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Thursday 8 May 2014
Great Falls Man Sentenced to 8 Years in Federal Prison for MethRead the Press Release
The United States Attorney's Office announced that TODD ALLEN SCHMIDT, 50, of Great Falls, was sentenced to 96 months in prison, to be followed by four years of supervised release, during a federal court session in Helena on May 7, 2014, before Senior U.S. District Judge Sam Haddon. Schmidt was sentenced in connection with his January 2014 guilty plea to possession with intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Bryan Whittaker, the prosecution told the Court that on January 14, 2013, in Helena, an informant contacted a local methamphetamine dealer to arrange to purchase 2 ounces of methamphetamine. The first drug dealer was out of town, but told the informant that he could obtain methamphetamine from Todd Schmidt, and that he, the first drug dealer, would have Schmidt call him, the informant.
A short time later, the informant received a call from Schmidt who told the informant that he would meet Schmidt the next evening in Helena with the methamphetamine. The following evening, January 15, 2013, the informant placed several calls to Schmidt which were recorded by law enforcement. The two agreed to meet at the Grub Steak Restaurant parking lot in Helena. Law enforcement provided the informant with sufficient funds to complete the transaction and then monitored the meeting with Schmidt.
Schmidt arrived at the Grub Steak parking lot in a white Cadillac. Schmidt got out of his vehicle and into the informant's vehicle where he gave the informant approximately 2 ounces of methamphetamine in exchange for the cash. Schmidt did not count the money and immediately left the vehicle. Schmidt got back into his car and drove out of the parking lot. The informant then turned the drugs over to law enforcement which were later analyzed and found to contain methamphetamine.
The case was investigated by the Federal Bureau of Investigation, Montana Division of Criminal Investigations, and the Missouri River Drug Task Force.
Former Postmaster Sentenced for Stealing Postal Service FundsRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Michael Kozina, 57, of Eden, N.Y., who was convicted of misappropriation of postal funds by a postal service employee, was sentenced to six months in prison by U.S. District Judge U.S. District Judge Richard J. Arcara. The defendant was also ordered to pay $27,345.75 in restitution to the U.S. Postal Service.
“We have stated on numerous occasions that those who work in Government owe the public the highest duties of honesty and integrity,” said U.S. Attorney Hochul. “This Office will not tolerate those who would steal from the taxpayers they serve.”
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that Kozina was employed as Postmaster at the Lawtons, N.Y. Post Office between April 2, 2005 and July 31, 2012. As the Postmaster, the defendant accepted cash payments from more than 12 United States Postal Service customers for the purchase of money orders. Instead of depositing the cash payments into the USPS register, Kozina kept a portion of the cash for his own purposes. The defendant then falsified USPS records to make it appear that customers purchased money orders in an amount which was significantly less than what was actually paid.
As a result, losses to the USPS totaled $13,760.75. In addition, Kozina also stole $13,585 in post office box rental payments between January 1, 2009 and July 31, 2012.
The conviction was the culmination of an investigation on the part of Special Agents of the United States Postal Service, Office of Inspector General, under the direction of Special Agent-In-Charge Monica Weyler.Former Postal Worker Sentenced for Stealing Video Games from the MailRead the Press Release
BOSTON – A former postal worker was sentenced today for stealing more than 200 video games from the mail.
James L. White, 68, of Dorchester, was sentenced by U.S. District Judge Douglas P. Woodlock to 30 days in prison, three years of supervised release, and $8,000 in restitution to Gamefly. In January, White pleaded guilty to theft of mail.
From July through November 2012, White, while working as a mail handler at the Boston General Mail Facility, stole GameFly video games from the mail. He then resold those video games to Gamestop, a videogame and software retailer, garnering himself several thousands of dollars in profit.
United States Attorney Carmen M. Ortiz and Rafael Medina, Special Agent in Charge of the United States Postal Service, Office of Inspector General, Northeast Area Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption and Special Prosecutions Unit.
Former Owner of Sacramento Capitals Tennis Team Pleads Guilty to $50 Million Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Deepal Wannakuwatte, 63, of Sacramento, pleaded guilty today to one count of wire fraud in furtherance of a long-running and large-scale fraud scheme, announced United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBI’s Sacramento Field Office, Jose M. Martinez Special Agent in Charge for the IRS-Criminal Investigation (IRS-CI) and Wade V. Walters Special Agent in Charge of the Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG).
Under the terms of his plea agreement, the government will recommend that United States District Judge Troy L. Nunley sentence Wannakuwatte to 20 years in prison, the maximum punishment allowable for the offense to which he pleaded guilty. In addition, the agreement requires Wannakuwatte to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims.
According to the plea agreement, from 2002 to 2014, Wannakuwatte convinced more than 100 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Wannakuwatte’s companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. He falsely claimed that these companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. In fact, while he did have a contract with the VA, it was worth up to only $25,000 a year.
In all, Wannakuwatte ultimately obtained well over $150 million from his victims. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations.
“Mr. Wannakuwatte’s guilty plea brings to an end to one of the longest running, most extensive, and most damaging fraud schemes our region ever has seen,” said U.S. Attorney Wagner. “We are still calculating the total damage resulting from his scheme, but he caused well over $50 million in losses, and the total losses could be closer to $100 million. Together with the FBI and the IRS, our office moved swiftly to ensure not only that he would be held accountable for this crime, but also that we could take all steps possible to return remaining funds to his victims. The very substantial sentence that he is likely to receive should send a clear message that my office will continue to prosecute financial crimes like this one vigorously.”
“Wannakuwatte’s financial empire collapsed because it was based on fraud and deceit. Unfortunately, he left a trail of victims — individuals, businesses, government agencies, venture funds, and other lenders — who suffered significant losses,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “The FBI is committed to working with our agency partners to aggressively pursue those who betray the trust of the public for personal gain.”
“This was not your average Ponzi scheme,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “The fraud involved hundreds of millions of dollars and more than 100 victims including individuals, corporate entities and financial institutions. The defendant conned investors through the use of false documents, inflated tax returns, and convincing lies. IRS-CI will continue to work closely with our law enforcement partners to aggressively pursue fraud schemes such as these.”
“The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG) is pleased to have joined the Department of Justice and our law enforcement colleagues in conducting this investigation,” stated FDIC OIG Special Agent in Charge Wade V. Walters. “We are especially concerned when individuals like Mr. Wannakuwatte defraud our nation’s financial institutions. We are firmly committed to joint efforts such as this one in the interest of ensuring integrity in individual institutions and the financial system as a whole.”
Wannakuwatte used a variety of false and fraudulent means to back up his claims of financial success. For example, Wannakuwatte regularly provided investors with inflated financial statements that supported his claims that he had more than $100 million in sales with the VA. He also regularly provided victims with false corporate ledgers from IMG and Relyaid. Some ledgers falsely showed tens of millions of dollars in accounts receivable from the VA. Other ledgers falsely showed tens of millions of dollars in glove inventory.
Wannakuwatte also provided his victims with personal and corporate tax returns. Wannakuwatte actually reported and paid taxes on returns that falsely overstated his annual personal income and the annual gross receipts and sales for IMG. He used these returns to establish his financial credibility with financial institutions and individual investors.
On at least two occasions, Wannakuwatte set up fake conference calls between himself, a victim, and a person whom he directed to act as a VA representative. The conference calls were to convince victims of the value of the VA contracts and the relationship Wannakuwatte claimed to have with the VA.
Wannakuwatte’s plea agreement contains multiple provisions designed to return as much investor money as possible. He must disclose the existence of any assets or property that he obtained as the result of his scheme, and forfeit his interest in 16 properties, four vehicles, multiple bank accounts, insurance policies, business interests, and any tax refunds to which he may be entitled. Wannakuwatte’s properties are in Hawaii, Oregon, and in the counties of Sacramento, Yolo, and Yuba. They include his residence, vacation homes, and commercial properties. In addition, Wannakuwatte agreed to file for personal bankruptcy, and to file bankruptcy petitions on behalf of any business in which he may have an interest. These filings must be done by the end of May 2014 and should give creditor victims a forum to pursue claims against him.
This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. Assistant United States Attorneys Michael Beckwith and Kevin Khasigian are prosecuting the case.
Wannakuwatte is scheduled to be sentenced by Judge Nunley on July 24, 2014. The plea agreement is subject to the approval of Judge Nunley. If the agreement is accepted, Wannakuwatte’s actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Former Executive Director of Virgin Islands Legislature Charged with Bribery and Extortion <br /> in Award of Government ContractsRead the Press Release
The former e xecutive director of the Legislature of the Virgin Islands was indicted today by a federal grand jury in the Virgin Islands for accepting bribes and engaging in extortion in the award of contracts with the Legislature, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Ronald W. Sharpe for the District of the Virgin Islands.
The indictment charges Louis “Lolo” Willis, 56, of St. Thomas, Virgin Islands, with three counts of federal programs bribery and three counts of extortion under color of official right.
According to the indictment, Willis was the executive director of the Legislature between 2009 and 2012. One of his responsibilities included oversight of the renovation of the Legislature building, which included awarding and entering into contracts on behalf of the Legislature. These contracts included contracts for general construction, air-conditioning services and carpentry, which were not publicly bid. Willis was also responsible for paying the contractors for their work. As alleged in the indictment, Willis accepted payments, including, among other things, thousands of dollars in cash, from three contractors in exchange for using his official position to secure contracting work for the contractors and to ensure they received payment upon completion.
An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.
This case was investigated by the FBI’s San Juan Division, the Office of the Virgin Islands Inspector General and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Trial Attorneys Peter Mason and Jennifer Blackwell of the Criminal Division’s Public Integrity Section and First Assistant U.S. Attorney Thomas Anderson of the District of the Virgin Islands.Former Camp Pendleton Marine Gunnery Sergeant Guilty of Nearly $100,000 FraudRead the Press Release
United States Attorney Laura E. Duffy announced today that a former U. S. Marine Gunnery Sergeant admitted to submitting false lodging reimbursement requests to the Marine Corps from 2009 to 2011, totaling nearly $100,000. At the time, the defendant, Gunnery Sergeant Devin Pierre Alario was stationed at Marine Corps Base Camp Pendleton.
As detailed in his plea agreement, under certain circumstances, reservists who are called to active duty become eligible for a housing reimbursement benefit during the term of their active duty, in addition to the basic allowance for housing that they receive. Alario exploited this housing reimbursement benefit by falsely claiming reimbursement for rent that he never paid. Specifically, on 27 occasions from June 2009 through October 2011, Alario submitted false rental receipts that inflated the amount he was paying for rent, included a fictitious landlord, or contained a false address. To substantiate his lodging claims and conceal the fraud, Alario also submitted fake leases that he prepared. Typically, Alario’s false claims sought rental reimbursement for up to $3,800 per month. All told, he made $95,013.10 from his fraud.
Alario pleaded guilty to one felony count of making false claims against the United States.
In his plea agreement, Alario agreed to pay restitution to the U.S. Marine Corps in the full amount of the losses.
United States Attorney Duffy stated, “We will aggressively prosecute anyone who siphons much-needed taxpayer funds from our nation’s armed forces, including those who exploit their positions within the military to do so.”
Acting Special Agent in Charge Kevin F. Boyne of the Defense Criminal Investigative Service (DCIS) Western Field Office commented, “DCIS is committed to working with the Naval Criminal Investigative Service and other partner agencies to aggressively pursue those individuals who undermine the public trust and the efforts of the Department of Defense to support the warfighter and their families. Schemes motivated by greed betray the values of the Marine Corps and cannot be tolerated.”
The case has been assigned to U. S. District Judge Cathy Ann Bencivengo. The next scheduled court appearance is July 25, 2014 at 9:00 a.m. for sentencing.
DEFENDANT Case Number: Devin Pierre Alario Age: 40 Temecula, CA CHARGESFalse claims, in violation of Title 18, United States Code, Section 287 - Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of three years, restitution, and $100 special assessment.
INVESTIGATING AGENCYDefense Criminal Investigative Service
Naval Criminal Investigative Service*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.
Florence Attorney Pleads to Mail FraudRead the Press Release
Contact Person: Bill Day (803) 929-3000
Columbia, South Carolina ----- United States Attorney Bill Nettles stated today that William J. Rivers,III, age 48, of Darlington, South Carolina, was sentenced in federal court in Florence by Chief United States District Judge Terry L. Wooten to 60 months and ordered to pay $2,702,060.00 in restitution, for violations of mail fraud, a violation of Title 18, United States Code, Section 1341.
Evidence presented at the change of plea hearing established that clients of Schurlknight & Rivers, P.A., a personal injury law firm in Florence, South Carolina, complained to the South Carolina Bar Association that they had been defrauded by William J. Rivers, III, and his partner, John L. Schurlknight. During the resulting investigation by the Disciplinary Counsel of the South Carolina Supreme Court, an investigator scheduled an appointment with John L. Schurlknight. However, on the day of the meeting with Schurlknight, he committed suicide. Investigation revealed that between October 2006 and November 2012, more than one hundred clients of the firm were defrauded of more than $3,300,000.00. Twenty six of the victims were directly attributable to actions by Rivers. Rivers defrauded his clients by forging their names on releases to settle personal injury cases and lying to his clients telling them the cases had not been settled. The money was then kept by the law firm. In addition to keeping the settlement monies of his clients, Rivers also failed to pay medical providers with the settlement proceeds, leaving the clients owing hundreds of thousands of dollars for the medical treatment they had received.
The case was investigated by the agents of the Federal Bureau of Investigation. Assistant United States Attorney William E. Day, II, of the Columbia office handled the case.Federal Indictment Charges Six Men with Trafficking Narcotics in Lea CountyRead the Press Release
ALBUQUERQUE – A federal grand jury has returned an indictment charging six men with narcotics trafficking offenses, announced Acting U.S. Attorney Damon P. Martinez, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division and Commander Byron Wester of the Lea County Drug Task Force (LCDTF).
The seven-count indictment, which was filed yesterday, charges Leroy Castillo, 32, Sergio Garza, 35, and Joe Padilla, 32, of Hobbs, N.M., Ruben Estrada, 32, and Richard Armijo-Romero, 22, of Las Vegas, N.M., and Charlie Gutierrez, 34, of Albuquerque, N.M., with violating the federal narcotics laws. Four of the defendants, Estrada, Garza, Armijo-Romero and Gutierrez were arrested on May 1, 2014, based on a criminal complaint. Castillo and Padilla have yet to be arrested and are considered fugitives. Individuals with information regarding the whereabouts of Castillo and Padilla are asked to call the FBI at 505-622-6001.
Estrada, Garza, Armijo-Romero and Gutierrez were arraigned this morning on the indictment in federal court in Las Cruces, N.M., and each entered a not guilty plea. Estrada and Garza were ordered detained pending trial during detention hearings held this morning. Armijo-Romero and Gutierrez remain in custody pending detention hearings scheduled for May 13, 2014.
The indictment in this case is the result of an investigation primarily targeting a drug trafficking organization operating in Lea County, N.M., that allegedly was led by Castillo. The investigation was led by the FBI and LCDTF with assistance from the DEA and New Mexico State Police. The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.Count 1 of the indictment alleges that between April 28, 2014 and May 1, 2014, the six defendants conspired to possess cocaine with the intention of distributing the drugs in Lea County and elsewhere. Count 2 alleges that the six defendants possessed cocaine with intent to distribute on May 1, 2014, in Bernalillo County, N.M. Counts 3 and 4 allege that Castillo possessed cocaine and heroin with intent to distribute on May 1, 2014, in Lea County. Counts 5 and 6 allege that Garza possessed cocaine and heroin with intent to distribute in Lea County on May 1, 2014. Count 7 charges Garza with using and carrying a firearm in relation to and in furtherance of drug trafficking crimes in Lea County on May 1, 2014.
According to court filings, on April 28 and 29, 2014, the defendants made plans to pool their money to purchase narcotics from a source of supply in Phoenix, Arizona. On April 30, 2014, Estrada traveled to Phoenix allegedly to purchase narcotics. On May 1, 2014, Estrada, Armijo-Romero and Gutierrez traveled from Phoenix to Albuquerque in two vehicles. The three men were stopped by law enforcement officers on Interstate 40 west of Albuquerque and were arrested after the officers found approximately 8.5 kilograms of cocaine in the vehicle Armijo-Romero was driving. Garza was arrested in Hobbs later that day.
Following the arrests of Estrada, Armijo-Romero and Gutierrez, officers executed federal search warrants for six residences in Hobbs. The officers allegedly recovered 23 firearms, 1.6 kilograms of heroin, more than half a kilogram of methamphetamine and an additional 4.1 kilograms of cocaine, for a total of approximately 12.6 kilograms of cocaine.
If convicted on Counts 1 and 2 of the indictment, each of the six defendants faces a mandatory minimum ten years in prison and a maximum of life in prison. Castillo faces a similar sentence if convicted on Count 4. Castillo faces a mandatory minimum of five years to a maximum of 40 years in prison if convicted on Count 3, and Garza faces a similar sentence if convicted on Counts 5 and 6. Garza faces a five-year mandatory minimum prison sentence that must be served consecutive to any other sentence imposed if he is convicted on Count 7. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Roswell and Las Cruces offices of the FBI and the LCDTF, with assistance from the Las Cruces office of the DEA, the New Mexico State Police and the Phoenix Police Department. The case is being prosecuted by the U.S. Attorney’s Las Cruces Branch Office.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department the Tatum Police Department and the Jal Police Department, and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
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Castillo Indictment
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Castillo, Joe Photo
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Castillo, Leroy Photo
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Federal Charges Brought Concerning Lansing Federal Income Tax Refund ScamRead the Press Release
Over $1,000,000 in tax refunds sought by tax fraudsters.
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr. announced today that Takabvako Chiwocha-Crowell, age 40, currently residing in the Dallas, Texas metropolitan area, was charged in a federal indictment in the Western District of Michigan, which alleges a conspiracy to file false claims against the United States government.
The indictment alleges that over six hundred false federal individual tax returns were filed by Chiwocha-Crowell in 2011, with many of those returns submitted to the IRS listing a residential address in the Lansing, Michigan area. The indictment further alleges family members and friends assisted Ms. Chiwocha-Crowell in the scam.
The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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Fargo Man Sentenced to 12 Years for His Role in the Death of Local MusicianRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on May 8, 2014 Nathan William Evenson, 27, Fargo, N.D., was sentenced to serve 12 years in prison for conspiracy to distribute a controlled substance, before U.S. District Judge Ralph R. Erickson.
The investigation revealed that Evenson and other co-conspirators would receive shipments of heroin from a source in Minneapolis, Minn., and would distribute them to various people in the F-M area. Evenson and co-defendants Seth Lund and Nicole Wadsworth distributed the heroin that resulted in physical injury and contributed to the death of Cody Conner of Fargo, N.D. Seth Lund was previously sentenced to 7 years in prison. Wadsworth is scheduled for sentencing on June 2, 2014, at 10:30 a.m. U.S. District Court.
Judge Erickson also sentenced Evenson to serve three years supervised release, pay $4367.50 in restitution and a $100 special assessment to the Crime Victims Fund.
The case was investigated by the Drug Enforcement Administration and the Fargo Police Department.
First Assistant U.S. Attorney Chris Myers prosecuted the case.
Eleven Charged in Federal Court with Cocaine Trafficking in the Bronx and Across New York StateRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Janet DiFiore, the Westchester County District Attorney, Scott W. Brown, Tarrytown Police Chief on behalf of the Greenburgh Drug and Alcohol Task Force, and George Venizelos, Assistant Director-In-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of 11 defendants and the unsealing of an Indictment and a Superseding Indictment charging a conspiracy to distribute kilogram quantities of cocaine in and around the Bronx, across the Hudson Valley, and up to Albany, New York.
U.S. Attorney Preet Bharara stated: “These arrests are the product of the ongoing and unparalleled cooperation between our office and the Westchester District Attorney’s Office, and between federal and local law enforcement authorities. In particular, it is our privilege to work with District Attorney DiFiore and her team to prosecute alleged narcotics traffickers like the defendants. I want to thank our many federal and local law enforcement partners, representing villages, towns, cities and the nation all of whom coalesced to bring this case.”
Westchester District Attorney Janet DiFiore stated: “Law enforcement from all levels, federal, state and local, collaborated in a multi-jurisdictional effort that stretched from New York City to the Capitol District. This coordinated effort resulted in the takedown of a major narcotics trafficking operation in New York State. Our ongoing joint efforts with the United States Attorney’s office and the assistance of U.S. Attorney Preet Bharara in this and other prosecutions is a model of collaborative law enforcement and its results.”
Chief Scott W. Brown of the Tarrytown Police Department, speaking for the Greenburgh Drug and Alcohol Task Force, stated: “We are extremely proud of our officers and grateful for the assistance and cooperation of all agencies involved. The dedication and diligence of these law enforcement professionals will have a significant impact on the flow of illegal drugs in our communities.”
FBI Assistant Director-in-Charge George Venizelos stated: “Today, we were able to disrupt and dismantle yet another drug trafficking organization whose primary goal was to distribute cocaine in the surrounding areas. The arrests and searches were carried out today with our law enforcement partners working side by side to make the streets safer.”
According to allegations in the Indictments unsealed today:
The Indictments charge eleven people, PHILLIP LLENAS, a/k/a “Bemba,” 39, FRANKLIN ABREU, 28, SHERMAN ALSTON, a/k/a “Sherm,” 51, VICTOR ANDRADES, a/k/a “Fat Man,” 38, JAMES FERNANDEZ, a/k/a “Burg,” a/k/a “Burger,” 32, FERNANDO GUERRERO, 31, JOSE PEREYRA, a/k/a “Nano,” 33, MENSUR RADONCIC, a/k/a “Stu,” 31, KEENAN SOTO, a/k/a “Chinito,” 25, and KARL ZARATE, 38, with conspiring to distribute, and possess with intent to distribute, five kilograms or more of cocaine in Westchester County, New York, Orange County, New York, Albany County, New York and the Bronx, New York. The Superseding Indictment charges ANGEL APONTE, a/k/a “A,” 34, with conspiring to distribute, and possess with intent to distribute, five kilogram or more of cocaine. The charge against each defendant and the corresponding maximum potential penalties are outlined in the chart attached to this press release.
All eleven of the defendants charged in the Indictments unsealed today were arrested. Ten of the defendants were presented in White Plains federal court this afternoon before U.S. Magistrate Judge Paul E. Davison. One defendant, ALSTON, is scheduled to be presented at 2:00 p.m. tomorrow before Judge Davison.
Contemporaneous with the arrests, state and federal law enforcement officers executed search warrants at 24 locations and upon 4 vehicles. These searches resulted in the seizure of more than $800,000 cash, more than 5 kilograms of cocaine, approximately 40 pounds of marijuana, eight firearms, several kilo presses and other drug trafficking paraphernalia.
Mr. Bharara praised the outstanding investigative work of the FBI, the Greenburgh Drug and Alcohol Task Force, comprised of the police departments of the Town of Greenburgh, and the Villages of Ardsley, Dobbs Ferry, Elmsford, Hastings, Irvington, North Castle, Sleepy Hollow, and Tarrytown, the Westchester District Attorney’s Office, the New York State Police, the Yonkers Police Department, the U.S. Department of Homeland Security, the U.S. Drug Enforcement Administration, and the New York City Police Department.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Michael Gerber and Scott Hartman are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is responsible for the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Aponte, S1 14 Cr. 268
United States v. Llenas, et al., 14 Cr. 268
Takedown ChartElba I. Bonilla-Bayon Indicted and Arrested for Theft of Government PropertyRead the Press Release
SAN JUAN, P.R. – Yesterday, May 7, a Federal grand jury returned a 175 count-indictment against Elba I. Bonilla-Bayón for theft of government property, concealment of bankruptcy assets, student assistance program fraud, money laundering and aggravated identity theft, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The defendant is facing a forfeiture allegation of $1,429,873.00.
According to the indictment, from on or about January, 2010 through on or about December 2012, the defendant wilfully and knowingly stole and purloined goods of the United States, that is, funds from Head Start / Early Head Start Programs; Child Care Development Fund Program; Child and Adult Care Food Program; and the American Recovery and Reinvestment Act, property of the United States of the value of $1,429,873.00, in checks ranging from $1,000 to $37,000, which said property had come into the possession and under the care of Elba I. Bonilla-Bayón by virtue of her employment as a President and Chairman of the Board for Programa Avance en Puerto Rico, grantee and delegated agency of United States Department of Health and Human Services (Head Start, Early Head Start and Child Care Development Fund Program) and the United States Department of Agriculture (Child and Adult Care Food Program).
Bonilla-Bayón operated and administered 49 Head Start / Early Head Start centers in the municipalities of Loíza, Canóvanas, Río Grande and Luquillo that served 1,318 children. From in or around January 2010, continuing through in or around December, 2012 the defendant through Programa Avance en Puerto Rico, opened approximately 35 bank accounts at Westernbank, Banco Popular de Puerto Rico, Banco Santander and Cooperativa de Ahorro y Crédito Metodistas Unidos de Puerto Rico. She received approximately $30,800,178.45 in federal funds from multiple federal agency programs, including but not limited to Head Start Program, Early Head Start Program, Child Care Program, Child and Adult Care Food Program (CACFP) and the American Recovery and Reinvestment Act.
During the scheme, Bonilla-Bayón through Programa Avance en Puerto Rico began receiving funds under the CACFP for reimbursement of the meals and snacks it was purportedly providing to children in its programs. From that time until in or around December 2012, Avance received a total of approximately $549,736.28 as a direct result of monthly records the defendant signed and provided to the Puerto Rico Department of Education.
Also, according to the indictment, on or about September 25, 2010, Bonilla-Bayón opened an account at the San Juan Marriott Resort & Stellaris Casino and was approved a credit line of up to $30,000.00 as a local player. The majority of the funds stolen by the defendant were spent by her at the San Juan Marriott Resort & Stellaris Casino.
In addition to the scheme purported by the defendant, Bonilla-Bayón filed for bankruptcy under the provisions of Chapter 11 at the United States Bankruptcy Court for the District of Puerto Rico. The defendant, knowingly and fraudulently concealed property belonging to Programa Avance en Puerto Rico, specifically a Child and Adult Care Food Program (USDA) check payment of $99,307.03, from the trustee charged with control of the debtor’s property, from the creditors and the United States Trustee.
The defendant herein knowingly engaged and attempted to engage in monetary transactions affecting interstate and foreign commerce in criminally derived property of a value greater than $10,000, such property having been derived from the specified unlawful activity of Concealment of Bankruptcy Assets. Specifically, the indictment details at least four payments ranging from $13,000 to $18,000 Bonilla-Bayón made to the San Juan Marriott Resort & Stellaris Casino with the money concealed from the United States Trustee.
The aggravated identity theft charges relate to monthly reports submitted by Bonilla-Bayón to the Puerto Rico Family Department in order to receive the funds using the identity of the Head Start Program participants as she knowingly possessed, used, and transferred without lawful authority, a means of identification of the Head Start Program beneficiaries (Name, Date of Birth and Family ID) in connection to the theft of government funds.
The Student Financial Aid Fraud charge relates to the fact that the defendant did knowingly and willfully fail to refund $13,185.50, as required by federal regulation, to the United States Department of Education. These funds were received as Pell grant moneys for students at Centro de Capacitación y Asesoramiento Vetelba, Inc. who did not complete their course of study or were otherwise not entitled to Pell grants.
“The defendant took advantage of her managerial position in Programa Avance en Puerto Rico and stole directly from the government of the United States, money that was intended to be used for children’s education and development,” said United States Attorney Rosa Emilia Rodríguez-Vélez. “The vast majority of government employees are hardworking members of our community, but those who betray the trust and use their position for personal gain should know that they will be investigated and prosecuted to the full extent of the law.”
“I am proud to be part of the Federal team that brought Elba Bonilla to justice,” said Tom O’Donnell, Special Agent in Charge of Health and Human Services OIG (HHS/OIG). “Greed, at the expense of valuable HHS Head Start Grant funds, will not be tolerated. These funds are needed to nurture low-income children and their families. I would like to thank HHS/OIG’s Office of Audit Services for their expertise in the audit of Programa Avance, and for providing significant support during the investigation.”
“The defendant’s criminal activities remind the public that fraud against the United States government remains an ongoing problem in our country,” said Carlos Cases, Special Agent in Charge of the FBI, San Juan Field Office. “The FBI and our law enforcement partners are committed to preventing and prosecuting fraud against the government at all levels.”This case was investigated by the US Department of Health and Human Services, Office of Inspector General (Investigations / Audit Services), with the collaboration of the Federal Bureau of Investigation, the US Department of Agriculture, Office of Inspector General, the US Trustee Office, and the US Department of Education, Office of Inspector General.
The case is being prosecuted by Special Assistant U.S. Attorneys Wallace A. Bustelo and Pedro R. Casablanca. If found guilty, the defendant could face a possible sentence of 10 years in prison for theft of government property and engaging in monetary transactions in property derived of specific unlawful activity, five years of imprisonment and a fine of up to $250,000.00 for the concealment of bankruptcy assets, and two additional years for each aggravated identity theft count. A criminal indictment contains only charges and is not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty.El Secretario de Justicia de los Estados Unidos Holder y el Secretario Duncan Emiten Orientación Para los Distritos Escolares para Garantizar el Acceso Igualitario a las Escuelas Públicas para Todos los Niño...Read the Press Release
WASHINGTON - El Secretario de Justicia de los Estados Unidos Eric Holder y el Secretario Arne Duncan anunciaron hoy la emisión de una orientación actualizada para ayudar a las escuelas públicas primarias y secundarias a garantizar que los procesos de matriculación sean compatibles con la ley y cumplir con su obligación de brindar acceso igualitario a la educación a todos los niños, independientemente de su procedencia.
En 2011, los Departamentos de Justicia y Educación emitieron una orientación para ayudar a las escuelas a comprender sus responsabilidades bajo el fallo de la Corte Suprema en Plyler contra Doe y las leyes federales de derechos civiles de brindar acceso igualitario a la educación a todos los niños, independientemente de su situación inmigratoria o la de sus padres. Hoy, los departamentos están emitiendo importantes actualizaciones a dicha orientación, la que incluye ejemplos de prácticas de matriculación permitidas, así como ejemplos de los tipos de información que no pueden usarse como base para denegar el ingreso de un estudiante a la escuela.
Los documentos de orientación actualizados—los que incluyen una carta orientativa a los estados y los distritos escolares y una hoja informativa y un documento de preguntas y respuestas—destacan la necesidad de flexibilidad al aceptar documentos de los padres para probar la edad de un menor y probar que el menor vive en el área de servicio de una escuela. También brindan ejemplos específicos de los tipos de documentos que muchas escuelas han aceptado. Los documentos orientativos recuerdan a las escuelas que no pueden exigir ciertos documentos—tales como una licencia de conducir de un padre o una madre, emitida por el estado—cuando dicha exigencia impediría la matriculación de un estudiante debido a la situación inmigratoria de su padre o madre.
"Los distritos de escuelas públicas tienen la obligación de matricular a los alumnos independientemente de su situación inmigratoria y sin discriminar debido a raza, color u origen nacional", señaló el Secretario de Justicia de los Estados Unidos Eric Holder. "El Departamento de Justicia hará todo lo posible para garantizar que las escuelas cumplan con esta obligación. Haremos valer la ley para asegurar que la puerta de la escuela permanezca abierta para todos".
"Queremos garantizar que cada líder escolar comprenda las exigencias legales según la Constitución y las leyes federales, y esperamos que esta actualización corrija algunos conceptos erróneos", indicó el Secretario Arne Duncan. "El mensaje es claro: permitan que todos los niños que viven en su distrito se inscriban en sus escuelas públicas".
En los tres años desde la emisión original de la orientación en 2011, los departamentos vienen trabajando en conjunto con los estados y los distritos escolares en todo el país para lograr el cumplimiento de acuerdo con Plyler y las leyes federales de derechos civiles que prohíben la discriminación debido a raza, color y origen nacional.
Los cambios importantes anunciados hoy brindarán a los distritos herramientas adicionales y la orientación práctica necesarias para asegurar que la puerta de la escuela esté abierta para todos los estudiantes, y que menores indocumentados y menores pertenecientes a familias inmigrantes ya no enfrenten barreras para la matriculación en la escuela y para su camino hacia un futuro mejor.
District Woman Pleads Guilty to Health Care Fraud, Sold Counterfeit Documents to Would-Be Home Health Care Aides-Documents Needed to Gain Work, Confirm Qualifications-Read the Press Release
WASHINGTON – Adoshia L. Flythe, 36, of Washington, D.C., pled guilty today to a federal charge of health care fraud following an undercover investigation into the sale of counterfeit health certificates to people seeking jobs in the home health care industry.
The plea was announced by U.S. Attorney Ronald C. Machen Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C.; and Charles J. Willoughby, Inspector General for the District of Columbia.
Flythe pled guilty in the U.S. District Court for the District of Columbia. The Honorable Rudolph Contreras scheduled sentencing for Sept. 4, 2014. The charge carries a statutory maximum of 10 years in prison as well as financial penalties. Under federal sentencing guidelines, Flythe faces up to six months of incarceration and a fine of up to $5,000.
Flythe, a personal care aide, was one of 24 people -- including operators of home care agencies and nurse staffing agencies, office workers, and personal care aides -- arrested in late February 2014, following investigations into fraudulent billing practices in the home health care industry. The investigations uncovered numerous, separate schemes involving fraud, kickbacks, and false billings in the growing field of home care services for District of Columbia Medicaid patients. She is the first defendant to plead guilty in the various schemes.
The home health care industry includes services intended to assist people in performing the activities of daily living, such as getting in and out of bed, bathing, dressing, taking medication, and other needs. Such services are provided by personal care aides, who often work for home care agencies and nurse staffing agencies. In order to be reimbursed by D.C. Medicaid, the personal care aides performing the services had to have documentation showing that they meet numerous qualifications as set forth by D.C. regulations.
In her guilty plea, Flythe admitted selling packages of counterfeit documentation to two individuals, charging them $350 apiece. The fraudulent documents Flythe sold included a counterfeit “Home Health Care Aide” certificate from the University of the District of Columbia and a counterfeit “Health Certificate for Staff” that contained the forged name and signature of at least one doctor. The two individuals who purchased the documents from Flythe purportedly wanted to apply for employment with a home care agency and to cause Medicaid to be billed for personal care services; actually they were working as part of the undercover investigation.
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director in Charge Parlave, Special Agent in Charge DiGiulio, and Inspector General Willoughby commended the work of those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Donna Galindo, Krishawn Graham, Corinne Kleinman, and Nicole Wattelet.
Finally, they expressed appreciation for the work of the prosecutors handling the health care cases, including Assistant U.S. Attorney Michael J. Friedman, who appeared in court today, Assistant U.S. Attorneys David Johnson, Ted Radway, Lionel André, and Special Assistant U.S. Attorney Dangkhoa Nguyen.
14-107Defendant Sentenced in Manhattan Federal Court to Six Months in Prison and Six Month’s Home Confinement for Being A Leader of an International Multimillion-Dollar Illegal Sports Gambling BusinessRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ILLYA TRINCHER was sentenced today in Manhattan federal court to six months in prison followed by six months’ home confinement in connection with his leadership role in the operation of a high-stakes illegal sports gambling business. TRINCHER was also ordered to forfeit approximately $6.4 million. He was sentenced by U.S. District Judge Jesse M. Furman.
According to the Indictment, other documents filed in Manhattan federal court and statements made at various proceedings in this case, including today’s sentencing:
TRINCHER and defendant Hillel Nahmad, a/k/a “Helly,” operated and led a nationwide illegal gambling business in New York City and Los Angeles that catered primarily to multi-millionaire and billionaire clients. As part of this business, the organization ran a high-stakes, illegal sportsbook that utilized several online gambling websites operating illegally in the United States. The organization booked bets that were often in the hundreds of thousands of dollars, and at times a million dollars, on a single sporting event. The organization also made millions of dollars of sports bets each year.
Twenty-nine defendants in this case have pled guilty, and two have entered into deferred prosecution agreements. The defendants who have pled to date have agreed to forfeit, in total, more than $69,000,000. The following defendants have pled guilty, and have been or await sentencing:
- Bryan Zuriff pled guilty to gambling charges on July 26, 2013, and was sentenced on November 25, 2013.
- William Barbalat pled guilty to gambling charges on August 14, 2013, and was sentenced on December 16, 2013.
- Kirill Rapoport pled guilty to gambling charges on August 16, 2013, and was sentenced on December 19, 2014.
- Edwin Ting and Justin Smith pled guilty to gambling charges on September 4, 2013, and were sentenced on January 21, 2014, and January 6, 2014, respectively.
- Dmitry Druzhinsky and David Aaron pled guilty to gambling charges on October 4, 2013, and were sentenced on April 18, 2014, and February 14, 2014, respectively.
- Alexander Zaverukha pled guilty to gambling charges on October 10, 2013, and was scheduled on May 1, 2014.
- Nicholas Hirsch pled guilty to conspiring to commit wire fraud on October 16, 2013, and was sentenced on February 25, 2014.
- Anatoly Shteyngrob pled guilty to conspiring to commit money laundering on October 17, 2013, and is scheduled to be sentenced on June 10, 2014.
- Yugeshwar Rajkumar pled guilty to gambling charges on October 18, 2013, and was sentenced on March 25, 2014.
- Stan Greenberg pled guilty to conspiring to commit racketeering on October 22, 2013, and was sentenced on May 2, 2014.
- Arthur Azen pled guilty to conspiring to commit money laundering and conspiring to collect extensions of credit by extortionate means on November 5, 2013, and was sentenced on April 9, 2014.
- Hillel Nahmad pled guilty to gambling charges on November 12, 2013, and was sentenced on April 30, 2014.
- Vadim Trincher pled guilty to conspiring to commit racketeering on November 14, 2013, and was sentenced on April 30, 2014.
- Eugene Trincher pled guilty to gambling charges on November 14, 2013, and is scheduled to be sentenced on June 9, 2014.
- Anatoly Golubchik pled guilty to conspiring to commit racketeering on November 15, 2013, and was sentenced on April 29, 2014.
- Illya Trincher pled guilty to gambling charges on November 15, 2013, and was sentenced on May 8, 2014.
- Ronald Uy pled guilty to structuring financial transactions on November 25, 2013, and was sentenced on March 27, 2014.
- Moshe Oratz pled guilty to gambling charges on December 3, 2013, and was sentenced on April 9, 2014.
- Michael Sall pled guilty to interstate travel in aid of an unlawful activity (illegal gambling), and Jonathan Hirsch pled guilty to gambling charges on December 4, 2013. Sall was sentenced on April 18, 2014, and Hirsch is scheduled to be sentenced on May 9, 2014.
- Noah Siegel pled guilty to gambling charges on December 5, 2013, and was sentenced on April 10, 2014.
- Molly Bloom pled guilty to gambling charges on December 12, 2013, and was be sentenced on May 2, 2014.
- Alexander Katchaloff pled guilty to gambling charges on January 16, 2014, and is scheduled to be sentenced on May 20, 2014.
- Donald McCalmont, John Jarekci, a/k/a “John Hanson,” and Abraham Mosseri pled guilty to making a fraudulent tax statement, to failing to file a tax return, and to causing a financial institution to participate in a lottery related matter, respectively, on January 24, 2014. McCalmont was sentenced on May 7, 2014, and Jarekci and Mosseri are scheduled to be sentenced on May 28, 2014, and May 21, 2014, respectively.
- William Edler and Peter Feldman entered into deferred prosecution agreements on April 11, 2014.
- Illya Rozenfeld pled guilty to interstate travel in aid of an unlawful activity (illegal gambling) on May 6, 2014, and is scheduled to be sentenced on August 14, 2014.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation, the New York City Police Department, and the Internal Revenue Service.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Harris M. Fischman, Joshua A. Naftalis, Peter J. Skinner, and Kristy J. Greenberg of the Violent and Organized Crime Unit are in charge of the prosecution. Assistant U.S. Attorney Alexander Wilson of the Office’s Money Laundering and Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
Daytona Beach Tax Preparer Sentenced to PrisonRead the Press Release
Orlando, Florida – U.S. District Judge Charlene Edwards Honeywell today sentenced Fane Dacosta (40, Daytona Beach) to 2 years and 4 months in federal prison for aiding in the preparation of false tax returns and failing to file his own tax returns. Dacosta was also ordered to serve one year of supervision, following his incarceration, and to pay $656,084 in restitution to the Internal Revenue Service. Dacosta was convicted by a federal jury on January 30, 2014.
According to evidence presented at trial, Dacosta was the owner of a tax return business (“More Than Enaf Refund & Affordable Tax Services”) in Holly Hill, Florida. For the tax years 2006 through 2009, Dacosta prepared returns for individuals in which he falsified the amounts of deductions and tax credits owed to taxpayers, resulting in those taxpayers receiving undeserved tax refunds. In particular, Dacosta fraudulently claimed education credits for clients who never attended college, and he inflated itemized deductions. In response to the false returns that Dacosta prepared, the Internal Revenue Service issued more than $500,000 in undeserved refunds. In addition, Dacosta failed to file his personal tax returns in 2007, 2008, and 2009, despite earning over $100,000, $200,000, and $300,000 in each of those years, respectively.
This case was investigated by the Internal Revenue Service - Criminal Investigation Division. It was prosecuted by Assistant United States Attorney Roger B. Handberg.
DEA’s Albuquerque Office Spearheads New Mexico’s Multi-Agency Participation in Nationwide Synthetic Drug Takedown Thirteen Search Warrants, Eleven Seizure Warrants and Seven Arrests Executed in Albuquerque on May 7, 2014 as Part of Project Synergy PhaseRead the Press Release
ALBUQUERQUE – Yesterday the Drug Enforcement Administration (DEA), Customs and Border Protection (CBP), Immigration and Customs Enforcement Homeland Security Investigations (HSI), Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS) and other federal, state, and local partners announced the culmination of Project Synergy Phase II, an ongoing effort targeting every level of the dangerous global synthetic designer drug market. Since January and leading up to early this morning, nationwide enforcement operations have taken place targeting these drug trafficking organizations that have operated in communities across the country.
According to the announcement, Project Synergy II began in Jan. 2014 and culminated yesterday with law enforcement operations in 29 states that involved more than 45 DEA offices serving nearly 200 search warrants. The Albuquerque District Office of the DEA coordinated New Mexico’s participation in the nationwide takedown which included the FBI, U.S. Marshal’s Service, U.S. Postal Inspection Service, Albuquerque Police Department, Bernalillo County Sheriff’s Office, the HIDTA Region I Middle Rio Grande Task Force, HIDTA Region III Narcotics Task Force and the Safe City Strike Force.
“The abuse of dangerous synthetic drugs has become a nationwide concern,” said Special Agent in Charge Joseph M. Arabit of the El Paso Division of the DEA. “DEA, with the help of our law enforcement partners, will continue to identify, investigate, arrest, and seize the illicit assets of those who manufacture and deal in these substances. Individuals, retailers and organizations that continue to circumvent the law and engage in the trafficking of these dangerous drugs should be on notice that law enforcement agencies will utilize all available resources to hold them accountable for their actions.”
The New Mexico operation included the arrest of five individuals on federal synthetic drug trafficking charges and one individual on state synthetic drug trafficking charges, and the execution of 11 federal search warrants, 11 federal seizure warrants and two state search warrants in Albuquerque, N.M.Amjad Al-Washah, 27, Sabah Al-Washah, 47, Iman Al-Washah, 23, Sajey Beirat, 19, and Ramzi Kahalah, 53, all of Albuquerque, were arrested yesterday based on federal criminal complaints:
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Amjad Al-Washah is charged with distribution of a controlled substance analogue based on his alleged sale of synthetic cannabinoid to an undercover officer at Carlos’ Smoke Shop at 806 Old Coors Drive SW in Albuquerque on Dec. 4, 2013.
Iman Al-Washah is charged with conspiracy and distribution of a controlled analogue based on his participation in the alleged sale of synthetic cannabinoid to an undercover officer at Carlos’ Smoke Shop on Jan. 7, 2014.
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Sabah Al-Washah, the owner of Carlos’ Smoke Shop, is charged with conspiracy and aiding and abetting the distribution of a controlled analogue based on an alleged sale of synthetic cannabinoid to an undercover officer at the smoke shop on Jan. 7, 2014. Sabah Al-Washah also is charged with maintaining drug-involved premises.
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Sajey Beirat is charged with distribution of a controlled substance based on his alleged sale of synthetic cannabinoid to an undercover officer at C Jay’s Smoke Shop at 5823 Osuna NE in Albuquerque on March 6, 2014.
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Ramzi Kahalah, the owner of C Jay’s Smoke Shop, is charged with maintaining drug-involved premises.
The five defendants made their initial appearances in federal court this morning and remain in custody pending detention hearings scheduled tomorrow morning. If convicted on the distribution and conspiracy charges, each of the five defendants faces a statutory maximum penalty of 20 years in prison. If convicted on the maintaining drug-involved premises charges, Sabah Al-Washah and Ramzi Kahalah each face a maximum statutory penalty of 20 years in prison.
Fidel Abdeljawad, 46, of Albuquerque, was arrested on a state criminal complaint charging him with possession with intent to distribute a control substance, synthetic cannabinoids, a fourth degree felony. Abdeljawad’s bond was set at $150,000 cash or surety. If convicted, Abdeljawad faces up to 18 months in prison.
Charges in criminal complaints are merely accusations and the defendants are presumed innocent unless found guilty in a court of law.
During yesterday’s law enforcement operation, officers seized more than $275,000 in cash, approximately 12,000 packages of suspected synthetic cannabinoid, more than half a kilogram of treated suspected synthetic cannabinoid that had not yet been packaged and 13 vehicles valued at more than $450,000. The vehicles seized included a Lamborghini, two Dodge Vipers and a Cadillac CTSV with a 1000 horsepower racing engine.
The federal cases are being prosecuted by Assistant U.S. Attorneys Jennifer M. Rozzoni and Jack E. Burkhead and related forfeiture matters are being handled by Assistant U.S. Attorney Stephen R. Kotz. The state case is being prosecuted by Assistant District Attorney Jason Yamato of the 2nd Judicial District Attorney’s Office.
The DEA’s Albuquerque District Office also participated in investigation that contributed to Project Synergy II’s law enforcement operations in the Atlanta, Ga., metropolitan area. Those operations included the seizure of bank accounts containing an aggregate of $1.4 million, $150,000 to $200,000 in cash, 177 kilograms of synthetic cannabinoid, 800 processed packages of synthetic cannabinoid, and 250 pounds of untreated spice plant material.
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Synergy Complaint 14-MJ-1554
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Synergy Complaint 14-MJ-1555
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Synergy Complaint 14-MJ-1556
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Synergy Complaint 14-M-1557
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Synergy Complaint 14-MJ-1558
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Cranston, West Warwick Businessman Charged in Federal Court with Possession with the Intent to Distribute “Bath Salts”Read the Press Release
PROVIDENCE, R.I. – Glen Lonardo, 48, of Cranston, owner of Buddha’s Bazaar in Cranston and XCitement Video and Smoke Shop in West Warwick, appeared before U.S. District Court Judge Lincoln D. Almond today on a federal criminal complaint charging him with allegedly possessing synthetic drugs with the intent to distribute, announced United States Attorney Peter F. Neronha, John J. Arvanitis, Special Agent in Charge of the DEA’s New England Field Division, Cranston Acting Police Chief Rhode Island State Police Captain Kevin M. Barry and West Warwick Police Chief Colonel Richard G. Silva.
Lonardo’s arrest earlier today by members of the RI DEA Drug Task Force follows a year-long investigation by the Drug Task Force, Cranston Police and West Warwick Police into the alleged sale of “bath salts” at Lonardo’s Cranston and West Warwick businesses. Lonardo’s arrest is one of more than 150 DEA led arrests of alleged synthetic drug makers, wholesalers and retailers in 30 states over the past two days.
Lonardo is charged with one count of possession with intent to distribute a mixture and substance containing a detectable amount of: a-Pyrrolidinovalerophenone (a-PVP), an analog of methylenedioxypyrovalerone (MDV), a Schedule I controlled substance, commonly referred to as “bath salts.” Bath salts is a generic term applied to a variety of chemical substances sold under various names for purported use as bath salts, glass cleaner, or incense (among other things) but which is being consumed, smoked or injected by drug addicts to experience a “high.” The various chemical substances are often scheduled drugs or analogues of scheduled drugs.
According to an affidavit filed with the court, Cranston Police began an investigation into the alleged distribution and use of “bath salts’’ in the early spring and summer of 2013, after receiving numerous complaints of apparent drug overdoses and erratic behavior in the general vicinity of Buddha’s Bazaar. The investigation, including surveillance of the area and alleged undercover purchases of bath salts called “Nuke” from Buddah’s Bazaar, resulted in a federal court authorized search of the business in August 2013. During the execution of the search warrant, law enforcement seized nearly 200 packets and bags of bath salts, some labeled Nuke, Krush, Frenzy and Blast.
According to the affidavit, following the execution of the search warrant at Buddha’s Bazaar, the investigation into the alleged sale of bath salts was expanded to include Lonardo’s West Warwick business, XCitement Video and Smoke Shop. The investigation allegedly included numerous undercover purchases of bath salts by West Warwick Police.
According to the affidavit, on January 17, 2014, West Warwick Police responded to a reported breaking and entering at XCitement Video and Smoke Shop. While processing the alleged burglary, West Warwick Police allegedly came across numerous packages labeled “Nuke.” West Warwick Police applied for, received and then executed a court authorized search warrant for XCitement Video and Smoke Shop. Additional bath salts were allegedly seized during the search and Lonardo was arrested on state drug charges.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.Lonardo was released on $10,000 unsecured bond following his initial appearance in U.S. District Court.
Possession with the intent to distribute a mixture containing a detectable amount of a Schedule I controlled substance is punishable by a statutory penalty up to 20 years in federal prison and a fine of up to $1,000,000.
The case is being prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Crab Orchard Man Pleads Guilty to Selling Addictive Prescription Pain PillsRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Gene James, also known as “Butch,” 44, of Crab Orchard, West Virginia, pleaded guilty in federal court in Beckley to distributing a quantity of oxycodone, a powerful and addictive prescription pain medication. James admitted that on November 13, 2013, he sold pills to a person who was cooperating with law enforcement authorities. The drug deal took place on Hot Coal Road in Sophia, Raleigh County, West Virginia.
James faces up to 20 years in prison and a $1,000,000 fine. United States District Judge Irene C. Berger scheduled the sentencing for August 21, 2014.
The Beckley/Raleigh County Drug and Violent Crime Unit conducted the investigation.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The United States 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.
Connecticut Man Pleads Guilty in Multi-Million Dollar Diploma FraudRead the Press Release
PHILADELPHIA – James Enowitch, 48, of Cromwell, CT, pleaded guilty today to mail fraud and aiding and abetting mail fraud, in connection with the operation of a number of fraudulent diploma mills, announced United States Attorney Zane David Memeger. Between 2003 and 2012, Enowitch sold $5 million worth of fake degrees throughout the world. He profited more than $700,000 from this fraudulent scheme.
As early as 2003, Enowitch began operating a diploma mill, through which he advertised and sold diplomas for a fee, requiring no course work for those “diplomas.” Enowitch and his alleged co-schemer ultimately operated at least seven different websites, through which they sold fraudulent degrees in the name of Redding University, Suffield University Glendale University, Greenwood University, and Bryson University. Those purported universities were actually diploma mills in that they had no faculty, offered no academic curricula or services, required no course or class work, and were not recognized by the United States Department of Education. Part of the scheme to which Enowitch pleaded guilty was a fraudulent accrediting body, called the “National Distance Learning Accreditation Council” (“NDLAC”), used to claim, falsely, that the diploma mills were “nationally accredited.”
Enowitch admitted that he and others created phony transcripts stating that the purchaser had taken courses that the purchaser had never taken; allowed purchasers to create their own transcripts and backdate degrees; and provided fraudulent verification services to back up the fake degrees, in case an employer or other party sought verification. The degree packages ranged in price from $475 to $550 for associates, bachelors, masters, and doctoral-level degrees, with a “multi-degree discount” for buying more than one. For an additional fee, purchasers could also allegedly select grades for the phony courses included in their transcripts.
The defendant faces a maximum possible sentence of 20 years in prison, three years of supervised release, a $250,000 fine, a $100 special assessment, and an order of forfeiture.
The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services Office of the Inspector General, the Defense Criminal Investigative Service, and U.S. Immigrations and Customs Enforcement Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Matthew J.D. Hogan.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
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PATTY HARTMAN, Media Contact, 215-861-8525Colorado Resident Charged in California Marijuana ConspiracyRead the Press Release
FRESNO, Calif. —Mark Jeff Zeldes, 52, of Broomfield, Colo., appeared today in federal court in Fresno to face charges contained in an indictment of cultivating and distributing marijuana, United States Attorney Benjamin B. Wagner announced.
According to court documents, between June 1, 2009, and March 9, 2010, Zeldes was responsible for a large-scale marijuana cultivation and distribution operation with multiple indoor grow locations in Bakersfield, Newbury Park, and Northridge, Calif. After being questioned by law enforcement agents in California, Zeldes relocated to Colorado where he continued to engage in marijuana cultivation and interstate distribution activities.
Following his arrest on April 8, 2014, Zeldes was brought before a U.S. Magistrate Judge in Denver, who ordered him detained as a flight risk and danger to the community. Zeldes remains in custody and is next scheduled to appear in court in Fresno for a status conference on June 23, 2014.
If convicted, Zeldes faces a statutory penalty of 10 years to life in prison and a $10 million fine. Any sentence, however, would 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 charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by the U.S. Drug Enforcement Administration with assistance from the U.S. Marshal Service and Bakersfield Police Department. Assistant United States Attorney Karen Escobar is prosecuting the case.
Charleston Felon Pleads Guilty to Illegally Possessing FirearmRead the Press Release
CHARLESTON, W. Va. -- Mark Johnson, Jr., 23, pleaded guilty today in federal court to being a felon in possession of a firearm in Charleston, WV, where he resides. In November 2013, Johnson was involved in an altercation outside the Town Center Mall and he brandished a firearm during that altercation. Johnson has two prior felony convictions – both involving firearms. Johnson faces up to 10 years’ imprisonment when he is sentenced on August 20, 2014.
This case was investigated by the Charleston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. United States District Judge Thomas E. Johnston conducted today’s guilty plea hearing.
Centreville Man Sentenced for Heroin and Weapon OffensesRead the Press Release
Follow @SDILNewsBeckley, 30, of Centreville, Illinois, pled guilty to both federal charges on October 30, 2013. He has been continuously confined since last October.
At his change of plea hearing, Beckley admitted that he had been selling heroin for about two years, and that his heroin supplier was Deborah Perkins. Perkins was arrested on January 21, 2013, a few minutes after police saw her deliver heroin to Beckley’s residence. Perkins was convicted of distributing heroin and sentenced to 324 months imprisonment on December 5, 2013.
Beckley was one of several defendants convicted of selling heroin provided by Perkins. Others include Sean McGilvery and Perkins’ son, Douglas Oliver.
At Beckley’s sentence hearing, Chief U.S. District Court Judge David R. Herndon warned Beckley that he “could have easily killed someone on any one of the occasions when you sold heroin.” Two women did in fact die from ingesting heroin at Perkins’ former residence in Fairview Heights, Illinois.
The investigation which led to Beckley’s conviction and sentence was conducted by DEA Task Force agents, and by police officers assigned to the Metropolitan Enforcement Group of Southwestern Illinois (MEGSI).
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Cedar Rapids Man Sentenced to More Than Eight Years for Being A Felon in Possession of A Stolen FirearmRead the Press Release
A felon who was apprehended after crashing a stolen vehicle while fleeing from police was sentenced today to more than eight years in federal prison after officers found a loaded stolen handgun in the vehicle.
Jacob Voshell, age 46, from Cedar Rapids, Iowa, received the prison term after a January 22, 2014, guilty plea to one count of being a felon in possession of a firearm.
In a plea agreement, Voshell admitted that, in the early morning hours of August 7, 2013, he fled from police in a stolen vehicle when officers tried to stop him for driving the wrong way on a one-way street. Voshell eventually crashed the vehicle and attempted to flee on foot when he was arrested. A search of the stolen vehicle revealed a police scanner, burglary tools, stolen license plates, personal use amounts of controlled substances, drug use paraphernalia, and a loaded, stolen, .380 caliber handgun. Voshell was prohibited from possessing firearms because he was a felon, having been convicted in 1987 of Robbery in the First Degree and Sexual Abuse in the Second Degree.
Voshell was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Voshell was sentenced to 105 months’ imprisonment. The sentence was based, in part, on the fact Voshell recklessly endangered the lives of others while fleeing from the police. The Court held that the sentence was to run consecutively to an undischarged sentence of seven years Voshell is serving for three other convictions imposed by the Iowa District Court for Linn County: 1) Theft 2nd Degree; 2) Theft 2nd Degree and Possession of Burglary Tools; and 3) Burglary 3rd Degree. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Voshell is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was being prosecuted by Assistant United States Attorney C.J. Williams and was investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Cedar Rapids Police Department. This case was a result of the Cedar Rapids Safe Streets Task Force and was in furtherance of the Project Safe Neighborhoods initiative.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-cr-91.
Carlisle Woman Charged with Social Security FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today it filed a Criminal Information in U.S. District Court in Harrisburg charging a Carlisle woman with theft of more than $500,000 in Social Security Administration benefits paid to Stock’s mother over the past 30 years.
According to United States Attorney Peter Smith, Susan Stock, 71, of Carlisle, PA signed a plea agreement with the United States that was also filed today. Stock agreed to plead guilty to the one-count Information that charges her with theft of government funds. Stock faces up to 10 years imprisonment and a fine of up to $250,000.00. Stock has also agreed to make restitution to the Social Security Administration (SSA) in the amount of $523,683.20.
According to the U.S. Attorney’s Office, in 2013 investigators for the Social Security Administration’s Office of Inspector General discovered the fraud when trying to arrange an interview with Stock’s mother, who had been receiving SSA benefits since at least April 1983. The SSA checks were deposited over that 30 year period into an account which Susan Stock controlled. It was discovered that Stock’s mother died in 1983 but that Stock never notified SSA of her mother’s death and continued to receive and spend her deceased mother’s SSA benefits.
The case has been assigned to Senior U.S. District Court Judge William C. Caldwell. The plea agreement is subject to the Court’s approval. The investigation was conducted by the Social Security Administration’s Office of Inspector General. Prosecution of the case has been assigned to Assistant United States Attorney William A. Behe.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is imprisonment for 10 years, 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.
Camden Man Sentenced for Crack Cocaine and Cocaine Distribution Offenses and Ordered to Forfeit Drug ProceedsRead the Press Release
MOBILE, AL-- The United States Attorney, Kenyen R. Brown announces that Roderick O=Neil McMillian was sentenced today to forty three months imprisonment and an eight year term of supervised release for possession with the intent to distribute crack cocaine in violation of Title 21 USC '841(a)(1). McMillian was also ordered to forfeit $1,511.00 in drug proceeds seized from him at the time of his arrest. He was also ordered to pay a $100.00 special assessment for the victims of crime. Under Title 21 USC '853, Congress has made it mandatory for federal drug defendants to forfeit the proceeds of their drug offenses as well as assets they use to facilitate the commission of such offenses.
The case was jointly investigated by the Drug Enforcement Administration and Alabama Alcoholic Beverage Control Bureau, Enforcement Division.
Brothers Sentenced for $2 Million FraudRead the Press Release
Earlier today, Amner A. Borukhov, also known as “Alex Amner Borukhov” and “Avner Borikhov,” was sentenced to 57 months of imprisonment to be followed by 3 years of supervised release following his plea of guilty to conspiracy to commit mail and wire fraud. Last month, his brother, Markiel Borukhov, also known as “Mark Borukhov,” was sentenced to 24 months of imprisonment to be followed by one year of supervised release following his plea guilty to conspiracy to commit mail and wire fraud. The sentences were imposed in federal court in Central Islip, New York by United States District Judge Sandra J. Feuerstein. As part of their sentences, Judge Feuerstein ordered Amner Borukhov and Markiel Borukhov to pay restitution and forfeit approximately $2.2 million and $622,000, respectively.
The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office.
“The defendants conned investors who were seeking to buy precious metals by using lies and deception to steal millions of their precious investment dollars,” stated United States Attorney Lynch. “When federal law enforcement began to close in on them, the defendants felt the heat and fled to Morocco, where they hid for over a year. But they soon learned what should serve as a lesson to all criminals: you can run, you can hide, but you cannot escape justice.” Ms. Lynch expressed her grateful appreciation to Moroccan authorities for Morocco’s cooperation and assistance with the extradition and successful prosecution of this case.
FBI Assistant Director-in-Charge Venizelos stated, “Instead of running a legitimate business, the defendants stole money by marketing bogus precious metals to unwitting investors. The long arm of the law stretched all the way to Morocco as the defendants found. This is the latest example of what happens when you steal and cheat from others to get ahead.”
According to court filings and facts presented during the court proceedings, between May 2009 and January 2011, the defendants induced approximately 60 investors to give them more than $2.2 million by promising to use their money to purchase palladium and other precious metals. The defendants, however, never gave those investors the metals that they promised to purchase, nor did they return any money to those individuals. Instead, the defendants used those funds to pay their personal expenses. In furtherance of their fraudulent scheme, the defendants used aliases and falsely told prospective investors that they were in a partnership with Jim Cramer, who hosts an investment program on CNBC called Mad Money.
In early 2011, the defendants learned that they were being investigated by the FBI. As a result, they bought one-way plane tickets to Casablanca, Morocco. They lived in Morocco for approximately 14 months while the U.S. Attorney’s Office, the FBI, and the Office of International Affairs worked with Moroccan authorities to locate, arrest, and return the defendants to the United States, so that they could be prosecuted for their crimes. In May 2012, Moroccan authorities located and arrested the defendants. Months later, the defendants were returned to the United States, where they have been in custody ever since. On October 9, 2013, the defendants pleaded guilty.
The government’s case was prosecuted by Assistant United States Attorney Christopher Caffarone. The Office of International Affairs in the Department of Justice’s Criminal Division provided assistance in this case.
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.
The Defendants:
AMNER A. BORUKHOV
Also known as “Alex Amner Borukhov” and “Avner Borikhov”
Age: 34
Residence: Great Neck, New York
MARKIEL BORUKHOV
Also known as “Mark Borukhov”
Age: 30
Residence: Brooklyn, New York
Bolingbrook Man Charged with Attempting to Illegally Export Thermal Imaging Camera to PakistanRead the Press Release
CHICAGO — A Bolingbrook man was indicted on federal charges alleging that he violated U.S. export laws by attempting to ship a thermal imaging camera from his company in Schaumburg to a company in Pakistan without obtaining a license from the U.S. Commerce Department, federal law enforcement officials announced today.
The case involves a FLIR HRC-U thermal imaging camera, which was on a Commerce Department list of controlled export goods for reasons of national security and regional stability. As a controlled material, a license was required from the Commerce Department’s Bureau of Industry and Security to export the camera to certain countries, including Pakistan.
The defendant, BILAL AHMED, 33, was charged with one count of violating the International Emergency Economic Powers Act (IEEPA) and one count of attempted smuggling of goods in violation of U.S. export regulations in a two-count indictment returned by a federal grand jury yesterday. Ahmed was initially charged in a criminal complaint and arrested on March 14, and he was subsequently released on a $100,000 secured bond.
No date has been set yet for Ahmed to be arraigned in U.S. District Court in Chicago.
According to the complaint affidavit and the indictment, Ahmed was the owner, president, and registered agent of Trexim Corp., which used the address of a virtual office in Schaumburg. Between November 2013 and February of this year, Ahmed corresponded via email with a company in California and negotiated the purchase of a FLIR HRC-U camera for approximately $102,000, which he paid with two checks in February. Ahmed took delivery of the camera on Feb. 27 at a commercial shipping store in Bolingbrook.
On March 7, Ahmed allegedly took the camera, packaged in two boxes, to a different commercial shipper located in Elk Grove Village and left the packages to be shipped to a company in Pakistan. The waybill included a handwritten note containing the letters “NLR,” meaning “no license required.” A search of U.S. State and Commerce Department databases showed there were no licenses applied for or obtained by Ahmed, Trexim or any other related individual or company names for the export of a FLIR HRC-U camera from the U.S. to Pakistan, the indictment alleges.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Ronald B. Orzel, Special Agent-in-Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office. The Justice Department’s National Security Division is providing assistance in the case.
Violating IEEPA carries a maximum penalty of 20 years in prison and a $1 million fine, while attempted smuggling of goods carries a maximum penalty of 10 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. The government is being represented by Assistant U.S. Attorney Bethany Biesenthal.
An indictment contains merely charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Beckley Area Men Sentenced for Oxycodone CrimesRead the Press Release
BECKLEY, W.Va. – Robert Sears and Curtis Sears, both age 21, and both of Crab Orchard; and Stephen Hatcher, age 35, of Beckley, were sentenced today in Beckley, West Virginia, announced United States Attorney Booth Goodwin. Robert Sears was sentenced to 4 months home confinement with 100 hours community service; Curtis Sears was sentenced to 6 months imprisonment; and Stephen Hatcher was sentenced to 8 months imprisonment. All three defendants previously pleaded guilty in January 2014 to obtaining oxycodone by misrepresentation, fraud, forgery, deception and subterfuge. Each defendant obtained stolen blank prescription scripts, which they forged or which were forged by others, and obtained oxycodone at local Beckley pharmacies.
This case was investigated by the United States Drug Enforcement Administration. United States District Judge Irene C. Berger handed down today’s sentences.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The United States 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.
Bankers and Attorney Convicted of Fraud, False Statements, and Making a False Claim Against the United StatesRead the Press Release
PANAMA CITY, FLORIDA– Late last night, a federal jury returned verdicts finding Donald Terry Dubose, a/k/a “Terry Dubose,” 66, of Panama City Beach, Florida, Elwood Ladon West, a/k/a “Woody West,” 40, of Monroeville, Alabama, and Frank Alfred Baker, 62, of Marianna, Florida, guilty of conspiring to commit wire fraud, making false statements, and filing false claims against the Federal Deposit Insurance Corporation. In addition, the three defendants were found guilty of seven counts of wire fraud, three counts of making false statements to the FDIC, and one count of aiding and abetting a false claim against the United States. The verdicts were handed down late last evening, following a trial that lasted almost three weeks.
The evidence at trial established that Coastal Community Investments (“Coastal”) was a bank holding company that owned Coastal Community Bank, based in Panama City Beach, Florida, and Bayside Savings Bank, based in Port St. Joe, Florida. Coastal Community Bank and Bayside Savings Bank both failed on July 30, 2010. Dubose was the Chairman and Chief Executive Officer of Coastal and the largest Coastal shareholder. West was the Chief Financial Officer of Coastal and a Coastal shareholder. Baker was an attorney for Coastal and was Coastal’s second largest shareholder.
The case involved a fraud committed against the Government relating to the FDIC’s Temporary Liquidity Guarantee Program (TLGP), which was created at the height of the nation’s financial crisis in October 2008. The purpose of the TLGP was to encourage banks to begin lending to one another again, and thereby, help to stabilize the economy. To accomplish this, the TLGP provided that the FDIC would guarantee a loan made by one financial institution (the “lender”) to another financial institution (the “borrower”) in an amount up to 125% of the borrower’s existing unsecured debt, thus assuring repayment to the lender by the borrower or, in the event of default, by the FDIC.
The evidence at trial showed that in October 2008, Coastal had a $3,000,000 secured loan with RBC Bank (USA), which was secured by 100% of the stock of Coastal Community Bank and Bayside Savings Bank (the “RBC Loan”). At that time, the RBC Loan was in default, thus giving RBC the ability to exercise its right to take the pledged stock that secured the loan and take over Coastal Community Bank and Bayside Savings Bank. Under pressure from RBC to repay this debt, the defendants falsely certified to the FDIC that the RBC Loan was unsecured, knowing for a fact that it was instead a secured loan, so that Coastal could get an FDIC-guaranteed loan under the TLGP.
The evidence at trial established that Coastal obtained a $3,750,000 loan from central Florida-based CenterState Bank. Based on the defendants’ misrepresentations, the CenterState Bank loan was guaranteed by the FDIC under the TLGP (the “TLGP Loan”), and as provided by the program, represented 125% of the RBC Loan. Coastal used the proceeds of the TLGP Loan to repay the RBC Loan.
In June 2010, Coastal defaulted on the TLGP Loan, and on August 6, 2010, CenterState Bank filed a claim with the FDIC for payment of the full amount due on the TLGP Loan, plus interest. The FDIC paid CenterState’s claim on August 13, 2010, by wiring $3,805,833.34 in principal and interest from the FDIC to CenterState.
United States Attorney Marsh said, “These defendants – bank officers and a bank attorney – took advantage of the Temporary Liquidity Guarantee Program, which was designed to help the country avoid financial collapse, and instead used the program to enrich themselves. Such fraud committed by bank insiders against programs designed to help our citizens will not be tolerated. Not only is such conduct a breach of trust, it is harmful to our communities and our nation. My office will continue to investigate and prosecute any individual who would harm our banking system, our financial institutions, and our national economy.”
Matt Alessandrino, Assistant Inspector General for Investigations, FDIC, said, “The Federal Deposit Insurance Corporation Office of Inspector General is pleased to have joined the U.S. Attorney's Office and our law enforcement colleagues in investigating the fraud that led to these convictions today. It is particularly troubling to the FDIC OIG when bank insiders and other professionals affiliated with the bank violate the public trust and engage in activities that cause losses to the Deposit Insurance Fund or harm FDIC programs designed to restore the strength of the banking system. We are committed in our efforts to maintain integrity in our nation's banks.”
The defendants are facing a maximum of 30 years’ imprisonment on each count of conspiracy to commit wire fraud, wire fraud, and making false statements to the FDIC. Each defendant faces a maximum of five years’ imprisonment for causing the submission of CenterState Bank’s false claim against the United States.
This case was investigated by the Federal Reserve – Office of the Inspector General, the Federal Bureau of Investigation, the FDIC, and the Office of the Special Inspector General for the Troubled Asset Relief Program.
The case was prosecuted by Assistant U.S. Attorney Gayle Littleton and Assistant U.S. Attorney Ryan Love, with the invaluable assistance of Federal Reserve – Office of the Inspector General Special Agent Amy Whitcomb.Bank Employee Sentenced for Embezzling from Senior Citizens’ AccountsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON, OHIO – Diane Elizabeth Niehaus, 40, of Sugarcreek Township, Ohio was sentenced in U.S. District Court to serve 60 months in prison followed by three years of supervised release for embezzling from the accounts of elderly customers of the bank where she worked as a manager. She was also ordered to pay restitution to the victims of her embezzlement and to the IRS.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) announced the sentence handed down today by U.S. District Judge Timothy S. Black.
According to court documents, Niehaus managed the Union Savings Bank branch in Centerville between 2007 and 2010. Using her position with the bank, she methodically targeted and stole hundreds of thousands of dollars from her elderly customers, many of whom she knew to suffer from cognitive conditions such as dementia and Alzheimer’s disease.
To prevent detection of her embezzlement, she used a host of deceptive tactics including creating fictitious gift letters and fraudulent powers of attorney, and engaging in complicated and layered financial transactions to conceal her theft. Niehaus frequently converted the money into cashiers’ checks or official checks that she then negotiated or caused to be negotiated at USB or other locations. Niehaus illegally earned thousands of dollars through this embezzlement scheme, and she failed to report this fraudulently-obtained income on her federal income tax returns.
“Ms. Niehaus has been and remains an economic danger to this community,” Assistant U.S. Attorney Brent Tabacchi told the court. “Far from having no financial impact on her victims, this defendant’s actions have cost her former employer hundreds of thousands of dollars for which it has yet to receive complete restitution.”
Niehaus pleaded guilty on September 19, 2013 to one count each of embezzlement, money laundering, and filing a false income tax return.
Judge Black sentenced her to pay restitution to the bank, which had reimbursed the customers for their losses, and to the IRS. The exact amount will be determined in the next 90 days.
"Embezzlement and fraud cases can take time to unravel due to the complex financial transactions," said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "As we often see, the victims are not only the taxpayers, but also the individuals and entities who suffer the financial harm."
U.S. Attorney Stewart commended the cooperative investigation by special agents of the FBI and IRS, as well as Assistant U.S. Attorney Brent Tabacchi, who is prosecuting the case. U.S. Attorney Stewart also acknowledged the cooperation of Union Savings Bank in the investigation.
Bahamian Man Charged in Mail and Wire Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paula Reid, Special Agent in Charge, U.S. Secret Service (USSS), and Ronald J. Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), announce the return of a 23-count indictment charging Rudolph Kermit King, a/k/a “Rudy,” 46, of Nassau, the Bahamas, with mail fraud, wire fraud, and aggravated identity theft in a scheme to defraud.
According to the indictment, King created fictitious corporations that he then used to create merchant accounts with credit card processors. Rudolph Kermit King would inflate the amount of funds within the merchant account by charging unauthorized access devices. These funds would then be deposited to a small business checking account under King’s control, from which he withdrew funds. Finally, King used unauthorized access devices to purchase goods and services to fund his lifestyle.
If convicted, King faces a statutory maximum penalty of 20 years in prison for each count of mail fraud and wire fraud, followed by three years of supervised release, a fine of up to $250,000 and restitution, and a consecutive two years in prison for each count of aggravated identity theft.
Mr. Ferrer commended the investigative efforts of USSS and USPIS. The case is being prosecuted by Assistant U.S. Attorney Alexandra Hui.
An indictment is only an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
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.
Attorney General Holder and Secretary Duncan Issue Guidance for School Districts to Ensure Equal Access for All Children to Public Schools, Regardless of Immigration StatusRead the Press Release
WASHINGTON—Attorney General Eric Holder and Secretary Arne Duncan today announced updated guidance to assist public elementary and secondary schools to ensure enrollment processes are consistent with the law and fulfill their obligation to provide all children – no matter their background – equal access to an education.
In 2011, the Departments of Justice and Education issued guidance to help schools understand their responsibilities under the Supreme Court’s decision in Plyler v. Doe and federal civil rights laws to provide all children with equal access to an education regardless of their or their parents’ immigration status. Today, the departments are issuing important updates to that guidance, including examples of permissible enrollment practices, as well as examples of the types of information that may not be used as a basis for denying a student entrance to school.
The updated guidance documents— including a guidance letter to states and school districts and a fact sheet and Q and A document—emphasize the need for flexibility in accepting documents from parents to prove a child’s age and to show that a child resides within a school’s attendance area. They also provide specific examples of the types of documents that many schools have accepted. And the guidance documents remind schools that they may not require certain documents – such as a parent’s state-issued driver’s license – where such a requirement would prevent a student from enrolling because of his or her parent’s immigration status.
“Public school districts have an obligation to enroll students regardless of immigration status and without discrimination on the basis of race, color, or national origin,” said Attorney General Eric Holder. “The Justice Department will do everything it can to make sure schools meet this obligation. We will vigilantly enforce the law to ensure the schoolhouse door remains open to all.”
“We want to be sure every school leader understands the legal requirements under the Constitution and federal laws, and it is our hope that this update will address some of the misperceptions out there,” said Secretary Arne Duncan. “The message here is clear: let all children who live in your district enroll in your public schools.”
In the three years since the guidance was initially issued in 2011, the departments have worked collaboratively with states and school districts across the country to meet their obligations under Plyler and federal civil rights laws that prohibit discrimination on the basis of race, color and national origin.
The important changes announced today will provide districts with the additional tools and practical guidance needed to make sure the schoolhouse door is open to all students and that undocumented children and children from immigrant families no longer face barriers to enrollment in school and starting down the path to a better future.
All updated guidance material from today’s call will be available in both Spanish and English at http://www.justice.gov/crt/about/edu/documents/plyler.php
Arkansas-based Man, Responsible for over 800 Illegal Aliens Smuggled into Arizona from Mexico, Sentenced to Federal PrisonRead the Press Release
PHOENIX – On May 7, 2014, Rony Abimael Gonzalez-Herrera, 37, from Guatemala, was sentenced by U.S. District Judge John A. Jarvey to 57 months in federal custody. Gonzalez had pled guilty on Jan. 9, 2014, to conspiracy to transport and harbor illegal aliens.
Beginning in 2012 and continuing through April of 2013, Gonzalez, the leader of the alien smuggling organization based in Little Rock, Ark., and his associates, were responsible for illegally transporting and harboring at least 827 illegal aliens into the United States from Mexico. Gonzalez utilized multiple stash houses in the Phoenix area, including one discovered in January 2013 with over 40 illegal aliens. The organization also coordinated the illegal transportation of undocumented persons throughout the United States by significantly overloading vehicles.
On May 13, 2013, Homeland Security Investigations (HSI) agents in Little Rock, Ark., arrested Gonzalez and seized four cell phones which Gonzalez had utilized to contact his alien smugglers and illegal aliens’ families to make payments on behalf of their relatives.
Families of the illegal aliens reported that Gonzalez directed them to deposit the smuggling fees into specific bank accounts. After one illegal alien was apprehended by law enforcement, his family members contacted Gonzalez to request he return the smuggling fees. Gonzalez told the family that “your family will pay if you keep asking for the money.”
The investigation in this case was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Phoenix and Little Rock. The prosecution was handled by Kristen Brook, Assistant U.S. Attorney, District of Arizona, Phoenix
CASE NUMBER: CR13-1141-PHX-NVW
RELEASE NUMBER: 2014-028_Gonzalez-HerreraFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Wednesday 7 May 2014
Wyoming Businessman Sentenced to Prison for Using Concealed Caribbean Bank Account in Tax Evasion SchemeRead the Press Release
Robert C. Sathre was sentenced today to serve 36 months in federal prison for tax evasion by U.S. District Judge Alan B. Johnson in Cheyenne, Wyoming, the Justice Department and Internal Revenue Service (IRS) announced. Sathre was also ordered to pay $3,113,882 in restitution to the IRS and to serve three years of supervised release. Sathre pleaded guilty on Feb. 26, 2014, to willfully evading the payment of his 1995 and 1996 tax liability.
According to court documents and proceedings, Sathre sold a Minnesota business and received installment payments in 1995 and 1996 of more than $3 million. Sathre concealed his income by filing a 1995 tax return in which he reported only $64,928 in total income. Sathre then purchased land and set up another business, a gas station and convenience store in Sheridan, Wyoming, known as the Rock Stop.
According to court documents and proceedings, Sathre concealed assets by opening a foreign bank account in the Caribbean island of Nevis and by using purported trusts. In a 10 month period spanning from 2005 through 2006, Sathre sent over $500,000 to the account in Nevis to keep the funds out of reach from the IRS. When Sathre sold the Rock Stop in 2007, he wired over $1,250,000 from the sale proceeds to the trust account of a Wyoming law firm. He later directed the law firm to wire $900,000 from the trust account to his account at the Bank of Nevis. Sathre also provided a false declaration and false promissory note to the Bank of Nevis to conceal the source of this transfer and obtained a debit card linked to the foreign account to access funds locally. In addition, Sathre provided the Bank of Sheridan with an IRS form on which he falsely claimed that he was neither a citizen nor a resident of the United States.
This case was investigated by special agents of IRS – Criminal Investigation. Trial Attorneys Ellen Quattrucci and Ignacio Perez de la Cruz of the Justice Department’s Tax Division prosecuted the case.
Westchester Man Pleads Guilty in White Plains Federal Court to Engaging in, and Videoing, Sexually Explicit Conduct with Seven Different Child Victims, All Under ElevenRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and James T. Hayes, Jr., Special Agent-in-Charge of U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations in New York (“HSI”), announced that RICHARD DINIZO, 59, entered a guilty plea today to a six-count Information that was filed on May 5. The Information to which DINIZO pled guilty charges that DINIZO engaged in sexually explicit conduct with seven different minors, all under the age of 11 at the time of the sexual abuse, and videoed the sexual abuse, and that DINIZO transported the videos he made of the minors engaging in sexual activity to recipients outside of New York.
On April 25, 2013, the Government unsealed a six-count Indictment charging DINIZO with engaging in sexual activity with five minors and videoing it and transporting the sexually explicit videos to recipients outside of New York. The six-count Information filed May 5 supersedes that Indictment and adds additional victims of DINIZO’s crimes.
U.S. Attorney Preet Bharara stated: “For the children preyed upon by Richard Dinizo, the encounter was a nightmare. This serial pedophile not only recorded his deviant criminal acts but shared those videos with others. This prosecution incapacitates and holds to account a dangerous man who threatened the well-being of children in our community.”
Special Agent in Charge James T. Hayes, Jr. stated: “Today’s guilty plea will ensure that one of the most heartless and depraved child predator this office has ever encountered can never again victimize another child. I am grateful for the tireless, diligent effort of the HSI Special Agents, Westchester and Putnam police officers and deputies, the New York State Police, and local and Federal prosecutors who investigated and prosecuted these crimes."
According to the Information filed on May 5, 2014, and court proceedings:
From 2007 through 2010, DINIZO engaged in sexually explicit conduct with seven different minors, all under the age of 11 and videoed that conduct. DINIZO’s homemade videos included multiple videos in which DINIZO appears on camera with a blindfolded victim and engages in trickery in order to manipulate the victim into engaging in sexual activity.
After editing the videos (and removing, among other things, images of himself and the voices that appear on the unedited videos), DINIZO transported his homemade sexually explicit videos to recipients outside of New York. In 2010 and 2011, the National Center for Missing and Exploited Children (“NCMEC”) received DINIZO’s homemade videos among other videos recovered by law enforcement in investigations throughout the country and internationally. Until DINIZO’s arrest in this case and the instant investigation, NCMEC had not been able to identify the child victims or the place of their abuse.
DINIZO is scheduled to be sentenced by U.S. District Judge Vincent L. Briccetti on September 12, 2014, and faces a minimum sentence of 15 years in prison and a maximum sentence 170 years (30 years on each of Counts One through Five and 20 years on Count Six). The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
On February 18, 2014, DINIZO was convicted in Westchester County Court of Predatory Sexual Assault against a Child Less Than 13 Years Old and sentenced to a term of imprisonment of 25 years to life.
Mr. Bharara praised the efforts of ICE HSI, the Westchester County District Attorney’s Office, the Putnam County District Attorney’s Office, Putnam County Sherriff’s Office, the New York State Police, and the National Center for Missing and Exploited Children in connection with this investigation.
The prosecution is being handled by the Office’s White Plains Division. Assistant United States Attorney Marcia S. Cohen is in charge of the prosecution.
DINIZO supersedinginformation FINAL
Washington Man Receives 19 Year Sentence in Child Pornography CaseRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls on April 28, 2014, before U.S. District Judge Brian Morris, KEITH CLIFFORD CUNNINGHAM, 70, of Kent, Washington, was sentenced to 228 months imprisonment followed by 5 years supervised release.
Cunningham was sentenced in connection with his January 2014 bench trial where he was found guilty. In a trial brief filed by Assistant U.S. Attorney Cyndee L Peterson, the government stated that the defendant Keith Clifford "Casey" Cunningham had traveled around several states, including Montana, due to his work on pipelines. In mid-August 2011, Cunningham was in Stanford, Montana. Cunningham had been intermittently visiting Stanford and frequenting the local diner for a couple years. On August 18, 2011, Cunningham saw an 8 year old girl in a local diner. Cunningham learned the girl's mother would be out of town for the day, and knew the girl was going to the local swimming pool that day.
That day, Cunningham befriended the child at the public swimming pool. Cunningham groomed the child throughout the day by doing such things as challenging her to play games at the pool, promising her chocolate bars, letting the child drive his vehicle while seated on his lap, and acting as though he was looking out for the child's well-being while her mother was out of town. Eventually, Cunningham took the little girl to the Judith Basin County Fairgrounds where he produced child pornography of the 8 year old girl. During an interview with law enforcement officers, Cunningham admitted he produced the images of the child with his digital camera stating that the child was acting "sexy" and wanted him to take the photographs.
The Grand Jury indicted Cunningham for production of child pornography in violation of federal law, and he was convicted of the crime at a bench trial on January 14, 2014. At trial, there was also evidence that Cunningham had previously purchased videos depicting child pornography online.
The United States' Attorneys Office for the District of Montana is committed to the safety and well-being of every child and has placed a high priority on combating sexual exploitation of minors. This case was prosecuted by an Assistant U.S. Attorney specifically designated to be a Project Safe Childhood for the District of Montana. Project Safe Childhood is a Department of Justice initiative launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children. The threat of sexual predators soliciting children for physical sexual contact is well-known and serious. The danger of sexual perpetrators who produce child pornography - like Mr. Cunningham -- is equally, if not more, dramatic and disturbing.
Through a network of federal, state, tribal, and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation. Project Safe Childhood is implemented through partnerships including the organizations who were involved in this case: Homeland Security Investigations, the Montana DOJ Division of Criminal Investigation, the Montana Internet Crimes Against Children Task Force, the Fergus County Sheriff's Office, and the Judith Basin County Sheriff's Office.
U.S. Attorney Melinda Haag, Alameda County District Attorney Nancy O’Malley, Drug Enforcement Administration, and High Intensity Drug Trafficking Area (HIDTA) Hosting Bay Area Prescription Drug Abuse Summit TodayRead the Press Release
SAN FRANCISCO – U.S. Attorney Haag, Alameda County District Attorney Nancy O’Malley, DEA, HIDTA, State Superintendent of Public Instruction Tom Torlakson, National HIDTA Director Mike Gottlieb, District Attorneys George Gascon (San Francisco), Ed Berberian (Marin), Mark Peterson (Contra Costa), Steve Wagstaffe (San Mateo), Gary Lieberstein (Napa), Board Presidents of the Medical Board of California, Pharmacy Board of California and Dental Board of California, The Partnership at DrugFree.org, UCSF, pharmaceutical CEOs, educators, pharmacists, medical insurers, coroners, physicians, local, state and federal law enforcement officials, policymakers, families and community members whose lives have been devastated by prescription drug abuse, and community members who have formed coalitions to address awareness, education and prevention efforts are joining together today for the Bay Area Prescription Drug Abuse Summit.
The event is being held at Futures Without Violence, 100 Montgomery Street, Presidio of San Francisco. Agenda attached.
Attorney General Eric Holder has recently stated that the rise in overdose deaths from heroin and prescription painkillers in the United States in recent years is an “urgent public health crisis.”
As part of the presentations it was revealed that nationally drugs overtook traffic accidents as a cause of death in 2009, and this trend continues. In Contra Costa County, accidental drug poisoning has been exceeding traffic accident fatalities in recent years. The majority of those overdoses involved prescription drugs. In 2013, for the first time in Marin County, the same is true.
U.S. Attorney Haag stated: “The Department of Justice has made combatting prescription drug abuse a high priority. U.S. Attorneys across the country are working hand in hand with law enforcement and the community to break down silos and force the conversation among relevant industries and agencies to bring this epidemic under control. Today’s summit furthers that effort. Awareness is a key component in bringing the issue out into the open so that parents and young people understand the prevalence of these dangerous drugs, and the devastating effects when they are misused.”
“Prescription drug abuse is a public safety and public health issue,” stated co-host Alameda County District Attorney Nancy O’Malley. “These drugs are highly susceptible to misuse and abuse, which can lead to addiction, accidental poisoning, or other grave consequences. Rates of prescription drug abuse and addiction in Alameda County as well as around the state and nation are alarmingly high, as are the numbers of tragic accidental overdoses due to these drugs. I applaud our Federal partners for their attention and dedication to addressing this epidemic.”
California State Superintendent of Public Instruction Tom Torlakson made opening remarks: “Prescription drug abuse continues to be a major threat to the safety and wellbeing of our young people, and it comes with some unique challenges. We need to educate parents and grandparents, educators, health care providers, and communities about how to keep young people safe from the abuse of prescription drugs.”
Co-host and DEA Special Agent in Charge Jay Fitzpatrick added: “Prescription drug abuse continues to plague the nation at an alarming rate, crossing all age, gender, and socioeconomic boundaries. It is the fastest growing drug problem in America and has reached epidemic proportions. Not only will this summit provide us with an opportunity to learn the extent of the problem in our communities, but also allows us to create an important dialog as we work toward the common goal of combatting this serious public health and safety issue.”
Prescription drug abuse has taken hold in every community and every state in the union. Governors across the country are facing the burgeoning issue of prescription drug abuse and the related resurgence of heroin, and like the Bay Area, are grappling with this public health crisis.
The Centers for Disease Control and Prevention has classified prescription drug abuse as an epidemic in the United States. According to CDC, one in twenty people 12 years and older used prescription painkillers without a prescription in 2010. And more than 2.1 million people in the U.S. are addicted to prescription opioid painkillers.
Many people who misuse prescription drugs, particularly teens, believe these substances are safer than illicit drugs because they are prescribed by a healthcare professional and dispensed by a pharmacist. The number of unintentional overdose deaths from prescription pain relievers has soared in the United States, more than quadrupling since 1999. In 2010 nearly 60% of drug overdoses involved pharmaceutical drugs. Opioids (oxycodone, hydrocodone and methadone) were involved in approximately three of every four pharmaceutical deaths.
Opioid addiction can lead to heroin addiction. As an addict’s tolerance for opioids increases, the habit becomes increasing and exponentially more expensive. At some point, heroin becomes the drug of choice for many because of its wide availability and far lower cost. A recent study concluded that 81% of heroin initiates mis-used prescription pain relievers before turning to heroin.
DEA and HIDTA addressed the substantial uptick in heroin in the Bay Area and California – much of it driven by a voracious appetite for prescription drugs. Co-host Mike Sena, HIDTA Director for Northern California said: “The uptick in the availability of prescription drugs on our streets and the resurgence of heroin on a large scale in Northern California is of great concern to law enforcement. It is essential that we focus our attention on enforcement, but equally important is raising awareness and providing education about the dangers of prescription drug abuse. We are hearing of too many young people descending into heroin when they can no longer obtain or afford prescription drugs. It is best to prevent their use of prescription drugs and make them aware of the dangers associated with this behavior.”
Michael Gottlieb, Director of the High Intensity Drug Trafficking Area Program at the White House Office of National Drug Control Policy spoke at the event. “The abuse of prescription drugs is having a devastating impact on public health and safety in communities throughout the Bay area and across the United States,” he said. “While there are no silver bullet solutions to this challenge, we know that every sector of our society - parents, patients, healthcare providers, law enforcement and manufacturers – each play a vital role in making our communities healthier and safer. The drug challenge is a public health issue, not just a criminal justice issue and by pursing a holistic response to this epidemic we know we can save lives.”
To address the threat of prescription drug abuse and diversion while also protecting legitimate access to these drugs for those suffering from pain, the Administration released Epidemic: Responding to America's Prescription Drug Abuse Crisis in 2011. This action plan provides a national framework for reducing prescription drug diversion and abuse by supporting education for patients and healthcare providers, recommending more convenient and environmentally responsible disposal methods to remove unused medications from the home, supporting the expansion of state-based prescription drug monitoring programs, and reducing the prevalence of pill mills and doctor shopping through enforcement efforts.The Governor of Vermont recently dedicated his state of the union speech to the issue of heroin addiction. In Vermont, last year there were 21 fatal heroin overdoses, twice as many as the year before, and five times the number just five years ago.
A few more disturbing national statistics:
- The number of prescriptions written for opioids has increased ten-fold since 1990.
- There was a five-fold increase in treatment admissions for prescription painkillers between 2000 and 2010.
- Between 2006 and 2010, heroin overdose deaths increased nationally by 45%. Heroin treatment numbers are up over 250% since 2000 and over 40% in the past year.
- 69% of those who mis-used pain relievers obtained them from a friend or relative.
- In Ohio, from 1999-2010, drug overdose deaths increased by 372%, and 45% of those involved prescription drugs.
Drug abuse is not a problem that law enforcement can solve alone. This is the reason for bringing experts in the Bay Area together today -- educators, doctors, pharmacists, pharmaceutical companies, researchers, policymakers, community activists, elected officials, local, state and federal law enforcement, practitioners in the rehabilitation world, the media, and others, to help tackle this challenging issue and highlight the absolute need for a focused effort in this area including prevention, awareness, treatment, and enforcement.
One significant challenge in the Bay Area is a lack of local statistics. Anecdotally participants and panelists are all seeing prescription drug abuse in the Bay Area on the rise and our teenagers and young adults are increasingly becoming the new face of heroin addiction. One local rehab director with decades of experience in the field called the influx of prescription drug and heroin addicted young adults in the Bay Area a “tsunami.”
U.S. Attorney Haag remarked: “The summit is intended to be the start of a movement to get in front of the issue in Northern California – to collect information, share best practices, develop ways to track and measure this growing phenomenon, and devise ways to contain this growing epidemic – before we are years down the road and more lives are lost or destroyed.”
(Summit Agenda )
Two Indicted and Two More Plead Guilty in Department of Labor Fraud CasesRead the Press Release
KNOXVILLE, Tenn. – On May 6, 2014, a federal grand jury returned two, one-count indictments against Kenneth A. Gianbolvo, of Knoxville, Tenn., and Shaun Hurst, of Sevierville, Tenn., charging both men with theft of government funds.
According to the indictment on file with the U.S. District Court, Eastern District of Tennessee, Gianbolvo is alleged to have embezzled more than $1000 from the U.S Department of Labor (DOL) from May 19, 2008, to May 16, 2009. The indictment against Hurst, also on file with the U.S. District Court, Eastern District of Tennessee, alleges that he embezzled more than $1000 from DOL, from Mar. 28, 2009, to Nov. 28, 2009.
Additionally, on May 6, 2014, John A. Savage and James Phillips waived indictment and each pleaded guilty to an information charging them both with theft of government funds. According to their plea agreements on file with the U.S. District Court, Eastern District of Tennessee, Savage and Phillips both received unemployment benefits from the state of Tennessee unemployment program. These unemployment benefits were supplemented with federal funds through the American Recovery and Reinvestment Act of 2009, which authorized 100 percent federal funding for unemployment benefits that they qualified for and received. An internal audit determined that each individual was overpaid unemployment benefits after failing to report his employment and earnings from his employer, violating the policies and procedures for receiving unemployment benefits. In his plea agreement Phillips admitted to obtaining unemployment insurance benefits to which he was unentitled. Savage also acknowledged in his plea agreement that he owed the overpayment.
If convicted, Gianbolvo, Hurst, Savage, and Phillips all face up to 10 years in prison, a fine of up to $250,000, a term of supervised release of up to three years, and a $100 special assessment. In addition to the criminal penalties, defendants faced a state-determined one-year ban from receiving unemployment benefits.
Unemployment benefits are designed to assist those who qualify under specific policies and procedures. Unemployment benefits fraud is a serious offense. Individuals who take advantage of this benefit program through theft, fraud, and lies, effectuated by hiding earnings, may be prosecuted and face both terms in prison and fines.
These charges are the result of an investigation by DOL- Office of Inspector General and Tennessee Department of Labor. Assistant U.S. Attorney Brooklyn Sawyers represents the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
Two Houma Men Sentenced in Heroin Distribution ConspiracyRead the Press Release
ROLAND “TROY” CHAMBERS, age 45, and GREGORY JACKSON, age 40, both of Houma, Louisiana, were sentenced yesterday by U.S. District Judge Jay C. Zainey to 71 months and 60 months incarceration, respectively, announced U.S. Attorney Kenneth Polite. Both defendants were sentenced to four years of supervised release to be served after their incarceration.
CHAMBERS previously pleaded guilty to one count of conspiracy to distribute 100 grams or more of heroin, one count of possession with intent to distribute 100 grams or more of heroin, and three counts of distribution of heroin. JACKSON previously pleaded guilty to one count of conspiracy to distribute 100 grams or more of heroin and five counts of distribution of heroin.
According to court documents, CHAMBERS and JACKSON worked together to sell heroin in the Houma, Louisiana area. From July 1, 2012 through May 31, 2013, CHAMBERS and JACKSON made several sales of heroin to confidential sources of the Drug Enforcement Administration (“DEA”). During the course of the conspiracy, JACKSON would instruct others on how to “bag up” heroin for resale to other drug users. CHAMBERS served as a supplier, making several trips to New Orleans to obtain more heroin. DEA agents and Terrebonne Parish Sheriff’s Office deputies arrested CHAMBERS in possession of over 100 grams of heroin immediately after he returned from New Orleans.
The case was investigated by the DEA New Orleans Division Office and the Terrebonne Parish Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Matthew Payne
Travel Agent Indicted for $360,000 Fraud Scheme, Stole from Willard High School BandRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a travel agent was indicted by a federal grand jury today for stealing $360,000 from the Willard High School Band Boosters, which forced the cancellation of a trip to Hawaii for more than 300 students and chaperones.
Calliope Rocky Saaga, also known as “Ope,” 39, of Saratoga Springs, Utah, was charged in a 15-count indictment returned by a federal grand jury in Springfield, Mo.
According to today’s indictment, Saaga, doing business as Present America Tours, LLC, contracted with the Willard High School Band Boosters in January 2011 to provide travel arrangements for a June 2012 band trip to Hawaii. Saaga was responsible for booking airfare, lodging, transportation, meals, tours, and travel insurance for over 300 students and chaperones. The Willard High School Band Boosters wired 12 payments of $30,000 each to Saaga between February 2011 and January 2012.
Saaga booked no reservations as required in the contract, the indictment says. Instead, as he received wire transfers from the band boosters, Saaga allegedly used the funds to finance his personal lifestyle, which included gambling in Las Vegas, Nev., international travel to Samoa, a trip to Disneyland, and numerous other expenses unrelated to the terms of the contract.
As a result of Saaga’s diversion of funds, the indictment says, the Willard High School band trip was cancelled and the Willard High School Band Boosters suffered a loss of $360,000.
While he was spending the money of the Willard High School Band Boosters to finance his personal lifestyle, the indictment says, Saaga transmitted e-mails to the Willard High School director of bands, which lulled the band boosters into believing that their trip to Hawaii was on schedule.
Today’s indictment charges Saaga with 12 counts of wire fraud and three counts of money laundering. The indictment also contains a forfeiture allegation, which would require Saaga to forfeit to the government any property derived from the proceeds of the alleged offense, including a $400,000 money judgment.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull II. It was investigated by IRS-Criminal Investigation, the FBI and the Willard, Mo., Police Department.Top Players in South L.A. Gang Controlled by Incarcerated Mexican Mafia Member Plead Guilty to Federal Racketeering ChargesRead the Press Release
LOS ANGELES – The “shotcaller” of a South Los Angeles street gang pleaded guilty today to federal racketeering and drug trafficking charges for his role in orchestrating the day-to-day activities of the gang that is controlled by an incarcerated member of the Mexican Mafia.
Today’s guilty pleas by Manuel Valencia come one week after the daughter of the Mexican Mafia member admitted to acting as her father’s voice to convey orders to the Harpys street gang.
The Harpys gang, which claims territory southwest of downtown Los Angeles and north of the University of Southern California, is one of more than a dozen Latino gangs across a wide swath of South Los Angeles controlled by Mexican Mafia member Danny Roman, who is serving a life-without-parole sentence at Pelican Bay State Prison and was not charged in the federal RICO case.
Roman’s daughter, Vianna Roman, 37, of Los Angeles, pleaded guilty on May 1 to racketeering, narcotics and weapons offenses pursuant to a plea agreement that contemplates a sentence of approximately 20 years in federal prison but could lead to a life prison term if the sentencing judge determines this is appropriate. When she pleaded guilty, Vianna Roman admitted that she acted as a conduit for her father’s orders as he exercised control over the Harpys gang.
The shotcaller of the Harpys gang – the man who imposed the orders from Danny Roman – pleaded guilty today to violating the federal RICO statute and to engaging in a continuing criminal enterprise connected to drug trafficking. Manuel Valencia, 38, of Walnut, admitted that he oversaw and participated in gang activities, which included collecting “taxes” from drug dealers who were allowed to operate in gang territory, retaliating against people who ran afoul of the gang, and engaging in drug trafficking. Valencia, who as a result of his guilty pleas also faces a maximum of life in federal prison, agreed in his plea agreement to serve a 27-year prison term.
According to court documents, Vianna Roman and Valencia orchestrated a scheme that allowed Danny Roman to continue to continue to control the activities of the South Los Angeles street gangs from the Special Housing Unit of Pelican Bay State Prison. Vianna Roman used coded language to pass information to and received orders from her father during trips to the Pelican Bay prison in Northern California. Vianna Roman pass the orders to Valencia and other high-ranking members of Harpys, who oversaw violent conduct and drug trafficking within both Harpys territory and the broader area controlled by Danny Roman. Valencia controlled and enforced the collection of tax payments from Latino gangs under Danny Roman’s control and issued orders to other gangs regarding drug sales and the use of violence.
Vianna Roman and Valencia pleaded guilty before United States District Judge R. Gary Klausner, who is scheduled to sentence Roman on July 28 and Valencia on September 8.
With the guilty pleas of Vianna Roman and Valencia – and two others that were entered on Monday – a total of 24 defendants charged two years ago in a federal racketeering indictment have now pleaded guilty. Out of the 29 defendants named in the indictment, one is still pending trial, three are fugitives, and charges against one were dismissed following his conviction of first-degree murder in Los Angeles Superior Court.
According to court documents, Danny Roman oversaw gang activity by giving orders that directed gang members to engage in criminal conduct, including the murder of rival gang and Mexican Mafia members, and the extortion of businesses and gangs to generate income that was funneled back to Danny Roman in state prison. The Harpys gang collected taxes and other extortionate payments through threats of violence, including murder. Acting under Danny Roman’s authority, Vianna Roman and Valencia orchestrated the extortion of vendors at the Alameda Swap Meet, which is outside of Harpys territory but within the area controlled by Danny Roman. The Alameda Swap Meet was in territory controlled by the 38th Street gang, another gang under the control of Danny Roman.
In addition to outlining Danny Roman’s control of the Harpys and of other gangs in South Los Angeles, the indictment charged specific criminal acts, including the distribution of methamphetamine, cocaine, crack cocaine and heroin; the murder of a gang member over a drug debt; robberies against residents and rival gang members; and conspiracies to commit murder, including a plot to kill a witness in a state court case against a member of another gang.
Two other defendants, who were scheduled to go on trial in two weeks, pleaded guilty on Monday.
Jaime Montano, 34, of Los Angeles, who is linked to the East Side Trece gang, pleaded guilty to two racketeering offenses that could send him to prison for as long as 30 years. In his plea agreement, Montano admitted leading a conspiracy to murder a man who testified at trial against another gang member.
Edgar Gonzalez, 30, also linked to the East Side Trece gang, pleaded guilty engaging in a racketeering conspiracy, admitting that he conducted Harpys business and represented Danny Roman while incarcerated in an Arizona state prison. Gonzalez faces up to 20 years in federal prison.
Montano and Gonzalez are scheduled to be sentenced by Judge Klausner, respectively, on July 28 and August 4.
The investigation into members of the Harpys and the other street gangs was called Operation “Roman Empire” and was conducted by the Los Angeles High Intensity Drug Trafficking Area (HIDTA) Task Force, which is comprised of officers with the Los Angeles Police Department and agents with the Drug Enforcement Administration.
Release No. 14-055
Three Topeka Men Indicted on Federal Gun ChargesIn Unrelated CasesRead the Press Release
WICHITA, KAN. – Three Topeka men were indicted Wednesday on federal gun charges in unrelated cases, U.S. Attorney Barry Grissom said.
Courtney Douglas Grayson, 32, Topeka, Kan., is charged with one count of unlawful possession of a .38 caliber revolver and ammunition after being convicted of a felony. He was convicted in 2013 in Shawnee County on a felony charge of criminal discharge of a firearm at an occupied building. The gun crime is alleged to have occurred Jan. 29, 2014, in Shawnee County, Kan.
Lamont T. Keeling, 37, Topeka, Kan., is charged with one count of unlawful possession of a .357 caliber revolver and ammunition after felony convictions. His previous convictions include felony vehicular burglary in 2008 in Shawnee County and aggravated assault with a deadly weapon in 2012 in Shawnee County.
Lenard Ramirez, Jr., 38, Topeka, Kan., is charged with one count of unlawful possession of a .45 caliber pistol and ammunition after being convicted of a felony. He was convicted in 2005 in Pottawatomie County on a felony charge of sale of narcotics. The gun crime is alleged to have occurred April 3, 2014, in Shawnee County, Kan.
If convicted, each of the defendants faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The ATF Violent Crimes Task Force and the Topeka Police Department investigated the cases. Assistant U.S. Attorney Randy Hendershot is prosecuting.
OTHER INDICTMENTS
Jermaine A. Rayton, 31, Topeka, is charged with one count of possessing a .45 caliber pistol in furtherance of a drug trafficking crime (possession with intent to distribute cocaine). The crime is alleged to have occurred April 29, 2014, in Topeka, Kan.
If convicted, he faces a penalty of not less than five years. The FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Three Sentenced in Wire Fraud CaseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota, woman, her husband, and her son were sentenced on April 29, 2014, by U.S. District Judge Roberto A. Lange.
On October 10, 2012, Shannon Running, age 55, and Norman Running, Sr., age 55, both of Rosebud, and their son Norman Running, Jr., age 35, of Soldier Creek, were all indicted by a federal grand jury for Conspiracy to Commit Wire Fraud. Shannon was also charged with six counts of Wire Fraud, and Norman, Jr. was also charged with Structuring Currency Transactions.
Shannon and Norman, Sr. both pled guilty to the conspiracy charge on February 4, 2014. The other charges against Shannon were dismissed. On the same date, Norman, Jr. pled guilty to a Superseding Information charging him with Larceny, and the original Indictment against him was dismissed.
Shannon was sentenced to 51 months in custody, to be followed by 3 years of supervised release. She was ordered to pay restitution in the amount of $405,790.
Norman, Sr. was sentenced to 3 years of probation. He was ordered to pay restitution in the amount of $35,832.80.
Norman, Jr. was sentenced to 3 years of probation. He was ordered to pay restitution in the amount of $10,130.
In approximately June of 2009, Shannon Running contacted an acquaintance in California and told him that she expected to receive a large inheritance from her grandmother, which was untrue. Shannon requested that the victim provide her and her family with financial assistance, and assured him he would be repaid from her inheritance.
The victim was unable to provide the entire amount of financial support requested by Shannon, so he recruited some of his friends to loan money to the Running family as well.
The victims were contacted by e-mail and were instructed to send money via Western Union, MoneyGram, and other wire transfer methods. All three defendants benefitted from the scheme.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Ann M. Hoffman prosecuted the case.
Shannon Running was allowed to self-surrender to the U.S. Marshals Service on May 6, 2014, and the two other defendants immediately began their terms of probation.
Synthetic Drug Dealers with Central Valley Connection Arrested as Part of Nationwide Enforcement OperationRead the Press Release
FRESNO, Calif. — Douglas Jason Way, 41, of Evanston, Ill.; Timothy Ortiz, 43, of Waukegan, Ill.; and Natalie Middleton, 28, of Clovis, Calif., have been arrested as part of a nationwide law enforcement effort to combat the threat of synthetic drugs. The arrests were announced by United States Attorney Benjamin B. Wagner; Jeffrey J. Fitzpatrick, Special Agent in Charge of the San Francisco Field Division of the U.S. Drug Enforcement Administration; Jose Martinez, Special Agent in Charge of the Oakland Field Office, Internal Revenue Service, Criminal Investigation; and Clark E. Settles, Special Agent in Charge of the San Francisco Field Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The defendants were charged in a federal criminal complaint with conspiracy to traffic synthetic cannabinoids, commonly known as “spice,” “K2,” or “herbal incense.” They were also charged with causing the introduction of misbranded drugs into interstate commerce. Middleton, individually, was charged with money laundering the proceeds of drug trafficking. According to the complaint, the conspiracy involved the manufacture and distribution of at least 11 tons of smokable synthetic cannabinoids that contained the synthetic drugs AM-2201, JWH-018, and XLR11 to smoke shops and retail outlets throughout the United States and generated in excess of $20 million in illicit income. Manufactured by companies called Zencense and Zenbio, the drugs were processed in warehouses in Millbrae and Stockton, Calif. and marketed under the brand names of Bizarro, Posh, Sonic Zero, Headhunter, Neutronium, and Orgazmo. They were distributed to The Stuffed Pipe smoke shops in Central Valley, as well as to other retail establishments in 47 other states.
Public health and law enforcement agencies have seen the emergence of synthetic drug use. State and local public health departments note that synthetic cannabinoids can cause serious adverse health effects, including agitation, anxiety, nausea, vomiting, tachycardia, elevated blood pressure, tremor, seizures, hallucinations, and paranoid behavior. According to the American Association of Poison Control Centers, poison centers throughout the United States received 5,230 calls about exposures to these drugs in 2012 and 2,656 calls about exposures in 2013. Synthetic cannabinoids are not regulated as drugs for human consumption, and are often marketed as “legal” substances and sometimes labeled as “herbal incense” or “potpourri.” To address this emerging challenge, President Obama signed the Synthetic Drug Abuse Prevention Act into law in 2012, classifying 26 types of synthetic cannabinoids, including AM-2201, as Schedule I drugs under the Controlled Substance Act. DEA placed JWH-018 in Schedule I in 2011 and placed XLR11 in Schedule I last year.
This case was the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the DEA, IRS, and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration and the Fresno County Sheriff’s Department. The OCDETF program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, OCDETF is the centerpiece of the United States Attorney General’s drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises. This OCDETF investigation was also part of a nationwide law enforcement effort coordinated by the DEA’s Special Operations Division.
This enforcement action called Project Synergy began January 2014 and culminated this morning in 29 states. Project Synergy involves more than 45 DEA offices serving nearly 200 search warrants. As of today, more than 150 individuals have been arrested and federal, state and local law enforcement authorities have seized hundreds of thousands of individually packaged, ready-to-sell synthetic drugs as well as hundreds of kilograms of raw synthetic products to make thousands more. Additionally, more than $20 million in cash and assets were seized. These numbers are expected to grow as investigations continue.
The three Eastern District of California defendants were arrested in other districts. They will make their initial in the district where they were arrested, and a court date in the Eastern District of California has not yet been set.
If convicted of the drug charges, Way, Ortiz, and Middleton face a maximum statutory penalty of 20 years in prison and a $1 million fine. The FDA mislabeling charge carries a maximum statutory penalty of three years in prison and a fine of $10,000. Middleton also faces a maximum statutory penalty of 20 years in prison and a $250,000 fine if convicted of the money laundering charge. Any sentence, however, would 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 charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Assistant United States Attorney Karen A. Escobar is prosecuting the case, and Assistant United States Attorney Heather Mardel Jones is handling the forfeiture of assets.
St. Charles County Man Sentenced for Using Interstate Facilities to Entice A MinorRead the Press Release
St. Louis, MO – MICHAEL ENGLER was sentenced to 60 months in prison for using interstate facilities to entice a minor on Craigslist. But that minor was an undercover officer working with the FBI’s Crimes Against Children Task Force.
According to court documents, in October 2013, an undercover officer posing as an 18-year-old posted a "male looking for a male" ad on Craigslist and Engler responded. When the undercover officer told Engler he was "14 years old," Engler still wanted to meet the child. When the "14-year-old" expressed hesitation, Engler told him he knew about boys experimenting and told him he was in a Boy Scouts "Venturing Program" for kids aged 14 – 20. On October 15, Engler agreed to meet with the officer posing as the 14-year-old boy saying he would teach him about oral sex. Engler was arrested on October 16, 2013, when he showed up at the designated meeting spot behind an ice rink on Brentwood Boulevard.
Engler, St. Charles, Missouri, pled guilty in January to one felony count of using interstate facilities to transmit information about a minor with intent to engage in sexual activity. He appeared today for sentencing before United States District Judge Henry Autrey.
This case was investigated by the St. Louis County Police Department in conjunction with the Federal Bureau of Investigation, the United States Secret Service and the St. Charles County Cybercrime Unit.
Southfield Tax Preparer Pleads Guilty to Aiding in the Preparation of False ReturnsRead the Press Release
A Southfield, Michigan resident pleaded guilty to willfully making false claims to the United States government by aiding in the preparation of false income tax returns, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge Carolyn Weber, Internal Revenue Service Criminal Investigation.
Claudia Prince, 42, entered the guilty plea before U.S. District Court Judge John Corbett O’Meara.
According to court records, from 2009 to November 2011, Prince, doing business as A&C Tax Services, working out of her residence in Southfield, Michigan prepared forty-two individual tax returns for the years 2008, 2009 and 2010. These tax returns were false. Prince fabricated or inflated W-2 wage and earning statements, withholding information, and education credits (Hope and Lifetime Learning Credits). Prince will be required to pay restitution of $107,846 to the Internal Revenue Service.
A sentencing hearing was set by Judge O’Meara for September 9, 2014 at 10am. The maximum penalty for willfully aiding in the preparation of false tax returns is imprisonment of not more than three years and a $250,000 fine per each count.
The investigation of this case was conducted by the Special Agents of the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.SoCal Immigration Consultants Sentenced to Prison in Scheme That Filed Bogus Asylum Applications for Hundreds of Chinese AliensRead the Press Release
SANTA ANA, California – The owner of a San Gabriel immigration consulting business and one of his employees have been sentenced to federal prison for participating in a long-running scheme to prepare and file fraudulent asylum applications that made phony claims of religious persecution on behalf of hundreds of Chinese nationals.
Haoren Ma, 50, of San Gabriel, the owner of New Arrival Immigration Service, was sentenced April 28 to 4½ years in federal prison after pleading guilty to conspiracy, immigration document fraud and aggravated identity theft. Ma’s employee, Minghan Dong, 49, of San Gabriel, was sentenced on Monday, May 5 to one year and one day in prison for conspiracy to commit immigration document fraud. Both men were sentenced by United States District Judge Cormac J. Carney.
According to court documents, Ma and Dong charged as much as $6,500 to prepare and file fraudulent asylum applications on behalf of Chinese nationals. Ma and Dong falsely claimed that their clients fled China after being persecuted for their Christian beliefs, even in situations where the clients said they were Buddhists.
Federal authorities founds that many of the asylum applications prepared by the defendants contained nearly identical accounts of purported persecution, including descriptions of underground church meetings that led to arrests and torture by Chinese authorities. As part of the scheme, Ma and Dong provided their clients with detailed written materials and audio tapes on Christianity to help them prepare for their asylum interviews.
Suspicions about New Arrival Immigration Service first arose in January 2009 when U.S. Customs and Border Protection officers intercepted a package containing a stuffed animal that contained five fraudulent Chinese passports. The package was being shipped to an address used as a mail drop by New Arrival Immigration Service.
During a search of New Arrival Immigration Service and related offices, investigators seized stacks of partially completed asylum applications, counterfeit Chinese consular and embassy embossing seals, financial records and counterfeit identity documents. Ma and Dong were arrested in September 2011 by special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) following the execution of the federal search warrants.
“As this sentence makes clear, those who corrupt the integrity of our nation’s legal immigration system by exploiting our country’s generous asylum laws must understand there are serious consequences for those actions,” said Claude Arnold, special agent in charge for HSI Los Angeles. “As a country, we’re committed to providing refuge for those fleeing persecution, but there will be no such protections for people who manipulate this system for profit and put our nation’s security at risk in the process.”
As the investigation unfolded, HSI worked closely with U.S. Citizenship and Immigration Service’s (USCIS) Los Angeles Asylum Office in Anaheim to identify potentially fraudulent asylum applications submitted by the defendants.
“We are very pleased with this outcome,” said David Radel, Acting L.A. Asylum Office Director with USCIS. “It is an excellent example of federal agencies working together to combat fraud and maintain the integrity of our immigration system. USCIS is committed to identifying those who may have illegally obtained asylum through this fraudulent scheme and providing this information to our investigative colleagues.”
Based upon queries of databases maintained by the immigration courts, HSI investigators linked the defendants to more than 800 asylum applications filed since 2000, making it one of the largest asylum fraud cases uncovered in the Los Angeles area in recent years.
Release No. 14-057
Silver Spring Man Sentenced to over 20 Years in Prison for Conspiring to Induce A 9 Year Old Girl to Be Photographed Engaging in Sexual ActsRead the Press Release
Helped Entice the Victim to Submit to Sexual Degradation and Abuse
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced David Andrew Pizer, age 46, of Silver Spring, Maryland today to 249 months in prison followed by supervised release for life, for conspiring to produce child pornography. Judge Grimm ordered that upon his release from prison, Pizer must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief J. Thomas Manger of the Montgomery County Police Department.
According to his plea agreement, co-conspirator A used pictures of a nine year old girl to create profiles on online forums to advertise to others who expressed a sexual interest in children. Thereafter, and from March 16 to May 11, 2012, Pizer emailed and chatted online with conspirator A and the victim to encourage the victim to submit to sexual degradation and abuse that Pizer either watched through web-cam or that co-conspirator A would photograph and provide to Pizer and others. Pizer also introduced co-conspirator B to the victim and co-conspirator A, to help persuade the victim to continue to engage in sexual acts. Pizer and co-conspirator B repeatedly emailed images of minors dressed in sexually provocative outfits or engaged in sexual acts to co-conspirator A to help groom the victim to engage in sexual acts.
Further investigation revealed that Pizer’s laptop computer had 4,486 images and six videos that depicted children engaged in sexual acts with adults, children in sexually provocative poses or nude image of children. Approximately 605 of the images depicted the victim in lingerie, nude or engaged in sexual acts.
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 and the Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi O’Malley, who prosecuted the case.
Seattle Police and ATF Sieze Cache of Guns in Magnolia HomeRead the Press Release
The tenant who rented the basement of a home in Seattle’s Magnolia neighborhood, and his heroin supplier, have both been charged with gun and drug crimes after selling heroin and a firearm to a person working with law enforcement, announced U.S. Attorney Jenny A. Durkan. At the time of the arrests last week, law enforcement seized a dozen weapons including a Mac-11 submachine gun and silencer. JORGE CARLOS CAMPS, 34, made his initial appearance in U.S. District Court in Seattle last week on charges of distributing heroin and two counts of being a felon in possession of a firearm. ROGER LEE HIDDLESTON, 44, of Seattle, made his initial appearance in federal court today. He is charged with distribution of heroin, possession of heroin with intent to distribute, possession of methamphetamine with intent to distribute and unlawful possession of a firearm. Both men are being held at the Federal Detention Center at SeaTac pending further proceedings in the case.
According to the criminal complaint, on April 28, 2014, CAMPS allegedly sold heroin and a firearm to a person working with law enforcement. CAMPS or his cohorts also sent pictures of various weapons via text message, along with a price list for the guns. CAMPS has a prior felony conviction for violating a domestic violence court order and is prohibited from possessing firearms. HIDDLESTON allegedly supplied the heroin to CAMPS and was present and participated in the sale to the person working with law enforcement. Police stopped HIDDLESTON’s car after he left the Magnolia home. Inside they found heroin, methamphetamine, drug distribution materials, and $2,225 in currency. In the trunk they recovered a Sig Sauer Model P230 9mm Kurz semi-automatic pistol. HIDDLESTON is the subject of a domestic violence protection order and therefore is prohibited from possessing firearms.
Distribution of heroin is punishable by up to 20 years in prison. Possession with intent to distribute methamphetamine is punishable by up to 40 years and has a five year mandatory minimum sentence. Felon in possession of a firearm is punishable by up to ten years in prison.
The charges contained in the criminal complaints 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 Seattle Police Department, the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
The cases are being prosecuted by Assistant United States Attorney Todd Greenberg.