the following day. Investigation also revealed that many of the guns were sold within a week and a half of the burglary in exchange for money.
The defendants made an initial appearance today before U.S. Magistrate Judge Jonathan W. Feldman. Church and Smith are being held pending a detention hearing on July 28. Lowe was released on conditions.
The Criminal Complaint is the result of an investigation on the part of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, New York Field Office, the Horseheads Police Department, under the direction of Acting Chief Scott Zelko, The New York State Police, under the direction of Major Scott Crosier, the Chemung County Sheriff’s Department, under the direction of Christopher Moss, the Elmira Police Department, under the direction of Chief Michael Robertson, the Elmira Heights Police Department, under the direction of Chief A. Rich Churches, and the West Elmira Police Department, under the direction of Chief Peter Michalko.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.St. Mary’s County Drug Dealer Sentenced to 15 Years in PrisonRead the Press Release
Greenbelt, Maryland – Chief U.S. District Judge Deborah K. Chasanow sentenced Jeffrey Kirk Berry, a/k/a “Kojack,” age 55, of Lexington Park, Maryland, today to 15 years in prison, followed by five years of supervised release, for conspiring to distribute and possess with intent to distribute powder and crack cocaine; and for being a felon in possession of firearms. Chief Judge Chasanow also found that Berry was an armed career criminal based on three previous drug convictions.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; St. Mary’s County Sheriff Tim Cameron; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to Berry’s plea agreement and other court documents, from February 2012 to April 2013, Berry conspired with Damon Estep, Alrahman Allen, Jamar Holt and others to distribute cocaine and crack in southern St. Mary’s County. Holt provided Allen with cocaine and other drugs and then regularly called Estep to coordinate the delivery of cocaine to Estep, Berry or others from St. Mary’s County.Nearly every week, Berry, Estep and others met Allen in the Glen Burnie area and paid Allen for one-fourth, one-half and one kilogram quantities of cocaine for further distribution in St. Mary’s County by Estep, Berry and others at Estep’s direction. Once Berry and others transported the cocaine back to their stash locations in St. Mary’s County, Estep and others would cook portions of the cocaine into crack, and distribute the cocaine and crack throughout southern Maryland at Estep’s direction.
Estep stored the powder and crack cocaine in several locations, including Berry’s residence at 18310 Three Notch Road in Lexington Park. Berry, Estep and others sold the drugs at locations in southern Maryland.
A search of Berry’s home on April 15, 2013, recovered a 9 mm rifle, two 9mm handguns, a .40 caliber handgun, and a .25 caliber handgun, as well as ammunition for the guns. Due to his previous felony convictions, Berry was prohibited from possessing firearms or ammunition. Berry admits that over the course of the conspiracy he was responsible for the distribution of between five and 15 kilograms of cocaine, and between 280 and 840 grams of crack.
Chief Judge Chasanow sentenced Jamar Holt, a/k/a “Reds,” “Jamal Holt” and “Rex,” age 36, of Baltimore, Maryland, to 20 years in prison and Damon Jerome Estep, a/k/a “Country”, age 39, of California, Maryland, to 188 months in prison. Co-defendant Alrahman Sharif Allen, a/k/a “Rock” and “Rahman Allen,” age 38, of Baltimore, Maryland, previously pleaded guilty to his participation in the conspiracy and awaits sentencing.
United States Attorney Rod J. Rosenstein praised the DEA, St. Mary’s County Sheriff’s Office, and IRS-Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Leah Jo Bressack and Deborah A. Johnston and James A. Crowell IV, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Shiprock Woman Pleads Guilty to Federal Child Abuse ChargeRead the Press Release
ALBUQUERQUE – Angela Sloane, 30, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., pleaded guilty today to an indictment charging her with child abuse.
Sloane was arrested in May 2014, on a criminal complaint alleging that on May 9, 2014, she endangered the lives and safety of two children, a nine-month-old infant and a nine-year-old child, by driving under the influence of alcohol while the children were unrestrained in the back seat of her vehicle. The children did not suffer seriously bodily injury when Sloane crashed the vehicle into a wooden fence and a parked vehicle. She subsequently was indicted and charged committing child abuse by placing the children in a situation that may have endangered their lives or health.
In entering her guilty plea, Sloane admitted driving under the influence of alcohol, with a blood alcohol content of .23, and losing control of the vehicle in which the two children were unrestrained passengers. Sloane admitted placing the children in a situation that endangered their lives by crashing into fencing and a parked vehicle.
At sentencing, Sloane faces a maximum statutory penalty of three years in federal prison. Her sentencing hearing has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety and is being prosecuted by Special Assistant U.S. Attorney David Adams.
Shiprock Man Pleads Guilty to Firearms and Stalking Charges Arising from Threats Against Former Intimate Partner and her New BoyfriendRead the Press Release
ALBUQUERQUE – Peterson Yazzie, 34, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., pleaded guilty today to a two-count felony information charging him with discharging a firearm during a crime of violence and stalking. Under the terms of the plea agreement, Yazzie will be sentenced to eleven years in federal prison followed by a term of supervised release to be determined by the court.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI, and Director John Billison of the Navajo Nation Division of Public Safety.
Yazzie was arrested on April 24, 2014, on a criminal complaint alleging that he stalked his former intimate partner, a Navajo woman, by leaving numerous threatening messages in her cellphone voicemail box on April 12, 2014. In some of the messages, Yazzie threatened to shoot the victim and her new boyfriend. The criminal complaint also alleged that Yazzie assaulted the victim’s new boyfriend on April 12, 2014, by firing multiple shots at a vehicle the boyfriend was driving.
During today’s proceedings, Yazzie pled guilty to the two-count felony information. In his plea agreement, Yazzie admitted stalking his former intimate partner on April 12, 2014 by leaving messages on her cellphone voicemail box including one in which he threatened to “put a bullet in her head,” causing the victim to fear that death or seriously bodily injury would occur. Yazzie also admitted that April 12, 2014, he committed a crime of violence by using a rifle to shoot at a vehicle driven by the second victim. Yazzie acknowledged committing both crimes within Navajo Indian Reservation.
Under the terms of his plea agreement, Yazzie will be sentenced to ten years in federal prison on the firearms charge and one year in prison on the stalking charge. The two sentences will be served consecutive to each other for an aggregate sentence of eleven years in prison. Yazzie has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Farmington Office of the FBI and Shiprock office of the Navajo Nation Division of Public Safety, and is being prosecuted by Special Assistant U.S. Attorney David Adams.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
San Miguel County Man Arrested on Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – Guy N. Martinez, 22, of Las Vegas, N.M., was arrested by the FBI on July 18, 2014, on federal child pornography charges. Martinez made his initial appearance in federal court earlier today, and remains in custody pending a detention hearing scheduled for tomorrow morning.
Martinez is charged in a criminal complaint with possessing, receiving and distributing visual depictions of minors engaged in sexually explicit conduct. According to the criminal complaint, the FBI initiated the investigation leading to Martinez’s arrest after receiving a lead from Queensland Police Service (QPS) in Brisbane, Australia. Following the arrest of an Australian citizen in March 2012, on child pornography charges, the QPS identified more than 100 United States-based email accounts that allegedly had been used to send, receive or discuss child pornography with the Australian citizen. Investigation by the FBI revealed that one of those email accounts was subscribed to Martinez.
The FBI’s investigation revealed that Martinez had two email accounts that allegedly had been used to receive and distribute more than 1,000 images consistent with child pornography. On July 18, 2014, the FBI executed a search warrant at Martinez’s residence in Las Vegas, N.M. They arrested Martinez while executing the search warrant.
If convicted of the charges in the criminal complaint, Martinez faces a federal prison term of not less than five years and not more than 20 years. Martinez also would be required to register as a sex offender. Charges in criminal complaints are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Santa Fe office of the FBI and the New Mexico State Police with assistance from the QPS. The case is being prosecuted by Assistant U.S. Attorney Jacob A. Wishard as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, 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 http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 74 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the NMAGO. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Resident of Great Britain Sentenced for Stealing Camera Equipment from A Bethesda Production CompanyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Darren Oliver Raymond Charles Defoe, age 40, a citizen and resident of Great Britain, today to a year and a day in prison for interstate transportation of property taken by fraud. Judge Titus also entered an order that Defoe pay $275,000 in restitution.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief J. Thomas Manger of the Montgomery County Police Department.
Visual Edge Productions was a business located in Bethesda, Maryland, specializing in providing rental cameras and filming equipment. According to his plea agreement, on February 12, 2011, Defoe and a conspirator flew from Heathrow to Dulles airports and arrived at Visual Edge in Bethesda. Defoe and the conspirator took possession of Visual Edge camera equipment pursuant to a rental agreement. On February 13 to 14, they flew back to Heathrow Airport with the rented camera equipment, valued at approximately $275,000, knowing that they had stolen the equipment.Co-defendant William Henry Stickland, age 40, also a citizen and resident of Great Britain, was charged with conspiracy and interstate transportation of property taken by fraud in connection with this scheme. The government intends to seek extradition of Stickland.
United States Attorney Rod J. Rosenstein praised the HSI Baltimore and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Thomas P. Windom, who prosecuted the case.
Piney Flats Man Sentenced to Serve 14 Months in Prison for Counterfeit Postage SchemeRead the Press Release
GREENEVILLE, Tenn. – On July 21, 2014, Jason Matthew Smalling, 34, of Piney Flats, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 14 months in federal prison.
Upon his release from prison, Smalling was ordered to serve three years of supervised release. He was also ordered to pay $330,000 in restitution to the U.S. Postal Service and pay a fine of $5,000.
Smalling pleaded guilty in October 2013 to an information charging him with devising a scheme to defraud the U.S. Postal Service through the creation of counterfeit postage mailing labels. Smalling operated a business from his residence in Piney Flats, Tenn., called Value Decals. Value Decals created and sold vinyl decals, some being generic graphics and images and others being unlicensed reproductions of trademarked logos of professional sports teams including Major League Baseball, National Football League, National Basketball League, and National Hockey League teams. Value Decals obtained orders for vinyl decals through its website, valuedecals.com, as well as Amazon.com. In addition to paying for the decals, customers were also charged for the costs of shipping the orders through the U.S. Mail. The orders were shipped to the customers by U.S. Postal Service Priority Mail.
Beginning in approximately August 2011, Smalling created counterfeit postage labeling for parcels being mailed by Value Decals. Using computer software, he reproduced information-based indicia from postage obtained through Stamps.com, manipulating the addressee information but using the same bar-coded information from the original postage. This allowed him to mail the packages without paying for postage.
In addition to using the counterfeit postage to mail the parcels to Value Decal’s customers, Smalling continued to collect money from his customers for the costs of mailing as well as reproducing unlicensed trademarked team logos. As a result of the scheme, he defrauded both the U.S. Postal Service for payments of postage and customers of Value Decals for payments for postage.
The case was investigated by the U.S. Postal Inspection Service. Assistant U.S. Attorney Neil Smith represented the United States.
Parmelee Man Charged with AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Parmelee, South Dakota, man has been indicted by a federal grand jury for Assault Resulting in Serious Bodily Injury and Assault Resulting in Substantial Bodily Injury to an Intimate Partner.
Kevin Two Eagle, age 30, was indicted on April 22, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on July 16, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
On or about January 16, 2014, in Todd County, Two Eagle unlawfully assaulted his dating partner and the assault resulted in serious bodily injury.
The charge is merely an accusation and Two Eagle is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Tim Maher is prosecuting the case.
Two Eagle was released to a third party custodian pending trial. A trial date has not been set.
Owner of Herndon Engineering Firm Convicted of Paying Bribes to A Government OfficialRead the Press Release
ALEXANDRIA, Va. – Francisco L. Bituin, 58, of Sterling, Virginia, pleaded guilty today to paying bribes to a GSA official in exchange for the official’s assistance in obtaining government contracts for Bituin’s engineering firm.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Robert C. Erickson, Jr., Acting Inspector General for the U.S. General Services Administration (GSA); and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Claude M. Hilton.
Bituin is the owner of FLBE, Inc., an engineering firm located in Herndon, Virginia, that has received over $30 million in government contracts since 2003. In a statement of facts filed with his plea agreement, Bituin admitted to paying bribes to a GSA employee who was in a position to recommend FLBE for GSA-managed contracts. The bribes included a $3,750 golf club membership and $2,000 in cash passed by the defendant to the GSA employee during lunch at a Tysons Corner, Virginia restaurant. On another occasion, Bituin offered the GSA employee other things of value in exchange for his assistance in obtaining GSA contracts, including access to a retirement home in Las Vegas, the down payment on a home in Virginia, and 5% of the equity in FLBE.
Bituin faces a maximum penalty of fifteen years in prison when he is sentenced on Nov. 7, 2014.
This case was investigated by GSA’s Office of the Inspector General and the FBI’s Washington Field Office. Assistant U.S. Attorney Paul J. Nathanson is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-236.
Organizer of Bank Heist That Yielded $565,000 Using Staged Kidnapping and Fake Bomb Sentenced to 14 Years in PrisonRead the Press Release
LOS ANGELES – A man who conspired with a former assistant manager of a Bank of America branch in East Los Angeles was sentenced today to 14 years in federal prison for plotting a heist in which his one-time girlfriend wore a fake bomb to simulate a kidnapping to steal approximately $565,000 from the bank.
Reyes “Ray” Vega, 35, of Bell, received the 168-month sentenced from United States District Judge Manuel Real. In addition to the prison term, Judge Real ordered Vega and his co-defendants to pay $556,800 in restitution.
Vega and his then-girlfriend – Aurora Barrera, 33, who now resides in Downey – were convicted in March following a one-week trial in United States District Court. The jury found the couple guilty of conspiracy to commit bank robbery and bank robbery. The jury also found that Vega and Barrera committed the robbery by assaulting a bank employee with a dangerous weapon – the hoax explosive device that Barrera wore when she entered the bank on September 5, 2012.
During the robbery, Barrera walked into the bank with what appeared to be an explosive device taped to her body, convinced a co-worker that she had been kidnapped from her home that morning by two men, and told the co-worker that they had to open the vault and place money outside the bank or else the kidnappers would harm them.
Barrera and her co-worker placed $565,800 of the bank’s money into bags and then threw the bags out the bank’s side door. One of Vega’s longtime friends, Richard Menchaca, picked up the money and drove it away from the bank. Menchaca met up with another accomplice, Bryan Perez, and they moved the money to a safe location.
The device attached to Barrera’s body turned out to be a hoax, but “because the device was attached to a human, the Los Angeles Police Department’s Bomb Squad rushed in without their full protective gear to remove it from Barrera,” according to court documents. “Due to its detailed construction, the Bomb Squad then used a robot to remotely detonate the device, for fear that it might explode and injure a member of law enforcement.”
Menchaca and Perez pleaded guilty and testified at the trial of Vega and Barrera. They are scheduled to be sentenced by Judge Real next month.
Menchaca and Perez collectively received about $150,000 of the robbery proceeds, most of which they spent. The remaining approximately $400,000 has not been recovered.
Barrera is scheduled to be sentenced by Judge Real on August 6.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Huntington Park Police Department.
Release No. 14-091
Oklahoma City Man Charged with Traveling to Colorado to Bring 13-Year-Old to Oklahoma City to Engage in Illicit Sexual ConductRead the Press Release
Oklahoma City, Oklahoma – Late last Friday, a criminal complaint was unsealed charging MARK SUMPTER, 43, from Oklahoma City, with traveling to Colorado to pick up a 13-year-old girl to bring her to Oklahoma City to engage in illicit sexual conduct, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to court records, on June 27, 2014, the Oklahoma City Police Department (OCPD) notified the FBI that they had recovered an endangered 13-year-old runaway girl who was reported missing to the Douglas County Sheriff’s Department in Douglas County, Colorado. It is alleged that an investigation of social media accounts were traced to an IP address located at 1916 Heritage Park Drive, Apartment 249, in Oklahoma City. When OCPD officers responded to the address they found Sumpter and the missing girl. The complaint alleges that Sumpter and the girl communicated through the website chathour.com, Skype (a Voice Over Internet Protocol service that allows users to communicate through a computer or other wifi-compatible device), and Kik (a social media application designed for mobile technology that utilizes usernames, rather than phone numbers, to connect people via instant messaging). It is alleged that after exchanging messages and sexually-explicit photos, Sumpter traveled to Colorado to pick up the girl and return to Oklahoma City where they stayed for several days, from approximately June 21, 2014 through June 27, 2014. It is alleged that during the trip from Colorado to Oklahoma and at the Oklahoma City apartment, Sumpter engaged in illicit sexual conduct with the 13-year-old girl. Reference is made to the criminal complaint for further information.
Sumpter was arrested on July 17, 2014, and appeared before a United States Magistrate in Oklahoma City late last Friday afternoon. He is held without bond.
If convicted, Sumpter faces up to life in prison. The public is reminded that the defendant is presumed innocent unless and until proven guilty.
This case is the result of an investigation by the Douglas County Sheriff’s Department (Colorado), the Oklahoma City Police Department, the Edmond Police Department, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Brandon Hale and Julia E. Barry.
Newark, N.J., Man Pleads Guilty to 11 Armed Robberies in Essex and Hudson CountiesRead the Press Release
TRENTON, N.J. - A Newark man today admitted his role in a series of 11 robberies in Newark, Harrison and Jersey City between September 2012 and April 2013, U.S. Attorney Paul J. Fishman announced.
Christopher Mojica, 23, pleaded guilty to an information charging him with one count of Hobbs Act conspiracy, one count of Hobbs Act robbery and one count of discharging a firearm in furtherance of a crime of violence. He entered his plea today before U.S. District Judge Joel A. Pisano in Trenton federal court.
According to documents filed in this case and statements made in court:
Mojica conspired with others to rob New Jersey commercial establishments as follows:
New Barbershop
Newark
Sept. 14, 2012
Newark
Sept. 2012
Amcare Pharmacy
Newark
Nov. 13, 2012
Summer Pharmacy
Newark
Dec. 11, 2012
Community Health Pharmacy
Newark
Jan. 19, 2013
Delson Jewelry
Newark
Feb. 8, 2013
Pharmacy Plus
Harrison
Feb. 21, 2013
Forest Hill Pharmacy
Newark
April 4, 2013
Montgomery Pharmacy
Jersey City
April 15, 2013
Harris Pharmacy
Newark
April 16, 2013
Delta Gas Station
Newark
April 19, 2013
Mojica and his conspirators robbed each of these establishments at gunpoint, stealing cash, oxycodone pills, jewelry and other items. During the Delta Gas Station robbery on April 19, 2013, Mojica fired a .45 caliber semi-automatic handgun during his flight from the scene of the robbery.
The Hobbs Act conspiracy and robbery charges to which Mojica pleaded guilty each carry a maximum penalty of 20 years in prison. The charge of discharging a firearm in furtherance of a crime of violence carries a minimum consecutive term of 10 years in prison, and a maximum of life in prison. Each of these charges carries a statutory maximum fine of $250,000.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today's plea. He also thanked the Newark, Harrison and Jersey City Police Departments, along with the Essex County and Hudson County Prosecutor’s Offices for their work on this case.
Sentencing before Judge Pisano is scheduled for Dec. 8, 2014.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.
14- 257
Defense counsel: Paulette Pitt Esq., Woodbridge, New Jersey
Mojica, Christopher Information
Nampa Man Sentenced for Unlawfully Possessing FirearmRead the Press Release
BOISE – Juan Jose Sanchez, 23, of Nampa, Idaho, was sentenced today in United States District Court to 41 months in prison, followed by three years of supervised release for unlawfully possessing a firearm, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Sanchez to forfeit the firearm involved in the offense. Sanchez pleaded guilty to the charge on May 5, 2014.
According to information presented in court, officers with the Nampa Police Department contacted Sanchez on January 14, 2014, when they responded to a complaint at a residence in Nampa. When officers spoke to Sanchez they discovered that he had a loaded handgun tucked in the front of his waistband. Officers seized the handgun and identified it as an H&R, 9-shot, .22 caliber revolver. Sanchez is prohibited from possessing firearms because he was previously convicted of the felony crime of aggravated battery on September 7, 2011, in Canyon County, Idaho. Sanchez was still on parole at the time he possessed the .22 revolver.
The case was investigated by the Nampa Police Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Treasure Valley Metro Violent Crimes Task Force. The Metro Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole.
Sanchez was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Modesto Man Sentenced in Tax Fraud ConspiracyRead the Press Release
FRESNO, Calif. — Heath Lee Roberson, 39, of Modesto, was sentenced today to two years and nine months in prison by Senior United States District Judge Anthony W. Ishii, for conspiring to submit false claims to the IRS, United States Attorney Benjamin B. Wagner announced. Roberson was also ordered to pay over $66,322 in restitution to the IRS.
According to court documents, from December 2010 to May 2011, Roberson and a co-defendant obtained personal identifying information from more than 40 individuals, used the information to generate false tax returns and submitted them to the IRS. Any tax refunds that they received were deposited into accounts the defendants controlled.
This case was the product of an investigation by the Internal Revenue Service Criminal Investigation. Assistant United States Attorney Michael G. Tierney prosecuted the case.
Members of Three Different Android Mobile Device App Piracy Groups ChargedRead the Press Release
Three federal indictments were unsealed today in the Northern District of Georgia charging six members of three different piracy groups – Appbucket, Applanet and SnappzMarket – for their roles in the illegal distribution of copies of copyrighted Android mobile device applications, or “apps,” announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia, and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office.
Two members of the SnappzMarket Group – Joshua Ryan Taylor, 24, of Kentwood, Michigan, and Scott Walton, 28, of Cleveland, Ohio – were arrested today. Taylor will appear before U.S. Magistrate Judge Ellen S. Carmody in Grand Rapids, Michigan, and Walton will appear before U.S. Magistrate Judge William H. Baughman, Jr. in Cleveland, Ohio.
“As a result of their criminal efforts to make money by ripping off the hard work and creativity of high-tech innovators, the defendants are charged with illegally distributing copyrighted apps,” said Assistant Attorney General Caldwell. “The Criminal Division is determined to protect the labor and ingenuity of copyright owners and to keep pace with criminals in the modern, technological marketplace.”
“Copyright infringement discourages smart people from doing innovative things,” said U.S. Attorney Yates. “This problem is especially acute when it comes to rapidly developing technologies, like apps for smart phones, and these defendants are now being held accountable for the intellectual property they stole.”
“Today’s federal indictments are the direct result of an extensive and thorough federal investigation into three groups of individuals aggressively engaged in and profiting from the theft of intellectual property,” said Special Agent in Charge Johnson. “While copyright infringement is the direct theft of the hard work of others in the form of research and development expended, it can also negatively impact incentives for further or future development of those ideas or applications. The FBI will continue to provide significant investigative resources toward such groups engaged in such wholesale pirating or copyright violations as seen here.”
An indictment returned on June 17, 2014, by a grand jury in the Northern District of Georgia charges Gary Edwin Sharp II, 26, of Uxbridge, Massachusetts, along with Taylor and Walton, with one count of conspiracy to commit criminal copyright infringement, and also charges Sharp with two counts of criminal copyright infringement. According to the indictment, Sharp, Taylor and Walton identified themselves as members of the SnappzMarket Group. From May 2011 through August 2012, they conspired with Kody Jon Peterson, 22, of Clermont, Florida, and other members of the SnappzMarket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps, with a total retail value of over $1.7 million, through the SnappzMarket alternative online market without permission from the copyright owners of the apps, who would otherwise sell copies of the apps on legitimate online markets for a fee. A separate information filed on Jan. 23, 2014 charged Peterson with one count of conspiracy to commit criminal copyright infringement, and he pleaded guilty on April 14, 2014.
An indictment returned on June 17, 2014, by a grand jury in the Northern District of Georgia charged James Blocker, 36, of Rowlett, Texas, with one count of conspiracy to commit criminal copyright infringement. According to the indictment, he and his fellow conspirators identified themselves as members of the Appbucket Group. From August 2010 to August 2012, Blocker conspired with Thomas Allen Dye, 21, of Jacksonville, Florida; Nicholas Anthony Narbone, 26, of Orlando, Florida; Thomas Pace, 38, of Oregon City, Oregon; and other members of the Appbucket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps, with a total retail value of over $700,000, through the Appbucket alternative online market without permission from the copyright owners of the apps, who would otherwise sell copies of the apps on legitimate online markets for a fee. A separate information filed on Jan. 24, 2014 charged Dye, Narbone, and Pace with one count of conspiracy to commit criminal copyright infringement. Dye, Narbone and Pace pleaded guilty to the charged conspiracy on March 10, 2014, March 24, 2014 and April 15, 2014, respectively.
An indictment returned on June 17, 2014, by a grand jury in the Northern District of Georgia charges Aaron Blake Buckley, 20, of Moss Point, Mississippi; David Lee, 29, of Chino Hills, California; and Sharp with one count of conspiracy to commit criminal copyright infringement, and also charges Lee with one count of aiding and abetting criminal copyright infringement and Buckley with one count of criminal copyright infringement. According to the indictment, Buckley, Lee, and Sharp identified themselves as members of the Applanet Group. From May 2010 through August 2012, they conspired with other members of the Applanet Group to reproduce and distribute over 4,000,000 copies of copyrighted Android mobile device apps, with a total retail value of over $17 million, through the Applanet alternative online market without permission from the copyright owners of the apps, who would otherwise sell copies of the apps on legitimate online markets for a fee.
The indictments charge leading members of the SnappzMarket Group, the Appbucket Group, and the Applanet Group with renting computer servers to host websites such as www.snappzmarket.com , www.appbucket.net , and www.applanet.net , respectively, to provide digital storage for the pirated copies of copyrighted Android apps that each group distributed to their members or subscribers. On Aug. 21, 2012, seizure orders were executed against these three website domain names for the illegal distribution of copies of copyrighted Android mobile device apps – the first time website domains involving mobile device app marketplaces have been seized.
Charges contained in an indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI. Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher Bly of the Northern District of Georgia are prosecuting the case, with the assistance of Assistant U.S. Attorney Brian M. Pearce of the Northern District of Georgia. The Office of International Affairs provided assistance in the matter. Significant assistance in the case has also been provided by the CCIPS Cybercrime Lab.Lorain Man Charged with Possession of Child PornographyRead the Press Release
Edward A. Dembiec, 53, of Lorain, Ohio, was charged with possession of child pornography, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The criminal information charges that from on or about October 1, 2008, through on or about May 5, 2013, in the Northern District of Ohio, Eastern Division, and elsewhere, Dembiec, did knowingly possess an Apple iMac Desktop computer, an Acer Aspire Laptop computer, and numerous DVD/CD discs that contained child pornography, which had been shipped and transported in interstate and foreign commerce by any means, including by computer, in violation of Title 18, United States Code, Section 2252A(a)(5)(B).
If convicted, the sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique 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.
This case is being prosecuted by Assistant United States Attorney Carol M. Skutnik. The case was investigated by the United States Postal Inspection Service.
An information 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.
Liberty Man Sentenced for Social Security FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Liberty, Mo., man was sentenced in federal court today for stealing $84,137 by spending his deceased mother’s Social Security benefits.
Jeffery Schwed, 40, of Liberty, was sentenced by U.S. Chief District Judge Greg Kays to five years in federal prison without parole. The court also ordered Schwed to pay $84,137 in restitution to the government.
On Feb. 11, 2014 Schwed pleaded guilty to theft of government money. Schwed was a joint owner of his mother’s bank account, where her monthly Social Security payments were deposited. Schwed’s mother died on March 16, 2007, but her monthly disabled divorced widow’s insurance benefits continued to be deposited into the bank account for approximately five more years, through April 2012. Schwed admitted that he converted at least some of these payments for his own personal use.
Schwed admitted that he knowingly and intentionally concealed his mother’s death from the Social Security Administration in order to fraudulently obtain Social Security payments that he knew he was not entitled to receive. Schwed was incarcerated when the Social Security Administration made some of its deposits. Approximately $18,000 in ATM withdrawals were made by unknown persons during the periods while Schwed was incarcerated.
This case was prosecuted by Special Assistant U.S. Attorney Trey Alford. It was investigated by the Social Security Administration, Office of Inspector General.Lake Andes Man Sentenced to 120 Months for Distribution of MethamphetamineRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lake Andes, South Dakota, man convicted of Distribution of a Controlled Substance was sentenced on July 21, 2014, by U.S. District Judge Karen E. Schreier.
Michael Todd Andrews, age 42, was sentenced to 120 months in custody, three years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Andrews was indicted for Distribution of a Controlled Substance by a federal grand jury on December 3, 2013. He pled guilty on April 28, 2014.
Andrews sold methamphetamine to a confidential source working with the Federal Bureau of Investigation (FBI) in Lake Andes in January 2013.
This case was investigated by the FBI, Bureau of Indian Affairs, South Dakota Division of Criminal Investigation, Charles Mix County Sherriff’s Office, and the Wagner Police Department. Special Assistant U.S. Attorney Jennifer D. Mammenga prosecuted the case.
Andrews was immediately turned over to the custody of the U.S. Marshals Service.
Korean National Sentenced for Investment FraudRead the Press Release
FRESNO, Calif. — Kwan Yong Choi, 72, of Fresno, was sentenced today by United States District Judge Anthony W. Ishii to three years in prison for money laundering, United States Attorney Benjamin B. Wagner announced. Choi was also ordered to pay $2.1 million in restitution to 13 victims of his investment fraud scheme here in the United States.
On June 10, 2006, Choi was arrested in Fresno based on an extradition order from the Republic of Korea for a fraud scheme he had perpetrated there. Choi waived extradition and was returned to Korea in June 26, 2006, where he served four years in prison for fraud, marriage fraud and visa fraud. On May 27, 2010, a federal grand jury in Fresno returned a six-count indictment against Choi charging him with money laundering related to a fraud scheme that targeted elderly Korean nationals living in the United States. Federal agents escorted Choi back to Fresno after he finished serving his sentence in South Korea.
“The reality that this fraudster faces a lengthy term in federal prison should provide a measure of consolation for the defendant’s victims, some of whom lost their life saving as a result of his scams,” said Nick Annan, acting special agent in charge for Homeland Security Investigations San Francisco. “Today’s sentencing is particularly gratifying, given that it’s the culmination of seven years of intensive investigation carried out on two continents.”
According to court documents, in 2002, Choi, formerly of Daejeon City, South Korea, began marketing an investment scheme whereby investors could invest money into his company, Sun Min Trading Inc. Choi told investors that the company bought souvenirs and sold them to the White House. He claimed that the venture would make 30 percent profit with 10 percent going to a purported charity named “International Christian Mission Center,” and 20 percent going to investors every quarter. He specifically targeted persons of Korean descent and marketed investment opportunities to potential clients in California and elsewhere by making various false representations, including that the “International Christian Mission Center” was an extension of the CIA, that he was an ordained minister, that he had a history of investment successes, and that the investments were secure.
Instead of investing the money as promised, Choi spent the funds on his own personal and business expenses, including payments for homes, cars, and credit card bills. He lulled investors into thinking that their investments were making a return by sending false account statements, sending payments, or giving excuses as to why payments were delayed. As a result of the scheme, investors lost more than $2 million.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Fresno-based HSI special agents received substantial assistance from HSI’s attaché office in Seoul as well as from the Republic of Korea’s Ministry of Justice. Assistant United States Attorneys Mark E. Cullers and Heather M. Jones prosecuted the case.
Kansas City, Kan., Man Gets 15 Years in Federal Prison in Drug Trafficking CaseRead the Press Release
KANSAS CITY, KAN. – A Kansas man who was part of a drug trafficking organization that distributed more than $1.6 million’s worth of cocaine, crack and marijuana in the Kansas City, Kan., area was sentenced Monday to 15 years in federal prison.
Rahmann Easley, 35, Kansas City, Kan., pleaded guilty to one count of conspiracy. In his plea, he admitted that he was a member of a drug trafficking organization headed by co-defendant Gregory Moore that operated in the Kansas City metropolitan area from 2006 through 2012. Easley and his brother, co-defendant Charles Easley, purchased cocaine from Moore. On March 27, 2012, a search of Easley’s car turned up 29.5 grams of cocaine, 24.6 grams of crack and 31.5 grams of marijuana.
Easley agreed to a money judgment against him of more than $1.6 million, which represents the proceeds of the crime.
Co-defendants who have been sentenced include:
Damian Mays: 220 months.
Frank Sharron Piper, III, 24, Kansas City, Kan: 135 months.
Charles Easley, 38, Kansas City, Kan.: 121 months.
Christopher Holliday, 26: 114 months.
Brenton Bassett, 38, Kansas City, Kan.: 84 months.
Michael D. Davis, 33, Kansas City, Kan., 40 months.
Johnie Mitchell, 60, Kansas City, Kan.: 35 months.
Oudre Durham, 40, Kansas City, Kan.: 30 months.Grissom commended the FBI, the Kansas City, Mo., Police Department Career Criminal Squad, the Social Security Administration, the Kansas City, Kan., Police Department, Assistant U.S. Attorney Sheri McCracken, Special Assistant U.S. Attorney Trent Krug and Assistant U.S. Attorney Bruce Rhoades of the Western District of Missouri for their work on the case.
Justice Department Seeks to Shut Down Los Angeles Area Tax Return PreparerRead the Press Release
The United States has asked a federal court in Los Angeles to bar Elton L. Barnes Jr. from preparing tax returns for others, the Justice Department announced today.
In 2002, Barnes pleaded guilty to aiding and assisting in the preparation of false tax returns, but he resumed preparing returns when he was released from prison, the government alleges. Since then, according to the complaint, Barnes has repeatedly prepared federal income tax returns, sometimes working under the names McNair Group, So Cal Financial Services and Anderson Investment Group, with fraudulent claims such as falsely inflated charitable contribution deductions and losses from imaginary home businesses. The complaint further alleges that Barnes has prepared returns that intentionally overstate the amount of federal income tax that has been withheld from his clients’ paychecks in order to claim a larger refund.
According to the complaint, the Internal Revenue Service (IRS) has chosen to audit more than 180 tax returns that Barnes prepared and that have been filed since his release from prison in 2009. The complaint also alleges that, although it has not completed its audits of all those returns, the IRS has already identified almost $2 million in false refund claims and understatements of taxes owed.
The complaint also alleges that Barnes met with a customer and obtained the customer’s personal identifying information, including his name, address and social security number. Allegedly, without the customer’s knowledge, Barnes then used the customer’s information to file a tax return that directed the IRS to deposit the claimed tax refund into Barnes’ bank account. The United States has identified more than 50 tax refunds that were deposited into bank accounts Barnes controls, although some deposits may have been made with the knowledge of Barnes’ clients. It is against federal law for a tax return preparer to deposit a client’s tax refund into his own bank account. According to the complaint, Barnes violated other laws that apply to return preparers by failing to sign returns he prepared or use his preparer tax identification number on them.
Return-preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Elton L. Barnes Jr.
United States Complaint for Permanent Injunctive ReliefJury Convicts Man of Impeding Boston Marathon Bombing InvestigationRead the Press Release
A federal jury in Boston has convicted a friend of alleged Boston Marathon bomber, Dzhokhar Tsarnaev, for impeding the bombing investigation.
Assistant Attorney General John P. Carlin of the Justice Department’s National Security Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge Vincent B. Lisi of the FBI’s Boston Field Division, made the announcement today.
The jury found Azamat Tazhayakov, 20, guilty of conspiring to obstruct justice and obstructing justice with the intent to impede the Boston Marathon bombing investigation. U.S. District Judge Douglas P. Woodlock scheduled sentencing for October 16, 2014.
In August 2013, Tazhayakov was indicted for obstructing a terrorism investigation. Tazhayakov is a national of Kazakhstan who was temporarily living in the United States on a student visa while attending the University of Massachusetts Dartmouth, but at the time of his arrest his visa had been revoked.
The evidence at trial proved that on April 18, 2013, after the release of photographs of the two men suspected of carrying out the Marathon bombings (who were later identified as Tamerlan Tsarnaev and Dzhokhar Tsarnaev), Tazhayakov and others went to Tsarnaev’s dormitory room and found items that linked Tsarnaev to the bombing, including fireworks from which “gunpowder” appeared to have been removed and a jar of Vaseline that they believed could be used to make bombs. A forensic examiner testified that Vaseline can be used to make improvised explosive devices. A month before the bombing, Tsarnaev had told Tazhayakov that it would be good to die as shaheed (martyr) and that he knew how to build a bomb. Tsarnaev also identified specific ingredients one could use to make a bomb, including “gunpowder.”
After searching Tsarnaev’s dormitory room on the evening of April 18, 2013, Tazhayakov helped remove Tsarnaev’s laptop and a backpack containing fireworks, a jar of Vaseline, and a thumb drive. Later that night while Tazhayakov was monitoring the manhunt for the Tsarnaev brothers, he discussed getting rid of the backpack containing the fireworks and agreed to get rid of it. The backpack was then placed in a garbage bag and then thrown into a dumpster outside Tazhayakov’s New Bedford apartment. The FBI recovered this backpack a week later, after 25 agents spent two days searching a landfill in New Bedford.
The charging statute provides a sentence of no greater than 20 years in prison on the obstruction of justice count and five years on the conspiracy count, three years of supervised release, and a fine of $250,000 for each charge. Tazhayakov will also be deported at the conclusion of this prosecution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
This investigation was conducted by the FBI's Boston Division and member agencies of the Boston Joint Terrorism Task Force (JTTF) which is comprised of more than 30 federal, state and local enforcement agencies. U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Massachusetts State Police, University of Massachusetts Dartmouth Department of Public Safety, New Bedford Police Department, Dartmouth Police Department, U.S. Department of Transportation – Office of Inspector General, U.S. Treasury Inspector General for Tax Administration (TIGTA), Essex County Sheriff’s Office, and Internal Revenue Service, Criminal Investigations, provided assistance to this investigation.
T he case is being prosecuted by Assistant U.S. Attorneys B. Stephanie Siegmann and John A. Capin of Ortiz’s Anti-Terrorism and National Security Unit with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.