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15 July 2014
Louisville Man Pleads Guilty to Producing Child PornographyRead the Press Release
LOUISVILLE, Ky. – A Louisville man pled guilty to violating federal child exploitation laws today, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Craig Ian Elliott, age 47, pled guilty to a single charge of producing child pornography. Senior United States District Court Judge Charles R. Simpson, III, accepted the guilty plea.
According to the written Plea Agreement filed in open court, on April 2, 2010, the defendant was living at a residence on Algonquin Parkway in Jefferson County, Kentucky, with his girlfriend. On that date, his girlfriend was at work, but her 17-year-old daughter was at home with Elliott after she finished school for the day. Elliott used his girlfriend’s cell phone - a Boostmobile Sanyo Mirro Model SCP 3810 - to take sexually explicit photos of the girl. The cell phone was manufactured outside the Commonwealth of Kentucky. The metadata from the images showed that the pictures were taken at approximately 4:08 P.M.
After Elliott took the photos of the girl, he used the cell phone to transmit the images, via the Internet, to his Yahoo! account. There is no evidence that he distributed the images to anyone else. Elliott faces a statutory mandatory minimum term of imprisonment of 15 years and a maximum sentence of 30 years. He faces at least five years of Supervised Release and could be placed on Supervised Release for the remainder of his life. Judge Simpson scheduled a sentencing hearing for October 21, 2014, at 2:30 p.m.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Louisville Metro Police Department Crimes Against Children Unit conducted the investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab.
Leader of Check Kiting Scheme Sentenced to More Than Five YearsRead the Press Release
Tampa, FL – U.S. District Judge Charlene Edwards Honeywell today sentenced Johnathan Bergren (41, Tampa) to five years and three months in federal prison for conspiracy to commit bank fraud. As part of his sentence, the Court also entered a money judgment in the amount of $309,581.75, which constitutes the proceeds of the offense.
Bergren pleaded guilty on March 27, 2014.
According to court documents, between September 2012 and December 2013, Bergren and others engaged in a conspiracy to defraud banks, primarily Bank of America and SunTrust. Bergren established shell companies and then opened or had others open more than 20 business checking accounts in those companies’ names. Bergren and others working with him deposited checks drawn on various accounts into other newly established accounts at other financial institutions. Bergren then withdrew funds prior to the checks clearing the banks. Each of the deposited checks was ultimately returned for insufficient funds. Despite this, Bergren had already transferred or withdrawn the funds immediately made available to the accounts under his control.
In August 2013, after being arrested and released on bond for his participation in this conspiracy, Bergren continued to commit this same check kiting scheme with other individuals he recruited. The scheme caused an additional $30,000 in losses to Bank of America.
Bergren, and co-conspirators acting at his direction, deposited approximately $577,155.16 in fraudulent checks, which were drawn on unfunded business accounts that he established. As a result, they were able to fraudulently obtain over $300,000 from at least three different federally insured financial institutions.
This case was investigated by the Tampa Police Department, Pinellas County Sheriff’s Office, and the United States Secret Service. It is being prosecuted by Assistant United States Attorney Mandy Riedel.
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Las Vegas, Nev. Attorney Sentenced to Prison for Laundering Client Fraud MoniesRead the Press Release
LAS VEGAS, Nev. – A Las Vegas attorney was sentenced to 366 days in prison today for assisting a client launder approximately $2.25 million that had been obtained fraudulently in an online investment scheme, announced the United States Attorney’s Office for the District of Nevada.
R. Christopher Reade, 43, of North Las Vegas, was sentenced by U.S. District Judge Kent J. Dawson, who allowed Reade to self-report to federal prison by Oct. 17, 2014. Reade pleaded guilty in January to one count of accessory after the fact to laundering of monetary instruments.
“Reade’s conduct was not a “one-off” act spawned by the unfortunate coupling of naïveté and necessity,” said First Assistant U.S. Attorney Steven W. Myhre. “It was a knowing, calculated, and sophisticated course and pattern of conduct motivated by greed and engaged in over time. Reade knew that his conduct was wrong and that it ran contrary to his professional obligations as an attorney and would hurt others.”Reade was a licensed attorney in Las Vegas and practiced business law. His client, Rick Young, owned and operated a Nevada corporation known as Global One Group, LLC, a web-based company which purported to train others how to trade in the foreign currency exchange market, or FOREX. Young advertised that he was an experienced and highly successful trader in the FOREX market, who for a fee would teach persons his winning trading strategies and techniques. Young solicited persons to become members of Global One which would allow them access to his web-based live training seminars. Young claimed that he had developed an automated trading program that traded according to his strategies simply by “flipping a switch.” Young enticed members into providing money for “loans” to Global One and told them that they would be able to earn high yield returns on their investments. In actuality, the automated trading program did not exist in the form that Young represented and Young was running an elaborate Ponzi scheme in which proceeds from the member loans were diverted to Young his own use. From about 2006 to 2008, Young derived approximately $16 million in proceeds from the scheme.
Beginning in February 2007, Reade represented Young and Global One in connection with business litigation and transactions. In March 2007, Young intended to use Global One loan monies to purchase a FOREX brokerage company named Trend. To disguise the source and ownership of the illegal proceeds, Young authorized Reade to create and control a holding corporation called Way FX Corp. In April 2007, Young transferred approximately $2.25 million from Global One accounts to the Way FX bank account controlled by Reade, and Reade signed an agreement to purchase Trend. On August 21, 2007, Reade received $75,000 from Global One for his services related to Way FX and the purchase of Trend.
From about May 2007 to August 2007, in connection with an investigation by the National Futures Association about the ownership and funding of Trend, Reade falsely told investigators that he was unaware who owned Global One or how Global One raised money, and that the funds used to purchase Trend came from his personal contributions and not from Global One. Reade knew that his statements were false and that Young had committed the offense of money laundering. Reade also knew that he had assisted Young in order to hinder or prevent the investigation of Young in connection with the money laundering.
In March 2011, Young was convicted by a federal jury in the District of Nevada of conspiracy, fraud and money laundering charges. In December 2011, he was sentenced to 25 years in prison and ordered to pay $13.3 million in restitution.
The case was investigated by the FBI and IRS Criminal Investigation, and prosecuted by First Assistant United States Attorney Steven W. Myhre and Assistant United States Attorney James E. Keller.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Laguna Pueblo Man Sentenced to Federal Prison for Assaulting his Intimate Partner by StrangulationRead the Press Release
ALBUQUERQUE – Brian Dyea, 28, was sentenced today to 24 months in prison followed by two years of supervised release for assaulting his intimate partner by strangulation. Dyea also was ordered to pay a $2,000.00 fine and to undergo domestic violence treatment.
The sentence was announced by U.S. Attorney Damon P. Martinez, DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of BIA’s Office of Justice Services, and Acting Chief Brian Carr of the Pueblo of Laguna Tribal Police Department.
Dyea, a member of the Pueblo of Laguna who resides in Mesita, N.M., was arrested on Jan 21, 2014, on a criminal complaint alleging that he assaulted his intimate partner, a Laguna Pueblo woman, by strangling and biting her. Dyea subsequently was indicted and charged with assaulting his intimate partner by strangulation on Jan. 12, 2014 in a location within the Pueblo of Laguna.
Dyea entered a guilty plea on March 24, 2014, and admitted assaulting the victim on Jan. 12, 2014, by biting her and strangling her, by placing his hands around her neck and impeding her normal breathing. Dyea acknowledged that the victim suffered contusions to her forehead and foot, three bite-marks to her left hand and forearm, a wrist sprain, and a head injury with the loss of consciousness as a result of the assault.
This case was investigated by the Laguna Agency of BIA’s Office of Justice Services and the Pueblo of Laguna Tribal Police Department, and is being prosecuted by Special Assistant U.S. Attorney David Adams.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Lackawanna County Woman Charged with Defrauding Credit UnionRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that an indictment was returned by a grand jury charging Farah Laurent, age 30, of Scranton, Pennsylvania, with obtaining approximately $26,000 by fraud from the Tobyhanna Federal Credit Union in May through July of 2010.
According to United States Attorney Peter Smith, Laurent allegedly made fictitious credit card payments to the Tobyhanna Federal Credit Union by using either closed or invalid at other banks.
Laurent faces a maximum sentence up to 30 years in prison and fines in the amount of $500,000.
The prosecution is the result of an investigation by the United States Secret Service. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 30 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Lacey Weld Sentenced to More Than 12 Years in Prison for Conspiracy to Manufacture MethamphetamineRead the Press Release
Manufacturing and Smoking Methamphetamine while Pregnant Results in Enhanced Sentence
KNOXVILLE, Tenn. - Lacey Weld, 27, of Dandridge, Tenn., was sentenced today to serve 151 months in prison followed by five years of supervised release by the Honorable Thomas Varlan, Chief U.S. District Judge. The sentence was the result of a guilty plea by Weld in November 2013 to a federal grand jury indictment charging her with conspiracy to manufacture methamphetamine (meth).
This case is unique because Weld used and manufactured meth while in her ninth month of pregnancy. Her baby was born severely drug-addicted and suffered from withdrawals for almost six weeks. Department of Children’s Services Case Manager Lynnie Vaughn testified that in the approximately 50 cases she has investigated involving drug-addicted babies, this case was by far the worst, with this baby suffering extreme harm.
Judge Varlan determined that the enhancement for creating a substantial risk of harm to a minor, which resulted in a six-offense level increase to Weld’s Guidelines range, was justified due to her using and manufacturing meth while pregnant. Video evidence from the investigation showed that Weld was in a meth lab for approximately 40 minutes, where she cooked and used meth. Tennessee Bureau of Investigation Special Agent Matt Thompson testified about the extremely hazardous conditions, including the toxic fumes and explosive environment, surrounding that meth lab.
“This nation has seen a tragic rise in the number of babies born addicted to drugs. Through this prosecution, the U.S. Attorney’s Office sends a message that, should a child, born or unborn, be exposed to a substantial risk of harm through the manufacture of methamphetamine, we will pursue any available enhancements at sentencing,” said U.S. Attorney William C. Killian.
The indictment and subsequent conviction of Weld was the result of an investigation conducted by Tennessee Bureau of Investigation, Fourth Judicial Drug Task Force, Dandridge Police Department, Jefferson County Sheriff’s Department, and Sevier County Sherriff’s Department. The United States was represented by Assistant U.S. Attorney Kelly Norris.
Klamath Falls Drug Dealer Sentenced to 10 Years in PrisonRead the Press Release
MEDFORD, OREGON— On Monday, July 14, 2014, Senior U.S. District Judge Owen M. Panner sentenced Earl Allen IV, 39, of Klamath Falls, Oregon, to ten years in federal prison, after he pleaded guilty to possession of methamphetamine with intent to distribute and being a felon in possession of a firearm. Allen will also be on five years of supervised release after he completes his prison term.
On June 30, 2013, a Rogue Area Drug Enforcement (RADE) detective received information that Allen and a female companion, both Klamath Falls fugitives, were staying in Grants Pass, and that Allen had methamphetamine for sale. RADE detectives checked various Grants Pass motels and eventually observed Allen standing outside the Comfort Inn. RADE detectives arrested Allen and found him holding $3,216 cash. The female arrived a short time later driving one of Allen’s vehicles and was also arrested.
Detectives obtained search warrants for Allen’s motel room and two vehicles. The motel room contained 95.8 grams of pure methamphetamine, digital scales, drug packaging materials, marijuana, and a stolen laptop computer. Allen’s Ford F150 pickup truck contained multiple sets of digital scales, drug notes, and drug packaging materials in the pickup bed, a 9 mm handgun behind the driver’s seat with a loaded magazine under the seat, and a loaded .22-caliber revolver also under the seat.
Allen is a multiple convicted felon with prior convictions for delivery of methamphetamine in 2007 and 2004, possession of methamphetamine in 2006, supplying contraband in 2000, and multiple misdemeanor convictions for assault, menacing, and robbery.
This case was investigated jointly by the Rogue Area Drug Enforcement Team, the Bureau of Alcohol, Tobacco, and Firearms, and the U.S. Drug Enforcement Administration, and was prosecuted by Assistant U.S. Attorney Douglas W. Fong.
Justice Department and the Pennsylvania Office of Attorney General Require Divestiture from Sinclair Broadcast Group in Order to Proceed with Its Acquisition of Perpetual Corp.Read the Press Release
The Department of Justice announced today that it will require Sinclair Broadcast Group and Perpetual Corp. to divest their interests in WHTM-TV, an ABC affiliate in Harrisburg, Pennsylvania, in order to proceed with Sinclair’s proposed $963 million acquisition of Perpetual. The department said that, without the required divestiture, prices for broadcast television spot advertising would likely increase in parts of central Pennsylvania.
The department’s Antitrust Division and the Pennsylvania Office of Attorney General filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“Perpetual’s WHTM-TV competes directly with WHP-TV and WLYH-TV, two stations owned or operated by Sinclair, in the sale of broadcast television spot advertising in parts of central Pennsylvania,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The rivalry between the stations has helped to constrain advertising rates, and without the divestiture, advertisers on stations in this area would likely have paid higher prices.”
The department’s complaint alleges that the proposed acquisition would lessen competition in broadcast television spot advertising in the Harrisburg-Lancaster-Lebanon-York, Pennsylvania, designated market area (DMA). According to the complaint, the merging stations are relatively close substitutes for many advertisers, with similar demographic profiles and competing independent local news operations. As a result of the acquisition, Sinclair would own or control three of the six broadcast television stations selling advertising in the area, and advertisers could be forced to accept price increases due to the loss of competition. To remedy this harm, the proposed settlement requires Sinclair and Perpetual to divest all assets primarily used in the operation of WHTM‑TV to Media General, an independent purchaser approved by the United States.
The department also analyzed the likelihood of competitive harm in Charleston, South Carolina, where Sinclair will acquire ABC affiliate WCIV-TV as part of the proposed acquisition. Cunningham Broadcasting, a company with partnership and operation agreements with Sinclair around the country, owns the Charleston FOX affiliate, WTAT-TV. Due to the close ties between Sinclair and Cunningham, the department’s competitive analysis treated the relationship between the ABC affiliate Sinclair is acquiring, WCIV-TV, and the Cunningham-owned WTAT-TV as akin to a merger of those stations. The department’s investigation and antitrust analysis of the Charleston market revealed that advertisers do not largely view the stations as close substitutes, and even a full merger would not likely result in a substantial lessening of competition.
Sinclair, a Maryland corporation with headquarters in Hunt Valley, Maryland, owns or operates more than 145 broadcast television stations nationwide. Sinclair’s WHP-TV is the CBS affiliate in the Harrisburg-Lancaster-Lebanon-York DMA. Additionally, Sinclair operates WLYH-TV, the CW affiliate for the area, under an existing agreement with Nexstar Broadcasting, which is not a party to the proposed settlement.
Perpetual, a Delaware corporation with its headquarters in Arlington, Virginia, owns and operates seven broadcast television stations in six markets throughout the United States. Perpetual’s WHTM‑TV is the ABC affiliate in the Harrisburg-Lancaster-Lebanon-York DMA.
Media General, a Virginia corporation with headquarters in Richmond, Virginia, owns or operates more than 28 broadcast television stations nationwide. Media General does not currently own or operate any broadcast television stations in the Harrisburg-Lancaster-Lebanon-York DMA.As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60‑day comment period to Scott A. Scheele, Chief, Telecommunications and Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530. At the conclusion of the 60‑day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.
Justice Department Releases Best Practices Guide to Reform HIV-Specific Criminal Laws to Align with Scientifically-Supported FactorsRead the Press Release
The Justice Department announced today that it has released a Best Practices Guide to Reform HIV-Specific Criminal Laws to Align with Scientifically-Supported Factors . This guide provides technical assistance regarding state laws that criminalize engaging in certain behaviors without disclosing known HIV-positive status. The guide will assist states to ensure that their policies reflect contemporary understanding of HIV transmission routes and associated benefits of treatment and do not place unnecessary burdens on individuals living with HIV/AIDS.
This guide is in follow-up to the department’s March 15, 2014, article published with the Centers for Disease Control and Prevention (CDC), Prevalence and Public Health Implications of State Laws that Criminalize Potential HIV Exposure in the United States, which examined HIV-specific criminal laws. Generally, these laws do not account for scientifically-supported level of risk by type of activities engaged in or risk reduction measures undertaken. As a result, many of these state laws criminalize behaviors that the CDC regards as posing either no risk or negligible risk for HIV transmission even in the absence of risk reduction measures.
“While initially well intentioned, these laws often run counter to current scientific evidence about routes of HIV transmission, and may run counter to our best public health practices for prevention and treatment of HIV,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The department is committed to using all of the tools available to address the stigma that acts as a barrier to effectively addressing this epidemic.”
The department’s efforts to provide guidance on HIV-specific criminal laws are part of its ongoing commitment to implementation of the National HIV/AID Strategy, released in 2010. Today’s guide furthers the expectation from the Office of National AIDS Policy that we tackle misconceptions, stigma and discrimination to break down barriers to care for those people living with HIV in response to the President’s Executive Order last year on the HIV Care Continuum Initiative. For more information on the National HIV/AIDS Strategy, visit the White House website .
For more information on the ADA and HIV, visit this website . Those interested in finding out more about obligations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website .
Hudson Man Sentenced for Fraud Conspiracy in Connection with Renovation of McCormack Federal BuildingRead the Press Release
Boston – A Hudson man was sentenced today for conspiring to defraud the government in connection with the renovation of the John W. McCormack Post Office and Courthouse in Boston.
Aluisio Dasilva, 67, was sentenced by U.S. District Court Judge George A. O’Toole, Jr., to one year of probation, including six months of home confinement, and ordered to pay $10,800 in restitution. In March 2014, Dasilva and his co-defendant, Wael Isreb, 55, of Wrentham, each pleaded guilty to conspiracy to commit mail fraud and false statements. Isreb is scheduled to be sentenced on Aug.7, 2014.
DaSilva was employed as a cement mason by Taunton Forms, a now-defunct concrete construction company based in Lakeville, Mass., that was owned and operated by Isreb. In 2006, the Government Services Administration (GSA) retained Suffolk Construction Company as the general contractor to renovate the McCormack Building. Suffolk Construction, in turn, retained Taunton Forms as a subcontractor to perform certain concrete work on that project. Suffolk Construction ultimately paid Taunton Forms in excess of $1 million for its work.
Federal law requires that contractors on federal projects over $2,000 pay workers a prevailing wage, and that they submit weekly reports certifying the wages they paid their employees. Beginning in December 2007, however, Isreb, DaSilva and others conspired to pay Taunton Forms workers less than the prevailing wage while certifying to Suffolk Construction, the GSA, and the Department of Labor (DOL) that Taunton Forms was, in fact, paying the prevailing wage.
As part of the conspiracy, the defendants agreed to report, falsely, to the Massachusetts Department of Unemployment Assistance (DUA) that DaSilva and other workers had been laid off. That permitted the workers to offset their lower wages with unemployment benefits while they worked on the McCormack Building project and other projects. The conspiracy also permitted Taunton Forms to avoid making fringe benefit payments to certain labor union benefit plans that it was required to pay pursuant to its applicable collective bargaining agreements. Taunton Forms also failed to withhold applicable payroll taxes.
United States Attorney Carmen M. Ortiz; Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office; Luis A. Hernandez, Special Agent in Charge of the U.S. General Services Administration, Office of Inspector General, Office of Investigations; Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Boston Regional Office; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston. The case is being prosecuted by Assistant United States Attorney Stephen E. Frank of Ortiz’s Economic Crimes Unit.
Homer Man Pleads Guilty to Stealing More Than $59,000 from EmployerRead the Press Release
SHREVEPORT, La. –A Homer man pleaded guilty to stealing more than $59,000 from his Claiborne Parish employer’s bank account, U.S. Attorney Stephanie A. Finley announced today.
John Bob Jr., 46, of Homer, La., pleaded guilty before U.S. District Judge Elizabeth E. Foote to one count of bank fraud and one count of aggravated identity theft. According to the evidence presented at the guilty plea, the defendant used his employer’s debit card and personal identification number to make approximately 200 withdrawals totaling $59,602 from May 2012 to July 2013 from banks across northwest Louisiana.
Bob faces a maximum penalty of 32 years in prison, five years of supervised release, and a $1 million fine. A sentencing date of November 13, 2014 was set.
The FBI and Claiborne Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Homer Man Pleads Guilty to Stealing More Than $59,000 from EmployerRead the Press Release
SHREVEPORT, La. –A Homer man pleaded guilty to stealing more than $59,000 from his Claiborne Parish employer’s bank account, U.S. Attorney Stephanie A. Finley announced today.
John Bob Jr., 46, of Homer, La., pleaded guilty before U.S. District Judge Elizabeth E. Foote to one count of bank fraud and one count of aggravated identity theft. According to the evidence presented at the guilty plea, the defendant used his employer’s debit card and personal identification number to make approximately 200 withdrawals totaling $59,602 from May 2012 to July 2013 from banks across northwest Louisiana.
Bob faces a maximum penalty of 32 years in prison, five years of supervised release, and a $1 million fine. A sentencing date of November 13, 2014 was set.
The FBI and Claiborne Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.Hartford Man Sentenced to 5 Years in Federal Prison for Role in Narcotics Trafficking RingRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ANTHONY HARRINGTON, also known as “Tone,” 29, of Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 60 months of imprisonment, followed by four years of supervised release, for his role in a narcotics trafficking ring.
This matter stems from a joint law enforcement investigation headed by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) into a narcotics trafficking operation headed by Luther Nance, also known as “Papers” and “Cash.” The investigation, which included numerous controlled purchases of narcotics and physical surveillance, revealed that Nance and his associates sold crack cocaine and heroin in several communities throughout Connecticut utilizing multiple bases of operation, including a house on Carroll Road in East Hartford, the Sheldon Oaks housing complex in Hartford and an apartment on Valley Street in Willimantic.
According to court documents and statements made in court, HARRINGTON obtained crack cocaine from other members of the conspiracy, supplied the drug to other dealers and also sold it to his own customers in the Hartford area and in Providence, R.I.
On June 27, 2013, a federal grand jury returned a 51-count superseding indictment charging HARRINGTON, Nance and 13 other individuals with narcotics conspiracy and related offenses.
HARRINGTON has been detained since his arrest on June 13, 2013. On March 27, 2014, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 28 grams or more of cocaine base (“crack cocaine”).
HARRINGTON’s criminal history includes multiple felony convictions in Connecticut and Rhode Island.
On March 7, 2014, Nance pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 280 grams or more of cocaine base, and one count of conspiracy to engage in money laundering. He is detained while awaiting sentencing.This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation Division, the U.S. Marshals Service, the Office of the Chief State’s Attorney, the State’s Attorney for the Judicial District of Hartford, and the Hartford, Willimantic, East Hartford, Enfield and Middletown Police Departments.
The case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
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(203) 821-3722 [email protected]Happy’s Pizza Franchise Owner and Nominee Owner Plead Guilty in Tax Fraud SchemeRead the Press Release
Two West Bloomfield, Michigan, residents pleaded guilty in the U.S. District Court for the Eastern District of Michigan today, announced the Justice Department and Internal Revenue Service (IRS).
Arkan Summa, an owner of numerous Happy’s Pizza franchises, pleaded guilty to corruptly endeavoring to obstruct or impede the due administration of the internal revenue laws. Tagrid Summa Bashi, Summa’s sister and a nominee owner, pleaded guilty to willfully delivering false documents to the IRS.
A multiple count indictment was unsealed July 16, 2013 alleging that from approximately June 2004 through April 2011, Summa executed a scheme in which he diverted gross receipts, underreported wages and caused the taxable income and payroll tax information of specific Happy’s Pizza franchises to be underreported to the IRS.
According to the information filed in court, in 2009, Bashi caused false payroll information forms to be submitted to the IRS. Documents filed with the court indicate Summa’s obstruction of the IRS resulted in a tax loss of approximately $199,847, and Bashi caused approximately $55,000 in wages to be underreported to the IRS through her false submission.
For the obstruction charge, Summa faces a statutory maximum sentence of three years in prison and a fine of up to $250,000. Bashi faces a statutory maximum sentence of 12 months in prison and a fine of up to $100,000. Sentencing for both defendants is scheduled for Oct. 23.
This case was investigated by IRS – Criminal Investigation, the Drug Enforcement Administration and the FBI. It is being prosecuted by Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Justice Department’s Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found at the division website .
Hamburg Man Sentenced for Impersonating a Federal OfficerRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Jack DeMeo, 52, of Hamburg, N.Y., who was convicted of impersonation of a federal officer, was sentenced to one year probation by Chief U.S. District Judge William M. Skretny.
Assistant U.S. MaryEllen Kresse, who handled the case, stated that in March 2009, the defendant, owner of Southtown Sports, Inc., pretended to be a Revenue Officer with the Internal Revenue Service. In doing so, DeMeo sent false levy releases to several companies with which Southtown Sports did business.
In March 2009, the IRS began a collection action against the defendant and his company. During the course of the case, the assigned Revenue Officer issued levies to companies that owed money to Southtown Sports and instructed them to send all payments directly to the IRS. The Revenue Officer later issued levy releases as to several of the companies.
Thereafter, DeMeo took one of the legitimate levy releases and accompanying letter from the Revenue Officer and altered the documents by removing any reference to the company the paperwork was originally sent. The defendant then faxed the fraudulent levy release and letter to several companies that previously received levies. The defendant told the companies to forward all monies owed to Southtown Sports directly rather than the IRS.
The sentencing is the culmination of an investigation by Internal Revenue Service Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.Greenville Man Receives 97 Months Imprisonment for 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 Christopher E. Miller, age 26, of Greenville, South Carolina, was sentenced today in federal court in Anderson, South Carolina, for possession of child pornography, a violation of 18 U.S.C. ' 2252A. Senior United States District G. Ross Anderson, Jr., sentenced Miller to 97 months imprisonment, five years of supervised release, and ordered him to pay a $100 special assessment fee.
Evidence presented at the change of plea hearing established that agents received information that someone located in Greenville, South Carolina, was using peer-to-peer software to download child pornography via the internet. Investigative efforts allowed law enforcement to determine the IP address that was utilized to download the child pornography. The Federal Bureau of Investigation then traced the IP address to Miller’s home.
Agents executed a search warrant at Miller’s home in Greenville. They seized computers from the home and conducted a forensic examination. Agents discovered hundreds of still images and videos of minors engaging in sexually explicit conduct.
The case was investigated by agents of the Federal Bureau of Investigation. 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.Garfield Heights Man Faces Heroin and Firearms ChargesRead the Press Release
An eight-count indictment was filed today charging a Garfield Heights man with distributing heroin and illegally possessing a firearm, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Deion Thompson, 27, also known as Sino Grams, was indicted on six counts of distribution of heroin, one count of possession of heroin with intent to distribute and one count of being a felon in possession of a firearm.
“This defendant sold heroin on our streets and had a gun despite being prohibited from having one,” Dettelbach said. “We will continue to work to reduce the supply of drugs in our neighborhoods while working with other partners to reduce demand.”
Thompson made multiple sales of heroin in June and July. On July 7, he possessed 66 grams of heroin and a 9 mm Browning pistol, despite prior convictions in Cuyahoga County Common Pleas Court, including drug trafficking offenses with a schoolyard specification, having weapons under disability and failure to comply with a police order, according to the indictment.
This case is being handled by Assistant U.S. Attorney Henry F. DeBaggis following an investigation by the Southeast Law Enforcement Task Force, a collaboration of police departments including Bedford, Bedford Heights, Garfield Heights, Maple Heights, Solon, Oakwood and Walton Hills.
If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record , the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt
Former Wilmington Trust Lender Indicted on Bank Fraud and Illegally Benefiting in Customer TransactionsRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Peter W. Hayes, age 48 of Newark, Delaware, was charged on July 15, 2014, in a seven-count Indictment with the following offenses:
- Counts 1 and 2 charge the defendant with Fraudulently Benefiting in a Loan Transaction, in violation of Title 18, United States Code, Sections 1005 and 2. The maximum penalties for each of Counts 1 and 2 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100 special assessment; and mandatory restitution.
- Counts 3 and 4 charge the defendant with Soliciting or Accepting for His Own Benefit Anything of Value in Connection With the Transaction and the Business of a Financial Institution, in violation of Title 18, United States Code, Sections 215(a)(2) and 2. The maximum penalties for each of Counts 3 and 4 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
- Counts 5 through 7 charge the defendant with Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 2. The maximum penalties for each of Counts 5-7 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
The Indictment alleges that Mr. Hayes, a former Relationship Manager (“RM”), or lender, in the Delaware Commercial Real Estate (“CRE”) Division at the Wilmington Trust Co. (“WTC”) engaged in several fraudulent transactions with one of his customers, identified in the Indictment as “Customer A.” According to the Indictment, Hayes engaged in the following conduct in his dealings with Customer A: (1) Hayes accepted and solicited from Customer A investment opportunities in Customer A’s real estate developments, in which Hayes received monthly rental income sufficient to pay his mortgage plus expenses on investment properties purchased from Customer A;
(2) Hayes later solicited and accepted a favorable loan from Customer A to pay off Hayes’ investment losses;
(3) Hayes knowingly causing WTC loan funds to be disbursed to Customer A for purposes that were not authorized by WTC’s loan agreements with Customer A, and submitted false information in support of draw requests to provide funding to Customer A, including to cover overdrafts in Customer A’s operating bank account; and
(4) Hayes caused WTC to lend funds without loan committee approval to an investment company founded by Customer A’s President, so that the investment company could purchase model homes that would be leased back to Customer A or others.
“The indictment alleges that the defendant, a former Wilmington Trust lender, engaged in multiple fraudulent schemes to benefit one of Wilmington Trust’s largest clients, as well as himself,” stated United States Attorney Oberly. “The client ultimately suffered millions of dollars in losses, which were shouldered by the Bank and its shareholders. Our office will continue to vigorously investigate alleged fraudulent schemes, such as those charged in today’s Indictment, related to the downfall of Wilmington Trust.”Christy Romero, Special Inspector General for TARP (SIGTARP) said, “Hayes stands charged with bank fraud, bribery, and fraudulently benefitting from loan transactions for a multitude of various offenses. This type of fraud and self-dealing is unacceptable, and SIGTARP and our law enforcement partners will pursue any offenders whose conduct jeopardizes taxpayers’ TARP investments to hold perpetrators accountable for their crimes.”
The case was investigated by the Federal Bureau of Investigation and the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz, Lesley F. Wolf, and Ilana H. Eisenstein.
Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.
Former Virginia-Based Attorney Convicted of Multi-Million Dollar Fraud SchemesRead the Press Release
ALEXANDRIA, Va. – Michael Eisner, 32, of Mastic, New York, entered a guilty plea today in connection with several different fraud schemes that Eisner conducted while he was a practicing attorney and licensed member of the Virginia State Bar.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee.
Eisner was indicted on May 15, 2014 by a federal grand jury, and he pleaded guilty to wire fraud and conspiracy to commit wire fraud. Eisner faces a maximum penalty of twenty years in prison when he is sentenced on October 31, 2014.
In a statement of facts filed with the plea agreement, Eisner admitted to defrauding financial institutions and his own clients of approximately $4.8 million in intended losses. When defrauding financial institutions, Eisner took advantage of the lag time between when a victim financial institution realized that one of Eisner’s checks or credit card payments was fraudulent and when Eisner could obtain real money from that victim. For example, Eisner and co-conspirator Mark Head, who pleaded guilty on Jan. 29, 2014, opened an account at Fidelity Cash Management in K.C.’s name, but without K.C.’s knowledge or permission. Head and Eisner then used that account to issue several large checks to Eisner’s law firm when, in reality, K.C.’s brokerage account never had more than $20 in it. Eisner deposited the checks at various Bank of America branches in northern Virginia and Washington, D.C., and he quickly withdrew approximately $350,000 before Bank of America realized that the checks were fraudulent.
In another scheme, Eisner obtained automobile loans from financial institutions, which he purportedly paid off using phony checks. Before the financial institutions realized the checks were phony, they released the automobile titles to Eisner. And before the financial institutions could reclaim title, Eisner worked to sell the automobiles to CarMax so that he could keep the proceeds despite not having valid title to the car.
In addition to these schemes to defraud financial institutions, Eisner admitted to defrauding his own clients of money he was supposed to have kept in trust. For example, around October 2009, A.T. hired Eisner to represent him in a bankruptcy-related legal matter. Eisner was supposed to have kept more than $300,000 of A.T.’s money in a trust account in connection with that bankruptcy. In reality, Eisner used A.T.’s funds for his own personal benefit.
In or about January 2013, Eisner signed an affidavit consenting to the revocation of his license to practice law in the Commonwealth of Virginia. In that affidavit, Eisner acknowledged that he never deposited client funds into a trust account and, in fact, did not have a trust account during the time he conducted this scheme.
This case was investigated by the FBI’s Washington Field Office. Assistant U.S. Attorney Chad Golder is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-167.
Former Miami-Dade Correctional Officer and Co-Defendants Sentenced in Stolen Identity Tax Refund SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, and Ronald J. Verrochio, Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division, announce that Anthony A. Pace, Jr., 29, Brandon A. Terry, 29, Derel L. Henry, 39, and Rosa Johnson, 26, all of Miami, were sentenced today before U.S. District Judge K. Michael Moore. Pace was sentenced to 81 months in prison, to be followed by three years of supervised release. Terry was sentenced to 60 months in prison, to be followed by three years of supervised release, and was ordered to pay $19,674 in restitution. Henry was sentenced to 40 months in prison, to be followed by three years of supervised release, and was ordered to pay $24,489 in restitution. Johnson was sentenced to one year and a day in prison, to be followed by three years of supervised release. Pace and Johnson were ordered to pay joint restitution of $62,683.
Each of the defendants previously pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286. Pace also pled guilty to one count of theft of government property, in violation of Title 18, United States Code, Section 641, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Terry and Henry also pled guilty to one count of possession of fifteen or more access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Johnson also pled guilty to one count of theft of government property, in violation of Title 18, United States Code, Section 641.
According to court documents, Pace was employed as a correctional officer with the Miami-Dade Corrections and Rehabilitation Department. From August 2012 to April 23, 2013, Pace, with the assistance of Johnson, filed 176 false and fraudulent tax returns using multiple stolen identities of former and current Miami-Dade County prisoners, among other stolen identities. A number of the tax returns list defendant Johnson as the preparer of the tax returns. The tax returns directed the IRS to deposit the tax refunds into accounts controlled by defendants Pace and Johnson at TD Bank and into an account controlled by Johnson at Bank of America.
Court documents also state that from August 2012 to April 23, 2013, defendant Henry filed 48 false and fraudulent tax returns using multiple stolen identities. During this time, defendant Terry filed 38 fraudulent returns. On April 23, 2013 search warrants were executed on both Henry and Terry’s apartments based, in part, on IP data demonstrating that multiple false tax returns had been filed from their apartments. A search of a computer found in Henry’s apartment revealed multiple .JPEGs which contained names, dates of birth and social security numbers of 243 individuals. In Terry’s apartment, agents saw a spreadsheet open on a computer screen, which spreadsheet, as well as other loose papers found in the apartment, contained personal identity information including names, dates of birth and social security numbers of hundreds of victims, at least some of which had been used to file false and fraudulent tax returns.
According to court documents, both Henry and Terry gave statements at the time of the searches where they admitted that they had been filing false and fraudulent tax returns using stolen identities. Henry admitted to obtaining the identities from his neighbor and co-defendant, Terry, who he claimed had taught him how to file false and fraudulent tax returns. Henry admitted that he had directed the IRS to put the tax refunds associated with these returns on debit cards that he had directed to be delivered to his apartment. Henry used the debit cards to obtain illicit tax proceeds through ATM withdrawals. Terry admitted that he had directed IRS to deposit the illicit tax refunds associated with these returns onto debit cards and into bank accounts provided to him by co-defendant Pace.
Mr. Ferrer commended the investigative efforts of IRS-CI, FBI, USSS and USPIS. The case is being prosecuted by Assistant U.S. Attorney Peter A. Forand.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Hughestown Borough Police Officer Pleads Guilty to Drug Trafficking OffenseRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Robert F. Evans, Jr., age 38, of Moosic, Pennsylvania, pleaded guilty to a one-count Criminal Information charging that he distributed oxycodone on numerous occasions between August 2012 and July 29, 2013. At the time of the offense, Evans was employed as a police officer with the Hughestown Borough Police Department.
At the guilty plea hearing, United States District Court Judge Malachy E. Mannion accepted Evans’ guilty plea after Evans acknowledged distributing approximately 750 oxycodone pills during the scheme; possessing a firearm in connection with the activity; and abusing his position of trust as a police officer which significantly facilitated and concealed the offense. Judge Mannion ordered that a presentence investigation report be compiled in advance of the sentencing.
United States Attorney Peter J. Smith stated that the charge is the result of an investigation conducted by the Federal Bureau of Investigation and the Pennsylvania State Police. Prosecution is assigned to Assistant United States Attorney John Gurganus.
A sentence following a guilty plea is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines. In this particular case, the maximum penalty under the federal statute is twenty years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Former Employee of Touchstone Medical Imaging, LLC Pleads Guilty to Embezzling More Than $1.2 MillionRead the Press Release
Defendant Purchased Expensive Automobiles, Furs and Other Luxury Items
NASHVILLE, Tenn. - July 15, 2014- Michelle Nixon, 48, of Chicago, Illinois, formerly of Nashville, pleaded guilty today to a scheme to defraud her former employer of more than $1.2 million, announced David Rivera, U. S. Attorney for the Middle District of Tennessee. Nixon pleaded guilty to two counts of wire fraud in a hearing before U.S. District Court Judge Aleta A. Trauger.
During the plea hearing, Nixon admitted that, from June 2009 until August 2013, she embezzled more than $1.2 million from Touchstone Medical Imaging LLC, a provider of medical imaging services based in Brentwood, Tennessee, where she served as the Regional Controller. Nixon admitted generating fraudulent checks totaling more than $1,178,000 that were made payable to a company that she owned, despite lacking any permission or authority to do so and despite the fact that her company provided no goods or services to Touchstone. Nixon also admitted generating additional fraudulent checks that were made payable to herself and to taking steps to conceal her fraud, including making false entries in the corporate ledger. Nixon used funds derived from the fraudulent checks to purchase automobiles, jewelry, luxury items, and other goods.
On February 14, 2014, agents with the Federal Bureau of Investigation seized various items from Nixon’s residence in Nashville that had been purchased with proceeds from the fraud. Among the items seized were a Mercedes Benz sedan, a Range Rover sport utility vehicle, jewelry, fur coats, and various luxury items sold by Tiffany & Co., Louis Vuitton, Gucci, Prada, Cartier, Jimmy Choo, Versace, and others.
Nixon is presently scheduled to be sentenced by Judge Trauger on October 16, 2014. She faces up to 20 years in prison for each count of wire fraud, and has also agreed to pay restitution to Touchstone in the amount of $1,283,269.51 and to forfeit the proceeds of her crime to the United States.
The case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney William F. Abely.
Former City Clerk Sentenced to Twenty-One Months' Imprisonment for Defrauding the City of MasonvilleRead the Press Release
A woman, formerly the city clerk for Masonville, Iowa, who defrauded the city of more than $80,000, was sentenced on July 14, 2014, in federal court in Cedar Rapids.
Christine King, 42, from Strawberry Point, Iowa, received the prison term after a May 5, 2014, guilty plea to one count of mail fraud.
In a plea agreement, King admitted that, from July 2002 through October 2011, while working as the city clerk for the city of Masonville, she routinely issued herself fraudulent payroll and expense reimbursement checks. King further admitted she included fraudulently inflated bank account balances for the city’s bank accounts on reports King provided to the city council and to the Auditor for the State of Iowa in order to prevent anyone from discovering her fraud. At sentencing, the court determined King had defrauded Masonville of $81,524.24. King also agreed she was responsible for an $11,070.57 bill from the Iowa State Auditor to Masonville for an audit of Masonville after King’s fraud was discovered.
King was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. King was sentenced to twenty-one months’ imprisonment. A special assessment of $100 was imposed and she was ordered to make $82,594.81 in restitution to Masonville and $10,000 in restitution to an insurance company. She must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
King was released on conditions previously set and is to surrender to the United States Marshal on August 4, 2014.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/. The case file number is 14-CR-2009.
Father and Son Pizza Store Owners Plead Guilty to Tax FraudRead the Press Release
Thair Alwan and his son Saill Fadhil, owners and operators of Raleigh, North Carolina, area pizza stores, pleaded guilty today to willfully filing false tax returns in the U.S. Court for the Eastern District of North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today.
According to court documents and statements made in court, Alwan, of Garner, North Carolina, and Fadhil, of Raleigh, own and operate a number of pizza stores in and around Raleigh called I Love NY Pizza. During the tax years 2008 and 2009, Alwan and Fadhil willfully skimmed almost all of the company’s cash receipts from their various stores and filed false federal income tax returns which failed to report the flow-through income, resulting in substantial tax underpayments. The skimmed receipts – estimated at $1.34 million – were used for personal expenditures or deposited into their personal bank accounts. When making cash deposits, the defendants structured the transactions under $10,000 and avoided the filing of Currency Transaction Reports.
According to court documents and statements made in court, I Love NY Pizza had two stores locations in Raleigh and one store location in Knightdale by 2008, and in 2009 another location in Apex was added. Fadhil eventually assumed management responsibility for a location after he graduated from college. Although employees stated that the business was at least 40 percent cash sales, cash deposits into the corporate bank account, as a percentage of total deposits, were 1.3 percent in 2008 and 2.3 percent in 2009. Between 2007 and 2010, Alwan made or caused 73 currency deposits into his personal accounts. Of the 73 deposits, 50 were at least $9,000, and the majority of these were in the amount of $9,980. None of the deposits were more than $10,000.
Alwan and Fadhil each face a statutory maximum sentence of three years in prison, one year of supervised release and a maximum fine of $250,000 per count at their sentencings, which have not yet been scheduled. Alwan and Fadhil have also agreed to pay restitution to the IRS.
The case was investigated by special agents from IRS-Criminal Investigation and prosecuted by Trial Attorney Todd Ellinwood of the Justice Department's Tax Division and Assistant U.S. Attorney Adam Hulbig of the Eastern District of North Carolina.
Additional information about the Tax Division and its enforcement efforts may be found a t the division website .
Essex County, N.J., Tax Preparer Admits to Tax Fraud That Caused More Than $99,000 LossRead the Press Release
NEWARK, N.J. - A Bloomfield, New Jersey, woman who operated a tax return preparation business admitted today that she caused at least 37 fraudulent income tax returns to be filed with the IRS, causing a total tax loss of $99,864 to the United States, U.S. Attorney Paul Fishman announced.
Daidry Montanez, 41, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to four counts of aiding and assisting in the filing of false federal income tax returns for tax years 2009, 2010, 2011 and 2012.
According to the information and statements made in court:
Montanez owned and operated a tax preparation business called DM Multiservices, which she ran from a storefront in Newark. On behalf of her clients, she prepared false and fraudulent individual income tax returns that contained either falsely claimed or fabricated deductions, including fictional business expenses, such as rent or lease of other business property, supplies and travel. Also included within the tax returns were purported deductions for home mortgage interest and points, state or local income tax, and unreimbursed employee expenses. Montanez used the fraudulent deductions to substantially reduce her clients’ taxable income on their individual federal income tax returns, which resulted in her clients receiving tax returns that were larger than they were due.
Montanez falsified clients’ 2009, 2010, 2011 and 2012 individual federal income tax returns. She then caused these false and fraudulent individual federal income tax returns to be filed with the IRS, resulting in a total tax loss of more than $99,864 for 37 clients.
Each of the four tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing before U.S. District Judge Faith Hochberg is scheduled for Nov. 6, 2014.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, the inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates and special agents of the U.S. States Secret Service, under the direction of Special Agent in Charge James Mottola, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit.
14-250
Defense counsel: Arlindo B. Araujo Esq., Newark
Montanez, Daidry Information
Erie Man Charged with Illegally Possessing A Firearm and AmmunitionRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that James Presley, a 43-year-old Erie, Pennsylvania resident was indicted by a federal grand jury today for unlawfully possessing a firearm and ammunition as a convicted felon in Luzerne County on May 15, 2014.
According to United States Attorney Peter Smith, the grand jury alleges that James Presley unlawful possessed a Hi Point 9mm firearm. The indictment alleges that at the time he possessed the firearm and ammunition Presley was a convicted felon.
The charge stems from an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Pennsylvania State Police.
If the defendant is convicted of the charge, he faces up to 10 years in prison and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Eleven Defendants Charged in International Conspiracy to Smuggle Chemicals and Money LaunderingRead the Press Release
TULSA, Okla. — United States Attorney Danny C. Williams Sr. announced today the unsealing of a four count superseding indictment charging 11 defendants with conspiracy to defraud the United States and smuggle chemicals from China, substantive smuggling charges, and a money laundering conspiracy. A sealed superseding indictment was filed on June 9, 2014.
According to the superseding indictment, beginning in April of 2011, the defendants conspired to defraud the United States through deceit and dishonest means to smuggle chemicals with fraudulent documents and to sell and transport the chemicals after the chemicals had been smuggled into the United States.
The conspirators ordered chemicals from China and created fraudulent invoices and air waybills used to smuggle and transport the chemicals to residences, businesses, and other locations in Oklahoma, Nevada, Louisiana, California, and New Jersey.
Today, the Tulsa Offices of the United States Immigration Customs Enforcement Homeland Security Investigations, the Internal Revenue Service Criminal Investigations and the Tulsa County Sheriff’s Office coordinated a nationwide takedown with arrests and search warrants in the following locations:
- Tulsa: 2 arrest warrants
- Baton Rouge: 3 search warrants and 2 arrest warrants
- Las Cruces: 1 arrest warrant
- Las Vegas: 1 arrest warrant
- New Orleans: 1 arrest warrant
- Huntington Beach, CA: 1 arrest warrant
- Santa Ana, CA: 1 arrest warrant
- Houston: 1 seizure warrant
The following defendants have been arrested:
- Ban Lam and Huong Thi Dao, in Tulsa, Oklahoma
- Tim Minh Tran and Ariel Dunn, in Baton Rouge, Louisiana
- Denis Langevin, in Las Cruces, New Mexico
- Jason Eric Johnson, in Las Vegas, Nevada
- Liem Thanh Vu, in New Orleans, Louisiana
- Minh Thang Pham, in Huntington Beach, California
- Duc Huy Vu, in Santa Ana, California
Assistant United States Attorneys Janet Reincke, Catherine Depew, and Gary L. Davis II, are prosecuting the case on behalf of the United States.
An indictment is one method of charging a defendant with alleged violations of Federal Law, which must be proven in a court of law beyond a reasonable doubt to overcome a defendants’ presumption of innocence.
U.S. v. Tran et al.
Detroit Man Pleads Guilty to Role in Huntington Heroin RingRead the Press Release
HUNTINGTON, W.Va. – A Detroit man who participated in a conspiracy to distribute heroin in Huntington in 2013 pleaded guilty today to a federal drug charge, announced U.S. Attorney Booth Goodwin. Steven Edward Lewis, also known as “Rico,” 27, pleaded guilty before Chief United States District Judge Robert C. Chambers to conspiracy to distribute 100 grams or more of heroin.
Beginning in the summer of 2013, Lewis participated in a conspiracy with Christopher Lamarr-Shawn Harris, Denzel Lamar Bunkley, Jakaiser Wesley Jackson, Brandon S. Keaton and others, to distribute heroin primarily in West Huntington. As part of his guilty plea, Lewis admitted he was recruited by Harris to travel from Detroit to Huntington to assist in heroin distributions. Lewis also admitted to distributing heroin in West Huntington, transporting heroin between various locations, and transporting cash proceeds from heroin distributions from Huntington to Detroit.
On December 31, 2013, officers with the Huntington Police Department’s Special Investigations Unit executed a search warrant at an apartment located at 1416 Jefferson Avenue in West Huntington. Officers seized approximately 413 grams of heroin and $12,349 in cash during the search. Officers also arrested Lewis, Harris and Bunkley, who were located inside the apartment.
Harris, Bunkley and Jackson, all of Detroit, previously pleaded guilty to their roles in the conspiracy and will be sentenced in October 2014. Keaton, of Huntington, was sentenced yesterday to 15 months in federal prison for his role.
Lewis faces five to 40 years in federal prison when he is sentenced on October 14, 2014.
The Huntington Police Department Special Investigations Unit, the West Virginia State Police, the United States Drug Enforcement Administration, and the United States Marshals Service all participated in the investigation. Assistant United States Attorney Joseph F. Adams is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of heroin and prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiates, including heroin, in communities across the Southern District.
Defendants in Prostitution Ring Sentenced in Federal CourtRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that four defendants were sentenced in Macon today by the Honorable Marc T. Treadwell, United States District Court Judge, in connection with the operation of a place of prostitution and money laundering activities. The charges against the four defendants, all Korean nationals, stemmed from the operation of the Sedona Tanning Salon, formerly known as the Soft Hands Massage Parlor, located at 1922 Riverside Drive, Macon, Georgia, from August 2008 to March, 2012.
The owner of the business and admitted leader of the operation, Hyeon Joo Chae, age 45, was sentenced to three years in federal prison for conspiracy to promote prostitution and money laundering offences. In addition, she forfeited her interest in a condominium in Buckhead (Atlanta) Georgia as well as a BMW X5 automobile and $4000 in cash. It should be noted that there is no parole in the federal penal system.Also sentenced for conspiracy to promote prostitution was Kye Wol Dyreson, age 73, who at various times served as the manager of the facility in the absence of Ms. Chae. Ms. Dyreson received three years probation for her role in the scheme.
The two remaining defendants, who cooperated with the prosecuting authorities in this case, each were sentenced to probation for the offense of misprision of a felony. Ki Un Jordan, age 49, was given three years probation and Jin Noh was sentenced to one year of probation for their activities in connection with the prostitution business.
Ms. Chae, the owner of the business, admitted changing the name of the business and putting its ownership into a “shell” corporation controlled by her when she became concerned that it had drawn the interest of law enforcement authorities. She also maintained and used various bank accounts in the name of herself, the business, and the corporation to launder, or conceal, the illegal nature of the income it was generating. Ms. Chae also admitted that, though the establishment purported to be a massage and tanning parlor, it operated solely as a place of prostitution, having only one unused tanning bed and no personnel qualified to perform legitimate massage services. Credit cards were accepted for payment, supplying the interstate nexus necessary for federal prosecution. Virtually all of the women employed by the business were Korean nationals. Ms. Chae had twice previously pled guilty to maintaining a place of prostitution in the State Court of Bibb County, Georgia.
The case was the result of a joint investigation conducted by the Macon/Bibb County Sheriff’s Department, the Federal Bureau of Investigation, the United States Internal Revenue Service-Criminal Investigation, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
“Among the priority programs of the United States Department of Justice are the prevention and prosecution of human trafficking and the protection of the most vulnerable in our society. This is one of several cases of this nature in which my office has been involved over the past months and it is an excellent example of the results that can be obtained from the outstanding cooperation by local and federal authorities such as occurred here,” said United States Attorney Michael J. Moore.J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: "Establishing and maintaining a false business front to allow for various criminal activities is something that could, if left unaddressed by law enforcement, lead to more established and organized criminal activities within our community to include that of human trafficking. The FBI will continue to work with its many law enforcement partners as we identify, investigate, and present for prosecution such individuals who are engaged in this type of criminal activity and are doing so in such a brazen fashion".
“This case is a perfect example of federal law enforcement agencies coming together to put a stop to criminal activity in Georgia communities,” said Ryan Spradlin, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Atlanta. “The U.S. Attorney’s Office has moved aggressively to prosecute prostitution activity in the Middle District of Georgia, and HSI special agents will continue to support these investigations wherever they might occur with the hopes of identifying victims of exploitation.”
“IRS Criminal Investigation is committed to addressing fraud at every level and is proud to have worked with our law enforcement partners to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice,” stated Special Agent in Charge, Veronica F. Hyman-Pillot. “The sentence today is a vital element in maintaining public confidence that the individuals and others who commit similar crimes will be held accountable.”
“I am proud to have been involved with these fine officers and the United States Attorney’s Office in bringing these defendants to justice. I believe this sends the message to all of the other houses of prostitution in this area that we will not tolerate the ongoing exploitation of disadvantaged people for the profit of a few,” said Rebecca Grist, Bibb County Solicitor-General.
Bibb County Sheriff David Davis said, “This case shows the wide geographic reach of these type offenses. Partnerships with federal authorities help our local agencies to make much more effective arrests and prosecutions.”
This case was prosecuted by former Assistant United States Attorney Verda Colvin and Criminal Division Chief Michael T. Solis of the United States Attorney’s Office.
Questions regarding this matter should be directed to Karen Moore of the United States Attorney’s Office for the Middle District of Georgia (478/621-2606; [email protected]).Corporation Owner/CEO Charged with Federal Income Tax FraudRead the Press Release
HOUSTON – Robert Earl Carter has been arrested following the return of a four-count indictment alleging false statement on his personal tax returns, announced United States Attorney Kenneth Magidson.
The indictment was returned under seal July 9, 2014, and unsealed today upon Carter’s arrest. He is expected to make his initial appearance before U.S. Magistrate Judge Stephen Wm. Smith at 2:00 p.m. today.
The indictment charges Carter, owner/CEO of Enterprise Advisory Services Inc., with willfully making materially false statements in his 2007, 2008, 2009 and 2010 personal federal income tax returns. According to the indictment, he allegedly under-reported the total income he had earned in each of those four years.
If convicted, Carter faces up to three years in federal prison and/or a $100,000 fine on each count.
The indictment was the result of an investigation conducted by Internal Revenue Service – Criminal Investigation and NASA - Office of Inspector General. Assistant U.S. Attorney Daniel C. Rodriguez is prosecuting.
An indictment is a formal accusation of criminal conduct, not evidence.
The defendant is presumed innocent unless and until convicted through due process of law.Co-conspirators Who Ran Store in Johnstown Arrested for Tax Evasion and Conspiracy to Defraud the IRSRead the Press Release
DENVER –Alan Timothy Hershey, age 49, of Gilcrest, Colorado, and Renee F. Molinar, age 46, of Johnstown, Colorado, were arrested yesterday without incident for tax evasion and conspiracy to defraud the Internal Revenue Service, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Hershey and Molinar appeared in court for their initial appearance before U.S. Magistrate Judge Boyd N. Boland yesterday afternoon, where they were advised of their rights and the charges pending against them. They were indicted by a federal grand jury in Denver on July 3, 2014. The indictment remained sealed pending their arrests.
According to the facts contained in the Indictment, from March 2001 through April 2012, Alan Timothy Hershey and Renee Molinar, conspired together to defraud the Internal Revenue Service. Johnstown Liquor is a retail liquor store located in Johnstown, Colorado. In March of 2001 Hershey transferred the store into Molinar’s name. They concealed from the IRS the fact that Molinar, who for much of the period of the conspiracy lived with Hershey, was the owner of Johnstown Liquor in name only, and that Hershey continued to control the operation of the business as its true owner.Hershey directed Molinar and others as to how to operate the business, usually by speaking to them at his home or by speaking to them by phone during business hours. Hershey dealt as much as possible in cash, and minimized his own use of bank accounts. Molinar opened bank accounts in the name of Johnstown Liquor over which she and individuals other than Hershey had signature authority. She also obtained a liquor license to operate Johnstown Liquor in her name.
They used a point of sale record-keeping system which was connected to the store’s cash registers and accurately recorded the business’s cash, check, and credit card receipts. It also maintained an accurate record of the items sold, the cost of each item sold, and the price for which it was sold. An unindicted co-conspirator, typically reconciled the sales receipts to the daily point of sale close-out reports, then placed the cash and checks in a safe in the store each night. At Hershey’s direction, Molinar then removed most of the cash receipts before preparing the deposit slips and causing the bank deposits to be made. She gave that cash to Hershey. To conceal the existence of the cash receipts that had been removed, they used a second set of books.
They also used the check-cashing business operated by Johnstown Liquor to conceal the true amount of the business’s cash receipts. Hershey filed no federal income tax returns for the entire period of the conspiracy and made no payments of income taxes to the IRS. Molinar sent payments to the IRS for each tax year from 2001 through 2010, but filed no returns with those payments to explain the amounts she sent. The amounts she paid were roughly consistent with what she may have earned as an employee at Johnstown Liquor, but not consistent with her income as sole proprietor of the business. In 2008, after she had been confronted by an IRS revenue agent about her failure to file federal income tax returns, she filed returns for 2005 and 2006. On these, she held herself out as the true owner of Johnstown Liquor and substantially understated the gross receipts of the business.
Johnstown Liquor was also required to withhold employment taxes from each employee’s wages and submit those withholdings, along with an Employer’s Quarterly Federal Tax Return (Form 941), to the IRS along with an annual Employer’s Annual Federal Unemployment Tax Return (Form 940). Molinar paid certain employees in cash at the direction of Hershey. No taxes were withheld from the wages paid in cash. To ensure the IRS would not discover employees paid in cash, Hershey instructed the employees who were paid in cash not to file tax returns.
To conceal Hershey’s control of Johnstown Liquor, its cash receipts, his income, and his assets from the IRS, he arranged for residential properties and businesses to be purchased in the names of nominees.
Renee Molinar was charged with one count of conspiracy to defraud the United States, which carries a penalty of not more than 5 years in federal prison and a fine of up to $250,000.
Alan Timothy Hershey was charged with one count of conspiracy to defraud the United States, which carries a penalty of not more than 5 years in federal prison and a fine of up to $250,000, and 10 counts of tax evasion, which carries a penalty of not more than 5 years in federal prison, and a fine of up to $100,000 per count.
This case was investigated by IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Linda Kaufman.
The charges contained in the indictment are allegations, and the defendants are presumed innocent until proven guilty
Cincinnati Man Sentenced to 32 Years in Prison for Producing Child Pornography Victimizing A Child He BabysatRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Caleb Zachary Storey, 31, Cincinnati, was sentenced in U.S. District Court to 384 months in prison for producing sexually explicit photographs of a child he was babysitting in the family’s home, and trading child pornography through an email account.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, FBI Cincinnati, Cincinnati Police Chief Jeffrey Blackwell, Hamilton County Sheriff Jim Neil and members of the Greater Cincinnati Internet Crimes Against Children Task Force (ICAC) announced the sentence handed down today by Senior U.S. District Judge Sandra Beckwith.
Storey pleaded guilty in March 2014 to one count of production of child pornography and one count of possession of child pornography. According to court documents, FBI agents and members of the FBI Violent Crimes Against Children Section, Major Case Coordination Unit, investigating a case in Savannah, Georgia found a sexually explicit image of a child and traced it to an address in Cincinnati. Further investigation determined that the photo was taken at the family’s home. The child’s parents identified Storey as their in-home child care provider when the photograph was taken.
On January 8, 2014 investigators searched Storey’s residence and found evidence that he had been trading child pornographic images using an email account and a photograph-sharing website. Preliminary forensic examination of computer and storage media seized from his residence have identified at least four other boys, all less than eight years old, pictured in pornographic images taken by Storey. The FBI arrested Storey on January 8 based on a criminal complaint. He has been in custody since his arrest.
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 U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The FBI Child Exploitation Task Force includes the Regional Electronics and Computer Investigations (RECI) unit from Hamilton County Sheriff Jim Neil’s Office and the Cincinnati Police Department. Other agencies participating in the Greater Cincinnati ICAC include Homeland Security Investigations (HSI), the U.S. Marshals Service, U.S. Secret Service, Hamilton County Prosecutor Joe Deters, and the police departments in Amberley Village, Blue Ash, and West Chester.
U.S. Attorney Stewart commended the FBI agents and task force officers who investigated the case, as well as Assistant U.S. Attorney Christy Muncy who represented the United States in this case.
Central Florida Businessman Pleads Guilty to $44 Million Bank Fraud ConspiracyRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that Pedro “Pete” Benevides (44, Astatula) today pleaded guilty to conspiracy to commit bank fraud and faces a maximum penalty of 30 years in federal prison. In addition, he agreed to forfeit $44,059,565, including several bank accounts holding approximately $40,000,000 in cash, and three exotic sports cars (i.e. a 2008 Lamborghini Murcielago; a 2009 Audi R8; and a 2009 Lamborghini Gallardo). Benevides also agreed to pay full restitution to the financial institutions that were the victims of his offense.
According to the plea agreement, from about 2005 through September 2008, Benevides obtained 20 commercial and residential loans and lines of credit from several federally insured financial institutions, totaling approximately $44,049,565. Benevides obtained the fraudulent loans by giving the financial institutions documents that, among other things, contained false information concerning the income and assets of Benevides or the business that he used to obtain the loans and lines of credit. During that time, Benevides controlled several Central Florida businesses, including a private jet charter service, an exotic car rental service, and hotels in Orange County and Pinellas County, Florida. Those companies included Superior International Investment Corporation (SIIC); ABC Auto Wholesalers, Inc.; Skyview Aviation, Inc.; Fidelity Investment Group LLC; PBJB Best Investment LLC; Divello Family LLC; and Leesburg Title and Escrow Company. Benevides then used the fraudulently-obtained funds for his own purposes, including paying the interest and principal on other, earlier loans that he had obtained in order to continue the fraudulent scheme, paying business expenses, paying the other co-conspirators involved in the scheme, and funding living expenses for himself and his family.
This case was investigated by the Internal Revenue Service (IRS) Criminal Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the United States Secret Service (USSS), and the St. Cloud IRS-USSS Federal Financial Crimes Task Force. It is being prosecuted by Assistant United States Attorneys Daniel C. Irick and James Mandolfo.
Calera Man Sentenced to 36 Months, $45,500 Restitution for Embezzlement by Bank Officer or EmployeeRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that DANIEL JAMES ABBOTT, age 32, of Calera, Oklahoma, was sentenced to 3 years of probation, 8 months of home detention and was ordered to pay $45,524.47 in restitution for Embezzlement By Bank Officer Or Employee, in violation of Title 18, United States Code, Section 656.
The charge arose from an investigation by the Durant Police Department and the United States Secret Service. The defendant pled guilty in March 2014.
The Information alleged that from on or about October 26, 2011 to on or about September 18, 2013, in the Eastern District of Oklahoma, the defendant, being an officer and employee of the First United Bank and Trust, Durant, Oklahoma, a bank whose deposits are insured by the Federal Deposit Insurance Corporation, with intent to injure and defraud First United Bank and Trust, willfully misapplied and embezzled the moneys, funds and assets belonging to said bank and entrusted to the custody and care of the defendant as an officer and employee in an amount exceeding $1,000.00.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing.
Assistant United States Attorney Chris Wilson represented the United States.
Buffalo Man Sentenced for Drug ConspiracyRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Orville Rodriguez, 31, of Buffalo, N.Y., who was convicted of conspiracy to distribute cocaine, was sentenced to 84 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Edward H. White, who handled the case, stated that from July of 2008 through October of 2008, Rodriguez distributed 10 kilograms of cocaine to co-defendant Marcus Chambers on three separate occasions. Chambers paid Rodriguez a total of $1,000,000 for the 30 kilograms of cocaine.
Marcus Chambers was convicted of similar drug charges.
The sentencing is the culmination of an investigation on the part of the Federal Bureau of Investigation.Aynor Resident Sentenced for Theft of Government Funds, FirearmsRead the Press Release
Contact Person: Bill Day (803) 929-3000
Columbia, South Carolina -----United States Attorney Bill Nettles stated today that Steven Mickey Bunker, age 47, of Aynor, South Carolina was sentenced today in federal court in Florence, South Carolina, for theft of government funds, a violation of 18 U.S.C. § 641, and conspiracy to make false statements when purchasing a firearm, a violation of 18 U.S.C. § 371. United States District Judge R. Bryan Harwell of Florence sentenced Bunker to imprisonment for 24 months, 3 years of supervised release, and restitution in the amount of $108,489.36.
Evidence presented at the change of plea hearing established that the Department of Veterans Affairs began an investigation of Steven Mickey Bunker after the Sun News interviewed Bunker and published an article concerning injuries he claimed to have sustained while serving in the military in Iraq. After the news article was published, the Department of Veterans Affairs was notified because the newspaper received so much negative feedback indicating that Bunker had made false statements concerning his injuries. At the time, Bunker was receiving total disability from the VA as a result of his claims that he was paralyzed and unable to walk, drive, eat, or otherwise take care of himself without assistance. Bunker’s total disability included payment for others to take care of him at his home. Bunker also received over $40,000 to purchase a vehicle to be driven by someone without the use of their legs, which Bunker promptly traded for a Hummer. The VA’s investigation revealed that Bunker was able to walk, drive, and otherwise take care of himself. As a result of Bunker’s false claims, he received over $159,000 in VA benefits. In addition, Bunker had purchased twenty-three firearms using straw purchasers. The straw purchasers falsely stated on the ATF forms that they were purchasing the firearms for themselves when in fact Steven Bunker picked out and paid for the firearms. Steven Bunker was not permitted to purchase firearms because of a prior felony conviction for lewd act or attempted lewd act upon a minor less than 16 years of age.
The case was investigated by agents of the Department of Veterans Affairs, Office of Inspector General and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney William E. Day II prosecuted the case.Atoka Woman Sentenced to 5 Months, $29,000 Restitution for Wire FraudRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that MICHELLE RENA McININCH, age 44, of Atoka, Oklahoma, was sentenced to 5 months imprisonment, followed by 5 months of home detention, 3 years of supervised release and ordered to pay $29,337.74 in restitution for Wire Fraud, in violation of Title 18, United States Code, Sections 1343.
The charges arose from an investigation by the Office of Emily Redman, District 19 District Attorney and the United States Secret Service. The defendant pled guilty in November 2013.
The Information alleged that in or about January, 2013 through in or about March, 2013, the defendant, did execute a scheme to defraud banks within the Eastern District of Oklahoma, to-wit: the defendant deposited false and fraudulent financial instruments into accounts at First United Bank, Landmark Bank, BancFirst and First Texoma Bank and immediately began withdrawing approximately $43,121.11 from the accounts by means of automated teller machines (ATMs). As part of the scheme to defraud, the defendant transmitted and caused to be transmitted by means of wire communication in interstate commerce, writings, signs, signals, pictures, or sounds, for the purpose of executing and attempting to execute the aforesaid scheme and artifice to defraud.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing. The defendant was ordered to report to the Bureau of Prisons on August 14, 2014.
Assistant United States Attorney Chris Wilson represented the United States.
Albuquerque Man Sentenced to Ten Years for Robbing Wells Fargo Bank Branch at Gunpoint in September 2013Read the Press Release
ALBUQUERQUE – Mariano H. Herrera, 59, of Albuquerque, N.M., was sentenced today to 121 months in federal prison followed by five years of supervised release for his conviction on armed bank robbery and firearms charges.
Herrera was arrested on Sept. 20, 2013, and charged in a criminal complaint with armed bank robbery. Herrera was indicted in Oct. 2013, and charged with armed bank robbery and using a firearm in relation to a crime of violence. Herrera pleaded guilty on Jan. 28, 2014, to the indictment without the benefit of a plea agreement. In entering his guilty plea, Herrera admitted robbing the Wells Fargo Bank branch located on 3401 Coors Blvd. NW, in Albuquerque at gunpoint on Sept. 20, 2013.
Court filings reflect that on Sept. 20, 2013, a man wearing a ski mask entered the bank and drew a handgun from his pants. The masked man brandished the handgun at two bank tellers and demanded that they give him all their money. After the two tellers handed currency to the robber, he left the bank on foot and ran around the building where he got into a pickup truck. Two bank customers, who followed the robber and watched him get into the truck, called “911” and provided the truck’s license plate number.
Deputies of the Bernalillo County Sheriff’s Office proceeded to Herrera’s residence, which was listed as the address for the registered owner of the truck. The deputies arrested Herrera after one of the bank customers positively identified him as the bank robber having seen Herrera’s face as he pulled off the ski mask as he drove away from bank. Herrera then led the deputies to a toolbox that contained Herrera’s handgun and almost all the money Herrera stole from the bank.
This case was investigated by the Albuquerque office of the FBI and the Bernalillo County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney Norman Cairns.
Alabama Men Found Guilty of Robbing Eight Banks Across the SouthRead the Press Release
Gulfport, Miss – Following a two week trial in United States District Court in Gulfport, Keith Anthony Kiel, 38, of Mobile, Alabama, and Randy Laverne Marshall, 34, of Pritchard, Alabama, were found guilty of carrying out a series of eight bank robberies across the Southeast, announced U.S. Attorney Gregory K. Davis and FBI Acting Special Agent in Charge Johnnie Sharp.
The defendants were charged with bank robberies spanning from March 2008 through May 2013 in Mississippi, Alabama and Florida, and the investigation involved federal, state and local law enforcement from four federal judicial districts. The defendants were charged in three separate federal indictments which were consolidated together for trial.
Kiel was found guilty on eleven separate criminal counts including bank robbery, conspiracy to commit bank robbery, brandishing a firearm during a violent felony, interstate transportation of a stolen vehicle, and witness intimidation. Marshall was found guilty on seventeen counts of bank robbery, conspiracy to commit bank robbery, brandishing a firearm during a violent felony, and interstate transportation of a stolen vehicle.
Three of the robberies occurred from March – June 2008 with the other five robberies occurring from December 2012 through May 2013. Most of an approximately four-year gap in the robberies coincided with a period from July 2008 to May 2012 when defendant Randy Marshall was in continuous custody for another conviction.
A chronological list of the eight bank robberies in Mississippi, Alabama, and Florida is as follows: Regions Bank, Bienville Boulevard, Ocean Springs, MS (3/4/08)
First Federal Savings and Loan, U.S. Highway 90, Gautier, MS (5/13/08)
Regions Bank, Eisenhower Drive, Biloxi, MS (6/19/08)
Merchants & Marine Bank, Mississippi Highway 613, Moss Point, MS (12/13/12)
Wells Fargo Bank, Mobile Highway, Pensacola, FL (1/28/13)
Hancock Bank, Cowan Road, Gulfport, MS (3/20/13)
Bancorp South, Fort Dale Road, Greenville, AL (5/2/13)
Hancock Bank, Main Street, Moss Point, MS (5/17/13)
Marshall was arrested on May 19, 2013, on a state warrant just days after the Hancock Bank robbery in Moss Point, and Kiel was arrested on a federal warrant in September 2013. Both Kiel and Marshall will be sentenced by Chief U.S. District Judge Louis Guirola, Jr. on October 14, 2014. The maximum penalty for each count of bank robbery is 25 years in prison and a $250,000.00 fine. The maximum penalty for each count of conspiracy is 5 years in prison and a $250,000.00 fine. The maximum penalty for brandishing a firearm during a violent felony is not less than 7 years in prison (consecutive to other penalties) and a $250,000.00 fine for the first conviction and not less than 25 years in prison (consecutive to other penalties) and a $250,000.00 fine each for subsequent convictions. The maximum penalty for each count of interstate transportation of a stolen vehicle is 10 years in prison and a $250,000.00 fine. The maximum penalty for witness intimidation is 20 years in prison and a $250,000.00 fine. Two other co-defendants in the case, Lamarcus Moore and Reginald Robinson of Saraland, Alabama, previously pled guilty to related charges and were cooperating accomplice witnesses against Kiel and Marshall. Moore pled guilty to one count of bank robbery and one count of conspiracy to commit bank robbery. He will be sentenced on September 4, 2014. Robinson pled guilty to conspiracy to commit bank robbery and will be sentenced on July 28, 2014.
This case was investigated by the Federal Bureau of Investigation with substantial assistance from the FBI Safe Streets Task Force, FBI Laboratory in Quantico, Virginia, and the FBI Cellular Analysis Survey Team. Also assisting in the case were multiple other federal, state and local law enforcement agencies including substantial assistance from the Mississippi and Alabama State Crime Labs. The case was prosecuted by Assistant U.S. Attorney Stan Harris.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
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14 July 2014
Woodbridge Man Charged with Defrauding Milford Company of More Than $1 MillionRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that GIOVANNI MASUCCI, also known as John Masucci, 46, of Woodbridge, was arrested yesterday on an indictment that charges him with defrauding a Connecticut company of more than $1 million.
MASUCCI appeared today before U.S. Magistrate Judge William I. Garfinkel in Bridgeport, entered a plea of not guilty and was ordered detained pending a hearing that is scheduled for July 17.
According to the indictment, MASUCCI operated a financial consulting business in North Haven. As part of his business, he provided financial consulting services to a company located in Milford and had access to the company’s checkbooks and financial ledgers. From approximately July 2011 to May 2014, it is alleged that MASUCCI defrauded the Milford company by diverting company funds to his own bank account. He then used the funds to pay personal expenses, including travel and lodging expenses, and purchases at several high-end retailers. It is further alleged that MASUCCI created false entries in the corporate check ledger that falsely indicated the checks were written for legitimate business purposes. MASUCCI would typically forge the signature of the authorized company representative on the check.
On July 9, 2014, a federal grand jury sitting in New Haven returned an indictment charging MASUCCI with four counts of wire fraud and three counts of mail fraud. Each charge carries a maximum term of imprisonment of 20 years and a fine of up to $250,000.
U.S. Attorney Daly stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Connecticut Financial Crimes Task Force, the United States Secret Service and the Greenwich Police Department. The case is being prosecuted by Assistant U.S. Attorney Ray Miller.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Wichita Man Pleads Guilty to Filing False Tax ReturnRead the Press Release
WICHITA, KAN. A Wichita man pleaded guilty Monday to filing a false tax return and agreed to pay $34,510 in restitution, U.S. Attorney Barry Grissom said.
James L. Pennington, 66, Wichita, Kan., pleaded guilty to one count of filing a false tax return. In his plea, he admitted his federal income tax return for calendar year 2006 made false claims of expenses for a consulting business. The tax return also failed to report income from the consulting business.
Pennington is a co-defendant with his son, Jason Matthew Pennington, 42, Bel Aire, Kan., who is awaiting trial on charges of wire fraud, money laundering, bank fraud and making false statements to a financial institution. The indictment alleges Jason Pennington stole money from the trust of Marlene M. Brown after her death.
James Pennington is set for sentencing Oct. 6. Both parties have agreed to recommend a year of supervised release in addition to the restitution.
Grissom commended the FBI, IRS - Criminal Investigation and Assistant U.S. Attorney Lanny Welch and Assistant U.S. Attorney Aaron Smith for their work on the case.
West Huntington Man Sentenced for Role in Heroin ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A West Huntington man was sentenced today to 15 months in federal prison for his role in a heroin distribution conspiracy, announced U.S. Attorney Booth Goodwin. Brandon S. Keaton, 28, pleaded guilty in April 2014 to conspiracy to distribute a quantity of heroin before Chief United States District Judge Robert C. Chambers in Huntington.
Beginning in the summer of 2013, Keaton participated in a conspiracy along with Christopher Lamarr-Shawn Harris, Denzel Lamar Bunkley, Jakaiser Wesely Jackson, and others, to distribute heroin primarily in West Huntington. On December 30, 2013, Keaton distributed heroin to a confidential informant in the 1400 block of Jefferson Avenue in West Huntington. After the distribution, Keaton was observed entering an apartment located at 1416 Jefferson Avenue.
On December 31, 2013, officers with the Huntington Police Department’s Special Investigations Unit executed a search warrant at the Jefferson Avenue apartment. Officers seized approximately 413 grams of heroin and $12,349 in United States currency during the search. Keaton was arrested on January 26, 2014, and admitted to officers that he participated with others in the conspiracy by distributing heroin in West Huntington from the apartment over a six-month period.
Harris, Bunkley, and Jackson all previously pleaded guilty to their roles in the conspiracy and are scheduled to be sentenced in October 2014.
The Huntington Police Department Special Investigations Unit, the West Virginia State Police, the United States Drug Enforcement Administration and the United States Marshals Service all participated in the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of heroin and prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiates, including heroin, in communities across the Southern District.
Wanblee Man Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wanblee, South Dakota, man charged with two counts of Simple Assault pled guilty to the charges and was sentenced on July 8, 2014, by U.S. Magistrate Judge Mark A. Moreno.
Lionel Between Lodges, age 26, was sentenced to 12 months of probation and a $20 assessment to the Federal Crime Victims Fund.
The conviction stems from an incident that took place in Eagle Butte on March 9, 2010, when Between Lodges unlawfully assaulted a male adult victim from Wanblee.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. The case was prosecuted by Assistant U.S. Attorney Mikal Hanson.
Virginia Beach Man Convicted of Conspiracy and Production of Child PornographyRead the Press Release
NORFOLK, Va. – Robert Harold Scott, Jr., 27, of Virginia Beach, Va., was convicted today by a federal jury on 28 counts involving child pornography and destruction of records charges.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Special Agent in Charge Clark Settles, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C., made the announcement after the verdict was accepted by Senior United States District Judge Robert G. Doumar.
Scott faces a maximum penalty of life imprisonment when he is sentenced on November 12, 2014.
A superseding indictment against Scott was returned on March 5, 2014, by a federal grand jury for five counts of conspiracy to produce child pornography; eight counts of production of child pornography; eight counts of receipt of child pornography; five counts of use of an interstate commerce facility to entice a minor to engage in sexual activity; and two counts of destruction of records.
According to court records and evidence at trial, Scott assumed the online identity of “Mike Pyro.” He would routinely communicate with women in and around the Tidewater area to set up “sex parties,” where the women would work as prostitutes and Scott would pay them for their services. In reality, Scott would not pay them and sometimes would extort the women by threatening to publish sexually explicit videos. In May 2013, Scott was convicted in Virginia Beach Circuit Court for felony extortion and larceny based on similar facts. In addition to the adult parties, Scott was found to be conspiring to and producing child pornography with at least five different women. Law enforcement found that, when discussing the sex parties, sometimes Scott would request these women to produce child pornography and was very specific as to the sex acts he wanted done on camera. Five different women complied, in return for the promise of money. Three of these women already pleaded guilty in Federal court to production of child pornography, and one of these women pleaded guilty in Chesapeake Circuit Court. In total, law enforcement identified seven minor victims involved in the sexual abuse and production, with the youngest being one year old and the oldest being five years old.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Elizabeth M. Yusi and Jay V. Prabhu are prosecuting the case on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
United States Attorney Joe Hogsett Announces Resignation from OfficeRead the Press Release
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced today his resignation from office, effective July 31, 2014. In a letter submitted to Attorney General Eric Holder this morning, Hogsett thanked his staff and reflected on his time as U.S. Attorney:
“It has been an honor to serve in this office for the last four years because I have had the privilege to do so alongside a talented group of Assistant United States Attorneys. I owe them and our tireless support staff a debt of gratitude for the dedication and resilience that has been displayed every day of my tenure…
The result of this effort has been the most exciting period in the office’s history. We have set new records for the number of defendants charged and the total number of criminal convictions. The office has led the nation in average length of sentences imposed on criminal defendants. Fiscally, annual office spending has fallen every year I have served, and is currently at a level not seen since the Bush Administration.
But numbers alone are not sufficient to describe the office’s accomplishments. Rather, the full story is told through the thousands of victims who found some sense of justice over the last four years – children who had faced horrific exploitation, grandmothers who had watched their retirement funds disappear, neighborhoods that used to live in fear of violent gangs that operated with no regard for the rule of law.”
In July 2010, Joseph H. Hogsett was nominated to serve as United States Attorney for the Southern District of Indiana. He was unanimously confirmed by the United States Senate and sworn into office on October 7, 2010.
A full-length copy of Hogsett’s resignation letter to Attorney General Holder is attached.
U.S. Attorney’s Office Reaches Forfeiture Settlement with RRA Liquidating TrusteeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Donnell Young, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that the United States Attorney’s Office has reached a forfeiture settlement, subject to court approval, with Michael I. Goldberg, Esq., the Liquidating Trustee for Rothstein, Rosenfeldt & Adler PA (“RRA”), globally resolving all issues between RRA’s bankruptcy estate and the United States relating to forfeiture and restitution matters in connection with the criminal prosecution of Scott W. Rothstein (“Rothstein”). The proposed settlement follows Rothstein’s 2010 guilty plea to conspiracy to violate the RICO statute in violation of Title 18, United States Code, Section 1962(d); conspiracy to commit money laundering in violation of Title 18, United States Code, Section 1956(h); conspiracy to commit mail fraud and wire fraud in violation of Title 18, United States Code, Section 1349; and two counts of wire fraud in violation of Title 18, United States Code, Section 1343. Rothstein was sentenced to 50 years in prison and was ordered to pay restitution to 320 victims of the scheme. Since Rothstein’s conviction, approximately 24 other defendants have been convicted in connection with the scheme.
The United States sought forfeiture of a vast array of real property, luxury boats and vehicles, bank accounts, jewelry, and investments valued at approximately $50 million. According to court documents, the parties will seek approval of the settlement agreement by both the U.S. Bankruptcy Court overseeing RRA’s bankruptcy and the U.S. District Court handling the underlying criminal case. Upon approval of the settlement agreement, the parties have agreed to the entry of a final order of forfeiture for assets sufficient to satisfy the U.S. District Court’s restitution orders. The United States has expressly agreed to restore all forfeited assets and proceeds from those assets to satisfy the restitution orders entered in the criminal case.
Further, subject to court approval, the settlement agreement provides an equitable mechanism that will allow for all non-subordinated victims to be paid in full. Approximately $28 million from the seized assets will go towards restitution payments to qualifying victims in the criminal case, while the RRA bankruptcy estate to receive a distribution in the approximate amount of $21 million. The full restitution to the qualifying victims is possible through a combination of forfeited funds as well as funds obtained by the victims through the bankruptcy proceedings, federal and state proceedings and other collateral sources.
The settlement agreement also provides for the appointment of Michael I. Goldberg, Esq., as the “Restitution Receiver” responsible for distributing the restitution funds to qualifying victims in accordance with the terms of the agreement and the eventual amended restitution order (which shall account for all collateral sources of recovery pursuant to Title 18, United States Code, Section 3664(j)).
U.S. Attorney Wifredo A. Ferrer stated that “This case demonstrates our commitment to work tirelessly to return stolen assets to the victims of the financial crimes perpetrated by Scott Rothstein’s criminal network. Today’s settlement is the culmination of many years of relentless work to maximize forfeiture to obtain restitution for the victims of Rothstein’s fraud consistent with the Department of Justice Asset Forfeiture Program and the Mandatory Victims Restitution Act.”
IRS-CI Acting Special Agent in Charge Donnell Young stated, “IRS-CI enforces the nation’s tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others. We are pleased with today’s settlement agreement to return assets to the victims of this case, and will continue to work with our law enforcement partners to assist in dismantling criminal enterprises and forfeiting their assets.”
“In addition to bringing fraud perpetrators to justice, a top priority for the FBI is seizing assets obtained through fraud in order to compensate victims,” said Acting FBI Special Agent in Charge Kelly M. Darden, Jr. “For many fraud perpetrators, taking their assets removes most or all benefit they obtained by their crimes.”
Mr. Ferrer commended the investigative efforts of the IRS-CI and the FBI. The criminal case was prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan. The forfeiture proceedings were handled by Assistant U.S. Attorneys Michelle B. Alvarez, Evelyn B. Sheehan, and Alison W. Lehr. The appeal of the forfeiture proceedings was handled by Assistant U.S. Attorney Madeleine R. Shirley
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
U.S. Attorney John Walsh's Remarks at Citigroup Settlement Regarding Securities Containing Toxic MortgagesRead the Press Release
Click here for link to Department of Justice press release and settlement documents
Press Conference on Citi Settlement
July 14, 2014, 10:00 a.m.Remarks by John Walsh
United States Attorney for the District of ColoradoThank you, Tony. I am John Walsh, U.S. Attorney for the District of Colorado. I also serve as one of the national co-chairs of the Department’s RMBS Working Group.
The settlement announced today holds Citigroup responsible for its actions. It holds Citigroup responsible for using false representations to sell billions of dollars of residential mortgage-backed securities full of toxic mortgage loans.Citigroup’s conduct had far-reaching and financially devastating consequences for investors, including investors in Colorado, the housing market and ultimately, the global economy. Investors suffered billions of dollars in losses on the value of these RMBS securities.
Citi knew that when it sold these securities to investors, its representations about the mortgage loans were crucial. The mortgage loans had to have the quality and characteristics that Citi represented the loans to have. If not, then Citi was responsible. This settlement holds Citi to its word: The mortgage loans Citi packaged and sold to investors were not what Citi said they were. They were far worse, and Citi knew it. And now, Citi is being held responsible.
As U.S. Attorney Lynch will describe for you, the resolution announced today reflects the extraordinary hard work of prosecutors and staff in the U.S. Attorney’s Offices both in Brooklyn and in Colorado. Our investigation focused on whether Citi told the truth when it securitized and sold billions of dollars mortgage loans. Some details of what the investigation showed are set forth in a statement of facts that Citi has itself acknowledged. Let me briefly summarize those facts, as even Citi has acknowledged them.
In the years leading up to the global financial crisis of 2008, Citi securitized numerous pools of mortgage loans from loan originators such as Ameriquest, Accredited, and New Century. Each loan pool could contain hundreds or thousands of mortgage loans, worth billions of dollars. Citi packaged those loan pools into securities and sold them as safe investments.
When Citi sold those securities, it provided representations to investors about the underlying mortgage loans. Citi knew those representations were important. Investors, after all, did not have direct access to the loan files in order to make their own assessment of the loans.
But Citi did. It could review the loan files. And before securitizing the loan pools, Citi did conduct a review -- due diligence -- of some loans in the loan pools. Citi hired outside underwriting firms to review a limited sample of loan files from the pool.
Those firms checked some basic facts on the sample of loans. The firms looked at whether the loan originator – the lender -- had followed its “underwriting guidelines,” which were criteria used to check if a borrower could pay the mortgage. The firms checked whether the lender had followed federal, state, and local laws, laws that were designed to protect borrowers. And the firms reviewed house values and appraisals.
Those firms gave each loan a grade. Some loans were graded as passing. Other loans were graded as rejects.
The “reject” loans had material defects. For example, a loan might be a reject if the borrower did not the ability to pay the mortgage, or if the lender violated the law when issuing the loan, or if the home appeared to be worth far less than what was being reported, or if the borrower was underwater on the mortgage. Under its own procedures and from its representations made to investors, Citigroup knew these “reject” loans should be excluded from the securitization.
But as our investigation learned, Citi employees often personally ordered the due diligence firms to change the loan grades, from reject to acceptable. Citi frequently ordered these grade changes without giving a reason.
And even after Citi ordered these changes in the grades, the outside firms often still reported to Citi that significant percentages of the sampled loans were rejects. In certain instances, these “reject rates” indicated that a significant and likely comparable percentage of the unsampled loans in the pools were also “rejects.” In other words, a small sample of the loan pools showed high reject rates, but Citi did not attempt to find those same sort of reject loans that Citi knew would be included in the rest of the loan pool, which Citi had not reviewed.
Those significant reject rates told Citi that the representations Citigroup was providing about the loans were not true. But despite seeing these significant problems in the samples, Citi went ahead and securitized the remainder of the loan pools, and sold the resulting securities, while providing false representations about the loans.
The statement of facts, which Citi has acknowledged today, provides a few brief examples. Let me describe two examples.
First, in 2007, Citi bought thousands of loans from a loan originator. The due diligence firm told Citi that large numbers of the sampled loans had material defects. In fact, the words of a Citi trader say it all: “[I] went thru the Diligence Reports and think that we should start praying… I would not be surprised if half of these loans went down. There are a lot of loans that have unreasonable incomes, values below the original appraisals (CLTV would be >100), etc. It’s amazing that some of these loans were closed at all.” Despite this, Citi employees then changed hundreds of loan grades from reject to acceptable. And then Citi securitized the loans into two deals in 2007.
Second, the statement of facts also describes another series of four deals in 2007 in which Citi bought and securitized thousands of loans from a loan originator. In early 2007, Citi explored purchasing that originator’s assets as a way to be sure that Citi’s pipeline of mortgage loans to securitize did not run dry as the residential real estate market turned down. Citi conducted due diligence on the originator, and on the pools of loans that the originator sold to Citi. Through its own due diligence, Citi learned that there were substantial percentages of the originator’s loans that failed to adhere to the lender’s underwriting guidelines. Through its own due diligence, Citi learned that the originator lacked key internal quality control measures. The problems were spelled out for Citi in the originator’s own internal audit reports. Citi’s response to the serious issues raised about the underwriting violations and reject rates was to ignore the defects, and to purchase and securitize the loans in four securitizations in 2007.
To its credit, in this settlement, Citi has agreed to take responsibility for its conduct, in several ways, by paying a large penalty, by providing valuable consumer relief, and by acknowledging a statement of facts that describes its conduct. Taking responsibility for the conduct is an important step to restoring faith in the financial markets. The strength of our markets depends on the truth of the representations that banks provide to investors and the public every day. However, the work of the RMBS working group continues, because many other banks that have not yet accepted responsibility for their actions in selling RMBS securities full of toxic mortgages.The strength of our financial markets depends on the truth of the representations that banks provide to investors and the public every day. Today's $7 billion settlement is a major step toward restoring public confidence in those markets. Due to the tireless work by the Department of Justice, Citigroup is being forced to take responsibility for its home mortgage securitization misconduct in the years leading up to the Financial Crisis. As important a step as this settlement is, however, the work of the RMBS working group is far from done, we will continue to pursue our investigations and cases vigorously because many other banks have not yet taken responsibility for their misconduct in packaging and selling RMBS securities.
I want to thank the Attorney General for his strong support of the RMBS Working Group, as well as Associate Attorney General Tony West, U.S. Attorney Lynch and the entire team from the Eastern District of New York, and FHFA-OIG for their hard work in this case. I also particularly want to recognize Colorado Assistant U.S. Attorneys Kevin Traskos, J. Chris Larson and Lila Bateman, as well as the many other hardworking members of the team, for their outstanding work on this matter.Two Leaders of Israeli Fraud Ring Sentenced in Manhattan Federal Court in Connection with “Lottery” Scheme That Targeted Elderly Victims in the United StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that AVI AYACHE and YARON BAR, two leaders of an Israeli lottery fraud ring, were sentenced today by Chief United States District Judge Loretta A. Preska to 13 years and 12 years in prison, respectively, on mail and wire fraud charges. All 12 members of the ring who were charged in this case have pleaded guilty. With this sentence, nine of the twelve defendants have been sentenced. Before today’s sentencing, the sentences have ranged from 40 to 144 months in prison. Three remaining sentencings are scheduled for July and August, 2014.
Manhattan U.S. Attorney Preet Bharara said: “Avi Ayache and Yaron Bar were leaders of a predatory group that targeted elderly people in the U.S., conning them into believing they were lottery winners. Preying on their victims’ dreams of financial comfort, Ayache and Bar bilked them out of substantial portions of their life savings. Now Ayache and Bar will spend a substantial portion of their lives in prison.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made at various proceedings in this case:
From approximately 2005 through 2009, the defendants participated in a phony “lottery prize” scheme that targeted victims, mostly elderly, in the United States. The defendants identified victims, or “leads,” by purchasing from list brokers the names and contact information of U.S. residents who subscribed to sweepstakes lotteries. Then, operating out of telemarketing boiler rooms run by “Managers,” “Qualifiers” called the victims and, using a script, falsely told the victims they had won a substantial cash prize, and asked them about their assets. If the victim had sufficient assets, the victim was transferred to a “Shooter,” who purported to be an attorney in the U.S., and who told the victims that to obtain the prize, they had to pay several thousands of dollars in fees and taxes. Victims who complied were typically contacted again by Shooters and induced to send additional funds, amounting to tens and sometimes hundreds of thousands of dollars. In reality, there was no lottery prize and the victims were ultimately bilked out of an estimated total of more than $8 million.
The defendants operated multiple boiler rooms that used the names of various sham law firms purportedly located in New York, including law firms named “Abrahams Kline,” “Bernstein Schwartz,” “Steiner, Van Allen, and Colt,” “Bloomberg and Associates,” and “Meyer Stevens.” The defendants further used various aliases and call forwarding telephone numbers to mask the fact that the defendants were located in Israel. The defendants also possessed bank accounts in Israel, Cyprus, and Uganda, to which illegal proceeds were wired. In furtherance of the fraudulent scheme, the defendants even sent shipments of flowers and gift baskets to various victims in the United States in order to “congratulate” them on their purported lottery winnings.
In addition to the prison terms, Judge Preska also ordered AYACHE and BAR to forfeit $8.2 million and pay restitution of $8.2 million.
Eleven of the twelve defendants were arrested in Israel in July 2009. All 11 were extradited to the United States. A twelfth defendant, Matthew Getto, was arrested in July 2009 at Newark International Airport as he attempted to board a flight for Israel.
The earlier sentencings of the members of the lottery fraud scheme included the following:
- On June 5, 2012, Avi Perov was sentenced by the Honorable Barbara S. Jones to 51 months in prison on wire fraud charges;
- On August 4, 2011, Yulia Rayz was sentenced by the Honorable Barbara S. Jones to 40 months in prison on wire fraud charges;
- On December 15, 2011, Naor Green was sentenced by the Honorable Barbara S. Jones to 40 months in prison on wire fraud charges;
- On June 7, 2012, Ian Kaye was sentenced by the Honorable Barbara S. Jones to 51 months in prison on wire fraud charges;
- On April 18, 2013, Limor Cohen was sentenced by the Honorable Loretta A. Preska to 97 months in prison on wire fraud charges;
- On December 12, 2013, Matthew Getto was sentenced by the Honorable Harold Baer to 144 months in prison on wire fraud charges.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Peter M. Skinner is in charge of the prosecution.
Tennessee Business Owner Pleads Guilty to Cargo Theft SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Memphis, Tenn., business owner pleaded guilty in federal court today to his role in a cargo theft scheme that included a theft in West Plains, Mo.
Earl Stanley Nunn, 59, pleaded guilty before U.S. Magistrate Judge David P. Rush to theft of an interstate shipment.
Nunn, the owner of Nu World Trucking, LLC, was the leader of a cargo theft ring that used the resources of Nu World Trucking to steal cargo in various states. They did so by “bob-tailing” (meaning they traveled in a road tractor truck, without a semi-trailer attached) through truck stops and service stations located on or near interstate highways, looking for semi-trailers that had been left parked and unattended, and were not coupled to road tractors. When they located a semi-trailer that appeared to be unattended, they would steal the semi-trailer and the goods it contained by coupling their road tractor truck to it and driving off. After having stolen a semi-trailer and its contents, they usually transported the stolen goods to the Chicago, Ill., and Detroit, Mich., areas to be “fenced” or sold.
Nunn’s co-conspirators included his nephew, Michael Lee Sherley, 49, of Memphis, Tenn. (who pleaded guilty on March 19, 2014), his son, Roderick Nunn (who pleaded guilty in a related case in the Western District of Michigan) and others.
The government plans to establish that co-conspirators committed thefts in various states, including Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Missouri, Nebraska, Ohio, Tennessee, Texas, and Virginia.
The specific charge to which both Nunn and Sherley pleaded guilty involves a theft that occurred on May 11, 2013, at the Snappy Mart Truck Stop in West Plains. Nunn and Sherley stole a 2000 Wabash trailer (valued at $7,500), which contained a load of Green Giant canned corn (valued at $73,008). The trailer, owned by Bryant Freight, LLC, was in transit from Minnesota to a food bank in Arkansas. Nunn and Sherley admitted that they traveled through Missouri and Indiana with the stolen cargo before being apprehended in Michigan.
Under federal statutes, Nunn and Sherley are each 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 Steven M. Mohlhenrich. It was investigated by the FBI’s Memphis Cargo Theft Task Force, the U.S. Marshal’s Service, the West Plains, Mo., Police Department and the Michigan State Highway Patrol.St. Louis Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
Follow @SDILNewsTyrone H. Bailey, 56, of St. Louis, Missouri, was sentenced on July 11, 2014, in federal district court in East St. Louis, Illinois, for his failure to register as a sex offender, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Bailey was sentenced to 15 months in federal prison, five years of supervised release, ordered to pay $100 special assessment and a $300 fine.
Bailey moved back and forth from Missouri to Illinois between August 18, 2010, and November 19, 2013, failing to register within the three day requirement each time he changed his residence. The registration condition was due to his three count Statutory Rape conviction on November 17, 1995, in St. Louis County, Missouri.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The case was investigated by the United States Marshals Service and prosecuted by Assistant United States Attorney Daniel T. Kapsak.