Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 14 May 2014
Rochester Woman Sentenced for Threatening to Kill the PresidentRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Christine Wright-Darrisaw, 38, of Rochester, N.Y., who was convicted following a jury trial of making a direct threat to kill the President of the United States and then lying to United States Secret Service Agents investigating the case, was sentenced to 33 months in prison today by U. S. District Court Judge Frank P Geraci.
Assistant U.S. Attorneys Craig R. Gestring and Grace M. Carducci, who handled the prosecution of the case, stated that the defendant threatened to kill President Barack Obama during a telephone call to the White House on February 24, 2012. At trial, the Government called the White House Operator who took the call from the defendant and she graphically described the “brutality” and the “violence” of Darrisaw’s words. The Operator stated that she has answered thousands of calls while serving as an operator with the White House Comments Line, but that this call stood out in her memory, almost two years later.
Secret Service Agents from Washington and Rochester also testified at trial about their investigation and how they were able to identify the defendant as a suspect. Agents in Rochester linked Wright-Darrisaw to the cellular telephone used to make the threat, and conducted an interview with her. During that interview, the defendant made several false statements to the Secret Service which were material to and impacted their investigation.
The sentencing is the culmination of an investigation on the part of Special Agents of the United States Secret Service, under the direction of Special Agent in Charge, Tracy Gast.Retired Chicago Official Arrested on Federal Bribery Charge for Taking Cash and Personal Benefits to Steer $124 Million in City Contracts to Redflex for Red Light Camera ProgramRead the Press Release
CHICAGO — A retired City of Chicago official who managed the city’s red light camera program for nearly a decade was arrested today for allegedly accepting cash and personal benefits totaling hundreds of thousands of dollars to steer $124 million in city contracts to Redflex Traffic Systems, Inc., to establish, operate and expand the program. The defendant, JOHN BILLS, allegedly received cash bribes, other forms of payment, and an Arizona condominium, all funneled from Redflex through unnamed Individual A, Bills’ one-time friend who received $2 million in salary, bonuses, and commissions as a consultant to Redflex.
Bills, 52, of Chicago, was charged with one count of federal program bribery in a criminal complaint that was filed yesterday and unsealed today. Bills was scheduled to appear at 3 p.m. before U.S. Magistrate Judge Maria Valdez in Federal Court.
Between 2003, when the city awarded Phoenix-based Redflex its initial contract, and 2011, Bills allegedly received from Individual A cash and checks directly and indirectly for his benefit, including to repay loans, for his retirement party, and catering for another party. Individual A also purchased for Bills a Glendale, Ariz., condominium for $177,000, which Bills, often with friends and family, visited 22 times between May 2008 and 2012.
Bills, who retired in 2011 as managing deputy commissioner of the city’s transportation department after 32 years with the city, managed the city’s red light program and served as a member of the city’s contract evaluation committee.
According to an FBI affidavit supporting the charges, in October 2003, the city awarded a contract to Redflex for the installation, maintenance and operation of the city’s first Digital Automated Red Light Enforcement Program (DARLEP), which used cameras to automatically record and ticket drivers who ran red lights. Between 2004 and 2008, the city paid Redflex approximately $25 million under this contract, and Redflex installed and maintained 136 camera systems in Chicago intersections, and assisted in reviewing and processing violations. Bills, then assistant transportation commissioner, was a voting member of the city’s request for proposal (RFP) evaluation committee that recommended awarding the contract to Redflex after a one-month trial run of competing systems by Redflex and another finalist. In February 2008, the city awarded a new, non-competitive contract to Redflex to operate and maintain the previously installed 136 camera systems, and paid Redflex approximately $33 million under that contract.
Also in February 2008, following the competitive RFP process, the city awarded a new DARLEP contract to Redflex that was similar to the first. Bills was an advisory member of this RFP evaluation committee. The city paid Redflex approximately $66 million under this contract, which resulted in approximately 248 red light cameras being installed, bringing the total number of Redflex cameras to 384 and the total amount the city has paid Redflex to approximately $124 million.
By 2010, Chicago had the largest red light camera program in the United States, representing 20 percent of the total camera systems that Redflex operated nationwide. For Redflex, a subsidiary of Australian-based Redflex Holdings Ltd., the Chicago contract was its most important because of the revenue it generated and the name recognition it gave the company, according to the affidavit.
The complaint affidavit is supported by information from Confidential Source 1 (CS1), a former Redflex employee who initially provided Bills in 2002 with an unsolicited proposal to install red light cameras in Chicago. Frequent communications between CS1 and Bills led CS1 to understand that Bills was trying to determine if he could get money from Redflex in return for the company getting the red light camera contract. Shortly after a Jan. 3, 2003, pre-bid meeting that CS1 attended with other vendors, Bills asked CS1 to get him and his friends a hotel room in Los Angeles. CS1 paid for Bills’ hotel room with the approval of CS1’s superiors, believing that it would influence Bills to help Redflex get the Chicago contract. As CS1 anticipated, Bills did not offer and did not reimburse CS1 for the hotel room and instead thanked CS1, who submitted a voucher and was reimbursed by Redflex.
Between February and May 2003, during a pilot phase with Redflex and a competing vendor, Redflex paid for drinks and meals for Bills. Upon Bills’ recommendation, Redflex hired Company A as a subcontractor. In May 2003, before the city contract was awarded, Bills made comments to remind CS1 that Bills was being courted by the competing vendor. After Bills and CS1 strategized to ensure a favorable result, on May 27, 2003, the evaluation committee and city transportation commissioner recommended that Redflex be awarded the DARLEP contract, which went into effect in October 2003.
At a celebratory dinner in June 2003, Bills allegedly told CS1 words to the effect of, “It’s time to make good,” which CS1 understood to mean that Bills wanted and expected to be paid for helping Redflex win the Chicago contract. Bills allegedly floated alternative suggestions for funneling benefits to him, including suggesting that Redflex could pay him through the newly created Chicago customer liaison position. During the summer and fall of 2003 Redflex hired Individual A to fill that position and negotiated his compensation structure. In addition to salary and bonuses, Redflex payments to Individual A included commissions totaling more than $1.34 million between 2008 and 2011.
Before Bills retired, he allegedly made it known to CS1 and other Redflex employees that he wanted a job with Redflex. After it was decided that Redflex could not hire him directly, Redflex arranged for Bills to get a job with Company B, which was funded by Redflex. That job lasted through the early spring of 2012.
The affidavit alleges that between late 2003 and November 2012, Individual A and Bills used several different methods to transfer funds to Bills. In 2008, Individual A purchased the Glendale, Ariz., condominium for Bills’ use. In addition, checks written on Individual A’s bank account were used to repay debts Bills had accumulated and also to pay for personal expenses of Bills and his family. Individual A also withdrew large amounts of cash, totaling more than $643,000 between 2006 and 2011, which temporally correspond to Bills’ repayment of loans as well as Bills’ payment of numerous personal expenditures, including purchasing a $12,500 used Mercedes-Benz, with cash. Although some of Bills’ cash expenditures do not correspond to specific withdrawals by Individual A, Bills’ financial records reflect no withdrawals of cash by him to support the personal expenditures. In fact, records reflect very little cash on-hand by Bills during this time period.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Joseph Ferguson, Inspector General for the City of Chicago. The investigation is continuing, they said.
The government is being represented by Assistant U.S. Attorneys Carrie Hamilton and Laurie Barsella.
Federal program bribery carries a maximum penalty of 10 years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Readout of the Attorney General’s Meeting with D.C.-area College Campus Leadership on Addressing Campus Sexual AssaultRead the Press Release
Today, Attorney General Eric Holder met with campus leadership from eight Washington, D.C.-area colleges and universities: American University; Catholic University of America; Gallaudet University; Georgetown University; George Washington University; Howard University; Trinity University; and University of the District of Columbia, to discuss how administrations are addressing sexual assault on campus.
In recognition of the 20th anniversary of the Violence Against Women Act, the department’s Office of Violence Against Women (OVW) launched a campus tour from April 23-May 1 for Sexual Assault Awareness Month. Senior officials from the Departments of Justice and Education visited 11 campuses across the country, including public and private universities, community colleges, historically black colleges, and faith-based and tribal-affiliated institutions.
During today’s discussion, convened at the Department of Justice, officials shared lessons learned and feedback from the campus tour. Campus leaders shared their achievements and challenges in implementing effective prevention and intervention strategies and responses to address sexual assault, including student engagement, public education efforts, strong collaborations and a focus on campus culture. Justice officials also encouraged school leaders to take advantage of the assistance being provided by the government. Department of Justice campus assistance includes specialized training for school officials and guidance on how to improve their investigative and adjudicative protocols.
President Obama and Vice President Biden took an unprecedented step this year in the Administration’s effort to address campus sexual assault by establishing the “White House Task Force to Protect Students from Sexual Assault.” The Task Force was charged with sharing best practices, and increasing transparency, enforcement, public awareness and interagency coordination to prevent violence and support survivors. At the end of April, the Task Force issued their first report, reflecting what they had heard in the many listening sessions that were held this year, and what the government can do in the short-term to better partner with academic institutions.
Since 1999, OVW has funded approximately 400 campus-based projects, totaling more than $139 million, to address domestic violence, dating violence, sexual assault and stalking on campuses.
Associate Attorney General Tony West, Acting Assistant Attorney General for Civil Rights Jocelyn Samuels, and OVW Principal Deputy Director Bea Hanson, as well as the Department of Education’s Jamienne Studley, Deputy Under Secretary of Education, and Seth Galanter, Principal Deputy Assistant Secretary, Office for Civil Rights, also participated in today’s meeting. The roundtable discussion was organized in partnership with the DC Coalition Against Domestic Violence (DCCADV) University Leadership Initiative.
Rangeley Man Sentenced to Almost Four Years on Firearms ChargeRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Frank
J. McConnell, III, a/k/a “Frank Thompson,” 23, of Rangeley, Maine, was sentenced today in
U.S. District Court in Bangor to almost four years (46 months) of imprisonment, three years of
supervised release and a $500 fine for being a felon in possession of a firearm. The defendant
pleaded guilty on November 13, 2013.Court records reveal that on July 13, 2013, law enforcement officers responded to a
complaint that an intoxicated man was at a home in Dallas Plantation shooting a gun. When the
officers arrived, the defendant was standing outside the home firing a handgun toward the
woods. The defendant was intoxicated and prohibited from possessing firearms because of prior
felony convictions for domestic violence assault and a bail violation.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and
Explosives, the Rangeley Police Department, the Franklin County Sheriff’s Office, the Maine
State Police, and the U.S. Border Patrol.Raleigh Man Sentenced for Receipt of Child PornographyRead the Press Release
GREENVILLE – United States Attorney Thomas G. Walker announced that in federal court today Senior United States District Judge Malcolm J. Howard sentenced WALLACE EDWIN PERRY, JR., 28, of Raleigh, North Carolina, to 188 months imprisonment followed by 15 years of supervised release.
A Criminal Information was filed on December 9, 2013, charging receipt of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2). On February 10, 2014, PERRY pled guilty to the charge.
According to the investigation, in February, 2012, Cary Police Department initiated an investigation related to the peer-to-peer sharing of child pornography. From February, 2012, to August, 2012, an undercover agent identified a computer offering to share files containing child pornography. A search warrant was obtained and executed in September, 2012. Computer forensics revealed over 20,000 images of child pornography.
The criminal investigation of this case was conducted by the Cary Police, the Raleigh Police Department and the Federal Bureau of Investigation. Assistant United States Attorney Ethan A. Ontjes is handling the prosecution on behalf of the Eastern District of North Carolina.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Portland Man Pleads Guilty to Pharmacy RobberyRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Jason
Campbell, 39, of Portland, pled guilty today in U.S. District Court before Judge Jon D. Levy to
pharmacy robbery.According to court records and evidence introduced at the plea hearing, on April 11,
2014, Campbell entered the CVS pharmacy, located on Congress Street in Portland, carrying a
backpack. As he approached the pharmacy counter, he opened the backpack, said he had a
“bomb,” displayed what appeared to be a soda bottle with wires attached to it, and told the
pharmacist to evacuate the CVS and to close the gate in front of the store. He demanded the
opioid pain medications Duragesic (fentanyl), demerol and dilaudid and absconded after being
given the narcotics. He disposed of his outer clothing and the backpack in a nearby trash
can. He was located a short time later in the vicinity of his Portland residence and some of the
stolen narcotics were recovered. The investigation revealed that the bomb was not an explosive
device.
Campbell faces up to 20 years in prison and a $250,000 fine, or both. He will be
sentenced after the completion of a presentence investigation report by the U.S. Probation Office.The investigation was conducted by the Portland Police Department and the Federal
Bureau of Investigation.Pittsburgh Jeweler Sentenced to Probation for Failing to File IRS FormsRead the Press Release
PITTSBURGH - A Pittsburgh jeweler has been sentenced in federal court to three years of probation, a $12,000 fine, and 100 hours of community service on his conviction of failing to file Internal Revenue Service forms for the purpose of evading federal reporting requirements, United States Attorney David J. Hickton announced today. The first six months of probation will be served in home detention with electronic monitoring.
Senior United States District Judge Gustave Diamond imposed the sentence on Alan Kashi, 32.
According to information presented to the court during the earlier guilty plea proceeding, on March 13, 2012, Kashi, who was engaged in the jewelry business known as Kashi Jewelers located on Fifth Avenue in downtown Pittsburgh, for the purpose of evading federal reporting requirements, failed to file an Internal Revenue Service Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, following his receipt of approximately $12,500 in currency as a payment for a Breitling watch.
The charges against Kashi arose as a result of an undercover IRS investigation of Kashi's sale of high-end jewelry to known drug traffickers for cash. The investigation established that transactions exceeding $10,000 were not, as required by law, reported to the IRS on Forms 8300.
During the execution of a federal search warrant at Kashi Jewelers, $933,025 was discovered in two safes and seized by federal agents. Prior to the sentencing proceeding, Kashi agreed to the Court entering an order forfeiting the money to the United States.
Assistant United States Attorney Carolyn J. Bloch prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service, Criminal Investigation, for the investigation leading to the successful prosecution of Kashi.
Philadelphia Woman Admits Conspiracy to Traffic Firearms from Philadelphia to CamdenRead the Press Release
CAMDEN, N.J. – A Philadelphia woman today admitted conspiring to sell guns without a license, U.S. Attorney Paul J. Fishman announced.
Rosselyn M. DeJesus, 26, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an information charging her with conspiracy to deal firearms without a license.
According to documents filed in this case and statements made in court:
Between June 30, 2012, and July 19, 2012, DeJesus bought five pistols from Philadelphia-area gun shops, which she then transferred for resale to her conspirator, Michael Wayne Lee, also of Philadelphia. Lee, a previously convicted felon, resold them. Two of the five weapons were sold by a third individual, Ammie Steward, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). These two weapons are now in the custody of law enforcement.
On Feb. 19, 2014, Lee pleaded guilty before Judge Bumb to one count of conspiring with DeJesus, Steward, and others to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. He is scheduled to be sentenced Sept. 29, 2014.
On Dec. 19, 2012, Steward, pleaded guilty before Judge Bumb to dealing firearms without a license and one count of possession of a firearm by a previously convicted felon. He is scheduled to be sentenced Sept. 19, 2014.
Also in connection with this investigation, on May 5, 2014, ATF agents arrested Wendelle L. Ford, 40, of Camden. Ford was charged with conspiracy to deal firearms without a license.
From January 2012 through July 2012, Ford obtained firearms from different sources, who purchased them in gun shops in Philadelphia and pawn shops in North Carolina. Ford then resold the firearms, including at least two firearms to Steward, who in turn sold the weapons to an ATF informant. In total, Ford dealt 15 firearms without a license.
Ford made his initial appearance in court on May 5, 2014, before U.S. Magistrate Judge Karen M. Williams and was released on bond.
The count of conspiracy to illegally deal firearms to which DeJesus pleaded guilty, and with which Ford is charged, carries a maximum potential penalty of five years in prison and a $250,000 fine. DeJesus is scheduled to be sentenced Sept. 5, 2014.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge Robin Shoemaker, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
The charges and allegations contained in the complaint against Ford are merely accusations, and the defendant is considered innocent unless and until proven guilty.
14-169
Defense counsel:
DeJesus: Frederick Klepp Esq., Cherry Hill, N.J.
Lee: Stanley King Esq., Woodbury, N.J.
Ford: Mark Catanzaro Esq., Moorestown, N.J.DeJesus, Resselyn Information
Lee, Michael Wayne Information
Steward, Ammie Information
Ford, Wendelle ComplaintPatient Recruiter Sentenced in Detroit for Role in $14.5 Million Medicare Fraud SchemeRead the Press Release
A patient recruiter who participated in a Medicare fraud scheme that totaled almost $14.5 million was sentenced in Detroit yesterday to serve 86 months in prison.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
Richard Shannon, 41, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan. In addition to his prison term, Shannon was sentenced to serve three years of supervised release and was ordered to pay more than $1.6 million in restitution, jointly and severally with his co-defendants.
On Oct. 26, 2012, Shannon, a patient recruiter for a network of fraudulent home health care companies, was found guilty at trial of one count of conspiracy to commit health care fraud.
According to evidence presented at trial, Shannon and his co-conspirators caused the submission of false and fraudulent claims to Medicare through All American and Patient Choice, two Oak Park-based home health care companies, which purported to provide skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.
The evidence showed that Shannon acted as a patient recruiter, paying Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary. The owners of Patient Choice and All American then paid physicians to sign referrals and other therapy documents necessary to bill Medicare. Physical therapists and physical therapist assistants would then create fake medical records using the blank, pre-signed forms obtained by Shannon and other patient recruiters to make it appear as if physical therapy services had actually been rendered.
Shannon recruited destitute beneficiaries from housing projects and soup kitchens in the Detroit area, obtaining their patient information in exchange for cash and promises of prescription narcotics prescribed by co-conspirator physicians.
This case was investigated by the FBI, HHS-OIG and the Internal Revenue Service and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case was prosecuted by Deputy Chief Gejaa Gobena, Assistant Chief Catherine Dick and Trial Attorney Niall O’Donnell of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged almost 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Parmelee Man Sentenced for Abusive Sexual Contact by ForceRead the Press Release
United States Attorney Brendan V. Johnson announced that a Parmelee, South Dakota, man convicted of Abusive Sexual Contact by Force was sentenced on May 12, 2014, by U.S. District Judge Roberto A. Lange.
Daryl Plumman, age 21, was sentenced to 5 years in custody, 5 years of supervised release, a $100 special assessment to the Federal Crime Victims Fund, and $44.46 in restitution.
Plumman was indicted for Abusive Sexual Contact by Force by a federal grand jury on May 15, 2013. He pled guilty on February 20, 2014.
The conviction stems from an incident that took place in July 2011 at Parmelee, when Plumman began to kiss the victim and she attempted to end the encounter. Plumman held her down while he removed her pants and touched her inappropriately.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers prosecuted the case.
Plumman was immediately turned over to the custody of the U.S. Marshals Service.
Owner and Operator of New Jersey-Based Real Benefits Association LLC Admits Selling Bogus Health InsuranceRead the Press Release
TRENTON, N.J. - An insurance broker who allegedly stole nearly $1 million while continuing to sell health care coverage he knew was fake pleaded guilty today in connection with the scheme, U.S. Attorney Paul J. Fishman announced.
David Clark, 70, of Morristown, N.J., entered his guilty plea to an information, charging him with conspiracy to commit wire fraud, before U.S. District Judge Michael Shipp in Trenton federal court.
According to documents filed in this case and statements made in court:
Clark owned and operated Real Benefits Association, LLC (RBA), a New Jersey limited liability company he incorporated on Dec. 17, 2003, under a similar name. Clark established RBA as a purported labor organization and as a way to market and sell health insurance to the general public through the RBA Welfare Plan. Initially, the Welfare Plan was fully insured through Perfect Health, a licensed New York insurance company. Participants paid insurance premiums to bank accounts of RBA and/or the Welfare Plan, which Clark then remitted to Perfect Health.
Perfect Health was purchased by Health Insurance Programs (HIP) in 2008, and HIP discontinued its insurance policy with the RBA Welfare Plan. The federal government notified Clark that RBA did not qualify as a labor organization and was required to cease operating.
Nonetheless, Clark continued to market and sell the health insurance plans to unsuspecting participants. Eventually participants began to complain to their respective state insurance departments when their medical claims were not being paid, which prompted various departments throughout the United States to issue cease and desist orders.
Clark and conspirators continued to market and sell bogus health insurance, and from December 2008 to July 2011, they collected approximately $1,789,596 in premiums for RBA health insurance coverage. Clark diverted approximately $962,027 from the premiums paid by RBA participants for his personal use, including by using victims’ premiums to fund personal debit and credit card purchases, college tuition payments and deposits to a relative’s bank account.
The conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is currently scheduled for Aug. 20, 2014.
U.S. Attorney Fishman credited special agents of the U. S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia; and the U.S. Department of Labor Employee Benefits Security Administration (EBSA), under Jonathan Kay, Regional Director; as well as postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates, with the investigation leading to the plea.
The government is represented by Assistant U.S. Attorney Michael H. Robertson of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.
If you have information or think you might be a victim of this scheme, please contact (866) 444-3272 to speak to an EBSA benefits advisor.14-170
Defense counsel: John P. McDonald Esq.; Somerville, N.J.
Clark, David Information
Omak Mental Health Counselor Sentenced to Five Years Probation for Filing False Income Tax ReturnRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Debra Van Brunt-Oreiro, age 59, of Omak, Washington, was sentenced today for filing a false income tax return. United States District Court Chief Judge Rosanna M. Peterson sentenced Van Brunt-Oreiro to a five-year term of probation. The Court ordered Van Brunt-Oreiro to pay $250,172 to the IRS in unpaid taxes, to perform 10 hours of community service on a weekly basis during her entire term of probation, and to pay a $100 penalty assessment. The Court also ordered that any proceeds Van Brunt Oreiro may receive from the sale of property she owns, which is held in trust by the Colville Confederated Tribe, will be garnished and distributed to the IRS.
According to information disclosed during court proceedings, Van Brunt-Oreiro was the owner-operator of ADJR Counseling Services in Omak, Washington, and provided mental health counseling and therapy services to Colville Confederated Tribal (CCT) members and non-members. Van Brunt-Oreiro was an independent contractor and not a tribal employee. According to court documents, Van Brunt-Oreiro filed false Federal income tax returns with the IRS for the years 2006, 2007 and 2008 which underreported income she received from the CCT by approximately $575,616. She also failed to file a 2009 Federal income tax return, even though she earned approximately $233,737 in income that year.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, "The privilege of living well in the United States carries certain burdens, one of which is the voluntary payment of taxes. The system only works when everyone truthfully reports their income and pays their fair share of taxes."
"When someone gives in to greed and cheats on their taxes, they cheat and steal from all of us," said Kenneth Hines, Special Agent in Charge of IRS Criminal Investigation's Seattle Field Office. "This sentencing demonstrates the committed efforts of the IRS and the United States Attorney's Office to bring to justice to those who shirk their duties as American citizens."
The investigation was conducted by the Internal Revenue Service, Criminal Investigation. The case was prosecuted by George J.C. Jacobs, III, an Assistant United States Attorney for the Eastern District of Washington.
13-CR-00110-RMP
Olympia Man who Preyed on 16-Year-Old Convicted of Production and Possession of Child PornographyRead the Press Release
A 47-year old Olympia, Washington man was found guilty late yesterday of production and possession of child pornography following a two day bench trial in U.S. District Court in Tacoma, announced U.S. Attorney Jenny A. Durkan. MICHAEL T. LAURSEN, supplied a 16-year-old with drugs and photographed her in sexually explicit conduct. U.S. District Judge Robert J. Bryan found LAURSEN guilty and set sentencing for August 8, 2014. LAURSEN faces a mandatory minimum 15 years to 30 years in prison.
According to records filed in the case, the victim was known to LAURSEN through her relatives. She first met LAURSEN when she was 12-years-old. After she turned 16 years old in 2012, LAURSEN initiated a sexual relationship with her, supplied her with drugs, and encouraged her to miss school. In June 2012 and October 2012, LAURSEN took photographs of the victim, including photographs of his sexual conduct with her. LAURSEN encouraged the victim to run away from home, and then had her stay with him in motel rooms, apartments, and other person’s homes, while also directing her to engage in sexually explicit acts and taking photographs of her.
The case was investigated by the Washington State Patrol-Missing and Exploited Children’s Task Force, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI)-South Sound Investigative Task Force, Bureau of Alcohol Tobacco and Firearms, and the Federal Bureau of Investigation.
The case was prosecuted by Assistant United States Attorneys Ye-Ting Woo and Special Assistant United States Attorney Seth Wilkinson.
Odessan Pleads Guilty to Federal Drug ChargeRead the Press Release
Kelly Jay Duarte, the 22-year-old former proprietor of Urban City, a retail business in Odessa, faces up to 20 years in federal prison after pleading guilty earlier today to one count of possession of a synthetic cannabinoid with intent to distribute announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division.
By pleading guilty, Duarte admitted that in May 2013, synthetic cannabinoids packaged under the names of “Diablo,” “KMA,” “Mad Hatter,” and “Hypnotic Haze” were knowingly sold to customers at his business in violation of federal law.
Duarte remains on bond pending sentencing. A sentencing date has yet to be scheduled.
This investigation was conducted by the Federal Bureau of Investigation and the Odessa Police Department with lab assistance provided by the Drug Enforcement Administration. Assistant United States Attorney John Klassen is prosecuting this case on behalf of the Government.North Carolina Seafood Distributor Pleads Guilty to Tax EvasionRead the Press Release
Jeffrey Wayne Scott, 48, of Wilmington, North Carolina, pleaded guilty to tax evasion in Raleigh, North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today. Scott was indicted on Nov. 25, 2013, for five counts of personal income tax evasion and one count of filing a false corporate tax return. He pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007.
According to court documents and court proceedings, Scott has owned and operated Greenville Loop Seafood (GLS), a seafood distribution company located in Wilmington, since 1995. For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns. Scott provided his return preparer with handwritten summaries of gross receipts and categorized expense items for the wholesale and retail fish distribution businesses as well as tax documents provided by financial institutions. Scott, under penalty of perjury, reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period. During these five years, however, the Scotts spent far in excess of this reported taxable income on personal expenditures.
According to court documents and court proceedings, between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS. This included, among other things, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership. They also purchased five vehicles totaling more than $200,000, a $100,000 boat and a $2.1 million waterfront home. Scott also made a monthly transfer of $10,000 from GLS’ business account into a personal brokerage account. After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from GLS’ business account to pay the mortgage and related expenses. Through a bank deposit and expenditure analysis, the IRS calculated that Scott failed to report taxable income for these five years in excess of $1,151,642 and owed at least $390,678 in additional taxes. For the 2007 tax year, Scott failed to report $328,754 in taxable income with an additional tax due and owing of $113,967.
According to court documents and court proceedings, when first contacted by IRS-Criminal Investigation agents in June 2011, Scott falsely stated that he was letting friends stay in his second home rent free. Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 GLS corporate income tax return claiming the painting of his personal residence, repair work by a plumber at his personal residence, and health bills related to his family dog as business expenses.
Chief U.S. District Judge James C. Dever III scheduled the sentencing for the term of court to begin Aug. 18, 2014. Scott faces a statutory maximum prison term of five years and a maximum fine of $250,000.
This case was investigated by special agents of IRS-Criminal Investigation. Assistant U.S. Attorney Susan B. Menzer and Trial Attorney Todd A. Ellinwood of the Justice Department’s Tax Division are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at the division website .
North Carolina Seafood Distributor Pleads Guilty to Tax EvasionRead the Press Release
WASHINGTON – Jeffrey Wayne Scott, 48, of Wilmington, North Carolina, pleaded guilty to tax evasion in Raleigh, North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today. Scott was indicted on Nov. 25, 2013, for five counts of personal income tax evasion and one count of filing a false corporate tax return. He pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007.
According to court documents and court proceedings, Scott has owned and operated Greenville Loop Seafood (GLS), a seafood distribution company located in Wilmington, since 1995. For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns. Scott provided his return preparer with handwritten summaries of gross receipts and categorized expense items for the wholesale and retail fish distribution businesses as well as tax documents provided by financial institutions. Scott, under penalty of perjury, reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period. During these five years, however, the Scotts spent far in excess of this reported taxable income on personal expenditures.
According to court documents and court proceedings, between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS. This included, among other things, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership. They also purchased five vehicles totaling more than $200,000, a $100,000 boat and a $2.1 million waterfront home. Scott also made a monthly transfer of $10,000 from GLS' business account into a personal brokerage account. After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from GLS' business account to pay the mortgage and related expenses. Through a bank deposit and expenditure analysis, the IRS calculated that Scott failed to report taxable income for these five years in excess of $1,151,642 and owed at least $390,678 in additional taxes. For the 2007 tax year, Scott failed to report $328,754 in taxable income with an additional tax due and owing of $113,967.
According to court documents and court proceedings, when first contacted by IRS-Criminal Investigation agents in June 2011, Scott falsely stated that he was letting friends stay in his second home rent free. Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 GLS corporate income tax return claiming the painting of his personal residence, repair work by a plumber at his personal residence, and health bills related to his family dog as business expenses.
Chief U.S. District Judge James C. Dever III scheduled the term of court to begin Aug. 18, 2014. Scott faces a statutory maximum prison term of five years and a maximum fine of $250,000.
This case was investigated by special agents of IRS-Criminal Investigation. Assistant U.S. Attorney Susan B. Menzer and Trial Attorney Todd A. Ellinwood of the Justice Department's Tax Division are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.
Nine Trey Gangster Member Sentenced to 30 Years in Federal PrisonRead the Press Release
RICHMOND Va. – Clyde Maurice Neblett, III, 23, of Richmond, Virginia, a member of the Nine Trey Gangsters, was sentenced today on three firearms offenses. A jury convicted Neblett in January of possession of three firearms by a felon and also, in a separate incident, of possessing a fourth gun while a felon. He was sentenced today to ten years on each of those two counts, with the sentences to run consecutively. In addition, Neblett pled guilty today to discharging a firearm during an attempted robbery in April 2013, and received an additional ten year sentence, consecutive to the earlier firearms charges, for a total sentence of 30 years. In the Statement of Facts filed with the Court in conjunction with his plea today, Neblett admitted that he also engaged in two additional home-invasion style robberies in Richmond and Chesterfield County between December 2012 and January 2013.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge, Federal Bureau of Investigation’s Richmond Field Office; Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; and Chief Douglas A. Middleton, Henrico County Police Division, made the announcement today after the sentence was imposed by United States District Court Judge Henry E. Hudson.
Neblett was a high-ranking officer in the Nine Trey Gangsters (“NTG”) and is one of nearly four dozen members of that gang to be convicted on federal charges since 2012. NTG is part of the United Blood Nation (UBN), the first unified Blood gang alliance on the East Coast. The gang started on Riker’s Island in the New York City jail system. Since its inception, NTG has been one of the most active East Coast Blood gang sets, and has spread across the eastern United States. The FBI and numerous dedicated gang task forces have undertaken a long-term investigation of NTG activities in Virginia and neighboring states.
This case was initiated and investigated by the Federal Bureau of Investigation as part of its Organized Crime Drug Enforcement Task Force (OCDETF) investigation, dubbed Full Blooded Ink. Assistant United States Attorney Angela Mastandrea-Miller prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.New York Man Pleads Guilty to Part in Scheme to Use Counterfeit Access Devices to Steal from CasinosRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that Benfen Zhang, 43, of Flushing, N.Y., pleaded guilty before U.S. District Judge Richard T. Haik to conspiracy to use counterfeit access devices to receive cash advances from Louisiana casinos.
According to evidence presented at the guilty plea, Zhang and three Chinese nationals obtained cash advances using unauthorized access devices from November 2012 to September 2013. Zhang drove his co-conspirators to casinos and provided the counterfeit access devices. The co-conspirators would then get cash advances from the casinos, gamble briefly, and then move to the next casino. The total amount of loss to the casinos is believed to be $103,624.81. Illegal cash advances were obtained from the Coushatta Casino Resort in Kinder, L=Auberge Casino in Lake Charles, El Dorado Casino in Shreveport, and Horseshoe Casino in Bossier City.Zhang faces up to 10 years in prison, three years of supervised release, a $250,000 fine, and restitution for one count of conspiracy to possess more than 15 counterfeit or unauthorized access devices.
The Federal Reserve defines an access device as a card, code or other means of access to a consumer’s account or a combination of these used by the consumer to initiate Electronic Fund Transfers (EFT). Access devices include debit cards, personal identification numbers (PINs), telephone transfer and telephone bill payment codes, and other means to initiate EFT or to form a consumer account.
The U.S. Secret Service and the Louisiana State Police conducted the investigation. Assistant U.S. Attorney Howard C. Parker is prosecuting the case.
New Iberia Man Pleads Guilty to Failing to Update His Sex Offender RegistrationRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that Rodger Dale Seilhan, 63, of New Iberia, La., pleaded guilty before U.S. District Judge Richard T. Haik to charges that he failed to update his sex offender registration.
According to evidence presented at the guilty plea, after failing to report his whereabouts to authorities for two years, the U.S. Marshals Service and other law enforcement agencies located Seilhan in New Iberia at a relative’s residence. He was arrested on March 11, 2014. The Travis County Sheriff’s Office in Texas arrested Seilhan on January 21, 1982 for aggravated sexual assault of a child, and he was later sentenced to 15 years in prison. After being released from prison, Seilhan reported residence changes to authorities while he lived in Texas until September 5, 2012. He was found to not be living at his last known address in Willis, Texas, after a sex offender verification check was conducted.Seilhan faces up to 10 years in prison, five years to life of supervised release, and a $250,000 fine for one count of failure to update sex offender registration. A sentencing date was not set.
The U.S. Marshals Service, Travis County Sheriff’s Office, Texas Department of Public Safety, Montgomery County Sheriff’s Office, and Louisiana State Police conducted the investigation. Assistant U.S. Attorney James T. McManus is prosecuting the case.
Mission Man Sentenced for Involuntary ManslaughterRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man convicted of Involuntary Manslaughter was sentenced on May 13, 2014, by U.S. Magistrate Judge Mark A. Moreno.
Colin Whirlwind Solider, age 21, was sentenced to 30 months in custody, 3 years of supervised release, a $100 special assessment to the Federal Crime Victims Fund, and $7,560.68 in restitution.
Whirlwind Soldier was indicted for Involuntary Manslaughter by a federal grand jury on November 14, 2013. He pled guilty on February 20, 2014.
The conviction stems from an incident that took place on September 18, 2013, when Whirlwind Soldier was driving a motor vehicle while under the influence of alcohol. Whirlwind Soldier drove between 65 and 69 miles per hour in a 35-mile per hour zone, failed to keep the vehicle on the roadway, and rolled. The victim was ejected from the vehicle and killed as a result of blunt force trauma sustained in the crash. Whirlwind Soldier had a blood alcohol level of .178.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and the Federal Bureau of Investigation. Assistant U.S. Attorney Tim Maher prosecuted the case.
Whirlwind Solider was immediately turned over to the custody of the U.S. Marshals Service.
Mission Man Sentenced for Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man convicted of Assault Resulting in Serious Bodily Injury was sentenced on May 13, 2014, by U.S. District Judge Roberto A. Lange.
Reno Roubideaux, age 40, was sentenced to 84 months in custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Roubideaux was indicted for Assault Resulting in Serious Bodily Injury by a federal grand jury on August 21, 2013. He pled guilty on March 10, 2014.
The conviction stems from an incident that took place on July 1, 2013, in Todd County, when Roubideaux assaulted a man while he was asleep. Roubideaux hit the victim with his fists, while others also assaulted him with their fists and a cane. As a result of the assault, the victim suffered a large laceration to his scalp that required staples to repair.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers prosecuted the case.
Roubideaux was immediately turned over to the custody of the U.S. Marshals Service.
Minister Pleads Guilty to Child Pornography ChargeRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that in federal court today TIMOTHY JACK STRICKLAND, 42, of Mount Olive, North Carolina, pled guilty before United States District Judge Terrence W. Boyle to being in receipt of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2). A Federal Grand Jury returned a Criminal Indictment on February 18, 2014.
According to the investigation, in March, 2013, while attending training, a Federal Bureau of Investigation Task Force Officer engaged in a chat with STRICKLAND, who it was determined later, was a Pentecostal minister. During the chat the agent observed that STRICKLAND’s directory contained child pornography files. A search warrant was later executed at STRICKLAND’s home, where a laptop, several hard drives and other media devices were seized. Computer forensics revealed approximately 11,000 images of child pornography.
At sentencing, set for August 18, 2014, STRICKLAND faces up to 20 years imprisonment. If it is determined that he has had prior convictions related to sexual abuse, abusive sexual conduct with a minor, or an offense related to child pornography or sex trafficking of children, he faces up to 40 years imprisonment.
The criminal investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Ethan A. Ontjes is handling the prosecution on behalf of the Eastern District of North Carolina.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Milford Resident Admits Embezzling $108k from EmployerRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAVID LIPTAK, 49, of Milford, waived his right to indictment and pleaded guilty today before U.S. District Judge Jeffrey A. Meyer in Bridgeport to one count of interstate transportation of money obtained by fraud.
According to court documents and statements made in court, LIPTAK was employed by Consolidated Management Group (“CMG”) of Westport. CMG provided management services to condominium associations, including managing the bank accounts and expenses of the associations. From approximately June 2008 to March 2012, LIPTAK embezzled approximately $108,000 from CMG.
Judge Meyer scheduled sentencing for August 6, 2014, at which time LIPTAK faces a maximum term of imprisonment of 10 years and a fine of up to $250,000.
This matter is being investigated by the United States Secret Service and the Westport Police Department. The case is being prosecuted by Senior Litigation Counsel Richard J. Schechter.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Meth Defendant Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Lee Anthony Guidry, 48, of Robertsdale, was sentenced today in federal court to 130 months imprisonment for his role in a conspiracy to manufacture methamphetamine. Guidry pled guilty to the charge in June of 2013. United States District Court Judge William H. Steele imposed the sentence this morning, ordering that Guidry would serve a three-year term of supervised release following the completion of his prison term. Judge Steele ordered that Guidry pay $100 in special mandatory assessments, but did not impose a fine.
The case was investigated by the Baldwin County Sheriff’s Office and the Bay Minette Police Department. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
Member of the Granados-Hernandez Sex Trafficking Organization, Samuel Granados-Hernandez, Sentenced to 15 Years in PrisonRead the Press Release
Earlier today, Samuel Granados-Hernandez was sentenced before Judge Kiyo A. Matsumoto in U.S. District Court in Brooklyn, New York, to 15 years’ imprisonment, to be followed by five years of supervised release, for his involvement in sex trafficking.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.
“This defendant took advantage of young women who were seeking a better life, tricking them into trusting him and then forcing them into sexual slavery. He also used violence to achieve his ends, including forcing one of his victims to have an abortion when she became pregnant,” stated United States Attorney Lynch. “This sentence sends a message to would-be traffickers that we will not tolerate trafficking of women and girls, and we stand firm in our commitment to eradicate human trafficking.” Ms. Lynch extended her grateful appreciation to the organizations that provided services and advocacy to the victims in this case, including Sanctuary for Families, Safe Horizon, My Sister’s Place, and the law firm of Steptoe & Johnson.
On July 24, 2012, Granados-Hernandez pled guilty to a superseding information charging that between October 2000 and April 2011, he smuggled three victims from Mexico illegally into the United States and forced each of them to engage in prostitution. Granados-Hernandez, who kept the prostitution proceeds earned by the victims, engaged in a pattern of abuse for over a decade.
According to court documents, Granados-Hernandez smuggled each of the victims with the intent to force then into prostitution. For example, soon after he smuggled the victim identified as Jane Doe #6 to New York from Mexico in early 2010, Granados-Hernandez insisted that she work as a prostitute. When she refused, Granados-Hernandez threatened her mother who was in Mexico. As a result of continued threats, Jane Doe #6 worked for the Granados-Hernandez in multiple states through the summer of 2010.
Similarly, in 2010, Granados-Hernandez smuggled the victim identified as Jane Doe #7 into the United States under the guise of a promise of a better life. After their arrival to New York, Granados-Hernandez told her that because of a debt owed to the smugglers, she had to work as a prostitute. Shortly after she began working as a prostitute, Jane Doe #7 became pregnant. Granados-Hernandez became violent, including choking and hitting her, and forced her to have an abortion.
In May 2010, Granados-Hernandez recruited Jane Doe #8 and smuggled her into the United States shortly thereafter. Similar to his other victims, she was forced into prostitution and worked for the Granados-Hernandez as a prostitute in New York, Maryland, and Virginia until January 2011.
At the sentencing, a letter written by a fourth victim of Granados-Hernandez was read to the Court. This victim described how Granados-Hernandez was “physically, verbally and sexually abusive,” and how Granados- Hernandez “took away my youth, my innocence and my ability to trust and caused me an immeasurable amount of pain.”
Granados-Hernandez’s brother Eleuterio Granados-Hernandez and his cousin, Angel Cortez-Granados, also smuggled young women from Mexico illegally into the United States, forced them to work as prostitutes in New York City and elsewhere, and collected profits from their activities. Both pleaded guilty to sex trafficking. In September 2013, Cortez-Granados was sentenced to 15 years in prison. In March 2014, Eleuterio Granados-Hernandez was sentenced to 22 years in prison. In total, six members of the Granados family have been prosecuted and convicted in the United States.
The government’s case was prosecuted by Assistant United States Attorney Soumya Dayananda.
The Defendant:
SAMUEL GRANADOS-HERNANDEZ
Age: 33
Mexico
E.D.N.Y. Docket No. CR-11-297 (S-5) (KAM)
Mass City Man gets over 11 Years in Federal Prison for Selling Powerful "Bath Salts"Read the Press Release
MARQUETTE, MICHIGAN – U.S. District Judge R. Allan Edgar sentenced three people for their involvement in distributing two powerful “bath salts” – alpha-pyrrolidinopentiphenone, which is commonly known as alpha-PVP, and pentylone – for human consumption in the Upper Peninsula.
Scott Bernard Will, age 56, of Mass City, Michigan, received a sentence of 137 months (11 ½ years) in federal prison. Last December, a federal jury in Marquette found Will guilty of distributing and conspiring to distribute alpha-PVP and pentylone in Baraga and Houghton Counties. In imposing the sentence, Judge Edgar commented on Will’s extensive criminal history, noting that Will was a “walking crime wave.” Also sentenced were Derrick John Guzek, age 34, also of Mass City, and Kristen Ellen Bergeron, age 31, of Pelkie, Michigan. Guzek received a sentence of 16 months in prison while Bergeron was sentenced to 18 months.
The term “bath salts” refers to a group of substances containing synthetic cathinones that all have similar chemical properties. These substances have a powerful amphetamine-like effect on the central nervous system when consumed. Synthetic cathinones are chemically similar to the natural drug cathinone, a drug that comes from khat plants in east Africa.
The evidence presented at trial showed that Will began selling bath salts in the Marquette area in 2011. He was jailed for his activities from June 2011 until November 2012. But, upon release from jail, he went back to selling the substances. Will’s sales of alpha-PVP and pentylone in Baraga and Houghton Counties in early 2013 drew the attention of the Upper Peninsula Substance Enforcement Team and the U.S. Bureau of Indian Affairs. An undercover officer made a number of purchases of these substances from Mr. Will and his co-conspirators in March and April 2013. He and his co-conspirators were arrested in April 2013. Guzek and Bergeron pled guilty and testified for the government. Will went to trial in Marquette on December 9, 2013.
As part of its case, the government presented testimony from users who said that the bath salts sold to them by Will were extremely powerful and addictive. They reported staying up for days after injecting the substances, and experiencing psychosis, paranoia and suicidal thoughts. Judge Edgar noted that the users were “physically wrecked by these drugs.”
The evidence at trial showed Will specifically targeted people with drug problems by offering the substances for free. Once the user was hooked, Will charged up to $200 per gram.
This case was investigated by the Michigan State Police as part of the Upper Peninsula Substance Enforcement Team and the Bureau of Indian Affairs. Assistant U.S. Attorneys Maarten Vermaat and Paul D. Lochner prosecuted the case.
END
Man sentenced to Prison for Abusive Sexual Contact with a Person Under the Age of 12 YearsRead the Press Release
United States Attorney James L. Santelle announced today that Leslie A. Miller, (age: 50), of Keshena, Wisconsin located on the Menominee Indian Reservation, was sentenced on April 15, 2014, to 42 months of imprisonment, followed by a term of 10 years on supervised release. The sentence was the result of a guilty plea by Miller on January 17, 2014, to a federal indictment charging him with abusive sexual contact with a person under the age of 12 years.
The investigation revealed that around January 1, 2013, Leslie A. Miller, an enrolled member of the Menominee Indian Tribe of Wisconsin, his wife, and a 10-year-old female were watching a movie while lying in bed. After his wife went to sleep, Miller sexually assaulted the child. During a subsequent interview, Miller admitted that he assaulted the child.
This case was investigated by the Menominee Tribal Police and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Benjamin L. Whittemore. .
Man Sentenced for Beauty Supply Store ArsonRead the Press Release
LAS VEGAS, Nev. – A local man who maliciously attempted to destroy a Las Vegas beauty supply store by fire and explosive devices, was sentenced today to five years in prison, three years of supervised release, and ordered to pay nearly $1.7 million in restitution, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Reynaldo Staana, 48, of Las Vegas, who pleaded guilty in February to one count of arson of property used in or affecting interstate commerce, was sentenced by U.S. District Judge James C. Mahan.
“Defendant Staana caused over $1 million in property damage and destruction,” said U.S. Attorney Bogden. “It is very fortunate that his dangerous actions did not also result in injury or the loss of human life.”
According to the court records filed in the case, Staana was an assistant manager at Beauty Supply Warehouse located at 3310 South Nellis Boulevard in Las Vegas, but was terminated from his position in August 2013. On about Sept. 8, 2013, Staana entered the business after hours without permission in order to commit theft of property, and while inside the business, intentionally and maliciously used fire to ignite a flammable liquid with intent to destroy the business. The fire caused more than $1 million in damage to structure and contents.
Staana has been in custody since his arrest in September 2013.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Clark County Fire Department, and the Las Vegas Metropolitan Police Department, and was prosecuted by Assistant U.S. Attorney Christina M. Brown.Man Pleads Guilty to Enticing a ChildRead the Press Release
Rochester, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced that William E. Miller, 52, of Rochester, NY, pleaded guilty before U.S. District Judge David G. Larimer, to coercing and enticing a child to engage in sexual activity. The charge carries a mandatory minimum term of imprisonment of 10 years and a maximum of life, a fine of $250,000 or both.
Assistant U.S. Attorney Marisa J. Miller, who handled the case, stated that the defendant came to the attention of law enforcement in August 2012 when members of the Rochester Police Department conducted a robbery investigation at the defendant’s residence. During the course of that investigation, members of the joint RPD and FBI Child Exploitation Task Force discovered images of child pornography. As part of his plea, the defendant admitted to using a cellular telephone to entice and coerce a child under the age of 16 to engage in sexual activity and that the child was used, persuaded and coerced into and for the production of child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The plea was the culmination of an investigation on the part of Special Agents and Task Force Officers of the Federal Bureau of Investigation Child Exploitation Task Force, including members of the FBI, under the direction of Special Agent in Charge, Brian P. Boetig, Rochester Police Department under the direction of Chief Michael A. Ciminelli, and Monroe County Sheriff’s Office under the direction of Patrick M. O'Flynn.
Sentencing is scheduled for September 3, 2014 at 2:00 p.m., before Judge Larimer.Louisiana-Pacific Corp. Abandons Its Proposed Acquisition of Ainsworth Lumber Co. Ltd.Read the Press Release
Louisiana-Pacific Corp. (LP) abandoned its plan to acquire Ainsworth Lumber Co. Ltd., its close competitor in the sale of a type of manufactured wood-based panel called oriented strand board (OSB), after the Department of Justice expressed concerns about the transaction’s likely anticompetitive effects. The department said that the transaction likely would have substantially lessened competition in the market for the production of OSB sold to customers in the Pacific Northwest and Upper Midwest regions of the United States.
According to the department, OSB is widely used in the construction and remodeling of homes and other buildings. An increase in the price of OSB would likely result in significant harm to consumers in the Pacific Northwest and Upper Midwest by making it more expensive to purchase or remodel homes, the department said.“The companies’ decision to abandon the transaction, which would likely have resulted in less competition and higher OSB prices, is a win for customers in the Pacific Northwest and the Upper Midwest,” said Renata B. Hesse, Deputy Assistant Attorney General of the Department of Justice’s Antitrust Division. “As a result of the abandonment of this transaction, consumers will continue to benefit from Ainsworth’s presence as an independent competitive force in the OSB industry.”
LP and Ainsworth are two of only four principal producers selling OSB into the Pacific Northwest, and two of only three principal producers selling OSB into the Upper Midwest. The proposed merger would have given the combined firm a 63 percent market share in the Pacific Northwest region of the United States and a 55 percent market share in the Upper Midwest.
According to the department, the merger would have allowed LP to substantially increase its market share by acquiring one of the largest suppliers of OSB in the Pacific Northwest and Upper Midwest, while also eliminating the significant head-to-head competition between LP and Ainsworth in these regions, thereby enabling LP to better target its customers in these areas for price increases. By gaining control over Ainsworth’s mills, LP would have been in a better position to restrict the amount of OSB supply available in these regions, and to coordinate output and price decisions with its few remaining principal competitors, driving prices above competitive levels.
During the course of its investigation of the transaction, the department’s Antitrust Division closely coordinated its investigation of the transaction with the merger review conducted by Canada’s Competition Bureau.
“Cooperation among competition agencies around the world enables our agencies to more efficiently and effectively achieve our shared goals of enhancing competition and protecting consumers,” said Deputy Assistant Attorney General Hesse. “The Antitrust Division and the Canadian Competition Bureau have a long history of working closely together, as reflected by the recent issuance of best practices for coordinating, among the Antitrust Division, the Canadian Competition Bureau and the Federal Trade Commission, the review of mergers affecting both the United States and Canada.”LP is a Delaware corporation with headquarters in Nashville, Tennessee. In 2013, LP had net sales of $2.1 billion, with $1.1 billion coming from its OSB business. Ainsworth is a Canadian corporation with its headquarters in Vancouver, British Columbia. In 2013, Ainsworth had sales of $488 million CAD, all of which came from OSB production.
Leaders of Violent Gang Convicted on All Counts in Racketeering and Murder CaseRead the Press Release
Yesterday, following more than two weeks of trial, a federal jury in Brooklyn, New York, returned guilty verdicts against Anthony Mayes Jr. and Antoine Mayes on charges of racketeering – including, against Anthony Mayes Jr., three murders as racketeering acts – as well as multiple counts based on their trafficking in crack cocaine. Earlier today, the jury also rendered a special verdict authorizing the forfeiture of almost $64,000 in cash, several firearms, and more than 500 rounds of ammunition seized from the defendants’ Queens residence.
The charges arose out of the defendants’ long-time dominance of a drug crew that operated in the East New York neighborhood of Brooklyn, New York, and in Williamston, North Carolina. When sentenced by United States District Judge Allyne R. Ross, the defendants face mandatory sentences of life imprisonment.
The verdicts were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
Between 1998 and 2010, the Mayes brothers led a group of violent drug dealers that sold crack cocaine and was based on Ashford Street in East New York. The criminal enterprise used violence and the threat of violence to maintain its source of income. Specifically, on June 18, 1999, Anthony Mayes Jr. shot and killed David Martin at a party in East New York, in retaliation for Martin having previously stabbed Mayes. This, and other acts of violence, were well known in the community and allowed the enterprise to dominate the local drug trade. After the Martin murder, Anthony Mayes Jr. moved to Williamston, North Carolina, where, using the alias Gus Rascoe Jr., he quickly came to dominate the drug trade in that area, selling crack-cocaine that he transported from New York and elsewhere. On January 27, 2003, Anthony Mayes Jr. murdered Eric Rayshawn Keel, and on February 29, 2004, he murdered Keith Cofield, both in North Carolina. Keel was murdered for purportedly stealing drugs belonging to the Mayes brothers’ criminal enterprise. Cofield was murdered because he owed a drug-related debt to the enterprise -- his corpse was dumped into a river.
Antoine Mayes was convicted of three separate counts of attempted murder based on enterprise’s drug and turf-related disputes in Brooklyn.
“For over a decade the Mayes brothers ran a violent and lucrative drug organization that held the residents of East New York hostage, forcing them to live in fear of violence. They expanded their operation to the State of North Carolina, dominating the drug trade in one corner of that state. The organization used murder as a management tool, killing those who threatened their source of income or just their stature on the street,” stated United States Attorney Lynch. “Today, their ability to earn money through crime comes to an end, and so does their rule of the streets. This verdict sends the message that that violence and drug-dealing have no place in our communities.” Ms. Lynch extended her grateful appreciation to Federal Bureau of Investigation, New York Field Office, the New York City Police Department, the North Carolina State Bureau of Investigation, the Williamston Police Department, the Martin County Sheriff’s Office, and the Edgecombe County Sheriff’s Office for their outstanding work in this case.
The government’s case was prosecuted by Assistant United States Attorneys Berit W. Berger, Richard M. Tucker, and Alicyn Cooley.
The Defendants:
ANTHONY MAYES JR.
Age: 33
Brooklyn, New York
ANTOINE MAYES
Age: 30
Brooklyn, New York
E.D.N.Y. Docket No. 12 CR 385 (ARR)
Leader of International Sex Trafficking Organization Sentenced in Manhattan Federal Court to Life in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ISAIAS FLORES-MENDEZ, 42, of Queens, New York, was sentenced today in Manhattan federal court to life in prison in connection with his leadership of a long-running sex trafficking conspiracy that employed force, fraud, and coercion to sell young women for sex against their wills. FLORES-MENDEZ was also ordered to forfeit approximately $1.7 million, and to pay $84,000 in restitution to a victim of his crime. He was sentenced by U.S. District Judge Katherine B. Forrest.
Manhattan U.S. Attorney Preet Bharara said: “The defendant viciously robbed the victims in this case of their freedom, their dignity, and their fundamental human rights. Although the victims of the defendant’s crimes will never be made whole, his prosecution and today’s sentence hopefully signal to them and everyone else that such atrocities cannot be tolerated in our society and will be prosecuted and punished to the full extent of the law.”
In sentencing FLORES-MENDEZ Judge Forrest said: “On behalf of our system of justice I do want to say to the victims of this crime who are not here because of their undocumented status, because of their fear . . . I do know that no sentence can return to the victims that which has been so brutally taken from them . . . but today is a day that perhaps these victims have been waiting for – a day when our society would understand, and listen to what was happening to them, and see that this defendant, who committed such awful crimes using them, would be brought to justice and is brought to justice. The harm done to those victims is today recognized for what it is in all of its horror. For that which was taken from these women and cannot be returned by any sentence, the defendant is here today to be sentenced and to be brought to justice.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made at various proceedings in this case, including today’s sentencing:
Since at least 1999, when he was first arrested for promoting prostitution, FLORES-MENDEZ has been sexually exploiting vulnerable women for his own financial gain. His predatory crimes have ranged in scope over the years.
He used violence and threats of violence to personally force at least one young woman (“Victim-1”) to engage in prostitution against her will. At the age of 17, Victim-1 was romanced by FLORES-MENDEZ, and lured to the U.S. with the promise of a better life for her and her baby. Once in New York, Victim-1 was made to sleep on a floor with her child, was repeatedly beaten, and was verbally abused on a regular basis by FLORES-MENDEZ, who sexually enslaved Victim-1 and made her work as a prostitute against her will for his own financial gain. When she tried to resist, she was beaten and abused. On one such occasion, FLORES-MENDEZ pushed her and her young child outside on a cold winter night, locked the door, and refused to let her back in. Afraid that her baby would die, Victim-1 succumbed to FLORES-MENDEZ’s demands that she continue to be sold for sex. After she escaped, FLORES-MENDEZ and his brother Bonifacio Flores-Mendez continued to torment her, on one occasion trying to run her over with his car.
FLORES-MENDEZ also used threats of violence to force another woman (“Victim-A”) to help teach Victim-1 how to handle customers, telling Victim-A that he would “break her in half” if she didn’t comply.
In addition to his direct sex trafficking by force, fraud, and coercion, FLORES-MENDEZ also owned and operated a sprawling network of brothels in and around New York City that sexually exploited at least five women per day, each of whom was required to have sex with up to 20 customers per day under abhorrent conditions. Many of the victims of this sex trafficking-prostitution enterprise were forced to engage in prostitution against their wills.
Sixteen defendants in this case, including Bonifacio Flores-Mendez, have pled guilty, and one has entered into a deferred prosecution agreement. All but four defendants have been sentenced. The defendants who have pled to date have agreed to forfeit, in total, more than $1.7 million.
Mr. Bharara praised the outstanding investigative work of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The prosecution of this case is being overseen by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Amanda Kramer and Rebecca Mermelstein are in charge of the prosecution.
Laurel Man Sentenced to over 6 Years in Prison for Transportation of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Jeffrey Ellis, age 35, of Laurel, Maryland, today to 78 months in prison, followed by 15 years of supervised release, for transportation of child pornography. Judge Blake ordered that upon his release from prison, Ellis must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Colonel Marcus L. Brown, Superintendent of the Maryland State Police.According to Ellis’ plea agreement, on February 16, 2012, an FBI agent working in an undercover capacity signed onto a file sharing program through an Internet-connected computer and chatted with a user named “mdboi78,” later identified as Jeffrey Ellis. The user allowed the undercover agent to download several images of minors engaged in sexually explicit content from the “mdboi78” folder. On June 13, 2012, FBI agents executed a search warrant at Ellis’ residence and recovered three laptop computers, a digital camera, and at least three external hard drives.
At least 250 images, including videos, of child pornography were recovered from the seized items. Logs and chats involving Ellis were also recovered from one of the laptop computers and hard drive. The recovered chats included conversations in which Ellis stated that he was having sex with a 13-year old girl and that he had been having sex with her for approximately two years. Ellis also sent a photo of the girl to the person with whom he was chatting. The child was identified and interviewed by law enforcement. The girl advised that she did not have sex with Ellis and Ellis also denies having sex with the child, although he chatted about having sex with her online.
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.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), which was created in 2010, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children and to combat child prostitution.
United States Attorney Rod J. Rosenstein commended the FBI and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Ayn B. Ducao, who prosecuted the case.
Lafayette Business Man Sentenced to 30 Months in Prison for Scheme That Cost Investors MillionsRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that Herbert S. “Steve” Fouke, 55, of Lafayette, was sentenced by U.S. District Judge Richard T. Haik to 30 months in prison and three years of supervised release for conspiracy to commit securities fraud, investment adviser fraud, wire fraud and mail fraud, involving an investment scheme that cost investors $8 million. He was also ordered to pay $6,380,808.03 restitution to victims of the scheme.
According to evidence presented at the guilty plea on September 6, 2013, Fouke became a client of Richard Buswell and Bowman Investment Group LLC, which was also Buswell’s company. Fouke later became president of the company and recruited friends and business associates to become clients of Bowman Investment Group. Fouke admitted to being present at meetings between Buswell and his clients, during which Buswell made false statements to the clients about his credentials, his commissions, and the rates of return that he guaranteed the clients would receive. Buswell admitted in a guilty plea July 24, 2013 to engaging in frequent and excessive stock trades in order to earn commissions.
The FBI conducted the investigation. Assistant U.S. Attorneys Kelly P. Uebinger and Howard C. Parker prosecuted the case.
Lackawanna County Man Sentenced for His Role in Tax FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Walter J. Pietralczyk, Jr., age 40, Jermyn, Pennsylvania was sentenced yesterday in federal court for his role in a tax fraud while also involved his wife, Lackawanna County Attorney, Danielle Ross. U.S. Magistrate Judge, Thomas M. Blewitt, sentenced Pietralczyk to a two year term of probation and ordered him to pay restitution in the amount of $63,124.
According to United States Attorney Peter Smith, a criminal information was filed on November 5, 2013 which charged Pietralczyk with one count of preparing and filing a fraudulent joint tax return on behalf of himself and his wife, Danielle Ross. The information charges that Pietralczyk knew that the tax return, Form 1040, was fraudulent and false as to a material matter in that the income reflected was substantially less than the couple’s actual joint income for the calendar year 2009. The restitution ordered reflects the tax loss for the calendar years 2008 through 2010.
The prosecution is the result of a joint investigation by the United States Internal Revenue Service (IRS) and the Federal Bureau of Investigation (FBI). The case was prosecuted by Assistant United States Attorney Michelle Olshefski.
Jury Convicts Lebanon Man of Firearms Violations after he Rammed into Pawn Shop with his CarRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Lebanon, Mo., man was convicted in federal court today for illegally possessing a firearm and attempting to acquire a firearm.
James Roy Jacoby, 31, of Lebanon, was found guilty of both counts of a May 8, 2011, federal indictment that charges him with being a felon in possession of a firearm and with making false statements in an attempt to acquire a firearm.
On Jan. 15, 2013, Jacoby took out a $50 pawn broker loan at Rawhide Gun and Pawn, 321 W. Commercial, in Lebanon. Jacoby gave a Remington 16-gauge shotgun as collateral. The shotgun belonged to Jacoby’s mother.
On Feb. 1, 2013, Jacoby returned to Rawhide Gun and Pawn to redeem his pawn ticket and retrieve the shotgun. Jacoby completed ATF Form 4473 (Firearms Transaction Record Part I – Over-the-Counter). On the form, Jacoby falsely answered “No” to the question about whether he had a felony conviction: “Have you ever been convicted in any court of a felony, or any other crime, for which the judge could have imprisoned you for more than one year, even if you received a shorter sentence including probation?”
After Jacoby paid $60 to a store employee to repay the loan, the employee informed Jacoby that the National Instant Criminal Background Check System (NICS) showed that he was a felon, and that his request for the return of the shotgun was being denied. The employee also refused to return Jacoby’s loan payment, and said the store would not release the shotgun to another person.
Jacoby then turned over a glass display case, and the employee ordered him to leave the pawn shop. Jacoby exited the shop and got into his car. Jacoby twice rammed the store with his car, striking the employee, a store patron, and another vehicle. Jacoby’s car became disabled, and he fled on foot.
Jacoby was subsequently subdued by Lebanon police officers after a struggle in which he struck an officer. Jacoby was charged in state court with assault, armed criminal action and property damage, and held on a $100,000 bond.
It is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Jacoby has two prior felony convictions for assault and prior felony convictions for assaulting a law enforcement officer and resisting arrest.
Under federal statutes, Jacoby is subject to a mandatory minimum sentence of 15 years in federal prison without parole. Jacoby will be sentenced as a career criminal due to his prior felony convictions. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for about an hour before returning the guilty verdict to U.S. District Judge Beth Phillips, ending a trial that began Monday, May 12, 2014.
This case is being prosecuted by Assistant U.S. Attorney Gary Milligan. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lebanon, Mo., Police Department.
Julio A. Garcia-Encarnacion in Jail for Failure to Pay Legal Child SupportRead the Press Release
SAN JUAN, P.R – Today, United States District Court Judge Francisco Besosa revoked the probation term of convict Julio A. García-Encarnación, a well-known and highly appraised race horse jockey, for failure to pay legal child support obligations, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. Originally, Garcia-Encarnacion was sentenced to five years of probation with restitution as a condition of probation. The defendant owes child support of his two children of approximately $177,000. Judge Besosa resentenced García-Encarnación to two years in prison. Imprisonment does not terminate his restitution obligation.
Defendant García-Encarnación, is the registered parent of a minor who was born on October 1995 and since on or about January 2008, the defendant failed to comply with his child support obligation. As of May 2012, the past due amount of child support owed by García-Encarnación amounts to approximately $65,152.00.
García-Encarnación is also the biologcal and registered parent of another minor who was born in January 1996. García-Encarnación has failed to pay child support to his daughter since October 2007. As of May 2012, the defendant’s failure to comply with his child support obligation in relation to his daughter has accrued a past due amount of approximately $100,848.42.
The investigation was conducted by the Department of Health & Human Services, Office of Inspector General with the assistance of ASUME (Puerto Rico Child Support Enforcement Administration). The case was prosecuted by Assistant United States Attorneys Héctor Ramírez-Carbó and Wallace A. Bustelo.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office today announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Strong in Great Falls on May 13, 2014 and entering pleas of Not Guilty were:
- TERRY LEE MESSOM, a 45-year-old resident of Plentywood, appeared on charges of distribution and possession of child pornography. If convicted of the most serious charge contained in the indictment, MESSOM faces 20 years imprisonment, $250,000 in fines and lifetime supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 14-31
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court's calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indictment Charges Individual with Burglary of Federal Firearms Licensee in Roosevelt, Utah; 18 Handguns were Taken During June 2013 BurglaryRead the Press Release
SALT LAKE CITY - A three-count indictment unsealed Tuesday in U.S. District Court in Salt Lake City charges Raymond Michael Livingston, aka Bobby and Michael, age 34, with possession of 18 stolen firearms and burglary of a federal firearms licensee in connection with a June 23, 2013, burglary of Stewart’s Ace Hardware in Roosevelt.
Livingston, who has lived in Ballard, Utah, and Las Vegas, Nev., is also charged with receiving firearms while under Felony Information. At the time the indictment alleges he was in possession of the firearms stolen in Utah, he was facing a forgery charge in Nevada.
Livingston had an initial appearance Tuesday in federal court and entered not guilty pleas to the charges in the indictment. A five-day jury trial has been scheduled to start July 21, 2014, in U.S. District Judge David Nuffer’s courtroom. A detention hearing is set for Wednesday at 9:30 a.m. before U.S. Magistrate Judge Evelyn J. Furse.
Five of the firearms taken during the Roosevelt burglary have been recovered by the Las Vegas Metro Police Department during criminal investigations.
The potential maximum penalty for possession of stolen firearms and burglary of a federal firearms licensee is 10 years in prison and a fine of $250,000. Receiving firearms while under Felony Information has a potential five-year penalty. Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The case is being investigated by ATF special agents and prosecuted by the U.S. Attorney’s Office in Salt Lake City as a part of Utah Project Safe Neighborhoods, an initiative that targets gun violence in Utah communities.
Henderson County, Kentucky, Man Charged with Human Trafficking for Recruiting Minors to Engage in Commercial Sex ActsRead the Press Release
BOWLING GREEN, Ky. – A Henderson County, Kentucky, man was charged today, by a federal grand jury in Bowling Green, with human trafficking after allegedly recruiting two minors to engage in commercial sex acts announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the two count indictment, between March 16, 2014, and March 20, 2014, in Henderson County and elsewhere, the defendant, Jathar Williams, age 31, knowingly recruited, enticed, harbored, transported, provided, obtained, and maintained by any means, two minor females, who the defendant knew through observation, had not attained the age of 18 years, and caused the minors to engage in a commercial sex act.
If convicted at trial, defendant Williams faces no less than 10 years in prison, no more than life in prison, a fine of up to $250,000 for each count, and a five year period of supervised release.
This case is being prosecuted by Assistant United States Attorney Amanda Gregory and is being investigated by the Federal Bureau of Investigation (FBI) and the Henderson, Kentucky Police Department.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Grand Rapids Man Sentenced for Mortgage FraudRead the Press Release
GRAND RAPIDS, MICHIGAN – Seamus P. Dillon, 37, of Ada, was sentenced to two years in federal prison, followed by three years of supervised release and ordered to pay restitution in the amount of $755,693 after pleading guilty to conspiracy to commit mortgage fraud, U.S. Attorney Patrick Miles announced today. The conspiracy charge alleged that during 2007, Dillon and others defrauded a bank in connection with a mortgage for 2295 Indian Mill Creek Drive NW, in Grand Rapids Michigan. As a result of a series of false statements designed to defraud the lender, Dillon and his cohorts obtained approximately $850,000 which they used for their own purposes.
In delivering the 24-month sentence, Chief U.S. District Judge Paul L. Maloney emphasized that mortgage fraud is a serious crime that undermines our financial system and hurts ordinary citizens by driving down property values. The prison sentence will be followed by three years’ supervised release.
“Mortgage fraud, like many financial crimes, threatens the financial health of our communities,” said Carolyn Weber, Acting Special Agent in Charge, IRS Criminal Investigation. “IRS Criminal Investigation will work diligently with the U.S. Attorney and our law enforcement partners to ensure that those who participate in these illegal activities are investigated and brought to justice.”
The FBI and IRS investigated the case as part of the Western District of Michigan’s Mortgage Fraud Task Force. This group was created to investigate and prosecute the growing number of mortgage fraud cases that have recently come to light. Assistant U.S. Attorney Timothy P. VerHey prosecuted this case.
END
Gloucester County, N.J., Man Arrested, Charged in Alleged Mortgage Foreclosure Rescue, Real Estate Ponzi SchemeRead the Press Release
CAMDEN, N.J. – A Gloucester County, N.J., man is charged with scamming distressed homeowners into giving him their houses and then soliciting fake real estate investments from private investors – secured by those same properties – that netted him more than $3 million in illicit profits, U.S. Attorney Paul J. Fishman announced.
Randy Poulson, 42, of Woolwich Township, N.J. – the owner and operator of Equity Capital Investments LLC – was arrested this morning by special agents of the Philadelphia FBI. Poulson was arrested on a complaint charging him with mail fraud, which alleges the business he operated was actually a multimillion-dollar Ponzi scheme. Poulson is scheduled for an initial appearance and bail hearing this afternoon before U.S. Magistrate Judge Anne Marie Donio in Camden federal court.
According to the complaint unsealed today:
Poulson engaged in a two-pronged scheme. First, he promised to pay the mortgages of distressed homeowners facing foreclosure if they sold their homes to him – for no other compensation. Using this method, Poulson obtained the deeds to more than 25 distressed homeowners’ residences, causing them to vacate the homes so renters could move in. Poulson then stopped making the monthly mortgage payments, causing those mortgages to go into foreclosure without the distressed homeowners’ knowledge.
In the second prong of the scheme, Poulson successfully solicited more than 50 private investors into his companies – including Equity Capital Investments, which purportedly bought and sold real estate. Poulson explained to the investors that their money would be used to acquire and rehabilitate properties, which Poulson claimed he would rent out and then sell for a 10 to 20 percent return on the investment. In order to give the impression that Equity Capital Investments was a legitimate business, Poulson provided investors with fake mortgages and promissory notes for residential properties he claimed to be purchasing, renting and reselling. In support of the scheme, Poulson gave three weekend-long seminars, numerous speeches at monthly dinners and various, private tutorial sessions purporting to teach real estate investing tips to individuals who paid fees to attend. Poulson was the former president of the South Jersey Real Estate Investment Club.
The properties for which Poulson solicited private investments were the properties he acquired from the distressed homeowners. In reality, Poulson spent the investments on personal expenses and to partially repay previous investors in Ponzi-scheme fashion. Poulson spent some of the investors’ money on Ray’s Pizza, Acme, Exxon/Mobil, Jos. A. Bank, DirecTV, Hollywood Grooming, Kiddie Garden, Philadelphia Union tickets, American Express, Studio 122 (a hair salon), The Disney Store, Toys ‘R Us, Wawa, and rent-to-own payments on a personal beach house located in Ventnor, N.J.
The investigation to date has uncovered more than $3 million in investor losses as a result of Poulson’s schemes.
The mail fraud count which with Poulson is charged carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special
Agent in Charge Edward J. Hanko in Philadelphia, for the investigation leading to today’s complaint.The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
The charge and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
14-168
Defense counsel: Richard Coughlin Esq., Camden
Poulson, Randy Complaint
Gang Member Sentenced on Drug and Gun ChargesRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Jacob Rivera, a/k/a “JJ,” 20, who was convicted of conspiracy to distribute more than 280 grams of cocaine base, and possession of a firearm in furtherance of his drug trafficking activities, was sentenced to 17 years in prison by U.S. District Judge Frank P. Geraci.
Assistant U.S. Attorney Douglas E. Gregory, who is handling the case, stated that the defendant, along with several others, was part of a violent, street level drug trafficking organization that referred to themselves as “M.D.B.”, or “The Broezel Boys.” From 2010 until their arrest in the summer of 2013, members and associates of MDB operated an open air drug market in a multi block area near the intersection of Dewey and Lexington Avenues, including all of Broezel Street, the north end of Maryland Street, portions of Driving Park and portions of Lakeview Park, in Rochester.
M.D.B. members and associates also maintained several drug houses in Rochester, including the duplex residence at 325/327 Lexington Avenue, the upstairs apartment at 171 Maryland Street, the upstairs apartment at 316 Lakeview Park and 672 West Main Street, each for the purpose of possessing, manufacturing, distributing, and using controlled substances.
Rivera possessed firearms in furtherance of his drug trafficking activities and used violence and threats of violence against unaffiliated persons who attempted to sell illegal controlled substances within their territory and against certain witnesses who were viewed as hostile to the interests of M.D.B.
The sentencing is the culmination of an investigation on the part of the Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, New York Field Office, the Rochester Police Department, under the direction of Chief Michael Ciminelli, the Federal Bureau of Investigation, and the Drug Enforcement Administration, under the direction of Jamie J. Hunt, Acting Special Agent in Charge, New York Field Division.Four Men Charged with Synthetic Drug DistributionRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III today announced the unsealing of a federal indictment charging four individuals with crimes relating to the distribution of synthetic cannabinoids. The indictment charges Ali El Khateeb (45, Tampa), Al Eddin Khaled (23, Wesley Chapel), and George Challita (56, New Orleans, LA) with conspiring to distribute and the distribution of AM-2201, a controlled substance analogue. El Khateeb, Khaled, and Anwar Gaber (31, Tampa) are also charged with conspiring to distribute and distribution of the controlled substance XLR-11. If convicted, each offense carries a maximum penalty of 20 years in federal prison. The indictment also seeks forfeitures, including a money judgment in the amount of approximately $5.9 million.
Corporate filings reveal that Khaled is associated with a business known as Wild Incense, located 4401 E. 10th Avenue in Tampa. This location was the focus of a search warrant that was executed on July 25, 2012, the date of nationwide enforcement actions relating to the distribution of smokable synthetic cannabinoids.
An analogue substance has a substantially similar chemical structure and effect as a controlled substance. The Controlled Substance Analogue Enforcement Act of 1986 (CSAEA) allows many of these drugs to be treated as controlled substances if they are proven to be chemically and/or pharmacologically similar to a Schedule I or Schedule II controlled substance. When intended for human consumption, analogues are treated in the same fashion as the controlled substance and provide law enforcement with a means to keep pace with the rapidly changing environment surrounding the distribution of chemicals used to replace outlawed substances.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This indictment is the result of a long-term Organized Crime Drug Enforcement Task Force (OCDETF) investigation involving the joint participation of numerous law enforcement agencies in the Tampa Bay area and nationwide. The agencies involved include the Drug Enforcement Administration in Tampa, Gainesville, Los Angeles, New Orleans, and Milwaukee, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Marshals Service, Hillsborough County Sheriff’s Office, Pinellas County Sheriff’s Office, Tampa Police Department, Pasco County Sheriff’s Office, Ocala Police Department, Gainesville Police Department, Alachua County Sheriff’s Office, Levy County Sheriff’s Office, Union County Sheriff’s Office, Columbia County Sheriff’s Office, and Marion County Sheriff’s Office. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
(Download Factual Basis )
Former Subway Franchise Owner Pleads Guilty to Gift Card Hacking Scheme at Subway RestaurantsRead the Press Release
WASHINGTON – A California man pleaded guilty today in the District of Massachusetts for his role in a conspiracy to hack into the computerized cash registers of a number of Subway restaurants to fraudulently obtain more than $40,000 in gift cards.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service in Manchester, New Hampshire, made the announcement.
Shahin Abdollahi, aka Sean Holdt, 46, of Lake Elsinore, California, pleaded guilty before U.S. District Judge Richard G. Stearns to one count of conspiracy to commit computer intrusion and wire fraud and one count of wire fraud. Sentencing is scheduled for Aug. 6, 2014. Abdollahi, along with his co-conspirator, Jeffrey Wilkinson, 37, of Rialto, California, was indicted on March 6, 2013. Wilkinson pleaded guilty on Feb. 27, 2014, and is scheduled for sentencing on May 28, 2014.
Prosecutors informed the court that had the case proceeded to trial, the government would have proven that Abdollahi owned Subway franchises in Southern California from 2005 to 2008 and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway restaurant franchises around the country. POS systems are a type of computerized checkout register that allows merchants to manage customer purchases made by credit, debit and gift cards.
Beginning in approximately 2011, Abdollahi and Wilkinson conspired to remotely hack into POS systems in Subway restaurant franchises around the country. Members of the conspiracy hacked into at least 13 Subway POS systems that Abdollahi sold through POS Doctor and fraudulently added at least $40,000 in value to Subway gift cards. Abdollahi and Wilkinson used the fraudulent gift cards to make purchases at Subway, and Wilkinson also sold fraudulent gift cards to others using eBay and Craigslist.
The case is being investigated by the U.S. Secret Service. The case is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam J. Bookbinder of the District of Massachusetts.
Former Subway Franchise Owner Pleads Guilty <br /> to Gift Card Hacking Scheme at Subway RestaurantsRead the Press Release
A California man pleaded guilty today in the District of Massachusetts for his role in a conspiracy to hack into the computerized cash registers of a number of Subway restaurants to fraudulently obtain more than $40,000 in gift cards.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service in Manchester, New Hampshire, made the announcement.
Shahin Abdollahi, aka Sean Holdt, 46, of Lake Elsinore, California, pleaded guilty before U.S. District Judge Richard G. Stearns to one count of conspiracy to commit computer intrusion and wire fraud and one count of wire fraud. Sentencing is scheduled for Aug. 6, 2014. Abdollahi, along with his co-conspirator, Jeffrey Wilkinson, 37, of Rialto, California, was indicted on March 6, 2013. Wilkinson pleaded guilty on Feb. 27, 2014, and is scheduled for sentencing on May 28, 2014.
Prosecutors informed the court that had the case proceeded to trial, the government would have proven that Abdollahi owned Subway franchises in Southern California from 2005 to 2008 and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway restaurant franchises around the country. POS systems are a type of computerized checkout register that allows merchants to manage customer purchases made by credit, debit and gift cards.
Beginning in approximately 2011, Abdollahi and Wilkinson conspired to remotely hack into POS systems in Subway restaurant franchises around the country. Members of the conspiracy hacked into at least 13 Subway POS systems that Abdollahi sold through POS Doctor and fraudulently added at least $40,000 in value to Subway gift cards. Abdollahi and Wilkinson used the fraudulent gift cards to make purchases at Subway, and Wilkinson also sold fraudulent gift cards to others using eBay and Craigslist.
The case is being investigated by the U.S. Secret Service. The case is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam J. Bookbinder of the District of Massachusetts.Former Murray County Judge IndictedRead the Press Release
ROME, Ga. – Former Murray County Chief Magistrate Judge Bryant L. Cochran has been indicted for sexually assaulting a county employee, for framing a woman who alleged that she had been sexually propositioned by Cochran, and for tampering with a witness.
“Cochran is charged with crimes that reflect that he completely abused the power and trust given to him by the people of Murray County,” said United States Attorney Sally Quillian Yates. “First, he attempted to use his judicial position to solicit sexual favors from a female citizen. And, once the alleged misconduct came to light, Cochran tried to use his power and influence to cover up the incident by having the citizen framed for drug possession and by tampering with a witness.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “This latest indictment brings to light additional details of an orchestrated scheme full of false allegations lodged against one citizen but, in the end, costing the careers and reputations of those public servants making them. The FBI will continue to work with its various law enforcement partners in investigating all matters regarding public corruption.”
“It is important for citizens to have confidence in public officials, especially those entrusted with upholding and enforcing the law. The indictment of Cochran shows that people in these positions will be held accountable when they are involved in criminal activity. The GBI is committed to work with our federal partners to insure those in a position of trust are held accountable,” said Vernon Keenan, Director, the Georgia Bureau of Investigation.
According to United States Attorney Yates, the charges, and other information presented in court: From January 1, 2004 to August 15, 2012, Bryant Cochran served as the Chief Magistrate Judge in Murray County, Ga. In that position, Cochran sexually assaulted a Murray County employee and unlawfully searched the personal cellular telephone of another Murray County employee.
In addition, on April 9, 2012, Cochran met with a female citizen regarding a legal matter. During the meeting, Cochran made inappropriate sexual advances towards the citizen. By mid-July 2012, the allegations of Cochran’s sexual misconduct towards the citizen had become public. In response, Cochran called several local police officers providing them with a “tip” – that the citizen carried drugs in her vehicle.
In an effort to discredit the citizen, on or about August 12, 2012, Clifford J. Joyce (who was a tenant of Cochran’s and who has been convicted of conspiring to distribute a controlled substance) planted a metal tin containing five packets of methamphetamine under the fender of the citizen’s car.
Two days later, on August 14, 2012, Murray County Sheriff’s Office Deputy Joshua Greeson (who has since been convicted of witness tampering) conducted a traffic stop on a car occupied by the citizen. During the traffic stop, several officers and a police drug dog searched the car for approximately 15 to 20 minutes – but did not find any drugs. Thereafter, Captain Michael Henderson (who is Cochran’s cousin and who has also been convicted of witness tampering) had an approximately two minute telephone conversation with Cochran. Following that call, Henderson told an officer at the scene that according to his information; the citizen hid her drugs in a magnetic box under the left, rear tire well. Upon receiving that information, Greeson found the metal box magnetically attached to the car in that precise location. Inside the box, Greeson recovered five small packets containing methamphetamine. Greeson then told the citizen that he had recovered drugs from her car. At that point, the citizen stated that she had been set up. Despite this, Greeson arrested the citizen and transported her to jail.
On August 15, 2012, the day after the arrest, Cochran resigned his position as Murray County’s Chief Magistrate Judge. On August 22, 2012, Joyce admitted to law enforcement officers that he planted drugs – after which the local District Attorney dismissed the charges against the woman. Finally, in an apparent effort to cover up the framing of the woman, Cochran tried to persuade a witness to provide false information to law enforcement officers.
On May 13, 2014, a federal grand jury indicted Cochran, 44, of Chatsworth, Ga. for: (1) Conspiracy against Rights; (2) Deprivation of Rights under Color of Law, (3) Conspiracy to Distribute a Controlled Substance, and (4) Tampering with a Witness. The most serious of the charges carries a maximum sentence of 20 years in prison and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation and Georgia Bureau of Investigation.
Assistant United States Attorneys Jeffrey W. Davis and William L. McKinnon Jr. are prosecuting 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia Rome Division is http://www.justice.gov/usao/gan/.
Former Manager of Tutoring Company Sentenced in Manhattan Federal Court to 24 Months in Prison for Scheme to Bill Federal Government for Tutoring Services That Were Never ProvidedRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that MICHAEL LOGAN, a former manager of TestQuest, Inc. (“TestQuest”) — an educational services company that provided tutoring services to students attending underperforming public schools in New York City as part of a federally-funded program — was sentenced today in Manhattan federal court to 24 months in prison for his role in a scheme to defraud the federal government into paying for tutoring services that were never provided. LOGAN pled guilty in June 2013 before U.S. District Judge John F. Keenan, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “With today’s sentence Michael Logan must now pay with his liberty for exploiting a federal program meant to benefit students in need. I would like to thank the U.S. Department of Education’s Office of the Inspector General for their work in helping us to bring this important case.”
According to the Criminal Complaint, Information, and other documents filed in Manhattan federal court, as well as statements made at today’s sentencing and other proceedings:
Each year from 2005 through 2012, the New York City Department of Education (“NYCDOE”) received funds from the federal government to pay for New York City’s Supplemental Educational Services program (“SES”), which included after-school tutoring and other remedial and supplemental academic enrichment services for students attending underperforming public schools. NYCDOE entered into contracts with private entities and organizations to provide SES tutoring to public school students. Students were eligible to receive SES tutoring if they met certain criteria, such as attending a school that had been identified as needing improvement or restructuring for at least two years.
Private entities contracted by NYCDOE to provide SES tutoring were required to have each student who attended a class sign a standard attendance sheet. The tutor was also required to sign the sheet, attesting to the fact that he or she provided SES tutoring to those students whose names appeared on the sheet. Further, as a condition of getting paid for providing tutoring, the private entities were required to certify to NYCDOE that their attendance records were “true and accurate.”
From 2005 through 2012, TestQuest contracted with NYCDOE to provide SES tutoring. It provided individual tutoring to students at their homes and group tutoring at various New York City public schools, including the Monroe Academy of Business and Law/High School of World Cultures (“Monroe”) and the Global Enterprise Academy/Christopher Columbus High School (“Columbus”). TestQuest received tens of millions of dollars in federal funding for tutoring during this time period, including approximately $2.3 million for tutoring purportedly provided at Monroe and Columbus alone.
From 2005 through 2012, LOGAN was responsible for managing TestQuest’s SES tutoring program at Monroe and, later, at Columbus. LOGAN also worked as a long-term substitute teacher and computer technician at Monroe and, at times, coached its baseball team. From 2005 through 2012, LOGAN instructed TestQuest employees to forge student signatures on attendance sheets and to have students sign attendance sheets for tutoring classes they had not attended. On some occasions, he caused TestQuest employees to fraudulently obtain students’ signatures by collecting them from students assembled in the school cafeteria or participating in after-school activities such as baseball or basketball practice. LOGAN told these employees that they would not get paid if they did not collect signatures. One TestQuest employee (who did not actually provide any tutoring services for TestQuest but falsely certified that he had) periodically had conversations with LOGAN during which the employee asked what he was supposed to be doing, and LOGAN replied that the employee should tell anyone who asked that he was teaching English.
Further, when LOGAN learned of the criminal investigation, he coached other participants in the fraud to lie to federal investigators. In one recorded conversation, for example, LOGAN encouraged another TestQuest employee to lie about having taught classes that occurred when LOGAN and the employee were actually coaching after-school sports. As a result of LOGAN’s conduct, TestQuest employees repeatedly submitted bills to NYCDOE for tutoring that never occurred, and for which TestQuest was paid substantial sums of money.
In addition to the prison term, LOGAN, 50, of the Bronx, New York, was ordered to forfeit $250,000.
The case against LOGAN is part of a broader effort by this Office’s Criminal and Civil Divisions to hold SES providers and their employees accountable for fraudulent conduct. To date, this Office has brought coordinated proceedings against three New York City SES providers and their employees for falsifying attendance records and billing for tutoring they did not provide. In 2012 and 2013, this Office filed civil charges against The Princeton Review, Inc. (“Princeton Review”), and civil and criminal charges against several of its former employees. In 2013, this Office filed civil charges against TestQuest, and civil and criminal charges against several of its former employees, including LOGAN. In 2014, this Office filed civil charges against The Academic Advantage (“Academic Advantage”), and civil and criminal charges against several of its former employees. TestQuest settled the civil charges against it by admitting misconduct and agreeing to pay the Government $1.725 million. Princeton Review and Academic Advantage settled with the Government by admitting misconduct and committing to pay up to $10 million and $2 million, respectively. In addition to LOGAN, the following former employees of TestQuest, Princeton Review and Academic Advantage have pled guilty to criminal fraud charges, settled civil fraud charges, or both: Robert Stephen Green, Ana Azocar, Zorayma Azocar, Sandra Allen, Edwin Guzman and Luz Mercedes.
Mr. Bharara praised the investigative work of the U.S. Department of Education’s Office of Inspector General.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Joseph P. Facciponti and Christopher B. Harwood are in charge of the prosecution.
Former Financial Officer of New Jersey-Based Equipment Company Sentenced to 18 Months in Prison for Filing False Corporate and Personal Income Tax ReturnsRead the Press Release
CAMDEN, N.J. – A former financial officer and president of General Glass Equipment Company in Galloway, N.J., was sentenced today to 18 months in prison for concealing his actual income on corporate and personal tax returns, including more than $700,000 he failed to report in 2004, U.S. Attorney Paul J. Fishman announced.
Frank A. Dominico, 68, of Linwood, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an indictment charging him with filing false income tax returns. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between 2004 and 2009, Dominico worked as a financial officer for General Glass and prepared their corporate income tax returns. During that time he was promoted from treasurer to president of the company.
For each tax year between 2004 and 2008, Dominico admitted he filed returns which reported only a portion of his income and, in some years, overstated his itemized deductions.
For instance, Dominico admitted that for 2004 tax year, he listed his compensation from General Glass as $51,334 on his personal tax return and $89,822 on General Glass’s corporate federal income tax return. In fact, Dominico failed to report an additional $722,000 in compensation for the 2004 tax year, which resulted in a tax loss to the United States of $129,710.
In addition to the prison term, Judge Hillman sentenced Dominico to serve one year of supervised release and ordered him to pay restitution of $840,321.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: Lori M. Koch Esq., Assistant Federal Public Defender, Camden
14-172Former Fairmont State Official Sentenced to PrisonRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistELKINS, WEST VIRGINIA – A former vice-president at Fairmont State University has been sentenced to federal prison for stealing over $1.3 million dollars from the school.
United States Attorney William J. Ihlenfeld, II announced that David A. TAMM, age 45, of Parkersburg, West Virginia, was sentenced to 46 months in prison as a result of his convictions for “Embezzlement from State Agency Receiving Federal Funds” and “Making and Subscribing a False Tax Return for Tax Year 2012.” U.S. District Judge Irene Keeley imposed the punishment today at a sentencing hearing in Elkins.
TAMM, a former vice-president at Fairmont State University, was convicted of stealing funds from the school through the use of state-issued purchasing cards. TAMM admitted that from October of 2007 until January of 2013, he embezzled and stole funds from Fairmont State, including funds from federal education grants. TAMM, who served as Chief Information Officer at the school, also admitted to filing a false tax return for the 2012 tax year by reporting substantially less income than he had actually received.
The Court ordered TAMM to make restitution in the amount of $1,324,191.04 to Fairmont State University and $224,759 to the IRS for back takes. The Court also imposed a money judgment in the amount of $639,174.33. TAMM, who is on bond, will self-report to prison next month.
The investigation revealed that TAMM purchased hundreds of computer switches with purchasing cards and then resold them for cash. The cash was then used by TAMM to purchase luxury automobiles, a $435,000 home in Bridgeport, West Virginia, and other expensive items. TAMM also used a purchasing card to acquire high-end electronics for his personal use.
This case was prosecuted by Assistant United States Attorney Andrew R. Cogar and was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-CI, the West Virginia Commission on Special Investigations and the Fairmont State University Police.
If anyone has information regarding public corruption in their community they are encouraged to call the West Virginia Public Corruption Hotline at 1-855-WVA-FEDS (1-855-982-3337), or to send an email to [email protected].