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Monday 12 May 2014
Leader of Bryan Drug Distribution Ring Receives 212 MonthsRead the Press Release
HOUSTON - Donal Monta Amerson, 37, of Missouri City, has been ordered to federal prison for nearly 18 years for operating a cocaine and marijuana distribution organization in Bryan, announced United States Attorney Kenneth Magidson.
Amerson was indicted Sept. 27, 2010, and soon fled the Houston area. He was apprehended April 5, 2013, in the Dallas area by agents and officers of an FBI task force in Dallas. He pleaded guilty Nov. 25, 2013, to aiding and abetting possession with intent to distribute up to 100 kilograms of marijuana and more than 500 grams of cocaine.
Also charged were Jumond Anthony Burrell, 32, of Hearne, Zarick Banard Shivers, 34, and Johnnie Willie Hickman, 73, both of Bryan, and Bennie Ray Hawkins Jr., 25, of College Station. All pleaded guilty and have been sentenced to varying terms for their roles in the conspiracy.
During his sentencing hearing, Amerson challenged the manner in which the court calculated the amount of drugs distributed through the organization as well as the allegation that he was the organization’s leader.
U.S. District Judge Lynn N. Hughes rejected Amerson’s claims, finding that between December 2008 and April 2010, Amerson, through his organization, distributed hundreds of kilograms of cocaine onto the streets of Bryan.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI worked jointly with the Bryan Police Department in the investigation. Former Assistant U.S. Attorney (AUSA) Kenneth P. Dies prosecuted the case. AUSA Richard Hanes handled the sentencing.
Laurel Man Sentenced to 30 Years in Prison for Sex with A 7-Year OldRead the Press Release
Defendant Had Intercourse with Child and Took Pictures
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Anthony Palomino-Coronado, age 21, of Laurel, Maryland, today to 30 years in prison, followed by lifetime supervised release, for sexual abuse of a minor to produce child pornography. Judge Titus ordered that upon his release from prison, Coronado must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief Mark A. Magaw of the Prince George’s County Police Department; and Prince George’s County State’s Attorney Angela D. Alsobrooks.
“Child exploitation cases often turn your stomach, and this is one of them,” said U.S. Attorney Rod J. Rosenstein.
According to evidence presented at Coronado’s five day trial, on May 2, 2012, the Prince George’s County Police Department responded to a 911 call regarding a missing seven year old female child. During the subsequent search, at approximately 2:20 a.m., the child was found next to a privacy fence that separated the child’s residence from Coronado’s. At the base of the fence on Coronado’s side, officers found an empty condom wrapper. The child was not wearing any underwear and told officers that Coronado asked her to meet him at his house, then helped her get back into her yard when the police arrived.
Witnesses testified that during subsequent separate interviews with a sexual assault nurse, Prince George’s County Police detective and FBI child forensic interview specialist, the victim stated: that she had been to Coronado’s home, specifically his basement, 10 times; that Coronado had been engaging in sexual activity with her, including vaginal sex; and that Coronado had taken pictures of her, with and without her clothes on, with his black and red cellular telephone.
Trial evidence showed that a search warrant executed at Coronado’s residence recovered, among other things, a black and red cell phone, which contained a photo documenting Coronado’s sexual abuse of the child. A forensic examination established that the photo was taken on March 20, 2012, and had been deleted. In addition, six photos of the victim clothed, in the basement, and under the light of a flashlight were also found on the phone. Digital data established that these photos were taken on May 2, 2013, between 1:00 and 2:00 a.m. According to trial testimony, after his arrest the next day, Coronado denied engaging in sex activity with the victim, but admitted that during the night of May 2, 2012, the victim was at his home between 11:00 p.m. and 2:00 a.m., “playing games.”
During trial, on November 20, 2013, the victim testified that Coronado had engaged in sexually explicit conduct with her and identified herself and Coronado in the child pornography picture found on Coronado’s cell phone, as well as in the clothed pictures taken on May 2, 2012, in the basement of Coronado’s residence.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, Prince George’s County Police Department and the Prince George’s County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Special Assistant U.S. Attorney LisaMarie Freitas of the U.S. Justice Department, Criminal Division, Child Exploitation and Obscenity Section and Assistant U.S. Attorney Kristi N. O’Malley, who prosecuted the case.
Laser Strikes: Clovis Defendant Sentenced, Bakersfield Defendant Pleads GuiltyRead the Press Release
FRESNO, Calif. — Today, United States District Judge Lawrence J. O'Neill sentenced Jennifer Lorraine Coleman, 24, of Clovis, to two years in prison, to be followed by three years of supervised release, for aiming a laser pointer at a law enforcement aircraft, and Brett Lee Scott, 26, of Bakersfield, entered a guilty plea to the same crime, United States Attorney Benjamin B. Wagner announced.
Coleman and her boyfriend, Sergio Patrick Rodriguez, 26, of Clovis, were both convicted by a federal jury after a three–day trial in Fresno in December 2013.
“Coleman and Rodriguez demonstrated outrageous and willful disregard for the safety of aviators, Air George’s patients, and the public,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “The FBI and our state and local law enforcement partners are committed to locating, identifying, and arresting individuals who intentionally shine lasers at aircraft aloft, recklessly jeopardizing the safety of the communities we serve.”
According to evidence presented at trial, Coleman and Rodriguez used a high‑powered green laser pointer to repeatedly strike the cockpit of a Fresno Police helicopter, Air 1, during a clear summer night in 2012. Air 1 had responded to the apartment complex where Coleman and Rodriguez lived near the Fresno Yosemite International Airport, to investigate the report of laser strikes on Air George, an emergency transport helicopter for Children’s Hospital of Central California. The laser pointer that Coleman and Rodriguez used was 13 times more powerful than the permissible power emission level for hand-held laser devices. The crew members of both Air 1 and Air George testified that the laser strikes caused significant visual interference.
In imposing sentence, Judge O’Neill considered the opinion of Dr. Leon McLin, a Senior Research Optometrist for the Air Force Research Laboratory who testified at trial, that the laser pointer that Coleman used was an instrument capable of inflicting serious bodily injury and, indirectly, death due to a high potential for crash caused by visual interference.
Judge O'Neill found the high‑powered laser pointer was a dangerous weapon, and referring to the potential for a crash resulting from the pilots’ impaired vision stated, "I physically shudder to think of what could have happened."
The Coleman case was the product of an investigation by the Federal Bureau of Investigation, with assistance from the Clovis and Fresno Police Departments, Federal Aviation Administration, and the National Institute of Standards and Technology of the U.S. Department of Commerce. Assistant United States Attorneys Karen A. Escobar and Michael G. Tierney prosecuted the case.
In a separate laser case, Scott pleaded guilty to aiming a laser pointer at a Kern County Sheriff helicopter, also known as Air-1. Scott acknowledged that he used two different laser pointers to strike Air-1 over a six-month period. The lasers emitted powerful green and purple laser beams. As a result, the pilots of Air-1 suffered flash blindness that lasted a few minutes, causing disorientation. The pilots were ultimately able to pinpoint the origin of the beams and, with the help of patrol deputies, identified Scott as a suspect.
Sentencing for Scott is set for July 21, 2014. He faces a maximum statutory penalty of five years in prison and a $250,000 fine for aiming a laser pointer at Air-1. 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.
The case against Scott was the result of a joint investigation conducted by the FBI and Kern County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting this case.
According to the FAA, there were 3,960 reports of people shining lasers at aircraft in the United States in 2013. In the Eastern District of California, which encompasses 34 counties in the eastern portion of California, reported 94 laser strikes, with the largest number of laser incidents reported by the Fresno Yosemite International Airport and Bakersfield Meadows Field Airport. Law enforcement and emergency transport helicopters are particularly vulnerable, since they typically fly at lower altitudes. Their convex-shaped windows also cause greater refraction and visual interference when the beam of a laser strikes. Night-vision goggles can also amplify the beam and pose a greater threat of visual interference.
Earlier this year, as a result of the increasing threat of laser strikes on aircraft, the FBI in Sacramento, along with several other cities in the United States that have reported a large number of laser incidents, launched a public awareness campaign regarding the issue and offered a $10,000 reward for information that leads to the arrest of a laser offender. Since the launch of the public awareness campaign, the FBI reports a decrease in the number of laser incidents.
Justice Department to Monitor Elections in NebraskaRead the Press Release
The Justice Department announced today that it will monitor elections on May 13, 2014, in Colfax and Douglas Counties, Nebraska, to ensure compliance with the Voting Rights Act and other federal voting rights statutes. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
In Colfax County, the department will assign federal observers from the U.S. Office of Personnel Management (OPM) to monitor polling place activities based on a court order. The observers will watch and record activities during voting hours at polling locations in this jurisdiction, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, department personnel will monitor polling place activities in Douglas County. A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.
Each year, the department deploys federal observers from OPM and departmental staff to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931.
Visit this website for more information about the Voting Rights Act and other federal voting laws.
Jury Convicts Humble Man on All Charges in Health Care Fraud ConspiracyRead the Press Release
HOUSTON – Lawrence Tyler, 41, has been convicted of conspiracy to commit health care fraud, seven counts of health care fraud and one count of money laundering, announced United States Attorney Kenneth Magidson. The verdicts were returned just moments ago following five days of trial and less than four hours of deliberation.
Tyler, of Humble, ran a durable medical equipment company called 1866-ICPayday.com from 2006 to 2008.
The evidence at trial showed that between January 2007 and December 2008, Tyler engaged in a scheme to defraud Medicare and Medicaid. He falsely billed Medicare and Medicaid for so-called “ortho kits” which consisted of an assortment of various back, knee, ankle, wrist and shoulder braces. Tyler allegedly billed for equipment that was never delivered, billed for equipment using prescriptions from a physician who never treated the patients and upcoded - billed for a higher reimbursed brace but delivered a cheaper brace that either did not fit the billing code or did not qualify for any Medicare reimbursement. During the conspiracy, Tyler submitted approximately $3 million in claims for durable medical equipment and was paid approximately $1.4 million by Medicare and Medicaid.
The evidence at trial also showed that Tyler paid kickbacks to a recruiter named Birdie Leroy Revis in exchange for beneficiary information and false prescriptions issued by Revis’ cousin, Dr. John Perry. Many of the beneficiaries testified that they did not know Perry and had never been treated by him. Revis was convicted of illegally receiving kickbacks, while Perry was convicted of conspiracy to commit health care fraud in separate cases.
In addition, the evidence showed Tyler conducted a monetary transaction in criminally derived proceeds when he withdrew approximately $140,000 from Wachovia Bank. The monies were proven to be the proceeds of the health care fraud conspiracy.Tyler faces up to five years in prison for the conspiracy as well as up to 10 years for each count of health care fraud and money laundering in addition to substantial fines.
The case was the result of a joint investigative effort of the FBI, the Texas Attorney General’s Medicaid Fraud Control Unit, Department of Health and Human Services - Office of Inspector General, Office of Investigations and the U.S. Attorney’s Office. Special Assistant United States Attorneys Suzanne Bradley and Adrienne E. Frazior prosecuted the case.
Jonesboro Man Pleads Guilty to Fraudulently Obtaining FEMA GrantsRead the Press Release
SHREVEPORT, La.–United States Attorney Stephanie A. Finley announced today that Curtis Roller, 57, of Jonesboro, La., pleaded guilty before U.S. District Judge Donald E. Walter to three counts of wire fraud after illegally obtaining Federal Emergency Management Agency (FEMA) grants and making false statements on workers compensation forms.
According to evidence presented in the indictment and the guilty plea hearing, from Jan. 1, 2002 to Dec. 31, 2010, Roller submitted false information on grant applications he sent to FEMA so that fire departments in Louisiana and Arkansas were eligible to receive federal funds, which could be used to purchase equipment from his company, Louisiana Firefighting Services. Roller is accused of inflating population data, agency coverage areas and numbers of responded calls on the FEMA grant applications. He also is accused of overstating the type of calls responded to, under-reporting the size of budgets and increasing the scope of their needs on the applications. It is against FEMA rules and policies for a grant writer to financially benefit from money awarded.
Roller faces a maximum penalty of 20 years in prison, five years of supervised release, a $250,000 fine and restitution for each count of wire fraud. Sentencing was set for September 18, 2014.
The U.S. Department of Homeland Security, U.S. Postal Service/Office of Inspector General, and the U.S. Department of Labor/Office of Inspector General conducted the investigation. Assistant U.S. Attorney Earl Campbell is prosecuting the case.
Independence Man Pleads Guilty to Distributing and Possessing Child PornographyRead the Press Release
A man who distributed and possessed child pornography pled guilty on May 9, 2014, in federal court in Cedar Rapids.
Steven Risk, age 38, from Independence, Iowa, was convicted of one count of distribution of child pornography and one count of possession of child pornography.
At the plea hearing, Risk admitted that, between June 2011 and February 2013, he distributed child pornography. He also admitted that, between October 2012 and February 2013, he possessed child pornography, including depictions of prepubescent children.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Risk remains in custody of the United States Marshal pending sentencing. Risk faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 40 years’ imprisonment, a $500,000 fine, a $200 special assessment, and supervised release for 5 years to life following his imprisonment.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Iowa Division of Criminal Investigation, Homeland Security Investigations, and the Federal Bureau of Investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 14-2010.
Illinois Man Sentenced to Prison for Selling Peptides, HGH from China over the InternetRead the Press Release
PITTSBURGH - A resident of Norridge, Ill., has been sentenced in federal court to 27 months imprisonment on his conviction of mail fraud, distribution of human growth hormone and money laundering, United States Attorney David J. Hickton announced today.
Senior United States District Judge Donetta W. Ambrose imposed the sentence on Ronald J. DeFranco, 54.
According to information presented to the court, DeFranco maintained a website for the illegal distribution of peptides - chemical compounds which require a prescription for dispensation, but which are illegitimately sought by body builders for muscle enhancement. DeFranco deceived the Internet service provider and the FDA by falsely representing on the website that he was selling these substances "for research purposes only . . . not for human consumption." In addition to sales of peptides, DeFranco also allegedly sold human growth hormone (HGH) without the required physician's prescriptions. During the period from May 2010, until January 2011, DeFranco allegedly paid $94,777.40 in Western Union and bank wire transfers to acquire these substances from suppliers in the Peoples Republic of China.
Prior to imposing sentence, Judge Ambrose stated that she was denying the defendant’s downward variance request due to the serious nature of the offense and because his prior sentence of imprisonment “speaks volumes about [his] ability to conform [his] behavior to the law.”
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the FDA Office of Criminal Investigations, IRS - Criminal Investigation and the DEA for the investigation leading to the successful prosecution of DeFranco.
Hollywood Man Pleads Guilty in Million Dollar Identity Theft Tax Refund FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Judes Celestin, 36, of Hollywood, pled guilty for his role in an identity theft tax refund scheme that resulted in the receipt of approximately $1 million in fraudulent tax refunds. Sentencing is scheduled for August 13, 2014 at 8:30 a.m. before U.S. District Judge Robert N. Scola.
Celestin pled guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. At sentencing, Celestin faces a maximum term of 22 years in prison.
According to the plea documents, Celestin set up two Florida corporations – JC Easy Tax, Inc. (“JC Easy Tax”) and Tax Filing Made Easy! (“Tax Filing Made Easy”) – and listed himself as president. He opened and controlled bank accounts for these two corporations at various banks in South Florida. Celestin caused false and fraudulent individual income tax returns to be filed with the Internal Revenue Service in the names of individuals without those individuals’ knowledge or authority. The defendant caused approximately one million dollars in tax refund monies to be direct deposited to bank accounts for JC Easy Tax and Tax Filing Made Easy. Celestin then withdrew this money for his own personal use and benefit.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
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.
Guilty Plea Entered by Final Defendant Charged in Augusta, Georgia Sex Trafficking RingRead the Press Release
Five defendants have now pled guilty to charges arising out of
Sex Trafficking of a Minor InvestigationAUGUSTA, GA – William Warren Hart, 35, of Hephzibah, Georgia, pled guilty last week before Senior United States District Court Judge Dudley H. Bowen, Jr. for his role in a sex trafficking organization which operated in Augusta, Georgia, in 2013. Hart, who faces up to five years in prison for his limited role in the sex trafficking organization, pled guilty to Using a Facility of Interstate Commerce to Facilitate the Carrying on of a Business Involving Prostitution. The other four Defendants charged include:
Charles Henry Castillo, a/k/a “Joe King,” 32, of Augusta, Georgia,
Allison Jontil Barnes, a/k/a “Jah” and “Shantae Davis,” 29, of Augusta, Georgia,
Shelica Daniels, a/k/a “Red,” 27, of Augusta, Georgia, and,
Heather Leigh Hedrick, 30, of Augusta, Georgia.Each of these four Defendants pled guilty previously to Conspiring to Engage in the Sex Trafficking of a Minor. The charge carries a possible sentence of life imprisonment. A sentencing date has not yet been scheduled.
United States Attorney Edward Tarver stated, “Georgia’s children are at risk and continue to be vulnerable to exploitation. More collaborative efforts and faster responses by law enforcement agencies are needed to protect our children. The aggressive prosecution of individuals like these Defendants will continue to be a priority for the Department of Justice and this United States Attorney’s Office.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, said, “The Defendants in this case clearly illustrate the need for law enforcement, working within the community, to protect our youth who remain vulnerable to those who would prey on them. The FBI will continue to provide significant investigative resources toward investigations that focus on juvenile sex trafficking within Georgia.”
According to evidence presented during several guilty plea hearings, Daniels, in the summer of 2013, encouraged a 16-year-old girl to leave home and begin working for and with Daniels as a prostitute. Daniels placed ads on Backpage.com using a pseudonym for the victim to facilitate the criminal conduct. Soon afterwards, Barnes, who met the victim through Daniels, encouraged the victim to begin working for Barnes in the same way. Ultimately, the two met up with Castillo, who assumed a leadership role in the operation. Castillo enlisted the assistance of Hedrick and Barnes in preparing images and videos of the minor to be used to advertise her availability for prostitution. Hart assisted Barnes in posting some of those advertisements on Backpage.com.
On August 26, 2013, the FBI received a tip from the National Center for Missing and Exploited Children that a juvenile’s images were being posted on Backpage.com for prostitution services. Through an undercover operation conducted that same day, agents and officers with the FBI’s Computer Crime Child Exploitation (CCCX) Task Force identified and arrested Castillo, Hedrick, and Barnes, and rescued the 16-year-old victim at Castillo’s apartment.
This prosecution was the result of a joint investigation of the FBI’s CCCX Task Force, made up of Augusta-area FBI agents; the Georgia Bureau of Investigation; Richmond County Sheriff’s Office; and the Columbia County Sheriff’s Office. This case was brought as part of Project Safe Childhood, which is a nationwide U. S. Department of Justice initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims.
Assistant United States Attorneys Patricia Rhodes and Nancy Greenwood, Deputy Criminal Chief in the Augusta U. S. Attorney’s Branch Office and Project Safe Childhood Coordinator, prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.Goose Creek Man Sentenced for Interstate Transportation of Stolen GoodsRead the Press Release
Contact Person: Rhett DeHart (843) 727-4381
Columbia, South Carolina ----- United States Attorney Bill Nettles stated today that Eugene Jones, age 60, was sentenced in federal court in Charleston, South Carolina, for Conspiracy to Transport Stolen Goods in Interstate Commerce, a violation of 18 U.S.C. §§ 371 and 2314. United States District Judge David C. Norton of Charleston sentenced Jones to 36 months imprisonment and 3 years supervised release.
Evidence presented in this case establ ished that from at least 2007 through 2012, Eugene Jones led a conspiracy to transport stolen goods in interstate commerce via the Internet. It was part of the conspiracy thatJones owned and operated Patriot Pawn in North Charleston, S.C. Jonesrecruited dozens of persons to steal merchandise from retail stores including Lowes, Target, Wal-Mart, Home Depot, Belk, K-Mart, Bed Bath and Beyond, and Best Buy. Jones suggested to his co-conspirators to steal specific merchandise, including computer software, calculators, tool kits, electronic devices, and kitchen appliances.
After stealing goods from area stores,the co-conspiratorstook the stolen goods to Patriot Pawn, where Jones and his employeesbought the stolen goods for far less than retail value, knowing the goods were stolen or obtained by fraud. Jones,with the assistance ofothers, sold the stolen goods on eBay, an Internet auction and shopping site.
Jones sold the stolen goods in transported in interstate commerce from South Carolina to buyers in other States, including Texas, Florida, Pennsylvania, Minnesota, and California. During the conspiracy, approximately $1 million in stolen goods were sold on eBay and transported in interstate commerce, and Jones divided these illegal proceeds between himself and his co-conspirators.
The case was investigated by agents of the Secret Service and the North Charleston Police Departure. Assistant United States Attorney Rhett DeHart of the Charleston office prosecuted the case.Former Virginia Department of Social Services Employee Sentenced for Preparing False Tax Returns and Stealing IdentitiesRead the Press Release
Sybil Marshall Coles, 45, of Pamplin, Virginia, was sentenced today to serve five years in prisonfor aggravated identity theft and preparing a false tax return, announced Assistant Attorney General Kathryn Keneally for the Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia and Attorney General of Virginia Mark R. Herring. On Jan. 28, 2014, Coles pleaded guilty to a two count criminal information. Coles was also ordered to one year of supervised release and to pay $949,273 in restitution.
According to court documents and evidence from her sentencing, Coles was an employee at the Virginia Department of Social Services in Nottoway County. From both her work and personal computers, Coles prepared and filed at least 222 false federal income tax returns claiming false refunds based on fictitious itemized deduction expenses and fictitious Schedule C businesses that reported losses, among other items, which resulted in a tax loss to the U.S. Treasury of at least $949,000. Coles also prepared and filed false Commonwealth of Virginia tax returns.
According to court documents, Coles used family members and friends to recruit individuals for whom she prepared tax returns. She also prepared returns for herself, family members, friends and colleagues. Coles used bank accounts in the name of another family member to conceal the activities and proceeds of the false return scheme. As part of the scheme, Coles stole identities of taxpayers for whom she had prepared returns and used their information on other returns to claim fictitious childcare expenses. In addition, after the criminal investigation began, Coles asked certain individuals to tell Internal Revenue Service (IRS) investigators that someone else prepared their tax returns.
The case was prosecuted by Tax Division Trial Attorney and Special Assistant U.S. Attorney Rebecca Perlmutter and Assistant Attorney General and Special Assistant U.S. Attorney Michael Jagels. IRS-Criminal Investigation in Richmond, Virginia, investigated the case.
Former Qualcomm Directors Indicted for Insider Trading Derek Cohen and Robert Herman Bought More Than $500,000 in Securities of Atheros Communications, Inc. Just One Day Before Qualcomm Officially Announced Its Acquisition of That CompanyRead the Press Release
San Diego, CA – Two former Qualcomm sales directors have been charged with four counts of insider trading in an indictment unsealed today.
According to the indictment, Derek Montague Cohen and Robert William Herman were both directors of Qualcomm’s North America Sales Department. In addition to their day jobs, they were also part of an informal stock trading group, sharing tips and opinions about the stock market. According to the indictment, while still employed by Qualcomm, Cohen and Herman learned that Qualcomm (QCOM) was about to acquire Atheros Communications, Inc. (ATHR), then a publicly traded technology company headquartered in California. Based on this inside information—and just one day before Qualcomm officially announced the acquisition—Cohen and Herman placed more than $500,000 in trades on various Atheros securities, including stocks purchases and option contracts. At the same time, Cohen allegedly covered a short position that he maintained, in violation of company policy, on Qualcomm stock.
Shortly after Cohen and Herman placed their trades, the New York Times’ DealBook blog leaked news of the impending acquisition, causing shares of Atheros to dramatically increase in value. Cohen and Herman then sold their securities, realizing a total profit of nearly $230,000. The indictment alleges that Cohen and Herman later falsely claimed to in-house Qualcomm lawyers and staff that they had only traded after reading a leaked news item—even though trading records, combined with records of the New York Times Company, show that this was impossible.
United States Attorney Laura E. Duffy said: “Insider trading is a threat to public companies and investors alike. This indictment should send a message throughout Southern California and beyond: the Department of Justice will not tolerate the manipulation of the securities markets for cynical and selfish personal gain.”
In a parallel action, the Securities and Exchange Commission today announced civil insider trading charges against Cohen and Herman.
Michele Wein Layne, director of SEC’s Los Angeles Regional Office, said: “As alleged in our complaint, Qualcomm placed trust in these sales managers who proceeded to exploit the confidential information shared with them and conduct insider trading for their personal gain.”
Cohen was arrested Saturday at Los Angeles International Airport at the request of the Federal Bureau of Investigation after he returned from an overseas visit to the Philippines. Herman remains at large.
Cohen was arraigned on the indictment in federal court in Los Angeles this afternoon; he entered a not-guilty plea, and was to be released on a $100,000 bond. He is scheduled to appear before U.S. Magistrate Judge Ruben B. Brooks in San Diego on May 14, 2014 at 10:30 a.m., for a status hearing.
DEFENDANT Case Number: 14CR1202-JLS Derek Montague Cohen Age: 52 San Diego, CARobert William Herman
Age: 52 San Diego, CA CHARGESCounts 1-4: Securities Fraud – 15 U.S.C. §§ 78j(b) and 78ff. Maximum penalties: 20 years in prison, 3 years of supervised release, $3 million fine and a $100 special assessment for each count.
INVESTIGATING AGENCYFederal Bureau of Investigation
*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.
Former Office Manager Pleads Guilty to Forgery and Signing a False Tax ReturnRead the Press Release
Oklahoma City, Oklahoma – ERIN MARIE WELLS, of Yukon, Oklahoma, pled guilty today to check forgery and signing a false federal income tax return, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
From 2009 until mid-2013, Wells was employed as the office manager of Advanced Electric, located in Oklahoma City. She was responsible for paying the company’s bills, depositing checks into the company bank account, and maintaining the company’s books and records. Today she pled guilty to forging the signature of the company’s owner on a $1,500 check and using the proceeds for her personal benefit. In a plea agreement, she has agreed to pay restitution to the company in the amount of $256,857.76.
In addition to pleading guilty to forgery, Wells has pled guilty to signing a false tax return. She admitted that on January 11, 2013, she signed a personal federal tax return for the 2012 calendar year that she knew was false because it reported only $28,386 in total income, substantially less than the income she actually received.
As a result of her conviction for forgery, Wells faces up to 10 years in prison, three years of supervised release, a $250,000 fine, and mandatory restitution. With respect to the tax conviction, she faces up to three years in prison, one year of supervised release, and a $250,000 fine. Sentencing will take place in approximately 90 days. Reference is made to the information and other public filings for further information.
This case is the result of an investigation by the Internal Revenue Service Criminal Investigations, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Scott E. Williams.
Former New York Tax Liens Investment Company Executive Pleads Guilty for Role in Bid Rigging Scheme at Municipal Tax Lien AuctionsRead the Press Release
A former New York-based tax liens company executive pleaded guilty today for his role in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens, the Department of Justice announced.
Vinaya K. Jessani, of New York City, entered a guilty plea in the U.S. District Court for the District of New Jersey in Newark to felony charges filed today. Under the plea agreement, Jessani has agreed to cooperate with the department’s ongoing investigation.
According to the charge, from at least as early as 1994 until as late as February 2009, Jessani, a former senior vice president who supervised the purchasing of municipal tax liens at auctions in New Jersey for the company he worked for, participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to, and instructing others to, allocate among certain bidders which liens each would bid on. The department said that Jessani and those under his supervision submitted bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.
“Today’s guilty plea demonstrates the Antitrust Division’s continuing effort to prosecute those who manipulate the competitive process in order to harm home and property owners,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division will continue to be vigilant in rooting out conspiracies that harm already distressed property owners.”
The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. New Jersey state law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.
According to court documents, the conspiracy permitted the conspirators to purchase tax liens with limited competition and each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.Today’s plea is the 15th guilty plea resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Including Jessani, 12 individuals and three companies have pleaded guilty. Additionally, four individuals and two entities have been indicted for their roles in the conspiracy to rig bids at tax lien auctions.
Today’s case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established 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 nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.Former KC Attorney Pleads Guilty to Money LaunderingRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Kansas City, Mo., attorney pleaded guilty in federal court today to money laundering.
James C. Wirken, 69, of Kansas City, waived his right to a grand jury and pleaded guilty before U.S. District Judge Fernando J. Gaitan to a federal information that charges him with one count of money laundering.
Wirken was a lawyer and principal at The Wirken Law Group until he was disbarred by the Missouri Supreme Court in 2012.
By pleading guilty today, Wirken admitted that he withdrew money from his law firm’s trust account, which was being held for the benefit of a client, and deposited the funds into his law firm’s operating account. Wirken then used the funds for his personal benefit. All of the transactions were conducted without the client’s consent.
Wirken wrote six checks between December 2009 and Jan. 13, 2010, totaling $116,730.
Today’s plea agreement cites the specific incident in which Wirken transferred $51,000 into the law firm’s operating account, then directed an employee to purchase a $50,000 cashier’s check from that account. The $50,000 cashier’s check was to repay a loan that another client had made to Wirken, which had been in default since Oct. 2, 2008.
Under federal statutes, Wirken is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000 (or not more than twice the amount of the criminally derived property) and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by IRS-Criminal Investigation.Former Health Care Center Nursing Supervisor Indicted for Selling Hydrocodone and other Pain KillersRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul announced today a federal grand jury handed down a four-count indictment charging Catherine Vitello, 41, of Elma, N.Y., with possession with intent to distribute and distribution of hydrocodone, fentanyl and alprazolam, and maintaining a drug involved premises. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney John M. Alsup, who is handling the case, stated that the defendant was the Director of Nursing at the St. Catherine Laboure Health Care Center in Buffalo. According to the indictment, Vitello sold un-used prescription drugs from her office. These controlled substances included hydrocodone, fentanyl, and alprazolam. On three separate occasions in October 2013, the defendant sold hydrocodone, fentanyl and alprazolam to a confidential source working with the Drug Enforcement Administration.
The indictment is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of James J. Hunt, Acting Special Agent in Charge, New York Field Office, the Lackawanna Police Department, under the direction of Chief James Michel, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Former Employee of Day Treatment Program Found Guilty of Criminal Abuse of A Vulnerable AdultDefendant Made Malicious Statements Toward Person in Her CareRead the Press Release
WASHINGTON - Ivy Fauntroy, 34, a former employee of United Cerebral Palsy of Washington & Northern Virginia, a District of Columbia day services provider for individuals with developmental disabilities, has been found guilty and been sentenced for criminal abuse of a vulnerable person in her care, U.S. Attorney Ronald C. Machen, Jr. and District of Columbia Inspector General Charles J. Willoughby announced today.
Fauntroy, of Washington, D.C., was found guilty on May 8, 2014, of one count of criminal abuse of a vulnerable adult. The Honorable Yvonne M. Williams found her guilty following a trial in the Superior Court of the District of Columbia. Judge Williams sentenced Fauntroy on the day of her verdict to a 60-day jail term, but suspended the time provided that Fauntroy successfully completes nine months of probation.
According to the government’s evidence, on Jan. 4, 2013, the adult victim attended a day treatment program for developmentally disabled persons operated by United Cerebral Palsy in Northeast Washington. On that day, Fauntroy repeatedly made malicious statements toward the victim, directing her to “roll over” and “play dead.” Fauntroy directed the attention of her co-workers to this abuse, while capturing video footage of the incident on her cell phone. This video clip was subsequently used by the government in its prosecution of the case.
In announcing the conviction and sentence, U.S. Attorney Machen and Inspector General Willoughby praised the work of Investigator Eduardo Torre of the Office of the Inspector General Medicaid Fraud Control Unit (MFCU), who handled the investigation. They also commended the work of Special Assistant U.S. Attorney Adrienne Rose and Special Assistant U.S. Attorney Brent Wolfingbarger of the MFCU, who jointly prosecuted the case, as well as Assistant U.S. Attorney Lindsey Merikas, who worked on the matter prior to trial.
14-111Former Deputy Admits to Money LaunderingRead the Press Release
McALLEN, Texas - Robert Ricardo Maldonado, 49, of Weslaco, has entered a plea of guilty to one count of conspiracy to commit money laundering, announced U.S. Attorney Kenneth Magidson. Maldonado was a former deputy with the Hidalgo County Sheriff’s Office.
From 2001 to November 2013, Maldonado transported currency derived from the distribution of narcotics from various destinations including Detroit, Chicago, Birmingham and elsewhere to the Rio Grande Valley. Maldonado was a paid a percentage of the total amount of the currency transported. He then utilized these funds to purchase various properties and assets.
U.S. District Judge Randy Crane, who accepted the guilty plea, has set sentencing for July 21, 2014. At that time, Maldonado faces up to 20 years in prison along with a potential fine up to $500,000 or twice the amount of the proceeds.
The investigation leading to the charges was conducted by the Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation and Texas Department of Public Safety. Assistant United States Attorney James Sturgis prosecuting the case.
Former Chelsea Housing Authority Executive Pleads GuiltyRead the Press Release
BOSTON – The former Executive Director of Chelsea Housing Authority (CHA) pleaded guilty today for rigging the inspection process for federally-funded housing units at the CHA.
Michael McLaughlin, 68, pleaded guilty today before U.S. District Court Judge Douglas P. Woodlock to conspiring to defraud the United States. In October 2013, McLaughlin was indicted along with two co-defendants who are pending trial. Sentencing is scheduled for June 20, 2014 at 2:30 p.m.
From 2000 until November 2011, McLaughlin was the Executive Director of the Chelsea Housing Authority, which managed three federal housing developments funded by the Department of Housing and Urban Development (HUD) and contained approximately 350 units. Between 2007 and 2011, McLaughlin conspired with his co-defendants to defeat the purpose and efficacy of HUD inspections of the Chelsea Housing Authority's living spaces. They did this by obtaining in advance the list of units that HUD was going to inspect, enabling the housing authority to focus on repairing those units and to deceive the HUD inspectors about the integrity of the unit inspection.
In July 2013, McLaughlin was sentenced to 36 months in prison for falsely reporting his salary in annual budgets required by HUD.
McLaughlin pleaded guilty pursuant to a plea agreement with the United States. If the Court accepts McLaughlin’s guilty plea, he will be sentenced to one year in prison, to be served consecutively with the prison term he is currently serving, and a $3,000 fine.
United States Attorney Carmen M. Ortiz and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today. The case is being prosecuted by S. Theodore Merritt of Ortiz’s Public Corruption Unit and Brian Pérez-Daple of Ortiz’s Major Crimes Unit.
FBI Agents Honored at U.S. Attorney AwardsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA – Three agents from the Federal Bureau of
Investigation were recognized for their outstanding work in investigations involving two former West Virginia sheriffs and a woman who embezzled over a million dollars from a race track.United States Attorney William J. Ihlenfeld, II, recognized three FBI agents at the U.S. Attorney’s Award ceremony held in Wheeling. FBI Special Agent Dave Rauser was honored for his work in exposing the civil rights violations committed by former Jefferson County (WV) Sheriff Bobby Shirley that led to Shirley’s resignation, conviction, and prison sentence.
FBI Special Agent Frederick Aldridge was honored for his investigation of former Barbour County Sherriff John Hawkins, who resigned and recently pleaded guilty to charges related to the filing of a false insurance claim. Hawkins is free on bond pending a sentencing hearing.
FBI Special Agent Lawrence Quigley was recognized for his work in exposing the crimes of Anita Ambler, the former bookkeeper at the Mountaineer Racetrack who was convicted by a federal jury trial last year on 11 counts of mail fraud, 10 counts of wire fraud, and four counts of transacting in criminal proceeds. The evidence at trial showed that Ambler was involved in the theft of over $1.3 million from an account that was being maintained by Mountaineer Race Track and Casino on behalf of the Horsemen’s Association. Ambler presently is serving an 87 month prison sentence.
Other recipients of awards include:
- Retired DEA Special Agent Robert L. Manchas, U.S. Attorney Award for Distinguished Service;
- Greater Harrison County (WV) Drug Task Force, U.S. Attorney Award for the investigation of “Hot Stuff, Cool Things”, a synthetic drug retailer from Clarksburg;
- Hancock-Brooke-Weirton Drug Task Force, a U.S. Attorney Award for its investigation of a drug trafficking organization from Chicago;
- West Virginia State Police Sgt. Matthew S. Adams, U.S. Attorney Award for investigation of Michael John Jones, who was convicted of “Sexual Exploitation of a Child”, sentenced to 25 years in federal prison, and is now facing charges in state court in Brooke County for similar conduct;
- ATF Special Agent Ken Grace, U.S. Attorney Award for the investigation of the thefts of firearms from the Stonewood, West Virginia police department; and
- IRS-CI Agent Jeff James, IRS Agent Danielle McWatters, & HHS Agent Mary Ann Withrow, U.S. Attorney Awards for their inquiry into Dr. Allen Saoud, who was convicted at trial for scheming to circumvent Medicare and Medicaid, bankruptcy fraud, lying to a federal agent, aggravated identify theft, and obstruction of internal revenue laws by filing false income tax returns.The ceremony included remarks from U.S. District Court Judge Frederick P.
Stamp, Jr. and the presence of many local, state and federal law enforcement leaders from throughout West Virginia.
The individuals included in the photo are U. S. Attorney William J. Ihlenfeld, II; Special Agent Quigley; Special Agent Rauser; Special Agent Aldridge; and Special Agent in Charge Scott Smith.Elkins Teen Wins U.S. Attorney Award for CourageRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA – An Elkins teen who lost his right leg just days
prior to his sixteenth birthday was recognized for his courage and resilience in a special ceremony held in Wheeling.Tanner Boatwright was presented with the United States Attorney’s Award for Courage as a result of his response to the tragic hunting accident that occurred in November of 2011. The incident, which led to the conviction of a West Virginia man for being a felon in possession of a firearm, led to Boatwright receiving a prosthetic leg. Boatwright was honored for the bravery he has shown since it occurred.
“Tanner stared trauma and tragedy in the face and didn’t blink,” said U.S. Attorney Ihlenfeld. “He could have curled up into a ball, stayed in his room, and never come out, and no one would have questioned it. But instead has embraced this change in his life, and he now does things that he never would have done before the incident.”
Boatwright now hunts and fishes, drives without restrictions, snowboards, swims, and rock climbs. He won four gold medals at the Endeavor Games in Oklahoma, and recently worked on the Twentieth Century Fox movie "The Fault in Our Stars." The movie is scheduled to come out later this year and is based upon the best-selling book by John Green.
Tanner plans to become a prosthetic practitioner upon his completion of college.
Tanner’s father, Roger Boatwright, was also recognized during this week’s ceremony. Ihlenfeld presented Roger Boatwright with a special award for his efforts to save his son’s life on the night that Tanner was shot.
The individuals included in the photo are U. S. Attorney William J. Ihlenfeld, II; Susie Boatwright; Roger Boatwright; and Tanner Boatwright.Dispositions for Kern County and Fresno County Marijuana CasesRead the Press Release
FRESNO, Calif. — Noe Alvarez Ramirez, 28, of Michoacàn, Mexico, was sentenced today to two years and nine months in prison, and Rudy Alberto Gonzalez Rocha, 28, and his brother, Eloy Damian Gonzalez Rocha, 32, both of Jalisco, Mexico, entered guilty pleas to being aliens in possession of firearms seized from a marijuana cultivation site, according to U.S. Attorney Benjamin B. Wagner.
7,302 Marijuana Plants Seized from Sequoia National Forest (No. 1:13-cr-172 AWI)
Alvarez was sentenced following his guilty plea in March to conspiring to manufacture, distribute, and possess with intent to distribute marijuana grown in the Gibboney Canyon area of the Sequoia National Forest in Kern County. The area is also within the federally designated Domeland Wilderness area. According to court documents, U.S. Forest Service agents seized 7,302 marijuana plants from the site and found 5,000 marijuana plant stalks consistent with a prior harvest in 2012. During the execution of a federal search warrant at the site, agents found Alvarez sleeping in a tent. Alvarez was also ordered to pay $2,675 in restitution to the U.S. Forest Service caused by the negative environmental impact of the cultivation. Trash and fertilizer bags were scattered about the area and the ground was terraced after native vegetation, including oak trees, was cut down to make room for the marijuana plants. Trash also was found in the waterway of Gibboney Creek. Alvarez is subject to potential deportation to Mexico after he serves any prison sentence.
This case was investigated by the U.S. Forest Service, U.S. Drug Enforcement Administration, California Department of Fish and Wildlife, and the Kern County Sheriff’s Office.
Firearms Seized from Fresno County Grow (1:14-cr-39 AWI)
The Gonzalez brothers entered guilty pleas to being illegal aliens in possession of three firearms, one of which was reported stolen from Arkansas and another having an obliterated serial number. The guns were found during the execution of a narcotics search warrant at the men’s leased residence in Dunlap, Calif. According to court documents, at the beginning of this year, Fresno County Sheriff deputies had been dispatched to the property to investigate several calls about people coming and going to and from the property, which had a strong odor of marijuana. Deputies seized 260 marijuana plants, more than 200 pounds of processed marijuana, and $17,120 in cash, along with the firearms. The defendants have agreed to the forfeiture of the money and guns.This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Fresno County Sheriff’s Office, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The Gonzalez brothers are scheduled for sentencing on August 4, 2014. They face a maximum prison term of 10 years and a $250,000 fine. Their actual sentences, 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.
Assistant U.S. Attorney Karen A. Escobar is prosecuting the above cases.
Detroit Man Pleads Guilty to Distributing HeroinRead the Press Release
Huntington, W.Va. – A Detroit man who was part of a heroin conspiracy in the Huntington area, pleaded guilty today to a federal drug charge, announced U.S. Attorney Booth Goodwin. Daniel M. Flowers, 43, pleaded guilty before Chief United States District Judge Robert C. Chambers in Huntington to distributing heroin.
Between August of 2008 and April of 2013, Flowers and his co-conspirators, some of whom transported the heroin from Detroit to Huntington, utilized multiple residences in the Huntington area to store, prepare and distribute heroin. On April 10, 2013, a confidential informant contacted Flowers and arranged to buy some heroin. The informant subsequently met with Flowers at an apartment in the 1000 block of 12th Avenue in Huntington, where Flowers sold the heroin to the informant $150.
Flowers faces up to 20 years in federal prison when he is sentenced on August 11, 2014.
The FBI Huntington Violent Crimes Drug Task Force and the Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Defendants Sentenced for Robbing Marston, NC, Post OfficeRead the Press Release
Five subjects sentenced in Greensboro on federal robbery and firearm offenses
GREENSBORO, N.C. – United States Attorney Ripley Rand announced today that Matthew James Owens, Dennis Shaquille Ross, Brandon Letrell McCain, Takai Terrell Roe and Antonio Chrishawn Jones were sentenced in federal court for their involvement in the June 5, 2013, armed robbery of the Marston, NC, Post Office.
Dennis Shaquille Ross, Brandon Letrell McCain, and Takai Terrell Roe each entered the post office and joined in robbing the Post Office with the use of a firearm. Ross, McCain and Roe each pleaded guilty to interference with commerce by robbery and carrying and using a firearm during and in relation to a crime of violence. Ross received a total prison sentence of 155 months; McCain received a total prison sentence of 91 months; and Roe received a total prison sentence of 87 months. Ross received a five-year term of supervised release following his release from confinement, and McCain and Roe each received a three-year terms of supervised release following their release from confinement.
Matthew James Owens and Antonio Chrishawn Jones were involved in the robbery but did not actually enter the post office. Owens pleaded guilty to interference with commerce by robbery and received a 120 month prison sentence. Jones also pleaded guilty to interference with commerce by robbery received a 52 month prison sentence. Owens received a five-year term of supervised release following his release from confinement and Jones received a three-year term of supervised release following his release from confinement.
All five defendants were ordered to pay $1,389.29 in restitution.
The case was primarily investigated by the United States Postal Inspection Service and the Richmond County Sheriff’s Office. Other agencies assisting with the investigation included the North Carolina State Highway Patrol, the Rockingham Police Department, the North Carolina State Bureau of Investigation, the Moore County Sheriff’s Office and the Scotland County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Cliff Barrett.
Davenport Man Sentenced to Three Years of Imprisonment for Possession of Child PornographyRead the Press Release
DAVENPORT, IA – On May 12, 2014, Charles Louis Linville, age 71, of Davenport, Iowa, was sentenced to 36 months of imprisonment for possession of child pornography, announced United States Attorney Nicholas A. Klinefeldt. United States District Judge John A. Jarvey also sentenced Linville to a five-year term of supervised release, following his term of imprisonment.
Linville was identified during a peer-to-peer file sharing investigation. Law enforcement executed a search warrant at Linville’s address, seized his computer, and determined that Linville possessed thousands of images of child pornography. Linville also possessed multiple digital recording devices, including video capable underwater face masks, which he had used to create videos of a minor female swimming in her bathing suit.
This case was investigated by the Scott County Sherriff’s Office and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Cobb County Man Sentenced for Distributing Child PornographyRead the Press Release
ATLANTA – Corey Charles Plunkett has been sentenced to 12 years in federal prison for distributing a pornographic image of his one-year-old daughter to an undercover law enforcement officer.
“Distribution of child pornography is in and of itself a heinous crime,” said United States Attorney Sally Quillian Yates. “This case is all the more disturbing because the victim was the defendant’s one-year-old daughter. We will continue to aggressively prosecute those who exploit our children.”
“J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI has, for many years, not only investigated those who would sexually exploit children, but has also helped to educate the public and parents on how to better protect their children. To see a case, such as this, where the child’s father was sexually exploiting his own child leaves many of our seasoned investigators without words.”
According to United States Attorney Yates, the criminal indictment, and information presented in court: On September 26, 2013, a law enforcement officer in Ohio was engaged in an undercover investigation identifying subjects involved in the on-line victimization of children using two chat rooms known for attracting individuals with a sexual interest in children. He was contacted by a subject later identified as Corey Charles Plunkett. Plunkett wrote that he had a one year old daughter and asked whether a one year old was too young for sexual activity. He also stated that he wanted his daughter to perform oral sex. Shortly thereafter, Plunkett sent an image of himself, a non-pornographic image of his daughter, and later that day a pornographic image of his daughter to the undercover officer. During the execution of a search warrant at the defendant’s home in Cobb County, Ga., police seized Plunkett’s phone and located the image that Plunkett had sent to the undercover officer.
Plunkett, 27, of Marietta, Ga., was sentenced by United States District Judge Steve C. Jones to 12 years in prison to be followed by supervised release for life. He was also ordered to pay a $100 special assessment. The defendant will be required to register as a sex offender when he is released from prison.
This case was investigated by the Federal Bureau of Investigation and the Cobb County Police Department.
This case is being brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals who sexually exploit children and to identify and rescue victims.
Assistant United States Attorney Jill E. Steinberg prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Civil Rights Division Highlights Accomplishments and New Records for 2013Read the Press Release
The Department of Justice Civil Rights Division today released its accomplishments report for 2013. This report supplements the division’s first accomplishments report , issued last year, on the division’s work during the first four years of Attorney General Eric Holder’s leadership. In the division’s 57th year, its substantial caseload reflects the persistence of civil rights challenges that create barriers to equality and freedom. But in 2013, the division continued to set new records for numbers of cases and to reach first-of-their-kind agreements in a number of areas. Through its enforcement efforts, the division works to fight discrimination and protect the civil and constitutional rights of people across the country.
The division’s 2013 accomplishments report highlights its work to advance three core principles: expanding opportunity for all, safeguarding the fundamental infrastructure of democracy and protecting the most vulnerable among us.
“Last year, the Civil Rights Division worked to safeguard the most fundamental rights of American democracy, to extend the promise of equality and opportunity, and to advance the cause of justice that has defined this country since its earliest days,” said Attorney General Holder. “I commend the dedicated men and women of the Civil Rights Division for their leadership on these critical efforts. Their work is exemplary and in many cases groundbreaking. It goes to the heart of who we are as a nation and as a people. And that’s why it continues to be a top priority for this Department of Justice: because we are, and will always be, firmly committed to overcoming persistent threats as well as new challenges in order to ensure equal justice under law.”
“Over the course of 2013, the Civil Rights Division continued the impressive track record it initiated during the first four years of Attorney General Holder’s leadership,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “But for all that the division has accomplished, much work remains. The division remains committed to meeting the next generation of civil rights challenges and to combating discrimination in all its forms. We look forward to an even more productive 2014.”
Expanding opportunity for all
The division’s efforts to ensure equal access to education, housing, consumer credit and employment continue to set new records and to pioneer new models for bringing equal opportunity to all. For example, working with the Consumer Finance Protection Bureau, the division reached its largest ever auto lending settlement when Ally Bank and Financial Inc. agreed to pay $98 million for pricing discrimination in its automobile lending practices. The settlement provided $80 million in direct relief to African-American, Hispanic and Asian/Pacific Islander borrowers who were charged higher interest rate markups on auto loans than white borrowers. The division has obtained more than $800 million in monetary relief in fair lending settlements since the unit was founded in 2010.
Ahead of this year’s 60th anniversary of the landmark Supreme Court decision Brown v. Board of Education, in 2013, the division launched new tools and entered into agreements to address racial disparities in education systems across the country. After an investigation into disciplinary practices in the Meridian, Mississippi, public school system, the division found that black students frequently received far harsher disciplinary consequences, including arrests and incarceration, than white students for comparable and often minor misbehavior. The department entered into a landmark settlement with the Meridian school system that will create a discipline system that treats all students equally regardless of race. Also, to help all school districts administer discipline fairly and consistently, the division, along with the Department of Education, issued a groundbreaking joint discipline guidance for schools to prevent and address racial discrimination in school discipline. This guidance, along with its additional technical assistance material, provides important information on the means by which schools can act to dismantle the school-to-prison pipeline.
The division continues its efforts to eliminate unnecessary segregation of persons with disabilities and to ensure that individuals with intellectual and developmental disabilities are given the opportunity to participate fully in their communities, in accordance with the Supreme Court’s decision in Olmstead v. L.C. In 2013, the division investigated Training Thru Placement (TTP), one of the largest facility-based employment service providers in Rhode Island, and a sheltered workshop in a Providence high school. The division found that workers with intellectual and developmental disabilities typically remained at TTP for decades, earning sub-minimum wages, and that the high school workshop acted as a pipeline to TTP. The department’s investigation found that the workers with disabilities at TTP were not in the most integrated setting appropriate for them; rather, they were capable of working in real jobs with supports and participating in activities in the community. The division entered into an interim agreement with the state of Rhode Island and the Providence Public School District regarding TTP and the school-based workshop and expanded its investigation to all state-funded employment and day facilities to address the rights of people with disabilities to receive state employment and daytime services in the broader community, rather than in segregated sheltered workshops and facility-based day programs. Since 2009, the division’s Olmstead enforcement work has helped protect the rights of more than 46,000 people with disabilities.
T he division also continues to aggressively enforce the Uniformed Services Employment and Reemployment Rights Act (USERRA), ensuring that servicemembers returning from active duty are not penalized by their civilian employers. The division’s USERRA program is critically important because USERRA cases typically involve small amounts of back pay; without the division’s help, many servicemembers would not be able to find or afford private attorneys to take their cases. In Forsyth County, North Carolina, for example, the division reached an agreement to vindicate the employment rights of an Army National Guard soldier who was discharged from his job as a sheriff without cause less than a year after completing a deployment to Iraq.
Finally, the division collected a record in civil penalties, nearly $900,000, through its enforcement of the Immigration and Nationality Act (INA), which prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee, document abuse and retaliation or intimidation. The division also collected more in back pay than in any year in the past 10 years and settled major cases involving discriminatory documentary practices by Macy’s and Centerplate.
Safeguarding the fundamental infrastructure of democracy
In the wake of the Supreme Court’s decision in Shelby County v. Holder, the division continues to use all of the tools still available in the Voting Rights Act (VRA) to ensure that all Americans can cast a ballot free from racial discrimination. In 2013, the department filed three complaints under the VRA to protect the rights of minority voters in Texas and North Carolina to challenge discriminatory voting laws; each of these challenges alleges that these state laws were enacted with discriminatory intent.
The division also expanded its record number of agreements with law enforcement agencies by entering into model agreements with the University of Montana Office of Public Safety and the Missoula Police Department to ensure that police services are delivered without discrimination, that sex crimes are fully and adequately investigated and that victims are treated fairly and with respect after an investigation found systemic failures to protect women victims of sexual assault.
During Fiscal Year 2013, the division’s Courts Language Access Initiative worked with the court systems in 17 states to ensure that individuals are not denied access to important court proceedings because of their national origin and their limited English proficiency. Access to state courts is critically important. Whether cases involve child custody, domestic violence, foreclosure, wage claims or criminal prosecution, the stakes are too high in the courtroom context for parties or witnesses to be effectively excluded from participation.
Protecting the most vulnerable among us
The division prosecutes crimes to ensure protections for some of the most vulnerable populations in the country: those who are abused and trafficked for sex work or labor; those who are attacked out of hate due to the color of their skin, where they worship or who they love. The division and its partners in the U.S. Attorneys’ Offices across the country filed 141 federal criminal civil rights cases, obtaining convictions of 166 defendants, in Fiscal Year 2013 –more than in any previous year in the division’s history.
For example, the division convicted 23 defendants on federal hate crimes charges – building on the division’s record in Fiscal Years 2009-2012, in which the division convicted 74 percent more individuals than in the preceding four years. The division’s Appellate Section also defended the constitutionality of the Matthew Shepard and James Byrd Jr. Hate Crime Prevention Act in court. Through its Human Trafficking Prosecution Unit, the division and its partners in the U.S. Attorneys’ Offices also brought 71 human trafficking cases, the most in the history of the division. The division also brought 53 cases involving sex trafficking, a 55 percent increase over the previous year, and obtained convictions of 90 individuals for trafficking crimes.
The division also works to develop policy and legislative proposals to close the gaps in our nation’s civil rights protections. This year, the division provided technical assistance on numerous legislative initiatives, including the reauthorization of the Violence Against Women Act and the Employment Non-Discrimination Act.
For more information about the Civil Rights Division, visit the division website.
Carlisle Resident Arrested for Child Pornography and Abuse of A ChildRead the Press Release
The United States Attorney’s Office for Middle District of Pennsylvania announced that a Criminal Complaint signed by an agent of the Department of Homeland Security (DHS), Homeland Security Investigations (HSI) was filed United States District Court in Harrisburg on May 9, 2014 against Zackary Adam Knight, Carlisle, Pennsylvania, alleging possession of child pornography and abusive sexual contact with a child under the age of 12.
Knight was taken into custody and today, May 12, appeared before Chief United States Magistrate Judge Martin C. Carlson. After a brief hearing Chief Magistrate Judge Carlson ordered that Knight, age 19, be detained in custody temporarily based on the seriousness of the offenses and the resolution of questions regarding a future fixed address for the defendant. At the time of the arrest, Knight was a resident of housing facilities at the Army War College, Carlisle Barracks.
No date was set for future court hearings.
The ongoing investigation is being conducted by the Department of Homeland Security (DHS), Homeland Security Investigations (HSI) and United States Postal Inspection Service. The case is assigned to Assistant United States Attorney James T. Clancy.
California Cocaine Courier Sentenced to Five Years in PrisonRead the Press Release
Transported 50 Kilograms of Cocaine Worth $1.5 Million
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Sergio Nunez, age 41, of Madera, California, today to five years in prison, followed by five years of supervised release, for possession with intent to distribute cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; and Howard County Police Chief William McMahon.“This is drug interdiction at its best. Mr. Nunez was caught bringing into Maryland a significant amount of cocaine. The quick and effective cooperation between our domestic offices along with our state and local law enforcement partners put an end to Mr. Nunez’s courier business,” stated Gary Tuggle, Assistant Special Agent in Charge of the Drug Enforcement Administration, Baltimore District Office.”
According to Nunez’s plea agreement, on May 22, 2013, Howard County Police stopped the vehicle Nunez was driving for speeding. Nunez provided his California driver’s license, but was not able to provide registration or proof of rental for the vehicle. A K-9 officer arrived shortly after and the dog alerted for the presence of drugs in the vehicle. A subsequent search of the vehicle recovered two duffel bags, each containing a large number of dark cellophane wrapped bricks. DEA agents secured the bags, which were determined to contain approximately 50 kilograms of cocaine with a street wholesale value of $1.5 million. Nunez admitted that he knew the bags contained cocaine and that he was to be compensated for transporting the drugs.United States Attorney Rod J. Rosenstein praised the DEA and Howard County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys James G. Warwick and Seema Mittal, who prosecuted the case.
Bank Branch Manager Charged with Defrauding CustomersRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced the filing of a Criminal Information in U.S. District Court on May 9, 2014, charging Tiffany Look, age 39, of Harrisburg, Pennsylvania, with mail fraud.
According to U.S. Attorney Peter Smith, over a period between 2007 and 2013, Look was a branch manager at two area financial institutions, Mid Penn Bank and Members First Federal Credit Union. Look allegedly devised and carried out a scheme to obtain money from four customers of the institutions by taking out fraudulent loans in the customers’ names. The total loss was allegedly approximately $140,000.
The government also filed a plea agreement with Look in the case which is subject to approval by the Court.
The financial institutions both cooperated with the investigation conducted by the United States Postal Inspectors and the Swatara Township and Hampden Township Police Departments. The case is being prosecuted by Assistant United States Attorney Joseph J. Terz.
If convicted, Look faces a term of imprisonment of up to twenty years and fines up to $250,000.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is twenty years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances, and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public, and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Another Detroit Man Pleads Guilty to Distribution of HeroinRead the Press Release
Huntington, W.Va. – A Detroit man who conspired with others to distribute heroin, cocaine base and oxycodone in Huntington, West Virginia pleaded guilty today to a federal drug charge, announced U.S. Attorney Booth Goodwin. Cecil Rice, 34, pleaded guilty in federal court in Huntington to possession with intent to distribute heroin.
Between August of 2008 and September of 2013, Rice participated with others in the transportation of heroin, cocaine base and oxycodone from Detroit to Huntington for distribution. Rice and his co-conspirators established multiple residences in the Huntington to store, prepare and distribute drugs.
On September 19, 2013, Rice was arrested after leaving a motel located on 16th Street Road in Huntington. At the time of his arrest, officers found two packs of heroin concealed in Rice’s mouth. A search of Rice’s motel room uncovered additional heroin and cocaine base.
Rice faces up to 20 years in federal prison when he is sentenced on August 11, 2014.
The FBI Huntington Violent Crimes Drug Task Force and the Huntington Police Department conducted the investigation with assistance from the Cabell County Sheriff’s Department. Assistant United States Attorney Joseph F. Adams is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
10th Street Gang Member Sentenced for RICO ConspiracyRead the Press Release
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that 10th Street Gang member Brandon Bobbitt, 25, of Buffalo, N.Y., who was convicted of Racketeering Influenced Corrupt Organizations (RICO), was sentenced to 210 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Joseph M. Tripi, who is handling the case, stated that on September 15, 2008, the defendant stole a car and gave it to 10th Street members who were looking to use it a drive-by shooting against rival 7th Street Gang members. The car was used in the drive-by shooting of Omar Fraticello-Lugo who was killed in the attack. Two other people and rival gang members were also injured during the incident.In addition, between 2008 and 2010, Bobbitt also sold cocaine and crack cocaine as part of his participation in the activities of the 10th Street Gang.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, the New York State Police, under the direction of Major Michael Cerretto, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon.
The defendant is among 44 10th Street Gang members and associates charged in this case. A total of 38 have been convicted. Charges are pending against the six remaining defendants. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Saturday 10 May 2014
Williamsburg Man Pleads Guilty to Wire Fraud and Money Laundering ChargesRead the Press Release
NORFOLK, Va. – Stephen Kohout, 56, of Williamsburg, Virginia, pleaded guilty yesterday to wire fraud and concealment money laundering.
Dana J. Boente, United States Attorney for the Eastern District of Virginia made the announcement after the plea was accepted by U. S. District Judge Robert G. Doumar.
Kohout was charged in a criminal indictment returned on March 11, 2014, with thirteen counts of wire fraud and eight counts of concealment money laundering. Kohout faces a maximum penalty of 20 years in prison on the wire fraud charge and a $250,000 fine, and a maximum penalty of 20 years in prison on the money laundering charge and a fine of $500,000 when he is sentenced on July 10, 2014, in Norfolk.
According to a statement of facts filed with his plea agreement, Kohout was given power of attorney by his parents, R. K. and J.K., on July 15, 2003. The power of attorney provided Kohout with full authority to act on behalf of both of his parents with respect to their property, assets and income. In 2006, Kohout began handling the financial affairs of his parents, whose assets were in excess of $1 million and were held in bank and investment accounts to which Kohout had gained full access and control. By 2007, his parents had lost the medical capacity to make financial decisions and Kohout assumed full control over their assets. R. K. died in July, 2011 and his entire estate was left to his wife J.K., who currently resides at a nursing home in Tyrone, Pennsylvania.
In 2007, Kohout, in connection with day trading activities, formed two business entities, ITM Traders, LLC and Nychi, Inc., and opened bank accounts for each of the companies. Thereafter he transferred $55,000 from his parents’ bank account into his account with ITM Traders, LLC. Subsequent to that transfer, he continued to transfer various funds between the ITM Traders, LLC account and the Nychi, Inc. account, all in an effort to support his trading activities.
Kohout did not return any gains made from these trades to his parents’ accounts. Instead, from 2008 through July 2011, Kohout wired approximately $465,000 from his parents’ investment account to his parents’ bank trust accounts. He then misappropriated money from the bank trust accounts in the amount of $386,000 by writing 86 checks, all but one of which were transferred to an account in Kohout’s name.
Kohout spent the misappropriated money on his personal living expenses, repayment of personal loans, credit card bills and dining, entertainment and retail expenditures. In addition to the disbursements Kohout made for his day trading and personal expenses, from 2007 through 2011, Kohout made various disbursements from his parents’ accounts in the form of gifts, loans to his siblings and for the medical care and living expenses of his parents.
Around December 2012, the nursing home caring for J.K. threatened eviction proceedings against her due to her account being in financial arrears. In January 2013, Kohout filed for bankruptcy and despite admitting that he acted contrary to his fiduciary duty and misappropriated his parents’ assets, he did not reveal the full extent of his misappropriation. Kohout’s sister was appointed emergency guardian of their parents’ estate by a Pennsylvania court. J.K. continues to reside at the nursing home where her care is being paid for in whole or in part by the Commonwealth of Pennsylvania Department of Public Welfare. The funds in the parents’ investment accounts had been liquidated and the balance in J.K.’s bank account is approximately $2,000.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service. Assistant U. S. Attorney Brian Samuels is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Friday 9 May 2014
Wellsville Woman Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that April Patterson, of Wellsville, N.Y., who was convicted of conspiracy to manufacture, possess with intent to distribute and distribute, 50 grams or more of methamphetamine, was sentenced to 30 months in prison and ordered to pay $3,143 in restitution to the New York State Department of Environmental Conservation by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the case, stated that during the execution of a search warrant on January 26, 2012 at a residence on South Main St. in Wellsville, law enforcement officers discovered items used to manufacture methamphetamine and a quantity of methamphetamine. A search warrant was later executed at a residence on Madison Ave. in Wellsville. During that search, officers discovered an active methamphetamine laboratory.
The defendant was arrested along with her husband Jason Patterson, Anthony Kidd, John Faber and Justin McPherson. Justin McPherson was convicted and sentenced to 24 months in prison. John Faber was convicted and sentenced to xx months in prison. Jason Patterson and Anthony Kidd have been convicted and are awaiting sentencing.
Today’s sentencing is the result of an investigation on the part of the New York State Police, under the direction of Major Michael Cerretto, the Wellsville Police Department, under the direction of Chief Timothy Walsh, and the Drug Enforcement Administration, under the direction of Jamie J. Hunt, Acting Special Agent in Charge, New York Field Division.Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS (before Magistrate Judge Roger B. Cosbey:)
Charley Gonzalez III, 26, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly conspiring to distribute and possess with the intent to distribute 5 kilograms or more of cocaine and with possessing a firearm in furtherance of a drug trafficking crime. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Damion Alexander, 20, of Fort Wayne, Indiana pled guilty to the felony offense of possession of a firearm after having been convicted of a misdemeanor crime of domestic violence. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
Narciso Soto III, 32, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly maintaining drug-involved premises. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Joseph Luna, 37, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly conspiring to distribute and possess with the intent to distribute 5 kilograms or more of cocaine. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Manuel Herrera, 44, of Fort Wayne, Indiana pled guilty to the felony offense of conspiracy to distribute and possess with intent to distribute controlled a substance. The magistrate is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, FBI Fort Wayne Safe Streets Task Force and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.The Fort Wayne Safe Streets Task Force is comprised of FBI agents and officers from the Indiana State Police, Allen County Police Department, and Fort Wayne Police Department.The New Haven Police Department, Steuben County Sheriff's Department, Elkhart County Interdiction and Covert Enforcement Unit, South Bend Police Department, and IMAGE Drug Task Force assisted with this investigation.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITION (before District Judge Theresa L. Springmann:)
Armando Gonzalez-Gutierrez, 44, of Fort Wayne, Indiana was sentenced to 1 year and 1 day with time served and 3 years supervised release after pleading guilty to the felony offense of conspiracy to distribute a controlled substance.According to documents filed in this case, between July 2011 and February 2013 investigation revealed the existence of a large scale narcotics distribution conspiracy operating in northeastern Indiana and southern lower Michigan.Gonzales – Gutierrez was a part of that network and obtained quantities of cocaine for distribution to his customers.This case was the result of an investigation by the Federal Bureau of Investigation .This case was prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
Week in Review - HammondRead the Press Release
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Jeremy Lloyd, 22, of Gary, Indiana, pled guilty before Senior District Judge James Moody to the felony offense of possession of a firearm by a convicted felon.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force, the Gary Police Department and the Indiana State Police.This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
Tambra Ducker, 25, of Indianapolis, Indiana, pled guilty before Senior District Judge James Moody to the felony offense of possession with the intent to distribute heroin.This charge was filed as a result of an investigation by the Drug Enforcement Administration and the Jasper County Sheriff’s Department.This case is being prosecuted by Assistant United States Attorneys Dean Lanter and Jennifer Chang-Adiga.
Kiontay Pennington, 35, of Gary, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of homicide in the aid of racketeering activity. Sentencing has been set for 9/2/14.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorneys David Nozick and Thomas McGrath.
James Huddleston, 41, of Wheatfield, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of theft concerning programs receiving federal funds.This charge was filed as a result of an investigation by Federal Bureau of Investigation and the Internal Revenue Service.This case is being prosecuted by Assistant United States Attorneys Dean Lanter and Gary Bell.
Jennifer Kurek, 40, of Hobart, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of theft of government property.Sentencing has been set for 7/17/14.This charge was filed as a result of an investigation by the Social Security Administration.This case is being prosecuted by Assistant United States Attorney Gary Bell.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITION:
Alejandro Murillo, 27, of Chicago, Illinois, was sentenced by Chief Judge Philip Simon to 57 months imprisonment and 3 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute methamphetamine.According to documents filed in this case, Murillo was arrested on Interstate 65 near Demotte, Indiana, while driving a vehicle containing 1,498 gross grams of methamphetamine, which he had hidden near the motor of the vehicle. Immigration law enforcement officials determined that Murillo is an illegal alien. This case was a result of an investigation by the Drug Enforcement Administration HIDTA Task Force.This case was prosecuted by Assistant United States Attorney Dean Lanter.
Virginia Man Sentenced to 12 1/2 Years for Transporting Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Stewart Thornton Reed, 50, of Virginia, was sentenced today in U.S. District Court by Judge
George Z. Singal to 12½ years in prison, to be followed by 5 years of supervised release, for
transporting child pornography. Reed pled guilty to the offense on December 20, 2013.According to court records, in September of last year, Reed sent an email message to an
undercover email account of a Special Agent with Homeland Security Investigations. Attached
to the email were image files depicting a young girl displaying her genitals. When the agent
asked the girl’s age, Reed replied that she was two years old. Reed was arrested near
Fredericksburg, Virginia in October. A cell phone in Reed’s possession when he was arrested
was later found to contain a number of images depicting minors engaged in sexually explicit
conduct, including the images that he had sent to the agent in September.The investigation was conducted by U.S. Immigration and Customs Enforcement’s
Homeland Security Investigations.Virginia Beach Man Sentenced to 180 Months in Prison for Receipt and Possession of Child PornographyRead the Press Release
NORFOLK, Va. – Marcus Warrick, 29, of Virginia Beach, Va., was sentenced today to 180 months in prison, followed by lifetime supervised release, for receipt of child pornography and possession of child pornography.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Katrina W. Berger, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Washington, made the announcement after sentencing by United States District Judge Mark S. Davis.
Warrick was found guilty by a federal jury on February 4, 2014. According to court records and evidence at trial, HSI executed a search warrant and seized his computer on November 8, 2013. HSI found more than 400 videos and images of child pornography on his computer. The investigation revealed that he installed numerous file-sharing programs on his computer and, using search terms, actively sought out images of child pornography.
This case was investigated by Homeland Security Investigations. Assistant United States Attorneys Randy Stoker and Elizabeth Yusi prosecuted the case on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Two New York Women Admit Trafficking Fraudulent Federal Tax Refund ChecksRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PRICILLA BRITO, 38, of New York, N.Y., and YOWANDY DeLEON, 38, of the Bronx, N.Y., pleaded guilty today before Senior U.S. District Judge Ellen Bree Burns in New Haven to federal offenses related to the trafficking of fraudulent federal tax refund checks.
According to court documents and statements made in court, this matter stems from an investigation into individuals who, through various means, obtained fraudulent U.S. Treasury tax refund checks using stolen identities. After obtaining the checks, individuals typically deposited them into bank accounts that had been opened using fraudulent identifying documents. The funds were then quickly withdrawn. At times, co-conspirators sold the fraudulent checks to others for less than face value of the checks. The government alleges that millions of dollars were lost as result of this scheme.
BRITO and DeLEON obtained several fraudulent tax refund checks, subsequently delivered some of the checks to co-conspirators in Connecticut, and received proceeds from the negotiation or sale of fraudulent checks.
In 2013, BRITO provided at least nine checks, with a total face value of $59,802, to an individual in Waterbury. In an undercover operation, the checks were then purchased by an individual working with law enforcement for $35,590.
In October 2013, DeLEON traveled to Connecticut to provide co-conspirators with one fraudulent check with a face value of $7,580.38. In addition, a law enforcement search of DeLEON’s cell phone revealed images of names, dates of birth, Social Security numbers, and amounts of refunds for 32 individuals whose identities had been used in filing fraudulent federal tax returns. In total, the intended loss to the U.S. Treasury resulting from the checks that DeLEON provided to co-conspirators, as well as the refunds issued to the 32 individuals whose personal information was found on her phone, was $240,450.
BRITO pleaded guilty to one count of conspiracy to defraud the U.S. She is scheduled to be sentenced on August 6, 2014, at which time she faces a maximum term of imprisonment of five years.
DeLEON pleaded guilty to one count of theft of public funds, and aiding and abetting the theft of public funds. She is also scheduled to be sentenced on August 6, 2014, at which time she faces a maximum term of imprisonment of 10 years.
Four other individuals have been charged as a result of this investigation:
On February 12, 2014, Ramon Mena, 25, of Waterbury, pleaded guilty to one count of theft of public money and one count of distribution of heroin. He has been detained since his arrest on November 23, 2013, and is scheduled to be sentenced on November 1, 2014.
On February 20, 2014, Jerry de los Santos Rodriguez, 23, a citizen of the Dominican Republic last residing in Waterbury, pleaded guilty to one count of conspiracy to defraud the U.S. On May 1, 2014, he was sentenced to approximately five months of imprisonment, time already served, and he will be deported.
Julio Lara Trinidad, 27, of Waterbury, and Cesar Penson-Perez, 27, of New York, N.Y., are awaiting trial.
Trinidad is charged with one count of conspiracy to defraud the U.S., six counts of theft of public money and aiding and abetting the same, one count of Social Security fraud and one count of aggravated identity theft. He has been detained since his arrest on November 23, 2013.
Penson-Perez is charged with one count of conspiracy to defraud the U.S., three counts of theft of public money and one count of aggravated identity theft. He has been detained since his arrest by the Darien Police Department on March 17, 2014.
As to Trinidad and Penson-Perez, U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the United States Postal Inspection Service, the Internal Revenue Service – Criminal Investigation Division, the United States Secret Service and Homeland Security Investigations, with the assistance of the Danbury and Darien Police Departments. The case is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Two Individuals Charged as Part of Securities Kickback SchemeRead the Press Release
BOSTON – Two California men were charged yesterday for their involvement in a microcap stock kickback scheme.
Sandip Shah, 40, was charged in an indictment with nine counts of wire fraud and Shailesh Shah, 47, was charged in an Information with two counts of mail fraud and two counts of wire fraud. Both are from Chino, Calif. And were previously arrested on February 27, 2014.
According to the charging documents, Sandip Shah was in the business of promoting penny stocks and assisting public companies in finding sources of funding. Shailesh Shah was the President and Chief Executive Officer of two publicly-traded companies, SOHM, Inc. and Costas, Inc. Shailesh Shah agreed to pay secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in his two publicly-traded companies. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents.
According to the charging documents, Sandip Shah agreed to introduce the investment fund representative to executives of publicly-traded companies so that those executives could enter into the kickback arrangement. In exchange for the introductions and for facilitating the kickback arrangements as they continued, Sandip Shah accepted a portion of the kickbacks paid by the executives. What the defendants did not know was that the purported investment fund representative was actually an undercover agent.
The charges follow a lengthy investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly-traded companies whose stock often trades at pennies per share.
If convicted, each defendant faces a statutory maximum penalty of 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss on each count.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. U.S. Attorney Ortiz expressed appreciation for the significant assistance her office received from the U.S. Securities and Exchange Commission. These cases are being prosecuted by Trial Attorney Alexander H. Berlin.
The details contained in the indictment and Information are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was brought in coordination with 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.
Two District Men Sentenced to Decades in Prison for Carjacking and Robberies Committed in Same Night-Third Defendant Sentenced to More Than Eight Years in Prison for Joining in Crimes-Read the Press Release
WASHINGTON – Rayshawn Clark, 25, and Dwayne Hilton, 22, both of Washington, D.C., were sentenced today to prison terms of 31 years and 25 years, respectively, for carrying out three separate armed robberies on the same night, as well as a carjacking of one of the victims, U.S. Attorney Ronald C. Machen Jr. announced.
A third man, Pernell Lee, 37, also of Washington, D.C., was sentenced to eight years and eight months in prison for participating in one of the robberies and acting as a getaway driver.
The men were found guilty by a jury in February 2014, following a trial in the Superior Court of the District of Columbia. They were sentenced by the Honorable Anita Josey-Herring. Upon completion of their prison terms, they will be placed on five years of supervised release.
The jury found Clark and Hilton guilty of conspiracy, three counts of armed robbery, armed carjacking, and firearms offenses. The jury found Lee guilty of one count of armed robbery, fleeing a law enforcement officer, reckless driving, and firearms offenses.
According to the government’s evidence, the series of crimes began in the early morning hours of June 17, 2012. Clark and Hilton pistol-whipped, robbed and carjacked the first victim, a man, in the 5600 block of 14th Street NW. An unidentified third co-conspirator got away in the victim’s car. A second man, who was walking by while the robbery was in progress, was pistol-whipped and robbed by Hilton, while Clark continued to hold the first victim at gunpoint. After obtaining property from both victims, Clark and Hilton took off in a dark Ford Explorer.
Minutes later, after the first victim had called 911, Clark and Hilton returned to the scene after realizing that during the robberies they dropped a cell phone – later determined to belong to Hilton. Clark got out of the car, and with a gun drawn, demanded the dropped phone. The victim, who had found and hidden the dropped phone, pretended to know nothing about it. Clark then robbed the victim of his remaining belongings.
Officers with the Metropolitan Police Department (MPD) arrived as this robbery was concluding, and as Clark ran back to the Explorer to flee. Following a chase, the Explorer flipped over. Lee, who had been driving, ran and was caught after a foot chase. Clark was extracted from the flipped vehicle with the first victim’s property in his pocket. Hilton escaped on foot and was arrested later. Two guns were recovered in and around the car. Hilton’s DNA matched DNA found on one of the guns.
In a separate proceeding today, Hilton was sentenced to an additional two years in prison – to run consecutively to his other sentence – on a charge of assault with significant bodily injury. He pled guilty earlier this year to that charge, which stemmed from a stabbing at the District of Columbia Jail on Dec. 20, 2013. Hilton participated in the attack against another inmate.
In announcing the sentences, U.S. Attorney Machen commended the work of those who investigated the robbery and carjacking case from the Metropolitan Police Department. He also expressed appreciation for the assistance provided by the District of Columbia Department of Forensic Sciences. He acknowledged the efforts of those who provided assistance and handled the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Chrisellen Kolb and Suzanne Curt, Deputy Chiefs of the Office’s Appellate Division; Victim/Witness Advocate Jennifer Clark; Criminal Investigators John Marsh and Stephen Cohen; Litigation Technology Specialist Leif Hickling, and Paralegal Specialists Deborah McPherson, Wanda Trice, and Todd McClelland. Finally, he commended the work of Assistant U.S. Attorney Vivien Cockburn, who handled the initial investigation, and Assistant U.S. Attorney Natalia Medina, who prosecuted the robbery and carjacking case at trial.
U.S. Attorney Machen also expressed appreciation to those who handled the case involving the stabbing at the jail, including the District of Columbia Department of Corrections Office of Investigative Services, Paralegal Specialist Todd McClelland, and Assistant U.S. Attorney Jin Park, who prosecuted that matter.
14-110Swiss Asset Management Firm and Related Companies Agree to Resolve Criminal Tax InvestigationRead the Press Release
James M. Cole, the Deputy Attorney General of the Department of Justice, Kathryn Keneally, the Assistant Attorney General for the Tax Division of the Department of Justice, Preet Bharara, the United States Attorney for the Southern District of New York, and Richard Weber, the Chief of the Internal Revenue Service, Criminal Investigation (IRS-CI), announced today that swisspartners Investment Network AG, a Swiss-based asset management firm, and three of its wholly-owned subsidiaries (collectively, the Swisspartners Group), entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Southern District of New York and agreed to pay $4.4 million to the United States. The NPA was entered into based on, among other things, the Swisspartners Group’s remedial measures, voluntary self-reporting and extraordinary cooperation, including its voluntary production of approximately 110 client files for non-compliant U.S.-taxpayer clients, and provides that the Swisspartners Group will not be criminally prosecuted for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from in or about 2001 through in or about 2011. The NPA requires the Swisspartners Group to forfeit $3.5 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $900,000 in restitution to the IRS, representing the approximate amount of unpaid taxes arising from the tax evasion by the Swisspartners Group’s U.S. taxpayer-clients. The NPA applies only to the four specific entities that are party to it and does not apply to any other subsidiaries of swisspartners Investment Network AG or any individuals.
“The extraordinary cooperation of Swisspartners has enabled us to identify U.S. tax cheats who have hidden behind phony offshore trusts and foundations,” said Deputy Attorney General Cole . “In this and other cases around the world, we will continue to provide substantial credit for prompt and full cooperation.”
“As today’s announcement shows, we receive information about U.S. taxpayers with undisclosed accounts from many sources, some of which are not public,” said Assistant Attorney General Keneally. “For many accountholders, the time to come forward voluntarily to avoid criminal prosecution has run out.”
“This office will continue to work aggressively to hold accountable not only those U.S. taxpayers who evade their tax obligations by hiding money overseas, but also those abroad who make such tax evasion possible,” said U.S. Attorney Bharara. “For its wrongdoing in assisting U.S. taxpayers to open and maintain undeclared accounts overseas, the Swisspartners Group is being made to pay $4.4 million in forfeiture and restitution. Swisspartners avoided criminal charges as a direct result of its decision to self-report its misconduct at a time when it was not even under investigation and its extraordinary cooperation, including its decision to turn over voluntarily the files and identities of U.S. taxpayer clients it helped hide money from the IRS. The case serves as a clear example of the benefits that can be obtained from early and complete cooperation with federal law enforcement.”
“I am very pleased that we have successfully concluded negotiations with the Swisspartners Group,” said IRS-CI Chief Weber . “In making amends, the Swisspartners Group has turned over 110 account files relating to U.S. taxpayer-clients who maintained undeclared assets overseas. This agreement marks yet another significant step forward in combating offshore tax evasion. Anyone who is hiding money or assets offshore with the intent of committing tax evasion will be found and prosecuted. It's not a matter of ‘if,’ it's a matter of ‘when."
The NPA was entered into between the U.S. Attorney’s Office, on the one hand, and swisspartners Investment Network AG and the following three wholly-owned subsidiaries on the other: swisspartners Wealth Management AG, a Zurich-based company that establishes and manages entities such as foundations and trusts; swisspartners Insurance Company SPC Ltd., a Cayman Islands-based life insurance carrier that offers life insurance and annuity products; and swisspartners Versicherung AG, a Liechtenstein-based insurance carrier that offers a variety of insurance and annuity products.
The NPA recognizes that, beginning in 2008, the Swisspartners Group voluntarily implemented a series of remedial measures to stop assisting U.S. taxpayers in evading federal income taxes. The NPA further recognizes that in 2012, at a time when it was neither a subject nor target of any investigation by the U.S. Department of Justice, the Swisspartners Group self-reported its conduct concerning U.S. taxpayer-clients to the Department of Justice. Additionally, the NPA recognizes the extraordinary cooperation of the Swisspartners Group, including its voluntary production of client files for 110 non-compliant U.S. taxpayers that included the identities of those U.S. taxpayers.
As part of the NPA, the Swisspartners Group admitted various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct. Specifically, the Swisspartners Group admitted that it knew certain U.S. taxpayers were maintaining undeclared foreign bank accounts with the assistance of the Swisspartners Group in order to evade their U.S. tax obligations, in violation of U.S. law. The Swisspartners Group acknowledged that it helped certain U.S. taxpayer-clients conceal from the IRS their beneficial ownership of undeclared assets maintained in foreign bank accounts by, among other things, creating sham foundations and other sham entities that served as the nominal account holders; placing accounts or insurance policies in the names of non-U.S. nationals; facilitating the transportation of large amounts of cash into the United States on behalf of U.S. taxpayer-clients; and arranging for the bulk deposit of cash at Swiss depository financial institutions on behalf of U.S. taxpayer-clients.
As part of the NPA, the Swisspartners Group has agreed to forfeit $3.5 million to the United States, representing certain fees it obtained in exchange for services that it provided to U.S. taxpayers with undeclared foreign bank accounts from in or about 2001 through in or about 2011. In connection with this forfeiture, the Swisspartners Group has agreed not to contest a civil forfeiture action filed by the United States. That action was filed on May 9, 2014, in the U.S. District Court for the Southern District of New York and assigned to U.S. District Judge Gregory H. Woods.
The department entered into the NPA based on factors including:
· the Swisspartners Group’s voluntary implementation of various remedial measures beginning in or about May 2008;
· the Swisspartners Group’s voluntary self-reporting of its criminal conduct at a time when it was neither a subject nor target of any investigation by the U.S. Department of Justice;
· the Swisspartners Group’s voluntary and extraordinary cooperation, including its voluntary production of account files that include the identities of U.S. taxpayer-clients;
· the Swisspartners Group’s willingness to continue to cooperate to the extent permitted by applicable law; and
· the Swisspartners Group’s representation, based on an investigation by outside counsel, the results of which have been shared with the U.S. Attorney’s Office and the Tax Division, that the misconduct under investigation did not, and does not, extend beyond that described in the Statement of Facts.
The NPA requires the Swisspartners Group to continue to cooperate with the United States for at least three years from the date of the agreement. In the event that the Swisspartners Group violates the NPA, the U.S. Attorney’s Office may prosecute the Swisspartners Group.Sovereign Citizen Convicted on Gun ChargeRead the Press Release
ATLANTA - Jermaine Eric Gibson has been convicted by a federal jury of unlawfully possessing a firearm as a convicted felon, in connection with his illegal occupation of a foreclosed property as a “sovereign citizen.”
“Sovereign citizens do not believe that laws apply to them except when it is to their benefit,” said United States Attorney Sally Quillian Yates. “This conviction demonstrates that our laws do apply to everyone. If you violate the law, you will be prosecuted.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Individuals and even groups who feel that our laws don’t apply to them can pose a more significant risk to law enforcement, particularly when they illegally arm themselves. The conviction in federal court of Mr. Gibson, a self-described sovereign citizen, is a clear reminder that he is not above the law.”
According to United States Attorney Yates, the charges and other information presented in court: In March 2013, Jermaine Gibson, a self-professed sovereign citizen, moved into a foreclosed home located in an upscale, gated community in Lithonia, Ga. The home, however, was under contract to be sold, and the Gibson was not the buyer. Gibson declared ownership of the property after he filed a deed in DeKalb County, Ga., in which he claimed that he had deeded the home to himself. After he moved into the residence, he changed the locks on the doors and posted a warning to real estate agents to stay off the property.
While Gibson was in the home, several people observed long-barreled guns at that residence. Efforts to convince Gibson to vacate the property failed. The real estate agent called the police to the residence, but was told that the matter was a civil matter. The homebuyer went to the residence and spoke to Gibson. When asked to leave because the homebuyer would be closing soon, Gibson refused to leave. Gibson told the homebuyer that someone lied to her because she would not be moving into that home.
The home was sold in April 2013, but the new buyer could not move into her home because Gibson still remained in the home. The bank and the homeowner joined together to file paperwork in DeKalb County to have Gibson evicted. In the meantime, warrants were obtained in DeKalb County for Gibson’s arrest.
On May 2, 2013, Gibson, 36, of Atlanta, Ga., was arrested and a search warrant was executed at the residence. During the search, officers found a .38 Smith and Wesson revolver in Gibson's bed. Because Gibson is a convicted felon, he cannot legally possess a firearm.
During the trial, agents testified that in a post-arrest interview, Gibson declared that the laws of the government do not apply to him. He advised further that he possessed the handgun for protection.
Sentencing is scheduled for July 29, 2014, at 10:30 a.m. before United States District Judge Thomas W. Thrash.This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Tracia King is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
South Portland Man Sentenced to More than Four Years for Heroin Trafficking ConspiracyRead the Press Release
Contact: Daniel J. Perry
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Nicholas Schwarz, 26, of South Portland, Maine was sentenced in United States District Court
by Judge George Z. Singal to more than four years (53 months) in prison and four years of
supervised release for conspiracy to distribute heroin. Schwarz pleaded guilty to the offense on
May 14, 2013.
According to court records, from 2011 until February 2013, the conspirators, led by
Mitch Merritt, obtained kilogram quantities of heroin in Lawrence, Massachusetts that was
distributed to customers in Maine and New Hampshire by Merritt, Schwarz, and
others. Numerous home burglaries and shoplifting crimes were committed by customers to pay
for that heroin.This case was investigated by the United States Drug Enforcement Administration; the
Bureau of Alcohol, Tobacco, Firearms and Explosives; the Maine Drug Enforcement Agency;
the New Hampshire and Maine State Police; the York County Sheriff’s Office; and the
Rochester, New Hampshire Police Department; and results from the ongoing effort of the
Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal,
state and local law enforcement agencies. The principal mission of the OCDETF program is to
identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money
laundering organizations, and those primarily responsible for the nation’s illegal drug supply.Snohomish County Men Indicted for Gun TraffickingRead the Press Release
Four men who trafficked firearms stolen from the Snohomish, Washington Fred Meyer store were indicted this week and will appear in the U.S. District Court in Seattle, announced U.S. Attorney Jenny A. Durkan. MATTHEW ELSHAUG, 35, of Monroe, Washington is currently in the Snohomish County Jail and will come to federal court next week. CASEY YOUNT, 26, also of Monroe; LEVI HERZ, 30, of Everett, Washington; and RAYMOND BARON, 52, of Marysville, Washington all appeared in the U.S. District Court on the indictment today, and are being detained at the Federal Detention Center at SeaTac pending further court hearings.
According to the indictment, in the early morning hours of November 17, 2013, ELSHAUG burglarized the Snohomish Fred Meyer store, using a crowbar to steal 29 firearms from the gun case. ELSHAUG and YOUNT then sold the guns for cash or drugs. HERZ bought nine of the stolen firearms and BARON bought other stolen firearms. ELSHAUG, YOUNT, and HERZ all are prohibited from possessing firearms because of prior convictions. ELSHAUG has prior convictions in Snohomish County for burglary, theft, and illegal firearms possession. YOUNT has prior convictions in Snohomish County for theft and drug crimes. HERZ has prior convictions in Snohomish County for drug crimes.
The thirteen count indictment charges all four men with conspiracy to receive, possess, barter, and sell stolen firearms. ELSHAUG is charged with Possession and Sale of Stolen Firearms, Theft of Firearms from a Federal Firearms Licensee, and being a Felon in Possession of Firearms. YOUNT is charged with Possession and Sale of Stolen Firearms, and being a Felon in Possession of Firearms. HERZ is charged with Possession and Sale of Stolen Firearms, being a Felon in Possession of Firearms, and Distribution of Controlled Substances (methamphetamine and heroin). BARON is charged with Possession and Sale of Stolen Firearms, Distribution of Controlled Substances (methamphetamine and heroin), Possession of a Firearm with Obliterated Serial Number, and Possession of a Firearm Not Registered to Possessor in the National Firearms Registration and Transfer Record.
The conspiracy count is punishable by up to five years in prison. The firearms related charges are punishable by up to ten years in prison, except for the count involving an obliterated serial number, which is punishable by five years in prison. The drug distribution charges are punishable by up to twenty years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the Snohomish Police Department, the Snohomish County Sheriff’s Department, the Marysville Police Department, the Everett Police Department, the Washington State Department of Corrections, the Snohomish Fugitive Task Force, and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The Snohomish County Prosecuting Attorney’s Office worked closely with the U.S. Attorney’s Office and law enforcement on the case.
The case is being prosecuted by Assistant United States Attorney Kate Crisham.Shooter One of Two Defendants Sentenced in Series of Armored Truck Robberies That Left One Person DeadRead the Press Release
ATLANTA – Ashley Henderson has been sentenced to 75 years and Stacey Dooley has been sentenced to 40 years in federal prison for committing a series of armored truck robberies in the Atlanta area between October 2010 and March 2011.
“The sentencing of these two defendants closes one chapter on a disturbingly violent robbery crew that had all Atlanta area law enforcement on high alert back in 2010 and 2011,” said United States Attorney Sally Quillian Yates. “These robberies grew increasingly violent and dangerous not only to armored car couriers, but to the public who had the misfortune to be nearby. The dismantling and sentencing of this robbery crew makes our district a safer place, and the long prison terms provide justice for the truly senseless murder of Mr. Castillo.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The sentencing of both Dooley and Henderson removes two violent career criminals from our streets. While the FBI is pleased with the role it played in bringing these two individuals to justice, our thoughts and prayers remain with those harmed in the wake of this violent crime spree, particularly the family of mortally wounded Garda courier Gary Castillo.”
According to United States Attorney Yates, the charges and other information presented in court: The defendants, Ashley Henderson and Stacey Dooley, were part of a group that robbed armored car couriers between October 7, 2010, and March 30, 2011. During the robberies, one or two gunmen would approach a courier after the courier made a cash pick-up from a location or as the courier was about to restock an ATM machine with cash. Other members of the robbery crew would act as lookouts during the robberies, with one being the designated getaway driver. During a robbery in January 2011, Henderson shot the victim courier multiple times at close range, critically injuring him. In March 2011, Henderson shot the victim courier multiple times, which resulted in the victim’s death. Altogether, members of this crew were responsible for six robberies involving over $470,000.
The evidence established that Henderson, Dooley, and their co-conspirators, were involved in the commission of the following robberies:
- The robbery of a Dunbar Armored courier just after he made a cash pick-up on October 7, 2010, at the Mex America Latino Services located in Marietta, Ga.
- The robbery of a Dunbar Armored courier who was restocking cash in an ATM machine on November 11, 2010, at a Bank of America located in Buford, Ga.
- The robbery of a Loomis Armored courier who was restocking cash in an ATM machine on November 29, 2010, at a Wells Fargo Bank located in Snellville, Ga.
- The robbery of a Dunbar Armored courier who was heading to an ATM machine to restock it with cash inside the Mall of Georgia on December 7, 2010.
- The robbery of a Loomis Armored courier who was restocking cash in an ATM machine on January 21, 2011, at a Wells Fargo Bank located in Stone Mountain, Ga. Ashley Henderson shot and seriously injured the courier during the robbery.
- The robbery of a Garda Cash Logistics courier outside the Kroger Grocery Store located on LaVista Road in DeKalb County, Ga. Ashley Henderson fatally shot the courier, Gary Castillo, after Castillo made a cash pick-up of $11,000 from the store.
Henderson pleaded guilty to five counts of Hobbs Act robbery (armed robbery of the couriers) and three counts of carrying and using a firearm during the commission of a violent crime. Dooley pleaded guilty to six counts of Hobbs Act robbery and two counts of carrying and using a firearm during the commission of a violent crime.
In addition to Henderson and Dooley, the following persons have also entered guilty pleas as a result of their role in the robberies:
- Quentin Booker, 36, of Douglasville, Ga., pleaded guilty to five counts of Hobbs Act robbery and two counts of carrying and using a firearm during the commission of a violent crime.
- Edwin Thornton, 31, of Atlanta, Ga., pleaded guilty to three counts of Hobbs Act robbery and one count of carrying and using a firearm during the commission of a violent crime.
- Derrick Powell, 26, of Atlanta, Ga., pleaded guilty to two counts of Hobbs Act robbery and one count of carrying and using a firearm during the commission of a violent crime.
- Michael Johnson, 31, of Atlanta, Ga., pleaded guilty to two counts of Hobbs Act robbery and one count of carrying and using a firearm during the commission of a violent crime.
- Ronnie Little, 22, of Stone Mountain, Ga., pleaded guilty to one count of Hobbs Act robbery and one count of carrying and using a firearm during the commission of a violent crime.
- Veronica Bullard, 35, of Lithia Springs, Ga., pleaded guilty to one count of Hobbs Act robbery.
Desiree Jones, 29, of Snellville, Ga., pleaded guilty to two counts of unlawfully transferring a firearm knowing it would be used in a crime of violence and received a sentence of five years in federal prison.
Henderson, 30, of Atlanta, Ga., was sentenced by United States District Judge Thomas W. Thrash, Jr., to 75 years in prison to be followed by five years supervised release. He was also ordered to pay an $800 special assessment. Dooley, 37, originally from Charlotte, NC, was sentenced to 40 years in prison on April 16, 2014 to be followed by five years supervised release. He was also ordered to pay an $800 special assessment.
This case is being investigated by the Federal Bureau of Investigation with significant assistance and resources provided by the Gwinnett Police Department. Other departments providing invaluable assistance were the Gwinnett County District Attorney's Office, DeKalb County Police Department, the DeKalb County District Attorney's Office, Marietta Police Department, and the Cobb County District Attorney's Office.
Assistant United States Attorneys Jill E. Steinberg and Tracia M. King are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Serial Armed Robber Sentenced to over 56 Years in PrisonRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Manuel Orosa, Chief, City of Miami Police Department, announce that Lionell Sanders, 19, of Miami, was sentenced by U.S. District Judge K. Michael Moore to fifty-six years and four months in prison, after pleading guilty on December 9, 2013 to conspiracy to commit robbery affecting interstate commerce, and two counts each of robbery affecting interstate commerce and the possession of a firearm in furtherance of a crime of violence.
According to information in the court record, from August through September 2013 Sanders and his associates conducted a string of violent armed robberies targeting food delivery drivers and taxicab operators. On at least five separate occasions, Sanders and his co-conspirators placed orders for food deliveries, or requested taxi service, at residential locations where he and others, brandishing firearms, assaulted the drivers and forcibly took money, other personal belongings, and any items to be delivered. Several of the robberies resulted in injuries to the victims of varying severity.
This case is, in large part, the result of the Violence Reduction Partnership, launched by the U.S. Attorney’s Office. Through this Partnership, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks in various neighborhoods, while simultaneously working with community leaders and concerned citizens to mentor at-risk youths, provide jobs and job training to young families, and help probationers and parolees successfully re-enter society.
Mr. Ferrer commended the investigative efforts of the ATF and the City of Miami Police Department. The case was prosecuted by Assistant U.S. Attorney Vanessa S. Johannes.
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.
Santa Fe Man Arrested on Federal Tax ChargesRead the Press Release
ALBUQUERQUE – Andre Lewis, 33, of Santa Fe, N.M., made his initial appearance in federal court in Albuquerque, N.M., this morning on an indictment charging him with federal tax offenses, announced Acting U.S. Attorney Damon P. Martinez and Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
Lewis was arrested without incident by the IRS yesterday afternoon. He remains in custody pending his arraignment hearing and a detention hearing, both of which are scheduled on May 12, 2014.
Lewis is charged in an eleven-count indictment that was filed on April 23, 2014. Count 1 of the indictment charges Lewis with conspiracy to defraud the IRS. Count 2 charges him with making a materially false statement to a federal officer. Counts 3 through 11 charge Lewis with preparing and aiding and abetting the preparation and filing of false tax returns. Lewis allegedly committed the offenses between Feb. 2009 and Aug. 2009 in Bernalillo, County, N.M.
According to Count 1 of the indictment, from Feb. to July 2009, Lewis conspired with others to defraud the IRS by preparing and filing fraudulent claims for tax refunds. Lewis and his co-conspirators allegedly perpetuated the scheme by obtaining the names, identifiers and W-2 Forms for federal taxpayers, and using that information to electronically file federal income tax returns included either false claims for the First Time Home Buyer Credit or false withholding information. Lewis and his conspirators allegedly obtained tax refunds to which they were not entitled from the IRS.
Counts 3 through 11 of the indictment identify nine separate instances in which Lewis allegedly filed or assisted in the filing of false federal tax returns that sought an aggregate of $97,803.00 in tax refunds. Based on those allegedly fraudulent filings, the IRS deposited an aggregate of $95,058.12 into bank accounts identified in the false tax returns, including five deposits made into Lewis’s bank accounts.
Count 2 of the indictment alleges that on Aug. 13, 2009, Lewis knowingly made a materially false statement to a Special Agent of the IRS. Lewis allegedly told the agent that he did not have an email address bearing his name knowing that his representation was false because he allegedly had used the email address to electronically file false federal income tax returns.
If convicted, Lewis faces a statutory maximum penalty of five years on each of Counts 1 and 2 of the indictment and a statutory maximum penalty of three years on each of Counts 3 through 11 of the indictment. Charges in indictments are merely accusations. Defendants are presumed innocent unless found guilty.
This case was investigated by IRS Criminal Investigation in Albuquerque and is being prosecuted by Assistant U.S. Attorney Cynthia L. Weisman.
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Lewis Indictment
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Sandra Hatfield, Former Chief Operating Officer of DHB Industries, Inc., Sentenced to 7 Years in Prison for Insider Trading, Fraud, and Obstruction of JusticeRead the Press Release
Earlier today, Sandra Hatfield, the former Chief Operating Officer of DHB Industries, Inc., was sentenced to 7 years in prison, to be followed by 3 years of supervised release, and ordered to forfeit some $1.8 million in illicit profits made during her fraudulent operation of a Long Island-based supplier of body armor to the U.S. military and law enforcement agencies. The sentence was imposed by United States District Judge Joanna Seybert in at the U.S. Courthouse in Central Islip, New York.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Shantelle P. Kitchen, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS).
Hatfield and her co-defendant DHB founder David H. Brooks were convicted in September 2010 on nine counts of conspiracy, insider trading, securities fraud, and obstruction of justice arising out of a $200 million fraud. Subsequently, Hatfield pleaded guilty to filing a false income tax return. The district court reserved its decision on how much Hatfield will be required to pay in restitution to the victims of her fraud. A decision is expected within 90 days.
“DHB made millions from supplying body armor to protect those who serve this country in the U.S. military and our law enforcement ranks. But, rather than honor the bravery of those who donned DHB’s products, Hatfield preyed upon investors, lied to them, and looted the company, all the while wrapping herself in the American flag,” stated United States Attorney Lynch. “And her lies did not stop there. She lied on her taxes and, when the SEC investigated, she lied to them too. Today, Hatfield was held accountable. This prosecution demonstrates my Office’s unwavering commitment to exposing and prosecuting corrupt executives.” Ms. Lynch thanked the FBI and IRS for leading the investigation and the Defense Criminal Investigative Service for its assistance in the case.
FBI Assistant Director-in-Charge Venizelos stated “Hatfield took advantage of her position as Chief Operating Officer at DHB to profit at the expense of honest and unsuspecting investors. She placed greed and entitlement above the law. Hatfield’s sentence should be a warning to those who engage in financial crimes that the consequences can be severe. We will continue to work with our law enforcement partners to investigate and present for prosecution those individuals who misuse their positions within the financial market for personal gain.”
IRS Acting Special Agent-in-Charge Kitchen stated, “The real shame is that DHB Industries provided vital products to the men and women of the U.S. military and to law enforcement, but Ms. Hatfield and Mr. Brooks used their positions in the company to satisfy their own voracious greed. Corporate officials hold positions of trust and that trust is broken when they abuse their power by committing crimes of selfishness. IRS-Criminal Investigation is committed to working with our law enforcement in vigorously investigating corporate officers who engage in financial crimes such as conspiracy, insider trading, securities fraud, and obstruction of justice, as well as tax crimes.”
During an eight-month trial, the government’s evidence proved that Hatfield and others conspired to loot DHB for personal gain. Hatfield helped her co-defendant Brooks conceal the related party status of Tactical Armor Products, a company supposedly run independently of DHB by Brooks’ wife, but in fact wholly controlled by Brooks. Through this scheme, Hatfield helped Brooks siphon more than ten million dollars from DHB to support a thoroughbred horse-racing business.
Hatfield also engaged in accounting fraud schemes designed to increase the net income and profits that DHB reported in its press releases and filings with the Securities and Exchange Commission by falsely inflating the value of DHB’s existing inventory, adding non-existent inventory to the company’s books and records, and fraudulently reclassifying expenses. Knowing that DHB’s stock price of $20 per share had been artificially-inflated through her many and varied schemes, Hatfield sold more than $5 million of DHB stock in late 2004. After those insider sales, DHB stock plummeted to pennies per share and the company was de-listed from the American Stock Exchange.
Hatfield resigned from DHB in November 2005 and Brooks was removed as DHB’s CEO in July 2006. In July 2006, DHB relocated its headquarters from Westbury, New York, to Pompano Beach, Florida, and on October 1, 2007, DHB changed its name to Point Blank Solutions, Inc. DHB stock was traded on the American Stock Exchange until trading was suspended on May 26, 2006, as the defendants’ schemes came to light
The government’s case was prosecuted by Assistant United States Attorneys Christopher Ott, Christopher Caffarone, James Knapp, Laura Mantell, Bonni Perlin, and Mary Dickman.
This prosecution was the result of efforts by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.