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16 July 2014
Long Island Fish Dealer Pleads Guilty to Fraud, Falsifying Federal Records, and Lacey Act ViolationsRead the Press Release
Jones Inlet Seafood Co., Inc., a federally-licensed fish dealer located in Point Lookout, New York, its company president, Michael G. Mihale, and the company vice-president, Bruce Larson, Jr. pleaded guilty today in federal court in Central Islip, New York., to federal felonies stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.
Michael G. Mihale and Bruce Larson, Jr. pleaded guilty to one count of wire fraud and one count of falsification of federal records. The two were involved in a scheme to direct unwitting subordinates to falsify and submit at least 65 fisheries dealer reports from June 2009 to December 2011, defrauding the United States of 56,000 pounds of overharvested and underreported fluke valued at $116,000. Jones Inlet Seafood Co., Inc. pleaded guilty to the falsification of federal records charge as well as one count of Lacey Act False Labeling for the knowing use of false documents in connection with approximately $100,000 worth of fluke that was shipped to customers in Connecticut and New Jersey.
As part of the plea deal, the three defendants agreed to be subject to between $222,000 and $276,000 in combined fines and restitution. The defendants also agreed to make a $30,000 community service payment to the Cornell Cooperative Extension of Suffolk County in order to pay for the enhancement of fluke habitat through the C.C.E.’s Marine Meadows Program. The jointly proposed sentence includes a ban on Mihale and Larson, Jr. from holding a federal dealer license, accessing the National Oceanic and Atmospheric Administration’s (NOAA) SAFIS computer system, participating in the RSA program, or being in a position to direct others to complete dealer reports . Jones Inlet also agreed to increased recordkeeping and auditing requirements. The court will hear sentencing recommendations regarding non-agreed terms at a hearing set for Jan. 12, 2015.
Jones Inlet Seafood is “Fish Dealer Y” as that entity is identified in the related case of U.S. v. Anthony Joseph. As a federal fish dealer, Jones Inlet Seafood had a NOAA permit to purchase fish directly from commercial fishing vessels without having to go through an intermediary. In June 2009, Mihale and Larson, Jr. learned that Anthony Joseph, captain of the F/V Stirs One, was consistently overharvesting fluke through Joseph’s abuse of the RSA Program. By June 2009, on behalf of Jones Inlet Seafood, Mihale and Larson, Jr. were making regular purchases of illegal fluke from Joseph at the Point Lookout, New York waterfront.
In order to cover his illegal fishing, Joseph would mail falsified fishing logs, known as FVTRs, to NOAA, but falsified FVTRs were just one side of the equation. This is because fish dealers are required to report their purchases to NOAA on an electronic form known as a dealer report. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price and weight. NOAA utilizes the data in the dealer reports to set quotas and implement other management measures designed to ensure a sustainable fisheries. The dealer reports also serve as a check on the information that is submitted in FVTRs. In other words, in order to effectuate his scheme, Anthony Joseph needed to ensure that corresponding false dealer reports were being submitted that contained the same false information as was contained on the falsified FVTRs. A mismatch would have indicated a serious error or fraud, and would have been a red flag for fisheries managers. Accordingly, during June 2009 to December 2011, Mihale and Larson, Jr. schemed with Anthony Joseph to file at least 65 false dealer reports with NOAA, representing a loss of 56,000 pounds of fluke valued at $116,000. The vast majority of these three defendants’ illegal activity took place in 2011.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.Logan County Men Admit Roles in Arch Coal Kickback SchemeRead the Press Release
Stephen Herndon and Scott Ellis admit to structuring currency transactions to generate cash for kickbacks
CHARLESTON, West Virginia – Stephen B. Herndon, 37, and Scott Ellis, 44, both of Holden, West Virginia, each face up to five years in prison after pleading guilty on Wednesday, July 16, 2014, to structuring a transaction in order to evade federal reporting requirements, United States Attorney Booth Goodwin announced. Herndon and Ellis also admitted to paying hundreds of thousands of dollars in kickbacks to the general manager of Arch Coal’s Mountain Laurel mining complex, located in Logan County. The men entered their pleas before United States District Judge Thomas E. Johnston.
Ellis admitted that he owned Tri-State Mine Service, Inc., which was a vendor at Mountain Laurel that performed rebuilds. Ellis gave Herndon a half interest in Tri-State in approximately March 2011, after Herndon left his position at Mountain Laurel as the warehouse manager. To ensure that Tri-State received rebuild work from Mountain Laurel, Ellis, later joined by Herndon, participated in a bid-rigging scheme where, in exchange for a guaranteed winning bid on certain jobs, vendors had to pay cash kickbacks to a person identified in other court documents as David Runyon.Ellis initially delivered the cash to Herndon, while he worked at Mountain Laurel, or Runyon. Herndon admitted that while he was the warehouse manager at Mountain Laurel, from approximately 2006 through March 2011, he served as a facilitator of kickback payments by vendors at Mountain Laurel to Runyon.
To generate the necessary cash, Ellis, later joined by Herndon, structured cash withdrawals from various personal and business accounts in amounts of $10,000 or less. They conducted the cash withdrawals in that manner to avoid triggering the bank's obligation to file a currency transaction report with the Internal Revenue Service, had they withdrawn cash in sums greater than $10,000.
Between early 2009 and approximately March 2011, Ellis structured approximately $163,521.25 in cash transactions. Ellis estimates that almost all of those funds were used to pay cash kickbacks to Runyon, and that he paid approximately $187,000 in cash kickbacks during that time. Between April 1, 2011, and September 30, 2013, Herndon and Ellis, working together, structured approximately $183,853. They estimate that they used almost all of those funds to pay cash kickbacks to Runyon and that they paid approximately $237,000 in cash kickbacks during that period.
Ellis has agreed to forfeit $215,355.85 and Herndon has agreed to forfeit $132,000 to the United States, representing a portion of the funds involved in and traceable to structuring.
Ellis and Herndon are scheduled to be sentenced on October 27, 2014 in Charleston.
Today’s charges stem from an investigation being conducted by the FBI, IRS Criminal Investigation, United States Postal Inspection Service, and the West Virginia State Police. Assistant United States Attorney Meredith George Thomas is in charge of the prosecutions.
KC Woman Pleads Guilty to Tax Fraud Scheme, Stealing Clients' RefundsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., woman pleaded guilty in federal court today to a tax fraud scheme in which she stole portions of her client’s inflated tax refunds.
Dinette Kay Cadenhead, also known as Kay Taylor, 46, of Kansas City, pleaded guilty before U.S. Chief District Judge Greg Kays to the theft of public money.
By pleading guilty today, Cadenhead admitted that she prepared federal income tax returns for clients containing material false and fraudulent claims. Cadenhead, working at her office in Raytown, Mo., or from her residence, assisted at least 12 individuals to file at least 29 false and fraudulent income tax returns for the tax years 2008 through 2010. The tax loss associated with those false returns is $109,627. The aggregate tax loss, including relevant conduct is $134,237.
Cadenhead admitted that she utilized false deductions to increase her clients’ refunds without the clients’ knowledge. The false entries included fraudulent charitable deductions, medical expenses, accounting expenses, attorney expenses, unreimbursed employee expenses and other expenses. She also included false IRA deductions on 18 of the returns without the clients’ knowledge. She reported net business losses, false energy credits and fraudulent dependents for some clients, all without their knowledge. Cadenhead electronically filed returns and indicated the returns were self-prepared.
Cadenhead charged her clients a return preparation fee of between $65 and $600 per return. However, without the knowledge of her clients, Cadenhead diverted a portion of the fraudulent refund into her own bank account, which increased the amount she actually received for each return. She fraudulently received up to $2,600 for preparing a return. Cadenhead directed over $14,000 into her bank accounts by splitting her clients’ refunds without their knowledge or permission.
The specific charge to which Cadenhead pleaded guilty today is related to her unauthorized splitting of her clients’ refunds without their knowledge or permission. Cadenhead admitted that she stole portions of her clients’ inflated tax refunds, totaling $14,082, between Feb. 12 and March 14, 2012.
Under federal statutes, Cadenhead is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by IRS-Criminal Investigation and the Missouri Department of Revenue Criminal Tax Investigation Bureau.Justice Department Sues to Stop Chicago Man from Promoting Alleged Tax Scheme and Preparing Tax ReturnsRead the Press Release
The United States filed a complaint today to bar Victor M. Crown, individually and through his businesses Crown and Franklin Accounting and Refunds, Crown-Franklin Accounting Inc., Accurate Accounting PV, and Lourdes Theodossis Estate, from promoting two alleged tax fraud schemes and from preparing federal tax returns for others, the Justice Department announced.
The complaint alleges that Crown’s tax schemes and the tax returns and other tax documents he prepares are based, at least in part, on his customers’ employment with the city of Chicago or on his customers’ discrimination awards in the class-action case Shakman, et al., v. Democratic Organization of Cook County, et al. (Shakman). Shakman is a discrimination class-action lawsuit against the city of Chicago that alleged political patronage in the hiring and promotion of public officials. As part of the settlement, the city of Chicago agreed to set up a $12 million fund to compensate class members for injuries that allegedly arose from violations of court orders.
According to the complaint, Crown prepares federal income tax returns and other documents that claim false amounts of income tax withheld from his customers’ earnings. The government contends that Crown asserts that his customers can claim credit for false amounts of tax withheld based on his contention that the city of Chicago incorrectly calculated the income taxes it withheld from its employees’ wages. According to the complaint, Crown’s claims lack merit because an employee is not entitled to claim an income tax withholding credit for more than the amount of income taxes actually withheld from their wages.
The complaint also alleges that Crown prepares customers’ income tax returns and other documents that claim bogus net operating losses. According to the complaint, Crown asserts that his customers are entitled to claim these bogus losses because the customers sought, but did not receive, a certain award amount for their Shakman class-action claim. For example, Crown allegedly prepared a return for a Shakman claimant who sought a $100,000 award, but only received $12,500. According to the complaint, Crown falsely claimed the customer was entitled to an $87,500 net operating loss on the customer’s amended tax returns. The complaint alleges that Crown’s scheme lacks merit because nothing in the Internal Revenue Code permits a taxpayer to deduct the amount of a denied discrimination claim as a net operating loss. According to the complaint, Crown’s frivolous claims have resulted in fraudulently understated tax liabilities on his customers’ federal income tax returns.
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. Victor M. Crown, et al.
Complaint for Permanent Injunction and Other ReliefJustice Department Sues to Shut Down Texas Tax Return PreparersRead the Press Release
The United States has asked a federal court in Waco, Texas, to permanently bar several tax preparers individually and through the business Accounting System Services, doing business as A Kind Bookkeeping and Tax Service, from preparing federal tax returns for others, the Justice Department announced today.
The individually named defendants are Patricia Foley aka Sissy Foley, Amanda Smith, April Leann Morgan aka April Leann Ercanbrack, Cassandra Egbert and Joshua Stifle.
The complaint alleges that the defendants prepared income tax returns for their customers that contain false, improper or inflated business expense deductions on Schedule F (Profit or Loss from Farming) of their returns. As a result, the government contends the defendants’ customers have repeatedly reported and paid less tax than they actually owe. The complaint alleges that the tax harm caused by these understatements could be as much as $500,000.
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. Patricia Foley, etc., et al.
Complaint for Injunctive ReliefJudge Sentences Aliquippa Man to 10 Years in Prison for Robbing Ambridge BankRead the Press Release
PITTSBURGH – A Beaver County resident has been sentenced in federal court to 120 months imprisonment on his conviction for committing bank robbery, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Robert Cole, Sr., 45, of Aliquippa, Pa.
According to information presented to the court, on or about June 12, 2013, Cole robbed the Huntington National Bank located at 700 Merchant Street in Ambridge, Pa. Cole entered the bank, stated to the bank teller that he had a gun and was not afraid to use it, and escaped with $1,425.
Assistant United States Attorney Katherine A. King prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Beaver County District Attorney’s Office and the Ambridge Police Department for the investigation leading to the successful prosecution of Cole.
Jasper Man Sentenced to 11 Years in Prison for Walker County Bank Robbery and Bomb ThreatsRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Jasper man to more than 11 years in prison for robbing a Walker County bank, calling in bomb threats on a hospital and a highway bridge before the robbery, and possessing guns as a convicted felon, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge Karon O. Bowdre sentenced BRANDON JOSEPH PEAKE, 33, to 11 years and three months in prison for the July 2013 armed robbery of Traders and Farmers Bank on Curry Highway in Jasper, and to brandishing a gun during the robbery, a Heckler & Koch .40-caliber pistol that he pointed at one of the tellers. The judge also sentenced Peake on three counts of being a convicted felon in possession of a firearm, and to charges of using a telephone to make false bomb threats against Walker Baptist Medical Center and a bridge spanning Alabama Highway 69. Peake pleaded guilty to all charges in December. Peake has remained in custody since his arrest in Tennessee about a week after the bank robbery.
Peake called in the bomb threats on July 5, 2013, before the afternoon bank robbery, according to his plea agreement with the government. Because of the threats, the hospital was evacuated, a police bomb squad dispatched, and the bridge and a stretch of Highway 69 closed.
A Walker County Sheriff's deputy found the H&K .40-caliber pistol used in the robbery of Traders and Farmers Bank in woods near the bank. The gun was traced to Peake, who bought it in 2007. Peake, who was convicted in Jefferson County Circuit Court in August 2012 for felony possession of a controlled substance, was prohibited from possessing a firearm.
He admitted in his plea agreement that he had traveled to Tupelo, Miss., two days after the bank robbery to meet an acquaintance who sold him a Glock 9mm pistol and a Bushmaster .223-caliber semi-automatic rifle. A fourth gun Peake possessed illegally was a Beretta 9mm pistol, which was found July 11 in the Chattanooga hotel room where police arrested him for the Walker County bank robbery.
The FBI, Walker County Sheriff's Office and the Walker County District Attorney's Office investigated the case. Special Assistant U.S. Attorney E. Wilson Hunter prosecuted the case.
Indictment Unsealed in Unauthorized Aliens Employment ConspiracyRead the Press Release
HOUSTON – Four Houston residents and one from Puerto Rico have been charged in a 13-count indictment involving a conspiracy to employ unauthorized aliens and encouraging and inducing undocumented aliens to reside in the country, announced United States Attorney Kenneth Magidson along with Special Agent in Charge of Homeland Security Investigations (HSI) Brian Moskowitz.
The indictment was returned under seal May 21, 2014, and unsealed in its entirety today as Ceasar Santiago Arroyo, 49, of Puerto Rico, surrendered to agents in Houston. He is expected to make his initial appearance before U.S. Magistrate Judge Stephen Wm. Smith at 2:00 p.m. today. Also charged and previously arrested were Houston residents Mary Louise Flores, 43, Fernando Emmanuel Bustos, 31, Rudy Alexander Martinez, 33, and Israel Arquimides Martinez, 37.
They are all charged with conspiracy to and encouraging and inducing illegal aliens to reside in the U.S. as well as conspiracy to and unlawfully employing unauthorized aliens.
According to allegations in the indictment, Arroyo, Rudy Martinez and Israel Martinez were employees of a waste disposal company and worked at the company’s Afton Road location in Houston. Arroyo was the district operations manager, while Rudy Martinez and Israel Martinez were the commercial route manager and residential operations lead driver, respectively. Flores and Bustos were employed by a staffing company in Houston and worked as managers onsite at the waste disposal company’s Afton location, according to the indictment.
From on or around July 30, 2008, through on or around April 24, 2012, the five defendants allegedly conspired to hire and continue to employ aliens they knew were unauthorized work in the U.S. at the waste disposal company’s Afton location in Houston.
Federal law requires employers to hire only U.S. citizens and aliens who are authorized to work in the country. However, according to allegations, they hired manual laborers with little or no regard to their legal status.
The defendants and their co-conspirators allegedly failed to take corrective measures to ensure the hired workers were authorized to work in the U.S. The indictment alleges that even after internal audits demonstrated the workers were, in fact, unauthorized to work in the country, the defendants continued to facilitate their continued employment. In some cases, the aliens themselves provided information indicating they were not eligible to work in the U.S.
According to the allegations, the defendants encouraged undocumented aliens to obtain false documentation, assigned false identities to undocumented aliens and, in some cases, provided them with employment documents related to their false identity. The individuals whose identities were assumed did not authorize or even know their identities were being used, according to the indictment. Those individuals were often former employees of the companies, or individuals who had applied for employment but were never hired. The indictment alleges information was stolen from documentation and records executed in connection with applications for employment. The defendants and their co-conspirators would allegedly enter information from the assumed identities of others, resulting in a paycheck for the undocumented alien under the other individual’s name.
According to the allegations, on or around Jan. 31, 2012, the defendants and their co-conspirators “fired” at least 10 helpers they knew to be unauthorized aliens purportedly because the aliens failed to supply documentation establishing they were legally present and authorized to work in the U.S. The indictment alleges that during their “termination,” the defendants encouraged them to assume the identity of U.S. citizens or individuals who had authorization to reside and legally work in the country. The defendants also allegedly informed undocumented aliens that they could come back to work if they got “good papers” belonging to other individuals. Following the “termination” of these undocumented aliens, the defendants and their co-conspirators assigned false identities to certain aliens and assisted said aliens in obtaining related identifiers to use for employment and payroll purposes, according to the charges. The defendants then allegedly “rehired” at least 10 aliens under their assumed identities.
If convicted of encouraging and inducing aliens to reside or conspiracy to do so, all face up to 10 years in federal prison. Thye further face another five years on any of the charges relating to the unlawful employment of unauthorized aliens. All charges also carry as possible punishment, a maximum fine of $250,000, upon conviction.
The investigation leading to the charges was conducted by HSI. Assistant United States Attorneys Casey N. MacDonald and Suzanne Elmilady are prosecuting the case.
The defendants are presumed innocent unless and until convicted through due process of lawIndependence Man Sentenced for Illegal FirearmRead the Press Release
Project Ceasefire
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Independence, Mo., man was sentenced in federal court today for illegally possessing a firearm.
Edward L. Garlock, Jr., 47, of Independence, was sentenced by U.S. District Judge Dean Whipple to 16 years and eight months in federal prison without parole. Garlock was sentenced as an armed career criminal due to his prior felony convictions.
On April 25, 2014, Garlock pleaded guilty to being a felon in possession of a firearm. Garlock admitted that he was in possession of a Phoenix Arms .22-caliber pistol on June 28, 2013.
According to court documents, Garlock was arrested on June 28, 2013, after a stand-off with police officers that lasted more than seven hours. The stand-off occurred after Independence police officers arrived at Garlock’s residence to arrest him for several outstanding warrants. Garlock’s girlfriend, who was questioned outside the residence, told officers that Garlock was inside the residence and that he was armed with a pistol. She said that he was hiding under a pile of dirty clothes in the laundry room in the basement. She also told officers that Garlock was becoming increasingly paranoid about going back to prison and had made statements he would not be taken peacefully and would “shoot it out” with the police if he were cornered.
Officers attempted to order Garlock out of the residence without success. Believing Garlock was a threat to officers and the public, the Special Response Team was deployed to the residence initiating a stand-off that lasted more than seven hours. At about 2:18 a.m., officers forced entry into the residence after deploying multiple canisters of CS gas and diversionary devices. Garlock was taken into custody without further incident.
When police officers searched the residence, they found the loaded pistol in a closet adjacent to the laundry room in the basement. According to court documents, Garlock later told police officers that he purchased the pistol for $50 about a month earlier and he attempted to hide the pistol before police officers entered his residence. Garlock admitted he was a habitual drug user and he was addicted to methamphetamine.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearms or ammunition. Garlock has three prior felony convictions for tampering, as well as prior felony convictions for burglary, resisting arrest, stealing and distributing a controlled substance.
This case was prosecuted by Assistant U.S. Attorney Bruce E. Clark. It was investigated by the Independence, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Ceasefire
Project Ceasefire, launched in October 1999, is a cooperative initiative by federal and local law enforcement and the Kansas City Crime Commission that targets for federal prosecution persons who unlawfully use or possess firearms.Illinois Federal Court Enjoins Certified Public Accountant from Specific ConductRead the Press Release
A federal court in East St. Louis, Illinois, permanently barred Ronald Manis, a certified public accountant, of Carbondale, Illinois, from engaging in certain conduct, the Justice Department announced today. This includes preparing or filing federal tax returns by improperly claiming deductions for commuting to and from work, unsubstantiated meals and entertainment expenses, or other non-deductible personal expenses.
The injunction order also bars Manis from misrepresenting his ability to practice before the Internal Revenue Service (IRS) and requires Manis to hire, and pay for, a third party monitor to review a sample of tax returns prepared by Manis each year for five years. Manis agreed to the injunction without admitting the allegations in the complaint.
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. Ronald E. Manis
Stipulated Final Judgment of Permanent Injunction Against Ronald ManisIdentity Theft Defendant Now Facing Weapons ChargesRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Kevin R. Feldis announced today that Joseph Keenan May, 60, was charged in a superseding indictment with federal weapons offenses. Defendant May, of Eagle River and Houston, Alaska, was indicted in June for identity theft crimes. He now faces three new federal charges, alleging that he unlawfully possessed firearms while a fugitive from justice, he unlawfully possessed unregistered explosive devices, and he lied in an application for a federal firearms license.
May was arrested by an FBI tactical team at a home in Eagle River in the early morning hours of
Friday, June 20. He had been wanted for capital sexual battery in Bradenton, Florida, since 1991. He was also the subject of a federal warrant charging unlawful flight to avoid prosecution since 1993.According to the indictment, May has been living under the identity of a stepbrother, Michael Camp, who died in his teens in the 1970s in Pennsylvania. May is a former deputy sheriff in Manatee County, Florida. The indictment charges two counts of unlawful use of a social security number, stemming from May’s use of Camp’s name and number to apply for an Alaska driver’s license in 2009 and unemployment benefits in 2013. He is also charged with aggravated identity theft. The new charges allege that he possessed eight firearms despite his status as a fugitive; that he possessed destructive devices and components to make them, including an exploding arrow and at least nine hand grenades; and the he lied on a 2011 application for a federal firearms license by using Camp’s identity and by claiming that he was not a fugitive from justice or then charged with a felony.
May faces up to 39 years in prison on the federal charges in Alaska. He potentially faces life imprisonment in Florida.
Mr. Feldis commends the efforts of the Social Security Administration, Office of the Inspector General; the Federal Bureau of Investigation, Anchorage Division; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, for conducting the investigation that led to the Alaska indictments and arrest. Thanks are also due to the FBI Tampa Division, the United States Attorney’s Office for the Middle District of Florida, the State’s Attorney’s Office in Brandenton, Florida, and the Manatee County Sheriff’s Office.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Horn Lake Man Pleads Guilty to Conspiring to Launder Bribes Received in AfghanistanRead the Press Release
Memphis, TN – Jerry Dennis, 68, of Horn Lake, MS, pled guilty today to a one-count information charging conspiracy to launder approximately $250,000 in bribe payments received from Afghan contractors in Afghanistan, announced Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division and United States Attorney for the Western District of Tennessee Edward L. Stanton III.
According to facts revealed in the criminal information and during the hearing, Jimmy Dennis, a former First Sergeant with the United States Army, was assigned to the Humanitarian Aid Yard at Bagram Air Field, Afghanistan. He served as a paying agent from March 2008 until his return to his home base at Fort Campbell, KY.
Together with a Project Purchasing Officer (PPO), Jimmy Dennis worked as a team to procure supplies from local Afghan contractors. These supplies were used as part of the Commander’s Emergency Response Program for urgent humanitarian relief requirements in Afghanistan.
Soon after Jimmy Dennis began working as a paying agent, an Afghan interpreter offered him a $10,000 bribe/kickback to accept certain Afghan contractors onto the list of eligible contractors. Jimmy Dennis accepted the money and later accepted bribe payments from a second interpreter to allow additional vendors onto the list of eligible contractors. Jimmy Dennis estimated that he personally received about $250,000 in bribes.
Jimmy Dennis smuggled the money home through the U.S. Mail through a variety of means including sending home a “jingle truck” (colorfully decorated trucks or buses in Afghanistan and Pakistan) to his father, Jerry Dennis. Jimmy Dennis hid the money in the rear compartment of the toy truck. Jimmy Dennis also shipped a hope chest containing approximately $100,000 in cash in a concealed compartment to Jerry Dennis. Jerry Dennis would then deposit the funds received from Jimmy Dennis into his personal bank account. Jerry Dennis stopped depositing the money into his bank account after being questioned by bank authorities regarding his cash deposits.
Jimmy Dennis then met with James Pittman while on leave and asked if he could send the money to Pittman to launder through his landscaping company. Pittman agreed and began sending “salary” checks to Jimmy Dennis after Jimmy Dennis provided Pittman with jingle trucks containing hidden cash and Jerry Dennis provided $20,000 remaining from the money he had received. Jerry and Jimmy Dennis used the money for a number of personal expenses including paying vehicle loans and buying motorcycles.
James Pittman and Jimmy Dennis pled guilty to the same charge, Pittman on May 15, 2014 before U.S. Magistrate Judge William B. Carter of the Eastern District of Tennessee and Jimmy Dennis on May 28, 2014 before U.S. District Judge Samuel H. Mays, Jr.
Jerry Dennis faces a maximum penalty of 20 years in prison, a $500,000 fine, restitution, forfeiture, and five years of supervised release. Sentencing is scheduled for November 20, 2014 at 2:00 p.m. before U.S. District Judge Samuel H. Mays, Jr.
This case was investigated by the Special Inspector General for Afghanistan Reconstruction, the FBI, the Army Criminal Investigative Division, the Defense Criminal Investigative Service, and the Air Force Office of Special Investigation. The prosecution is being handled by Trial Attorney Daniel Butler of the Criminal Division of the Department of Justice and Assistant U.S. Attorneys Frederick Godwin of the Western District of Tennessee and James Brooks of the Eastern District of Tennessee.Hampton Man Charged with Passport Fraud and False StatementsRead the Press Release
Abel Hernandez-Labra, age 43, from Hampton, Iowa, has been charged with passport fraud and false statements in a Complaint filed on July 15, 2014, in United States District Court in Cedar Rapids.
The Complaint alleges that Hernandez-Labra assumed the identity of a U.S. citizen by fraudulently obtaining the victim’s birth certificate. The Complaint also alleges the birth certificate, along with an Iowa driver’s license obtained by Hernandez-Labra in the victim’s name, was then used to apply for and receive a U.S. passport in 2008. The Complaint also alleges when confronted by investigating special agents, Hernandez-Labra completed a written sworn statement believed to contain several material false statements.
Hernandez-Labra appeared today in federal court in Cedar Rapids and was held without bond. Hernandez-Labra’s next appearance for a preliminary hearing is set for July 30, 2014, at 4:00 p.m.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorneys Rich Murphy and Daniel C. Tvedt and was investigated by the U.S. Department of State, Diplomatic Security Service (DSS) Chicago Field Office. DSS special agents were assisted in the arrest by officers of the Hampton Police Department, the Webster City Police Department, and the Hamilton County Sheriff’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-MJ-176.
Four Mississippi Men and Women Indicted for Racially Motivated Hate Crimes Spree in Jackson, MississippiRead the Press Release
Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division and U.S. Attorney Gregory K. Davis for the Southern District of Mississippi announced today that a federal grand jury has indicted John Louis Blalack, 20, of Brandon, Mississippi, Sarah Adelia Graves, 21, of Crystal Springs, Mississippi, Robert Henry Rice, 23, of Brandon, and Shelbie Brooke Richards, 20, of Pearl, Mississippi, for their alleged roles in a conspiracy to commit federal hate crimes against African-American people in Jackson, Mississippi.
Blalack, Graves and Richards are additionally charged with a racially motivated hate crime resulting in the death of a victim run over by a truck. Blalack and Rice are charged with two additional racially motivated hate crimes involving alleged assaults, and with carrying a firearm in relation to one of those assaults. Graves and Richards are additionally charged with soliciting others to commit hate crimes against African-Americans, and Graves is charged with making false statements to the FBI. Defendants Deryl Paul Dedmon, 20; John Aaron Rice, 19; Dylan Wade Butler, 21; William Kirk Montgomery, 23; Jonathan Kyle Gaskamp, 20; and Joseph Dominick, 22, all from Brandon, have previously entered guilty pleas in connection with their roles in these offenses.
The indictment alleges that, beginning in the spring of 2011, the defendants and others conspired with one another to harass and assault African-American people in and around the Jackson area. According to the indictment, on numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles, to cause, and attempt to cause, bodily injury to African-American people. The co-conspirators are alleged to have specifically targeted African-American people they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault. The co-conspirators would often boast about these racially motivated assaults. The indictment details several such assaults, including the fatal assault on a victim who was intentionally run over.
The defendants face a statutory maximum sentence of life in prison.
The case is the result of a cooperative effort between the U.S. Attorney’s Office for the Southern District of Mississippi, the Civil Rights Division and the Hinds County District Attorney’s office. This case was investigated by the Jackson Division of the FBI and the Jackson Police Department. It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division, and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.
The charges set forth in an indictment are merely accusations and the defendants are presumed innocent until proven guilty.
Former Social Security Administration Employee Sentenced to 18 Months in Prison for Taking Bribes in Return for Giving People Increased Benefits-Admits Accepting Total of $54,662 from 13 People-Read the Press Release
WASHINGTON – Christopher Payton, a former specialist for the Social Security Administration in Washington, D.C., was sentenced today to 18 months in prison for soliciting more than $50,000 in bribes from Social Security recipients in return for providing them with extra, unauthorized benefits.
The sentence was announced by U.S. Attorney Ronald C. Machen Jr. and Michael McGill, Special Agent in Charge of the Philadelphia Field Division of the Social Security Administration’s Office of the Inspector General.
Payton, 46, of Mount Rainier, Md., pled guilty in April 2014, in the U.S. District Court for the District of Columbia, to one count of bribery. He was sentenced by the Honorable Senior Judge Gladys Kessler. Following his prison term, Payton will be placed on three years of supervised release. He also must pay $54,662 in restitution to the Social Security Administration.
According to a statement of offense, signed by the defendant and the government, Payton was a Social Insurance Specialist for the Social Security Administration’s Anacostia Office in Southeast Washington. His duties included conducting interviews regarding eligibility for benefits, authorizing or disallowing entitlement, and reviewing and authorizing Supplemental Security Income. He had computerized access to the agency’s database.
Between January and May of 2013, Payton met with 13 people as part of his responsibilities at the agency. Upon meeting these individuals, Payton told them, in substance, that if they gave him a tip, he would take care of them. After they agreed to his solicitation, Payton caused retroactive Supplemental Security Income benefits to go into the individuals’ bank accounts. These retroactive payments were not properly authorized, and Payton knew that the people receiving them were not entitled to the extra income.
After the individuals began seeing increased retroactive benefits in their bank accounts, they met with Payton throughout the Anacostia neighborhood and gave him payments. All told, Payton received $54,662 in cash payments from the individuals for his actions.
Payton’s activities came to light after someone reported his suspicious conduct. In addition, authorities received information through a fraud hotline operated by the Social Security Administration’s Office of the Inspector General. The public can report allegations of waste, fraud, and abuse online at http://oig.ssa.gov/report or by phone at 1-800-269-0271.
In announcing the sentence, U.S. Attorney Machen and Special Agent in Charge McGill praised the work of those who investigated the case from the Social Security Administration’s Office of the Inspector General. They also acknowledged the efforts of those who handled the case from the U.S. Attorney’s Office, including Paralegal Specialists Donna Galindo, Krishawn Graham, and Angela Lawrence; Investigative Analyst Sharon Johnson, Intern Dan Chin, and former Paralegal Specialist Shanna Hays. They expressed appreciation for the assistance provided by Trial Attorney Edward P. Sullivan of the Department of Justice’s Public Integrity Section.
Finally, they commended the work of Assistant U.S. Attorney Philip A. Selden, who prosecuted the case, and Assistant U.S. Attorney Diane Lucas, who assisted with forfeiture issues.
14-167Former North Chicago School Board Member Sentenced to 10 Years in Federal Prison for Bus Contracts Fraud SchemeRead the Press Release
CHICAGO ― A former North Chicago school board member was sentenced today to 10 years in federal prison for receiving at least $566,000 in kickbacks from three co-defendants who controlled several different transportation companies that received more than $21 million in student bus contracts over nearly a decade.
The defendant, GLORIA HARPER, 63, formerly of North Chicago, pleaded guilty last October to one count each of wire fraud and filing a false federal income tax return. Harper admitted that between 2001 and 2010 she schemed to deprive the approximately 4,000-student North Chicago Community Unit School District 187 (NCSD) of her honest services. Harper instigated and orchestrated the fraud scheme with four co-defendants, including Alice Sherrod, the district’s former transportation director. The three co-defendants funneled kickbacks totaling at least $800,000 to Harper and Sherrod and made more than $9.6 million in profits.
“This was a serious, serious offense that took advantage of an impoverished school district and the ultimate victims were the school children of North Chicago,” U.S. District Judge Sharon Johnson Coleman said in imposing the sentence today after a hearing that began last week. Judge Coleman ordered Harper to serve her sentence consecutive to a 30-month federal sentence that Harper received in 2012 in Louisiana for defrauding the federal E-Rate program that funds education technology. The judge also ordered Harper to pay approximately $7.2 million in restitution.
“The North Chicago School District has one of the highest low-income populations in the state. But rather than looking out for the interests of the district’s taxpayers and the children who depended on the schools for education, Harper selfishly used her position to enrich herself, and then filed false tax returns,” Assistant U.S. Attorney Matthew Getter argued at sentencing.
Sherrod, 62, of Berwyn and formerly of Gurnee; Tommie Boddie, 69, of Harvest, Ala., and formerly of Wadsworth; Derrick Eubanks, 50, of Lake Villa; and Barrett White, 55, of Matteson, have also pleaded guilty and are awaiting sentencing.
Harper, who was a member of the NCSD board from 1999 to May 2009, and Sherrod, who was District 187's transportation director from 2001 to July 2010, used their positions to enrich themselves secretly by soliciting and accepting gifts and cash from their three codefendants in exchange for favorable official action regarding student transportation contracts. Initially, Harper and Sherrod received kickbacks of approximately $4,000 to $5,000 a month but, by 2003, they were collecting approximately $20,000 a month.
From the late 1990s until mid-2003, the NCSD contracted with various companies to provide student transportation, including T&M Transportation, which was owned in part and controlled by Boddie, and Eubanks Transportation, which was owned in part and controlled by Eubanks. In 2001, Harper and Sherrod met with Boddie and agreed they would arrange for the NCSD to increase the number of students that T&M transported in exchange for kickback payments.
In May 2003, Harper suggested to Boddie and Eubanks that they join together to form one company ― Safety First Transportation, Inc., which won the NCSD’s transportation contract in 2003, and Harper, Sherrod, Boddie, and Eubanks agreed that they would split the profits from the contract. After an IRS audit of Safety First in 2006-2007, White, who had been acting as the “bagman” for the kickbacks, began receiving funds from Safety First as both an employee and a contractor, even though he provided little service other than being the bagman.
In April 2008, the defendants agreed to set up a new company, Quality Trans, LLC, to replace Safety First and to assume its contracts with the school district. All five agreed to continue splitting profits from Quality Trans, and Boddie, Eubanks and White continued making cash payments to Harper and Sherrod.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The North Chicago School District cooperated with the investigation.
Former Caseworker for the Dallas Project Reconnect Is SentencedRead the Press Release
Defendant Pleaded Guilty to Witness Tampering, Making a False Statement to HUD and Deprivation Under Color of Law
DALLAS — Lawrence Hart, 37, was sentenced on Monday by U.S District Judge David C. Godbey to serve 15 months in federal prison and ordered to pay $8,619 in restitution following his guilty plea in April 2014 to felony and misdemeanor offenses stemming from his role as a caseworker for an outreach program managed by the City of Dallas’s Housing Department. Hart must surrender to the Bureau of Prisons in mid-October 2014. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.
Hart pleaded guilty to one count of witness tampering, one count of making a false statement to the U.S. Department of Housing and Urban Development (HUD) and one count of deprivation of rights under color of law.
According to documents filed in the case, in 2012 and 2013, Hart was a caseworker for Project Reconnect, a HUD-funded outreach program managed by the City of Dallas’s Housing Department. Project Reconnect provides reentry case management and community referrals to help non-violent offenders on parole settle back into the Dallas community. One of the main components of Project Reconnect is to provide housing to eligible individuals. As the program was being applied at the time, to be eligible for Project Reconnect, an individual must reside in Dallas, have felony conviction, be 18 years or older, be currently on parole or probation and meet HUD low to moderate income guidelines.
Hart admitted that in July 2012, he arranged for “Person A” to sign a lease for an apartment in Carrollton, under the Project Reconnect program, even though Person A did not qualify for the program at that time. The apartment’s rent was $980.00 per month, and Project Reconnect was responsible for $975 of that amount and Person A was responsible for $5.00 per month. Hart admitted that while he worked for the City of Dallas’s Housing Authority, he was in fact the sole occupant of that apartment and Person A never resided there. Hart further admitted that he submitted documentation to HUD reflecting that Person A was the sole occupant.
When HUD, the Dallas Police Department (DPD) and the FBI began investigating fraudulent activity related to Project Reconnect, they interviewed Hart about his involvement in Project Reconnect and his potential criminal activity. After that interview, Hart contacted Person A and instructed Person A to lie to a DPD detective and FBI special agent by telling them that Person A lived in the Carrollton apartment.
In late 2012, according to the factual resume filed in the case, Hart met “Person B” and fast-tracked Person B through the Project Reconnect program. While Person B was qualified for the program, Hart propositioned her for sex and expedited her placement in an apartment because she agreed to have sex with him. In January 2013, Person B ended her intimate relationship with Hart. Acting under color of law, Hart removed her from the HUD-subsidized apartment, wilfully depriving her of the right, to be free from discrimination in the terms, condition and privileges of rental of a dwelling because of her sex.
The DPD, HUD and FBI investigated the case. Assistant U.S. Attorney Errin Martin prosecuted.
Former CME Clerk Sentenced to Eight Months in Prison for Manipulating Trades to Profit More Than $200,000Read the Press Release
CHICAGO — A former clerk for a lean hogs futures trader was sentenced today to eight months in prison after being convicted in March of commodities fraud for manipulating trades to profit more than $200,000 for herself to the detriment of public customers.
The defendant, NICOLE M. GRAZIANO, 33, of Addison and formerly of Roselle, was also ordered to pay $212,000 in restitution to various clearing firms on behalf of victim investors. U.S. District Judge James Zagel, who found Graziano guilty of four counts of commodities fraud in March after a bench trial, imposed the sentence in Federal Court.
Graziano’s scheme resulted in an “almost unbelievable success rate” of 90 to 100 percent of winning trades for her own account, which would have been impossible in an ordinary market setting, Judge Zagel said when he delivered his verdict.
According to the evidence, Graziano, who was a clerk for a member broker at the Chicago Mercantile Exchange, now CME Group, secretly inserted order tickets for her own personal orders into the decks of tickets submitted by public customers. She provided the tickets and trade cards to brokers to execute during the closing bracket of trading in lean hogs futures contracts. Using her position as a clerk, Graziano fraudulently allocated favorable prices to her own trades (giving herself low prices for buy orders and high prices for sell orders), and reaped profits to the detriment of public customers. Between September 2009 and August 2010, Graziano submitted at least 89 fraudulent trade cards to the appropriate clearing firms, resulting in approximately $212,000 in illegal profits to her during the closing bracket.
Judge Zagel said that the scheme damaged “the legitimacy of the exchange itself” and hurt customers because she took away benefits that could have gone to them for her own advantage.
The sentence was 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 CME Group assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Christopher R. McFadden and Tiffany McCormick.
Five Defendants Sentenced in the District Court of GuamRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that five more defendants who were witnesses in the U.S. v. Mateo B. Sardoma, Jr. aka “Mat”, Rudy P.H. Sablan, Maria C. Edrosa aka “Cristina”, et al. trial were sentenced by Chief Judge Frances Tydingco-Gatewood, as follows:
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Defendant JAMES PANGELINAN, age 44, was sentenced on July 6, 2014, to time served followed by four years of supervised release. Defendant PANGELINAN pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 846. Defendant PANGELINAN assisted co-defendant Ana Toves in selling methamphetamine for Defendants Mateo Sardoma, Jr. and Rudy Sablan.
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Defendant SYLVIA MASHBURN DUENAS, age 30, was sentenced on July 8, 2014, to
37 months incarceration followed by five years of supervised release. Defendant
DUENAS pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of
21 U.S.C. §§ 841(a)(1) and 846. Defendant DUENAS assisted Defendant Mateo
Sardoma, Jr. in obtaining the methamphetamine. -
Defendant CHRISTOPHER A.D. MESA, age 33, was sentenced on July 9, 2014, to 51 months incarceration followed by five years of supervised release. Defendant MESA pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C.
§§ 841(a)(1) and 846 and aiding and abetting the brandishing of a firearm during a drug crime in aid of Defendant Mateo B. Sardoma, Jr. -
Defendant ANTHONY VILLANUEVA, age 48, was sentenced on July 10, 2014, to 46 months incarceration followed by five years of supervised release. Defendant VILLANUEVA pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 846. Defendant VILLANUEVA assisted defendant Mateo Sardoma, Jr. by supplying a post office box for Mateo Sardoma, Jr. to bring methamphetamine into Guam.
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Defendant PAUL PEREZ, age 47, was sentenced on July 10, 2014, to 48 months imprisonment and five years of supervised release. Defendant PEREZ pleaded guilty to Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841 and 846. PEREZ received a shipment of methamphetamine on behalf of Defendant Mateo B. Sardoma, Jr. and mailed some of the cash profits to California.
U.S. Attorney Limtiaco stated, “Our community is not immune from the poison of methamphetamine. These cases illustrate the hard work our partners in law enforcement do every day to stop the distribution of methamphetamine into Guam.” These three defendants were witnesses in the U.S. v. Mateo B. Sardoma, Jr. aka “Mat”, Rudy P.H. Sablan, Maria C. Edrosa aka “Cristina”, et al., which is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
The investigations were conducted by Special Agents and Task Force Officers at the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI) and the Drug Enforcement Administration (DEA). The cases were prosecuted by Assistant U.S. Attorney Fred Black.
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Eastern North Carolina Recycling Business and Owner Sentenced for Unlawful Handling of PCB-contaminated Oil, Tax Violations, and False StatementsRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that BENJAMIN FRANKLIN PASS, 61, and P&W WASTE OIL SERVICES INC. (P&W), of Leland, N.C., were sentenced today in federal court in Raleigh, North Carolina. PASS was sentenced to 42 months in prison and restitution in the amount of $21,373,143.38 for clean-up costs associated with the environmental contamination at his business and an additional $538,857 to the Internal Revenue Service for federal income taxes he failed to pay between 2002 and 2011.
PASS and the company previously pleaded guilty to crimes related to the unlawful handling and dilution of used oil contaminated with polychlorinated biphenyls (PCB). PASS also pleaded guilty to failure to pay taxes and P&W pleaded guilty to material false statements.
United States Attorney Thomas G. Walker stated, “This disregard of environmental protections resulted in significant contamination. The defendant’s conduct placed an economic burden on the United States and an unreasonable risk to the health and safety of the citizens of North Carolina.”
“Today’s sentence is just punishment for the defendant’s actions, which placed the health of North Carolina’s residents and their natural resources at risk,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Environmental violations such as these are serious crimes, and the Justice Department and the U.S. Attorney’s Offices will continue to vigorously prosecute those individuals and companies who ignore the laws Congress enacted to protect people and our environment from toxic substances like PCBs.”
The court also ordered P&W to pay restitution in the amount of $21,373,143.38 for losses incurred by Colonial Oil and International Paper as a result of the defendants’ mishandling of used oil contaminated with PCBs that led to widespread contamination and millions of dollars in clean-up costs. P&W was also ordered to serve a five-year term of probation and to take remedial action to address the environmental contamination at its facility in eastern North Carolina and other leased property in eastern North Carolina, including but not limited to, the proper treatment and disposal of PCB-contaminated waste oil.
According to information in the public record, PASS owned and operated P&W’s facility in Leland, N.C. The facility is located approximately 500 feet to the east of the Cape Fear River and a federally recognized wetland.
As part of its business operations, P&W collected, transported, processed, and marketed used oil that it received from small and large companies, such as automotive service stations, transformer repair companies and marinas. P&W also conducted tank cleaning and waste removal.P&W, however, was not authorized to transport, store, or handle used oil containing more than two parts per million (ppm) of PCBs. PCBs are man-made organic chemicals that were manufactured domestically from 1929 to 1979 and were used in hundreds of industrial and commercial applications, such as thermal insulation in electrical transformers and capacitors. PCBs were determined to cause cancer and have been demonstrated to cause a variety of adverse health effects on the immune system, reproductive system, nervous system, and endocrine system. Accordingly, Congress banned the production of PCBs and mandated that no person may distribute in commerce, or use any PCBs other than in a totally enclosed manner, and directed the U.S. Environmental Protection Agency (EPA) to promulgate rules phasing out the manufacture of PCBs and regulating their disposal. PCBs still exist in products produced before the 1979 ban and if mishandled and released into the environment, can remain for long periods of time in the air, water, and soil.
In July 2009, an employee of P&W transported used-oil contaminated with more than 500 ppm of PCBs from a business in Wallace, South Carolina, to its Leland facility where the contaminated used oil was blended and diluted with other used oil. Testing results obtained by PASS in October 2009 revealed PCB contamination in excess of 4,925 ppm.
The contaminated product was eventually resold to Colonial Oil and International Paper. Colonial Oil discovered the contamination as part of its standard sampling and testing protocol. As a result, over three million gallons of contaminated used oil had to be transported and incinerated at a certified disposal site for PCBs. The costs to Colonial Oil for the proper disposal of the contaminated used oil exceeded $17 million in addition to significant disruption of its business operations.
The investigation further revealed that at the direction of PASS, employees of P&W continued to transport and dilute the PCB-contaminated used oil at the facility after the contamination was discovered. The EPA intervened and had the Leland facility designated a Superfund site. Superfund is the name given to the federal environmental program established to clean up the nation’s uncontrolled hazardous waste sites. Costs for the clean-up of the contaminated tanks at the facility exceeded $3.4 million.
Law enforcement also learned that in 2009 and again in 2010, PASS and P&W falsely certified that its employees had taken requisite training on the handling of hazardous wastes and that, between 2002 through 2011, PASS failed to pay his federal income taxes despite having the ability to pay.
“Today’s sentencing is a direct result of the strong collaboration between EPA-CID and its federal law enforcement partners,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in North Carolina. “In order to safeguard the environment and public health, it is essential that we hold companies and their corporate officers responsible for falling to accurately report violations. We will continue to pursue those who fraudulently report information critical to human health and the environment to preserve the integrity of programs designed to protect the public.”
“Mr. Pass’s disregard to uphold his legal obligations in business and paying income taxes have come with a price,” said Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation. “Today’s sentencing reinforces law enforcements collaborative efforts to enforce the law and ensure public trust.” Thomas J. Holloman, Special Agent in Charge IRS Criminal Investigation added, “A fraud of this magnitude requires a coordinated effort among law enforcement agencies to stop those involved from profiting from their wrongdoing. We are the stewards of our environment and anyone who knowingly pollutes it should be held accountable.”
“Acting Assistant Attorney General Hirsch and U.S. Attorney Walker praised the continued joint efforts of the EPA’s Criminal Investigation Division and the IRS’s Office of Criminal Investigations and the U.S. Coast Guard’s Criminal Investigative Services for their diligent work in the investigation of this matter.” Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division are the prosecutors in charge of the case. Assistant United States Attorney Norman Acker and the Financial Litigation Unit provided significant support to the prosecution team.
East Texans Arrested on Federal ViolationsRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas - U.S. Attorney John M. Bales announced today that six individuals have been arrested following a lengthy investigation into illegal gambling, money laundering and drug trafficking in the Eastern District of Texas.
On July 15 2014, a combined task force of federal, state and local law enforcement executed six federal arrest warrants and four federal search warrants in the Tyler, Texas and Gladewater, Texas area as a result of a joint investigation by the Federal Bureau of Investigation, Smith County Sheriff's Office, U.S. Drug Enforcement Administration, and the Texas Racing Commission.
The operation resulted in the arrest of all six defendants and the seizure of over $30,000 cash, methamphetamine, and several firearms. The following defendants were arrested and appeared before U.S. Magistrate Judge K. Nicole Mitchell on charges of conspiracy to distribute methamphetamine, prohibition of illegal gambling businesses, and conspiracy to money launder: OMAR BONIFACIO BONILLA, a/k/a “Pelon,” 32, of Tyler; RENAULT LANSING KAY, a/k/a “Nault Pete,” a/k/a “Chocolate,” 47, of Tyler; JESSICA MARIA BONILLA, 31, of Tyler; JOEL ORLANDO BONILLA-LOYA, 36, of Tyler; GUILLERMO RIVERA-BONILLA, 58, of Tyler; and
SHEENA SHAVETTE PERRY, 31, of Tyler.If convicted, the defendants face as much as life in federal prison.
Homeland Security-Deportation and Removal Operations, Tyler Police Department, and the Texas Department of Public Safety also assisted in the arrests and searches. This case is being prosecuted by Assistant U.S. Attorneys Frank Coan and Richard Moore.
A complaint or arrest is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Easley Man Pleads Guilty to Possession of Child PornRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina -----United States Attorney Bill Nettles stated today that James A. Newton, age 54, of Easley, South Carolina, pled guilty today in federal court in Anderson, South Carolina, to possession of child pornography, a violation of 18 U.S.C. ' 2252A. United States District Judge Timothy M. Cain accepted the plea and will sentence Newton once a pre-sentence investigation report has been prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that on April 17, 2013, an agent with the Department of Homeland Security, Office of Investigations, was conducting an investigation of individuals sharing child pornography. The agent logged onto a peer-to-peer file sharing program and downloaded child pornography from a user in Easley, SC. Further investigation revealed that this IP address was associated with Newton’s residence.
On July 9, 2013, agents executed a federal search warrant at his residence. Multiple computers and storage devices were seized. Newton had 121 child porn videos and 2,517 still images—that is, images and videos of minors under the age of 18 engaged in sexually explicit conduct and the lascivious display of the genitals. Some of the minors had not attained the age of 12 and were prepubescent.
The case was investigated by agents of the Department of Homeland Security, Office of Investigations. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, 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 identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.Dignity Health Agrees to Pay $1.55 Million in Civil Penalties to Resolve Controlled Substances Act ClaimsRead the Press Release
SACRAMENTO, Calif. — Dignity Health, California’s largest hospital provider and the country’s fifth largest health system, has agreed to pay the United States $1.55 million to settle claims of deficiencies regarding the handling of controlled substances at its hospitals and clinics, United States Attorney Benjamin Wagner announced today. Dignity Health will pay $1,250,000 immediately, and the remaining $300,000 will be deferred pending Dignity Health’s compliance over the next two years with a detailed action plan.
The payment and action plan resolve the United States’ claims that Dignity Health facilities in the Sacramento area failed to properly record hundreds of transactions involving controlled substances in violation of the Controlled Substances Act (CSA) and its implementing regulations, and had insufficient compliance procedures and controls regarding the distribution of controlled substances. The action plan agreed to by Dignity Health is designed to advance the health system’s ability to meet its record-keeping requirements and its ability to detect and prevent diversion in its prescription drug-dispensing operations.
The DEA commenced its investigation of Dignity Health following reported losses of over 20,000 tablets of hydrocodone from the outpatient pharmacy at St. Joseph’s Medical Center in Stockton, CA in late 2010 and 2011. A 2011 audit conducted by the DEA at the pharmacy revealed significant shortages of a number of the controlled substances evaluated, including most strengths of hydrocodone, a Schedule III opioid analgesic narcotic sold in tablet form. Hydrocodone is highly addictive and often diverted to the black market from legitimate sources. The DEA’s subsequent investigation revealed that several Dignity Health locations were failing to keep accurate records under the laws designed to safeguard the public against diversion of the most abused classes of legally manufactured and prescribed drugs.
Since the DEA’s investigation, Dignity Health executive leadership has worked cooperatively with the DEA and the U.S. Attorney’s Office to develop a detailed action plan to address the identified deficiencies in Dignity Health’s handling of controlled substances by instituting an overhauled CSA compliance regime. Components of the action plan include: annual external audits of CSA compliance, with results to be reported to the DEA; keyless entry systems installed at Dignity Health locations to monitor and restrict access to areas containing controlled substances; increased physical counts and inventories of controlled substances to quickly identify discrepancies; monthly certifications that record-keeping requirements are met; and annual CSA compliance training for Dignity Health employees who handle controlled substances.
“The abuse of hydrocodone and other painkillers has become an epidemic,” said United States Attorney Wagner. “The CSA created a ‘closed system’ of controlled substance distribution so the DEA can better monitor the movement of prescription drugs to end users. This system reduces the opportunity for diversion of drugs that can have a useful and legitimate medical purpose for those lawfully consuming them. Unfortunately, however, if hospitals and pharmacies are lax in their record-keeping or supervision of their drug-dispensing operations, opportunities arise for the diversion of powerful drugs to unintended users who may be injured by them. We will continue to work with our law enforcement partners to investigate and prosecute these cases.”
“Healthcare providers have an obligation to protect public health. Keeping accurate records and restricting access to controlled substances are key in fulfilling that responsibility,” stated DEA Special Agent in Charge Jay Fitzpatrick. “This significant civil penalty underscores DEA’s commitment in the fight against prescription drug abuse by holding companies accountable, regardless of their size.”
Assistant United States Attorney Colleen M. Kennedy prosecuted the case.
Dalton Man Pleads Guilty to Possessing Child PornographyRead the Press Release
BOSTON – A Dalton man pleaded guilty yesterday in U.S. District Court in Springfield to possessing child pornography.
Jared Sprague, 25, pleaded guilty before U.S. District Judge Mark G. Mastroianni to possessing child pornography. Sprague is being held in custody pending sentencing which is scheduled for Oct. 7, 2014.
In 2012, agents executed a search warrant at Sprague’s residence and seized a computer that contained approximately 100 files of child pornography, including files that involved prepubescent minors subjected to sadistic or violent sexual conduct.
Pursuant to a plea agreement, Sprague has agreed to be sentenced to between 48 and 78 months in prison, 10 years of supervised release, to pay restitution to the minor females depicted in the child pornography collection, and to forfeit his computer media. Sprague also faces a maximum $250,000 fine.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Dalton Police Chief Jeffrey E. Coe, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Cibecue Man Convicted at Trial for Domestic Violence MurderRead the Press Release
PHOENIX, Ariz. – Willard John, 36, of Cibecue, Arizona, was found guilty of Second Degree Murderby a federal jury in Phoenix on July 11, 2014. The case was tried before U.S. District Judge James A. Teilborg. The defendant, who remains in custody, is scheduled to be sentenced before Judge Teilborg on October 15, 2014.
The evidence at trial showed that John killed the mother of his two young children on or about March 19, 2012, by stabbing her multiple times and cutting her neck with a pair of household scissors. Following the murder, he cut his own throat, but survived his injuries. The evidence revealed that John had been physically abusing the victim for years prior to the murder.
A conviction for Second Degree Murder carries a maximum penalty of life imprisonment, a $250,000.00 fine, or both.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Bureau of Indian Affairs. The prosecution was handled by Dimitra H. Sampson, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-12-8082-PCT-JAT
RELEASE NUMBER: 2014-039_JohnFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.Cape May County, N.J., Man Charged with Receiving Images of Child Sexual Abuse via InstagramRead the Press Release
CAMDEN, N.J. - A Cape May County, New Jersey man was arrested today by special agents U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), on charges he received images of child sexual abuse over the Internet using his cellphone, U.S. Attorney Paul J. Fishman announced.
Jeffrey Spicer, 44, of West Wildwood, New Jersey, is charged by complaint with one count of receipt of child pornography. He made his initial appearance today before U.S. Magistrate Judge Joel Schneider in Camden federal court and was remanded without bail. A bail hearing is scheduled for Friday.
According to the complaint and statements made in court: On March 19, 2014, law enforcement officers executed a search warrant at a home in Cape May, New Jersey, Spicer’s residence at that time. Law enforcement officers seized various forms of electronic and digital media from the residence pursuant to the warrant including Spicer’s cellphone, a thumb drive and a computer hard drive. They determined that these devices contained multiple images of child pornography.
On the receipt of child pornography count, Spicer faces a mandatory minimum term of 15 years in prison, a maximum penalty of 30 years in prison and a $250,000 fine if convicted.
U.S. Attorney Fishman credited special agents of the ICE-HIS, under the direction of Special Agent in Charge Andrew McLees; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Lower Township Police Department, under the direction of Chief William Mastriana; the West Wildwood Police Department, under the direction of Chief Jackie Ferentz; and the N.J. Regional Computer Forensics Laboratory with the investigation leading to the charges.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423 or by completing its online tip form. Both are staffed around the clock by investigators. For additional information about wanted suspected child predators, download HSI’s Operation Predator smartphone app or visit the online suspect alerts page.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney’s Office in Camden.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
14-251Defense counsel: Lisa Lewis Esq., Assistant Federal Public Defender, Trenton
Spicer, Jeffrey Complaint
British Nationals Who Supported Terrorism Are SentencedRead the Press Release
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NEW HAVEN, Conn. – Two British nationals were sentenced today in New Haven federal court for conspiring to provide and providing material support to terrorists, including the solicitation of funds, personnel, and military equipment to the Taliban, at a time when they were harboring Usama bin Laden and Al Qaeda, and allowing them to have a base of operations in Afghanistan from which they could plan terrorist attacks directed at the United States. Chief U.S. District Judge Janet C. Hall sentenced Babar Ahmad to 150 months of imprisonment, and Syed Talha Ahsan to approximately 96 months of imprisonment, time already served. Ahmad, with Ahsan’s assistance, operated “Azzam Publications,” which maintained a then-pre-eminent series of websites through which the defendants provided extensive material support to terrorist groups, including the Taliban.
Today’s sentencing was announced by Deirdre M. Daly, United States Attorney for the District of Connecticut, John Carlin, Assistant Attorney General for National Security, Bruce Foucart, Special Agent in Charge of Homeland Security Investigations in Boston, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation.
“Babar Ahmad provided material support unprecedented in scope to terrorists for over seven years,” said U.S. Attorney Daly. “Ahmad solicited funds, personnel and provided military equipment, training and expert advice in support of violent jihad in Afghanistan, knowing full well that his efforts could result in the killing of individuals, including U.S. forces. This criminal conduct continued even after the tragedy of September 11, 2001. I commend the dedicated investigators and members of our prosecution team who have worked tirelessly on this case for more than a decade. Let this be a warning to those that support terrorism, the Government will not rest until you are brought to justice. We thank our law enforcement partners, including Homeland Security Investigations, the FBI, IRS-Criminal Investigation, DCIS, NCIS, and our counterparts in the United Kingdom, all of whom provided critical assistance in this investigation.”
“Today’s sentences prove once again that the United States doesn’t set a time limit on bringing supporters of terrorism to justice,” said John Carlin, Assistant Attorney General for National Security. “We will remain tireless in our pursuit of those who provide material support to terrorists and promote violent extremism both here and abroad.”
“Today marks the culmination of a very long process,” said Bruce Foucart special agent in charge of HSI Boston. “This case began in the wake of the September 11th tragedy, and today, over a decade later these individuals have finally faced justice. I would like to thank my special agents, the FBI and the brave men and women of the London Met for their dogged persistence over the years. Their steadfast support and perseverance throughout this process shows, that the best way to combat international terrorism is through international cooperation.”
“Terrorism comes in many shapes and sizes and, as this case demonstrates, so does the material and financial support of terrorism,” said FBI Special Agent in Charge Ferrick. “We must remain ever vigilant of those like Ahmad who discreetly support radicals committed to violent jihad, not only through financial networking, but also through the supply of personnel, military equipment and intelligence. Ahmad’s crimes were a serious threat to the United States and to the world. It is critically important that the FBI, Homeland Security Investigations and all of our federal partners remain steadfast in the war on terror and those who support it.”
According to court documents and statements made in court, Ahmad was a member of a group that supported the Taliban through various means, including the operation of a series of websites under the name of “Azzam Publications,” including Azzam.com and Qoqaz.net, which promoted violent jihad and solicited support for such groups. Azzam Publications posted articles on how to train for and support the jihad and the mujahideen, posted biographies of “martyrs,” and also produced and/or sold a number of audio and video products that were advertised on the websites, including videos containing real combat footage and biographies and images of deceased mujahideen.
While the websites were in operation, the Taliban allowed territory under its control in Afghanistan to be used as a safe haven and base of operations for Usama bin Laden and Al Qaeda, who had committed and threatened to continue to commit acts of violence against the U.S. and its nationals, including the 1998 bombings of U.S. Embassies in Africa, the October 2000 attack on the U.S.S. Cole, and the terrorist attacks of September 11, 2001. For a period of time, the Azzam websites were made possible through the unwitting services of a web-hosting company headquartered in Trumbull, Conn.
Ahmad conspired with others to provide material support for terrorism through Azzam.com by soliciting and conspiring to provide funds and military equipment, and by facilitating the travel of individuals to attend training camps in Afghanistan. Ahmad’s efforts were intended to support the Taliban regime in Afghanistan, and were done knowing that such support would be used in preparation for or in carrying out a conspiracy to commit murder, kidnaping, or maiming, and a conspiracy to kill nationals of the U.S. while such nationals were outside the U.S.
Ahmad has admitted that he operated the family of websites collectively known as Azzam Publications, and that “the purpose of Azzam Publications [was] to ‘Incite the believers’ and also secondly to raise some money for the brothers.”
In 2001, Azzam Publications also posted on its websites an article entitled “What You Can Do to Help the Taliban,” which provided detailed instructions on how to raise, transport and personally deliver amounts over US$ 20,000 in cash to the Taliban government via its consulate in Pakistan. Azzam Publications solicited personnel and physical items, including military suits and gas masks, for the Taliban. This solicitation appeared on the Azzam websites following Usama bin Laden and Al Qaeda’s having claimed responsibility for the October 2000 attack on the U.S.S. Cole, and was intended to assist the Taliban defend against a claimed forthcoming attack by the United States in retaliation for Al Qaeda’s attack on the U.S.S. Cole.
Ahmad and Azzam Publications’ support continued even after September 11, 2001, when U.S. forces were actively fighting Taliban and Al Qaeda forces in Afghanistan, and after Usama bin Laden and Al Qaeda had claimed responsibility for the September 11th attacks. For example, from at least the fall of 2001 through mid-2002, Ahmad and the Azzam sites posted an “Appeal to Pakistanis All over the World,” which, post-9/11, encouraged Pakistanis worldwide to travel to and fight against “the Crusaders” in Afghanistan, and provided detailed instructions for Pakistani nationals to obtain a Pakistani visa under false pretenses. On a linked page discussing the fighting in Afghanistan, the Azzam site also posted a bar graph comparing casualties at the World Trade Center with casualties in Afghanistan. Moreover, a search of Babar Ahmad’s computer media from his office at Imperial College in London recovered a previously deleted document from December 2001 that discussed safe routes into and out of Afghanistan, the need for fighters, the provision of funds and night vision systems, and providing detailed information on U.S. casualties for circulation on the Azzam sites.
In December 2003, a search of Ahmad’s residence in the United Kingdom revealed that Ahmad was in possession of an electronic document setting forth previously classified plans regarding the makeup, advance movements, and mission of a U.S. naval battle group as it was to travel from California to its deployment in the Middle East. The document discussed the battle group’s perceived vulnerability to terrorist attack. Forensic analysis revealed that Syed Talha Ahsan created the electronic version of the battle group document, carefully altered the metadata to hide his authorship, and then delivered the material to Ahmad.
Ahmad, 40, has been detained since his arrest by British law enforcement authorities on August 5, 2004, and he was indicted in October 2004. Ahsan, 34, was indicted in June 2006, and has been detained since his arrest by British authorities on July 19, 2006. Following lengthy extradition proceedings, Ahmad and Ahsan were extradited to Connecticut in October 2012. On December 10, 2013, each pleaded guilty to one count of conspiracy to provide material support to terrorists and one count of providing material support to terrorists.
At the time of their pleas, Ahmad and Ahsan specifically agreed, in writing, that they pleaded guilty freely and voluntarily, and without intimidation or coercion of any kind, because they are guilty of conspiring to provide and providing material support to terrorists.
This case was investigated by a Task Force in Connecticut consisting of Special Agents from Homeland Security Investigations; law enforcement agents from the Federal Bureau of Investigation’s Joint Terrorism Task Force; the Internal Revenue Service – Criminal Investigation Division, Electronic Crimes Program; the Defense Criminal Investigative Service and the Naval Criminal Investigative Service.
U.S. Attorney Daly praised the substantial efforts of law enforcement authorities from the Metropolitan Police Service’s Counter Terrorism Command and the Extradition Unit, both within New Scotland Yard, whose efforts and assistance have been essential in the investigation in this case. She also thanked HSI, the FBI, the U.S. Marshals Service, and Justice Department attachés in London for their assistance in the matter.
The case is being prosecuted by a team of federal prosecutors including Assistant U.S. Attorneys Stephen Reynolds and Ray Miller from the U.S. Attorney’s Office for the District of Connecticut, and Trial Attorney Alexis Collins from the Counterterrorism Section of the Justice Department’s National Security Division.
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(203) 821-3722 [email protected]Baton Rouge Man Sentenced to 94 Months in Prison for Illegally Possessing Stolen Motor VehiclesRead the Press Release
SHREVEPORT, La. –A Baton Rouge man was sentenced to 94 months in prison and three years of supervised release for using multiple false identities to steal an RV, boat and sport utility vehicle, U.S. Attorney Stephanie A. Finley announced today.
Charles K. Smith, 60, of Baton Rouge, was also ordered by U.S. District Judge Elizabeth E. Foote to pay $91,208 in restitution. According to evidence presented at the guilty plea on February 3, 2014, Smith paid for a Winnebago from a Picayune, Miss., business using a fraudulent check for $189,500 under the alias Anthony J. Barnes on February 15, 2010. On May 10, 2010, Smith purchased a SeaPro boat from a Henderson, La., business using a fraudulent check for $26,975 under the alias Randal Bass. He also bought a GMC Terrain from a Bossier City business using a fraudulent check for $25,286 under the alias William Rayford Johnson on April 6, 2011.
The FBI conducted the investigation. Assistant U.S. Attorney Seth D. Reeg prosecuted the case.
Alleged Drug Trafficker Indicted in Puerto Rico Apprehended in Rhode Island by U.S. Marshal Service, R.I. State PoliceRead the Press Release
PROVIDENCE, R.I. – Carlos A. Rodriguez, a/k/a Maldi, 32, of Ponce, Puerto Rico, was ordered detained on Tuesday by U.S. District Court Magistrate Judge Lincoln D. Almond and returned to Puerto Rico, following his apprehension by the United States Marshal Service and Rhode Island State Police on an outstanding arrest warrant on drug trafficking charges from the District of Puerto Rico, announced United States Marshal Jamie A. Hainsworth, Rhode Island State Police Superintendent Colonel Steven G. O’Donnell and United States Attorney Peter F. Neronha.
Rodriguez is named in a sweeping 63-person, 11-count federal indictment returned in Puerto Rico in March 2014. The indictment, the result of an on-going 11-year investigation, alleges Rodriguez’s participation in a drug trafficking conspiracy to possess and distribute significant quantities of cocaine, crack cocaine, heroin, Oxycodone and Xanax in the La Ceiba Public Housing Project and other areas in and around Ponce, Puerto Rico. An arrest warrant for Rodriguez was signed on March 6, 2014, by a U.S. District Court Magistrate Judge in Hato Rey, Puerto Rico.
Members of the U.S. Marshal Service in Rhode Island and the Rhode Island State Police recently developed information that Rodriguez was living and working in Providence. Rodriguez was arrested on Tuesday morning without incident at his place of employment.
The Government was represented in U.S. District Court in Providence by Assistant U.S. Attorney Richard W. Rose.
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Contact: 401-709-5357
[email protected]Alabama Woman Convicted of Stolen Identity Refund FraudRead the Press Release
A jury found a Dothan, Alabama, woman guilty of conspiring to defraud the government through the filing of false tax returns, Deputy Assistant Attorney General Ronald A. Cimino of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced today.
Nina Macena, 32, was also found guilty of three counts of wire fraud and three counts of aggravated identity theft.
According to evidence from the trial, Macena provided stolen identities to Ivory Bolen, also of Dothan, who used the identities to file false tax returns that fraudulently requested refunds from the government. Bolen would attempt to have the refunds deposited onto prepaid debit cards, which would be mailed to addresses controlled by Bolen and Macena. Macena obtained the identities from Roderick Neal, a former bail bondsman in Dothan, who had access to the personal information of individuals who had been detained at the Dothan City Jail. Both Bolen and Neal previously pleaded guilty to their involvement in the scheme.
The evidence from the trial also showed that Bolen, acting at the direction of law enforcement, made several phone calls to Macena asking her to obtain more identities. Macena agreed to do so and said she would attempt to get more identities from a “friend” at “the bonding company.” Macena also stated in the calls that she had stolen identities in a storage unit. The next day federal agents executed a search warrant at Macena’s storage unit and seizedstolen identities and prepaid debit cards in the names of victims of the scheme. Altogether, Bolen filed tax returns claiming more than $300,000 in refunds using the stolen identities provided by Macena. The Internal Revenue Service (IRS), however, successfully stopped a number of the fraudulent returns.
Macena testified in her own defense at trial and admitted that she had obtained information from Neal for Bolen, but claimed that she was unaware of the nature of the information. She also testified that she stored items for Bolen in her storage unit, but that she was unaware of what she was storing.
Macena was ultimately convicted by the jury on all counts in the indictment. At sentencing Oct. 23, she faces a statutory maximum sentence of 10 years in prison for the conspiracy count, a statutory maximum sentence of 20 years in prison for the three wire fraud convictions and a mandatory sentence of two years in prison for the aggravated identity theft convictions. Her actual sentence, however, will be decided by a federal judge after considering the federal sentencing guidelines and statutory sentencing factors.
This case was investigated by special agents of the IRS - Criminal Investigation. Trial Attorneys Jason Poole and Charles Edgar of the Tax Division prosecuted the case with the assistance of the U.S. Attorney’s Office for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.
Alabama and Georgia Law Enforcement Officers Training to Deal with Domestic ExtremistsRead the Press Release
OXFORD, Ala. -- About 400 law enforcement officers from northeast Alabama and northwest Georgia will attend safety training on Thursday in Oxford to better prepare them for potential encounters with domestic extremists, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., and Oxford Police Chief Bill Partridge.
The U.S. Attorney's Office for the Northern District of Alabama, the FBI's Joint Terrorism Task Force and the Oxford Police Department will present the training at the Oxford Performing Arts Center. The training is designed to give local, state and federal law enforcement officers and government security personnel survival skills and best practice tips in case they do encounter domestic extremists, such as members of the Sovereign Citizen Movement or militia groups. The training also will address deadly force survival and weapons of mass destruction.
"Law enforcement officers must, first, protect themselves in order to protect the communities they serve," Vance said. "The goal of this training is for each participant to gain a greater appreciation of the potential threats associated with domestic extremism and how best to protect himself or herself if ever confronted with such a situation," she said.
"As sovereign citizens’ numbers grow, so do the chances of contact with law enforcement and, thus, the risks that incidents will end in violence," Schwein said. "Law enforcement must understand the sovereign-citizen movement, be able to identify indicators, and know how to protect themselves from the group’s threatening tactics and techniques,” he said.
“Under pressure, you don’t rise to the occasion; you sink to the level of your training. You react the way you’re trained," Partridge said. "Train hard and train often, your life depends on it.”
The afternoon session of the daylong training will be a study of the Aug. 5, 2012, mass shooting at a Sikh temple in Oak Creek, Wis., in which a white supremacist shot and killed six temple worshippers. The gunman, a U.S. Army veteran, also wounded three other worshippers and the first officer on the scene, who was struck with 12 bullets. The shooter killed himself with a shot to the head after another police officer shot him in the stomach.
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15 July 2014
Utah Man Sentenced to 60 Months for Religiously-Motivated Attack on Synagogue and Gun ChargesRead the Press Release
Macon Openshaw, 22, was sentenced today by U.S. District Court Judge Tena Campbell for the District of Utah to serve 60 months in prison for a bias-motivated attack at a local synagogue and for two unlawful gun possession charges. Openshaw was further ordered to pay $1,969 in restitution to the synagogue to repair the damage caused by his actions and was ordered to serve three years of supervised release following completion of his prison term.
On April 16, 2014, Openshaw pleaded guilty to the civil rights violation of damaging the synagogue and to the gun charges. As part of his plea, Openshaw admitted to firing three rounds from a Walther .22 caliber handgun at the Congregation Kol Ami synagogue in Salt Lake City in 2012. At the time of the attack, there were no congregants inside of the synagogue. Openshaw said he shot the synagogue because of its religious character. Openshaw also admitted to possessing a handgun with a destroyed serial number, which was the same handgun he used to shoot the synagogue. He also admitted to possessing several firearms and ammunition while he was subject to a protective order.
“Religiously-motivated violence cannot be tolerated by civil society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The department stands ready to combat violence based on a person’s religion, and will continue to prosecute these hate crimes vigorously.”
“Every person living in Utah has the right to be free from intimidating and threatening conduct,” said Acting U.S. Attorney Carlie Christensen for the District of Utah. “The U.S. Attorney’s Office in Utah has a strong history of prosecuting those who violate the civil rights of others in our communities.”
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Carlos Esqueda of the U.S. Attorney’s Office for the District of Utah and Trial Attorney Nicholas Durham of the Civil Rights Division’s Criminal Section.
USP-Canaan Inmate Sentenced to 15years’imprisonment for Attempted MurderRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Senior United States District Court Judge James M. Munley sentenced an inmate at the United States Penitentiary at Canaan, Pennsylvania, to 15 years’ imprisonment for stabbing another inmate multiple times with a sharpened weapon and with the intent to commit murder. Eddie Joe Sutton, age 60, formerly of Texas, was charged with the offense and pleaded guilty on April 15, 2014.
According to United States Attorney Peter Smith the attack on the victim inmate occurred on November 7, 2013; the victim inmate survived the attack but suffered numerous stab wounds which required treatment at a local hospital. At the time of the attack, Eddie Joe Sutton was serving a 20-year sentence for bank robbery. Judge Munley ordered the 15-year imprisonment term to be served after completion of his bank robbery sentence.
The case was investigated by the FBI and the Special Investigation Section at USP-Canaan.
Assistant United States Attorney John Gurganus prosecuted the case.
U. S. Attorney Announces Sentence of Crawfordsville Man for Fraudulent Tax ReturnsRead the Press Release
Restaurant owner stole unemployment insurance benefits and tax refunds
INDIANAPOLIS - Joseph H. Hogsett, the United States Attorney, announced today that Pedro Sanchez, 34, Crawfordsville, was sentenced with theft of government funds related to fraudulent receipt of unemployment benefits and the filing of fraudulent tax returns. Sanchez was sentenced to 26 months with a fine of $773,000 to the Internal Revenue Service (IRS) and $29,000 to the Indiana Department of Workforce Development (IDWD) for restitution. Sanchez was sentenced by District Court Judge Tanya Walton Pratt.
“Theft is always wrong, but theft of unemployment benefits takes money from some of the neediest Hoosier families. It affects all taxpayers and makes the cost of helping those in need higher than necessary,” said Hogsett.
The investigation revealed that Sanchez’s scheme was uncovered by a third party trying to apply for public aid. In May of 2010, an individual went to the Lafayette Indiana Department of Workforce Development office (“IDWD”) to obtain a printout of her past wages to assist in an application for public aid. While assisting her, IDWD determined that she was already receiving unemployment benefit, however, they were not being sent to her address. Instead, a benefits debit card was being sent to an address in Crawfordsville. While looking further into this matter, IDWD determined that multiple debit cards were being sent to the same address, which led investigators to Sanchez.
Further investigation found that Sanchez was defrauding multiple people of their unemployment benefits. Sanchez, through his Mexican grocery store, Video Y Discoteca El Charron (“El Charro”), which contained a money service, cashed numerous IRS refund checks that were issued based on fraudulent tax returns. On some occasions, Sanchez cashed the refund check himself. On other occasions, the tax refund checks were cashed by other people but went through the Mexican grocery store business account of Sanchez. Approximately $1,472,673 was received by Sanchez in fraudulent tax returns between January 2009 and February 2011.
“That someone would use a legitimate business as a cover for stealing funds from unassuming individuals as well as the general public is deplorable,” said Hogsett.
The tax refund scheme included obtaining refunds for individuals using tax identification numbers listing wages that could not be verified by employers. This was done by listing identical employers, similar and identical taxpayer home addresses, similar and identical wage while withholding information and claiming dependents which resulted in additional child tax credit.
This investigation was a collaborative effort between the United States Department of Labor- Office of the Inspector General, Internal Revenue Service and Indiana Department of Workforce Development.
“Combating unemployment insurance fraud remains a high priority for the Office of Inspector General and we will continue to work with our law enforcement partners and colleagues to address it. We would like to thank the Indiana Department of Workforce Development for their support in identifying the extent of the unemployment insurance fraud committed by the defendant,” said James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigation.
James C. Lee, IRS Criminal Investigation Special Agent in Charge stated, “At the IRS, protecting taxpayer money is our top priority. There are numerous victims when it comes to refund crimes; in addition to the government, the taxpaying public also pays the price. IRS Criminal Investigation is determined to stop these false tax refund schemes and warns that participation in refund fraud schemes does not pay and those who participate will be investigated and prosecuted for their involvement.”
According to Assistant United States Attorney Gayle Helart, who prosecuted this case on behalf of the government, Sanchez faces three years of supervised release after serving his sentence.
Three Members of the "Indigenous American Nationals" Sentenced to Ten Years in PrisonRead the Press Release
Contact Person: DeWayne Pearson (803) 929-3000
Columbia, South Carolina -----United States Attorney Bill Nettles stated today that Jerry Elmo Hartsoe, age 57, of West Columbia, James Chappel Dew, age 59 of North Myrtle Beach, and Mark Shannon Manuel, age 49 of Franklin, Tennessee, were sentenced to 10 years incarceration by United States District Judge Cameron McGowan Currie of Columbia for their convictions on eight counts of mail fraud. Facts presented at trial proved that the three men defrauded victims through their West Columbia business, Eden Gifted Properties. The men claimed to be able to eliminate their customers’ debt using a series of secret government accounts.
According to the testimony presented in the case, Hartsoe, Manuel and Dew claimed to have access to a secret government account worth approximately $100 billion. For a fee or “donation” of 10% of the value of the debt, the men claimed to be able to satisfy and pay off mortgages, credit cards and any other types of debt. Using connections within various religious and political groups, the defendants traveled across the United States to host seminars and presentations. After identifying potential victims at these seminars and presentations, the defendants would solicit several thousand dollars from each victim and begin mailing a series of bogus documents to banks and other lenders. Witnesses testified that the men encouraged customers to seek cash advances from credit cards and to raid retirement accounts in order to pay Eden Gifted Properties’ fees. The court found that the men took over $675,000.00 from their victims and intended to cause over $83,000,000.00 in losses to banks and other financial institutions.
Claims made by the men during the trial and during sentencing are similar to arguments presented by so-called “sovereign citizens.” Sovereign citizens” are U.S. citizens who reject their citizenship status and claim that the government is operating outside of its jurisdiction. They generally do not recognize the authority of federal, state or local governments and renounce their obligation to adhere to the laws, policies or regulations created by those governments
The investigation and convictions were pursued in furtherance of the FBI’s national strategy aimed at disrupting the criminal activity of individuals claiming to be sovereign citizensand prosecuted by Assistant United States Attorneys T. DeWayne Pearson and John Potterfield of the Columbia office.Strip Liquor Store Owner Pleads Guilty to Conspiracy to Defraud the IRSRead the Press Release
LAS VEGAS, Nev. – The owner of several liquor stores on the Las Vegas Strip has pleaded guilty to conspiring to defraud the IRS for failing to report income that was skimmed from the businesses, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Ramzi Suliman pleaded guilty on July 14, 2014, to one count of conspiracy to defraud the United States. Suliman faces up to five years in prison and up to a $250,000 fine, and is scheduled to be sentenced by U.S. District Judge Lloyd D. George on Jan. 12, 2015.
Suliman and co-defendant Jeffrey Nowak were originally charged in a criminal indictment dated April 10, 2013, with one count of conspiracy to defraud the United States, three counts of assisting in filing false corporate tax returns, and four counts of attempting to evade and defeat tax. Nowak’s case is pending, and he is currently scheduled for trial beginning Dec. 3, 2014.
According to Suliman’s guilty plea memorandum, from about 2006 to present, Suliman and Nowak owned and operated three liquor stores in Las Vegas, Super Liquor South Strip at 3999 S. Las Vegas Boulevard, Super Liquor Mid Strip at 2301 S. Las Vegas Boulevard, and Super Liquor McCarran Village at 384 E. Tropicana Avenue. Suliman stated in his plea agreement that he and Nowak diverted cash receipts from the stores to their own use by presenting false books and records to the corporate accountant for use in preparing corporate and individual tax returns for the businesses and the defendants.
From about 2006 to 2009, Suliman admitted that he and Nowak maintained multiple sets of accounting records for their liquor stores, and that they skimmed some of the cash received from one of the stores and agreed not to report it the IRS. Suliman reported that they omitted the skimmed cash from the accounting records that were provided to the accountant for the preparation of their tax returns. Suliman admitted that he was aware of and consented to the skim and occasionally made entries in the records. Suliman admitted that his participation in the conspiracy to defraud the IRS resulted in a tax loss to the government of $200,000 to $400,000 for the years 2006 to 2009.
The case is being investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Kathryn C. Newman.Skokie Couple Arrested for Allegedly Bilking Medicare and Paying Kickbacks for Patients in $800,000 Health Care Fraud SchemeRead the Press Release
CHICAGO — A Skokie couple was arrested today after they and their home health care company were indicted on federal health care fraud charges for allegedly bilking Medicare of more than $800,000 for physician services that were never provided to patients. The couple and their company were also charged with conspiring to pay another defendant $11,000 in illegal kickbacks for patient referrals.
The couple, JOHN YOUSEFZAI, and his wife, ARMANOUHI ARZOMANIAN, owned and operated MEDICOSE HOME HEALTH CARE SERVICE, Inc., which employed physicians and provided in-home medical services to patients. The couple operated Medicose from their home in Skokie, where federal agents executed a search warrant today.
Yousefzai, 66, and Arzomanian, 56, neither of whom is a licensed medical professional, were each charged with five counts of health care fraud, one count of conspiracy, and two counts of paying kickbacks for referrals of Medicare patients to Medicose, which was charged with five counts of health care fraud.
Also arrested today was WILSON NARSA, 52, of Chicago, who worked for a non-profit organization that provided services to the elderly and disabled. He was charged with conspiracy and two counts of receiving kickbacks for referring Medicare patients to Medicose.
The three individual defendants and Medicose pleaded not guilty at their arraignment this afternoon in U.S. District Court. Yousefzai and Arzomanian were each released on a $50,000 secured bond, and Narsa was released on his own recognizance. A status hearing was scheduled for Aug. 12 before U.S. District Judge Harry Leinenweber.
The defendants were charged in a 10-count indictment that was returned by a federal grand jury on July 1 and unsealed today following the arrests. The indictment also seeks forfeiture from the couple of at least $800,000 and a residence they own in Wilmette, as well as at least $11,000 from Narsa.
According to the indictment, Medicose employed four physicians licensed in Illinois. Between May 2008 and January 2014, Medicose sought more than $2.1 million in reimbursement from Medicare for physician home visits, and Medicare paid Medicose more than $1.4 million. Of that amount, Medicose, Yousefzai, and Arzomanian allegedly submitted more than $1.3 million in fraudulent claims to Medicare for physician services that were not actually provided. As a result, the couple and Medicose caused Medicare to lose more than $800,000. Those three defendants caused the fraud proceeds to be disbursed from Medicose’s corporate bank accounts for the couple’s personal benefit, the indictment alleges.
Between December 2010 and August 2013, all four defendants allegedly conspired to have Medicose pay kickbacks to Narsa and others, including at least $11,000 to Narsa, to induce Medicare patient referrals and increase the patient census at Medicose, which, in turn, enriched Medicose and its owners.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorney William Ridgway.
Each count of health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine or a fine totaling twice the gain or loss, whichever is greater, while conspiracy and each count of violating the anti-kickback statute carry a maximum sentence of five years in prison and a $250,000 fine, and restitution is mandatory. Medicose faces a maximum corporate penalty of each count of five years’ probation and a $500,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Sherman Man Pleads Guilty to Illegally Selling LivestockRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Timothy Deland, 28, of Sherman, N.Y., pleaded guilty before Chief U.S. District Judge William M. Skretny, to theft of property mortgaged or pledged to the Farm Services Agency. The charge carries a maximum sentence of five years in prison, a $250,000 fine or both.
Assistant U.S. Kathleen A. Lynch, who is handling the case, stated that in October 2008, the defendant worked as a farmhand in Sherman and negotiated a deal to purchase cows from the farm where he worked. On October 29, 2008, Deland obtained a loan for $212,775 from the Farm Services Agency (FSA) to purchase the cows and some machinery, using the cows and machinery as collateral.
In early 2011, the defendant left the farm where he was working for financial reasons and moved to another farm, located near Sherman. In March 2011, Deland petitioned the FSA to relocate the cows to a farm in Tennessee but his petition was denied. The defendant appealed the denial. The FSA did not approve the move and accelerated Deland’s loan payments. From March 2011 through January 20, 2012, after being denied by the FSA, Deland sold approximately 90 cows to livestock companies and individuals.
The defendant received multiple contacts from FSA which informed him that equipment and livestock were unaccounted for and instructed Deland to account for and report the loan securities. On August 1, 2012, the defendant was interviewed by the United States Department of Agriculture. During the interview, Deland signed a sworn statement acknowledging selling the cows valued at $110,125.
The plea is the culmination of an investigation by Special Agents of the United States Department of Agriculture, Office of Inspector General, under the direction of William G. Squires Jr., Special Agent in Charge, Northeast Region.
Sentencing is scheduled for November 3, 2014 at 9:00 a.m. before Judge Skretny.Second Local 17 Member Sentenced for ExtortionRead the Press Release
BUFFALO, N.Y. -- The United States Attorney’s Office announced today Michael J. Eddy, 45, of Gowanda, N.Y., who was convicted of extortion, was sentenced to eight months in prison, four months home confinement, and two years of supervised release by Chief U.S. District Judge William M. Skretny. The defendant was also ordered to pay $2,000 in restitution to victims.
According to Assistant U.S. Attorney Anthony M. Bruce, who handled the case, Eddy was a member of Local 17 of the International Union of Operating Engineers. The defendant was part of campaign designed to force Earth Tech, of Latham, N.Y., the low bidder on the 2005 project to remove contaminated soil on which the Buffalo Waterfront School was built, to sign a collective bargaining agreement with Local 17.
In the summer of 2005, Eddy, Local 17 President and Business Manager Mark Kirsch, Organizer James Minter, and other Local 17 members, carried out a campaign of violence and intimidation against Earth Tech in an effort to force the company to sign a collective bargaining agreement. This campaign caused Earth Tech to incur about $200,000 in additional expenses to secure the site from acts of sabotage.
Eddy was one of 12 officers and members of Local 17 arrested and charged in this case. Six defendants pleaded guilty, President Mark Kirsch was convicted at trial, four were acquitted at trial, and charges are pending against the twelfth defendant.
The investigation of this case was handled by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Cheryl Garcia, Special Agent-in-Charge of the New York Regional Office, the Federal Bureau of Investigation, and the New York State Police, under the direction of Major Michael Cerretto.Savannah Resident Indicted for Illegally Exporting Firearms Parts to RussiaRead the Press Release
SAVANNAH, GA – Viacheslav Zhukov, 33, was indicted last week by a federal grand jury sitting in Savannah for his role in illegally exporting firearm parts from Savannah, Georgia to others in Russia. The indictment alleges that Zhukov, a Russian citizen and lawful permanent resident of the United States living in Savannah, mailed multiple packages containing firearm magnifier scopes to Russia without obtaining an export license from the United States Department of Commerce. Various firearm magnifier scopes are controlled under the Export Administration Regulations for crime control purposes and require a license from the United States Department of Commerce to export to Russia. The indictment further alleges that Zhukov misrepresented the contents of packages he mailed to Russia on the customs declarations forms presented to the United States Postal Service.
Zhukov’s arraignment was held yesterday in Savannah before U. S. Magistrate Judge G.R. Smith. Zhukov was ordered detained pending trial. If convicted on all counts, Zhukov faces a 25 year maximum prison sentence. U. S. Attorney Edward Tarver emphasized that an indictment is only an accusation and is not evidence of guilt. The defendant is entitled to a fair trial, during which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
The investigation of this case was led by HSI, with assistance from the U. S. Customs & Border Protection, the U. S. Postal Inspection Service, and the Savannah-Chatham Metropolitan Police Department. Assistant United States Attorneys Tania Groover and Charlie Bourne are prosecuting the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
San Diego Criminal Defense Attorney Pleads Guilty to Laundering Drug Proceeds and Tampering with WitnessRead the Press Release
SAN DIEGO – San Diego criminal defense attorney James Warner pleaded guilty today to two federal felony offenses, admitting that he laundered $100,000 of a client’s drug trafficking proceeds and then tampered with a potential witness in the case.
Warner, 65, a San Diego resident who has been a member of the California bar since December of 1974, pleaded guilty before United States District Judge Jeffrey T. Miller to conspiracy to launder drug proceeds and attempted harassment of a witness.
At today’s hearing in United States District Court in San Diego, which was Warner’s first court appearance in this case, bond was set at $5,000. Judge Miller also scheduled a sentencing hearing for October 16, at which time Warner will face a statutory maximum sentence of 23 years in federal prison.
According to the plea agreement filed today, federal drug agents searched the home and business of one of Warner’s clients in May of 2012. The drug trafficker told Warner that agents had overlooked $100,000 in cash during their search, and Warner agreed to conceal the money.
As part of the money laundering scheme, Warner took the $100,000 – which he knew to be drug proceeds – and invested it in an off-shore business. According to his plea agreement, Warner used his own funds from his U.S. bank accounts and wired approximately $99,965 to an off-shore bank account in the British Virgin Islands. Warner then structured the $100,000 he received from the drug trafficker into his personal and business bank accounts to further conceal and disguise the nature of the drug proceeds. Structuring is the breaking up of cash deposits under $10,000 to avoid bank reporting requirements.
According to the plea agreement, Warner created a fictitious corporation named Grenadine Development Inc., and opened a bank account in the name of Grenadine Development Inc., to issue checks to the drug trafficker.
To further conceal his criminal activity, Warner admitted that he failed to file an IRS Form 8300 “Report of Cash Payments Over $10,000 received in a trade or business” which was required to be filed by defendant Warner when he received currency greater than $10,000 in his business as an attorney.
According to his plea agreement, Warner also admitted that he tampered with a witness when he told his client, a drug trafficker identified as “T.K.,” that he should pay legal fees of another drug trafficker to Warner, to prevent him from cooperating against T.K. Warner further told T.K. that if a court-appointed taxpayer-funded lawyer would “squeeze” the other trafficker to cooperate against T.K.
Federal search warrants were executed at Warner’s law office and his residence on September 11, 2013, following an investigation by IRS - Criminal Investigation and the Drug Enforcement Administration/Narcotics Task Force.
As part of his guilty plea, Warner agreed to a criminal forfeiture in the amount of $100,000 – the sum that was laundered. Warner also agreed to administratively forfeit approximately $200,080 in cash which was seized from his law office during the execution of a federal search warrant, along with $34,527.60 seized from Warner’s personal and business accounts.
Erick Martinez, Special Agent in Charge for IRS - Criminal Investigation, commented that James Warner is a well-known criminal defense attorney in San Diego, who devised a complex scheme to launder drug money. “Mr. Warner’s efforts were matched by the financial skill set and determination of our special agents. Today’s admission of guilt by Mr. Warner is another example of IRS Criminal Investigation’s continued commitment to protect the integrity of the nation’s financial system from illicit activity.”
DEA San Diego Special Agent in Charge William R. Sherman, stated: “Individuals who assist drug traffickers in their endeavors will be held just as accountable as the person who is actually selling the drugs. Regardless of your profession, if you assist drug dealers with their criminal activities, you will be punished. The fines assessed show the seriousness of getting involved in this kind of illegal activity.”
The case is being prosecuted by San Diego-based Assistant United States Attorney Sherri Walker Hobson. The United States Attorney’s Office in San Diego was recused from the matter, and the prosecution was supervised by the United States Attorney’s Office in Los Angeles.
Release No. 14-087
Removed Alien Charged with Illegally Re-Entering United StatesRead the Press Release
PITTSBURGH - An alien found in Pittsburgh has been indicted by a federal grand jury in Pittsburgh on a charge of illegal re-entry after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named German Cardenas-Leon, 42, of Mexico, as the sole defendant.
According to the indictment presented to the court, German Cardenas-Leon, a/k/a Eduardo Hurieta, an alien, was formally removed from the United States by United States Immigration and Customs Enforcement on July 1, 2013. German Cardenas-Leon was found by ICE agents to be illegally present in Pittsburgh on June 26, 2014.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The Pittsburgh Bureau of Police and the U.S. Department of Homeland Security, Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Reidsville Man Indicted as Felon in Possession of FirearmsRead the Press Release
STATESBORO, GA -- Robert Beecher,60, from Reidsville, Georgia, was indicted in June by a federal grand jury sitting in Savannah for possessing several firearms as a convicted felon. Beecher faces a minimum penalty of 15 years in prison if it is determined that he has three qualifying felony convictions and is classified as an Armed Career Criminal under federal law.
Evidence presented during an earlier detention hearing held at the federal courthouse in Statesboro, Georgia established that Beecher had multiple felony convictions dating back to the 1970s, including convictions for arson, burglary, and aggravated assault. Testimony during the hearing also revealed that Beecher was in possession of multiple firearms at his residence in Reidsville on May 7, 2014, the day of his arrest. Based on the evidence presented during Beecher’s detention hearing, U. S. Magistrate Judge G.R. Smith ordered Beecher detained pending trial.
U. S. Attorney Edward Tarver emphasized that an indictment is only an accusation and is not evidence of guilt. The defendant is entitled to a fair trial, during which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by the FBI and the ATF. Assistant United States Attorney Carlton R. Bourne, Jr. is prosecuting the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Punta Gorda Man Pleads Guilty to Investor FraudRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces that Anthony Michael Defeo (49, Punta Gorda) today pleaded guilty to wire fraud before United States District Judge John E. Steele. Defeo faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
Defeo was indicted on May 1, 2013.
According to court documents, Defeo solicited victim investors who thought they were investing in an opportunity involving a gravel pit and fill dirt to be used by road construction companies for improvements on Interstate 75 on the west coast of Florida. Defeo controlled companies and used these companies as vehicles to obtain victims’ money. He misrepresented to victim investors that he had lucrative contracts and purchase orders with a legitimate corporation engaged in asphalt paving, grading, and related services for roadway, and civil construction projects. Instead of using the money as represented, Defeo fraudulently diverted and converted approximately $6,280,580.00 in monies from investors for his own purposes. He failed to repay the investors.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
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Omaha Woman Sentenced for Possessing AmmunitionRead the Press Release
United States Attorney Deborah R. Gilg announced that Lori Jenkins, age 47 of Omaha, was sentenced to 120 months imprisonment for two counts of being a felon in possession of ammunition. The sentences are to run concurrent. Ms. Jenkins was placed on three years of supervised release following her release from incarceration. She was also ordered to pay a $100 special assessment on each count. The Honorable Laurie Smith Camp, Chief Judge of the United States District Court, presided.
Ms. Jenkins was previously found guilty by a jury on April 3, 2014, for purchasing ammunition on August 2, 2013 from Canfield’s and August 20, 2013, from Sol’s.
This case was investigated by the Omaha Police Department and the Douglas County Sheriff’s Office.
New York Man Sentenced to 7 Years in Prison for Trafficking HeroinRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CARLOS PADILLA, 29, a citizen of the Dominican Republic last residing in the Bronx, N.Y., was sentenced yesterday by Senior U.S. District Judge Warren W. Eginton in Bridgeport to 84 months of imprisonment for trafficking heroin.
According to court documents and statements made in court, on February 11, 2012, the Drug Enforcement Administration and Connecticut State Police stopped a vehicle PADILLA was driving on I-95 North in East Haven. After PADILLA gave his consent, law enforcement officers searched the car and found approximately 1.1 kilograms of heroin secreted inside a “trap” that had been installed in the car. PADILLA and a passenger, Francisco Torres, were arrested at that time. The investigation revealed that PADILLA and Torres were transporting the heroin from New York to Rhode Island.
On February 26, 2014, PADILLA pleaded guilty to one count of possession with intent to distribute heroin.
Torres, also a citizen of the Dominican Republic, previously pleaded guilty to one count possession with intent to distribute one kilogram or more of heroin, and one count of unlawful reentry of a removed alien. On April 15, 2014, he was sentenced to 130 months of imprisonment.
Torres’ criminal history includes a 2004 murder conviction in Rhode Island state court. In July 2010, he was deported to the Dominican Republic. He subsequently illegally reentered the United States.
This matter was investigated by the Drug Enforcement Administration’s New Haven Task Force and the Connecticut State Police. The case was prosecuted by Assistant U.S. Attorney Rahul Kale.
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FRANKFORT, KY - A Scarsdale, New York man, who was convicted of wire fraud relating to a Ponzi scheme, was sentenced to 120 months in prison yesterday. U.S. District Court Judge Gregory F. VanTatenhove sentenced Eilat Lev, 65, on his conviction.
Lev previously admitted that he defrauded investors, of approximately $33,000,000, during a scheme he executed from 2005 through 2008. According to the plea agreement, Lev admitted that he owned a business called International Tractor Company, Inc. (ITC), located in Ardsley, New York. He was in the business of buying and selling heavy construction equipment, domestically and internationally. Lev relied, in part, on other individuals to finance the purchase of the equipment, with the agreement that he would arrange for the sale of the equipment and would return the amount invested, pay interest on the amount invested, and share the profit made on any sale with the individuals who provided the financing.
In 2002, an investor accepted an ongoing business proposition from Lev, where the investor would finance the purchase of specific items of equipment on the global market. Lev had identified the equipment for sale and had typically secured a willing buyer. For each transaction, the investor would receive paper work from Lev identifying the equipment, the amount required to purchase it, and confirmation of the sale price, which had been negotiated and agreed upon by the ultimate purchaser. Upon receiving this documentation, the investor would arrange for the transfer of money from his bank account to an account utilized by ITC, in New York. Under the terms of the agreement, Lev would complete the transaction and would return the investment, the agreed interest and, the share of the profit to the investor, within an agreed upon time frame.
In 2005, the investor opened a line of credit with First Southern National Bank located in Pulaski County, Kentucky. He used this line of credit to continue to finance transactions with Lev and his company. In order to draw from the line of credit, Lev was required to submit the same itemized documentation to the bank, which would then transfer funds, by wire, from the investor’s line of credit to Lev’s account at Gotham Bank of New York.
Lev admitted that he perpetrated a scheme to defraud this investor, and others, by soliciting millions of dollars under false pretenses, failing to invest the investors’ funds as promised, and misappropriating investors’ funds without the knowledge or authorization of the investors. In furtherance of the scheme, rather than purchasing and selling specific items of equipment and returning the investment, interest, and profit to them, Lev ran a scheme by which he falsified purchase and sales documents and diverted new investor funds to pay prior investors their principal, interest and/or profits on prior transactions, thereby creating the impression among investors that the business was successful, which enticed them to invest more money. By the end of 2008, Lev was without funds to pay his investors their principal, interest, and/or profit, causing these individuals to lose approximately $33,700,000.
Lev plead guilty in October of 2013.
Under federal law, Eilat Lev must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for five years.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard S. Marshall, Special Agent in Charge, Louisville Field Office of the Federal Bureau of Investigation jointly announced the sentence.
The investigation was conducted by the Federal Bureau of Investigation. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Laura K. Voorhees.
New York Doctor Admits Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
Twenty-ninth Defendant to Plead Guilty in Connection with Scheme
NEWARK, N.J. – A doctor with a New York practice admitted today to accepting more than $100,000 in exchange for test referrals as part of a massive bribery scheme operated by Biodiagnostic Laboratory Services LLC (BLS) of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Peter Deplas, 47, of Glen Head, New York, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.
According to documents filed in this and other cases and statements made in court:Deplas admitted he accepted bribes through a sham lease agreement of $5,000 per month, as well as additional monthly cash payments of as much as $7,000. Over the course of 17 months, Deplas accepted approximately $120,500 in bribes in return for referring patient blood specimens to BLS, for which BLS received more than $900,000. Deplas admitted he even ordered unnecessary test for his patients in order to justify BLS bribe payments.
BLS salesman Cliff Antell negotiated the bribe arrangement with Deplas and paid him the cash, while BLS salesman Craig Nordman wrote the bribe checks pursuant to the sham lease agreement. Antell and Nordman pleaded guilty to their involvement in the scheme on June 10, 2013.
The bribery count to which Deplas pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 29, 2014. As part of his guilty plea, Deplas agreed to forfeit $120,500, representing the bribes he received from BLS.
Including Deplas, 29 people – including 18 physicians – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. The investigation has recovered more than $7 million to date through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS– Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
14-249Defense counsel: Joseph Tacopina Esq. and Chad Seigel Esq., New York
Deplas, Peter Information
New Jersey Man Charged with Drug and Gun Law ViolationsRead the Press Release
PITTSBURGH - A New Jersey man has been indicted by a federal grand jury in Pittsburgh on charges of conspiracy to distribute heroin, felon in possession of a firearm, and possession with the intent to distribute heroin, United States Attorney David J. Hickton announced today.
The three-count superseding indictment named Peter Woodley, 34, formerly of Plainfield, New Jersey.
According to the superseding indictment, Woodley conspired with others to distribute one kilogram or more of heroin between December 2011 and August 2012. The Superseding Indictment also alleges that Woodley possessed a firearm on Sept. 17, 2012, after having been convicted of seven different felony crimes. In addition, in the early morning hours of March 20, 2013, he was arrested by the Drug Enforcement Administration and the Pennsylvania State Police at the Greyhound bus station in downtown Pittsburgh after transporting heroin from New Jersey.
The law provides for a maximum total sentence of not less than 10 years and up to life in prison, a fine of $11 million, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan Conway is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Pennsylvania State Police conducted the investigation leading to the indictment in this case.
A superseding indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Missouri Man Sentenced to 14 Years in Federal Prison on Sex Trafficking ChargesRead the Press Release
PROVIDENCE, R.I. – Stephen Ardrey, 30, of Springfield, Mo., was sentenced in U.S. District Court in Providence today to 14 years in federal prison for transporting a 17-year old female from the Boston area into Rhode Island with the intent to engage in criminal sexual activity, announced United States Attorney Peter F. Neronha; Bart J. Cahill, Acting Special Agent in Charge of Homeland Security Investigations for New England; West Greenwich, R.I., Police Chief Richard N. Ramsay; Coventry, R.I., Police Chief Bryan J. Volpe; Warwick, R.I., Police Chief Colonel Stephen M. McCartney; and Medfield, Mass., Police Chief Robert E. Meaney, Jr.
At sentencing, U.S. District Court Judge John J. McConnell, Jr., also ordered that Ardrey serve a term of 10 years supervised release upon completion of his incarceration and that he register as a sex offender. Ardrey pleaded guilty on February 26, 2014, to one count each of trafficking a person under the age of 18 and transportation of a minor with intent to engage in illicit sexual conduct.
Ardrey was arrested on September 12, 2013, while walking with the victim along a Coventry, R.I., highway three days after the victim was reported missing from her Medfield, Mass., home.
United States Attorney Peter F. Neronha commented, “The message from today’s sentencing is simple: if you engage in human trafficking, if you engage in sex trafficking in this state, we are going to get our victim to a safe place and then we are going to come after you with all of our resources. Whether in federal court or state court, we will seek to lock you up for a long period of time.”
“The defendant sexually exploited a vulnerable minor for profit and for his own gratification,” said Acting Special Agent in Charge Bart J. Cahill of HSI Boston. “The reprehensible and degrading nature of these crimes should leave no doubt that he has earned every minute in prison he has received. This sentence should also send a message to those who traffic in human beings – that ICE and its federal and local law enforcement partners are committed to protecting those who cannot protect themselves”
At the time of his guilty plea, Ardrey admitted to the court that he met the victim in an online chat room in December 2012. Over time, communications with the victim online, via email and through an online service called “TextNow” intensified in frequency and became sexually explicit. As the communications continued, Ardrey discussed selling the victim in order to make money so they could “go away” together.
According to information presented to the court, on September 9, 2013, during a pre-arranged meeting, Ardrey met the victim at a public library in Medfield, Mass. Ardrey and the victim traveled by train from Boston to Providence and then by taxi to a West Greenwich, R.I., motel. The next day Ardrey posted an advertisement on backpage.com and other websites that displayed provocative photographs of the victim under a banner that read “Sweet girl next door -19.”
At the time of his guilty plea, Ardrey admitted to having had sexual contact with the victim at the motel in West Greenwich. Ardrey also admitted that he negotiated a price of $40 and two packages of cigarettes for an hour with the victim with an individual who responded to the Internet ad. That person visited with the victim on two occasions. During the second encounter, Ardrey admitted to remaining outside the door until the individual left, at which time he collected the payment from the victim.
On September 13, 2013, at about 6:30 a.m., the Coventry Police Department received a call from a local resident who observed a male and a female walking along Rte.3 in Coventry and the female fit the description of the reported missing girl from Medfield, Mass. A responding officer recognized the young woman as being the missing person from Medfield, Mass. According to information presented to the court, Ardrey provided the officer a Missouri identification card. The victim, who was not carrying any identification, initially identified herself as “Rose,” the same name used in the backpage.com advertisement. Ardrey admitted to the officer that the victim was the same girl whose picture had been shown on television and who had been reported missing.
Coventry Police Chief Bryan J. Volpe commented, “This case clearly indicates that this type of crime can affect any community at any time. If not for the quick thinking and response of one of our residents, the victim’s situation could have been much worse. The Coventry Police applaud the cooperative effort by all law enforcement agencies in this case and we are pleased with the sentence.”
West Greenwich Police Chief Richard Ramsay added, “The West Greenwich Police Department is very proud to have worked so well within this multi-agency investigation that helped to reunite a 17-year-old female with her family and to put a predator like Steven Ardrey behind bars in federal prison, where he belongs.”
Warwick Police Chief Colonel Stephen M. McCartney said, “The Warwick Police have always strongly supported multi-agency investigations. This is doubly so in such egregious cases as human trafficking of any sort. We are proud that our member of the task force was able to assist in bringing this predator to justice, as demonstrated in the sentence issued in this case. We will continue to support all efforts to protect the public from those who prey on the young or helpless."
The case was prosecuted by Assistant U.S. Attorney Adi Goldstein.
The matter was investigated by Homeland Security Investigations; West Greenwich, Coventry and Warwick, R.I., Police Departments; and the Medfield, Mass., Police Department, with the assistance of the Massachusetts State Police and the Boston Police Department.
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