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Monday 19 May 2014
Young Man Gets 15+ Years for Smuggling $1 Million in MethRead the Press Release
BROWNSVILLE, Texas - Jaime Homero Guerrero, 20, has been ordered to prison for conspiracy to possess and possession with intent to distribute more than 50 grams of methamphetamine, announced United States Attorney Kenneth Magidson. A federal jury convicted Guerrero, of Brownsville and Matamoros, Mexico, on Jan. 24, 2014, following more than two days of testimony and approximately five hours of deliberation.
Today, U.S. District Judge Andrew S. Hanen, who presided over the trial, handed Guerrero a sentence of 188 months in federal prison to be immediately followed by five years of supervised release. The court noted the sentence was imposed to reflect the seriousness of the offense, promote respect for the law, provide just punishment for the offense and afford adequate deterrence to criminal conduct.
Guerrero was a passenger in a 2010 Nissan on April 5, 2013, when it was stopped for a traffic violation on Highway 77 near Raymondville in Willacy County. At that time, officers found 36 packages containing a total of 26.16 kilograms of methamphetamine.
Guerrero initially stated he was headed from Matamoros, Mexico, to a Quincenera in Houston. He later claimed he was going to deliver the vehicle to Houston.
Also charged was Oraldo Arvey Castro-Rocha, who was driving the Nissan and later pleaded guilty. He will be sentenced June 4, 2014.
At trial, agents testified the methamphetamine Guerrero and Castro smuggled was valued at nearly $1 million in the Houston area.
Guerrero will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by Drug Enforcement Administration and the Texas Department of Public Safety. Assistant United States Attorneys Carrie Wirsing and David A. Lindenmuth prosecuted the case.Wolcott Man Sentenced to Prison for Impersonating Federal Officer, Falsifying Military DocumentRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BRUCE BROWN, also known as “Bruce Browne,” “Spenser Brown,” “Spenser Browne,” “Agent Brice” and “Detective Brice,” 47, of Wolcott, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 12 months and one day of imprisonment, followed by one year of supervised release, for impersonating a federal officer and falsifying a military discharge certificate.
According to court documents and statements made in open court, on August 8, 2013, BROWN, operating a Ford Crown Victoria equipped to resemble a police vehicle, entered a shoreline residential community in Old Lyme. BROWN was wearing a bullet proof tactical vest with police insignia and was carrying a weapon and handcuffs. When approached by an Old Lyme resident, Brown stated that he was a special agent of the United States Coast Guard and was sent there to observe a Coast Guard vessel that was in the area.
While in the Old Lyme community, BROWN’s fiancée asked a friend to take BROWN out on the friend’s boat. As the boat was backing out of the slip, BROWN informed the boat owner that “I am commandeering your boat. Your boat is now a U.S. Coast Guard vessel.” BROWN then directed the owner to pilot his boat toward other vessels and, at BROWN’s direction, the owner approached two boats operated by private citizens. In each instance, BROWN required the boat operators to produce their boating licenses.
BROWN then instructed the boat owner to approach an individual who was operating a jet ski. Again, BROWN asked the operator for his license. When the operator could not produce it, BROWN told him to return to the dock. The boat owner took BROWN back to the dock and then observed BROWN enter what appeared to be a police car and drive off with the emergency lights flashing. BROWN drove his car to the boat launch where the jet ski operator was removing his craft from the water and instructed the operator to obtain his license. After the operator showed BROWN the license, he was allowed to leave.
Law enforcement officers subsequently located and questioned BROWN in the Old Lyme residential community. BROWN initially told them that he was a law enforcement officer sent by the U.S. Coast Guard to photograph a Coast Guard cutter that was in the area, but eventually admitted that he was not an officer. A search of BROWN’s car revealed numerous law enforcement items, including a bulletproof/tactical vest with police insignia and a TSA badge, multiple sets of handcuffs, three handguns, loaded gun magazines, significant quantities of ammunition including hollow point bullets, a knife, and a police tactical baton. BROWN was arrested on state charges at that time.
While released on bond following his arrest, BROWN took four other law enforcement badges in his possession and threw them into the Chestnut Hill Reservoir in Wolcott. BROWN subsequently informed federal authorities of his actions and, on September 27, 2013, a dive team from the Connecticut State Police recovered the badges.
Further investigation of this matter revealed that in March 2013, BROWN offered to have a “scared straight” conversation with the sons of an acquaintance who believed BROWN was a federal law enforcement officer with experience in narcotics matters. Brown arrived at his acquaintance’s home in a Crown Victoria that resembled a police vehicle, displayed a badge and had a holstered gun and handcuffs secured on his belt. BROWN individually introduced himself to the minors as “Agent Brice” and “Detective Brice.” After some initial conversation, BROWN escorted the minors up to their rooms. Their mother tried to follow, but was ordered by BROWN to stay downstairs. She heard raised voices and later learned from her son that BROWN had drawn his gun and handcuffed her son while BROWN searched his room.
Eventually, BROWN walked downstairs with one of the minors and entered the garage. BROWN removed the weapon from his holster and pointed it in proximity of the minor as they prepared to enter the garage. BROWN returned with a backpack that contained about $200, a small amount of what appeared to be marijuana and a pipe. After confirming with the mother that the money was from a legitimate source, BROWN gave her the money and took the backpack and all of its contents. While in the house, BROWN indicated that he had conducted surveillance on the boys in the prior week and related several incidents to them that seemed to authenticate that claim.
The investigation further revealed that in April 2002, BROWN was discharged from the U.S. Coast Guard “under other than honorable conditions.” In February 2013, BROWN submitted a Pistol Permit Application to the Connecticut State Police Special Licensing and Firearms Unit. In the military history section of the application, BROWN stated that he had not been discharged from the United States Armed Forces with less than an Honorable Discharge. The form required BROWN to attach a copy of his Department of Defense Discharge Form, DD-214. In box 24 of his DD-214, BROWN obliterated the words “under other than,” leaving the form to appear as if he had been discharged under “honorable conditions.”
On February 24, 2014, BROWN waived his right to indictment and pleaded guilty to two counts of impersonating a federal law enforcement officer and one count of falsifying a military discharge certificate.
BROWN was ordered to report to prison on July 9, 2014.
This matter was investigated by the Department of Homeland Security – Office of Inspector General, the U.S. Coast Guard Investigative Service, the Connecticut State Police, and the Wolcott, Bristol and Southington Police Departments. The case was prosecuted by Assistant U.S. Attorney Ray Miller.
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[email protected]Williamson County Man Pleads Guilty to Methamphetamine ConspiracyRead the Press Release
Follow @SDILNewsOn May 15, 2014, a Williamson County, Ill., man pled guilty to an indictment, charging conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Jeremieh L. Hodge, 35, of Creal Springs, pled guilty to the one-count indictment charging conspiracy to manufacture methamphetamine. The offense occurred between 2009 and March 2013 in Williamson, Saline, and Johnson Counties. Evidence at the plea hearing established that Hodge was involved with others in the manufacture of methamphetamine. Hodge participated in anhydrous ammonia thefts and other persons provided Hodge with pseudoephedrine pills for the purpose of manufacturing methamphetamine. Hodge faces a term of imprisonment of up to 20 years, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Illinois State Police, Johnson County Sheriff’s Office, Jackson County Sheriff’s Office, Murphysboro Police Department, Illinois State Police Methamphetamine Response Team, and Drug Enforcement Administration.
The case is being prosecuted by Assistant United States Attorney Amanda A. Robertson.
Westminster Developer Sentenced for Bank FraudRead the Press Release
BOSTON – A Westminster man was sentenced today in U.S. District Court in Worcester for bank fraud.
Lance N. Korich, 53, was sentenced by U.S. District Judge Timothy S. Hillman to one year and one day in prison, two years of supervised release, and ordered to pay $593,617 in restitution. In December 2013, Korich pleaded guilty to four counts of bank fraud.
From 2008 to 2010, Korich applied for and obtained four construction loans at Colonial Cooperative Bank in Gardner, Mass. In support of those loans, Korich submitted false and fraudulent purchase and sale agreements. In particular, Korich fabricated the names of the purported home buyers and forged their signatures on the purchase and sale agreements.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Karin M. Bell and Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.
Wayne Woman Pleads Guilty in Major Federal Drug InvestigationRead the Press Release
Huntington, W.Va. – Ariell Varney, 23, of Wayne, West Virginia, pleaded guilty today in federal court to a charge of possession with intent to distribute MDMA, commonly known as Ecstasy, United States Attorney Booth Goodwin announced. On November 20, 2013, Varney was pulled over for a traffic violation in the 600 block of 8th Street in Huntington by members of the Huntington Police Department. During the stop, a drug dog gave a positive alert on the trunk of Varney’s car. During a subsequent search of the car, a pill bottle was located that contained an empty capsule and a similar capsule that contained a substance that field tested positive for MDMA. Also in the bottle were eight other tablets with no markings.
At the time of the stop, Varney was being investigated by the Drug Enforcement Administration for her connection to the drug trafficking activities of Kenneth Dewitt Newman, also known as “K-Kutta.” As a result of the investigation, Newman and 14 other individuals were charged with various offenses related to a drug trafficking conspiracy in the Huntington area. Varney was living in Miami, Florida, during the investigation, and is believed to have been a supplier of MDMA to the Newman organization. In addition to MDMA, Newman’s organization was responsible for selling cocaine, heroin, prescription pills, marijuana, and crack cocaine.
Varney faces up to 20 years in prison and a $1 million fine when she is sentenced on August 18, 2014. Chief United States District Judge Robert C. Chambers is presiding over the case.
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 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 opiate painkillers in communities across the Southern District.
U.S. Charges Five Chinese Military Hackers for Cyber Espionage Against U.S. Corporations and a Labor Organization for Commercial AdvantageRead the Press Release
A grand jury in the Western District of Pennsylvania (WDPA) indicted five Chinese military hackers for computer hacking, economic espionage and other offenses directed at six American victims in the U.S. nuclear power, metals and solar products industries.
The indictment alleges that the defendants conspired to hack into American entities, to maintain unauthorized access to their computers and to steal information from those entities that would be useful to their competitors in China, including state-owned enterprises (SOEs). In some cases, it alleges, the conspirators stole trade secrets that would have been particularly beneficial to Chinese companies at the time they were stolen. In other cases, it alleges, the conspirators also stole sensitive, internal communications that would provide a competitor, or an adversary in litigation, with insight into the strategy and vulnerabilities of the American entity.
“This is a case alleging economic espionage by members of the Chinese military and represents the first ever charges against a state actor for this type of hacking,” U.S. Attorney General Eric Holder said. “The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response. Success in the global market place should be based solely on a company’s ability to innovate and compete, not on a sponsor government’s ability to spy and steal business secrets. This Administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market.”
“For too long, the Chinese government has blatantly sought to use cyber espionage to obtain economic advantage for its state-owned industries,” said FBI Director James B. Comey. “The indictment announced today is an important step. But there are many more victims, and there is much more to be done. With our unique criminal and national security authorities, we will continue to use all legal tools at our disposal to counter cyber espionage from all sources.”
“State actors engaged in cyber espionage for economic advantage are not immune from the law just because they hack under the shadow of their country’s flag,” said John Carlin, Assistant Attorney General for National Security. “Cyber theft is real theft and we will hold state sponsored cyber thieves accountable as we would any other transnational criminal organization that steals our goods and breaks our laws.”
“This 21st century burglary has to stop,” said David Hickton, U.S. Attorney for the Western District of Pennsylvania. “This prosecution vindicates hard working men and women in Western Pennsylvania and around the world who play by the rules and deserve a fair shot and a level playing field.”
Summary of the Indictment
Defendants : Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui, who were officers in Unit 61398 of the Third Department of the Chinese People’s Liberation Army (PLA). The indictment alleges that Wang, Sun, and Wen, among others known and unknown to the grand jury, hacked or attempted to hack into U.S. entities named in the indictment, while Huang and Gu supported their conspiracy by, among other things, managing infrastructure (e.g., domain accounts) used for hacking.
Victims : Westinghouse Electric Co. (Westinghouse), U.S. subsidiaries of SolarWorld AG (SolarWorld), United States Steel Corp. (U.S. Steel), Allegheny Technologies Inc. (ATI), the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and Alcoa Inc.
Time period : 2006-2014.
Crimes : Thirty-one counts as follows (all defendants are charged in all counts).
Count(s)
Charge
Statute
Maximum Penalty
1
Conspiring to commit computer fraud and abuse
18 U.S.C. § 1030(b).
10 years.
2-9
Accessing (or attempting to access) a protected computer without authorization to obtain information for the purpose of commercial advantage and private financial gain.
18 U.S.C. §§ 1030(a)(2)(C), 1030(c)(2)(B)(i)-(iii), and 2.
5 years (each count).
10-23
Transmitting a program, information, code, or command with the intent to cause damage to protected computers.
18 U.S.C. §§ 1030(a)(5)(A), 1030(c)(4)(B), and 2.
10 years (each count).
24-29
Aggravated identity theft.
18 U.S.C. §§ 1028A(a)(1), (b), (c)(4), and 2
2 years (mandatory consecutive).
30
Economic espionage.
18 U.S.C. §§ 1831(a)(2), (a)(4), and 2.
15 years.
31
Trade secret theft.
18 U.S.C. §§ 1832(a)(2), (a)(4), and 2.
10 years.
Summary of Defendants’ Conduct Alleged in the Indictment
Defendant
Victim
Criminal Conduct
Sun
Westinghouse
In 2010, while Westinghouse was building four AP1000 power plants in China and negotiating other terms of the construction with a Chinese SOE (SOE-1), including technology transfers, Sun stole confidential and proprietary technical and design specifications for pipes, pipe supports, and pipe routing within the AP1000 plant buildings.
Additionally, in 2010 and 2011, while Westinghouse was exploring other business ventures with SOE-1, Sun stole sensitive, non-public, and deliberative e-mails belonging to senior decision-makers responsible for Westinghouse’s business relationship with SOE-1.
Wen
SolarWorld
In 2012, at about the same time the Commerce Department found that Chinese solar product manufacturers had “dumped” products into U.S. markets at prices below fair value, Wen and at least one other, unidentified co-conspirator stole thousands of files including information about SolarWorld’s cash flow, manufacturing metrics, production line information, costs, and privileged attorney-client communications relating to ongoing trade litigation, among other things. Such information would have enabled a Chinese competitor to target SolarWorld’s business operations aggressively from a variety of angles.
Wang and Sun
U.S. Steel
In 2010, U.S. Steel was participating in trade cases with Chinese steel companies, including one particular state-owned enterprise (SOE-2). Shortly before the scheduled release of a preliminary determination in one such litigation, Sun sent spearphishing e-mails to U.S. Steel employees, some of whom were in a division associated with the litigation. Some of these e-mails resulted in the installation of malware on U.S. Steel computers. Three days later, Wang stole hostnames and descriptions of U.S. Steel computers (including those that controlled physical access to company facilities and mobile device access to company networks). Wang thereafter took steps to identify and exploit vulnerable servers on that list.
Wen
ATI
In 2012, ATI was engaged in a joint venture with SOE-2, competed with SOE-2, and was involved in a trade dispute with SOE-2. In April of that year, Wen gained access to ATI’s network and stole network credentials for virtually every ATI employee.
Wen
USW
In 2012, USW was involved in public disputes over Chinese trade practices in at least two industries. At or about the time USW issued public statements regarding those trade disputes and related legislative proposals, Wen stole e-mails from senior USW employees containing sensitive, non-public, and deliberative information about USW strategies, including strategies related to pending trade disputes. USW’s computers continued to beacon to the conspiracy’s infrastructure until at least early 2013.
Sun
Alcoa
About three weeks after Alcoa announced a partnership with a Chinese state-owned enterprise (SOE-3) in February 2008, Sun sent a spearphishing e-mail to Alcoa. Thereafter, in or about June 2008, unidentified individuals stole thousands of e-mail messages and attachments from Alcoa’s computers, including internal discussions concerning that transaction.
Huang
Huang facilitated hacking activities by registering and managing domain accounts that his co-conspirators used to hack into U.S. entities. Additionally, between 2006 and at least 2009, Unit 61398 assigned Huang to perform programming work for SOE-2, including the creation of a “secret” database designed to hold corporate “intelligence” about the iron and steel industries, including information about American companies.
Gu
Gu managed domain accounts used to facilitate hacking activities against American entities and also tested spearphishing e-mails in furtherance of the conspiracy.
An indictment is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law.
The FBI conducted the investigation that led to the charges in the indictment. This case is being prosecuted by the U.S. Department of Justice’s National Security Division Counterespionage Section and the U.S. Attorney’s Office for the Western District of Pennsylvania.
Related Materials:
Indictment
U.S. Charges Five Chinese Military Hackers for Cyber Espionage Against U.S. Corporations and A Labor Organization for Commercial AdvantageRead the Press Release
First Time Criminal Charges are Filed Against Known State Actors for Hacking
WASHINGTON—A grand jury in the Western District of Pennsylvania (WDPA) indicted five Chinese military hackers for computer hacking, economic espionage and other offenses directed at six American victims in the U.S. nuclear power, metals and solar products industries.
The indictment alleges that the defendants conspired to hack into American entities, to maintain unauthorized access to their computers and to steal information from those entities that would be useful to their competitors in China, including state-owned enterprises (SOEs). In some cases, it alleges, the conspirators stole trade secrets that would have been particularly beneficial to Chinese companies at the time they were stolen. In other cases, it alleges, the conspirators also stole sensitive, internal communications that would provide a competitor, or an adversary in litigation, with insight into the strategy and vulnerabilities of the American entity.
“This is a case alleging economic espionage by members of the Chinese military and represents the first ever charges against a state actor for this type of hacking,” U.S. Attorney General Eric Holder said. “The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response. Success in the global market place should be based solely on a company’s ability to innovate and compete, not on a sponsor government’s ability to spy and steal business secrets. This Administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market.”
“For too long, the Chinese government has blatantly sought to use cyber espionage to obtain economic advantage for its state-owned industries,” said FBI Director James B. Comey. “The indictment announced today is an important step. But there are many more victims, and there is much more to be done. With our unique criminal and national security authorities, we will continue to use all legal tools at our disposal to counter cyber espionage from all sources.”
“State actors engaged in cyber espionage for economic advantage are not immune from the law just because they hack under the shadow of their country’s flag,” said John Carlin, Assistant Attorney General for National Security. “Cyber theft is real theft and we will hold state sponsored cyber thieves accountable as we would any other transnational criminal organization that steals our goods and breaks our laws.”
“This 21st century burglary has to stop,” said David Hickton, U.S. Attorney for the Western District of Pennsylvania. “This prosecution vindicates hard working men and women in Western Pennsylvania and around the world who play by the rules and deserve a fair shot and a level playing field.”
Summary of the Indictment
Defendants: Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui, who were officers in Unit 61398 of the Third Department of the Chinese People’s Liberation Army (PLA). The indictment alleges that Wang, Sun, and Wen, among others known and unknown to the grand jury, hacked or attempted to hack into U.S. entities named in the indictment, while Huang and Gu supported their conspiracy by, among other things, managing infrastructure (e.g., domain accounts) used for hacking.
Victims: Westinghouse Electric Co. (Westinghouse), U.S. subsidiaries of SolarWorld AG (SolarWorld), United States Steel Corp. (U.S. Steel), Allegheny Technologies Inc. (ATI), the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and Alcoa Inc.
Time period: 2006-2014.
Crimes: Thirty-one counts as follows (all defendants are charged in all counts).
Count(s) Charge Statute Maximum Penalty1
Conspiring to commit computer fraud and abuse
18 U.S.C. § 1030(b).
10 years.
2-9
Accessing (or attempting to access) a protected computer without authorization to obtain information for the purpose of commercial advantage and private financial gain.
18 U.S.C. §§ 1030(a)(2)(C), 1030(c)(2)(B)(i)-(iii), and 2.
5 years (each count).
10-23
Transmitting a program, information, code, or command with the intent to cause damage to protected computers.
18 U.S.C. §§ 1030(a)(5)(A), 1030(c)(4)(B), and 2.
10 years (each count).
24-29
Aggravated identity theft.
18 U.S.C. §§ 1028A(a)(1), (b), (c)(4), and 2
2 years (mandatory consecutive).
30
Economic espionage.
18 U.S.C. §§ 1831(a)(2), (a)(4), and 2.
15 years.
31
Trade secret theft.
18 U.S.C. §§ 1832(a)(2), (a)(4), and 2.
10 years.
Summary of Defendants’ Conduct Alleged in the Indictment
Defendant Victim Criminal ConductSun
Westinghouse
In 2010, while Westinghouse was building four AP1000 power plants in China and negotiating other terms of the construction with a Chinese SOE (SOE-1), including technology transfers, Sun stole confidential and proprietary technical and design specifications for pipes, pipe supports, and pipe routing within the AP1000 plant buildings.
Additionally, in 2010 and 2011, while Westinghouse was exploring other business ventures with SOE-1, Sun stole sensitive, non-public, and deliberative e-mails belonging to senior decision-makers responsible for Westinghouse’s business relationship with SOE-1.
Wen
SolarWorld
In 2012, at about the same time the Commerce Department found that Chinese solar product manufacturers had “dumped” products into U.S. markets at prices below fair value, Wen and at least one other, unidentified co-conspirator stole thousands of files including information about SolarWorld’s cash flow, manufacturing metrics, production line information, costs, and privileged attorney-client communications relating to ongoing trade litigation, among other things. Such information would have enabled a Chinese competitor to target SolarWorld’s business operations aggressively from a variety of angles.
Wang and Sun
U.S. Steel
In 2010, U.S. Steel was participating in trade cases with Chinese steel companies, including one particular state-owned enterprise (SOE-2). Shortly before the scheduled release of a preliminary determination in one such litigation, Sun sent spearphishing e-mails to U.S. Steel employees, some of whom were in a division associated with the litigation. Some of these e-mails resulted in the installation of malware on U.S. Steel computers. Three days later, Wang stole hostnames and descriptions of U.S. Steel computers (including those that controlled physical access to company facilities and mobile device access to company networks). Wang thereafter took steps to identify and exploit vulnerable servers on that list.
Wen
ATI
In 2012, ATI was engaged in a joint venture with SOE-2, competed with SOE-2, and was involved in a trade dispute with SOE-2. In April of that year, Wen gained access to ATI’s network and stole network credentials for virtually every ATI employee.
Wen
USW
In 2012, USW was involved in public disputes over Chinese trade practices in at least two industries. At or about the time USW issued public statements regarding those trade disputes and related legislative proposals, Wen stole e-mails from senior USW employees containing sensitive, non-public, and deliberative information about USW strategies, including strategies related to pending trade disputes. USW’s computers continued to beacon to the conspiracy’s infrastructure until at least early 2013.
Sun
Alcoa
About three weeks after Alcoa announced a partnership with a Chinese state-owned enterprise (SOE-3) in February 2008, Sun sent a spearphishing e-mail to Alcoa. Thereafter, in or about June 2008, unidentified individuals stole thousands of e-mail messages and attachments from Alcoa’s computers, including internal discussions concerning that transaction.
Huang
Huang facilitated hacking activities by registering and managing domain accounts that his co-conspirators used to hack into U.S. entities. Additionally, between 2006 and at least 2009, Unit 61398 assigned Huang to perform programming work for SOE-2, including the creation of a “secret” database designed to hold corporate “intelligence” about the iron and steel industries, including information about American companies.
Gu
Gu managed domain accounts used to facilitate hacking activities against American entities and also tested spearphishing e-mails in furtherance of the conspiracy.
An indictment is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law.
The FBI conducted the investigation that led to the charges in the indictment. This case is being prosecuted by the U.S. Department of Justice’s National Security Division Counterespionage Section and the U.S. Attorney’s Office for the Western District of Pennsylvania.
Two Men Plead Guilty in Cases Involving Guns and DrugsRead the Press Release
BOISE – U.S. Attorney Wendy J. Olson announced guilty pleas in two separate cases prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and State of Idaho to address gang crimes. Nathan John Vert, 30, of Caldwell, Idaho, pleaded guilty today in United States District Court to unlawfully possessing a firearm. In a separate case, Esteban Villegas-Gamez, 39, a Mexican national living in Bellevue, Idaho, pleaded guilty today to distribution of methamphetamine.
At today’s hearing, Vert admitted that he unlawfully possessed a 12-gauge shotgun. Vert was involved in a traffic accident on October 21, 2013. Officers with the Nampa Police Department arrived at the scene. During the investigation of the traffic accident, officers discovered a 12-gauge shotgun inside the vehicle that Vert was driving. Vert was prohibited from possessing firearms because he was previously convicted of the felony crime of delivery of a controlled substance in 2003 in Canyon County, Idaho.
The charge is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release. The government is seeking forfeiture of the firearm. Vert is scheduled to be sentenced on July 28, 2014, by U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Nampa Police Department and Treasure Valley Metro Violent Crimes Task Force. The Metro Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole.
Villegas-Gamez, who also pleaded guilty today, admitted he sold methamphetamine and firearms to a person assisting law enforcement as a confidential informant. Villegas-Gamez sold the informant methamphetamine and firearms on numerous occasions beginning in November 2013 until January 2014. Villegas-Gamez admitted that the combined total he sold the informant during the different transactions was in excess of 50 grams of methamphetamine.
The charge is punishable by up to twenty years in prison, a maximum fine of $1 million, and at least three years of supervised release. Villegas-Gamez is set for sentencing on August 11, 2014, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; and Blaine County Narcotics Enforcement Team. Other agencies that assisted with the investigation include the U. S. Immigration and Customs Enforcement’s (ICE) and Idaho State Police. The Blaine County Narcotics Enforcement Team includes the Blaine County Sheriff’s Office, Sun Valley Police Department, Hailey Police Department, Ketchum Police Department, and Bellevue Marshal’s Office.
Both cases are being prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Toledo Man Sentenced to 15 Years in Prison for Human TraffickingRead the Press Release
A Toledo man was was sentenced to 15 years in prison for sex trafficking involving children, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation's Cleveland Office.
Brady Jackson, 28, was convicted last year on two counts of sex trafficking of children following a jury trial.
“Human trafficking is a despicable crime,” Dettelbach said. “This defendant targeted vulnerable people for the sole purpose of profiting off them in the commercial sex industry.”
Anthony said: “The sexual human trafficking of minors for profit is an injustice that will not be tolerated. The FBI continues to aggressively pursue and bring to justice those who violate the rights of our most vulnerable of the community.”
Jackson advertised on backpage.com in in Septmber 2011 that the two girls, ages 16 and 15, were available for prostitution. Jackson told the girls that he would take all the money they would make from prostitution but that he would take them shopping and get their hair and nails done, according to court records.
This case is being prosecuted by Assistant United States Attorneys Carol M. Skutnik and Ava Dustin following an investigation by the Northwest Ohio Violent Crimes Against Children Task Force (NWOVCACTF).
The NWOVCACTF, directed by the FBI Resident Agency in Toledo, Ohio, includes special agents of the FBI, and agents and officers from the Ohio Bureau of Criminal Identification and Investigation, Ohio Highway Patrol, Toledo Police Department, Lima Police Department, Perrysburg Township Police Department, Fulton County Sheriff's Office and the Ottawa County Sheriff's Office. Toledo Office of the Federal Bureau of Investigation.
Three Deming Residents Appear in Federal Court on Kidnapping and Firearms ChargesRead the Press Release
ALBUQUERQUE – Jessie A. Hopper, Jr., 29, Jessie Hopper, Sr., 53, and Polly Hopper, 60, all of Deming, N.M., made their initial appearances this morning in federal court in Las Cruces, N.M., on a criminal complaint charging them with kidnapping and firearms charges. The three defendants remain in custody pending preliminary hearings and detention hearings which are scheduled for May 21, 2014.
The criminal complaint charges the three defendants with kidnapping a woman and her two young children and transporting them in interstate commerce. It also charges and Hopper, Jr., and Hopper, Sr., with brandishing a firearm during and in relation to a crime of violence. According to the complaint, Hopper, Jr., and Hopper, Sr., allegedly kidnapped the victims in Hot Springs, Ark., on May 8, 2014, with the assistance of Polly Hopper. Hopper, Jr., allegedly handcuffed the adult victim and brandished a firearm at her to force her to comply with his demands, including a demand that she telephone family members to assure them that she was voluntarily leaving Arkansas with Hopper, Jr.
The criminal complaint alleges that on May 8 and 9, 2014, the three defendants drove the victims from Arkansas to the defendants’ residence in Deming. It further alleges that on May 9 and 10, 2014, Hopper, Jr., and Hopper Sr., sexually assaulted the adult victim several times. On May 9, 2014, Hopper, Jr., allegedly brandished a firearm at the victim to force her to submit to a sexual assault by Hopper, Sr.
The three defendants were arrested by the New Mexico State Police on state charges on May 10, 2014. They remained in state custody until they were transferred to federal custody on May 16, 2014, to face the charges in this case. The state charges, which are being pursued by the 6th Judicial District Attorney’s Office for the State of New Mexico, are still pending.
If convicted on the federal kidnapping charges, each defendant faces a statutory maximum penalty any term of years to life imprisonment. If convicted on the firearms charges, Hopper, Jr., and Hopper, Sr., each face seven years in prison that must be served consecutive to any sentence imposed on the kidnapping charges.
This case was investigated by the Las Cruces office of the FBI, the New Mexico State Police, and the Luna County Sheriff’s Office, with assistance from the 6th Judicial District Attorney’s Office for the State of New Mexico. The FBI in Little Rock, Ark., the Garland County (Arkansas) Sheriff’s Office, and the U.S. Attorney’s Office for the Western District of Arkansas also assisted in the investigation. The case is being prosecuted by Assistant U.S. Attorneys Randy M. Castellano and Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office.
Statement by U.S. Attorney Jenny A. Durkan on Nomination of New Seattle Police ChiefRead the Press Release
The Department of Justice congratulates nominee Kathleen O’Toole. Commissioner O’Toole has a reputation for strong, effective and community based policing. She has experience running a large police department and also has recently worked with a police department operating under a consent decree with the DOJ.
If confirmed, Commissioner O’Toole will inherit a police department that has dedicated officers and civilian staff, but is undergoing profound change. In recent months, the Seattle Police Department has adopted new policies that touch every important part of policing: data collection, use of force, stops and detentions, crisis intervention and bias policing. SPD is now actively training staff and officers on these policies, which are built to serve communities throughout Seattle. The sheer logistics and effort to implement these changes cannot be overstated: virtually every officer will undergo intensive training in the coming months. Entire new data and computer systems must come on-line. Progress is being made every day but there is still work to be done.
We applaud Commissioner O’Toole’s pledge to continue this work. Her commitment to the men and women working at SPD is equally important. We have great respect for SPD officers and are confident they will continue to address issues raised in the DOJ investigation. On May Day they showed that even as the organization was being remade, they could implement strong and effective policing strategies.
SPD and City leadership understands and has demonstrated that constitutional policing and public safety go hand in hand. Public confidence and community trust are key elements that ensure officers have the tools necessary to solve crime and protect the community.
2014 is a pivotal year for SPD. Conducting and finishing training, beefing up supervision and collecting more data will require great effort. But they are essential to be able to more quickly and transparently monitor progress towards better policing and increasing public safety.
The Department of Justice looks forward to working with Commissioner O’Toole and the City of Seattle in building a police department that is a natural leader in urban policy.Statement by Attorney General Eric Holder <br /> on the Conviction of Abu Hamza al-MasriRead the Press Release
Attorney General Eric Holder issued the following statement today in response to a federal jury in Manhattan unanimously reaching a guilty verdict against Abu Hamza al-Masri:
“In both word and deed, Abu Hamza supported the cause of violent extremism. His conviction is as just as it was swift. This case is all the more noteworthy since it continues a trend of successful prosecutions of top terrorism suspects in our federal court system. With each efficiently delivered guilty verdict against a top al Qaeda-linked figure, the debate over how to best seek justice in these cases is quietly being put to rest.”
Statement of Manhattan U.S. Attorney Preet Bharara on the Conviction of Mustafa Kamel Mustafa, A/k/a “Abu Hamza”Read the Press Release
“Once again the men and women of this office and the FBI have brought a notorious terrorist before the bar of American justice and once again the men and women of an American jury, having weighed the evidence, have found him guilty beyond a reasonable doubt. We are gratified that the jury has returned a unanimous verdict of guilt against Mustafa Kamel Mustafa, also known as “Abu Hamza.” The defendant stands convicted, not for what he said, but for what he did. Abu Hamza was not just a preacher of faith, but a trainer of terrorists. Once again our civilian system of justice has proven itself up to the task of trying an accused terrorist and arriving at a fair and just and swift result. As we have seen in the Manhattan federal courthouse in trial after trial – of Ahmed Ghailani, of Suleiman Abu Ghayth, and now of Abu Hamza – these trials have been difficult, but they have been fair and open and prompt. These trials demonstrate that in an American civilian courtroom, the American people and all the victims of terrorism can be vindicated without sacrificing our principles. And that is one reason our civilian court system is admired the world over.”
Southwest City Man Sentenced for Illegally Reentering U.S.Read the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Mexican national was sentenced in federal court today for illegally reentering the United States after having been deported.
Isaac Elias Rodriguez-Nava, 27, a citizen of Mexico residing in Southwest City, Mo., was sentenced by U.S. District Judge Brian C. Wimes to four years and nine months in federal prison without parole.
Rodriguez-Nava, who pleaded guilty on Dec. 11, 2013, was arrested at the Tyson Foods plant in Noel, Mo., where he was employed. Rodriguez-Nava came to the attention of federal law enforcement after his fingerprints were taken at the Southwest City jail when he was arrested for driving without a valid license.
Rodriguez-Nava was deported from the United States on Jan. 5, 2012, after serving a prison sentence in Texas for aggravated robbery with a deadly weapon and possession of a controlled substance.
This case was prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by U.S. Immigration and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO).
South Loop Condo Developer and Two Attorneys Among Six Defendants Indicted in $22.8 Million Mortgage Fraud SchemeRead the Press Release
CHICAGO — A south loop condominium developer and two attorneys are among six defendants facing federal charges for allegedly engaging in a $22.8 million mortgage loan fraud scheme, federal law enforcement officials announced today. The defendants allegedly caused buyers to fraudulently obtain approximately 60 mortgages from various lenders to purchase condominiums at Vision on State, a 250-unit building located at 1255 South State St.
Real estate developer WARREN N. BARR, III, was a member of 13th & State, LLC, which obtained a $55.7 million loan in 2005 to finance the development and construction of Vision on State between 2004 and 2008. Barr, 62, of Riverside, was charged with nine counts of bank fraud and four counts of making false statements on loan applications in a 13-count indictment that was returned by a federal grand jury last Thursday.
Also indicted were: ROBERT D. LATTAS, 37, of Oak Brook, an attorney who represented 13th & State at condo closings, seven counts of bank fraud and three counts of making false statements; JEFFREY A. BUDZIK, 37, of Miami Beach and formerly of Chicago, an attorney who represented individuals purchasing condos at Vision on State, one count of bank fraud; ASIF A. ASLAM, 43, of Irvine, Calif., and formerly of Lincolnwood, six counts of bank fraud and one count of making false statements; LEONARDO V. SANDERS, 51, of Chicago, who similar to Aslam recruited individuals to purchase condos and then lease them to renters, two counts of bank fraud and one count making false statements; and JAMES J. CARROLL, 63, of Naperville, who was chief financial officer and a member of 13th & State, one count of bank fraud.
The indictment also seeks forfeiture of $22,872,527 from Barr, Lattas, Aslam, and Sanders.
Barr is believed to be living temporarily in Saudi Arabia and a warrant was issued for his arrest. The other five defendants are scheduled to be arraigned at 10 a.m. Wednesday, or on other dates to be determined, in U.S. District Court.
Between March 2007 and July 2012, the defendants allegedly caused buyers to obtain mortgages to purchase condos at Vision on State by making false statements to lenders in loan applications, real estate contracts, and HUD-1 settlement statements about the sales price of the units, the buyers’ employment, income, financial condition, assets, liabilities, sources of down payment, and intention to occupy the condos, and the funds that 13th & State was providing such as the buyers’ down payments, buyers’ incentives, and commissions.
According to the indictment, Barr, Lattas, and Carroll determined the minimum prices that 13th & State should receive for the condos and facilitated the sale of those units at inflated prices, knowing the difference between the two prices, or “the spread,” would be paid to Aslam, Sanders and others to recruit buyers with incentives that were not disclosed in loan documents.
All six defendants allegedly caused false documents to be prepared that concealed from lenders that funds represented as the buyers’ down payments were actually provided by 13th & State, so that the buyers were contributing little or no equity, and that the purchase prices were inflated. Aslam and Sanders allegedly received funds from Barr and others at Barr’s direction, and, knowing this was not disclosed to lenders, kept some of the funds for themselves and used some of the funds to pay condo buyers’ assessments and closing costs.
The indictment also alleges that Barr purchased a condo at Vision on State and that he, Lattas, and Carroll knew that loan documents contained false information about the sales price and the source of Barr’s down payment, as well as false information about his assets and liabilities.
The lenders allegedly defrauded include AmTrust Bank, Bank of America, First Tennessee Bank, JP Morgan Chase Bank, and Wells Fargo.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Michael P. Stephens, Acting Inspector General for the Federal Housing Finance Agency.
The government is being represented by Assistant U.S. Attorney Christopher R. McFadden.
Each count of bank fraud and making false statements on loan applications carries a maximum penalty of 30 years in prison and a $1 million fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Snohomish County Man Pleads Guilty to Distribution of Child PornographyRead the Press Release
A 35- year-old Arlington, Washington man pleaded guilty today in U.S. District Court in Seattle to distribution of child pornography, announced U.S. Attorney Jenny A. Durkan. CHRISTOPHER DAVID DOGGETT, faces a mandatory minimum 15 years in prison and up to 40 years in prison when sentenced by Chief U.S. District Judge Marsha J. Pechman on August 15, 2014. DOGGETT has a 2003 conviction for possession and distribution of child pornography triggering the mandatory minimum sentence.
According to the plea agreement, when Snohomish County Sheriff’s deputies searched DOGGETT’s home on January 22, 2010, they discovered more than 600 images of child pornography on his digital media devices that he had distributed via computer. On DOGGETT’s smartphone, investigators found images of him molesting a young child. DOGGETT was convicted in Snohomish County Superior Court of dealing child pornography and was sentenced to 90 months in prison in February 2011. Chief Judge Pechman will determine whether the state and federal sentences will run concurrently.
Under the terms of the plea agreement, DOGGETT will be required to register as a sex offender and will undergo a psycho-sexual evaluation.
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.
The case was investigated by the Snohomish County Sheriff’s Department and was prosecuted by Assistant United States Attorney Jerrod Patterson.
San Gabriel Valley Teacher Who Pleaded Guilty to Child Exploitation Offenses and Admitted Molestation Sentenced to over 23 YearsRead the Press Release
LOS ANGELES – A former teacher and athletic coach at Royal Oak Middle School in Covina, who pleaded guilty to producing child pornography and using the Internet to entice a minor to engage in sex, was sentenced today to 282 months in federal prison.
John David Boyle, 52, of Glendora, received the 23½-year sentence from United States District Judge Stephen V. Wilson.
At today's hearing, Judge Wilson said Boyle’s crimes were “horrendous” and that “the damage done to the victims is incalculable.”
Boyle, who in addition to teaching was also an athletic coach, pleaded guilty in March to enticement of a minor to engage in criminal sexual activity, admitting that he molested a 14-year-old boy who he met online. Boyle also pleaded guilty to production of child pornography, distribution of child pornography, and possession of child pornography.
Boyle “spent years collecting child pornography from the Internet, traded child pornography over e-mail, participated in sexually explicit conversations in Internet chat rooms in which he enticed underage boys to engage in sexually explicit conduct, and personally molested multiple underage boys,” prosecutors wrote in a sentencing brief filed with the court.
During the course of the investigation, Boyle engaged in online chats with an undercover agent, believing that the undercover agent shared his sexual interest in young boys, according to court documents. Boyle set up an in-person meeting with the undercover agent in his classroom at the school on a Sunday, believing that the purpose of the meeting was to engage in sexual activity while watching child pornography together.
After being confronted by authorities in June 2013, Boyle allowed them to access several of his online accounts. Investigators then discovered that Boyle had used one of his accounts to distribute child pornography. Following Boyle’s arrest, further investigation by agents revealed that Boyle had abused at least one other underage victim in the late 1980s.
“Simply put, defendant is a sexual predator, who has avoided detection by law enforcement for many years and poses an extreme danger not just to the community, but also to the most vulnerable in it – namely, young children,” prosecutors stated in their sentencing brief.
The investigation into Boyle was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the Internet Crimes Against Children Task Force (ICAC).
Release No. 14-063
Robbers Targeting Gas Stations and Hotels Along I-95 Plead GuiltyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, Julie Leon, Special Agent in Charge, ATF, Tampa/Orlando Field Office, Deryl Loar, Sheriff, Indian River County Sheriff’s Office, Wayne Ivey, Sheriff, Brevard County Sheriff’s Office, John A. Bolduc, Chief, Port St. Lucie Police Department, and Frank J. Kitzerow, Chief, Jupiter Police Department, announce that Yubran Alvarez Vasquez, 22, of Bluffton, South Carolina, and Matthew Emmanuel Vasquez, 24, of Savannah, Georgia, pled guilty today to charges stemming from six armed robberies targeting gas stations and hotels along I-95 from Melbourne to Jupiter. Each defendant pled guilty to two counts of possessing, brandishing, and discharging a firearm in furtherance of a crime of violence, in violation of Title 18, United States Code, Section 924(c)(1)(A)(ii & iii).
According to the terms of the plea agreements, the defendants must serve a minimum of 35 years in prison but may be sentenced to life in prison. Sentencing is scheduled for August 27, 2014 at 1:30 p.m. in Fort Pierce, before U.S. District Judge Jose E. Martinez.
The defendants admitted to targeting gas stations and hotels just off exits on I-95 from Melbourne to Jupiter. The defendants participated in one robbery spree that lasted five hours commencing on February 14, 2013, through the early morning hours of February 15, 2013, during which the defendants robbed at gunpoint two gas stations and two hotels. The defendants brandished guns in all the robberies and during the robbery of the Holiday Inn Express in Vero Beach, a firearm was fired. No one was seriously injured.
Mr. Ferrer commended the investigative efforts of ATF, the Indian River County Sheriff’s Office, the Brevard County Sheriff’s Office, the Port St. Lucie Police Department, and the Jupiter Police Department. The case is being prosecuted by Assistant U.S. Attorney Russell R. Killinger.
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.
Remarks as Prepared for Delivery by Deputy Attorney General James M. Cole Announcing Guilty Plea in Credit Suisse Offshore Tax Evasion Case Washington, D.c.Read the Press Release
After an exhaustive, multi-year investigation into the use of illegal offshore bank accounts at Credit Suisse, today we have announced an historic guilty plea by the bank and the largest monetary penalty of any criminal tax case ever.
Today's guilty plea is an appropriate resolution, given the duration and breadth of Credit Suisse's conduct. Credit Suisse engaged in serious wrongdoing, first, when it aided and abetted U.S. tax evasion, and then when it failed to take immediate steps to remedy this conduct and cooperate in our investigation. Today Credit Suisse has admitted that conduct and faces significant consequences for it. Its agreement to pay fines and restitution in excess of 2 and a half billion dollars reflects both the significance of the problem at the bank and the bank's acceptance of responsibility for it.
Credit Suisse is taking the appropriate steps to put its criminal conduct behind it and move toward a new era of compliance. Through this guilty plea and Credit Suisse's civil resolutions with the Securities and Exchange Commission, the Federal Reserve, and the New York Department of Financial Services, Credit Suisse has committed to working with U.S. law enforcement and banking regulators in order to ensure that its wrongdoing remains in the past. We acknowledge Credit Suisse's efforts in this regard, and I expect that as the Bank moves forward, it will continue on its new path of compliance with U.S. tax laws.
In coming to today's resolution, we are mindful that guilty pleas by a bank can have impacts far beyond the parties to the plea. This plea demonstrates that the Department of Justice and bank regulators are prepared hold banks and their relevant employees accountable while being mindful of the impacts on depositors and the American public. The coordination required for this result can take considerable time, as in this case, but it is work that we deem important.
In several public statements, I have promised additional public developments with respect to the Department's investigations into the use of secret offshore bank accounts in Switzerland and elsewhere, and one of those developments has come to pass with today's plea. But there have been many other notable actions in the past few months in our ongoing efforts to combat the use of foreign bank accounts to evade U.S. taxes. Eight individuals affiliated with Credit Suisse have been indicted by the United States Attorney's office for the Eastern District of Virginia for their role in conspiring to assist U.S. clients in concealing their income and assets from the IRS. Two of them have pleaded guilty in recent weeks. In January 2013, Wegelin Bank, another Swiss bank, pled guilty to conspiracy to evade taxes. We have targeted 13 other Swiss banks for similar conduct. Just recently, a Swiss asset management firm, Swisspartners Group, entered into a multi-million-dollar settlement with the U.S. Attorney's Office for the Southern District of New York, and produced account files of its clients. We have also had over 100 Swiss banks come forward as part of a program we put in place with the support of the Swiss government. Under this program, these banks, which were not under investigation, will pay penalties for the violations of US law that were committed at their institutions, and provide us with information that will lead to the identification of their US clients who evaded paying their taxes. We also have had over 43,000 US taxpayers enter into the IRS voluntary disclosure program and pay over $6 billion in back taxes and penalties to the United States Treasury.
The Department is committed to robust enforcement in the offshore area, not just in Switzerland, but wherever in the world it is found. We have taken public actions in India, Israel, Luxembourg, the Cayman Islands and several other Caribbean countries. And we are engaged in law enforcement actions around the world that are not yet public. The Department's approach to investigating and prosecuting these cases is multi-faceted, and we are committed to using the many law enforcement tools at our disposal - from grand jury subpoenas to John Doe summonses, to whistleblowers and cooperating witnesses - to gather information and evidence to identify wrongdoers and hold them to account.
While today's action is a significant milestone in our law enforcement efforts, our work in the offshore area is far from done, and we expect additional public actions in this area in the coming months.
Today I commend the efforts of the Tax Division led by Assistant Attorney General Kathryn Keneally, and the U.S. Attorney's Office for the Eastern District of Virginia, led by U.S. Attorney Dana Boente. I also applaud the work and support of the Internal Revenue Service, especially intensive investigative efforts of the Criminal Investigation Division, led by Chief Richard Weber. We also appreciate the efforts of the Swiss government and banking regulators in reaching a just result and bringing the Credit Suisse matter to a close.
I would now like to turn things over to Assistant Attorney General of the Tax Division, Kathryn Keneally, who will provide additional comments on today's action and our law enforcement efforts in the offshore area.
Remarks as Prepared for Delivery by Attorney General Eric Holder Announcing Guilty Plea in Credit Suisse Offshore Tax Evasion Case Washington, D.c.Read the Press Release
Good afternoon – and thank you all for being here. I am joined today by Deputy Attorney General Jim Cole; Assistant Attorney General for the Tax Division Kathryn Keneally; U.S. Attorney Dana Boente, from the Eastern District of Virginia; and Commissioner John Koskinen of the Internal Revenue Service. We are here to announce a major step forward in our ongoing effort to protect the American people from financial misconduct – and to hold accountable any individual, bank, or other institution that violates our laws and abuses the public trust.
Today, the Department of Justice filed a criminal information against Credit Suisse AG –a bank that is one of the largest wealth managers in the world. In the course of our painstaking, years-long investigation, the Department discovered that Credit Suisse and its subsidiaries engaged in an extensive and wide-ranging conspiracy to help U.S. taxpayers evade taxes. The bank actively helped its account holders to deceive the IRS by concealing assets and income in illegal, undeclared bank accounts. These secret offshore accounts were held in the names of sham entities and foundations. This conspiracy spanned decades. In the case of at least one wholly-owned subsidiary, the practice of using sham entities to conceal funds began more than a century ago. Credit Suisse not only knew about this illegal, cross-border banking activity; they willfully aided and abetted it. Hundreds of Credit Suisse employees, including at the manager level, conspired to help tax cheats dodge U.S. taxes.
In the course of these activities, Credit Suisse deceived the IRS, the Federal Reserve, the Securities and Exchange Commission, and the Department of Justice. The bank went to elaborate lengths to shield itself, its employees, and the tax cheats it served from accountability for their criminal actions. They subverted disclosure requirements, destroyed bank records, and concealed transactions involving undeclared accounts by limiting withdrawal amounts and using offshore credit and debit cards to repatriate funds. They failed to take even the most basic steps to ensure compliance with tax laws. And when the bank finally began to feel pressure to correct illegal practices and comply with the law – as a result of the Justice Department's investigation, of which they were notified in 2010 – Credit Suisse failed to retain key documents, allowed evidence to be lost or destroyed, and conducted a shamefully inadequate internal inquiry.
Today, I can announce that Credit Suisse has agreed to plead guilty to criminal charges related to this pervasive illegal activity. This is the largest bank to plead guilty in 20 years. The bank will pay a total of $1.8 billion in the form of a fine of over $1.13 billion and nearly $670 million in restitution to the IRS. They have admitted criminal wrongdoing in a detailed Statement of Facts filed alongside the information in this case. And they have stopped these activities, fundamentally changed their business operations, and agreed to provide critical information that will aid in our enforcement efforts - so the bank can move forward in full compliance with the law.
This plea agreement caps a years-long investigation that has already led to law enforcement actions with respect to several individual employees Credit Suisse. Since 2011, the Department has indicted eight employees at the bank, including some at the manager level; two of these have so far pleaded guilty.
This announcement should send a firm and unequivocal message to anyone who would engage in dishonest or illegal financial activity that the Justice Department does not, and we will not, tolerate such activities. When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here.
This case shows that no financial institution, no matter its size or global reach, is above the law. When the Department of Justice conducts investigations, we will always follow the law and the facts wherever they lead. We will never hesitate to criminally sanction any company or individual that breaks the law. A company's profitability or market share can never and will never be used as a shield from prosecution or penalty. And this action should put that misguided notion definitively to rest.
This resolution, and today's announcement, were conducted in close coordination with the bank's financial regulators - in this case, the Board of Governors of the Federal Reserve, which today announced a $100 million penalty; the New York State Department of Financial Services, which announced a resolution totaling $715 million; and the SEC, to which Credit Suisse paid $196 million this past February.
Because criminal charges involving a financial institution have the potential to trigger serious follow-on actions by regulatory agencies, this coordination was imperative. As the regulators have conveyed this afternoon, notwithstanding this plea agreement, the bank will move forward. And although I cannot comment on, or specify the targets of, other ongoing investigations, I am confident that this robust cooperation will serve us well in the weeks and months ahead.
I'd like to thank everyone who made today's announcement possible – particularly Assistant Attorney General Keneally, her colleagues in the Tax Division, and U.S. Attorney Boente and his colleagues in the Eastern District of Virginia. Thank you for your tireless work on this important matter. At this time it's my privilege to introduce Deputy Attorney General James Cole, who will provide additional details on today's announcement.
Remarks as Prepared for Delivery by Assistant Attorney General for the Tax Division Kathryn Keneally Announcing Guilty Plea in Credit Suisse Offshore Tax Evasion Case Washington, D.c.Read the Press Release
The central mission of the Tax Division is to enforce our nation's tax laws fairly and consistently. This is a responsibility that we owe to every honest taxpayer who pays his or her fair share.
As part of this mission, we are committed to using all enforcement tools against those who seek to avoid their legal obligations, and their responsibilities to their fellow citizens and taxpayers, by hiding their assets in foreign bank accounts. We are also committed to investigating and holding responsible financial institutions, bankers, and other professionals who facilitate this conduct.
Credit Suisse has now acknowledged that it acted in both the United States and Switzerland to aid and abet the use of secret Swiss bank accounts for the evasion of U.S. taxes. As set out in the statement of facts, Credit Suisse assisted its clients in using sham entities, soliciting IRS forms that falsely stated that those sham entities were the beneficial owners of assets in accounts with the bank, and facilitating access to the funds in those accounts in a manner designed to keep the accounts secret. It also failed to preserve documents that would have aided in our investigation. The plea agreement that has been announced today imposes serious consequences on Credit Suisse for this conduct.
We appreciate that Credit Suisse has taken this significant step to accept the consequences of these acts. We also recognize that Credit Suisse has ceased this conduct, and has changed its business operations to ensure that U.S. taxpayers will no longer be able to hide their assets at Credit Suisse. Also, through the information that Credit Suisse has agreed to provide, the Internal Revenue Service and the Department of Justice will be able to make treaty requests to Switzerland for account records. For those account holders who closed their accounts knowing that our investigations were focusing on Credit Suisse, we are obtaining information that is enabling us to follow the funds to other Swiss banks or to banks in other tax haven and bank secrecy countries. By its plea today, Credit Suisse has addressed its past conduct, and is in a position to move beyond these criminal activities.
We also appreciate that Switzerland has taken important steps to ensure that its banking community will no longer be a haven for U.S. tax evasion. Switzerland's ratification, in September 2009, of the Protocol amending U.S.-Swiss tax treaty, and its inter-govermental agreement with the United States concerning FATCA implementation, were significant steps toward this goal. We are also grateful for the support of the Swiss Financial Market Supervisory Authority, FINMA, and the Swiss government for the Swiss Bank Program that the Department announced in August 2013. Through this program, Swiss banks are cooperating to provide valuable information that will further our global investigations, and those Swiss banks in turn have a path to resolution for past activities.
I also take this opportunity to thank the Attorney General and the Deputy Attorney General for the support and assistance that the Tax Division received throughout this investigation and in all our our enforcement activities, to recognize and thank United States Attorney Dana Boente for the excellent work by his office in the Eastern District of Virginia, to recognize and thank the IRS Commissioner John Koskinen and the IRS Criminal Investigation Division for the important work of the IRS in this law enforcement priority, and to recognize and thank all of the prosecutors and investigative agents who have done excellent work throughout this investigation, and in particular to recognize Mark Lytle, Assistant United States Attorney for the Eastern District of Virginia, Mark Daly, Senior Litigation Counsel, and Nanette Davis, Assistant Chief, with the Tax Division, and IRS Special Agent James O'Leary.
I would like now to turn to IRS Commissioner John Koskinen for additional comments.
Rand Man Pleads Guilty in Major Federal Investigation of Huntington Drug TraffickingRead the Press Release
Huntington, W.Va. – Brandon Appleton, 25, of Rand, West Virginia, pleaded guilty today in federal court in Huntington to possessing cocaine and the drug MDMA, commonly known as Ecstasy, with the intent to distribute them, United States Attorney Booth Goodwin announced. On January 20, 2014, investigators working with the Drug Enforcement Administration conducted a search at 1814 Artisan Avenue in Huntington, which was the residence of Kenneth Dewitt Newman, also known as “K-Kutta.” At the time of the search, Appleton was in the residence. Appleton was in possession of a sandwich-style bag that contained smaller bags of both MDMA and cocaine, which Appleton intended to sell.
The investigation into Newman’s drug trafficking revealed that Appleton distributed drugs for Newman from approximately December 2013 until the January search. Additional amounts of cocaine and MDMA, as well as heroin, marijuana, and prescription pills, were seized in the residence. As a result of the investigation, Newman and 14 other individuals were charged with various offenses related to a drug trafficking conspiracy in the Huntington area.
Appleton faces up to 20 years’ imprisonment and up to a $1 million fine when he is sentenced on August 18, 2014. Chief United States District Judge Robert C. Chambers is presiding over the case.
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 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 opiate painkillers in communities across the Southern District.
Penn Yan Man Indicted for Conspiring and Attempting to Obtain Money from Bank by Extortion and Lying to the FBIRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned a four-count indictment charging Jonathan A. Karcher, 21, of Penn Yan, N.Y., with conspiring and attempting to extort money from the Lyons National Bank in Penn Yan on June 5, 2013 and later lying to the Federal Bureau of Investigation during the investigation into the incident. The charges carry a maximum penalty of 20 years in prison and a fine of $250,000.
Assistant U.S. Attorney Everardo A. Rodriguez, who is handling the case, stated that according to the indictment, on June 5, 2013, a member of the conspiracy called the manager of Lyons National Bank and demanded that the manager take $15,000 in cash and leave it by a dumpster behind the Rite Aid store across the street from the bank. During that conversation, the caller threatened the bank manager by informing her that the caller knew where the manager lived, how many children the manager had and that the car of one of the children was at the house that day. The indictment also alleges that Karcher drove to the area of the Lyons National Bank that day, parked in the Rite Aid parking lot and later walked by the dumpster where the manager had been directed to leave the $15,000.
The indictment further alleges that during a subsequent interview during the investigation, the defendant provided materially false statements to the FBI.
The indictment is the culmination of a joint investigation on the part of the Penn Yan Police Department, under the direction of Chief Mark Hulse, and the Federal Bureau of Investigation.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Passaic County, N.J., Man Pleads Guilty to Conspiring to Defraud the U.S. Treasury Department of More Than $2.5 MillionRead the Press Release
NEWARK, N.J. - A Passaic County, N.J., man today admitted his role in defrauding the U.S. Department of Treasury of more than $2.5 million in income tax return checks, U.S. Attorney Paul Fishman announced today.
Reyes Flores-Perez, 32, of Passaic, N.J., pleaded guilty today before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to defraud the United States and one count of knowingly transferring false identification documents.
According to documents filed in this case and statement made in court:
Citizens of the Commonwealth of Puerto Rico typically do not file tax returns with the IRS as long as all of their income is derived from sources in Puerto Rico. Members of the conspiracy filed or caused to be filed phony individual income tax returns with the IRS using the identity information of other individuals, including citizens of the Commonwealth of Puerto Rico. The IRS processed the false returns as if they were legitimate and issued refund checks, which were obtained by Flores-Perez’ conspirators. Flores-Perez’ role in the scheme was to produce fraudulent identification documents that matched the identities of the payees on the treasury checks, which his conspirators used to negotiate the treasury checks. Flores-Perez admitted the total loss from the conspiracy was more than $2.5 million.
The conspiracy charge to which Flores-Perez pleaded guilty carries a maximum potential penalty of five years in prison. The transferring fraudulent identification documents charge carries a maximum potential penalty of 15 years in prison. Both charges also carry a potential $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Sept. 10, 2014.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Acting Special Agent in Jonathan D. Larsen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Cari Fais of the General Crimes Unit and Andrew J. Bruck of the Organized Crime/Gangs Unit in Newark.
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Defense counsel: John Whipple Esq., Morristown, N.J.Flores-Perez, Reyes, Information
Pasco Man Sentenced for Distribution of MethamphetamineRead the Press Release
Spokane – Today, Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Kenneth Richard Rowell, a resident of Pasco, Washington, was sentenced after having previously pleaded guilty to Distribution of Methamphetamine. Senior United States District Judge William Fremming Nielsen sentenced Rowell to a 120 month term of imprisonment and a 60 month term of court supervision following his release from Federal prison.
According to information disclosed during the court proceedings, Rowell distributed over 5 grams of pure methamphetamine. The case began with an investigation by the Tri-City Metro Drug Task Force, which conducted a controlled purchase of methamphetamine from the Defendant. Special Agents with the Drug Enforcement Administration provided assistance and, on April 11, 2013, Rowell distributed 24.6 grams of pure methamphetamine.
Michael C. Ormsby said, "This prosecution is yet another example of the cooperation between members of the Tri-City Metro Drug Task Force and the Drug Enforcement Administration in the Tri-Cities. The corrosive effects of methamphetamine upon the community are well known. These state and federal law enforcement officers work together every day to investigate drug trafficking in the Eastern District of Washington and work closely with the United States Attorney's Office to prosecute aggressively individuals involved in such criminal activity. "
This investigation was conducted by the Tri-City Metro Drug Task Force and the Drug Enforcement Administration, and the prosecution was coordinated by Task Force Officer Kevin Barton. This case was prosecuted by Alexander C. Ekstrom, an Assistant United States Attorney for the Eastern District of Washington.
CR-13-6070
Operation Dirty GlassRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for possessing a large amount of PCP for distribution and for illegally possessing firearms.
Today’s sentence is a result of Operation Dirty Glass, a multi-agency investigation into a large-scale PCP and crack cocaine drug-trafficking organization in Kansas City that resulted in a series of 10 indictments that charged 20 defendants in separate but related cases.
Damond S. Hill, also known as “Day Day,” 35, of Kansas City, was sentenced by U.S. District Judge Dean Whipple to 19 years in federal prison without parole.
On July 1, 2013, Hill pleaded guilty to possessing one kilogram or more of PCP with the intent to distribute. Hill also pleaded guilty to possessing a firearm in furtherance of a drug-trafficking crime.
Law enforcement officers executed a search warrant at Hill’s residence following a controlled purchase of marijuana from Hill by an informant. Officers discovered nearly five kilograms of PCP packaged for distribution in various-sized bottles (including eye-droppers, gallon jugs and 32-ounce plastic bottles). Officers also found two .40-caliber pistols and a .45-caliber pistol, more than $3,000 and additional packaging material and items associated with drug trafficking.
This case was prosecuted by Assistant U.S. Attorney Brent Venneman. It was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Kansas City, Mo., Police Department, the U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Ohio Man Who Distributed Heroin Inters Federal Guilty PleaRead the Press Release
CHARLESTON, W.Va. – An Ohio man who distributed heroin to an informant in October 2013 pleaded guilty today to a federal drug charge, announced United States Attorney Booth Goodwin. Keith Irons, 25, of Marion, Ohio, pleaded guilty to distribution of heroin. Irons entered his guilty plea in a hearing before United States District Judge Thomas E. Johnston.
Irons admitted selling heroin to an informant working for the Parkersburg Police Department on two occasions in October 2013.
Irons faces up to 20 years in federal prison when he is sentenced on August 26, 2014.
The Parkersburg Police Department and the Washington County, Ohio Major Crimes Task Force conducted the investigation. Assistant United States Attorney Joshua Hanks is in charge of the prosecution.
Newfields Woman Sentenced to 12 Months and One Day ForRead the Press Release
Stealing Veteran’s Benefits
CONCORD, NEW HAMPSHIRE – Amy Greeley, 43, of Newfields, was sentenced in United States District Court for the District of New Hampshire to 12 months and one day in federal prison after pleading guilty to one count of misappropriating a veteran’s benefits and using them for her personal benefit, announced United States Attorney John P. Kacavas.
Greeley served as the fiduciary for benefits paid by the Department of Veterans Affairs on behalf of her father during the period from September 2002 through June 2011. As her father’s fiduciary, Greeley was obligated to use the funds solely for her father’s benefit. Beginning in May 2005 through June 2011, Greeley transferred the funds from the fiduciary account to accounts she controlled and spent the funds for her personal benefit. Greeley filed false annual reports with the VA indicating that the funds were in the fiduciary account. Those reports included the forged signatures of bank officials purportedly certifying the accuracy of the reports. Greeley was removed as the fiduciary in June 2011, after having stolen approximately $251,534 in benefits. The VA was reimbursed in its entirety before Greeley was sentenced.
The government requested a sentence of 24 months based on the advisory federal sentencing guideline. The court imposed the 12 months and a day sentence to be followed by a two year period of supervised release after she completes her prison sentence. During the term of supervised release Greeley’s behavior will be monitored by the United States Probation & Pretrial Services Office.
The case was investigated by the Department of Veterans Affairs Office of the Inspector General, Criminal Investigations Division and prosecuted by First Assistant United States Attorney Donald Feith.
New York Man Sentenced to 15 Months Imprisonment for Purchasing Atv in Enosburg with Counterfeit MoneyRead the Press Release
The Office of the United States Attorney for the District of Vermont that Judge William K. Sessions III, in Burlington, Vermont, today sentenced Francis Hamblin, 31, of, Fort Ann, New York to fifteen months in prison and two years of supervised release. Hamblin previously plead guilty to possessing counterfeit currency.
According to court records, on October 19, 2013, Hamblin, in response to an advertisement on Craig’s List, purchased a Yamaha ATV vehicle from a man in Enosburg with $3,500 in counterfeit U.S. currency. The seller of the ATV later became suspicious of the currency and contacted the Franklin County Sheriff’s Office who confirmed the currency was counterfeit. Investigation by the Franklin County Sheriff’s Office led to Hamblin’s arrest. Hamblin also purchased two other ATVs with counterfeit currency, one in Albany, Vermont and the other in Plattsburgh, New York. Two of the three ATVs were recovered and returned to the original owners. The third was not and Hamblin was ordered to pay $2,080 to the seller in Plattsburgh, New York. Court records show that Hamblin also passed a $20 counterfeit bill at Burger King in South Burlington, Vermont.
This case was investigated jointly by the United States Secret Service and the Franklin County Sheriff’s Office. The United States is represented by Assistant U.S. Attorney Joseph Perella. The defendant is represented by David McColgin, Esq. of the Federal Public Defender’s Office in Burlington.New Haven Man Sentenced to 3 Years in Federal Prison for Illegally Possessing Firearm and AmmunitionRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JEROME R. THOMAS, 22, of New Haven, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 36 months of imprisonment, followed by three years of supervised release, for possession of a firearm and ammunition by a convicted felon.
According to court documents and statements made in court, on January 1, 2014, members of the Yale University Police Department executed an arrest warrant for THOMAS at his girlfriend’s residence. THOMAS was apprehended after he attempted to flee the premises through a window. A search of the residence revealed a .45 caliber semi-automatic pistol, two magazines loaded with .45 caliber ammunition, and a bag containing more than 80 additional rounds of .45 caliber ammunition.
THOMAS was previously convicted in state court of criminal possession of a firearm, possession of narcotics with intent to sell, and carrying a pistol without a permit. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
THOMAS has been detained since his arrest. On February 19, 2014, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Yale University Police Department. The case was prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.
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[email protected]Neptune, N.J., Man Admits Involvement in Shooting of Cab Driver, Several Armed Robberies in Monmouth CountyRead the Press Release
TRENTON, N.J. – A Neptune, N.J., man today admitted his involvement in a 24-hour crime spree that took place in five separate shore-area towns and involved the shooting of a cab driver and a number of armed robberies, U.S. Attorney Paul J. Fishman announced.
Quam Wilson, 23, pleaded guilty to committing a Hobbs Act robbery and using a firearm during a the commission of that robbery. Wilson also admitted to committing additional armed robberies, which will be taken into consideration at the time of his sentencing. Wilson entered his guilty plea before Judge Peter G. Sheridan in Trenton federal court.
Wilson was initially arrested and charged by criminal complaint with the conspiracy and firearms counts on March 13, 2013. On June 3, 2013, U.S. Magistrate Judge Lois H. Goodman remanded him to federal custody pending trial. Wilson pleaded guilty today to counts one and two of the indictment returned against him on Sept. 5, 2013.
According to the documents filed in this case and statements made in court:
Wilson engaged in a crime spree that began at approximately 5:00 a.m. on Nov. 13, 2012, when he robbed a cab driver in Asbury Park. The driver was shot during the robbery. The victim, who survived, sustained a single gunshot wound to the head and was taken to Jersey Shore University Medical Center. During today’s hearing, Wilson admitted he took the cab driver’s identification, taxi keys and debit card during the robbery.
After robbing the taxi driver, Wilson proceeded to a Shell gas station located in Ocean Township. There, he approached a gas station attendant and, while brandishing a handgun, robbed him of cash and fled the area.
Later that morning, Wilson attempted to obtain money from the cab driver’s bank account from several area banks. Suspecting that a theft was taking place, a bank employee confiscated the identification and debit card from Wilson and contacted police.At approximately 9:00 p.m., that same day, he committed an armed robbery at a taxi stand in Long Branch, again while brandishing a handgun.
During the early morning hours of the next day, Nov. 14, 2012, Wilson robbed an Exxon gas station in Red Bank at gunpoint.
A short time later, Wilson entered a Quick Check convenience store in Neptune Township. Again, he pointed a handgun at a cashier and demanded money.
Wilson was arrested at approximately 10:00 p.m. by several police officers in Asbury Park, where he had been hiding in an attic.
The robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The firearm charge carries a maximum potential penalty of life in prison and a $250,000 fine, and a mandatory minimum penalty of 10 years in prison. Sentencing is currently scheduled for Sept. 3, 2014. U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Stephanie R. Shoemaker, with the investigation. He also thanked the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, Asbury Park Police Department, Ocean Township Police Department, Long Branch Police Department, Neptune Township Police Department and the United States Marshals Service N.Y./N.J. Regional Fugitive Task Force for their excellent work in the investigation and apprehension of Wilson.The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office in Trenton, and Special Assistant U.S. Attorney Jacquelynn Seely.
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Defense counsel: David R. Oakley Esq., Princeton, N.J.
Wilson, Quam Indictment
Mustafa Kamel Mustafa, A/k/a “Abu Hamza,” Convicted of 11 Terrorism Charges in Manhattan Federal CourtRead the Press Release
Charges Based on Participation in Hostage-Taking in Yemen, Support for the Establishment of a Terrorist Training Camp in the United States, and the Facilitation of Violent Jihad in Afghanistan
Preet Bharara, the United States Attorney for the Southern District of New York, today announced the conviction of MUSTAFA KAMEL MUSTAFA, a/k/a “Abu Hamza,” a/k/a “Abu Hamza al Masri,” (“ABU HAMZA”) for his participation in a hostage-taking in Yemen in 1998 that resulted in four deaths, a conspiracy to establish a terrorist training camp in Bly, Oregon, in 1999, and supporting violent jihad in Afghanistan in 2000 and 2001. Following a four-week trial and two days of deliberations, the jury convicted ABU HAMZA of each of the 11 charges that he faced. ABU HAMZA is scheduled to be sentenced on September 9, 2014 before U.S. District Judge Katherine B. Forrest, who presided over the trial.
Attorney General Eric Holder said: “In both word and deed, Abu Hamza supported the cause of violent extremism. His conviction is as just as it was swift. This case is all the more noteworthy since it continues a trend of successful prosecutions of top terrorism suspects in our federal court system. With each efficiently delivered guilty verdict against a top al Qaeda-linked figure, the debate over how to best seek justice in these cases is quietly being put to rest.”
Manhattan U.S. Attorney Preet Bharara said: “Once again the men and women of this office and the FBI have brought a notorious terrorist before the bar of American justice and once again the men and women of an American jury, having weighed the evidence, have found him guilty beyond a reasonable doubt. We are gratified that the jury has returned a unanimous verdict of guilt against Mustafa Kamel Mustafa, also known as ‘Abu Hamza.’ The defendant stands convicted, not for what he said, but for what he did. Abu Hamza was not just a preacher of faith, but a trainer of terrorists. Once again our civilian system of justice has proven itself up to the task of trying an accused terrorist and arriving at a fair and just and swift result. As we have seen in the Manhattan federal courthouse in trial after trial – of Ahmed Ghailani, of Suleiman Abu Ghayth, and now of Abu Hamza – these trials have been difficult, but they have been fair and open and prompt. These trials demonstrate that in an American civilian courtroom, the American people and all the victims of terrorism can be vindicated without sacrificing our principles. And that is one reason our civilian court system is admired the world over.”
As alleged in the Indictment against ABU HAMZA and established by the evidence admitted at trial:
Hostage-Taking in Yemen in December 1998
On December 28, 1998, in Yemen, hostage-takers stormed a caravan of sport utility vehicles carrying 16 tourists, including two United States citizens, and took the tourists hostage by force. Prior to the hostage-taking, ABU HAMZA issued a public warning to “infidels” not to travel to Yemen. In addition, five days prior to the hostage-taking, ABU HAMZA’s stepson and other associates of ABU HAMZA were arrested in Yemen. During the hostage-taking, the hostages told their victims that they were taken prisoner to free the hostage-takers’ “friends”.
Prior to the hostage-taking, ABU HAMZA provided the leader of the hostage-takers with a satellite telephone, and subsequently spoke with him on that satellite telephone the night before the hostage-taking and during the hostage-taking. During the call on the day of the hostage-taking, ABU HAMZA agreed to act as an intermediary on behalf of the hostage-takers. ABU HAMZA also provided advice to the leader of the hostage-takers over the telephone.
On December 29, 1998, the Yemeni military launched a rescue operation to free the hostages. The hostage-takers fought the Yemeni military, using the hostages as human shields. During the rescue operation, four of the hostages were killed and several others were wounded.
Subsequently, in a recorded interview with one of the surviving hostages conducted at his mosque, ABU HAMZA described the hostage-taking as “a good thing.”
Efforts To Create a Terrorist Training Camp in Bly, Oregon in 1999
In late 1999, ABU HAMZA and several co-conspirators, including Oussama Abdullah Kassir, Haroon Rashid Aswat, and others, attempted to create a terrorist training camp to support al Qaeda on property located in Bly, Oregon. The primary purpose of the Bly, Oregon, camp was to provide various types of terrorist training, including weapons training. In late November 1999, at ABU HAMZA’s direction, Kassir and Aswat traveled from London, England, to Bly to assist in setting up the camp. Kassir brought with him to the camp a manual on the use of sarin nerve gas and letters of appreciation to Usama bin Laden and ABU HAMZA. Aswat subsequently was present at an al Qaeda guest house in Pakistan.
On May 12, 2009, after a four-week jury trial in this District, Kassir was convicted of various criminal offenses, including conspiring to provide material support to terrorists and to al Qaeda, and conspiracy to kill persons overseas, as a result of Kassir’s participation in the efforts to establish the Bly terrorist training camp. On September 15, 2009, United States District Judge John F. Keenan sentenced Kassir to multiple terms of life in prison. The conviction was subsequently affirmed by the Court of Appeals.
Aswat was arrested in Zambia in July 2005 and then deported to England, where he was arrested at the request of the United States, pursuant to a warrant issued in this District. The extradition proceedings against Aswat are currently pending.
Facilitating Violent Jihad in Afghanistan 2000 and 2001
In November 2000, ABU HAMZA requested that Ernest James Ujaama, a London-based follower of Abu Hamza, escort another one of ABU HAMZA’s followers, Feroz Abassi, to Ibn Sheikh al-Libi, a commander at a terrorist training camp in Afghanistan. Thereafter, Ujaama and Abassi traveled from London to Pakistan. Ujaama and Abassi then separately entered Afghanistan. ABU HAMZA subsequently conveyed instructions for Abassi to contact Ibn Sheikh al-Libi, who was expecting Abassi. Thereafter, Abassi passed through an al Qaeda safe house in Afghanistan, attended al Qaeda’s al Faruq training camp, and met with senior al Qaeda leaders. In December 2001, United States forces took Abassi into custody in Afghanistan.
In addition, from the spring of 2000 through late 2001, ABU HAMZA provided goods and services to the Taliban by, among other things, directing Ujaama to deliver money to Taliban-controlled parts of Afghanistan.
Ujaama was arrested in 2002 and testified against ABU HAMZA as a cooperating witness for the Government.
ABU HAMZA, 56, a naturalized citizen of the United Kingdom, was extradited from the United Kingdom to the Southern District of New York in October 2012. The 11 offenses of conviction carry the following maximum penalties:
Click here to view chart(s)
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
The arrest, extradition and conviction of ABU HAMZA was the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York, the FBI, the NYPD, the United States Marshals Service, and New Scotland Yard in the United Kingdom.
Mr. Bharara expressed particular appreciation to the U.S. Department of Justice Office of International Affairs for its extraordinary assistance with the extradition in this case. Mr. Bharara also thanked the FBI’s Seattle Field Office, the Home Office of the United Kingdom, the U.S. Department of Justice National Security Division, and the United States Department of State for their assistance.
The case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys John P. Cronan, Edward Y. Kim and Ian McGinley are in charge of the prosecution.
Mississippi Man Pleads Guilty in Ricin Letter InvestigationRead the Press Release
James Everett Dutschke, 41, of Tupelo, Mississippi., was sentenced today by United States District Judge Sharion Aycock, in Aberdeen, Mississippi., to a 300 month prison sentence for developing and possessing the biological agent ricin and subsequently mailing ricin-laced, threatening letters including one that threatened bodily harm to the President of the United States. Dutschke was also sentenced to serve a term of 5 years supervised release.
The sentence was announced by John Carlin, Assistant Attorney General for the Justice Department’s National Security Division, Felicia Adams, U.S. Attorney for the Northern District of Mississippi, Daniel McMullen, Special Agent in Charge of the FBI’s Jackson Field Office, and Craig Caldwell, Special Agent in Charge of the Secret Service’s Birmingham, AL, District Field Office.
Following an investigation, Dutschke was arrested on April 27, 2013, and indicted by a federal grand jury on June 3, 2013. A superseding indictment was filed on Nov. 20, 2013. Dutschke pled guilty on Jan. 17, 2014 to one count of developing and possessing ricin, and three subsequent counts of mailing threatening letters laced with the substance to the President of the United States, U.S. Senator Roger Wicker, and Lee County, Mississippi, Justice Court Judge Sadie Holland. According to the plea agreement between Dutschke and the U.S. Attorney’s Office that was filed in U.S. District Court in Oxford, Dutschke had agreed to serve a 300 month prison sentence and had waived his right to appeal.
The investigation was conducted by the FBI’s Jackson and Memphis Joint Terrorism Task Forces, the U.S. Secret Service, the U. S. Postal Inspection Service, the U. S. Capitol Police and was assisted by the following state and local agencies: Mississippi National Guard 47th Civil Support, Mississippi Office of Homeland Security, Lee County Sheriff’s Office, Prentiss County Sheriff’s Office, Corinth Police Department, Tupelo Police Department and Booneville Police Department. The case is being prosecuted by Assistant U.S. Attorneys Chad Lamar, Clay Joyner and Clyde McGee of the Northern District of Mississippi, and Andrew Sigler of the Department of Justice, National Security Division.Mississippi Man Pleads Guilty in Ricin Letter InvestigationRead the Press Release
WASHINGTON— James Everett Dutschke, 41, of Tupelo, Mississippi, was sentenced today by United States District Judge Sharion Aycock, in Aberdeen, Mississippi, to a 300 month prison sentence for developing and possessing the biological agent ricin and subsequently mailing ricin-laced, threatening letters including one that threatened bodily harm to the President of the United States. Dutschke was also sentenced to serve a term of 5 years supervised release.
The sentence was announced by John Carlin, Assistant Attorney General for the Justice Department’s National Security Division, Felicia Adams, U.S. Attorney for the Northern District of Mississippi, Daniel McMullen, Special Agent in Charge of the FBI’s Jackson Field Office, and Craig Caldwell, Special Agent in Charge of the Secret Service’s Birmingham, Alabama, District Field Office.
Following an investigation, Dutschke was arrested on April 27, 2013, and indicted by a federal grand jury on June 3, 2013. A superseding indictment was filed on November 20, 2013. Dutschke pled guilty on January 17, 2014 to one count of developing and possessing ricin, and three subsequent counts of mailing threatening letters laced with the substance to the President of the United States, U.S. Senator Roger Wicker, and Lee County, Mississippi, Justice Court Judge Sadie Holland. According to the plea agreement between Dutschke and the U.S. Attorney’s Office that was filed in U.S. District Court in Oxford, Dutschke had agreed to serve a 300 month prison sentence and had waived his right to appeal.
The investigation was conducted by the FBI’s Jackson and Memphis Joint Terrorism Task Forces, the U.S. Secret Service, the U. S. Postal Inspection Service, the U. S. Capitol Police and was assisted by the following state and local agencies: Mississippi National Guard 47th Civil Support, Mississippi Office of Homeland Security, Lee County Sheriff’s Office, Prentiss County Sheriff’s Office, Corinth Police Department, Tupelo Police Department and Booneville Police Department. The case is being prosecuted by Assistant U.S. Attorneys Chad Lamar, Clay Joyner and Clyde McGee of the Northern District of Mississippi, and Andrew Sigler of the Department of Justice, National Security Division.
Mercer County Men Plead Guilty to Federal Drug ChargesRead the Press Release
Bluefield, W.Va. – United States Attorney Booth Goodwin announced today that three Mercer County men pled guilty in Bluefield to federal drug charges. Steven Eugene Champ, 41, of Matoaka, West Virginia, pled guilty to distribution of hydromorphone, admitting that on September 24, 2012, he distributed two hydromorphone pills to a person cooperating with law enforcement authorities. The transaction took place at or near Princeton. Champ further admitted that he distributed a total of 1,710 hydromorphone pills between July 2011 and February 2013.
Elijah Abdul Jones, 36, of Bluefield, pled guilty to distribution of cocaine base. He admitted that he sold .72 grams of cocaine base to a person cooperating with police on July 23, 2013, in Bluefield. He further admitted that he had also distributed a total of 14 grams of cocaine base and a small quantity of heroin.
Michael Devon Harmon, 37, of Princeton, pled guilty to distribution of hydromorphone, admitting that on July 24, 2013, he distributed two hydromorphone pills to a person cooperating with the police in Princeton. He also admitted that in addition to that transaction, in July 2013, he sold two more hydromorphone pills and small quantitites of cocaine base and cocaine.
Each of the defendants faces up to 20 years in prison and a one million dollar fine. Senior United States District Judge David A. Faber has set each defendant for sentencing on September 22, 2014.
The cases were investigated by the Southern Regional Drug and Violent Crime Task Force. Assistant United States Attorney John File is handling the prosecutions.
These cases are 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 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 opiate painkillers in communities across the Southern District.
Manhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Charges in Connection with Blackshades Malicious Software That Enabled Users Around the World to Secretly and Remotely Control Victims’ ComputersRead the Press Release
The Charges Are Part of the Largest-Ever Global Cyber Law Enforcement Operation, Involving More than 90 Arrests and Other Law Enforcement Actions in 19 Countries
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an indictment charging ALEX YÜCEL, the owner of an organization known as “Blackshades,” that since 2010, has sold and distributed to thousands of people in more than 100 countries a sophisticated and pernicious form of malicious software, or “malware,” known as the Blackshades Remote Access Tool, or “RAT.” The RAT was co-created by YÜCEL and has been used to infect computers throughout the world to spy on victims through their web cameras, steal files and account information, and log victims’ key strokes. Also unsealed today were criminal complaints against BRENDAN JOHNSTON, who was paid by Blackshades to help market and sell malware, including the RAT, and provide technical assistance to its users; KYLE FEDOREK, who purchased the RAT and used it to steal online account information from hundreds of victims; and MARLEN RAPPA, who purchased the RAT and used it to spy on dozens of victims and steal online account information. YÜCEL was arrested in Moldova in November 2013 and is pending extradition to the United States. JOHNSTON was arrested yesterday in Thousand Oaks, California, and will be presented today in the Central District of California. FEDOREK and RAPPA were arrested at their residences this morning and will be presented later today before United States Magistrate Judge James L. Cott in Manhattan federal court.
MICHAEL HOGUE, the co-creator of the RAT, was arrested in June 2012 as part of the Government’s investigation known as “Operation Cardshop” and subsequently pled guilty before U.S. District Judge Kevin Castel in January 2013. A transcript of his guilty plea was unsealed this morning.
In addition to the criminal charges, a domain name associated with the Blackshades website was seized pursuant to a seizure warrant obtained in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara said: “Blackshades’ flagship product was a sophisticated program known as the Remote Access Tool, or “RAT” for short. The RAT is inexpensive and simple to use, but its capabilities are sophisticated and its invasiveness breathtaking. As today’s case makes clear, we now live in a world where, for just $40, a cybercriminal halfway across the globe can – with just a click of a mouse – unleash a RAT that can spread a computer plague not only on someone’s property, but also on their privacy and most personal spaces.”
Assistant Director-in-Charge of the FBI George Venizelos said: “Armed with $40 and a computer, an individual could easily get the Blackshades Remote Access Tool and become a perpetrator. It required no sophisticated hacking experience or expensive equipment. This tool was purchased by thousands of people in more than 100 countries. The charges unsealed today showcase the top to bottom approach the FBI takes to its cases. We tackled this malware starting with those that put it in the hands of the users- the creators and those who helped make it readily available- the administrators. We will continue to work with our law enforcement partners to bring to justice anyone who used Blackshades maliciously.”
According to the allegations contained in the indictment and criminal complaints unsealed today in Manhattan federal court:
Overview
Since at least 2010, an organization known as “Blackshades” has sold and distributed malicious software to thousands of cybercriminals throughout the world. Blackshades’ flagship product was the Blackshades Remote Access Tool, or R.A.T. (the “RAT”), a sophisticated piece of malware that enabled cybercriminals to secretly and remotely gain control over a victim’s computer. After installing the RAT on a victim’s computer, a user of the RAT had free rein to, among other things, access and view documents, photographs and other files on the victim’s computer, record all of the keystrokes entered on the victim’s keyboard, steal the passwords to the victim’s online accounts, and even activate the victim’s web camera to spy on the victim – all of which could be done without the victim’s knowledge. The FBI’s investigation has shown that the RAT was purchased by at least several thousand users in more than 100 countries and used to infect more than half a million computers worldwide.
Purchasing and Installing the Blackshades RAT
The RAT was typically advertised on forums for computer hackers and marketed as a product that conveniently combined the features of several different types of hacking tools. Copies of the Blackshades RAT were available for sale, typically for $40 each, on a website maintained by Blackshades.
After purchasing a copy of the RAT, a user had to install the RAT on a victim’s computer – i.e., “infect” a victim’s computer. The infection of a victim’s computer could be accomplished in several ways, including by tricking victims into clicking on malicious links or by hiring others to install the RAT on victims’ computers.
The RAT contained tools known as “spreaders” that helped users of the RAT maximize the number of infections. The spreader tools generally worked by using computers that had already been infected to help spread the RAT further to other computers. For instance, in order to lure additional victims to click on malicious links that would install the RAT on their computers, the RAT allowed cybercriminals to send those malicious links to others via the initial victim’s social media service, making it appear as if the message had come from the initial victim. For example, a RAT user could send an instant message, or IM, to potential victims that appeared to come from the initial victim, inviting them to click on a link that appeared to lead to a legitimate website, but that in reality would install the RAT on the potential victim’s computer.
The Capabilities of the RAT
The RAT featured a graphical user interface, which allowed its users to easily view and navigate all of the victim computers that they had infected. Among other things, the user interface listed IP address information for each infected computer, the computer’s name, the computer’s operating system, the country in which the computer was located, and whether the computer had a web camera.
Once a computer was infected with the RAT, the user of the RAT had complete control over the computer. The user could, among other things, remotely activate the victim’s web camera. In this way, the user could spy on anyone within view of the victim’s webcam inside the victim’s home or in any other private spaces where the victim’s computer was used.
The RAT also contained a “keylogger” feature that allowed users to record each key that victims typed on their computer keyboards. To help users steal a victim’s passwords and other log-in credentials, the RAT also had a “form grabber” feature. The “form grabber” automatically captured log-in information that victims entered into “forms” on their infected computers (e.g., log-in screens or order purchase screens for online accounts).
The RAT also provided its users with complete access to all of the files contained on a victim’s computer. A RAT user could use such access to view or download photographs, documents, or other files on a victim’s computer. Further, using a tool known as “file hijacker,” the RAT enabled users to encrypt, or lock, a victim’s files and demand a “ransom” payment to unlock them. The RAT even came with a prepared script demanding such a ransom.
The RAT also allowed users to exploit victims’ computers to launch other cyber attacks. Infected computers could be gathered into a network and used to launch Distributed Denial of Service (“DDoS”) attacks against particular websites by repeatedly sending requests to the website in an effort to disable the website and deny service to legitimate customers.
YÜCEL and the Blackshades Organization
YÜCEL was the co-creator of the RAT, and owned and operated the Blackshades organization. YÜCEL employed several paid administrators, including a director of marketing, website developer, customer service manager, and a team of customer service representatives; he hired and fired employees, paid employees’ salaries, and updated the malicious software in response to customers’ comments and requests. Blackshades generated sales of more than $350,000 between September 2010 and April 2014.
The Other Defendants
JOHNSTON used Blackshades malware and was a paid employee of the Blackshades organization who, among other things, marketed and sold the RAT, and provided technical assistance to users of the RAT to assist them in infecting and remotely controlling victims’ computers with the RAT. In certain online postings, JOHNSTON described himself as an “authorized seller” and “admin,” or administrator, of Blackshades.
FEDOREK was a customer of Blackshades who purchased the RAT and used it to steal financial and other account information from more than 400 victims. A search of FEDOREK’s computer conducted by the FBI showed that FEDOREK was also deploying a variety of other types of malicious software against his victims.
RAPPA was a customer of Blackshades who purchased the RAT and used it to infect victims’ computers, spy on those victims using their web cameras, and steal personal files from their computers. A search of RAPPA’s computer by the FBI showed that RAPPA was also deploying a variety of other types of malicious software against his victims.
YÜCEL, 24, of Sweden, is charged with two counts of computer hacking, each of which carries a maximum sentence of 10 years in prison, one count of conspiring to commit access device fraud, which carries a maximum sentence of seven and a half years in prison, one count of access device fraud, which carries a maximum sentence of 15 years in prison, and one count of aggravated identity theft, which carries a mandatory term of two years in prison consecutive to any other sentence that is imposed.
JOHNSTON, 23, of Thousand Oaks, California, is charged with two counts of computer hacking, each of which carries a maximum sentence of 10 years in prison.
FEDOREK, 26, of Stony Point, New York, is charged with two counts of computer hacking, each of which carries a maximum sentence of 10 years in prison, and one count of access device fraud, which carries a maximum sentence of 10 years in prison.
RAPPA, 41, of Middletown Township, New Jersey, is charged with two counts of computer hacking, each of which carries a maximum sentence of 10 years in prison.
HOGUE, 23, of Maricopa, Arizona, pled guilty in January 2013 to two counts of computer hacking, each of which carries a maximum sentence of 10 years in prison. He is awaiting sentencing before the Honorable P. Kevin Castel.
The maximum potential sentences are prescribed by Congress, and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
The charges unsealed today are part of an unprecedented global law enforcement operation involving the participation of 19 countries. As part of the operation, more than 90 arrests have been made and more than 300 searches have been conducted worldwide. Mr. Bharara noted that the investigation is ongoing.
Mr. Bharara praised the extraordinary investigative work of the FBI. Additionally, Mr. Bharara specially thanked all the international law enforcement agencies that assisted this investigation, including the Moldova National Investigation Inspectorate of General Police Inspectorate of Ministry of Interior; the International Relations Department of Prosecutor’s General Office of the Republic of Moldova; Eurojust; the U.S. Department of State’s Diplomatic Security Service and United States Embassy personnel in Chisinau, Moldova; the FBI's Office of the Legal Attaché to Romania and Moldova; the FBI’s Office of the Legal Attaché to the Netherlands. He also thanked the Department of Justice’s Office of International Affairs and Computer Crime and Intellectual Property Section for their support.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys James Pastore and Sarah Lai are charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni with the Money Laundering and Asset Forfeiture Unit is in charge of forfeiture aspects of the case.
The charges contained in the Indictment and Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Alex Yucel Indictment S1 13 Cr 834
U.S. v. Kyle Fedorek Complaint 14 Mag. 1064
U.S. v. Michael Hogue Information 13 Cr. 12
U.S. v. Brendan Johnston Complaint 14 Mag 1086
U.S. v. Marlen Rappa Complaint 14 Mag. 1065Malvern Company Charged with Defrauding the City of PhiladelphiaRead the Press Release
An information was filed today charging Airmatic, Inc., a company located at 284 Three Tun Road, Malvern, PA, with one count of mail fraud for allegedly defrauding the City of Philadelphia of approximately $556,633.03. Airmatic allegedly supplied unapproved, off-contract products to various City departments in violation of its agreements with the City. The case was announced by United States Attorney Zane David Memeger and City of Philadelphia Inspector General Amy Kurland.
According to the information, Airmatic submitted false and fraudulent invoices to the City’s accounts payable department in order to conceal that it was providing off-contract products. Instead of reflecting the unapproved, off-contract products that were actually being provided, the invoices billed for items that were approved pursuant to the City’s agreements with defendant Airmatic. It is further alleged that Airmatic inflated the cost of the unapproved, off-contract items and products it provided to the City by an average of approximately 87% and profited from this scheme in the amount of approximately $556,633.03. For example, in one instance Airmatic falsely invoiced the City for a bearing assembly, an expensive industrial product and approved contract item, when, in fact, Airmatic delivered 12 asphalt rakes, items for which the defendant had no contract. To disguise the transaction, Airmatic manipulated the invoice and billed the City for the price of the bearing assembly, which the City never received, resulting in an extravagant profit margin on the sale of the rakes. Between January 2007 and August 2012, hundreds of similar transactions took place.
If convicted the defendant faces a maximum possible sentence of five years of probation, a $500,000 fine or twice the pecuniary gain/loss, a $400 special assessment, and restitution to the City of Philadelphia.
The case was investigated by the City of Philadelphia Office of Inspector General and the FBI. It is being prosecuted by Assistant United States Attorney Jennifer Chun Barry.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Leader of Internet Gambling Operation Sentenced to PrisonRead the Press Release
HONOLULU – Felix Gee Wan Tom, age 40, of Honolulu, was sentenced today by Chief United States District Judge Susan Oki Mollway to six months of imprisonment for transmission of wagering information, money laundering and filing a false tax return. Tom also forfeited over $4 million in assets, including two condominiums in Honolulu and a house in Las Vegas, and was ordered to pay $118,601 in taxes owed. The sentencing is the last of 27 Oahu residents prosecuted for a variety of gambling and other offenses related to internet gambling. The other defendants received sentences ranging from probation to 10 months in prison.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that starting in 2009, the Federal Bureau of Investigation, the Internal Revenue Service, Homeland Security Investigations and the Honolulu Police Department conducted a joint undercover investigation into a large-scale internet gambling operation established by Allen Yamada and led by Tom. According to information produced in court, the investigation revealed that, between 2005 and 2012, the illegal operation placed gross wagers totaling over approximately $670 million through internet websites based in Costa Rica.
U.S. Attorney Nakakuni said that according to law enforcement investigations, in the last several years, dozens of internet bookmakers have come into existence, many of whom are located in foreign countries where bookmaking activities are not illegal. These bookmakers direct their activities toward bettors in America, who are interested in gambling on American sporting events such as baseball, football, and basketball.
The prosecution identified Tom as the master agent for in excess of 20 agents located primarily on Oahu. As a master agent, Tom recruited, trained, and supervised the agents and provided agents with login credentials (username/password) for use by players to access his internet sports betting websites. Tom also collected gambling losses from and made payments on gambling winnings to his agents, and split profits with agents. The investigation also revealed that many agents also recruited sub-agents (lower-level bookies or runners), who also had their own client base.
The following defendants pled guilty to Transmission of Wagering Information, Money Laundering, and Filing False Tax Return, in addition to Tom:
Darin Fujimori, age 39 (Forfeiture $266,600, tax $127,395);
Jeffrey Ibara, age 36 (Forfeiture $217,666, tax $6,791);
Anh Phuong Lam, age 31 (Forfeiture $140,000 + house in Las Vegas $175,000, tax $19,226);
Vietanh J. Tran, age 33 (Forfeiture $607,423, tax $82,410);
Allen Yamada, age 41 (Forfeiture $793,136, tax $45,120);
Ponciano Erice, age 39 (Forfeiture $190,000, tax $64,779)
The following defendants pled guilty to Money Laundering:
Jason Chang, age 38 (Forfeiture $83,466)
Thomas Ky, age 47 (Forfeiture $1,336,500)
James Striker, age 56 (Forfeiture $145,600)
The following defendants pled guilty to Transmission of Wagering Information and Filing False Tax Return:
Chad Rees, age 41 (Forfeiture $20,000, tax $14,644);
Terrence Ching, age 41 (Forfeiture $636,115, tax $25,173);
Dane Amii, age 40 (Tax $3,113);
Harry Endo, age 46 (Forfeiture $253,536, tax $61,118);
Chad Fujiwara, age 44 (Forfeiture $310,000, tax $37,601);
Dean Horie, age 39 (Forfeiture $749,000, tax $25,753);
Dax Migita, age 34 (Forfeiture $102,773, tax $15,344);
Phalakone Oshiro, age 39 (Forfeiture $76,000, tax $19,338);
Jerome Romano, age 41 (Forfeiture $33,932, tax $29,515).
The following defendants pled guilty to Transmission of Wagering Information and Failing to File Monthly Tax Return for Wages:
Justyn Tabaniag, age 25 (Tax $14,045);
Troy Sakata, age 47 (Forfeiture $40,868, tax $6,113);
James Hayden, age 29 (Forfeiture $14,870, Tax $14,045);
Chad Iwamoto, age 41 (Forfeiture $104,850, tax $48,373);
Alvin Ngo, age 27 (Forfeiture $54,371, tax $58,059);
Jack Shizuru, age 65 (Forfeiture $3,794, tax $5,586);
Mathew Verdugo, age 30 (Forfeiture $8,155, tax $42,401).
The case was prosecuted by Assistant U.S. Attorney Larry Butrick.
Jasper Woman Pleads Guilty to Sending Hoax Anthrax LetterRead the Press Release
Jacksonville, FL – United States Attorney A. Lee Bentley, III announces that Kathryn Cohen Allen (47, Jasper) has pleaded guilty to sending letters to the offices of Senators Marco Rubio and Bill Nelson in June of 2011, threatening their lives. Allen faces a maximum penalty of ten years in federal prison and a fine of $500,000. A sentencing date has not yet been set.
According to court documents, on June 27, 2011, Allen mailed threatening letters containing a white powdery substance to the offices of United States Senators Marco Rubio and Bill Nelson. Both offices were evacuated as a result. Field and laboratory testing determined that the white powdery substance was not hazardous. Allen admitted that she sent the letters in an effort to frame her neighbor whom she believed was engaged in an interracial relationship. Allen was implicated in the scheme when her handwriting was identified in each of the letters.
This case was investigated by the Federal Bureau of Investigation and U.S. Customs and Border Protection. Numerous local agencies also participated in the investigation, including the Jacksonville Sheriff’s Office, Jacksonville Fire and Rescue, and the Hamilton County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Jay Taylor.
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Jackson Man Found Guilty of Bank Fraud, Wire Fraud, Aggravated Identity Theft, Money Laundering and ConspiracyRead the Press Release
Jackson, Miss – Following a three day trial in U.S. District Court last week, a jury found Gregory Bernard Griffin, 23, of Jackson, guilty of three counts of bank fraud, three counts of wire fraud, four counts of aggravated identity theft, six counts of money laundering and one count of conspiracy to commit money laundering, announced U.S. Attorney Gregory K. Davis.
Griffin was charged in a 17 count indictment with using a stolen identity to open a bank account at a Jackson area credit union, stealing $193,205.43 from a local Marriott hotel, and laundering some of the proceeds of his fraud with the help of his sisters, Tiffany Griffin, 30, and Erica Griffin, 27, both of Jackson.
According to the proof presented during the trial, Gregory Griffin caused the stolen money to be routed from the Courtyard Marriott hotel in Jackson, Mississippi to the fraudulent bank account he opened, by submitting a forged account change form to Bank of America Merchant Services. The forged form directed Bank of America Merchant Services to stop depositing the proceeds from all Visa and MasterCard transactions conducted at the Courtyard Marriott into the Marriott's bank account, and to begin depositing those funds into the account Gregory Griffin had established with a stolen identity. During the trial, the government introduced evidence that Gregory Griffin spent the stolen money at various places throughout Jackson, all while posing as the victim of the Aggravated Identity Theft. The evidence showed that Gregory Griffin laundered some of the stolen money by depositing a $57,900 check made payable to his sister, Tiffany Griffin, into a bank account that she had opened at a second Jackson area bank in her name, purchasing a vehicle from a salvage yard through an intermediary buyer and obtaining auto insurance on that vehicle in the name of his sister Erica Griffin, and by paying the premium with some of the stolen money.
Tiffany Griffin and Erica Griffin pled guilty last week to misprision of a felony for their role in the money laundering offenses.
All three defendants will be sentenced by U.S. District Judge Daniel P. Jordan on August 4, 2014 at 9:00 am. Gregory Griffin faces a maximum penalty of 30 years in prison and $1 million fine on each count of bank fraud, 20 years in prison and a $250,000 on each count of wire fraud, two years in prison and $250,000 fine on each count of aggravated identity theft, 20 years in prison and a $500,000 fine on each count of money laundering and conspiracy to commit money laundering. He also faces the forfeiture of two vehicles and other property he purchased with the proceeds of his fraud scheme. Tiffany Griffin and Erica Griffin each face a maximum penalty of three years in prison and a $250,000 fine.
This case was investigated by the U.S. Secret Service and prosecuted by Assistant United States Attorneys Scott Gilbert and Jay Golden.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:
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Indictment Charges Lafayette Hills Man with Pirating Movies and TV ShowsRead the Press Release
Brian Bethman, of Lafayette Hill, Pennsylvania, was charged by indictment, filed on May 15, 2014, smuggling goods into the United States, trafficking in counterfeit labels, and criminal copyright infringement, announced United States Attorney Zane David Memeger.
According to the indictment, between April 2010 and April 2011, Bethman smuggled in more than 6,000 audiovisual copies of movies and television shows that were protected by copyright. The television shows included, but were not limited to, House, Criminal Minds, NCIS, Weeds, The Office, and Royal Pains; the movies included, but were not limited to, Justfied, The Pacific, Dead Like Me, and Bambi. Bethman is charged with seven counts of smuggling goods into the United States, one count of trafficking in counterfeit labels, and one count of criminal copyright infringement.
If convicted the defendant faces a maximum possible sentence of 30 years in prison.The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations and is being prosecuted by Special Assistant United States Attorney Karen A. Fox.
Click here to view the indictment
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Huntington Man Pleads Guilty to Gun Charge in Major Federal Drug InvestigationRead the Press Release
Huntington, W.Va. – William Isiah Petties, 33, of Huntington, West Virginia, pleaded guilty today in federal court to possessing a firearm as a convicted felon, United States Attorney Booth Goodwin announced. On January 20, 2014, the Drug Enforcement Administration conducted a search of 1130 28th Street in Huntington, pursuant to a search warrant. Petties was outside that residence when law enforcement arrived to execute the warrant. The address was the residence of Petties’ girlfriend and where Petties stayed on a regular basis.
During the search, agents located a loaded Springfield .40 caliber pistol, which was owned by Petties’ girlfriend but which he jointly possessed and over which he had joint control. In a statement taken after the search, Petties admitted that he possessed the firearm. In 2000, Petties was convicted in Cabell County circuit court of the felony offense of aggravated robbery, and, as a result, was prohibited from possessing the firearm.
Petties was named as one of 15 defendants indicted for various offenses connected with the drug trafficking activities of Kenneth Dewitt Newman, also known as “K-Kutta.” The Newman investigation revealed that Newman, along with others, distributed cocaine, heroin, MDMA, marijuana, and prescription pills in the Huntington area.
Petties faces up to 10 years’ imprisonment and up to a $250,000 fine when he is sentenced on August 18, 2014. Chief United States District Judge Robert C. Chambers is presiding over the case.
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 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 opiate painkillers in communities across the Southern District.
Humane Society Financial Advisor Sentenced to Prison for Embezzling and Money LaunderingRead the Press Release
ERIE, Pa. - A former resident of St. Marys, Pennsylvania, has been sentenced in federal court to 46 months in jail and ordered to make restitution in the amount of $414,649.39 on his conviction of wire fraud and money laundering, United States Attorney David J. Hickton announced today.
United States District Judge Maurice B. Cohill, Jr. imposed the sentence on Richard Danz, 49. According to information presented to the court, Danz was the financial advisor/accountant for the Elk County Humane Society. From in and around September 2008 to in and around June 2012, Danz embezzled $422,017.81 from the Elk County Humane Society and another individual. Danz spent the embezzled funds on luxury items including a Mercedes-Benz and a kitchen remodeling.
Prior to imposing sentence, Judge Cohill noted the significant harm caused by Danz, which included the loss of seven jobs at the Elk County Humane Society and the reduced ability to provide critical services to abandoned animals.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the City of St. Marys, Police Department for the investigation leading to the successful prosecution of Danz.
Guatamalan National Sentenced for $600,000 Tax Refund FraudRead the Press Release
Juan Castro-Castro, 37, formerly a resident of Shelbyville, Kentucky, was sentenced on May 13, 2014, to serve 37 months in prison for engaging in a fraudulent tax refund conspiracy, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Castro-Castro is an undocumented alien and citizen of Guatemala and acknowledged in court that he will likely be deported upon completion of his prison sentence.
Castro-Castro pleaded guilty to conspiring with others to bring fraudulently acquired tax refund checks to Nashville, and with stealing about $649,000 in tax refunds, between January 2012 and August 2013.
“Castro-Castro and others are using these tax fraud schemes to steal millions of dollars from honest United States taxpayers,” said U.S. Attorney David Rivera. “Our federal law enforcement agencies are actively and aggressively on the hunt for such violations. They are working together to identify and disrupt these schemes, arrest the participants, and bring thieves of public money like Mr. Castro-Castro to federal court where they will be held accountable.”Testimony at sentencing established that Castro-Castro and others had used false names to submit more than 100 fraudulent federal tax returns in Kentucky. These false returns claimed that tax refunds were owed, and most listed one of four Kentucky addresses to which, multiple refund checks were mailed by the IRS as a result of the scheme. These addresses included empty apartments on which Castro-Castro was the lease holder and paid rent, as well as his own residence.
Castro-Castro received these refund checks and brought them to Nashville several times each week to be cashed by an accomplice. Federal investigators discovered the scheme and identified the location where the checks were being cashed as Cash City on Nolensville Rd. Castro-Castro was arrested by federal agents in May 2013 and has been held in custody since that time. During the past year, 21 other individuals involved in the scheme have been charged in other indictments, 16 of which have pleaded guilty.
“The defendants who perpetrated this scheme systematically defrauded the government and the taxpaying public,” said Christopher A. Henry, Special Agent in Charge, IRS-Criminal Investigation. “At the IRS, protecting taxpayer money is a matter we take very seriously. IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by preparing false claims for refunds.”
“Tax fraud is an outrage to honest citizens everywhere who fulfill their obligation to society by paying their fair share,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. “Criminals who attempt to cheat the system and steal from law-abiding Americans will continue to be a major priority for HSI investigators.” Parmer oversees a five-state area of operations to include Tennessee, Alabama, Arkansas, Louisiana and Mississippi.
The case was investigated by the Internal Revenue Service- Criminal Investigation, Homeland Security Investigations and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney Hilliard Hester.
An indictment is merely an accusation. With respect to the remaining defendants, all are presumed innocent until proven guilty.
Fresno Men Plead Guilty to Conspiring to Sell Fake DVDs and CDsRead the Press Release
FRESNO, Calif. — Jose Antonio Hernandez, 41, and Genaro Vela-Rodriguez, 28, both of Fresno, pleaded guilty today before Senior U.S. District Judge Anthony W. Ishii to one count each of conspiracy to commit criminal copyright infringement and traffic in counterfeit labels and counterfeit documentation and packaging, United States Attorney Benjamin B. Wagner announced.
According to court documents, Hernandez and Vela-Rodriguez admitted that from July to September 18, 2012, they were involved in an extensive scheme with others to store and distribute thousands of counterfeit DVD movies and audio CDs. Both men admitted to selling counterfeit movie DVDs and CDs, including some movies that had not yet been commercially distributed. Defendant Hernandez admitted to manufacturing counterfeit DVD movies.
This case is the product of an extensive investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Henry Z. Carbajal III and Patrick R. Delahunty are prosecuting the case.
The defendants are scheduled to be sentenced by Judge Ishii on August 11, 2014, at 10:00 a.m. The maximum statutory penalty for conspiracy to commit criminal copyright infringement and traffic in counterfeit labels and counterfeit documentation and packaging is five years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Four Southern Illinois Residents Charged with Methamphetamine ConspiracyRead the Press Release
Follow @SDILNewsOn May 19, 2014, Rusty J. Smith, 35, and Jonathan E. Merydith, 26, both of Cobden, Ruth D. Wiseman, a/k/a “Diane Wiseman,” 51, of Anna, and Shannon L. Connett, 36, of Marion, were charged by indictment with conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The offense occurred between 2012 and March 2014, in Union, Williamson, and Jackson Counties. Wiseman made her initial appearance in federal court on May 12, 2014. Merydith and Connett made their initial appearances in federal court on May 19, 2014. Wiseman and Merydith are currently being held without bond pending a July 21, 2014, jury trial. Connett is currently being held without bond pending a May 20, 2014, detention hearing. Smith is currently a fugitive.
The methamphetamine offense carries a penalty of up to 20 years’ imprisonment, to be followed by 3 years’ supervised release, and a fine of $1,000,000.
Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The ongoing investigation is being conducted by the Union County Sheriff’s Office, Jackson County Sheriff’s Office, Illinois State Police, Williamson County Sheriff’s Office, Marion Police Department, Carbondale Police Department, Illinois State Police Methamphetamine Response Team and Drug Enforcement Administration. The 19th Judicial District Drug Task Force (Tennessee) assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Four Individuals Charged in Multi-Million Dollar Mortgage Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Drew J. Breakspear, Commissioner, Florida Office of Financial Regulation, announce that Karl Oreste, 56, of Miramar, Marie Lucie Tondreau, a/k/a “Lucie Tondreau”, 54, of North Miami, Okechukwu Josiah Odunna, a/k/a “O.J. Odunna”, 49, of Lauderdale Lakes, and Kelly Augustin, 57, of North Miami, have been charged with conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and six counts of wire fraud, in violation of Title 18, United States Code, Section 1343. According to the allegations in the indictment, between December 2005 and May 2008, Oreste, president of KMC Mortgage Corporation of Florida, a mortgage lending business in North Miami Beach, identified residential properties in South Florida that were for sale. Oreste and Tondreau hosted several radio show programs in the South Florida area in which they advertised the services offered by KMC Mortgage. Oreste and Tondreau recruited and paid some of the listeners who responded to those advertisements, as well as other individuals, to pose as borrowers to purchase properties identified by Oreste. Augustin, an employee of KMC Mortgage, also recruited straw borrowers.
Thereafter, the indictment alleges that Oreste and Odunna, and other co-conspirators prepared or caused to be prepared loan applications on behalf of straw borrowers. Odunna was an attorney previously licensed to practice law in Florida, and president of O.J. Odunna, P.A. and Direct Title and Escrow Services. These loan applications included false information relating to employment, wages, assets and intent to make the property being purchased a primary residence. The loan applications and documents were submitted by co-conspirators to various mortgage lenders throughout the United States. Once the loan applications were approved, the lenders wired loan funds to O.J. Odunna, P.A., Direct Title or other title companies for closing.
The indictment alleges that in some instances Oreste, Odunna and other co-conspirators created and submitted duplicate HUD-1 Settlement Statement Forms, which grossly inflated the true purchase price of the properties. HUD-1 Settlement Statements also falsely and fraudulently represented to the mortgage lenders that the straw borrowers had met their down payment and cash to close obligations, when, in fact, the straw borrowers had never made any such payments.
At closing, a portion of loan proceeds were disbursed to Oreste through his corporation, JR Investment and Mortgage Corporation, or other bank accounts controlled by him. In some instances, a portion of the loan proceeds was diverted to O.J. Odunna, P.A. or Direct Title accounts. Oreste disbursed some of the proceeds he received to pay recruiters – such as Tondreau and Augustin – and straw borrowers. Oreste also transferred a substantial portion of the funds to bank accounts of LTO Investment Corporation, a corporation controlled by Tondreau. Tondreau used funds deposited in LTO Investment Corporation’s bank accounts to make payments on the falsely and fraudulently obtained mortgages in order to maintain the loans, and to conceal and further the fraud. She also used a portion of the funds deposited into LTO Investment Corporation’s bank accounts for her own personal use and benefit.
The indictment alleges that over the course of the conspiracy, the defendants fraudulently obtained loans on approximately 20 properties, for which the lenders have suffered losses in the amount of approximately $8,000,000.00. If convicted, each defendant faces a maximum term of 30 years in prison.
Mr. Ferrer commended the investigative efforts of the FBI and Florida’s Office of Financial Regulation. The case is being prosecuted by Assistance U.S. Attorney Lois Foster-Steers.
An indictment is only an accusation, and a defendant is presumed innocent until proven guilty.
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.
Four Greenbrier County Residents Face Federal Heroin IndictmentsRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that four Greenbrier County residents have been indicted by a federal grand jury in connection with heroin trafficking. Those indicted and subsequently arrested are:
Tiffany Rose Arbogast, 24, of Lewisburg, West Virginia, charged with four counts of heroin distribution;
Christopher Miller, 32, of Alderson, West Virginia, charged with two counts of heroin distribution;
Joshua Osborne, 30, also of Alderson, West Virginia, charged with two counts of heroin distribution and one count of possession of heroin with intent to distribute; and
Amanda Nicole Canaday, 26, of White Sulphur Springs, West Virginia, charged with possession with intent to distribute heroin.Miller and Canaday have been remanded to the custody of the United States Marshals Service pending trial. Osborne and Arbogast face hearings this week to determine whether they will remain in Marshals Service custody.
These cases were investigated by the Greenbrier County Drug and Violent Crime Task Force. Assistant United States Attorney John File is handling the prosecutions.
Goodwin’s office is prosecuting these cases to fight heroin trafficking in Greenbrier County and as part of an ongoing battle against the illegal sale of prescription drugs and heroin throughout the Southern District of West Virginia. The United States Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illicit pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin.
Note: The charges contained in the indictments are merely accusations, and the defendants are presume innocent unless and until proven guilty.
Former Wellcare Chief Executive <br /> Sentenced for Health Care FraudRead the Press Release
Former WellCare Chief Executive Officer Todd S. Farha, 45, of Tampa, Florida, was sentenced today in the Middle District of Florida to serve 36 months in prison for defrauding the Florida Medicaid program.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and United States Attorney A. Lee Bentley III of the Middle District of Florida made the announcement after Farha was sentenced by U.S. District Judge James S. Moody Jr.
Farha was convicted by a federal jury in the Middle District of Florida on June 10, 2013, of two counts of health care fraud.
According to court records and evidence at trial, Farha and others orchestrated a scheme to defraud the Florida Medicaid program from the summer of 2003 through the fall of 2007 by making fraudulent statements relating to expenditures for behavioral health care services.
WellCare operates health maintenance organizations (HMOs) in several states providing services through government-sponsored health care benefit programs like Medicaid. Two WellCare HMOs operating in Florida, StayWell and Healthease, contracted with the Agency for Health Care Administration (AHCA), the Florida agency that administers the Medicaid program, to provide Florida Medicaid program recipients with an array of services, including behavioral health services.
In 2002, Florida enacted a statute that required Florida Medicaid HMOs to expend 80 percent of the Medicaid premium paid for certain behavioral health services upon the provision of those services. In the event that the HMO expended less than 80 percent of the premium, the difference was required to be returned to AHCA. As part of the scheme, Farha and others fraudulently submitted inflated expenditure information in the company’s annual reports to AHCA to reduce the WellCare HMOs’ contractual repayment obligations for behavioral health care services.
On May 5, 2009 the government filed related charges in an information and a deferred prosecution agreement (DPA) against WellCare. Pursuant to that DPA, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the United States and cooperate with the government’s criminal investigation. The company complied with all of the requirements of the DPA. As a result, the information was later dismissed by the court following a government motion. In a related civil qui tam case, Wellcare agreed to pay $137.5 million in civil fines and penalties.
This case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, the FBI, and the Florida Attorney General's Medicaid Fraud Control Unit. The case was prosecuted by Senior Trial Attorney John Michelich of the Criminal Division’s Fraud Section and Assistant United States Attorneys Jay Trezevant and Cherie Krigsman and Special Assistant United States Attorney John Bowers of the Middle District of Florida.Former WellCare Executives Sentenced for Health Care FraudRead the Press Release
Tampa – U.S. District Judge James S. Moody, Jr. today sentenced former WellCare Chief Executive Officer Todd S. Farha (45, Tampa) to 36 months in prison for defrauding the Florida Medicaid program. In addition, the Court also respectively sentenced Paul L. Behrens (52, Odessa) to 24 months’ imprisonment; William L. Kale (64, Oldsmar) to one year and a day in prison; and Peter E. Clay (57, Wellesley, Massachusetts) to five years’ probation.
All four were convicted by a federal jury on June 10, 2013. Specifically, Farha was convicted of two counts of health care fraud; former WellCare Chief Financial Officer Paul L. Behrens was convicted of two counts of making false statements relating to health care matters and two counts of health care fraud; William L. Kale, former Vice President of Harmony Behavioral Health, Inc. (a wholly-owned subsidiary of WellCare), was found guilty of two counts of health care fraud; and Peter E. Clay, former WellCare Vice President of Medical Economics, was found guilty of making false statements to a law enforcement officer.
“Today’s sentences are the culmination of a lengthy and comprehensive investigation and prosecution of egregious crimes of fraud and greed,” said U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “We hope that the sentences imposed will send a strong message that individuals engaging in health care fraud will be prosecuted to the full extent of the law.”
“The former WellCare executives chose to engage in corrosive and illegal conduct. Unsatisfied with the wealth and power they already had, they chose to steal from the American public,” said Acting Special Agent in Charge Omar Perez Aybar, HHS-OIG Miami Regional Office. “Today they are being held accountable for their actions. The sentences serve as a warning to other corporate executives who may contemplate such action and are a testament to Justice truly being blind to power, position, and status.”
According to court records and evidence at trial, Farha and others orchestrated a scheme to defraud the Florida Medicaid program from the summer of 2003 through the fall of 2007 by making fraudulent statements relating to expenditures for behavioral health care services.
WellCare operates health maintenance organizations (HMOs) in several states providing services through government-sponsored health care benefit programs like Medicaid. Two WellCare HMOs operating in Florida, StayWell and Healthease, contracted with the Agency for Health Care Administration (AHCA), the Florida agency that administers the Medicaid program, to provide Florida Medicaid program recipients with an array of services, including behavioral health services.
In 2002, Florida enacted a statute that required Florida Medicaid HMOs to expend 80 percent of the Medicaid premium paid for certain behavioral health services upon the provision of those services. In the event that the HMO expended less than 80 percent of the premium, the difference was required to be returned to AHCA. As part of the scheme, Farha and others fraudulently submitted inflated expenditure information in the company’s annual reports to AHCA to reduce the WellCare HMOs’ contractual repayment obligations for behavioral health care services.
On May 5, 2009 the government filed related charges in an information and a deferred prosecution agreement (DPA) against WellCare. Pursuant to that DPA, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the United States and cooperate with the government’s criminal investigation. The company complied with all of the requirements of the DPA. As a result, the information was later dismissed by the court following a government motion. In a related civil qui tam case, Wellcare agreed to pay $137.5 million in civil fines and penalties.
This case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, the FBI, and the Florida Attorney General's Medicaid Fraud Control Unit. The case was prosecuted by Senior Trial Attorney John Michelich of the Criminal Division’s Fraud Section and Senior Litigation Counsel Assistant United States Attorney Jay Trezevant, Assistant United States Attorney Cherie Krigsman, and Special Assistant United States Attorney John Bowers of the Middle District of Florida.