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Monday 19 May 2014
Former Sacramento Man Pleads Guilty to Mortgage FraudRead the Press Release
SACRAMENTO, Calif. —Joshua Clymer, 28, currently of San Francisco, pleaded guilty today to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.
According to court documents, from approximately October 2006 through August 2008, Clymer participated in a mortgage fraud scheme involving multiple properties in the Sacramento area. As a part of the scheme, Clymer and a business partner used several fraudulent tactics to help buyers secure home loans from lenders, including inflating the buyer’s income, providing false employment histories, falsifying gifts made to the buyers, and giving undisclosed cash back to some buyers outside of escrow. Buyers of the properties later defaulted on their loans, leading to foreclosure sales, and in one instance a loan modification. The estimated loss associated with Clymer as a result of these activities is approximately $352,000.
This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Christopher S. Hales and Audrey Hemesath are prosecuting the case.
Clymer is scheduled to be sentenced by Judge William B. Shubb on September 22, 2014. Clymer faces a maximum statutory penalty of 30 years in prison and a $1 million fine. 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.
Former Minnesota Attorney Pleads Guilty to Tax FraudRead the Press Release
Barry V. Voss of St. Paul, Minnesota, pleaded guilty today to failure to pay over employment taxes , announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division Justice, U.S. Attorney Andrew M. Luger for the District of Minnesota and Special Agent in Charge Kelly R. Jackson of the St. Paul Field Office of the Internal Revenue Service (IRS)- Criminal Investigation. Voss pleaded guilty to one count of failure to pay over employment taxes for the fourth quarter of 2008.
According to the plea agreement, Voss filed quarterly employment tax returns with the IRS from July 2007 through December 2010 which reflected taxes withheld from the salaries of the employees of his law firm, Barry V. Voss P.A., including Voss’ own salary. However, Voss failed to timely pay over to the IRS the full amount of the taxes due and owing. Voss admitted that he intentionally failed to pay these taxes to the IRS, which totaled approximately $160,000.
Voss faces a statutory maximum prison term of five years in prison, a fine of $250,000 and payment of back taxes owed to the IRS. A sentencing hearing has not yet been scheduled.
This case was investigated by special agents of IRS-Criminal Investigation. It is being prosecuted by Trial Attorneys Lori A. Hendrickson and Adam R. Smart of the Tax Division and Assistant U.S. Attorney Karen Schommer of the District of Minnesota.
Former Coca-Cola Employee Sentenced to Prison for Corporate FraudRead the Press Release
ATLANTA - Jeffrey David Shamp, a former Senior National Account Executive with The Coca-Cola Company, was sentenced to two years and three months in prison for siphoning over $400,000 in corporate American Express gift checks for his personal use.
“Corporate employees who steal hurt their employer, fellow colleagues, their customers, and the community,” said United States Attorney Sally Quillian Yates. “By putting his personal gain above all else, Shamp has earned this time in federal prison.”
“The United States Secret Service and our law enforcement partners will continue to take an aggressive approach to arresting individuals who violate the trust of businesses to further their personal financial gain,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.
“This sentence is a message to others that there are consequences for taking what doesn’t belong to you,” stated Veronica F. Hyman-Pillot, IRS Criminal Investigation, Special Agent in Charge. “Individuals cannot fraudulently enrich their bank accounts and expect to go unpunished.”
According to United States Attorney Yates, the charges, and other information presented in court: Jeffrey Shamp worked for The Coca-Cola Company from approximately July 2002 to November 2011, most recently as a Senior National Account Executive based in Massachusetts. In his position, Shamp was authorized to order American Express (AMEX) gift checks to be used as part of a sales incentive program for Coca-Cola’s customers. From approximately November 2005 through September 2011, Shamp fraudulently obtained AMEX gift checks under the false pretense that the checks would be used as part of Coca-Cola’s sales incentive program, when in fact Shamp used them to pay for over $400,000 in personal expenses, including alimony and rent payments, and as gifts to friends and relatives.
Shamp, 40, of Cincinnati, Ohio, pleaded guilty to one count of wire fraud before United States District Court Steve C. Jones on February 27, 2014. In addition to his two year and three month sentence, Shamp was ordered to pay $411,550 in restitution to The Coca-Cola Company.
This case was investigated by the United States Secret Service and the Internal Revenue Service Criminal Investigation.
Assistant United States Attorney Steven D. Grimberg prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
First Rider Sentenced for Assaulting Federal Prison GuardsRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, Montana, on May 12, 2014, before U.S. District Judge Brian M. Morris, JASHA LASHELL FIRST RIDER, 29, of Browning, was sentenced to a term of 20 months imprisonment, two years supervised release, and a special assessment of $200.
First Rider was sentenced because she assaulted two federal officers while in jail. In an Offer of Proof filed by Assistant U.S. Attorney Ryan G. Weldon, the government would have proven that First Rider appeared in Blackfeet Tribal Court and had her bond set higher than she wanted. First Rider became enraged when at the Blackfeet Tribal Jail. Federal officers at the jail approached First Rider, but she punched one in the face and scratched another repeatedly.
First Rider pleaded guilty to two counts of Assault on a Federal Officer. In a sentencing memorandum, Weldon told the Court, "First Rider assaulted two correctional officers because she disagreed with a judicial decision. She disrupted the jail facility, and officers were required to shuffle inmates-a dangerous endeavor by itself-in order to ensure that First Rider did not hurt herself or others. Despite federal officers' best efforts, First Rider punched one in the face and scratched another. . . . First Rider has a pattern of assaultive conduct, including assaulting officers. Not only must the Court consider how it will deter First Rider from assaulting officers, but others must realize that such decisions will be met with severe consequences. Federal officers demand this protection and so do their families."
The Court sentenced First Rider to 20 months of imprisonment, with two years of supervised release to follow. Because there is no parole in the federal system, the truth in sentencing guidelines mandate that First Rider will likely serve all of the time imposed by the court. In the federal system, First Rider does have the opportunity to shorten the term of custody by earning credit for good behavior. However, this reduction will not exceed 15% of the overall sentence.
This investigation was conducted by the Federal Bureau of Investigation.
Federal Grand Jury Indicts President of Discovery Sales, Inc.Read the Press Release
OAKLAND – An Indictment by a federal grand jury, unsealed here today, charges Ayman Shahid with conspiracy to commit bank fraud and seventeen individual counts of bank fraud, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
According to the indictment, Shahid, 38, of Danville, Calif., is alleged to have masterminded a scheme to cause banks to approve mortgage loans for unqualified buyers at the height of the financial crisis. Shahid managed Discovery Sales, Inc., which was the sales arm of affiliated residential construction companies, including Discovery Home Builders and Albert D. Seeno Construction Co. According to the indictment, Shahid devised and managed a scheme to provide undisclosed incentives to unqualified home buyers, which allowed Discovery to continue selling houses during the financial crisis. Shahid intentionally hid the scheme from appraisers and bank underwriters so that loans to unqualified buyers would be approved. According to the Indictment, the aggregate sales price of the homes affected by the scheme was almost $230 million and loans having a value of $150 million went into foreclosure or short sale proceedings.
Shahid was arrested in Concord, Calif., this morning at approximately 8:45 a.m. and his initial appearance is scheduled for today at 11:30 a.m. in federal court before the Honorable Donna M. Ryu, United States Magistrate Court Judge in Oakland.
An Indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant could face a maximum sentence of 30 years in prison, and a fine of $1,000,000, plus restitution if appropriate, for each of the eighteen violations of 18 U.S.C. § 1344 alleged in the indictment. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being prosecuted by Assistant United States Attorneys John Hemann and Randy Luskey and was investigated by the FBI, IRS – Criminal Investigative Division, and Federal Housing Finance Agency, Office of Inspector General.
(Shahid indictment )
Elkville Man Sentenced for Methamphetamine ConspiracyRead the Press Release
Follow @SDILNewsOn May 15, 2014, Charles E. Witherspoon, a/k/a “Spoon,” 62, of Elkville, Ill., was sentenced in United States District Court in Benton on a one-count indictment charging conspiracy to manufacture methamphetamine, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois.
Witherspoon, who had previously pled guilty to the methamphetamine offense, was sentenced to 108 months’ imprisonment, 3 years’ supervised release, and was fined $300. The offense occurred between March 2012 and March 2013 in Jackson and Perry Counties. Evidence at the plea and sentencing hearings established that Witherspoon was involved with co-defendant Charles Scott and others in the manufacture of methamphetamine. On March 13, 2013, Scott received severe burns while manufacturing methamphetamine inside Witherspoon’s Elkville residence. Witherspoon’s sentence was enhanced based on the substantial risk of harm created by his criminal conduct. Scott was previously sentenced to 70 months’ imprisonment for his role in the methamphetamine conspiracy.
The investigation was conducted by the Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Murphysboro Police Department, Pinckneyville Police Department, DuQuoin Police Department, and Illinois State Police Methamphetamine Response Team.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
EOIR System UpdateRead the Press Release
At midnight on April 12, 2014, the Executive Office for Immigration Review experienced a catastrophic hardware failure that rendered inaccessible many of its applications. Immediately after identifying the problem, our staff began around-the-clock efforts to recover the hardware. We soon began working with data recovery service experts to preserve our data and restore our applications. Included in the inaccessible information were our backup systems.
We are happy to announce that the data recovery team was able to recover the data and create new drives for those which had failed. To date, we have not lost any data, and we are continuing to finalize restoration of those applications most critical to our internal and external stakeholders. As of 9:00 a.m. on May 19, 2014, our electronic databases are again functional. Although the case information hotline (800-898-7180) is also functional, the hotline is limited to providing information recorded in the electronic database, which our staff will continue to update until all case information is current. We are continuing recovery efforts on other applications, including eRegistration.
We appreciate the patience of our stakeholders through this frustrating time. Please know that our information technology staff has worked very hard to make sure that our system has been rebuilt, but we have also worked smart. Our system was reconstructed in a way that provides more and better redundancies and monitoring that will result in a greater assurance such issues will not again present.
Drug Traffickers Sentenced to Federal Prison in Operation Broken BoneRead the Press Release
KANSAS CITY, KAN. - Six defendants have been sentenced to prison as a result of a federal drug investigation in metropolitan Kansas City dubbed Operation Broken Bone, U.S. Attorney Barry Grissom said.
The investigation targeted a drug trafficking organization that operated from January 2006 to November 2011 to distribute cocaine, crack cocaine and marijuana in the Kansas City metropolitan area. The FBI, the Kansas City, Kan., Police Department and the Kansas City, Mo., Police Department worked with the U.S. Attorney’s Office for the District of Kansas and other members of an Organized Crime Drug Enforcement Task Force (OCDEFT) on the case.The following defendants were sentenced May 16:
Damian Mays, 24, Kansas City, Kan., 235 months in federal prison.
Verdell Mays, 37, Kansas City, Kan., 225 months.
Christopher Holliday, 26, 114 months.
Frank Sharron Piper, III, 35, Kansas City, Kan., 135 months.
Brenton Bassett, 38, Kansas City, Kan., 84 months.
Cynthia Hatfield, 32, Kansas City, Kan. 3 months.
At the sentencing, prosecutors told the judge the defendants conspired together to distribute drugs and to maintain multiple Kansas City area residences where the drugs were stored, consumed or distributed. The investigators arranged to buy drugs from the defendants and served search warrants in which drugs, money and firearms were seized.Other defendants include:
Gregory T. Moore, 37, Kansas City, Kan., who is awaiting sentencing.
Daniel Bryant, 34, Kansas City, Mo., who is awaiting sentencing.
Johnie Mitchell, 60, Kansas City, Kan., sentenced to 35 months.
Marcus M. Williams, 35, Overland Park, Kan., who is awaiting sentencing.
Michael D. Davis, 33, Kansas City, Kan., sentenced to 40 months.
Ondre Durham, 40, Kansas City, Kan., sentenced to 30 months.
Rahmann Easley, 35, Kansas City, Kan., who is set for sentencing July 17.
Charles Easley, 38, Kansas City, Kan., who is awaiting sentencing.
Joshua Jones, 28, Kansas City, Kan., who is awaiting sentencing.
Raymond Cornejo, 53, Kansas City, Kan., who is awaiting sentencing.
Lamar Brooks, 38, Kansas City, Mo., who is set for sentencing Oct. 21.
Christopher Craig, 31, Kansas City, Mo., who is set for sentencing July 15.
Jacquel Cunningham, 22, Kansas City, Kan., who is set for sentencing Aug. 5.
Anthony Smith, 41, Kansas City, Mo., who is awaiting sentencing.Grissom commended the FBI, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Kansas Bureau of Investigation, the Kansas City, Kan., Police Department, the Kansas City, Mo., Police Department, Immigration and Customs Enforcement, Homeland Security Investigations, the Kansas Highway Patrol, the Kansas City, Mo., Career Criminal Division, the Riverside Police Department, Assistant U.S. Attorney Sheri McCracken and Special Assistant U.S. Attorney Trent Krug for their work on the case.
District Man Pleads Guilty to Fraud Charges in $3 Million Embezzlement Scheme-Defendant Bought House and Trips to Las Vegas, Atlantic City, Miami, and Hawaii-Read the Press Release
WASHINGTON – Howard E. Person, Jr., 36, of Washington, D.C., pled guilty today to fraud charges stemming from his embezzlement of $3 million from a small business in the District of Columbia, using his employer’s money for the purchase of a house, trips to casinos in Las Vegas and Atlantic City, and other personal expenses.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD), and Kathy A. Michalko, Special Agent in Charge, Washington Field Office, U.S. Secret Service.
Person pled guilty in the U.S. District Court for the District of Columbia to Interstate Transportation of Money Taken by Fraud. The Honorable Reggie B. Walton scheduled sentencing for August 8, 2014. Under federal sentencing guidelines, Person faces a likely range of 46 to 57 months in prison. As part of his plea, person must pay $3.2 million in restitution.
According to the government’s factual proffer, Person was hired to be the Finance Director of a small business in the District of Columbia. As the Finance Director, Person managed and maintained all of the financial accounts and records for the company. He was responsible for and oversaw the company’s payroll, accounts receivable, accounts payable, invoices, bank accounts, loans, and expense payments. From March 2008 to September 2011, Person diverted money from the company to another account which he exclusively controlled in order to embezzle money from the company. He accomplished the theft by opening a bank account in the name of the company but with himself as the sole person with authority to conduct financial transactions on the account. The owner of the company was not aware of this account and did not authorize Person to maintain a company account solely in his exclusive control.
Person then obtained payment checks which had been mailed or delivered from the company’s clients for payment of work performed; instead of depositing the checks into the authorized company bank account, Person caused them to be deposited into the secret account over which he had exclusive control. Person arranged for clients to make electronic payments to the secret account instead of the authorized account for work performed by the company.
Person also arranged for a finance company to send money to the secret account through its system of financing Accounts Receivable for expected payments for work performed by the company, without the knowledge and permission of the owner.
Through this method of depositing checks, diverting client payments, and financing loans, Person obtained in the secret account approximately $6,545,000, which was due and owing the company.
In order to conceal the theft, Person transferred approximately $3,336,000 from the secret account to the company-authorized account and at times paid legitimate company expenses. He also used fake invoices substantially underreporting the amounts of money due and owing to the company. In this way, Person was able to trick the owner into believing that the amounts of deposits into the authorized account matched the incoming money as reflected on the fake invoices.
Person also obtained debit cards on the secret account enabling him to charge goods and services to be paid by the money in the secret account which was funded by money he stole from the company. Person spent the $3,209,000 in stolen money for his own personal business and enjoyment, including: purchasing his home in the District of Columbia, in an amount in excess of $340,000; paying for trips to Las Vegas, Atlantic City, Miami, the Dominican Republic, and Hawaii; transferring money into his personal bank account and into his side-line business account; funding parties and shows; and causing withdrawals of over $55,000 in cash from ATMs and over $35,000 in debit card purchases at casinos in Las Vegas and Atlantic City.
In announcing the plea, U.S. Attorney Machen, Chief Lanier, and Special Agent in Charge Michalko expressed appreciation for the work performed by MPD detectives from the Financial Crimes and Fraud Unit as well as by the Special Agents and financial analysts from the U.S. Secret Service. They also acknowledged the efforts of those who are working on the case from the U.S. Attorney’s Office, including Criminal Investigator Juan Juarez, Paralegal Specialists Donna Galindo and Corinne Kleinman, Assistant U.S. Attorneys Christopher Kavanaugh and Anthony Saler, former Assistant U.S. Attorney Mary Chris Dobbie, and Assistant U.S. Attorneys Virginia Cheatham and Bryan Seeley, who are prosecuting the case.
14-116David Wayne Grigsby Sentenced for Making False Declarations Before A Federal Grand JuryRead the Press Release
GREENEVILLE, Tenn. – David Wayne Grigsby, 48, of Wise, Va., was sentenced on May 12, 2014, by the Honorable J. Ronnie Greer, U. S. District Judge, after being convicted by a jury for three counts of making false declarations before a federal grand jury. Grigsby was sentenced to serve 12 months and one day in federal prison, to be followed by three years of supervised release under the supervision of a federal probation officer. A fine of $4,000 was also imposed. There is no parole in the federal system.
Evidence presented during the jury trial demonstrated that Grigsby falsely testified before a federal grand jury that he had no knowledge of a fraud scheme involving Eastman Chemical Company and denied any involvement in the collection of false samples of coal that were submitted to an independent testing service to defraud Eastman Chemical Company. However, audio recordings played during the jury trial demonstrated that Grigsby had in fact been directly involved in the fraud scheme by directing employees of the independent testing service to submit false samples of coal for testing. Employees of the testing service also testified that Grigsby had directed the collection of false samples of coal for testing for the purpose of defrauding Eastman Chemical Company.
This investigation was conducted by the FBI. Assistant U. S. Attorneys Neil Smith and Suzanne Kerney-Quillen represented the United States.
Credit Suisse Pleads Guilty to Conspiracy to Aid and Assist U.S. Taxpayers in Filing False ReturnsRead the Press Release
Credit Suisse AG pleaded guilty today to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service (IRS). The guilty plea by the Swiss corporation is the result of a years-long investigation by U.S. law enforcement authorities that has also produced indictments of eight Credit Suisse executives since 2011; two of those individuals have pleaded guilty so far.
The plea agreement, along with agreements made with state and federal partners, provides that Credit Suisse will pay a total of $2.6 billion - $1.8 billion to the Department of Justice for the U.S. Treasury, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Services. The plea agreement was filed in the Eastern District of Virginia today. Earlier this year, Credit Suisse paid approximately $196 million in disgorgement, interest and penalties to the Securities and Exchange Commission (SEC) for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC. That settlement with the SEC is also reflected in today’s plea agreement. Together, these actions by U.S. law enforcement and state and federal partners appropriately punish Credit Suisse for its past behavior in these matters.
The announcement was made by Attorney General Eric H. Holder, Deputy Attorney General James M. Cole, Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Commissioner John Koskinen of the IRS.
“This case shows that no financial institution, no matter its size or global reach, is above the law,” said Attorney General Holder. “Credit Suisse conspired to help U.S. citizens hide assets in offshore accounts in order to evade paying taxes. 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.”
As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS.
“Credit Suisse’s guilty plea is just the latest effort by the department to slam the door shut on undeclared bank accounts, phony trusts and other foreign schemes used by U.S. taxpayers to evade taxes,” said Deputy Attorney General Cole. “We will continue to hold to account the bankers, the brokers and other professionals in Switzerland and around the world as well as the institutions that trained and directed them to use bank secrecy laws to protect U.S. tax cheats.”
According to the statement of facts filed with the plea agreement, Credit Suisse employed a variety of means to assist U.S. clients in concealing their undeclared accounts, including by:
• assisting clients in using sham entities to hide undeclared accounts;
• soliciting IRS forms that falsely stated, under penalties of perjury, that the sham entities were the beneficial owners of the assets in the accounts;
• failing to maintain in the United States records related to the accounts;
• destroying account records sent to the United States for client review;
• using Credit Suisse managers and employees as unregistered investment advisors on undeclared accounts;
• facilitating withdrawals of funds from the undeclared accounts by either providing hand-delivered cash in the United States or using Credit Suisse’s correspondent bank accounts in the United States;
• structuring transfers of funds to evade currency transaction reporting requirements; and
• providing offshore credit and debit cards to repatriate funds in the undeclared accounts.
As part of the plea agreement, Credit Suisse further agreed to make a complete disclosure of its cross-border activities, cooperate in treaty requests for account information, provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed, and to close accounts of account holders who fail to come into compliance with U.S. reporting obligations. Credit Suisse has also agreed to implement programs to ensure its compliance with U.S. laws, including its reporting obligations under the Foreign Account Tax Compliance Act and relevant tax treaties, in all its current and future dealings with U.S. customers.
“Today’s plea by Credit Suisse is a significant step in our global enforcement against those who would avoid their tax obligations by hiding their assets in foreign bank accounts, and those financial institutions, bankers, and other professionals who facilitate this conduct,” said Assistant Attorney General Keneally for the Tax Division. “Credit Suisse has also changed its business operations to ensure that U.S. taxpayers will no longer be able to hide their assets at Credit Suisse, and provided the government with valuable information that will further our investigations.”
“This prosecution and plea should serve notice that secret accounts and assisting the evasion of income taxes has a high cost,” said U.S. Attorney Boente. “Concealing financial accounts from the U.S. government is not a legitimate part of wealth management or private banking services.”
“Pursuing international tax evasion is a priority area for IRS Criminal Investigation, and we will continue to follow the money here in the United States and around the world” said IRS Commissioner Koskinen. “I want to commend the special agents in IRS-Criminal Investigation for all of their hard work in this area and the close cooperation with the Department of Justice. Today's guilty plea is another important milestone in ongoing law enforcement efforts to investigate the use of offshore accounts to evade taxes. People should no longer feel comfortable hiding their assets and income from the IRS.”
The Board of Governors of the Federal Reserve System is also announcing today that it has reached a resolution with Credit Suisse, by which Credit Suisse has agreed to a cease and desist order, certain remedial steps to ensure its compliance with U.S. law in its ongoing operations, and a civil monetary penalty of $100 million. Additionally, the New York State Department of Financial Services is announcing a similar resolution by which Credit Suisse has agreed to a cease and desist order and a monetary penalty of $715 million.
On Feb. 23, 2011, a grand jury in the Eastern District of Virginia returned an indictment charging four Credit Suisse employees - Marco Parenti Adami, a former Credit Suisse manager; Emanuel Agustino, a former Credit Suisse banker; Michele Bergantino. a former Credit Suisse banker; and Roger Schaerer, Credit Suisse’s former Representative Officer in its Representative Office in New York - with conspiring with other Swiss bankers and U.S. taxpayers to defraud the United States. On July 21, 2011, the grand jury returned a superseding indictment adding four additional defendants charged with the conspiracy to defraud the United States. The four new defendants were: Markus Walder, the former head of North America Offshore Banking at Credit Suisse; Süsanne D. Rüegg Meier, a former Credit Suisse manager; Andreas Bachmann, a former banker at Credit Suisse Fides, a subsidiary of Credit Suisse; and Josef Dörig, a former Credit Suisse Fides employee and owner/operator of a trust company. On March 12, 2014, Bachmann pleaded guilty to the superseding indictment in connection with his work as a banker at Credit Suisse Fides. On April 30, 2014, Dörig pleaded guilty to conspiring to defraud the IRS in connection with his role managing offshore entities used by U.S. taxpayers to conceal their accounts at Credit Suisse. Those pleas were accepted by U.S. District Judge Gerald Bruce Lee. Bachmann and Dörig each face maximum penalties of five years in prison when they are sentenced on Aug. 8, 2014.
This case was prosecuted by Assistant U.S. Attorney Mark D. Lytle and Trial Attorneys Mark F. Daly and Nanette L. Davis of the Tax Division. The case was investigated by IRS-Criminal Investigation.
The Department of Justice expressed gratitude to the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the U.S. Securities and Exchange Commission, and the New York State Department of Financial Services for their significant and valuable assistance.
Related Materials:
Plea Agreement
Statement of Facts
Waiver of Indictment
Criminal InformationCredit Suisse Pleads Guilty to Conspiracy to Aid and Assist U.S. Taxpayers in Filing False ReturnsRead the Press Release
Bank Admits to Helping U.S. Taxpayers Hide Offshore Accounts from IRS; Agrees to Pay $2.6 Billion, Highest Ever Payment in a Criminal Tax Case
Investigation Has Also Led To Indictment of Eight Credit Suisse Employees Since 2011WASHINGTON – Credit Suisse AG pleaded guilty today to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service (IRS). The guilty plea by the Swiss corporation is the result of a years-long investigation by U.S. law enforcement authorities that has also produced indictments of eight Credit Suisse executives since 2011; two of those individuals have pleaded guilty so far.
The plea agreement, along with agreements made with state and federal partners, provides that Credit Suisse will pay a total of $2.6 billion - $1.8 billion to the Department of Justice for the U.S. Treasury, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Services. The plea agreement was filed in the Eastern District of Virginia today. Earlier this year, Credit Suisse paid approximately $196 million in disgorgement, interest and penalties to the Securities and Exchange Commission (SEC) for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC. That settlement with the SEC is also reflected in today’s plea agreement. Together, these actions by U.S. law enforcement and state and federal partners appropriately punish Credit Suisse for its past behavior in these matters.
The announcement was made by Attorney General Eric H. Holder, Deputy Attorney General James M. Cole, Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Commissioner John Koskinen of the IRS.
“This case shows that no financial institution, no matter its size or global reach, is above the law,” said Attorney General Holder. “Credit Suisse conspired to help U.S. citizens hide assets in offshore accounts in order to evade paying taxes. 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.”
As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS.
“Credit Suisse’s guilty plea is just the latest effort by the department to slam the door shut on undeclared bank accounts, phony trusts and other foreign schemes used by U.S. taxpayers to evade taxes,” said Deputy Attorney General Cole. “We will continue to hold to account the bankers, the brokers and other professionals in Switzerland and around the world as well as the institutions that trained and directed them to use bank secrecy laws to protect U.S. tax cheats.”
According to the statement of facts filed with the plea agreement, Credit Suisse employed a variety of means to assist U.S. clients in concealing their undeclared accounts, including by:
- assisting clients in using sham entities to hide undeclared accounts;
- soliciting IRS forms that falsely stated, under penalties of perjury, that the sham entities were the beneficial owners of the assets in the accounts;
- failing to maintain in the United States records related to the accounts;
- destroying account records sent to the United States for client review;
- using Credit Suisse managers and employees as unregistered investment advisors on undeclared accounts;
- facilitating withdrawals of funds from the undeclared accounts by either providing hand-delivered cash in the United States or using Credit Suisse’s correspondent bank accounts in the United States;
- structuring transfers of funds to evade currency transaction reporting requirements; and
- providing offshore credit and debit cards to repatriate funds in the undeclared accounts.
As part of the plea agreement, Credit Suisse further agreed to make a complete disclosure of its cross-border activities, cooperate in treaty requests for account information, provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed, and to close accounts of account holders who fail to come into compliance with U.S. reporting obligations. Credit Suisse has also agreed to implement programs to ensure its compliance with U.S. laws, including its reporting obligations under the Foreign Account Tax Compliance Act and relevant tax treaties, in all its current and future dealings with U.S. customers.
“Today’s plea by Credit Suisse is a significant step in our global enforcement against those who would avoid their tax obligations by hiding their assets in foreign bank accounts, and those financial institutions, bankers, and other professionals who facilitate this conduct,” said Assistant Attorney General Keneally for the Tax Division. “Credit Suisse has also changed its business operations to ensure that U.S. taxpayers will no longer be able to hide their assets at Credit Suisse, and provided the government with valuable information that will further our investigations.”
“This prosecution and plea should serve notice that secret accounts and assisting the evasion of income taxes has a high cost,” said U.S. Attorney Boente. “Concealing financial accounts from the U.S. government is not a legitimate part of wealth management or private banking services.”
“Pursuing international tax evasion is a priority area for IRS Criminal Investigation, and we will continue to follow the money here in the United States and around the world” said IRS Commissioner Koskinen. “I want to commend the special agents in IRS-Criminal Investigation for all of their hard work in this area and the close cooperation with the Department of Justice. Today's guilty plea is another important milestone in ongoing law enforcement efforts to investigate the use of offshore accounts to evade taxes. People should no longer feel comfortable hiding their assets and income from the IRS.”
The Board of Governors of the Federal Reserve System is also announcing today that it has reached a resolution with Credit Suisse, by which Credit Suisse has agreed to a cease and desist order, certain remedial steps to ensure its compliance with U.S. law in its ongoing operations, and a civil monetary penalty of $100 million. Additionally, the New York State Department of Financial Services is announcing a similar resolution by which Credit Suisse has agreed to a cease and desist order and a monetary penalty of $715 million.
On Feb. 23, 2011, a grand jury in the Eastern District of Virginia returned an indictment charging four Credit Suisse employees - Marco Parenti Adami, a former Credit Suisse manager; Emanuel Agustino, a former Credit Suisse banker; Michele Bergantino. a former Credit Suisse banker; and Roger Schaerer, Credit Suisse’s former Representative Officer in its Representative Office in New York - with conspiring with other Swiss bankers and U.S. taxpayers to defraud the United States. On July 21, 2011, the grand jury returned a superseding indictment adding four additional defendants charged with the conspiracy to defraud the United States. The four new defendants were: Markus Walder, the former head of North America Offshore Banking at Credit Suisse; Süsanne D. Rüegg Meier, a former Credit Suisse manager; Andreas Bachmann, a former banker at Credit Suisse Fides, a subsidiary of Credit Suisse; and Josef Dörig, a former Credit Suisse Fides employee and owner/operator of a trust company. On March 12, 2014, Bachmann pleaded guilty to the superseding indictment in connection with his work as a banker at Credit Suisse Fides. On April 30, 2014, Dörig pleaded guilty to conspiring to defraud the IRS in connection with his role managing offshore entities used by U.S. taxpayers to conceal their accounts at Credit Suisse. Those pleas were accepted by U.S. District Judge Gerald Bruce Lee. Bachmann and Dörig each face maximum penalties of five years in prison when they are sentenced on Aug. 8, 2014.
This case was prosecuted by Assistant U.S. Attorney Mark D. Lytle and Trial Attorneys Mark F. Daly and Nanette L. Davis of the Tax Division. The case was investigated by IRS-Criminal Investigation.
The Department of Justice expressed gratitude to the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the U.S. Securities and Exchange Commission, and the New York State Department of Financial Services for their significant and valuable assistance.Council Man Pleads Guilty to Violating Sex Offender Registration and Notification ActRead the Press Release
BOISE - Larry Grant Dana, 41, of Council, Idaho, pleaded guilty today to violating the Sex Offender Registration and Notification Act, U.S. Attorney Wendy J. Olson announced. Dana was indicted by a federal grand Jury in Boise on March 11, 2014.
According to the plea agreement, Dana was convicted in Canyon County in 1996 of Battery with Intent to Commit Rape, which requires him to register as a sex offender. He had registered off and on since May 2001, most recently on October 5, 2013, when he reported that he was residing in Council, Idaho. According to his Idaho State parole officer, Dana absconded from supervision in November 2013. Dana was apprehended in Albuquerque, New Mexico on February 16, 2014. The investigation showed Dana had been in Wyoming, Colorado, Texas, Louisiana, Florida and Oklahoma prior to his arrest. He failed to register as a sex offender in any of those states, and did not notify the Idaho Sex Offender Registry that he had changed his address or left the state, as required by state and federal law.
The charge of failure to register as a sex offender is a violation of the Sex Offender Registration and Notification Act and is punishable by up to ten years in prison, a maximum fine of $250,000.00, and five years up to lifetime supervised release.
Sentencing is set for July 28, 2014, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by U.S. Marshals Service (USMS), a member of the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icacidaho.org.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Correction: Charges Against Indian Citizen Were Dismissed Prior to Unsealing of Federal Indictment Charging Export License ViolationRead the Press Release
The United States Attorney’s Office for Middle District of Pennsylvania announced a correction today in a press release issued on April 23, 2014 concerning an indictment presented by the grand jury in December 2012.
The indictment was sealed until the filing of a criminal information on April 23, 2014 against Hetran Inc., an engineering and manufacturing plant in Orwigsburg, Pennsylvania and its Chief Executive, Helmut Oertmann, relating to the same charges.
When the indictment was unsealed the press release incorrectly stated that Suniel Malhotra, an Indian citizen, was one of the defendants. In fact, the charges against Mr. Malhorta were dismissed in 2013 at the request of the government.
Three Iranian citizens and two Iranian firms are defendant in the indictment. The charges involve the shipment of industrial equipment to Iran in 2012 in violation of U.S. export license requirements.
Blackshades Case Related Charging DocumentsRead the Press Release
U.S. v. Alex Yucel Indictment S1 13 Cr 834
U.S. v. Michael Hogue Information 13 Cr. 12
U.S. v. Kyle Fedorek Complaint 14 Mag. 1064
U.S. v. Marlen Rappa Complaint 14 Mag. 1065
U.S. v. Brendan Johnston Complaint 14 Mag 1086Bismarck Man Sentenced for Child Pornography ChargeRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that onMay 19, 2014, Preston Bushard, 33, Bismarck, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of receipt of materials involving the sexual exploitation of minors. Bushard pleaded guilty to the charge on Feb. 3, 2014.
Judge Hovland sentenced Bushard to serve 15 years in federal prison, to be followed by 10 years of supervised release. Bushard was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
In August 2012 law enforcement officials found Bushard to be in possession of child pornography, which he had downloaded from the Internet onto his computer from January 2012 until August 2012. Bushard has a previous conviction for possession of materials involving the sexual exploitation of minors.
The case was investigated by Homeland Security Investigations, North Dakota Bureau of Criminal Investigation, and U.S Probation & Pretrial Services.
This case was brought as a part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by 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.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
Big Timber Woman Sentenced in Bakken Drug Trafficking CaseRead the Press Release
The United States Attorney's Office announced that KERA EVANS, 30, of Big Timber, was sentenced to a term of 96 months imprisonment, five years supervised release, and a special assessment of $100 during a federal court hearing in Billings, Montana, on May 14, 2014, before U.S. District Judge Susan Watters.
EVANS was sentenced in connection with her November 22, 2013, guilty plea to the crime of possession with intent to distribute methamphetamine. The prosecution was part of "Project Safe Bakken," an effort by led by the United States Attorneys for Montana and North Dakota, the Attorneys General for Montana and North Dakota, and a host of federal, state, local, and tribal law enforcement agencies to provide a systematic response to serious crime, including drug trafficking, in the Bakken Region. In EVANS' case the investigation was led by the Montana Division of Criminal Investigations (MDCI), the United States Drug Enforcement Administration (DEA), the Sidney Police Department, and the Sweet Grass County Sheriff's Department as part of a long term investigation.
In an offer of proof, Assistant U.S. Attorney Joseph Thaggard stated the government would have proved that EVANS was a significant player in a methamphetamine distribution ring that transported large amounts of almost completely pure methamphetamine from the State of Washington to Montana. Thaggard further stated that much of the methamphetamine was then primarily distributed in the Bakken Region of Northeastern Montana and Western North Dakota, including Sidney and Fairview.
The District Court sentenced Evans to 96 months of imprisonment, with five years of supervised release to follow. Because there is no parole in the federal system, the truth in sentencing guidelines mandate that EVANS will likely serve all of the time imposed by the court. In the federal system, EVANS does have the opportunity to shorten the term of custody by earning credit for good behavior. However, this reduction will not exceed 15% of the overall sentence.
U.S. Attorney Mike Cotter said the sentence reflects the seriousness of the crime and underscores the need to protect Montanans from methamphetamine trafficking and organized crime. "Methamphetamine trafficking presents a serious threat to the health and safety of our community, particularly the Bakken Region. The investigation and prosecution in this case demonstrate that all levels of law enforcement in Montana and North Dakota take that threat seriously and will seek to ensure those who engage in drug trafficking are held accountable for their crimes."
Attorney General Holder, Deputy Attorney General Cole and IRS Officials to Hold Press Conference Announcing Major Law Enforcement ActionRead the Press Release
Attorney General Eric Holder, Deputy Attorney General James Cole, Assistant Attorney General for the Tax Division Kathryn Keneally and IRS Commissioner John Koskinen will hold a press conference TODAY, MONDAY, MAY 19, 2014 at 6:00 p.m. to announce a major law enforcement action.
WHO: Attorney General Eric Holder
Deputy Attorney General James Cole
Assistant Attorney General for the Tax Division Kathryn Keneally
IRS Commissioner John Koskinen
U.S. Attorney for the Eastern District of Virginia Dana Boente
IRS Criminal Investigation Chief Richard Weber
WHAT: Press conference to announce law enforcement action
WHEN: TODAY, 6:00 p.m. EDT, MAY 19, 2014
WHERE: Department of Justice
7th Floor Conference Room
950 Pennsylvania Ave., N.W.
Washington, D.C.
OPEN PRESS
NOTE: All media must present government-issued photo I.D. (such as driver’s license) as well as valid media credentials. Media must enter the department at the visitor’s entrance on Constitution Avenue between 9th and 10th Streets. Media may begin arriving at 5:00 p.m. EDT and cameras must be pre-set by 5:45 p.m. EDT. Press inquiries regarding logistics should be directed to the Office of Public Affairs at 202-514-2007.
Assistant Attorney General for National Security John Carlin Speaks at the Press Conference Announcing U.S. Charges Against Five Chinese Military Hackers for Cyber EspionageRead the Press Release
WASHINGTON - The National Security Division’s mission is to protect our nation’s security by using every legal tool available to confront and defeat threats to our country.Today, that tool is an indictment backed by the independence and credibility of our criminal justice system.
The threat is from members of unit 61398 of the Chinese military, who have targeted the U.S. private sector for commercial advantage.
We allege that members of unit 61398 conspired to hack into computers of six U.S. victims to steal information that would provide an economic advantage to the victims’ competitors, including Chinese state-owned enterprises.
In the past, when we brought concerns such as these to Chinese government officials, they responded by publicly challenging us to provide hard evidence of their hacking that could stand up in court.
Well today, we are.
For the first time, we are exposing the faces and names behind the keyboards in Shanghai used to steal from American businesses.
This indictment describes, with particularity, specific actions on specific days by specific actors to use their computers to steal information from across our economy.
It describes how they targeted information in industries ranging from nuclear, to steel, to renewable energy.
It shows that – while the men and women of our American businesses spent their business days innovating, creating, and developing strategies to compete in the global marketplace – these members of unit 61398 spent their business days in Shanghai stealing the fruits of our labor.
And it shows that the business information these individuals stole, including trade secrets, would have been particularly beneficial to Chinese companies.
Let me give you some examples of allegations from the indictment:
Right about the time SolarWorld was rapidly losing its market share to Chinese competitors that were pricing exports well below costs, these hackers were stealing cost, pricing, and strategy information from SolarWorld’s computers.
And while Westinghouse was negotiating with a Chinese state-owned enterprise over the construction of nuclear power plants, the hackers stole trade secret designs for components of those plants.
To be clear, this conduct is criminal.
And it is not conduct that most responsible nations within the global economic community would tolerate.
At the Department of Justice, we have repeatedly pledged that we would do more to hold accountable those that engage in these actions.
Today, we begin to fulfill that pledge.
And we will continue using all of the tools at our disposal to pursue those who steal our intellectual property, no matter who they are or where they reside.
Now I’d like to turn it over to David Hickton, the U.S. Attorney for the Western District of Pennsylvania, whose office has been a crucial partner in this investigation. David?
Anchorage Woman Arraigned on Identity Theft, Passport, PFD and Benefits FraudRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that Maualuga Leaana, 43, of Anchorage was arraigned on federal charges that she committed identity theft and falsely claimed U.S. citizenship to obtain various federal and state benefits. The Indictment, which was returned by the federal grand jury in April, charges Leaana with one count of passport fraud, nine counts of making false claims of U.S. citizenship, and one count of aggravated identity theft. The Indictment alleges that Leaana is a citizen of Samoa, formerly known as Western Samoa. Citizens of Samoa are not U.S. citizens, in comparison to those born in American Samoa, who do hold U.S. nationality by birth.
Leaana is charged with applying for and obtaining a U.S. passport in the name of her sister. She is also charged with falsely claiming U.S. citizenship on various applications for benefits, including Alaska Permanent Fund Dividends, unemployment compensation, and subsidized housing, as well as obtaining identification from the Alaska Division of Motor Vehicles. The Indictment alleges that she obtained over $14,000 in PFDs between 2003 and 2013, and that she also unlawfully obtained over $17,000 in unemployment benefits. The defendant faces a maximum prison term of ten years for passport fraud, with an additional two years consecutive for identity theft. Each of the false claims of citizenship charges carries a maximum term of five years of imprisonment. Each of the 12 counts carries a maximum fine of $250,000. Restitution to the State of Alaska can be ordered by the court in addition to any fines or other penalties.
The case was investigated by the U.S. Department of State, Diplomatic Security Service; the Social Security Administration, Office of the Inspector General, Office of Investigations; the Department of Homeland Security, Homeland Security Investigations, Immigration and Customs Enforcement; the Alaska Department of Revenue, Criminal Investigations Unit, and the Alaska Department of Labor and Workforce Development.
*******MEDIA ADVISORY******* Pills to Needles -- The Pathway to Rising Heroin DeathsRead the Press Release
The U.S. Attorney's Office for the Northern District of Alabama, the University of Alabama at Birmingham School of Public Health, and the Jefferson County Department of Public Health will present a community awareness summit on the rising abuse of prescription opiates and heroin, and the epidemic of heroin deaths in our community on Tuesday, June 10, from 8:30 a.m. to 4:30 p.m., at the UAB National Alumni Society House, 1301 1st Ave. South, Birmingham. U.S. Deputy Attorney General James M. Cole will deliver the day's keynote address. Speakers and panel discussions will address topics including the link between a growing dependency on prescription painkillers and heroin addiction and overdose deaths; law enforcement efforts to combat the problem; challenges and availability of prevention and treatment resources; and school intervention and education efforts to combat use and addiction. The summit will conclude with a discussion and audience input on developing and implementing a community action plan to address the dangerous and deadly epidemic.
Attached is an information sheet on the summit, which includes the registration form and a draft agenda. A few spots on the agenda remained to be confirmed, but it reflects the day's solid lineup of officials and experts from the fields of public health, education, law enforcement and addiction who are participating, as well as family members willing to speak out about their loss and their desire to help other families avoid that tragedy and heartbreak.
Help from the media in advancing news of this summit to encourage attendance by parents, teachers, faith and other community leaders would be extremely valuable. Attendance is free, but seating is limited, so advance registration is required. Again, the registration form is included in the attached document.
Click HERE for Information Sheet
Click HERE for the Registration Form
Click HERE for the Agenda
For more information contact:
Peggy Sanford
Public Information Officer
United States Attorney's Office
Northern District of Alabama
Office: 205-244-2020
Cell: 205-903-1697
[email protected]
OrLyndon J. Laster
Law Enforcement Coordination Manager
United States Attorney's Office
Northern District of Alabama
Office: (205) 244-2092
Cell: (205) 527-1645
Fax: (205) 244-2180
[email protected]
Friday 16 May 2014
“Ten-Percenter” Sentenced to One Year and One Day in Federal Prison on Tax and Tax Fraud Convictions Involving Winnings at Lone Star Park Horse-Racing TrackRead the Press Release
DALLAS — Willie L. Loveless was sentenced today by U.S. District Judge Barbara M. G. Lynn to one year and one day in federal prison and ordered to pay $25,826 in restitution, following his guilty plea last year to felony offenses stemming from his operation as a “ten-percenter” at the Lone Star Park horseracing track in Grand Prairie, Texas. Judge Lynn ordered Loveless to surrender to the Bureau of Prisons on July 1, 2014. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Loveless pleaded guilty in May 2013 to 20 of the 21 counts of the indictment — one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and 19 counts of fraud and false statements on Forms W-2G.
According to the Internal Revenue Code, gambling winnings, including those from horseracing bets, are taxable and must be reported on a gambler’s income tax return. A payer, such as Lone Star Park, is required to issue a Form W-2G, “Certain Gambling Winnings,” to a gambler if the gambler receives, among other types of winnings, $600 or more in gambling winnings, provided the payout is at least 300 times the amount of the wager. A winning ticket that would trigger the issuance of a Form W-2G is informally referred to by gamblers as an “IRS ticket.” The indictment also states that if an IRS ticket is for winnings greater than $5,000, a payer, such as Lone Star Park, is required to withhold and pay over to the IRS taxes in the amount of 25% of the winning ticket value. At Lone Star Park, there are special windows, known as “IRS Windows,” where an individual must cash an IRS ticket and complete and sign a Form W-2G.
“Ten-percenting,” according to the indictment filed in the case, is a practice that occurs at some gambling establishments in which a gambler arranges for another individual to cash the gambler’s IRS ticket, so that the gambler can avoid paying taxes on the winnings. The person cashing the ticket, often called a “ten-percenter,” completes the Form W2-G, falsely representing that he/she is the owner of the IRS ticket and the proper recipient of the winnings. Usually, according to the indictment, the person who cashes the ticket charges approximately ten percent of the winnings for the service.
Loveless admitted, according to the factual resume filed in the case, that in calendar years 2008, 2009 and 2010, he signed approximately 1445 Forms W2-G at Lone Star Park representing more than $1.76 million in winnings. On those forms, Loveless falsely attested that he was the only person entitled to any part of the winnings and each form signed by Loveless reflected his correct name, address and social security number.
The case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney J. Nicholas Bunch.
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITION (before District Judge Jon E. DeGuilio)
Larry Jones, 54, of South Bend, Indiana was sentenced to 151 months imprisonment with 4 years of supervised release after pleading guilty to the felony offense of possession of a stolen firearm.According to documents filed in this case, on June 21, 2013, Jones possessed a stolen Taurus handgun. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS (before Magistrate Judge Roger B. Cosbey:)
Brandon Sizemore, 23, of Indianapolis, Indiana pled guilty to the felony offense of armed bank robbery. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation Bank Robbery Task Force.Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Phillip Biddle, 36, of Kendallville, Indiana pled guilty to the felony offense of possession of materials depicting minor engaging in sexually explicit conduct. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by Internet Crimes against Children Task Force.Sentencing has not been set. This case is being prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
Billy Gonzalez, 26, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly conspiring to distribute and possess with the intent to distribute 5 kilograms or more of cocaine. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Alejandro Luna, 26, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly conspiring to distribute and possess with the intent to distribute 5 kilograms or more of cocaine. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITION (before District Judge Theresa L. Springmann:)
Luis Tapia, 52, of Fort Wayne, Indiana was sentenced to 27 months imprisonment after pleading guilty to the felony offense of conspiracy to distribute and possess with intent to distribute cocaine.According to documents filed in this case, Tapia, did knowingly open, lease, rent, use, and maintain a place in Fort Wayne for the purpose of distributing cocaine. This case was the result of an investigation by the Federal Bureau of Investigation and the Fort Wayne Police Department.This case was prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
Baldemar Robles, 43, of Phoenix, Arizona was sentenced to 240 months, 2 years supervised release and to pay $18,240 in restitution after pleading guilty to the felony offense of knowingly maintaining drug-involved premises and with being a felon in possession of a firearm.According to documents filed in this case, from August 2011 to September 2011, Robles did knowingly open, lease, rent, use, and maintain a place in Warsaw, Indiana for the purpose of distributing cocaine and marijuana. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Kosciusko County Drug Task Force, Kosciusko County Prosecuting Attorney’s Office.This case was prosecuted by Assistant United States Attorney Anthony Geller.
Week in Review - HammondRead the Press Release
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Keith Cloudy, 37, of Gary, Indiana, pled guilty before Senior District Judge James Moody to the felony offense of possession with the intent to distribute crack cocaine.This charge was filed as a result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case is being prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
Richard Dickus, 71, of Hebron, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of theft of government property.This charge was filed as a result of an investigation by the Social Security Administration.This case is being prosecuted by Assistant United States Attorney Dean Lanter.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Karen Stone, 57, of Hammond, Indiana, was sentenced by District Judge Joseph Van Bokkelen to 12 months of probation and restitution of $9,169.59 after pleading guilty to the felony offense of embezzlement from the International Brotherhood of Boilermakers, a labor organization.This case was a result of an investigation by the U.S. Department of Labor – Office of the Inspector General and the U.S. Department of Labor – Office of Labor Management Standards.This case was prosecuted by Assistant United States Attorney Toi Houston.
Christopher Bour, 40, of Gary, Indiana, was sentenced by Senior District Judge Rudy Lozano to life plus 85 years imprisonment and lifetime supervised release after pleading guilty to the felony offenses of the purchase of a child for production of child pornography, production of child pornography and possession of child pornography featuring a minor under the age of 12.According to documents filed in this case, Bour admitted that, for a period of over a year, he repeatedly purchased and obtained custody and control of a female child aged four to eighteen months with knowledge that she would be videotaped engaging in sexually explicit conduct.Bour also admitted to producing child pornography featuring a six to nine-month-old victim on at least two occasions, producing child pornography of another child aged three to five, and possessing pornography featuring these and many other prepubescent minor children being caused to engage in sexually explicit conduct. This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation, the Indiana State Police, the Gary Police Department and the Michigan City Police Department.This case was prosecuted by Assistant United States Attorney Jill Koster.
Stewart Roth, 48, of Griffith, Indiana, was sentenced by Chief Judge Philip Simon to 2 years’ probation and to pay $4000 in fines after pleading guilty to the felony offense of violation of the Clean Water Act, a national pretreatment standard.According to documents filed in this case, Roth, along with defendant NH Environmental Group, Inc. (“Tierra”) a waste water transporter and centralized waste water treatment facility, knowingly discharged, trucked or hauled liquid wastes, including industrial, sanitary, and food industry-related wastes, into the Hammond Sanitary District’s publicly-owned treatment works (“POTW”) at location that had not been designated, approved, or otherwise permitted by the POTW. This case was a result of an investigation by the Environmental Protection Agency.This case was prosecuted by Assistant United States Attorney Toi Houston.
Unlicensed Commodities Trader Sentenced to 36 Months in Connection with $300,000 Ponzi SchemeRead the Press Release
Earlier today at the federal courthouse in Brooklyn, NY, Jeffrey Shalhoub was sentenced to 36 months’ imprisonment in connection with his operation of a $300,000 Ponzi scheme. Shalhoub solicited investors to invest money into his company, The 9 Group, Ltd., by telling them they would receive profits of up to 10% of their principal every week through investments in the commodity market. However, Shalhoub never held the required license to operate a commodities trading pool and, after receiving $300,000 from investors, Shalhoub embezzled over $150,000 and lost the remainder through bad investments. He concealed the theft and losses with fraudulent account statements showing that his investors’ accounts were earning returns of up to 5.2% each week. To perpetuate the fraud, Shalhoub used the money of new investors to pay off earlier investors.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector in Charge, United States Postal Inspection Service, New York.
“Shalhoub lured his victims in with promises of high returns from a business investment. All they got, however, were false promises and phony documents, as he used lies and deception to steal the money entrusted to him,” Ms. Lynch said. “While there may be no risk-free investment, all investors are entitled to honesty and fidelity.”
The sentence was imposed by the Hon. Sterling Johnson, Jr. As part of the sentence, Judge Johnson ordered Shalhoub to pay restitution of over $240,000.
This prosecution was the result of efforts by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit http://www.StopFraud.gov.
The government’s case is being prosecuted by Assistant United States Attorney Tyler Smith.
The Defendant:
JEFFREY SHALHOUB
Age: 38
Residence: Staten Island, New York
E.D.N.Y. Docket No. 13-CR-434 (SJ)
USA Lynch Highlighted in Gotham Magazine's "the 50 Women Who Run New York"Read the Press Release
http://gotham-magazine.com/personalities/articles/50-most-powerful-women-in-new-york
TweetU.s. Attorney's Office, Fbi, and Nopd, Hold Joint Training Session on Investigating Police CorruptionRead the Press Release
U.S. Attorney Kenneth Allen Polite, Jr. announced that on May 13, 2014, the United States Attorney’s Office, the Federal Bureau of Investigation, and the New Orleans Police Department held a joint seminar on the subject of “Investigating and Prosecuting Police Misconduct and Corruption.” The event, held at U.S. Attorney Polite’s office, included attorneys from the U.S. Attorney’s Office Public Integrity Unit, Special Agents from the FBI Civil Rights and Public Corruption Squads, and the entire staff of the New Orleans Police Department’s Public Integrity Unit.
The purpose of the seminar was to foster cooperation and encourage the prosecutors and investigators to work joint investigations. The trainers were members of the “Tarnished Badge” Law Enforcement Task Force from Memphis, Tennessee. This Task Force is comprised of members from the United States Attorney’s Office, the FBI, the Memphis Police Department, and the Shelby County Sheriff’s Department. This is a full-time task force that exclusively work police corruption and civil rights violations. In the past seven years the Tarnished Badge Task Force has convicted in excess of 65 law enforcement officers in federal court.
Speakers included:
- U.S. Attorney Polite;
- Federal Bureau of Investigation Special Agent in Charge Michael Anderson;
- New Orleans Police Superintendent Ronal Serpas;
- Memphis Police Lt. Matthew Whittington and FBI Special Agent Anthony Householder, who provided specific training on investigative techniques, working with informants, and interview techniques. They also presented several case studies on specific investigations conducted by the Task Force; and
- Assistant United States Attorney Steve Parker, the former Chief of the Civil Rights and Law Enforcement Corruption Unit in the U. S. Attorney’s Office in Memphis. Mr. Parker is now on special assignment to the U.S. Attorney’s Office in New Orleans working on the NOPD Consent Decree. Mr. Parker presentation focused on the federal statutes used to prosecute police misconduct and the use of the Federal Grand Jury in these investigations.
U.S. Attorney Polite stated, “This seminar is the first of its kind in our District. We can and must do better in addressing police misconduct, and this seminar represents our renewed commitment to increasing collaboration and coordination amongst those involved in investigating and prosecuting these cases. Our shared expertise, intelligence, and investigative methodologies will help deter police misconduct more effectively and strengthen public confidence in the great work done by our law enforcement officers.”
U.S. Attorney Polite particularly acknowledged FBI Special Agent in Charge Anderson for participating in and providing financial support for the event.
U.S. Attorney Booth Goodwon and State and Local Officials Announce Federal Indictments Targeting Heroin Trafficking in Greenbrier CountyRead the Press Release
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin, Greenbrier County Sheriff Jan Cahill, and members of the West Virginia State Police will announce recent federal indictments and the subsequent arrests of four Greenbrier County residents in connection with heroin trafficking on Monday, May 19, 2014 at 11:00 a.m. at the Greenbrier County Courthouse located at 200 North Court Street in Lewisburg, West Virginia.
WHO:
United States Attorney Booth Goodwin
Sheriff Jan Cahill, Greenbrier County Sheriff’s Department
Members of the West Virginia State PoliceWHAT: U.S. Attorney Booth Goodwin, Greenbrier County Sheriff Jan Cahill and members of the West Virginia State Police to announce recent federal indictments against four Greenbrier County residents relating to heroin distribution.
WHERE:
Greenbrier County Courthouse (Lobby)
200 North Court Street
Lewisburg, WV
WHEN: Monday, May 19, 2014 at 11:00 a.m.Two Members of Burglary Crew Plead Guilty to Bank Larceny, Admitting to 13 Bank BurglariesRead the Press Release
Caused Losses of at least $250,000
Baltimore, Maryland – Kenneth Manns, age 47, of Baltimore, Maryland pleaded guilty today to bank burglary and his co-defendant, Aaron Davis, age 39, of Baltimore, pleaded guilty on May 13, 2014, to bank larceny, in connection with a two year scheme to burglarize banks, credit unions and retail stores.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Director in Charge Valerie Parlave of the Federal Bureau of Investigation’s Washington Field Office; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Chief James W. Johnson of the Baltimore County Police Department; Baltimore County State’s Attorney Scott Shellenberger; and Chief Cathy L. Lanier of the Metropolitan Police Department.
According to their plea agreements, from May 2011 through May 2013, Manns and Davis participated in a conspiracy that involved a group of associates, including Donald Taylor and others, to obtain money and property from thirteen banks, credit unions and retail stores by breaking into and entering buildings used in whole or in part as banks and credit unions.In order to avoid apprehension, the burglary crew would case the target location and assess the likelihood of obtaining valuables. One or more members of the conspiracy would stand look-out while others went inside the targeted bank or business. The burglary crew broke into gas stations, convenience stores, credit unions and other commercial establishments in Maryland and Washington D.C. wearing either white paper suits or dark outfits and masks and gloves, while communicating with handheld radios. The burglary crew would cut power lines, telephone lines, cables and other wires and destroy, reposition or disconnect surveillance video cameras. They stole cash, safes, cash-register drawers and lock boxes. On several occasions, the burglary crew gained entry to the ATM room of the target location by carving a hole with a power saw from an adjacent retail space. They also used tools to break into ATMs and safes at the target locations. The burglary crew transported the stolen goods back to locations to include the homes and businesses of the defendants in Maryland.
For example, on August 17, 2012, Manns and Davis put on white paper Tyvek suits, black masks and gloves, and got into the ATM room of a Bank of America in Washington, D.C. by carving a hole with a power saw from an adjacent retail space. The Metropolitan Police responded to alarms, causing Manns and his co-conspirator to flee before gaining access to cash drawer of the ATM machine.
On March 9, 2013, Manns and Davis broke into a Chinese restaurant adjacent to a credit union in Owings Mills, Maryland. They cut the communication network power cables to the credit union. Using industrial cutting tools, they removed a portion of the wall separating the banquet room of the restaurant from the ATM room inside the credit union. They entered the credit union, destroyed the motion sensor and then left the ATM room for approximately an hour in order to gauge whether there was a police response. They then re-entered the ATM room via the restaurant and shifted the direction of the security camera. They attempted unsuccessfully to cut through the ATM vault and gain access to the cash drawer.On March 31, 2013, at approximately 9:45 p.m., Manns and Davis, wearing white masks and black gloves, broke into the Shoe City store in Parkville, Maryland by carving a hole with a power saw from an adjacent unoccupied retail space. Before entering, Manns and his co-conspirators also cut the telephone lines to the retail store which disabled the alarm system. Manns and his co-conspirators removed a safe containing $400 and stole 23 pairs of shoes.
On April 28, 2013, shortly before midnight, Manns and Davis broke a side glass window to the Edmondson Sunoco station in Catonsville, Maryland, entered the store and severed phone, cable and alarm power lines inside. Meanwhile, Taylor served as a lookout from inside a van rented by Manns and parked nearby. After going behind the cashier area, Davis and Manns left the Sunoco and drove away from the gas station in a stolen U-Haul Ford van. More than an hour later, they returned to the Sunoco, re-entered the gas station, attempted to gain entry into the manager’s office and then left the store again. At approximately 3:15 a.m., Manns and Davis returned to the Sunoco gas station a third time and stole $200 from the cash register drawer and removed 2 store safes containing $10,080, using a handcart, while Taylor again served as look-out. They loaded the safes into the stolen U-Haul van and drove away, while Taylor followed them in the rented van.
Donald Taylor, age 59, also of Baltimore, pleaded guilty to his role in the scheme on April 3, 2014.
As part of their plea agreements, Manns, Davis and Taylor will be required to pay restitution in the full amount of the victims' losses, which is at least $250,000.
Manns and Davis each face a maximum sentence of 20 years in prison. U.S. District Judge Richard D. Bennett has scheduled sentencing for Davis on July 22, 2014 at 3:00 p.m. and for Manns on July 30, 2014 at 3:00 p.m. Judge Bennett also ordered that Manns be detained pending sentencing and he was taken into custody.
United States Attorney Rod J. Rosenstein praised the FBI, Maryland State Police, Baltimore County Police Department, Baltimore County State’s Attorney’s Office and the Metropolitan Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Mark W. Crooks, who is prosecuting the case.Two Gulfport Men Indicted for Theft of Postal Service EquipmentRead the Press Release
Gulfport, Miss – John Wendell Boyles, 51, of Gulfport, and his son, Nicholas Alan Boyles, 24, also of Gulfport, were arraigned in federal court on May 15th pursuant to an indictment charging them with conspiracy to convert Postal Service property to their own use and unlawfully sell the property over a two-year period, announced U.S. Attorney Gregory K. Davis, and Inspector-in-Charge Robert B. Wemyss, of the U.S. Postal Inspection Service.
The indictment alleges that, from approximately February, 2011, to February, 2013, John Wendell Boyles and Nicholas Boyles devised a scheme to convert Postal Service equipment to their own use and sell the equipment for scrap metal. As a part of their scheme, the Boyles stole Over-The-Road (OTR) Containers, which are made primarily of aluminum, cut them apart and sold the pieces as scrap. OTR containers are used by the Postal Service to organize and carry mail on freight trucks between Post Offices and Postal Distribution Centers.
In addition to the conspiracy charges, John Wendell Boyles is charged with 10 counts of unlawfully selling Postal Service property from approximately February, 2011, to March, 2012, and Nicholas Alan Boyles is charged with 11 counts of unlawfully selling Postal Service property from approximately June, 2011, to February, 2013.
This case is scheduled for trial before U.S. District Judge Sul Ozerden on July 7, 2014. The maximum penalty for conspiracy is five years in federal prison and a $250,000 fine on each count followed by three years of supervised release. The maximum penalty for theft of government property is ten years in federal prison and a $250,000 fine on each count followed by three years of supervised release. A general criminal forfeiture count is also included in the indictment.
The investigation in this case was conducted by the United States Postal Inspection Service. Postal Inspector Doug Wilson was the lead investigator and Assistant U.S. Attorney Stan Harris is the prosecutor for the case. U.S. Attorney Davis commended the Postal Inspection Service for its diligent work in the investigation of this matter.
The public is reminded that an indictment is a formal charge that a defendant has committed a violation of the federal criminal laws. All defendants are presumed innocent unless and until proven guilty.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Tampa Man Pleads Guilty to Violations of Federal Meat Inspection ActRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Jorge F. Ortega (27, Tampa) yesterday pleaded guilty to three violations of the Federal Meat Inspection Act. The violations include selling adulterated or misbranded meat, selling uninspected meat, and the improper slaughter of swine. Ortega faces a maximum penalty of 3 years in federal prison for each violation.
According to court documents, Ortega was the operator of Jorge’s Farm. He was responsible for the oversight of its activities, including the slaughtering, processing, handling, storing, and selling of swine in commerce, for human consumption. On October 27, 2011, Ortega slaughtered a swine in an inhumane manner. That swine was contaminated with insects and other filth. Ortega then sold the swine carcass to an undercover agent without labeling it properly and without the required federal meat inspection.
This case was investigated by the U.S. Department of Agriculture (USDA), Food Safety and Investigative Service (FSIS) and the Hillsborough County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Jennifer L. Peresie.
Tampa Felon Sentenced to More Than 15 Years for Firearm OffenseRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington yesterday sentenced Antouin L. Barker (43) to 15 years and eight months in federal prison for being a felon in possession of a firearm.
A federal jury found Barker guilty on February 11, 2014.
According to testimony and evidence presented at trial, on February 12, 2013, after sunset, Barker was riding his bicycle against traffic and without lighting equipment on 127th Avenue East, in Tampa. When stopped by deputies with the Hillsborough County Sheriff’s Office for the traffic infractions, Barker repeatedly put his hands in his pockets, despite repeated warnings not to do so. Barker verbally consented to a search, but ultimately put his hands back in his pockets and turned away from the deputies. Fearing for their safety, deputies removed Barker’s hands from his pockets and patted him down. During the search, a small .22 caliber revolver was found in the right front pocket of Barker’s shorts. The gun was loaded with one live round, and four spent casings.
At the time of the incident, Barker was a previously convicted felon. His prior felonies include drug charges, aggravated battery, grand theft, and burglary. As a previously convicted felon, Barker is prohibited from possessing a firearm or ammunition under federal law. This case was investigated by the Hillsborough County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Mark E. Bini.
It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Julie Leon, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline Strategy to reduce violent crime and improve the quality of life in communities where law enforcement efforts are focused.
Statesville Jury Finds Armed Bank Robbers GuiltyRead the Press Release
Defendant Used Vehicle He Carjacked That Morning To Commit Bank Robbery
STATESVILLE, N.C. – A federal jury sitting in Statesville returned a guilty verdict on Thursday, May 15, 2014, against Darius Donneal Freeman, 32, and Wincy Joseph, 29, both of Charlotte, for armed bank robbery and possession of a firearm in furtherance of a crime of violence charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The jury also found Freeman guilty of carjacking and a second possession of a firearm in furtherance of a crime of violence.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Chief Matthew A. Selves of the Troutman Police Department and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department.
According to filed court documents and trial proceedings:
In or about May 20, 2013, at approximately 5:15 a.m. Freeman carjacked a victim at gunpoint at a Circle K gas station located on South Boulevard in Charlotte. Later that morning, Freeman and Joseph used the carjacked vehicle to rob a Bank of America branch in Troutman, N.C. Soon after the bank opened, Freeman entered the bank wearing a black cap, sunglasses, gloves and brandishing a silver handgun. Freeman jumped on the tellers’ counter and demanded cash. Joseph entered the bank behind Freeman, dressed in a black sweatshirt with the hood pulled over his head, sunglasses and gloves, and demanded cash from another bank employee. The defendants then fled the scene with approximately $5,100 in cash, driving off in the car Freeman had jacked earlier that day. Law enforcement later found the car abandoned on Interstate-77 in Iredell County. The defendants were identified five days later, following a tip from a concerned citizen. Freeman was arrested on June 6, 2013. Joseph was arrested on June 13, 2013.The armed bank robbery charge carries a maximum prison term of 25 years and a $250,000 fine. The possession of a firearm in furtherance of a crime of violence offense carries a minimum of 7 consecutive years and a maximum of life in prison. Freeman also faces a maximum prison term of 15 years and a $250,000 for the carjacking charge. He also faces a minimum of 32 years and a maximum of life in prison for the possession of a firearm in furtherance of a crime of violence (carjacking). Both defendants remain in custody. Sentencing dates for the defendants have not yet been set.
The investigation was led by the FBI, the Troutman Police Department and CMPD. U.S. Attorney Tompkins also thanked the Mooresville Police Department, the Iredell County Sheriff’s Office and the Statesville Police Department for their assistance in the investigation.
The prosecution was handled by Assistant U.S. Attorney Elizabeth Greene and Special Assistant U.S. Attorney Rebecca McNerney. Ms. McNerney is a state prosecutor with the Iredell County District Attorney’s Office, and was assigned by District Attorney Sarah M. Kirkman to serve as a Special Assistant United States Attorney (SAUSA) with the U.S. Attorney’s Office in Charlotte.
Statement of the U.S. Attorney’s Office Regarding Meeting with Otero County OfficialsRead the Press Release
The U.S. Attorney’s Office participated in a meeting today with Otero County officials and representatives of the U.S. Forest Service for the purpose of discussing jurisdictional disputes involving use of the Lincoln National Forest. No resolution was reached during the meeting and the U.S. Attorney’s Office continues to monitor the situation in Otero County primarily to ensure that public safety is preserved. To that end, the U.S. Attorney’s Office will make every effort to facilitate a dialogue between county officials and the Forest Service.
Sinaloa Cartel Bodyguard Pleads Guilty to Federal Murder Charge in El PasoRead the Press Release
In El Paso, 32-year-old Rigoberto Ruiz-Alatorre, a Mexican citizen living in Denver, CO, faces a maximum of 28 years in federal prison after pleading guilty this afternoon to murdering a member of his drug trafficking organization announced United States Attorney Robert Pitman, Drug Enforcement Administration Acting Special Agent in Charge J. Todd Scott, El Paso Division, and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division.
On the third day of his trial on federal drug and firearms charges, Ruiz-Alatorre, an admitted drug trafficker and former bodyguard for Sinaloa narcotrafficker Gabino Salas-Valenciano (aka “El Ingeniero”), pleaded guilty to one count of murder resulting from the use or carrying of firearms during and in relation to a drug trafficking crime. By pleading guilty, Ruiz admitted to trafficking over 1,000 kilograms of marijuana in both the Western District of Texas and the District of New Mexico from 2002 to 2006; and, while in Albuquerque, NM, in July 2006, he shot and killed Roswell, NM, resident Fermin Rodriguez-Gonzalez to facilitate his narcotics trafficking operation and to prevent Rodriguez-Gonzalez from providing law enforcement with details of Ruiz’ narcotics trafficking activities.
Ruiz remains in federal custody pending sentencing. Sentencing is scheduled for September 3, 2014, before United States District Judge Frank Montalvo.
This joint investigation was conducted by the Drug Enforcement Administration and the Federal Bureau of Investigation together with the United States Border Patrol and the Bernalillo County (NM) Sheriff’s Office.
Scott Man Sentenced for Making False Statements to Social Security Administration in Oder to Steal BenefitsRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that William Joseph Folse, Jr., 51, of Scott, La., was sentenced by U.S. District Judge Elizabeth Foote, to 12 months in prison and three years of supervised release for making false statements to the Social Security Administration (SSA) concerning his disability status in order to fraudulently receive nearly $200,000 in benefits. He was also ordered to pay $199,007.80 in restitution to the SSA.
According to evidence presented at the guilty plea on January 22, 2014, Folse applied for and was granted benefits for total disability in the 1990s for a slip and fall accident. He also signed paperwork acknowledging that he would report his change in job status should he return to work. Investigators later determined that Folse worked at a restaurant in Lafayette since 1998 and earned more than $12,000 per year plus tips. It is estimated that he improperly received $199,007.80 from the SSA.
The SSA conducted the investigation. Assistant U.S. Attorney Howard C. Parker prosecuted the case.San Jose Couple Indicted in Connection with Seizure of over 90 Pounds of MethamphetamineRead the Press Release
SAN JOSE – A federal grand jury indicted Maria Anay Castaneda-Aleman, and Emmanuel Navarro Gallegos, a/k/a “Armando Roberto Espino,” on May 14, 2014, and charged both defendants with conspiring to distribute methamphetamine and possessing methamphetamine with the intent to distribute, announced United States Attorney Melinda Haag. Castaneda-Aleman was also charged with making available for use a house in San Jose for the purpose of unlawfully manufacturing, storing, and distributing methamphetamine.
An affidavit filed by a Special Agent with Homeland Security Investigations (HSI) in support of a criminal complaint filed in the same matter alleges that on May 3, 2014, HSI Special Agents responded to a house on Plateau Drive, San Jose, Calif., based on a report that drugs had been discovered on the premises. The agents found methamphetamine hidden beneath the stairwells. An HSI special agent weighted the bags and determined they had a total gross weight of 42.2 Kilograms (over 90 pounds).
According to the affidavit, the house was rented by Castaneda-Aleman who lived there with her boyfriend Emmanuel Navarro Gallegos. Castaneda-Aleman was arrested on May 3, 2014. According to the affidavit, the agents attempted to detain Emmanuel Navarro Gallegos on May 4, 2014, but he remains at large.
Castaneda-Aleman had her initial appearance before the Honorable Paul S. Grewal, United States Magistrate Court Judge, in San Jose, on May 5, 2014. She then had a detention hearing on May 9, 2014, and was ordered detained pending trial.
The following are the maximum statutory penalties for each charge in the indictment:
Counts 1 and 2 (against both defendants): Conspiracy to possess with intent to distribute methamphetamine and possession of methamphetamine with the intent to distribute (21 U.S.C. §§ 841(a)(1) and 846):
- Maximum prison sentence life
- Mandatory minimum prison sentence 10 years
- Maximum fine $10,000,000
- Minimum supervised release term 5 years
- Mandatory special assessment $100
Count 3 (against Castaneda-Aleman only): Maintaining Drug-involved Premises (21 U.S.C. § 856):
- Maximum prison sentence 20 years
- Maximum fine $500,000
- Maximum supervised release term 3 years
- Mandatory special assessment $100
However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
This case is in part the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
Please note, an indictment contains only allegations against a person and, as with all defendants, Maria Anay Castaneda-Aleman and Emmanuel Navarro Gallegos, must be presumed innocent unless and until proven guilty.
(Castaneda-Aleman and Navarro Gallegos complaint )
(Castaneda-Aleman and Navarro Gallegos indictment )
San Angelo Man Sentenced to 57 Months in Federal Prison for Possessing Child PornographyRead the Press Release
LUBBOCK, Texas — Brandon Cory Boshears, 30, of San Angelo, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 57 months in federal prison, following his guilty plea in February 2014 to one count of possession of child pornography. Boshears will surrender to federal custody on a date to be designated. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
According to documents filed in the case, Boshears admitted that in the course of using a file sharing program on his computer to search the Internet for depictions of minors engaged in sexually explicit conduct, he downloaded and viewed numerous images depicting minors engaged in sexually explicit conduct.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from San Angelo Police Department. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
SAC Capital Portfolio Manager Michael Steinberg Sentenced in Manhattan Federal Court To42 Months in Prison for Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL STEINBERG, a portfolio manager of Sigma Capital Management, LLC (“Sigma”), a division of the Connecticut based hedge fund S.A.C. Capital, was sentenced today in Manhattan federal court to 42 months in prison for crimes stemming from his involvement in an insider trading scheme. STEINBERG was convicted of various securities fraud charges on December 18, 2013. He was sentenced today by United States District Judge Richard J. Sullivan, who presided over the trial.
Manhattan U.S. Attorney Preet Bharara said: “Michael Steinberg traded on information from company insiders at Dell and NVIDIA to reap nearly $2 million in illegal profits. Today he has learned the steep cost of those transactions.”
According to the Superseding Indictment filed in Manhattan federal court, other court documents, and the evidence presented at trial:
STEINBERG traded in the securities of two publicly traded technology companies, Dell, Inc. (“Dell”), and NVIDIA Corporation (“NVIDIA”), based on inside information that his research analyst Jon Horvath obtained from a circle of analyst friends at different investment firms. Horvath previously pled guilty to insider trading, as did analysts Jesse Tortora, formerly of Diamondback Capital, Spyridon “Sam” Adondakis, formerly of Level Global, Danny Kuo, formerly of Whittier Trust, and Sandeep Goyal, formerly of Neuberger Berman. STEINBERG’s trading in Dell and NVIDIA resulted in approximately $1.8 million in illegal profits for his hedge fund.
In particular, Tortora provided Horvath and others with Inside Information related to Dell’s quarterly earnings (the “Dell Inside Information”), which Tortora obtained from Goyal who, in turn, had obtained the information from an employee at Dell (the “Dell Insider”). For example, for Dell’s quarter which was announced by Dell on August 28, 2008 (the “Dell Announcement”), the Dell Inside Information indicated that Dell would report gross margins that were materially lower than market expectations. In advance of the Dell Announcement, Horvath reported this negative inside information to STEINBERG.
On August 18, 2008, after a series of calls from the Dell Insider to Goyal and from Goyal to Tortora and Horvath, Horvath then called STEINBERG. Within a minute of the telephone call between STEINBERG and Horvath, STEINBERG’s portfolio began shorting shares of Dell. One minute later, Horvath wrote an email to STEINBERG stating: “Pls keep the DELL stuff especially on the down low . . . just mentioning that because JT [Jesse Tortora] asked me specifically to be extra sensitive with the info.” By the end of the day on August 18, 2008, STEINBERG had accumulated a net short position of over 167,000 shares of Dell. On August 26, 2008, Horvath confirmed in an email to STEINBERG and another portfolio manager at Sigma that Horvath’s Dell information had been based on a “2nd hand read from someone at the company.” STEINBERG responded: “Yes normally we would never divulge data like this, so please be discreet.” And on August 27, 2008, STEINBERG sent an email to Horvath with the subject line, “Dell action,” in which he asked, “Have u double checked [with] JT this week?” Horvath responded, “Yes he [Tortora] checked in [a] couple days ago, same read no change.” The following day, STEINBERG executed additional short trades based on the Dell Inside Information.
On August 28, 2008, before Dell’s Announcement, STEINBERG executed or caused to be executed additional short trades. STEINBERG also executed or caused to be executed options trades in Dell in advance of the Dell Announcement.
After the close of the market on August 28, 2008, Dell publicly announced gross margins that were substantially below market expectations. At the end of the next trading day following Dell’s Announcement, its stock price dropped by nearly 14%. Shortly thereafter, STEINBERG covered his short position, and closed out his position in Dell option contracts, resulting in an illegal profit for Sigma of approximately $1 million.
In addition, in 2009, Kuo obtained inside information regarding NVIDIA’s financial results (the “NVIDIA Inside Information”) in advance of NVIDIA’s quarterly earnings announcements. The NVIDIA Inside Information indicated, among other things, that NVIDIA’s gross margins would be lower than market expectations. Kuo obtained the NVIDIA Inside Information from a friend, Hyung Lim, who received it from an employee at NVIDIA (the “NVIDIA Insider”). In advance of NVIDIA’s May 7, 2009, quarterly earnings announcement (the “NVIDIA Announcement”), Kuo provided the NVIDIA Inside Information, which he had obtained from Lim, to Tortora, Horvath, and others. Horvath, in turn, provided the NVIDIA Inside Information to STEINBERG, who executed or caused to be executed transactions in NVIDIA in advance of the NVIDIA Announcement.
On May 7, 2009, NVIDIA publicly announced gross margins that were substantially lower than the market expected. At the end of the trading day following the NVIDIA Announcement, NVIDIA’s stock price dropped by more than 13%. Shortly thereafter, STEINBERG caused Sigma to liquidate its position in NVIDIA, resulting in an illegal profit for Sigma of approximately $350,000.
At trial, STEINBERG, 42, of New York, New York, was convicted of conspiracy to commit securities fraud and four counts of securities fraud.
In addition to the prison term, STEINBERG was sentenced to three years of supervised release. STEINBERG was also ordered to pay $365,142.30 in forfeiture and a $2 million fine.
Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Antonia M. Apps and Harry A. Chernoff are in charge of the prosecution.
Reunion Mortgage, Inc. to Pay $1.04 Million to Resolve Allegations of Defrauding the Federal Housing Administration ProgramRead the Press Release
SAN FRANCISCO – United States Attorney Melinda Haag announced today that Reunion Mortgage, Inc. and its former co-owners have agreed to pay $1.04 million to settle allegations that the company submitted false claims to the Federal Housing Administration (“FHA”) in violation of the False Claims Act, 31 U.S.C. §§ 3729-33.
The United States alleged that Reunion Mortgage falsely certified that certain loans met the U.S. Housing and Urban Development’s (“HUD”) requirements and were eligible for FHA insurance. The complaint further alleged that Reunion Mortgage knew that the company’s underwriters routinely failed to perform basic due diligence, failed to verify information in the loan file that bore directly on the borrower’s ability to make payments on the mortgage, and repeatedly certified mortgage loans that contained serious defects and departures from HUD’s underwriting standards. Reunion Mortgage, now out of business, was formerly located in Milpitas. The United States also alleged that Reunion Mortgage improperly issued a dividend to co-owners David Thayer and R. Kent Harvey that rendered the company insolvent and unable to pay its debts to the United States, in violation of the Federal Debt Collections Procedures Act.
“This Office is committed to holding lenders accountable for fraudulent and reckless underwriting of federally insured FHA home loans. The systematic abuse of the system will not be tolerated,” said United States Attorney Melinda Haag.
Ila C. Deiss is the Assistant U.S. Attorney who handled the case with the assistance of Michael Zehr, Tina Louie, and Sarah Oldridge. The case is the result of an investigation by HUD’s Office of the Inspector General’s Civil Fraud Division, and is part of HUD's High Default Lender Initiative.
Repeat Offender found Guilty of Illegally Possessing FirearmRead the Press Release
A known Seattle gang member who was sentenced in 2009 for drug dealing and possessing a stolen firearm, was found guilty late yesterday for being a felon in possession of a firearm, announced U.S. Attorney Jenny A. Durkan. JIMMY GENE MILLER, 29, was arrested on June 13, 2013 after Seattle Police responded to reports of a beating behind a nightclub in Seattle’s Capitol Hill neighborhood. MILLER was convicted following a three day jury trial. Jurors deliberated about five hours before returning the guilty verdict. Sentencing is scheduled for September 19, 2014 before U.S. District Judge Richard A. Jones.
According to records in the case and testimony at trial, MILLER encountered a rival gang member at ‘The Garage,’ a bar/pool hall/bowling alley on Capitol Hill in Seattle. MILLER flashed a firearm in the waistband of his pants as he took the victim out the alley door of the nightclub. In the alley MILLER assaulted the victim. Portions of the assault were captured on surveillance video. The victim was found stripped naked and beaten. The surveillance cameras photographed MILLER jumping into the passenger seat of a distinctive black Camaro. Seattle Police moved quickly after getting reports on the assault, locating the car a few miles from the club. MILLER and his associates were found nearby. The victim’s wallet was found in the front passenger seat. A court authorized search of the car revealed a .40 caliber Glock pistol in the glove compartment in front of where MILLER had been sitting. Text messages introduced at trial reveal MILLER discussing an extended magazine for the semi-automatic weapon with an associate in the weeks before the assault.
MILLER faces up to ten years in prison on this conviction and an additional two years in prison for violating the conditions of his supervised release on the prior conviction. MILLER was out of prison for about six months before reoffending.
MILLER was prosecuted as part of the Project Safe Neighborhoods program. Unveiled in May 2001, Project Safe Neighborhoods (PSN), is a comprehensive and strategic approach to gun law enforcement. PSN is a nationwide commitment to reduce gun crime in America by networking both new and existing local programs that target gun crime and then providing them with the resources and tools they need to succeed. Implementation at the local level -- in this case, in King County-- has fostered close partnerships between federal, state and local prosecutors and law enforcement.
The case was investigated by the Seattle Police Department and FBI. The case was prosecuted by Assistant United States Attorneys Vince Lombardi and Jerrod Patterson.
Relatives who Conspired to Traffick Oxycodone from California to Tacoma Sentenced to Long Prison TermsRead the Press Release
A Tacoma man and his nephew were sentenced today in U.S. District Court in Tacoma to lengthy prison terms for the scheme to smuggle and distribute thousands of pills of oxycodone, announced U.S. Attorney Jenny A. Durkan. DION K. MARTIN, 54, of Tacoma was sentenced to six and a half years in prison and three years of supervised release. MOROCCO T. MARTIN, 39, of Los Angeles, California was sentenced to eight years in prison and three years of supervised release. The men were arrested in September 2013 and pleaded guilty to conspiracy to distribute oxycodone in January 2014. At sentencing U.S. District Judge Ronald B. Leighton noted that he hoped the sentences would deter others from this criminal conduct.
“These defendants exploited a horrible addiction that destroys lives and families,” said U.S. Attorney Jenny A. Durkan. “I congratulate the South Sound Gang Task Force for terminating this pipeline of illegal prescription narcotics to our communities.”
According to records filed in the case, DION MARTIN distributed thousands of oxycodone pills in the Tacoma area, and transferred the drug proceeds to the suppliers in California by depositing payments in accounts in Tacoma, which were later withdrawn in Southern California. The conspirators were careful to keep the cash deposits below limits that would trigger further scrutiny. MOROCCO MARTIN shipped pills from California to his uncle in Tacoma, often hidden in stereo speakers. The shipments were sent to various relatives of DION MARTIN to try to conceal them from investigators. The men stopped using the mails after some of the shipments were seized. On September 8, 2013, the two men were stopped in a rental car headed from Los Angeles to Tacoma. In the trunk was a stereo speaker packed with 7500 oxycodone pills. A search of DION MARTIN’s Tacoma residence uncovered another 1,000 pills and more than $57,000 in cash.
MOROCCO MARTIN supplied the pills to his uncle and arranged for the cash deposits and withdrawals to pay co-conspirators. DION MARTIN supplied the pills to others in Western Washington.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The case was investigated by the South Sound Gang Task Force with agents and officers from the FBI, Tacoma Police Department and the Washington State Department of Corrections. The case was prosecuted by Assistant United States Attorneys Brian Werner and Gregory Gruber.
Pottawattamie County Resident Sentenced to Three Years in Prison for Felon in Possession of A FirearmRead the Press Release
COUNCIL BLUFFS, IA - On May 15, 2014, Newberry Winfield Wright, a 22 year-old resident of Oakland, Iowa, was sentenced by United States District Court Chief Judge James Gritzner to 36 months in prison, followed by three years of supervised release after the term of imprisonment, for being a convicted felon in possession of a firearm, announced United States Attorney Nicholas A. Klinefeldt.
On February 6, 2014, Wright pled guilty to the charge of being a felon in possession of a firearm which was the result of an investigation by law enforcement into a report of shots being fired at the Farm Creek Wildlife Area near Carson, Iowa. Wright was located a short distance from the Farm Creek Wildlife Area by deputies with the Pottawattamie County Sheriff’s Department. Wright was found to have in his possession a Smith and Wesson .50 caliber handgun and .50 caliber ammunition. Wright was prohibited from possessing a firearm after he pled guilty in 2012 to a felony controlled substance violation.
The investigation was conducted by the Pottawattamie County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the case was prosecuted by the U.S. Attorney’s Office for the Southern District of Iowa.
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Organized Crime Associate Sentenced in Manhattan Federal Court for Role in Commercial Carting SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that WILLIAM CALI was sentenced in Manhattan federal court in connection with his role in a scheme to exert control over the commercial waste-hauling industry in the greater New York City metropolitan area and in parts of New Jersey. CALI previously pled guilty to one count of participating in a conspiracy to commit extortion. CALI was sentenced today to 18 months in prison by U.S. District Judge P. Kevin Castel.
According to the Indictment, other documents filed in Manhattan federal court, and statements made at various proceedings in this case, including today’s sentencing:
CALI was a participant in a scheme, along with other members and associates of three different Organized Crime Families of La Cosa Nostra (“LCN”) – the Genovese, Gambino, and Luchese Crime Families – to control various waste disposal businesses in the New York City metropolitan area and multiple counties in New Jersey. Members of the scheme engaged in various crimes including extortion, loansharking, mail and wire fraud, and stolen property offenses. CALI, a Genovese Crime Family associate, provided protection and “backing” to a witness cooperating with the Government who operated a waste disposal company in exchange for regular payments made under the threat of harm.
In addition to the prison term, CALI, 61, of Queens, New York, was also sentenced to two years of supervised release, and ordered to pay forfeiture in the amount of $7,900.
CALI was charged as part of a large investigation led by the United States Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation (“FBI”), and the Westchester County Police Department. To date, 32 defendants have been charged with participating in the scheme to exert control over the commercial waste-hauling industry. Twenty-one of these defendants have been convicted for their roles in this scheme.
Mr. Bharara praised the investigative work of the FBI and the Westchester County Police Department.
The prosecution of this case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Brian R. Blais and Patrick Egan are in charge of the prosecution. Assistant United States Attorney Micah Smith of the Office’s Money Laundering and Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
Nifty Fifty's Accountant Indicted on Tax ChargesRead the Press Release
William J. Frio, 58, of Folsom, PA, is charged by indictment, unsealed today, in a tax evasion scheme involving the Nifty Fifty’s restaurant chain, announced United States Attorney Zane David Memeger. Frio is charged with conspiracy to commit tax evasion by operating the Nifty Fifty’s long-running scheme to avoid paying millions of dollars in personal and employment taxes. The scheme defrauded the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. Frio is also charged with filing his own false tax returns, aggravated structuring of financial transactions, and loan fraud.
Frio is an accountant and income tax preparer who has provided services to the Nifty Fifty’s organization since 1986. According to the indictment, Frio conspired and agreed with the owners and principals of Nifty Fifty’s, all of whom have been charged separately, in a scheme to use skimmed cash to pay themselves and people and businesses who supplied goods and services to the Nifty Fifty’s restaurants, providing those persons and businesses with the opportunity to evade the payment of their own taxes.
It is further alleged that, in 2008, Frio submitted a false loan application to Sovereign Bank, for a $417,000 mortgage for his personal residence. Frio allegedly submitted to the bank bogus federal income tax returns for 2006 and 2007, and bogus Forms W-2, falsely representing he had earned substantial income from Tanfasia, Inc., when, as the defendant knew, the 2006 and 2007 tax returns that he had actually submitted to the Internal Revenue Service showed far less income than the false returns supplied to Sovereign Bank, and that the defendant had not been employed by Tanfasia, Inc. in 2006 or 2007. It is further alleged that between January 2009 and November 2009, Frio knowingly structured transactions with Sovereign Bank, totaling more than $2.6 million, as part of a pattern of illegal activity involving transactions of more than $100,000 in a 12-month period. As explained in the indictment Frio used his position as the Nifty Fifty’s accountant to embezzle hundreds of thousands of dollars of funds that belonged to the organization.
If convicted, Frio faces a maximum possible sentence of 57 years in prison, full restitution to the IRS and a fine of up to $2.75 million.
The case was investigated by the Internal Revenue Service Criminal Investigation Division and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Paul G. Shapiro and Nancy E. Potts.
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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
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PATTY HARTMAN, Media Contact, 215-861-8525Newark Man Sentenced to over 7 Years in Prison for Sexual Coercion of A Minor over the InternetRead the Press Release
OAKLAND – A Newark man pleaded guilty to possession of child pornography and was sentenced yesterday to 92 months in prison, announced San Francisco Homeland Security Investigations Special Agent in Charge Clark Settles and United States Attorney Melinda Haag.
Jesse Yang, 25, was sentenced by the Honorable Yvonne Gonzalez Rogers, United States District Court Judge. Judge Gonzalez Rogers also sentenced Yang to ten years of supervised release.
According to court documents and information presented at court, on Nov. 16, 2011, the Royal Canadian Mountain Police received a telephone call from a man who reported that he found his 14 year old daughter partially dressed in front of a computer and webcam at their home. During the investigation, the victim’s father provided the laptop computer to officers. The computer was open to a Skype chat window between the victim and Yang, identifying himself online as “J”. The chat window contained text messages back and forth with Yang instructing the victim to remove her clothing and open her legs in front of the computer. Yang continued on to suggest to the victim that she engage in sexual acts in front of the webcam.
Yang met the victim through momegl .com, a website designed to allow users to anonymously chat with strangers. In order to entice his minor victim to undress and perform sexual acts, Yang, posing as a 15 year old boy, told the victim how beautiful he thought she was and encouraged her to play sexual explicit games while in front of the webcam, during which she would receive points for following instructions suggested by Yang while on line. Yang provided the victim instructions on how to set up her webcam.
Through Yang’s email address, which he provided to the victim, law enforcement officers were able to ascertain his computer’s IP address and thereafter identify him as Jessy Yang.
The case was prosecuted by Assistant U.S. Attorneys Randy Luskey and Rodney Villazor of the Northern District of California and was investigated by the Department of Homeland Security.(Yang superseding information )
New Orleans Men Sentenced After Pleading Guilty to Drug and Gun ChargesRead the Press Release
THOMAS HILLIARD, 24, CHRISTIAN JOHNSON, 25, WILLIE HILLIARD, 23, and JAMES BROWN, 24, residents of New Orleans, were sentenced by U.S. District Judge Lance M. Africk, after pleading guilty to crack cocaine and gun charges, announced U. S. Attorney Kenneth Allen Polite, Jr. THOMAS HILLIARD was sentenced to 121 months imprisonment followed by five years of supervised release. JOHNSON was sentenced to 228 months imprisonment followed by five years of supervised release. WILLIE HILLIARD and BROWN were sentenced to 12 months and 42 months imprisonment, respectively, followed by three years of supervised release.
THOMAS HILLIARD and JOHNSON pled guilty to conspiracy to possess with intent to distribute two hundred eighty grams or more of crack cocaine. JOHNSON also pled guilty to possession of a firearm in furtherance of a drug trafficking crime and felon in possession of a firearm. WILLIE HILLIARD pled guilty to possession with intent to distribute a quantity of crack. BROWN pled guilty to conspiracy to distribute and possess with the intent to distribute a quantity of crack cocaine.
The investigation of THOMAS HILLIARD, JOHNSON, WILLIE HILLIARD and BROWN was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) and the New Orleans Police Department (“NOPD”) as part of the Multi-Agency Gang Unit. These defendants, along with other individuals who have also pled guilty to drug charges, were identified as a gang known as “MMG” that distributed cocaine and possessed firearms to further their drug trafficking activities in the Seventh Ward area of New Orleans.
The Multi-Agency Gang Unit is an NOPD led division which includes federal agents from A.T.F., the Drug Enforcement Administration, the Federal Bureau of Investigation, and the U.S. Marshals Service, as well as participants from the Orleans Parish Sheriff’s Office, the Louisiana State Police, State Probation and Parole, and the New Orleans District Attorney’s Office.
“These lengthy prison sentences are the result of the MAG Unit’s continued commitment to fighting violent crime, stated U.S. Attorney Polite. “Our local, state, and federal law enforcement partners will not rest until our streets are safe for all residents of Southeast Louisiana.”
“The Multi-Agency Gang Unit continues to prove its effectiveness in getting violent criminals off the streets and out of our neighborhoods,” said Mayor Mitch Landrieu. “Since the fall of 2012, the MAG Unit has led to the indictments of 83 individuals associated with 8 groups. Through NOLA FOR LIFE, we will continue to focus on keeping our residents safe, reclaiming our neighborhoods, and offering opportunities to those who want to make better choices.”
The investigation was conducted by Special Agents of the Bureau of Alcohol, Tobacco and Firearms and the New Orleans Police Department. The case was prosecuted by Assistant United States Attorney Andre Jones.
Navajo, N.M., Man Sentenced to Federal Prison for Child Sex Abuse ConvictionRead the Press Release
ALBUQUERQUE – Cornallsen Cortez, 32, an enrolled member of the Navajo Nation who resides in Navajo, N.M., was sentenced today to 63 months in federal prison followed by five years of supervised release for his abusive sexual contact conviction. Cortez will be required to register as a sex offender when he completes his prison sentence.
Cortez was arrested in March 2013, based on a criminal complaint alleging that he sexually abused a 12-year-old child in Nov. 2012, in a residence located on the Navajo Indian Reservation. Cortez pled guilty on Jan. 16, 2014, to a felony information charging him with abusive sexual contact with a minor. In entering his guilty plea, Cortez admitted that on Nov. 28, 2012, he sexually abused a 12-year-old child by touching the child inappropriately.
This case was investigated by the Albuquerque and Gallup offices of the FBI and the Window Rock, Ariz., office of the Navajo Nation Division of Public Safety, and was prosecuted by Assistant U.S. Attorney Jennifer M. Rozzoni.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Multi-Convicted Felon Sentenced to 10 Years in PrisonRead the Press Release
Tampa, FL – U.S. District Judge Richard A. Lazzara today sentenced Tory Lenard James (32, Sarasota) to ten years in federal prison for being a felon in possession of a firearm. James was found guilty by a federal jury on February 25, 2014.
According to testimony and evidence presented at trial, on July 25, 2013, members of the Sarasota Police Department executed a search warrant at James’s residence. Inside the home, law enforcement officers found a loaded .22 caliber pistol.
At the time of the incident, James was a convicted felon. His prior felonies include robbery and multiple drug convictions. As a convicted felon, James is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Sarasota Police Department. It was prosecuted by Assistant United States Attorneys Carlton C. Gammons and Shauna S. Hale.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Julie Leon, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline Strategy to reduce violent crime in communities where law enforcement efforts are focused.