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1 July 2014
Husband and Wife Indicted for Bank Robbery of Scott Credit Union in O’Fallon, IllinoisRead the Press Release
Follow @SDILNewsA United States Grand Jury returned a two-count indictment against Steve M. Dodson, 45, and Denise K. Dodson, 43, (husband and wife) of Collinsville, Illinois, charging them with Conspiracy to Commit Bank Robbery and Bank Robbery, United States Attorney Stephen R. Wigginton announced today. Following a hearing, both were ordered held in custody without bond pending trial, which is set for August 25, 2014.
The offenses charged in the indictment allege that on May 24, 2013, Steve and Denise Dodson committed the offenses of Conspiracy to Commit Bank Robbery and Bank Robbery by (1) driving to the Scott Credit Union in O’Fallon, Illinois; (2) Steve Dodson exiting the vehicle, putting a mask over his face, and walking toward the credit union; (3) Denise Dodson waiting in a car to drive Steven Dodson away from the credit union; (4) Steve Dodson approaching two employees of Scott Credit Union, telling them that he had a gun, and taking money belonging to the credit union (5) stealing and retaining approximately $100,000 from the Scott Credit Union; and (6) fleeing the scene in a vehicle driven by Denise Dodson.
The announcement of this Indictment was delayed until the Dodsons could be brought into the federal system. Before this time, they were each serving sentences in the Illinois Department of Corrections for crimes related to burglary.
If convicted, each person faces a term in prison of up to 5 years on the charge of Conspiracy to Commit Bank Robbery and a term in prison of up to 20 years on the charge of Bank Robbery. Steve and Denise Dodson also face a fine up to $250,000 and a term of supervised release of up to five (5) years once they are released.
An indictment is a formal charge against a defendant that is comprised of the essential facts constituting the offense charged. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
The case was investigated by the O’Fallon Police Department and the Federal Bureau of Investigation. The case is assigned to Assistant United States Attorney Ali Summers.
Gaston Man Indicted for Being a Felon in Possession of FirearmRead the Press Release
Contact Person: Beth Drake (803) 929-3000
Columbia, South Carolina -----United States Attorney's Office announces today that Warren Dominque McDaniel, age 27, of Gaston, South Carolina was arrested today after being charged in a 2-count federal indictment. McDaniel was charged with two counts of being a felon in possession of a firearm and ammunition, a violation of Title 18, United States Code, Section 922(g)(1). The maximum penalty McDaniel could receive is 10 years imprisonment and a maximum fine of $250,000. The indictment stems from an April 14, 2014, shooting incident in Gaston and from a July 22, 2010, incident in Columbia. The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Lexington County Sheriff’s Department, and the Columbia Police Department, and is assigned to Assistant United States Attorney Stacey D. Haynes of the Columbia office for prosecution.
The United States Attorney stated that all charges in this Indictment are merely accusations and that all defendants are presumed innocent until and unless proven guilty.Former Wayne County Assistant County ExecutiveSentenced for Conspiracy to Commit Honest Services FraudRead the Press Release
Former Wayne County Assistant County Executive Michael Grundy was sentenced today to 90 months in prison for conspiracy to commit honest services fraud in connection with his position as executive director of HealthChoice of Michigan, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, and Acting Special Agent in Charge Jarod Koopman, Internal Revenue Service - Criminal Investigation.
In his guilty plea, Grundy, 42, of Detroit, admitted that he had caused the accountant of HealthChoice to wire transfer $400,000 to a company called Medtrix, Grundy falsely represented that the payment was made pursuant to an existing contract to develop and implement an electronic medical records (“EMR”) system for HealthChoice medical providers. In fact, however, the contract was not executed until the day the wire transfer was made, and was not approved by the HealthChoice Board of Directors. Further, Medtrix never created or obtained any EMR programming, and an EMR system that was developed by another company was already being offered to HealthChoice networks and medical providers.
Medtrix owner and co-conspirator Keith Griffin of Camel, Indiana, pleaded guilty to the wire fraud scheme and testified during Grundy’s nine-day sentencing hearing. Griffin admitted that Grundy used his position as Executive Director of HealthChoice to authorize fraudulent payments to Medtrix and Advertise Me, also owned by Griffin. Griffin admitted that he kicked back substantial portions of those payments to Grundy.
The court also considered evidence that Grundy extorted a contractor, causing that contractor to send payments to Advertise Me and Medtrix, and that portions of those payments were kicked back to Grundy.
In addition to his custodial sentence, Grundy will forfeit real property located at 19604 Shrewsbury Road, Detroit, a 2011 Jeep Wrangler, and $7,755 in currency, assets that were derived from proceeds traceable to the fraud.
United States Attorney McQuade said, "The citizens of Wayne County deserve honest services from their public officials. It is particularly offensive when corruption comes from officials entrusted to promote health and welfare. We will continue to prosecute public officials who enrich themselves instead of serve the people.”
"IRS-CI is committed to investigating those public officials that choose to steal funds earmarked for public programs in order to enrich themselves," said IRS-CI Special Agent in Charge Jarod J. Koopman.
The case was investigated by agents of the FBI and IRS. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Gjon JuncajFormer Teamsters Union Local President Indicted for Embezzlement of Union Funds, Illegal Loans, and Criminal Recordkeeping ViolationsRead the Press Release
– Jerry Thomas Vincent, Jr. was President of Teamsters Local 783 from 2006 to 2011
LOUISVILLE, KY - A federal grand jury in Louisville returned an indictment against Jerry Thomas Vincent, Jr., age 53, of Louisville, Kentucky, in Jefferson County, on charges of embezzling labor union funds, illegal labor union loans, and criminal recordkeeping violations, David J. Hale, United States Attorney for the Western District of Kentucky announced today.
The Indictment alleges that from October 5, 2009, through on or about August 17, 2011, Vincent embezzled approximately $17,272.84 in union funds from Teamsters Local 783, arranged $23,760 in illegal loans from the union local to himself from November 11, 2009 through July 28, 2011, and committed 13 criminal violations related to union records from October 5, 2009 through June 17, 2011.
Specifically, Vincent allegedly made false entries on credit card receipts, claiming false business purposes for transactions at Louisville restaurants and on four occasions Vincent allegedly caused the labor union to make loans to him in the amount of $2,970.00 and on July 14, 2011, caused the labor union to loan him $11,880.00.
In the event of a conviction, the maximum potential penalties are twenty-three years= imprisonment, a $2,050,000 fine, and supervised release for a period of three years.
The case is being prosecuted by Assistant United States Attorney Jason Snyder, and it was investigated by the United States Department of Labor, Office of Labor-Management Standards.
Vincent is scheduled to appear for arraignment before United States Magistrate Judge Dave Whalin on July 22, 2014, in Louisville, Kentucky.
The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
Former Serra Nissan Sales Manager Pleads Guilty to Fraud ConspiracyRead the Press Release
BIRMINGHAM -- A former sales manager at Serra Nissan in Birmingham pleaded guilty today in federal court to charges related to a scheme at the car dealership to falsify auto loan documents, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., and IRS-CI Special Agent in Charge Veronica Hyman-Pillot.
ABDUL ISLAM MUGHAL, 48, of Trussville, pleaded guilty before U.S. District Judge Virginia Emerson Hopkins to one count of conspiring with others, including Serra Nissan salesmen, general managers, sales managers and finance managers, to falsify loan documents in order to defraud customers, Nissan North America and financial institutions and sell more cars. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions, including Capital One Auto Finance, between January 2012 and October 2013.
Mughal is scheduled for sentencing Nov. 5.
According to Mughal's plea agreement with the government, while he was the dealership's general sales manager, "there was a pervasive scheme throughout Serra Nissan ... that if a customer did not qualify for a car loan for some reason, the salesman, finance managers, sales managers, or GSM were to falsify information or documents that would ensure the customer was funded."
The plea agreement lists ways that Mughal and others falsified loan documents including, but not limited to: • Inflating the income information of prospective car buyers, a process participants sometimes referred to as “fluffing.”
• Creating or altering documents to submit to financial institutions that required proof of the prospective buyer's income or residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount, a process participants sometimes called “power booking.” Mughal and others had a financial incentive to power book a deal, because if the profit on a transaction were high enough, the dealership would pay the employees on the deal something above their normal commission.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify because of poor credit or insufficient income.In Mughal's plea agreement, he acknowledges one incident in which he told a salesman that a specific sale “could not be funded until they created a ‘legal lie’ for the bank” that showed the buyer, identified as J.T., made $5,000 per month.
J.T. bought a vehicle from Serra Nissan on Oct. 16, 2012. According to the plea agreement, J.T. submitted a bank statement to Serra Nissan showing an ending account balance of $11.03, but the loan application the dealership submitted to Capital One Auto Finance included a fraudulent bank statement showing J.T. had monthly deposits of $6,179.
In a second vehicle purchase on Oct. 16, 2012, a customer identified as W.K. submitted only a Social Security letter as proof of income. Serra Nissan, however, submitted a loan application to Capital One on W.K.'s behalf that also included a fraudulent bank statement, a claim of $2,973 in monthly Veterans Administration benefits -- although W.K. is not a veteran -- and false information that W.K. was retired from the State of Alabama and made $4,500 a month.
The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine.
The FBI and IRS investigated the case, which Assistant U.S. Attorney Amanda Schlager Wick is prosecuting.
Former Operator of NYC Health Clinics Pleads Guilty in Manhattan Federal Court to $30 Million Medicare Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Thomas O’Donnell, the Special Agent-in-Charge of the New York Field Office of the United States Department of Health and Human Services Office of the Inspector General (“HHS-OIG”),
Shantelle Kitchen, the Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CID”), and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that OSCAR HUACHILLO, the former operator of multiple HIV/AIDS clinics in New York City, pled guilty to orchestrating a scheme to defraud Medicare out of more than $31 million by billing Medicare for expensive treatments that were administered at a highly diluted dose or never administered at all, and were often medically unnecessary. HUACHILLO also pled guilty to evading more than $3.4 million in federal income taxes by falsely underreporting his income. HUACHILLO pled guilty before U.S. District Judge Katherine Polk Failla.
Manhattan U.S. Attorney Preet Bharara said: “Oscar Huachillo has admitted guilt in defrauding Medicare out of tens of millions of dollars, and then literally compounding the felony by evading millions of dollars in taxes on the illegal windfall. In the process, his schemes put patients at risk, financially burdened the Medicare program, and cheated honest taxpayers. Now he awaits sentencing for his crimes.”
HHS-OIG Special Agent-in-Charge Thomas O’Donnell said: “Mr. Huachillo engaged in an elaborate scheme that resulted in poor patient care and millions defrauded from Federal health care programs. We will not tolerate such greed-fueled fraud, which undermines our health care system and the vulnerable individuals it serves.”
IRS-CI Acting Special Agent-in-Charge Shantelle P. Kitchen said: “IRS Criminal Investigation is pleased to work with our law enforcement partners in the fight against healthcare fraud, ready to follow stolen proceeds back to the orchestrators of schemes. It is clear how Medicare fraud, in particular, takes resources away from citizens with legitimate financial needs. However, money obtained through illegal sources, such as healthcare fraud, forms the backbone of the untaxed, underground economy. Such crimes pose threats to the nation’s tax system and the public’s confidence in it.”
FBI Assistant Director-in-Charge George Venizelos said: “Huachillo treated our American health care system as a vehicle to fuel his greed and line his own pockets when he organized a Medicare fraud of more than $31 million. The FBI, in conjunction with our law enforcement partners, will continue to investigate and bring to justice criminals who bilk the system and defraud the American taxpayer.”
According to the criminal complaint, superseding information, and other documents filed in Manhattan federal court, as well as statements made at related court proceedings:
HUACHILLO set up and operated multiple health care clinics in New York City that purported to provide injection and infusion treatments to Medicare-eligible HIV/AIDS patients, but that were, in reality, health care fraud mills (the “Clinics”) that routinely billed Medicare for medications that were never provided or were provided at highly diluted doses and that were often unnecessary because the person being “treated” did not medically need the treatments.
HUACHILLO and his co-conspirators executed the fraudulent scheme by recruiting HIV/AIDS patients who were eligible for Medicare to come to the Clinics multiple times per week, for multiple months, to undergo expensive “treatments” that were often unnecessary. The purported treatments included drugs costing hundreds of dollars each to administer and typically reserved for cancer and anemia patients. HUACHILLO and his co-conspirators paid the patients cash kickbacks of up to $300 per week in exchange for coming to the Clinics and agreeing to undergo the treatments. Patients were also offered approximately $50 for each additional patient they referred to the Clinics. HUACHILLO and his co-conspirators then used these patients’ status as Medicare beneficiaries to submit claims to Medicare for reimbursement for the treatments purportedly administered to the patients, often receiving tens of thousands of dollars in reimbursements per patient. However, in truth, the treatments typically were provided in highly diluted doses or not provided at all, and were often medically unnecessary. As a result of the scheme, from 2009 through 2013, HUACHILLO and his co-conspirators defrauded the Medicare system out of at least $31 million.
In addition, HUACHILLO willfully evaded over $3.4 million in taxes owed to the IRS during the tax years 2009 through 2011 by falsely underreporting his taxable income, including income he had obtained through fraudulent Medicare claims.
HUACHILLO, 54, of Manhattan, pled guilty to one count of conspiracy to commit health care fraud, which carries a maximum sentence of 10 years in prison, and one count of tax evasion, which carries a maximum sentence of five years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge. As part of his plea, HUACHILLO agreed to forfeit more than $31 million in proceeds of his crime, including over $14 million of assets that were seized at or around the time he was arrested, and to pay back taxes of more than $3.4 million. HUACHILLO is scheduled to be sentenced by Judge Failla on October 15, 2014, at 3:00 p.m.
George Juvier, 56, of Manhattan, has been charged separately in connection with the Medicare fraud scheme. The charges against Juvier are merely allegations, and he is presumed innocent unless and until he is proven guilty beyond a reasonable doubt.
Mr. Bharara praised the outstanding efforts of HHS-OIG, IRS-CID, and the FBI in the investigation, which he noted is ongoing. Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Jonathan Cohen is in charge of the prosecution. Assistant United States Attorney Micah Smith of the Office’s Money Laundering and Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
US v. Oscar Huachillo and George Juvier Complaint
US v. Oscar Huachillo S1 Information (Signed)Former Millbrae Resident Sentenced to 18 Months in PrisonRead the Press Release
SAN FRANCISCO – Angelo Degenhardt was sentenced yesterday to 18 months in prison and ordered to pay $55,600 in restitution for posting fraudulent auctions for automobiles on eBay, announced United States Attorney Melinda Haag and U.S. Secret Service Special Agent in Charge Andrew Adelmann.
Degenhardt pleaded guilty to an Indictment charging him with 12 counts of wire fraud. According to the plea agreement, Degenhardt admitted to taking control of an eBay account in September 2012 that had previously been used by his wife. He thereafter posted auctions on eBay for various vehicles, including for two Hummers and a Ferrari. Three eBay users submitted winning bids for those automobiles and sent payment to Degenhardt at a PayPal account that he controlled, as well as to his Citibank account. Degenhardt thereafter immediately removed the funds from his PayPal account by transferring them to another Citibank account he controlled, to his wife and children, and to his landlord for payment of rent. Once the buyers realized that the auctions had been fraudulent, they complained to eBay and/or its subsidiary PayPal, which refunded their payments in the total amount of $55,600.
Degenhardt, 57, formerly of Millbrae, was indicted by a federal grand jury on Oct. 15, 2013. He was charged with 12 counts of wire fraud. Degenhardt is currently serving a two-year sentence imposed by the U.S. District Court in the District of Utah for a violation of his supervised release in a case pending there. The 18-month sentence, imposed today, will be served consecutively to the sentence Degenhardt received in Utah.
The sentence was handed down by the Honorable Thelton E. Henderson, United States District Court Judge in San Francisco, following a guilty plea on 12 counts of wire fraud, in violation of 18 U.S.C. § 1343. Judge Henderson also sentenced the defendant to a three-year period of supervised release and ordered him to pay restitution to PayPal in the amount of $55,600.
Kyle F. Waldinger is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rawaty Yim. The prosecution is the result of an investigation by the U.S. Secret Service.
(Degenhardt indictment )
Former Iowa State Researcher Appears in U.S. District CourtRead the Press Release
DES MOINES, IA – United States Attorney Nicholas A. Klinefeldt announced that Dr. Dong Pyou Han appeared in United States District Court today before the Honorable Celeste F. Bremer, and was arraigned on an Indictment that charges him with four counts of making a false statement.
According to the Indictment, while conducting research on behalf of Iowa State University, Dr. Han falsified scientific data to make it appear an experimental HIV/AIDS vaccine, gp41, neutralized, or controlled, the HIV/AIDS virus in rabbits, when in fact the vaccine did not. The Indictment further alleges that Dr. Han spiked sera samples from gp41-immunized rabbits with human sera containing HIV antibodies. The spiking of the rabbit samples made it appear that gp41 produced neutralizing antibodies against the HIV/AIDS virus. The false data was reported to the National Institutes of Health in a research grant application and funded grant progress reports.
A jury trial is scheduled to commence on September 2, 2014, before Chief Judge James E. Gritzner.
Each count of making a false statement carries a maximum term of five years imprisonment, up to a $250,000 fine, and up to three years of supervised release. An indictment is merely an accusation, and Dr. Han is presumed innocent until and unless proven guilty.
(Download Press Release )
Former Bank President Guilty of Bank FraudRead the Press Release
Follow @SDILNewsA former bank president pleaded guilty to bank fraud on June 30, 2014, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Paul C. Smith, 54, of East Alton, Illinois, pled guilty to the charges after having been indicted by the federal grand jury on November 20, 2013.
Documents filed in US District Court established that Paul Smith was employed by Laclede Community Credit Union (LCCU) from November 1977, until his resignation on June 29, 2012. During his tenure at LCCU, Smith held various positions, including that of President beginning in January 2012. In addition to working at LCCU, Smith also served as the treasurer for a credit union trade association. Smith held a debit card for the trade association’s bank account at LCCU.
Smith was convicted for making cash advances and purchases with his trade association credit card, but then manipulating the bank’s computers so that the expenses would not be reflected against the trade association’s account. In total, from 2007-2012, investigators identified $58,286.85 in purchases and ATM withdrawals that were incurred with Paul Smith’s trade association debit card. By manipulating the computer system, Smith concealed his embezzlement while causing LCCU to pay for personal expenditures made with the trade association’s debit card.
Bank fraud is punishable by not more than 30 years in prison, and/or a $1,000,000 fine, or both, restitution, and not more than five years of supervised release. However, the United States Sentencing Guidelines must be applied to the case and considered by the Court during sentencing. Smith will be sentenced in US District Court on September 29, 2014.
The investigation was conducted by agents from the US Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
Florida Keys Resident Charged with Illegally Trafficking in Marine LifeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Tracey Dunn, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and David Pharo, Resident Agent In Charge, U.S. Fish & Wildlife Service Miami Area Office of Law Enforcement, announce that Charles R. Jamison, 74, of Little Torch Key, was arraigned Friday in Key West for conspiring with others to transport, sell, receive, acquire, and purchase juvenile bonnethead sharks (Sphyrna tiburo), with a fair market value in excess of $350.00, and attempt to do the same, knowing that the bonnethead sharks were taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, in violation of Title 16, United States Code, Sections 3372(a)(2)(A), 3372(a)(4)and 3373(d)(1) and (2), all in violation of Title 18, United States Code, Section 371.
Jamison faces a possible sentence of up to five years in prison, a term of supervised release of up to three years, and a criminal fine of up to $250,000. He also faces forfeiture of the vessel, engine, trailer, tackle, and gear used in the commission of the Lacey Act violations.
According to the allegations of the information filed against him, at the relevant times, Jamison was a resident of Monroe County and engaged in the harvest and sale of bonnethead sharks (Sphyrna tiburo). At no time did Jamison, directly or as a third party contractor, possess or hold any State of Florida special activities license to collect, harvest, or transport shark species, nor did he possess and hold a valid federal annual vessel permit for sharks issued pursuant to 50 C.F.R. 635.4 to harvest, collect, or take shark species as required by the laws of the State of Florida.
The information further alleges that between approximately June 2012 and October 2012, at Monroe County, Jamison and others, harvested bonnethead sharks from Florida state waters in the Florida Keys, thereafter negotiating the purchase, sale, transportation, and transfer of the bonnethead sharks in interstate commerce. The bonnethead sharks would then be shipped in interstate commerce by a variety of means, including rental truck and as commercial air cargo.
The information, in a series of “overt acts”, describes multiple instances when specific numbers of sharks were harvested, the transfer of sharks from Jamison to a commercial marine life facility on Big Pine Key, and specific payments received by Jamison for sharks sold in interstate commerce.
Mr. Ferrer commended the joint investigative efforts of the NOAA’s Office of Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement. Mr. Ferrer also noted the assistance of the Florida Keys National Wildlife Refuges and the U.S. Customs and Border Protection Air Marine Branch. This matter is being prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Antonia Barnes.
An information is only an accusation and the defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Federal Jury Convicts Tarrant County Man for Tax EvasionRead the Press Release
FORT WORTH, Texas — A federal jury in Fort Worth, Texas, has convicted Jeffery James on an indictment charging one count of tax evasion, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The trial began yesterday morning before U.S. District Judge John McBryde.
According to evidence presented during trial, James, between 2006-2009, embezzled over $250,000 from the Las Colinas Country Club in Irving, Texas, where he was employed as Director of Club Accounting. James evaded assessment and payment of taxes by failing to disclose his stolen money on his federal income tax return.
The government presented evidence at trial that during calendar year 2008, James, a married resident of Richland Hills, Texas, attempted to evade and defeat a large part of the federal income tax he and his spouse owed for calendar year 2007 by filing a fraudulent joint federal income tax return. That return stated, according to evidence presented, their joint taxable income for calendar year 2007 was $57,542, and tax due and owing was $5,639. In fact, as James well knew, their joint taxable income for that year was $153,959, of which tax due and owing was $32,059.
James, who is on bond, faces a maximum statutory penalty of five years in federal prison and a $250,000 fine. Sentencing is set for October 17, 2014.
Internal Revenue Service Criminal Investigation investigated the case. Assistant U.S. Attorneys Chris Wolfe and Doug Allen are prosecuting.
Federal Jury Convicts Six Current and Former Los Angeles Sheriff’s Deputies of Obstructing Federal Civil Rights InvestigationRead the Press Release
LOS ANGELES – Six sworn officers who were working in the Los Angeles Sheriff’s Department were found guilty today of obstruction of justice for interfering with a federal civil rights investigation into misconduct at the Men’s Central Jail. A federal jury determined that the defendants, including two lieutenants, attempted to influence witnesses, threatened an FBI agent with arrest and concealed an FBI informant who should have been turned over to federal authorities.
All six of the defendants were convicted of participating in a broad conspiracy to obstruct justice, a plot that began in the summer of 2011 after they learned that a jail inmate was an FBI informant and was acting as a cooperator in a federal investigation into corruption and civil rights violations at the jail.
“The deputy sheriffs found guilty today participated in a scheme to thwart a federal grand jury investigation into violations of basic constitutional rights guaranteed to both prisoners and visitors to county jails,” said United States Attorney André Birotte Jr. “While an overwhelming majority of law enforcement officials serve with honor and dignity, these defendants tarnished the badge by acting on the false belief that they were above the law.”
"Law enforcement at all levels must work together to arrive at justice and to safeguard the civil rights of all the people we serve," said Bill L. Lewis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "Today's verdict is another step toward ending a period of corruption at the Men’s Central Jail for the good of the public, as well as the employees of the Los Angeles County Sheriff's Department, who have continued to serve with distinction while enduring this temporary stain on the department’s reputation.”
The defendants convicted today are:
Gregory Thompson, 54, a now-retired lieutenant who oversaw LASD’s Operation Safe Jails Program;
Lieutenant Stephen Leavins, 52, who was assigned to the LASD’s Internal Criminal Investigations Bureau;
Gerard Smith, 42, a deputy who was assigned to the Operation Safe Jails Program;
Mickey Manzo, 34, a deputy who was assigned to the Operation Safe Jails Program;
Scott Craig, 50, a sergeant who was assigned to the Internal Criminal Investigations Bureau; and
Maricela Long, 46, a sergeant who assigned to the Internal Criminal Investigations Bureau.
The evidence presented at trial showed that the defendants learned that an inmate received a cellular phone from a deputy sheriff who took a bribe and that the inmate was part of a federal civil rights investigation. The deputies took affirmative steps to hide the cooperator from the FBI and the United States Marshals Service, which was attempting to bring the inmate into federal custody pursuant to an order issued by a federal judge. As part of the conspiracy, records were altered to make it appear as if the cooperator had been released, but he was re-booked under different names.
The deputies also engaged in witness tampering by attempting to influence witnesses to not cooperate with the federal grand jury investigation, including the informant and the sheriff’s deputy who had taken a bribe to smuggle the cell phone into the jail.
Over the course of several weeks, the defendants sought an order from a Los Angeles Superior Court judge that would have compelled the FBI to turn over information about its investigation to LASD. After the judge refused to issue such an order, based on a lack of jurisdiction, Craig and Long confronted an FBI special agent at her residence in an attempt to intimidate her into providing details about the investigation and to try to deter the FBI from conducting the federal investigation. The sergeants falsely told the special agent, and later her supervisor, that they were obtaining a warrant for her arrest.
In addition to the conspiracy count, all six deputies were convicted of obstruction of justice offenses. Craig and Long were also found guilty of making false statements to the FBI agent and to her supervisor about seeking a warrant for her arrest.
As a result of today’s convictions, all six defendants face statutory maximum sentences of 15 years in federal prison (with Craig and Long facing another potential five years for the false statements charges).
The defendants are scheduled to be sentenced on September 8 by United States District Judge Percy Anderson.
Thompson is retired. The rest of the defendants, according to the Sheriff’s Department, were relieved of duty without pay in December 2013.
Release No. 14-082
Farragut, Iowa, Resident Sentenced for Theft of Social Security FundsRead the Press Release
COUNCIL BLUFFS, IA - On July 1, 2014, Sharon Jean Manchester, a 51 year-old resident of Farragut, Iowa, was sentenced by United States District Court Judge John Jarvey to a year and one day in prison, and three years of supervised release following the period of imprisonment, announced United States Attorney Nicholas A. Klinefeldt. Manchester entered a guilty plea on February 6, 2014, to committing Social Security Fraud from October, 2008, up to July of 2013. Manchester was also ordered to pay restitution to the Social Security Administration in the amount of $48,815.93.
The charge was the result of an investigation into the payment of funds by the Social Security Administration to Sharon Manchester which were based on Sharon Manchester’s claim that she was not receiving financial support from her husband, co-defendant Andrew Manchester. Investigation showed that during the entire period of time Sharon Manchester claimed to be unsupported by Andrew Manchester, he did provide financial support that made Sharon Manchester ineligible for Social Security benefits.
Co-defendant Andrew Manchester pleaded guilty previously to the charge of possession of a false document, and is awaiting sentencing.
The investigation was conducted by the Fremont County, Iowa, Sheriff’s Office, Page County, Iowa, Sheriff’s Office, and the Social Security Administration - Office of the Inspector General. The case was prosecuted by the United States Attorney’s Office for Southern District of Iowa.
(Download Press Release )
El Paso Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Bernabe Carrasco, 35, of El Paso, Texas, pled guilty this morning in federal court in Las Cruces, N.M., to a methamphetamine trafficking charge pursuant to a plea agreement with the U.S. Attorney’s Office.
Bernabe Carrasco and his co-defendant and cousin, Carlos Jesus Carrasco, 24, also of El Paso, were arrested on Dec. 20, 2013, and charged by criminal complaint with conspiracy and possession of methamphetamine with intent to distribute. The two men subsequently were indicted on the same two charges. According to the indictment, Bernabe Carrasco and Carlos Carrasco conspired to distribute methamphetamine on Dec. 19, 2013, and possessed methamphetamine with intent to distribute on Dec. 20, 2013. The indictment alleges that the two men committed the two offenses in Otero County, N.M.
During today’s proceedings, Bernabe Carrasco pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute. In his plea agreement, Bernabe Carrasco admitted that on Dec. 20, 2013, he possessed 2.07 kilograms of pure methamphetamine. Bernabe Carrasco boarded a passenger bus in El Paso in order to take two packages of methamphetamine that were strapped to his body to Amarillo, Texas, in exchange for $1,200.00. He also acknowledged that he was traveling with his cousin, Carlos Carrasco, who also was carrying methamphetamine. The cousins were apprehended at the U.S. Border Patrol checkpoint on Highway 54 in New Mexico when Border Patrol agents boarded the bus to conduct a routine immigration check of the passengers.
Carlos Carrasco previously pled guilty to the indictment on May 20, 2014, and also admitted possessing 2.07 kilograms of methamphetamine on Dec. 20, 2013, which he intended to distribute.
Bernabe Carrasco and Carlos Carrasco have been in federal custody since their arrests and remain detained pending their sentencing hearings, which have yet to be scheduled. At sentencing, each man faces a sentence of not less than ten years and not more than life in prison.
This case was investigated by the Las Cruces office of the DEA, the U.S. Customs and Border Protection and the U.S. Border Patrol, with assistance from the Doña Ana County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Amanda Gould of the U.S. Attorney’s Las Cruces Branch Office.District Man Sentenced to 41 ½ Years in Prison for 2010 Murder of Teenager in Southeast Washington-Ambushed Victim and His Friend Outside Apartment Building-Read the Press Release
WASHINGTON – Joshua Andrews, 22, of Washington, D.C., was sentenced today to a prison term of 41 ½ years for a 2010 murder that took place in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Andrews was found guilty in April 2014, following a trial in the Superior Court of the District of Columbia, of first-degree premeditated murder while armed, assault with intent to kill while armed, and related offenses. He was sentenced by the Honorable Rhonda Reid Winston.
According to the government’s evidence, during the spring of 2010, Andrews, then 18, was seeking revenge on the victim, 17-year-old Durand Lucas, who Andrews “assumed” had shot at him on a prior occasion. On June 4, 2010, the day before the murder, Andrews explained exactly how he was going to kill Mr. Lucas. He found out where he could locate Mr. Lucas – at an apartment building in the 1600 block of W Street SE – armed himself, and went to that location. Early June 5, 2010, he saw Mr. Lucas go into the apartment building, and together with a co-conspirator, waited for him outside the door to the building.
About 20 minutes later, just before 3 a.m., Mr. Lucas and another man exited the building. Andrews jumped out from the shadows in the corner of the building and shot at both men. When the two victims tried to flee, Andrews’s co-conspirator jumped out from around the corner of the building and began firing.
Mr. Lucas tried to run away, but was struck by a bullet that broke his leg. After he fell to the ground, Andrews and his accomplice leaned over Mr. Lucas and continued to fire at point-blank range, killing him. The victim was shot a total of 15 times, including three times in the back of the head. The second man was shot twice, but managed to escape.
In announcing the sentence, U.S. Attorney Machen commended the work of the detectives, crime scene officers, and others who investigated the case for the Metropolitan Police Department (MPD). He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Criminal Investigator Derek Starliper; Intelligence Analysts Zach McMenamin, Shannon Alexis, and William Hamann; Litigation Technology Specialists Leif Hickling and Paul Howell; Litigation Technology Supervisor Joseph Calvarese; Victim/Witness Advocates Lezlie Richardson and Jennifer Clark; Victim/Witness Security Specialists Debra Cannon, Wanda Queen, and M. LaVerne Forrest; Victim/Witness Supervisory Security Specialist Michael Hailey; Paralegal Specialists Mia Beamon, Deb Joyner, and Phaylyn Hunt; and Assistant U.S. Attorneys Natalia Medina, Lauren Bates, Deborah Sines, Gary Wheeler, and Stephen Rickard. Finally, he expressed appreciation for the work of Assistant U.S. Attorneys Melinda A. Williams and Jonathan Kravis, who prosecuted the case.
14-156District Man Sentenced to 22-Year Prison Term for Two Armed Robberies and Related Charges-Defendant Targeted Two Victims in Rapid Succession-Read the Press Release
WASHINGTON - Calvin Jenkins, 24, of Washington, D.C., has been sentenced to a 22-year prison term on charges stemming from two armed robberies using a stolen car in Northeast Washington, D.C., U.S. Attorney Ronald C. Machen Jr. announced today.
Jenkins was found guilty by a jury in April 2014, in the Superior Court of the District of Columbia, of two counts of armed robbery, one count of unauthorized use of a vehicle during a crime of violence, one count of fleeing a law enforcement officer, and related firearms offenses. He was sentenced on June 27, 2014 by the Honorable Ronna L. Beck. Upon completion of his prison term, Jenkins will be placed on five years of supervised release.
According to the government’s evidence, on Jan. 15, 2013, just after 8 p.m., Jenkins and his former co-defendant, who pled guilty in August 2013, robbed their first victim of $22 in the 4800 block of 8th Street NE. One minute later and approximately a block-and-a-half away, the men robbed the second victim of approximately $40 in the 800 block of Buchanan Street NE.
Both robberies were committed using a distinctive Tec-9-style handgun. The robbers were seen departing the scene of the second robbery in a vehicle that had been stolen two days earlier. Police spotted that vehicle a few minutes later, resulting in a high-speed chase that continued over a mile to the parking lot of a Home Depot on Rhode Island Avenue NE. Both robbers fled from the car. Jenkins was stopped by police on a ramp adjacent to the Home Depot, and the gun was found on his flight path.
In announcing the sentence, U.S. Attorney Machen commended the work of those who investigated the case for the Metropolitan Police Department (MPD). He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Allison Daniels and Wanda Trice; Investigative Analyst Shannon Alexis; Information Technology Specialists Leif Hickling and Anisha Bhatia, and Assistant U.S. Attorneys Philip A. Selden, Scott Ray, John Giovannelli, Ann Carroll, Kevin Flynn, and John Mannarino. Finally, he expressed appreciation for the work of Assistant U.S. Attorneys Michael Spence and Christine Macey, of the Felony Major Crimes Trial Section, who prosecuted the matter.
14-157Devin Ray Horne Sentenced to 282 Months for Oxycodone Trafficking, Money Laundering, Witness Intimidation and Income Tax Fraud ChargesRead the Press Release
GREENEVILLE, Tenn. – Devin Ray Horne, 24, of Kingsport, Tenn., was sentenced on June 30, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 282 months in federal prison for his leadership role in oxycodone, money laundering and income tax fraud conspiracies, as well as witness intimidation. Most of this illegal activity was centered in and around the Sullivan County area of East Tennessee.
Others charged in this conspiracy were also sentenced on June 30, 2014, in U.S. District Court. Melissa Ann Nowlin, 28, of Kingsport, Tenn., was sentenced to serve 41 months in prison for her conviction of the oxycodone conspiracy and income tax fraud. Penelope Sharp, 44, of Blountville, Tenn., was sentenced on the same date to serve 41 months in prison for her conviction of the oxycodone conspiracy.
Pursuant to the income tax fraud conviction, Devin Horne was ordered to pay restitution in the amount of $23,451.00. Nowlin was ordered to pay restitution in the amount of $18,160.00.
This conspiracy included 17 individuals who were indicted for their involvement in a large scale oxycodone distribution ring stretching back to approximately May 2008. Many of the pills obtained and sold within this conspiracy were obtained from Michigan, Florida and Georgia and transported back to the Eastern District of Tennessee for resale. Devin Horne stipulated that he conspired to distribute a conservative estimate of 10,000 (30 mg) oxycodone pills in the Eastern District of Tennessee.
In February 2013, Nowlin, who was the girlfriend of Devin Horne, was subpoenaed to testify before a federal grand jury. Days before her appearance Devin Horne told her, in jail recorded conversations, that he would take her life away if she testified against him. In another jail recorded conversation, Devin Horne also told his father and co-defendant Donnie Horne, 56, of Kingsport, that he would kill Nowlin if she testified against him. Devin Horne further asked his father to take Nowlin’s car away from her if she testified and to have someone present at the courthouse watching her.
Devin Horne also directed numerous others including Nowlin and Donnie Horne to send wire transfers to other co-conspirators in Detroit, Michigan to advance and promote his oxycodone trafficking.
In addition to the oxycodone trafficking, money laundering and witness intimidation, Devin Horne also devised and implemented a scheme to fraudulently obtain funds by filing false and fraudulent federal income tax returns using personal identifying information obtained from other individuals while he was housed inside the Sullivan County Jail. Devin Horne used Nowlin and others to assist him in preparing the fraudulent forms and converting the refund checks to their own use.
Other individuals involved in this conspiracy were previously sentenced in U.S. District Court. Dustin Wilcox a.k.a. “Weiner”, 32, of Kingsport, Tenn., who stipulated to conspiring to distribute approximately 14,000 oxycodone pills, was sentenced to serve 270 months in prison. Many of these pills were sold from Wilcox’s residence at in Kingsport, which was a well-known and commonly used location among other co-conspirators to sell, buy and use drugs in the Kingsport area. A final order of forfeiture was recently entered in which Wilcox forfeited his interest in this tract of real property as a result of the continued drug dealing that took place there.
Ricky Harvey, 30, of Kingsport, Tenn., was previously sentenced to serve 180 months in prison following his convictions on oxycodone and money laundering conspiracy charges. Michael Sharp, 50, of Blountville, Tenn., was previously sentenced to serve 72 months in prison following his conviction on oxycodone trafficking charges. Donnie Horne, Jason Jones, 36, of Elizabethton, Tenn., and Stephen Leon Williams, 62, of Kingsport, Tenn., were all previously sentenced to prison terms of 71 months, 78 months and 90 months, respectively. Williams was convicted for selling oxycodone pills and a firearm while on parole for a prior murder conviction.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Devin Horne and his co-conspirators include the Bureau of Alcohol, Tobacco and Firearms, Sullivan County Sheriff’s Office, IRS Criminal Investigations Division, Kingsport Police Department, and Bristol Tennessee Police Department, all of which provided invaluable assistance during the course of the investigation. Assistant U.S. Attorney Wayne Taylor represented the United States.
U.S. Attorney William C. Killian stated, “We are pleased not only with this significant sentence on Devin Ray Horne, but also with the overall sentences of all of the individuals involved in this extensive criminal activity. The witness intimidation conviction is important because these tactics simply cannot be tolerated in the criminal justice system.”
Corona Woman Who Ran High-End Denim Jean Company Arrested Again for Defrauding InvestorsRead the Press Release
LOS ANGELES – A Corona woman, who is already charged with a $15 million bank fraud and bankruptcy fraud, was arrested today on a new charge and is expected to appear in federal court this afternoon.
Carolyn Marie Jones, 51, of Corona, who was the Chief Executive Officer of a high-end denim jean company, was arrested this morning by Special Agents with the United States Secret Service and the Internal Revenue Service pursuant to a criminal complaint issued yesterday by a federal judge.
According to the criminal complaint, which charges wire fraud, Jones defrauded two Georgia men in an investment fraud scheme. According to the complaint, Jones convinced the Georgia men to invest with her, but spent the money on her own personal expenses. Jones, who was on bond pending a September 23 trial in the bank and bankruptcy fraud case, was prohibited from soliciting money from investors while the trial is pending.
According to the nineteen count indictment returned by a grand jury in September 2013, Jones was the Chief Executive Officer of Diamond Decisions, Inc., which sold denim jeans marketed under the labels of Privacywear and PRVCY Premium. According to the indictment, Jones obtained a $15 million business line of credit from Union Bank, using fake financial statements and fake tax returns. The indictment states that Jones gave the bank a Social Security Number that belonged to someone else. Jones also hid from the bank that she had filed for bankruptcy previously and that she had a felony record. According to the indictment, Jones defaulted on the $15 million loan after a year causing Union Bank to file a lawsuit in state court. When Union Bank tried to seize the contents of the Diamond Decisions warehouse, Jones caused the company to file for bankruptcy and hid assets from the bankruptcy trustee.
Jones faces a maximum statutory sentence of 489 years in federal prison on the bank and bankruptcy fraud indictment. Jones faces a maximum statutory sentence of 20 years on the wire fraud complaint.
A complaint and an indictment contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The charges in the complaint and indictment are the results of an investigation conducted by the United States Secret Service and the Internal Revenue Service.
Release No. 14-081
Cleveland Man Indicted for Robbing Streetsboro BankRead the Press Release
A grand jury returned an indictment charging Ronnell A. Allen, of Cleveland, age 32, with one count of bank robbery, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Allen, along with his accomplice, Eddie Fletcher, robbed the First Merit Bank of Streetsboro, Ohio, on January 10, 2013. It further alleges that the two men used force, violence, and intimidation to steal approximately $2,083.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney M. Kendra Klump following an investigation by the Federal Bureau of Investigation and the Streetsboro Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Charlotte Man Sentenced to 235 Months in Prison for Series of Bank Robberies in CharlotteRead the Press Release
CHARLOTTE, N.C. – Anthony Watson, 55, of Charlotte was sentenced today to serve 235 months in prison on bank robbery and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn, Jr. also sentenced Watson to three years of supervised release and ordered him to pay $54,314 as restitution to the victim banks, Sun Trust and BB&T.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD) join U.S. Attorney Tompkins in making today’s announcement.
Court documents show that over the course of a three-month period in the summer of 2012, Watson committed four bank robberies stealing a total of $54,314 in cash. According to court documents and today’s sentencing hearing, on June 11, 2012, Watson entered a Sun Trust Bank branch located on Galleria Boulevard in Charlotte, approached a bank teller and asked for change to a $20 bill. Watson then handed the teller a small duffel bag and told the teller that he wanted “all of the money.” Court documents indicate that the teller complied and Watson fled the scene with more than $26,700 in cash. On July 20, 2012, Watson returned to the same Sun Trust branch and robbed the bank again, this time fleeing with more than $16,300 in cash, according to court records. Continuing his bank robbery spree, on July 30, 2012, Watson entered a BB&T branch on West Arbors Drive in Charlotte and, using the same method, demanded money from the bank teller. Filed documents show that the teller complied and Watson fled the bank with approximately $3,900 in cash. Then on August 3, 2012, Watson entered a BB&T branch located on Sardis Road in Charlotte, approached a bank teller and demanded “everything.” Watson also showed the teller the handle of a sawed-off .22 caliber rifle. According to filed documents, the teller complied and Watson left on foot with more than $7,300 in cash. Law enforcement arrested Watson three days later and seized, among other things, the .22 caliber sawed-off rifle Watson used in the bank robbery.
.In handing down the sentence, Judge Cogburn noted “that while still serving a sentence of probation related to other prior bank robberies, Watson committed a series of new bank robberies that put people in danger.” Judge Cogburn emphasized that Watson’s “continuing recidivism” and the need to protect the community from further crimes of the defendant were important factors in determining Watson’s sentence.
Watson pleaded guilty in April 2013 to four counts of bank robbery and one count of possession of a firearm by a convicted felon. Watson has been in federal custody in the Western District of North Carolina since his arrest. Upon designation of a federal facility they will be transferred into custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.
The investigation was handled by the FBI’s Safe Streets Task Force and CMPD. The prosecution for the government was handled by Assistant U.S. Attorney J. George Guise of the U.S. Attorney’s Office in Charlotte.
Cambria County Man Sentenced for Conspiring to Distribute and Possess MarijuanaRead the Press Release
JOHNSTOWN, Pa. - A resident of Patton, Pa., has been sentenced in federal court to ten months in prison and four years supervised release on his conviction of conspiracy to distribute and possess marijuana, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Christopher J. Jolly, 40.
According to information presented to the court, from March 2009 to May, 9, 20ll, Jolly conspired with George M. Lowmaster and others to distribute and possess with the intent to distribute 100 kilograms or more of marijuana.
Assistant United States Attorney John J. Valkovci, Jr. prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the joint task force, headed by the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, for the investigation leading to the successful prosecution of Jolly. Other agencies participating on the task force include the Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, Pennsylvania Attorney General's Office, Cambria County District Attorney's Office, Carrolltown Police Department, Patton Police Department, Ebensburg Police Department, Portage Police Department and Paint Township Police Department.
Brighton Resident Pleads Guilty to Child Enticement ChargeRead the Press Release
BOSTON - A Brighton man pleaded guilty late yesterday in federal court to a charge of coercion and enticement of a minor.
Zachary Stoloff, 29, admitted to meeting a 14-year-old victim, on the Internet, whom he persuaded to meet for the purpose of having sex. Stoloff traveled to the minor victim’s town in Massachusetts, and drove her to his Brighton residence where he engaged in sexual intercourse with her.
The statute provides a maximum sentence of life imprisonment with a 10-year-mandatory minimum sentence, a $250,000 fine, and supervised release for five years up to life. Should the Court accept the parties’ plea agreement, the following sentence will be imposed: incarceration for 120 months; a fine in the amount to be determined by the Court; five years of supervised release; restitution as ordered by the Court; forfeiture; $100 special assessment; and an order that the defendant have no contact directly or indirectly with the minor victim during the period of the defendant’s incarceration and supervised release. With this conviction, Stoloff will also be required to register as a sex offender.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the United States Postal Inspection Services, Boston Division; and Colonel Timothy Alben, Superintendent of the Massachusetts State Police, made the announcement today.
The case was investigated by the United States Postal Inspection Services, as well as the Massachusetts State Police. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Boone County Man Sentenced to 35 Years for Producing Child Pornography VideosRead the Press Release
COVINGTON, KY - A Boone County man, who previously admitted that he created multiple videos of minors engaged in sexually explicit conduct, was sentenced today to 35 years in prison.
U.S. District Judge David L. Bunning sentenced Michael Schweitzer, 47, for producing and possessing child pornography. Under federal law, Schweitzer will have to serve at least 85 percent of his prison sentence.
According to court documents, in November 2012, Schweitzer provided a drug to a minor and then recorded himself sexually assaulting the minor, while the minor was under the influence.
During the investigation, authorities seized Schweitzer’s cell phone and discovered more videos that Schweitzer had recorded, which also involved minors engaged in sexually explicit conduct.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Gary J. Hartwig, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI),and Michael Helmig, Boone County Sheriff, jointly made the announcement.
The investigation was conducted by the Boone County Sheriff’s Office and HSI. The Ft. Mitchell Branch of the U.S. Attorney’s Office prosecuted this case on behalf of the federal government.
Boise Man Pleads Guilty to Federal Drug ChargeRead the Press Release
BOISE – Jason James Martin, 32, of Boise, Idaho, pleaded guilty today in United States District Court to conspiring to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced.
Martin admitted that in February 2014, he traveled with co-defendant Martin Adam Hernandez to California in order to obtain methamphetamine. On February 21, 2014, law enforcement agents stopped the vehicle as Martin and Hernandez returned from California with the methamphetamine. During a search of the vehicle, agents located approximately two pounds of methamphetamine. Agents recovered evidence showing that Martin and Hernandez obtained the methamphetamine from California with the intent to distribute the methamphetamine in Idaho.
Co-defendant Martin Hernandez entered a guilty plea to the same charge on June 26, 2014. Both Martin and Hernandez are scheduled to be sentenced on September 17, 2014, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise. Both Martin and Hernandez face up to 20 years in prison, a maximum fine of $1 million, and at least three years of supervised release.
The case was investigated by the Drug Enforcement Administration and the Ada County Sheriff’s Office. The case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Baltimore Business Owner Sentenced to over 4 Years in Prison for FraudRead the Press Release
Directed Others to Steal Merchandise from Retail Stores and Exchange the Stolen Items for Gift Cards
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced John Tadros, age 45, of Baltimore, today to 58 months in prison followed by three years of supervised release for wire fraud conspiracy and money laundering. Judge Russell also entered an order requiring Tadros to pay restitution of $400,000.The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.
Tadros owned Busy Bees Convenience Mart located at 335 South Monroe Street, and J&J’s Bar and Liquor located at 1801 Ramsay Street, both in Baltimore. According to his plea agreement, from January 2009 to February 2013, Tadros directed Melissa Perry, Deanna Lynch, Mohamed Al-Omeri, Mark Brunelle, Steven Riley and others, known as boosters, to steal merchandise from large retail stores throughout Baltimore, Anne Arundel, Prince George’s, Howard and Harford Counties in Maryland, as well as Virginia, Pennsylvania and Delaware. The boosters then returned the stolen items in exchange for store gift cards. They used modified Maryland driver’s licenses that contained the personal identifier information of actual persons, without those persons’ knowledge, when returning the stolen items without a receipt.
Tadros bought the fraudulently obtained gift cards from the boosters for 50% of the card’s value. Tadros told the boosters to target specific stores at specific locations, and advised them of the best days to steal merchandise and the manner by which they modified their Maryland driver’s licenses. Tadros also collected the welfare benefit debit cards of the boosters which he held as collateral if he deemed that the boosters owed him money, and returned the benefit cards to the boosters for 50% of the card’s value. Tadros used the gift cards to purchase personal home goods, and supplies for his businesses and rental properties.
On February 27, 2013, the U.S. Secret Service executed a search warrant and seized 32 fraudulently obtained gift cards from his home. Agents also seized 329 retail store receipts from Busy Bee, for purchases made with fraudulently obtained gift cards.
The actual loss to retailers in Maryland caused by the scheme is at least $401,326.12.
Melissa Perry, age 34; Deanna Lynch, age 44; Mohamed Al-Omeri, age 39; Steven Riley, age 50; and Mark Brunelle, age 47, previously pleaded guilty to their participation in the scheme. Brunelle was sentenced to 51 months in prison and ordered to pay over $210,000 in restitution. Perry and Lynch were sentenced to 30 months and 18 months in prison, respectively, and were ordered to pay restitution of $401,326.12. Al-Omeri was sentence to one year of probation and ordered to pay restitution of $35,000. Steven Riley is scheduled to be sentenced on August 15, 2014.
United States Attorney Rod J. Rosenstein praised the U.S. Secret Service - Baltimore Field Office for its work in the investigation, and commended the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office for its assistance. Mr. Rosenstein thanked Assistant United States Attorney Mark W. Crooks, who prosecuted the case.
Armed Career Criminal Enhancement - Snow Hill Man Sentenced for Possession of Firearm by A FelonRead the Press Release
WILMINGTON - United States Attorney Thomas G. Walker announced that in federal court today Senior United States District Judge James C. Fox sentenced EZEKIEL DONJA GARDNER, 33,of Snow Hill, North Carolina, to 262 months in prison followed by 5 years of supervised released for possession of firearm by a convicted felon. GARDNER was convicted during a jury trial on October 15, 2013.
On January 13, 2011, the Farmville Police Department stopped a car being driven by GARDNER after receiving information from an informant that GARDNER was in possession of a firearm. Officers found a 9 millimeter pistol in the car after GARDNER admitted to having a firearm underneath the driver’s seat. GARDNER was prohibited from possessing the firearm due to his prior state felony convictions, including three counts of common law robbery, three counts of breaking and entering, assault with a deadly weapon inflicting serious injury and malicious conduct by a prisoner. GARDNER’S sentence was enhanced under the provisions of the Armed Career Criminal Act based on these convictions.
The investigation of this case was conducted by the Farmville Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Greenville Police Department. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Another Houston Man Sentenced in Area Armored Car RobberiesRead the Press Release
HOUSTON – Allen Moore Jr., 47, of Dallas, has been ordered to federal prison for 20 years following his convictions for discharging his firearm during an attempted robbery of an armored car operating in and around Houston, announced United States Attorney Kenneth Magidson.
Today, U.S. District Judge Gray H. Miller handed Moore a sentence of 120 months for interference with commerce by robbery and a consecutive 120 months for discharging a firearm during the crime. Following completion of his 20-year sentence, Moore will be on supervised release for five years.
Four others also charged in the case - Walter Keitric Freeman, 25, Chad Eric Haywood, 25, and Corinthians Lachell Phillips, 29, all of Houston, and Hendrick Dwayne Lynn, 31, of Houston – all previously also entered guilty pleas and were sentenced for their roles in the crimes. Haywood was convicted of two counts of interference with commerce by robbery and sentenced to 60 months in addition to a consecutive term of 120 months for discharging a firearm during a crime of violence for a total of 180 months. Freeman was sentenced to 57 months for his conviction of conspiracy to interfere with commerce by robbery as well as a consecutive sentence of 120 months for discharging of a firearm during the commission of a crime of violence for a total of 177 months. Phillips was convicted of the conspiracy charge and sentenced to 97 months. Lynn was convicted of the conspiracy charge and the attempted robbery and robbery of the two armored cars and sentenced 60 months.
Loomis Armored US Inc., who operated the trucks during the alleged robbery and robbery attempt, maintains offices throughout the United States and was engaged in the business of secured armored transport of United States currency in interstate commerce and in picking up and delivering United States currency to financial institutions and check cashing businesses, both of which are industries which affect interstate commerce.
Lynn, Haywood and Moore were charged with their involvement in the Aug. 7, 2009, attempted robbery of a Loomis armored truck at the Bank of America at 3704 Old Spanish Trail in Houston. Lynn drove to the location, at which time Haywood and Moore, who were armed with Glock pistols, jumped out and shot at the guard. The guard, who has since recovered, had been filling an ATM machine, but it was already locked and, therefore, no money was obtained.
The second incident occurred on Nov. 21, 2009, at which time another guard was shot. On that date, Lynn drove Freeman and Haywood to Senor Check Cashing Store #2 located at 5950 S. Gessner Rd. in Houston. Freeman fired his pistol and shot in the direction of the guard. The guard was hit, but survived. On that same date, Phillips drove a second vehicle to the Gessner location and, following the robbery, switched vehicles with Haywood, Freeman and Lynn.
The case was investigated by the FBI’s Bank Robbery Task Force and is being prosecuted by Assistant United States Attorney Jennie Basile.
Anamosa Man Plead Guilty to Manufacturing Methamphetamine Near A SchoolRead the Press Release
Zackery Lee Smock, age 36, from Anamosa, Iowa, pled guilty to one count of attempted manufacture of methamphetamine by a drug felon near a school on July 1, 2014, in federal court in Cedar Rapids.
At the plea hearing, Smock admitted that, on March 7, 2014, he attempted to manufacture methamphetamine at a residence in Anamosa. During the course of his manufacturing, he started a fire at the residence. The residence was within 1000 feet of St. Patrick’s school in Anamosa.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Smock remains in custody of the United States Marshal pending sentencing. Smock faces a mandatory minimum sentence of one year imprisonment and a possible maximum sentence of 60 years’ imprisonment, a $4,000,000 fine, a $100 special assessment, and at least six years of supervised release following any imprisonment.
The case is being prosecuted by Special Assistant United States Attorney Lisa C. Williams and was investigated by the Anamosa Police Department, Anamosa Fire Department, Iowa Division of State Fire Marshal, and the Iowa Division of Narcotics Enforcement.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-cr-57.
Activity for July 1, 2014Read the Press Release
Cheyenne, WY Man, formerly out of Havre, Montana, Convicted for Felon in Possession of a Firearm
U.S. Attorney Christopher A. Crofts announced today that Brian Hayden Allen, formerly of Havre, Montana and currently a Cheyenne, Wyoming resident, was convicted in federal court. A jury found Allen guilty of “Felon in Possession of a Firearm” after a three-day jury trial in the U.S. District Court in Casper. Allen will be sentenced by Federal District Court Judge Scott Skavdahl on September 4, 2014.
The investigation in this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, along with the Cheyenne Police Department and Laramie County Sheriff’s Office.
30 June 2014
Virginia Man Sentenced to 18-Month Prison Term for Failing to Register as A Sex OffenderRead the Press Release
WASHINGTON – Stanley McCord, 42, of Alexandria, Va., has been sentenced to 18 months in prison on a federal charge of failure to register as a sex offender, U.S. Attorney Ronald C. Machen Jr. and Michael Hughes, U.S. Marshal for the Superior Court of the District of Columbia, announced today.
McCord has one prior conviction in Texas for a sex offense involving a minor victim, which requires him to register as a sex offender. According to the government’s evidence, McCord was registering as a sex offender in the District of Columbia, but, between April 2012 and February 2013, he lived in Alexandria, Va., and did not register that information with the District of Columbia.
McCord pled guilty in April 2014 in the U.S. District Court for the District of Columbia to failure to register as a sex offender. He was sentenced on June 27, 2014, by the Honorable Richard J. Leon. His prison term is to be followed by 10 years of supervised release. Also, upon completion of his prison term, McCord will face a warrant for a probation violation in Texas.
As part of an overall strategy to combat child exploitation, the U.S. Marshals Service launched a nationwide operation in 2010 to target sex offenders who knowingly fail to comply with their sex offender registration requirements. The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act in 2006. The Adam Walsh Act also provides for the use of federal law enforcement resources, including the U.S. Marshals Service, to assist the states in locating and apprehending non-compliant sex offenders.
In announcing the sentence, U.S. Attorney Machen and U.S. Marshal Hughes praised the members of the D.C. Superior Court Sex Offender Investigations Section of the U.S. Marshals Service, who investigated the case, and Assistant U.S. Attorney Ari Redbord, who prosecuted the case.
14-155United States Attorney Announces Selection of Monitor in Miron Case and Describes Remedial Reasons and Purposes for MonitoringRead the Press Release
United States Attorney James L. Santelle announced today that Stephen C. VanderBloemen, CPA, CFF, has been selected as the monitor who will oversee Miron Construction Company, Inc. as required by the Non-Prosecution Agreement (NPA) between Miron and the United States of America. The Non-Prosecution Agreement, pursuant to which Miron made a $ 4 million dollar payment to the United States of America, was announced on April 16, 2014. Mr. VanderBloemen’s work as the monitor on Miron is expected to begin immediately.
Mr. VanderBloemen is the managing partner of The VanderBloemen Group. He has more than 43 years of experience in public accounting, including 41 years serving primarily construction contractors, construction suppliers, credit grantors to contractors (sureties and bankers), and construction industry associations. His group, the VanderBloemen Group CPAs & CFFs (TVG), has earned a national reputation for excellence and operates from offices located in Waukesha, Mayville, Fond du Lac, and Juneau, Wisconsin. TVG provides a wide range of services to contractors, including assistance with project estimating, contract management, project compliance, monitoring, and accounting.
Mr. VanderBloemen is a graduate of Concordia College, attended graduate school at Marquette University, and has shared his expertise through the teaching of others at the Milwaukee School of Engineering, focusing on that academic institution’s Construction Management Degree Program. Mr. VanderBloemen also devotes more than 100 hours of his time each year to construction industry-related training courses through organizations like the Associated General Contractors (AGC) of America. He is a published author in multiple journals and the co-author of the AGC of America’s “Construction Estimating & Bidding - Theory, Principles, Process” (Text Book 1st and 2nd Editions). Mr. VanderBloemen has also been a featured speaker at National AGC events.
In announcing Mr. VanderBloemen’s appointment, United States Attorney Santelle addressed the reasons why the United States Department of Justice required a monitor in this case. Specifically, United States Attorney Santelle explained that a criminal investigation, led by the Federal Bureau of Investigation, revealed that Miron had been obtaining funds from school districts by intentionally inflating the wages Miron allegedly had paid its employees. United States Attorney Santelle stated further that an in-depth analysis of five particular school district projects and a random sampling from a pool of approximately 150 total school projects showed clearly that, when Miron billed school districts for “actual wages paid,” contrary to the express language and terms of its contracts, Miron systematically and intentionally added not only overhead costs but also a hidden profit “multiplier” totaling up to an additional 45%. United States Attorney Santelle explained that the remedial work of the appointed monitor would help to ensure that Miron ceased its practice of intentionally overbilling school districts in this manner.
United States Attorney Santelle added that the monitor would also be responsible for helping to ensure that Miron would no longer engage in “cost smoothing.” In this regard, United States Attorney Santelle explained that the criminal investigation revealed that Miron routinely transferred costs from less profitable projects to unrelated projects that could absorb the additional costs and still appear to be profitable. The result of this conduct was that all of Miron’s projects appeared profitable to outsiders. As revealed by the investigation, this “cost smoothing” also allowed Miron to close the discrepancies in its accounting records that were caused by Miron’s inflation of labor costs in its bills to public school districts. Without “cost smoothing,” Miron’s financial statements on the school projects could not be reconciled with its inflated school district billings, Santelle explained.
Finally, United States Attorney Santelle confirmed that Miron recently paid the United States the $ 4 million sum required by the NPA and that the United States is in the process of distributing that money to the five school districts identified in that agreement.
U.S. Bank to Pay $200 Million to Resolve Alleged FHA Mortgage Lending ViolationsRead the Press Release
U.S. Bank has agreed to pay the United States $200 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today.
“By misusing government programs designed to maintain and expand homeownership, U.S. Bank not only wasted taxpayer funds, but inflicted harm on homeowners and the housing market that lasts to this day,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “As this settlement shows, we will continue to hold accountable financial institutions that violate the law by pursuing their own financial interests at the expense of hardworking Americans.”
“U.S. Bank ignored certain lending requirements causing substantial losses to taxpayers,” said United States Attorney for the Northern District of Ohio Steven M. Dettelbach. “This settlement demonstrates that the Department of Justice will not permit lenders to play fast and loose with the rules and stick the American people with their significant tab.”
“U.S. Bank’s lax mortgage underwriting practices contributed to home foreclosures across the country,” said United States Attorney for the Eastern District of Michigan Barbara L. McQuade. “This settlement recovers funds for taxpayers and demonstrates that lenders will be held accountable for engaging in irresponsible lending practices.”
During the time period covered by the settlement, U.S. Bank participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and certify mortgages for FHA insurance. If a loan certified for FHA insurance later defaults, the holder of the loan may submit an insurance claim to the U.S. Department of Housing and Urban Development (HUD), FHA’s parent agency, for the losses resulting from the defaulted loan. Because FHA does not review a loan before it is endorsed for FHA insurance, FHA requires a DEL to follow program rules designed to ensure that the DEL is properly underwriting and submitting mortgages for FHA insurance.
As part of the settlement, U.S. Bank admitted that, from 2006 through 2011, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements. U.S. Bank also admitted that its quality control program did not meet FHA requirements, and as a result, it failed to identify deficiencies in many of the loans it had certified for FHA insurance, failed to self-report many deficient loans to HUD, and failed to take the corrective action required under the program. U.S. Bank further acknowledged that its conduct caused FHA to insure thousands of loans that were not eligible for insurance and that the FHA suffered substantial losses when it later paid insurance claims on those loans.
“This substantial recovery on behalf of the Federal Housing Administration should serve as a vivid reminder of the potential consequences of not following HUD program rules, and the diligence with which we will pursue those that violate them, particularly where lenders such as U.S. Bank take actions to compromise the insurance fund,” said David A. Montoya, Inspector General of the Department of Housing and Urban Development.
“We are gratified that U.S. Bank has agreed to put this matter behind it, and we want to thank the Department of Justice and HUD’s Office of Inspector General for all of their efforts in helping us make this settlement a reality,” said Damon Smith, Acting General Counsel for the U.S. Department of Housing and Urban Development. “This settlement underscores our consistent message that following Federal Housing Administration rules for underwriting FHA-insured loans is a requirement, not an option.”
The agreement resolves potential violations of federal law based on U.S. Bank’s deficient origination of FHA insured mortgages. The agreement does not prevent state and federal authorities from pursuing enforcement actions for other origination conduct by U.S. Bank, or for any servicing or foreclosure conduct, including civil enforcement actions against U.S. Bank for violations of the CFPB’s new mortgage servicing rules that took effect on Jan. 10, 2014. U.S. Bank is a banking services company headquartered in Cincinnati, Ohio, and a wholly owned subsidiary of U.S. Bancorp, a bank holding company headquartered in Minneapolis, Minnesota.
The settlement was the result of a joint investigation conducted by HUD, its Office of Inspector General, the Civil Division of the Department of Justice, and the United States Attorney’s Offices for the Northern District of Ohio and the Eastern District of Michigan.
The settlement is part of enforcement efforts by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force, visit: www.stopfraud.gov .14-684
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Statement of FactsU.S. Bank to Pay $200 Million to Resolve Alleged FHA Mortgage Lending ViolationsRead the Press Release
U.S. Bank has agreed to pay the United States $200 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today.
“By misusing government programs designed to maintain and expand homeownership, U.S. Bank not only wasted taxpayer funds, but inflicted harm on homeowners and the housing market that lasts to this day,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “As this settlement shows, we will continue to hold accountable financial institutions that violate the law by pursuing their own financial interests at the expense of hardworking Americans.”
“U.S. Bank ignored certain lending requirements causing substantial losses to taxpayers,” said United States Attorney for the Northern District of Ohio Steven M. Dettelbach. “This settlement demonstrates that the Department of Justice will not permit lenders to play fast and loose with the rules and stick the American people with their significant tab.”
“U.S. Bank’s lax mortgage underwriting practices contributed to home foreclosures across the country,” said United States Attorney for the Eastern District of Michigan Barbara L. McQuade. “This settlement recovers funds for taxpayers and demonstrates that lenders will be held accountable for engaging in irresponsible lending practices.”
During the time period covered by the settlement, U.S. Bank participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and certify mortgages for FHA insurance. If a loan certified for FHA insurance later defaults, the holder of the loan may submit an insurance claim to the U.S. Department of Housing and Urban Development (HUD), FHA’s parent agency, for the losses resulting from the defaulted loan. Because FHA does not review a loan before it is endorsed for FHA insurance, FHA requires a DEL to follow program rules designed to ensure that the DEL is properly underwriting and submitting mortgages for FHA insurance.
As part of the settlement, U.S. Bank admitted that, from 2006 through 2011, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements. U.S. Bank also admitted that its quality control program did not meet FHA requirements, and as a result, it failed to identify deficiencies in many of the loans it had certified for FHA insurance, failed to self-report many deficient loans to HUD, and failed to take the corrective action required under the program. U.S. Bank further acknowledged that its conduct caused FHA to insure thousands of loans that were not eligible for insurance and that the FHA suffered substantial losses when it later paid insurance claims on those loans.
“This substantial recovery on behalf of the Federal Housing Administration should serve as a vivid reminder of the potential consequences of not following HUD program rules, and the diligence with which we will pursue those that violate them, particularly where lenders such as U.S. Bank take actions to compromise the insurance fund,” said David A. Montoya, Inspector General of the Department of Housing and Urban Development.
“We are gratified that U.S. Bank has agreed to put this matter behind it, and we want to thank the Department of Justice and HUD’s Office of Inspector General for all of their efforts in helping us make this settlement a reality,” said Damon Smith, Acting General Counsel for the U.S. Department of Housing and Urban Development. “This settlement underscores our consistent message that following Federal Housing Administration rules for underwriting FHA-insured loans is a requirement, not an option.”
The agreement resolves potential violations of federal law based on U.S. Bank’s deficient origination of FHA insured mortgages. The agreement does not prevent state and federal authorities from pursuing enforcement actions for other origination conduct by U.S. Bank, or for any servicing or foreclosure conduct, including civil enforcement actions against U.S. Bank for violations of the CFPB’s new mortgage servicing rules that took effect on Jan. 10, 2014.
U.S. Bank is a banking services company headquartered in Cincinnati, Ohio, and a wholly owned subsidiary of U.S. Bancorp, a bank holding company headquartered in Minneapolis, Minnesota.The settlement was the result of a joint investigation conducted by HUD, its Office of Inspector General, the Civil Division of the Department of Justice, and the United States Attorney’s Offices for the Northern District of Ohio and the Eastern District of Michigan.
The settlement is part of enforcement efforts by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force, visit: www.stopfraud.gov.
U.S. Attorney Vance Takes Part in White House Recognition of 'Champions' of Re-entry ServicesRead the Press Release
WASHINGTON, D.C. -- Northern District of Alabama U.S. Attorney Joyce White Vance participated in today's White House event focusing on the important connection between expanding employment opportunities for people leaving prison and their ability to successfully re-enter society.
Vance was one of three of the nation's 93 U.S. attorneys who represented the Department of Justice at the White House's daylong program on ex-offender re-entry. The day concluded with U.S. Attorney General Eric Holder joining White House officials to honor local "Champions of Change" who are doing extraordinary work to facilitate job opportunities for individuals coming out of prison. According to the White House, the Champions have distinguished themselves through their extraordinary dedication and hard work to help those with criminal records re-enter society with dignity and viable employment opportunities.
"Our lives will be better if the lives of the 12,000 people who return to the community each year from Alabama prisons and jails are better," Vance said. "If we put them in a position to succeed, our communities can be safer and we can put more of our resources into education and our communities, instead of into prisons."
Vance currently is a member of the attorney general's Federal Interagency Re-entry Council. Twenty federal agencies work on the council to make communities safer by reducing criminal recidivism. Among U.S. Attorneys, Vance has been a leader in advocating for re-entry programs and criminal justice reform. Vance organized the North Alabama Re-entry Council, through which her office coordinates with federal, state, and community agencies to improve re-entry outcomes within Alabama. The Northern District of Alabama's ongoing efforts center on collaborating with state and local partners to remove barriers to successful re-entry. Some of the worst barriers are limited job opportunities, lack of a driver's license, and restricted access to housing. Within the past three years, Alabama has received federal grants to improve community supervision, job skills, and access to medication for ex-offenders.
Before this afternoon's Champions of Change recognition, the White House co-hosted a seminar with the Council of State Governments Justice Center titled, Pathways to Prosperity: How Public and Private Sectors Can Put People with Criminal Records to Work. The first session brought together business leaders to explore how governmental actions can affect private sector efforts to integrate people with criminal records into the workforce. The second session included corrections and workforce development professionals from across the country to discuss the latest strategies for improving employment outcomes for adults with criminal records, and ways to engage business leaders in those efforts.
Currently, the Council of State Governments is coordinating with Alabama state officials to develop solutions to reduce crime rates and corrections costs through a policy of justice reinvestment. CSG reports that similar justice reinvestment initiatives implemented in 20 other states have resulted in reduced crime rates, prison closures, and an approximate $5 billion in projected savings to state governments.
Two Prince George’s County Women Each Sentenced to over 2 Years in Prison for Mortgage Fraud SchemesRead the Press Release
Separate Fraud Schemes Resulted in Over $2.5 Million in Losses and at Least 25 Individual and Corporate Victims
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Rhonda Scott, age 52, of Oxon Hill, Maryland, today to 30 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with two separate mortgage fraud schemes which resulted in losses of over $2.5 million. Judge Bredar also entered an order that Scott forfeit $2.7 million and pay restitution of $703,000.Judge Bredar also sentenced co-defendant Niesha Williams, age 34, of Fort Washington, Maryland today to 27 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with one of the mortgage fraud schemes. Judge Bredar also ordered that Williams forfeit $3.1 million and pay restitution of $1,445,593
The sentences were 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; Principal Deputy Inspector General Fred W. Gibson, Jr. of the Federal Deposit Insurance Corporation; Special Agent in Charge Cary A. Rubenstein of the Housing and Urban Development Office of Inspector General; Special Agent in Charge Gene E. Morrison, Washington Field Office, U.S. Department of Justice Office of the Inspector General; Howard County Police Chief William McMahon; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; and Howard County State’s Attorney Dario Broccolino.
According to their plea agreements, beginning in 2008, Scott participated in several fraudulent real estate transactions that settled at M&R Title, Inc. located in Alexandria, Virginia, and at Sanford Title Services, located in Columbia, Maryland. The fraudulent transactions at each title company were part of different conspiracies. In both schemes, Scott facilitated deals between her co-conspirators, recruited individuals that could be parties to the real estate transactions, received proceeds of the fraudulent transactions through a shell company designed to hide her receipt of the funds, sent money to co-conspirators and identified mortgage transactions that the co-conspirators could use to enrich themselves.
As part of the M&R Title conspiracy, Scott, Demetrius Peete and others deceived buyers, sellers and lenders to make it appear to sellers that they were selling their property at a low price, and to buyers and lenders that the property was being sold at a higher price. The co-conspirators created paperwork for two different sales of the property at the same time. The first sale was fraudulent because it was backdated, the buyer planned to immediately flip the property in a subsequent sale and the settlement statement listed a fake loan. In the second sale, the sales price was significantly increased and the settlement statement showed a large sum being disbursed to the lender to payoff an existing lien. In fact, those funds were improperly disbursed to the co-conspirators.As to the Sanford Title conspiracy, Scott, Peete, Bonnie Kraemer, Niesha Williams, Emeka Udeze and others used many fraudulent techniques, including: short sales in which the property would be sold for a higher price than the seller was aware of; sales of properties not owned by the seller, including properties Scott purported to own but in fact did not; multiple sales of the same property at the same time; the seller and/or buyer were shown different settlement statements and the conspirators used the difference in sales price to enrich themselves; and money that should have been paid to lien holders was instead disbursed to the co-conspirators. Williams facilitated deals between her co-conspirators, sent funds illegally obtained from real estate transactions to her co-conspirators, and identified mortgage transactions that the co-conspirators could use to enrich themselves.
Both of the M&R Title and Sanford Title fraud schemes involved at least 25 victims, including lenders, sellers and buyers of real estate, title insurance companies and lien holders. The reasonably foreseeable loss associated with Scott’s conduct was at least $2.5 million. The loss associated with Williams’ offenses was at least $3.1 million.
Bonnie Kathleen Kreamer, a/k/a Bonnie Meehan, age 49, of Riva, Maryland; Emeka Udeze, age 39, of Bowie, Maryland; Shola Risikat Balogun, age 48, of Upper Marlboro; Gregory Green, age 49, of Waldorf, Maryland; and Demetrius Peete, age 46, of Manassas, Virginia, each previously pleaded guilty to their roles in the fraud schemes. Kreamer, who was responsible for the daily operations at Sanford Title, was sentenced on April 25, 2014 to 51 months in prison, and ordered to pay restitution of $2,499,048 to the victims and to forfeit $4.8 million. Green was previously sentenced to three months in prison and ordered to pay restitution of $404,596. The other conspirators await sentencing.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage Fraud/index.html.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.United States Attorney Rod J. Rosenstein commended the FBI, U.S. Secret Service, FDIC, HUD-OIG, Department of Justice OIG, Howard County Police Department and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Harry Gruber and Special Assistant United States Attorney Colleen McGuinn assigned to this case from the Howard County State’s Attorney’s Office, who prosecuted the case.
Ten Taken into Custody for Drug ViolationsRead the Press Release
CONCORD, NEW HAMPSHIRE – Ten individuals were arrested by federal, state and local authorities, announced United States Attorney John P. Kacavas.
The arrests are the result of a year-long investigation conducted by state and federal authorities into allegations of marijuana, cocaine, and methylenedioxymethamphetamine (MDMA) distribution in New Hampshire.
Based on intelligence gathered by law enforcement, the Drug Enforcement Administration and the New Hampshire State Police conducted surveillance, undercover purchases of drugs, consensual monitoring of controlled purchases, and judicially approved wiretaps to identify and arrest the following individuals in connection with the distribution network.
(1) Alkis Nakos, age 35, of 366 Arah Street, Manchester, New Hampshire, was arrested and for engaging in a conspiracy to distribute controlled substances, in violation of Title 21, United States Code, Section 846, distribution of controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), and use of a communication facility to facilitate the distribution of controlled substances, in violation of Title 21, United States Code, Section 843(b);
(2) Kosmas Koustas, age 35, of 1465 Hooksett Road, Hooksett, New Hampshire, was arrested and for engaging in a conspiracy to distribute controlled substances, in violation of Title 21, United States Code, Section 846, distribution of controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), and use of a communication facility to facilitate the distribution of controlled substances, in violation of Title 21, United States Code, Section 843(b);
(3) Charles Fowle, age 35, of 267 Waverly Street, Hooksett, New Hampshire, was arrested and for engaging in a conspiracy to distribute controlled substances, in violation of Title 21, United States Code, Section 846, distribution of controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), and use of a communication facility to facilitate the distribution of controlled substances, in violation of Title 21, United States Code, Section 843(b);
(4) Frank Fowle, age 36, of 330 Milford Street, Manchester, New Hampshire, was arrested and for engaging in a conspiracy to distribute controlled substances, in violation of Title 21, United States Code, Section 846, distribution of controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), and use of a communication facility to facilitate the distribution of controlled substances, in violation of Title 21, United States Code, Section 843(b);
(5) Christopher Ranfos, age 36, of 241 Boutwell Road, Manchester, New Hampshire, was arrested and for engaging in a conspiracy to distribute controlled substances, in violation of Title 21, United States Code, Section 846, distribution of controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), and use of a communication facility to facilitate the distribution of controlled substances, in violation of Title 21, United States Code, Section 843(b);
(6) Kristopher Venturini, age 35, of 374 Thornton Street, Manchester, New Hampshire, was arrested and for engaging in a conspiracy to distribute controlled substances, in violation of Title 21, United States Code, Section 846, distribution of controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), and use of a communication facility to facilitate the distribution of controlled substances, in violation of Title 21, United States Code, Section 843(b);
(7) Marc Guillemette, age 37, of 255 Waverly Street, Manchester, New Hampshire, was arrested and for engaging in a conspiracy to distribute controlled substances, in violation of Title 21, United States Code, Section 846, distribution of controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), and use of a communication facility to facilitate the distribution of controlled substances, in violation of Title 21, United States Code, Section 843(b);
(8) John Horne, Jr., age 32, of 301 Prescott Road, Epping, New Hampshire, was arrested and for engaging in a conspiracy to distribute controlled substances, in violation of Title 21, United States Code, Section 846, distribution of controlled substances, in violation of Title 21, United States Code, Section 841(a)(1), and use of a communication facility to facilitate the distribution of controlled substances, in violation of Title 21, United States Code, Section 843(b); and
(9) Jonathan Venturini, age 32, of 516 Notre Dame Avenue, Manchester, New Hampshire, was arrested and for engaging in a conspiracy to distribute marijuana, in violation of Title 21, United States Code, Section 846, distribution of marijuana, in violation of Title 21, United States Code, Section 841(a)(1), and aiding and abetting the distribution of marijuana, in violation of Title 18, United States Code, Section 2.
(10) Jonathan Handschumaker, was arrested and for engaging in a conspiracy to distribute marijuana, in violation of Title 21, United States Code, Section 846, distribution of marijuana, in violation of Title 21, United States Code, Section 841(a)(1), and aiding and abetting the distribution of marijuana, in violation of Title 18, United States Code, Section 2.
Search warrants and seizures were executed in connection with the investigation that resulted in the seizure of approximately 30 pounds of marijuana, $85,000 in United States currency, paraphernalia associated with drug distribution such as digital scales and money counting machines, and firearms including a machine gun with a silencer, numerous handguns and hundreds of rounds of ammunition.
The investigation was conducted by the Drug Enforcement Administration, the New Hampshire State Police, and the Manchester, New Hampshire, Police Department. The arrests consisted of a joint federal, state and local effort. Members of the arrest teams included the: (1) Drug Enforcement Administration; (2) Federal Bureau of Investigation; (3) Immigration and Customs Enforcement; (4) United States Marshals Service; (5) New Hampshire State Police; (6) the Manchester, New Hampshire, Police Department; and (7) New Hampshire Liquor Enforcement.
Supporting Documents in U.S. V. BNP ParibasRead the Press Release
BNP Paribas Information
BNP Paribas Statement of Facts
BNP Paribas Notice of Intent
BNP Paribas Plea Agreement
BNP Paribas Consent Preliminary Order of ForfeitureStatement of Manhattan U.S. Attorney Preet BhararaOn the Guilty Plea by BNP ParibasRead the Press Release
"BNPP banked on never being held to account for its criminal support of countries and entities engaged in acts of terrorism and other atrocities. But that is exactly what we do today. BNPP, the world's fourth largest bank, has agreed to plead guilty and pay penalties of almost $9 billion for performing the hat trick of sanctions violations, unlawfully opening the doors of the U.S. financial markets to three sanctioned countries, Sudan, Iran, and Cuba. For years, BNPP provided access to billions of dollars to these sanctioned countries, as well as to individuals and groups specifically identified and designated by the U.S. government as being subject to sanctions. The bank did so deliberately and secretly, in ways designed to evade detection by the U.S. authorities. For its years-long and wide-ranging criminal conduct, BNPP will soon plead guilty in a federal courthouse in Manhattan."
St. Francis Man Sentenced for Simple AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota, man charged with Simple Assault pled guilty to and was sentenced on June 27, 2014, by U.S. Magistrate Judge Mark A. Moreno.
Jeremy Iron, age 29, was sentenced to 2 years of probation, and $10 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on February 16, 2014, when Iron returned home to the residence that he shared with the victim and her children. There was an argument and Iron knocked the phone out of the victims hand and assaulted her.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Tim Maher.
Iron was released from custody.
SoCal Man Who Attempted to Assist Al-Qai'da by Providing Weapons Training to Fighters in Pakistan Sentenced to 13 Years in PrisonRead the Press Release
LOS ANGELES – An Orange County man who admitted that he intended to assist al-Qai'da by traveling to Pakistan, where he would provide weapons training to members of the terrorist group, was sentenced this morning to 13 years in federal prison.
Sinh Vinh Ngo Nguyen, 25, of Garden Grove, California, was sentenced by United States District Judge John F. Walter, who called the crime “a very serious offense that requires a correspondingly long sentence.”
Nguyen pleaded guilty late last year to one count of attempting to provide material support to a designated foreign terrorist organization. Nguyen, who also used the name Hasan Abu Omar Ghannoum, admitted that in late 2012 he travelled to Syria where he joined opposition forces. Using a social network site during a four-month period he was in Syria, Nguyen told people that he was fighting against the Assad regime and that he had had a “confirmed kill.” After he returned to the United States, Nguyen told associates that he had offered to train al-Qai'da forces in Syria, but his offer had been turned down.
Between August 3 and October 11, 2013 Nguyen met with a man he thought was an al-Qai'da recruiter, but who in fact was working with the FBI. Within the first few minutes of their first meetings, Nguyen began questioning the man to determine if he was a fellow jihadist, according to a plea agreement filed in federal court. Nguyen told the man about his exploits in Syria and said he wanted to return to jihad because “this was what he was born to do.” During their meetings, Nguyen and the man he thought was an al-Qai'da recruiter discussed how Nguyen could travel to Pakistan under a fraudulently obtained United States passport. After Nguyen gave the purported recruiter a photo of himself and a passport application with bogus information, Nguyen agreed to travel to Pakistan, where he would train 30 al-Qai'da fighters for 5 or 6 weeks to prepare them "for a guerilla warfare ambush attack on coalition forces" that would take place in late 2013, according to the plea agreement.
With the intention to travel to Pakistan to train al-Qai'da forces for the ambush, Nguyen on October 1 purchased a plane ticket to travel from Mexico to Peshawar, Pakistan. On October 11, 2013, Nguyen went to a bus station in Santa Ana where he purchased a ticket to Mexico and was arrested by FBI agents. When he was taken into custody, Nguyen had in his possession the false passport and a computer hard drive that contained “over 180 training videos on shooting firearms.”
Nguyen has been in federal custody since his arrest.
The case against Nguyen is the product of an investigation by the Federal Bureau of Investigation and the Joint Terrorism Task Force.
Release No. 14-080
Second Mexican National Pleads Guilty in Bakersfield Stash House CaseRead the Press Release
FRESNO, Calif. — Gamaliel Salas-Mendoza, aka Rene Salas Mendoza (Salas), 38, of Mexico, pleaded guilty today to conspiracy to distribute and to possess with the intent to distribute methamphetamine, heroin, and cocaine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Salas and Miguel Sanchez-Mendoza (Sanchez), 46, also of Mexico, maintained a stash house in Bakersfield where law enforcement officers seized seven pounds of methamphetamine, one and a half pounds of cocaine, and one half pound of heroin, all packaged for sale. In addition to the drugs, officers found digital scales, cutting agents, a kilogram press, and $9,483 in cash, which has been forfeited.
Sanchez previously entered a guilty plea to the drug conspiracy and was sentenced last month to an eight-year prison term.
This case was the product of an investigation by the U.S. Drug Enforcement Administration, Kern County Sheriff’s Office Narcotics Enforcement Team, Kern County Sheriff’s Office Major Violators Unit, and the California Multijurisdictional Methamphetamine Enforcement Team. Assistant United States Attorney Karen A. Escobar is prosecuting the case.
Salas is scheduled to be sentenced by Senior U.S. District Judge Anthony W. Ishii on September 15, 2014. Salas faces a mandatory minimum prison term of 10 years, a maximum prison term of life and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. Both Salas and Sanchez are subject to deportation to Mexico following the completion of any prison term imposed.
Second Brother Sentenced to Prison in Methamphetamine ConspiracyRead the Press Release
HONOLULU – Joshua Lew, age 28, of Waialua, was sentenced today by United States District Judge J. Michael Seabright to 97 months imprisonment for being a member of a conspiracy to distribute and possess, with intent to distribute, 50 grams or more of methamphetamine. Lew’s brother and co-defendant, Jacob Drummondo-Farias, 31, also of Waialua, was previously sentenced on February 24, 2014 to 324 months in prison for being a manager and supervisor of the conspiracy.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to information presented in court, Lew and Drummondo-Farias agreed with other individuals to distribute methamphetamine that was sent from California, via express mail services, to Honolulu during 2011 and 2012. Pursuant to that agreement, Lew and Drummondo-Farias orchestrated the shipment of 890 grams of methamphetamine which was intercepted at the Honolulu Airport on January 26, 2012 by federal law enforcement authorities. Authorities arrested Lew after he returned to Hawaii from the Marshall Islands.
The investigation which resulted in the prosecution was conducted by the Drug Enforcement Administration Hawaii Airport Task Force and the United States Postal Service. Assistant U.S. Attorney Mark A. Inciong handled the prosecution.
San Diego Man Who Stole Identities of Deceased Children Convicted on All Countys of Identity Theft, Tax Evasion and False Statements to BanksRead the Press Release
Lloyd Irving Taylor, a San Diego tax attorney and Certified Public Accountant, was convicted by a federal jury today in a complex tax-evasion scheme involving the creation of bank accounts in the names of deceased children and fake churches.
Following a week-long trial, a jury deliberated for 30 minutes before reaching a verdict that rendered Taylor, 71, guilty of all 19 counts charged, including aggravated identity theft, false statements to a financial institution, tax evasion, corruptly endeavoring to impair or impede the IRS and making false statements on United States passport applications. The defendant has been in custody since his arrest in April of 2013.
According to evidence presented at trial, Taylor stole the identities of deceased children, used them as aliases and obtained fraudulent passports and other identification documents. He then used the passports and other documents to open and maintain multiple financial accounts in order to hide his income from the IRS and to transfer funds from these accounts to purchase various assets, such as gold coins. The purchase of gold coins was done, in part, to evade taxes.
Likewise, Taylor formed over a dozen fraudulent tax-exempt religious institutions and opened 31 related bank accounts, including investment accounts in the names of the fake churches, so his income could grow tax free.
Among the witnesses who testified at trial were the brother of one of the deceased children as well as a blind elderly woman whose social security number was stolen and used by the defendant. Also during the trial, prosecutors showed the jury death certificates of four deceased children, who died in the 1950s, and displayed $1.6 million in gold coins the defendant had hidden in a storage locker.
According to trial witnesses, Taylor failed to report $5 million in income during the span of the fraud, and he owed the IRS $1.6 million. During his 42 years of working, Taylor had filed a tax return just seven times, according to trial testimony.
At Taylor’s bond hearing in April, 2013, a judge ordered him detained while pending trial based on a number of circumstances, including his international travel on his false passports, the millions of dollars he controlled through dozens of bank accounts, and his numerous false statements to banks in furtherance of his criminal activity.
“We are very pleased with the jury’s quick and decisive verdict,” said U.S. Attorney Laura Duffy. “Lloyd Taylor was able to hide his money for a while, but his days of exploiting dead children and the elderly to line his pockets are over.”
“Mr. Taylor tried in every conceivable way to hide his income from the IRS—from hiding income in the names of his stolen identities and non-existent churches to converting income to gold coins,” said IRS Criminal Investigation’s Special Agent in Charge Erick Martinez. “This conviction sends a clear message that IRS Criminal Investigation is working hard to make sure that all taxpayers file and pay their fair share of taxes.”
“The U.S. Department of State’s Diplomatic Security Service is committed to the protection of the U.S. passport, and the investigation of those who would obtain and use it for illegal gain. DSS is pleased to have contributed the initial charges in this investigation, leading to the arrest, indictment and conviction of Taylor,” said DS Los Angeles Field Office Special Agent-in-Charge Robert Myers.
DEFENDANT Criminal Case No. 13CR1390-MMALloyd Taylor
Age: 71 San Diego, CA CHARGESCounts 1-3: Title 18, United States Code, Section 1542 – Making a False Statement on a United States Passport Application
INVESTIGATING AGENCIES
Maximum penalties: 10 years custody; $250,000 fine; $100 Special Assessment; 3 year supervised release.
Count 4: Title 26, United States Code, Section 7212 – Corrupt Endeavor to Impede and Impair the Due Administration of the Internal Revenue Laws
Maximum penalties: 3 years in prison, a fine up to $250,000, and term of supervised release of not more than 1 year.
Counts 5-6: Title 26, United States Code, Section 7201 – Tax Evasion
Maximum penalties: 5 years in prison, a fine of $250,000, and a term of supervised release of not more than 3 years.
Counts 7-13: Title 18, United States Code, Section1014 – False Statements to a Federally Insured Financial Institution
Maximum penalties: 30 years in prison, a fine of $1,000,000, and a term of supervised release of 5 years.
Counts 14-19: Title 18, United States Code, Section 1028A – Aggravated Identity Theft
Maximum penalties: 2 years consecutive to the sentence imposed for the underlying offense.San Diego Regional Fraud Task Force (multi-agency task force comprised of members of the United States Secret Service, the San Diego Police Department, and the San Diego District Attorney’s Office)
Internal Revenue Service
United States Department of State, Office of Diplomatic Security*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Retired Air Force Service Member Indicted for Stealing and Using Credit Cards of Fellow Service MembersRead the Press Release
SAN DIEGO – A retired Air Force senior master sergeant is charged in an indictment unsealed today with stealing credit cards from fellow service members on numerous San Diego area military installations, often while they exercised at base gymnasiums, and using the cards to make unauthorized purchases and obtain thousands of dollars in cash advances.
Christopher Dwan Underwood, 42, was indicted by a federal grand jury and arrested Friday. He made his first appearance in federal court this morning to face charges of wire fraud, bank fraud and aggravated identity theft. A bond hearing was set for July 3, 2014 at 10 a.m. before U.S. District Judge Gonzalo P. Curiel.
According to the indictment, Underwood had access to military installations because of his retiree status. He preyed on victims who left their personal belongings unattended during gym workouts on bases, and on more than 30 occasions he swiped military-issued credit and debit cards and victims’ personal information, such as dates of birth and social security numbers.
Government Travel Charge Cards, known as GTCCs, are authorized for use only when a cardholder is authorized to go on official military travel. Posing as the cardholders and using their personal information, Underwood called Citibank, the card issuer, to activate the cards. Once the cards were activated, he made over $20,000 in unauthorized purchases and cash advances, the indictment said.
DEFENDANTChristopher Dwan Underwood
Age: 42 San Diego, CA CHARGES18 U.S.C. § 1343 – Wire Fraud (30 years maximum sentence)
INVESTIGATING AGENCIES
18 U.S.C. § 1344 – Bank Fraud (30 years maximum sentence)
18 U.S.C. § 1028A – Aggravated Identity Theft (mandatory-minimum two-year sentence)Naval Criminal Investigative Service
Marine Corps Criminal Investigation Division
Navy Criminal Investigation Division*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Registered Sex Offender Sentenced to 20 Years for Sending Obscene Material to A MinorRead the Press Release
WICHITA, KAN. A registered sex offender was sentenced to 20 years in federal prison Monday for sending obscene material to a minor while he was a patient at Larned State Hospital, U.S. Attorney Barry Grissom said.
Christopher M. Case, 34, pleaded guilty to one count of transferring obscene material to a minor. In his plea, he admitted that he resided in the Sexual Predator Treatment Program of Larned State Hospital when he committed the crime. In mid-2011 he obtained access to a smartphone, which he shared with other residents. In December 2011 and January 2012 he learned that another resident of the program was using the smartphone to communicate with a 13-year-old female via email and chat. The girl was in Montana.
On January 16, 2012, Case used the smartphone to send the girl video of himself masturbating.
Grissom commended the Wichita Police Department=s Internet Crimes Against Children Task Force, Assistant U.S. Attorney Jason Hart and Assistant Attorney General Steve Karrer of Kansas Attorney General Derek Schmidt’s office for their work on the case.Project Save Our ChildrenRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Kansas City, Mo., man who has been living in Thailand was sentenced in federal court today for fleeing the United States in 2007 to avoid paying child support.
Randy Lee Essary, 61, of Springfield, Mo., was sentenced by U.S. District Judge Brian C. Wimes to 21 months in federal prison without parole. The court also ordered Essary to pay $170,891 in child support.
Essary was a resident of Chon Buri, Thailand, where he was employed as the senior vice president of development for Eclipse Hotels and Development, which is based in Manila, Philippines and in Hong Kong.
Essary, who pleaded guilty on Feb. 11, 2014, admitted that he has failed to pay any court-ordered child support for his son for more than nine years, since January 2005. Essary owes $170,891 in child support.
Essary was a resident of Missouri in 1996. On Feb. 9, 1996, the Jackson County Circuit Court ordered him to pay $1,500 in monthly child support payments for his son, who currently resides with his mother in Utah.
Essary’s last documented entry into the United States and exit thereafter was on Sept. 12, 2007, to attend his daughter’s wedding in Illinois. Essary did not fly directly into the United States for the wedding. Instead, Essary flew from Thailand or the Philippines to Canada. Border crossing records confirm Essary then walked across the border from Canada into the United States at Blaine, Wash. He returned to Thailand in the same manner – by walking across the border at Canada and flying back to Thailand.
Essary was arrested at LAX airport when he returned to the United States on Feb. 22, 2012.
This case was being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the Department of Health and Human Services, Office of Inspector General.
Project Save Our Children
Project Save Our Children is a multiagency law enforcement initiative that investigates and prosecutes the most egregious child support cases. Its members include investigative analysts from the Department of Health and Human Services, Office of Inspector General, the Administration for Children and Families (ACF) Office of Child Support Enforcement (OCSE), the U.S. Marshals Service, U.S. Attorneys' offices, and the Department of Justice, along with child support agencies across the United States. These entities identify, investigate, and prosecute noncustodial parents who knowingly fail to pay support obligations and meet the criteria for federal prosecution under the Deadbeat Parents Punishment Act. More information about federal child support enforcement is available at http://oig.hhs.gov/fraud/child-support-enforcement/Physician Sentenced for Medicare FraudRead the Press Release
FARGO – U.S. Attorney Timothy Q. Purdon announced that John C. Chen, 50, Seattle, Washington, was sentenced on June 30, 2014, before U.S. District Judge Ralph R. Erickson to one year of probation for unlawful possession of an identification feature. Chen, a physician, was also ordered to pay restitution of $56,642.52 to the Centers for Medicare and Medicaid Services, which he satisfied as part of $150,000.00 settlement of a parallel civil proceedings in the Western District of Washington alleging violations under the False Claims Act. Chen was ordered to pay a $25 special assessment to the Crime Victims Fund in addition to his sentence.
Chen pleaded guilty to one misdemeanor count of unlawful possession of an identification feature on June 30, 2014, related to certain claims he submitted to Medicare between 2007 and 2010 for patient services that were not rendered. Chen admitted in a plea agreement that he submitted claims for office visits that did not take place because the defendant was physically outside the United States. The claims, which originated from the Seattle area, were made through Noridian Administrative
Services, now known as Noridian Healthcare Solutions, LLC, a North Dakota based Medicare Administrative Contractor. As part of its responsibilities to Medicare, Noridian Healthcare Solutions, LLC, processes and pays Medicare claims arising from durable equipment suppliers throughout the State of Washington.The case was investigated by the Department of Health and Human Services, Office of Inspector General, Office of Investigations. The case was prosecuted by Special Assistant U.S. Attorney Matthew Greenley.
Palisade Man Sentenced to 15 Years for Producing Child PornographyRead the Press Release
Jerald Vrbas, age 60, of Palisade, Nebraska, was sentenced in United States District Court for producing child pornography. The Honorable John M. Gerrard committed Vrbas to the custody of the United States Bureau of Prisons for a term of fifteen (15) years. There is no parole in the federal penal system. After his release from prison Vrbas will be on supervised release for an additional fifteen years. The Court further noted that Vrbas will be in prison until age 75 and remain under supervision until age 90.
Vrbas took sexually explicit pictures of a three year old child in his home in Palisade. After taking the pictures he uploaded them to a Russian website where they could be viewed by others. The website reported the violation and the Internet Protocol address of the offending computer to the Department of Homeland Security. Further investigation determined that Vrbas had also distributed the images of the three year old child and other child pornography to an individual in Iowa and a second individual in Wauneta, Nebraska.
United States Attorney Deborah R. Gilg expressed her appreciation to Homeland Security Investigations and the North Platte Police Department for their thorough investigation. U.S. Attorney Gilg reiterated that the sexual exploitation of minors will not be tolerated and those who produce, distribute and possess child pornography will face harsh federal penalties for doing so.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Opelousas Man Pleads Guilty to Bankruptcy FraudRead the Press Release
LAFAYETTE, La. –An Opelousas man pleaded guilty to concealing his bail bonds business income during bankruptcy proceedings, U.S. Attorney Stephanie A. Finley announced today.
Kirby L. Daigle, 67, of Opelousas, La., entered a conditional guilty plea before U.S. Magistrate Judge C. Michael Hill to one count of making a false statement under penalty of perjury during bankruptcy proceedings. The plea will become final when accepted by U.S. District Judge Elizabeth E. Foote. According to evidence presented at the guilty plea, Daigle filed for Chapter 7 bankruptcy on December 22, 2009. On bankruptcy documents, under the section for income, he wrote “unemployed,” and under the section for income from operating a business, he wrote “none”. The incomes he did list were veteran’s benefits and Social Security disability payments. Daigle in fact owned a bail bonds business, and he wrote bonds and collected commissions on those bonds at the time he filed bankruptcy. He also used sub-producers to write bonds under his bonding license, and he was paid a fee when a sub-producer wrote a bond.
Daigle faces a maximum of five years in prison, three years of supervised release, and a $250,000 fine. Daigle’s sentencing was set for September 19, 2014.
The Social Security Administration conducted the investigation. Assistant U.S. Attorneys Robert C. Abendroth and Myers P. Namie are prosecuting the case.
Mission Man Sentenced for Assault by Striking, Beating and WoundingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man convicted of Assault by Striking, Beating, and Wounding was sentenced on June 26, 2014, by U.S. Magistrate Judge Mark A. Moreno.
Waylon Black Lance, Jr., age 24, was sentenced to 12 months in custody, 1 year of supervised release, and a $25 special assessment to the Federal Crime Victims Fund.
Black Lance was indicted by a federal grand jury on March 11, 2014, for First Degree Burglary, Assault with a Dangerous Weapon, and Assault Resulting in Serious Bodily Injury. He pled guilty to Assault by Striking Beating, and Wounding on May 13, 2014.
The conviction stems from an incident that took place on July 2, 2013, when Black Lance walked from his home to the home of the victim. After a verbal altercation started, Black Lance struck the victim on the head and in the face with his fists.
This case was investigated by Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers prosecuted the case.
Black Lance was immediately turned over to the custody of the U.S. Marshals Service.