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24 June 2014
Collin County Woman Guilty in Plano ISD Embezzlement SchemeRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – A 68-year-old Prosper, Texas woman has pleaded guilty in connection with her role in a conspiracy to embezzle millions from the Plano Independent School District, announced U.S. Attorney John M. Bales today.
Carol Ann LaRue pleaded guilty to an Information charging her with conspiracy to commit federal program fraud today before U.S. Magistrate Judge Don D. Bush.
According to information presented in court, LaRue owned and operated Fire Systems Specialists (FSS) and Digital Security Solutions (DSS), companies supposedly in the business of maintaining fire safety systems and security systems. Between May 2011 and December 2013, LaRue conspired with Plano Independent School District employee, Kris Wilson Gentz, to defraud Plano ISD by submitting fraudulent invoices for services that were not rendered and products that were not provided. When payment was made to FSS and DSS, LaRue and Gentz would split the profits between themselves. As a result of the fraudulent scheme, Plano ISD suffered a loss that did not exceed $7 million. LaRue is responsible for losses that do not exceed $2.5 million. Gentz pleaded guilty to the same charges on Apr. 1, 2014 and is awaiting sentencing.
"The other shoe has now dropped in the Kris Gentz-Carol LaRue fraud scheme,” said U.S. Attorney Bales. “These defendants not only cheated the taxpayers in Plano ISD, they robbed the children. I congratulate the investigative team for a job well done. This case also should serve as a warning to others who somehow believe that they can rip off the public and not be held accountable. There will always be a reckoning.”
LaRue faces up to five years in federal prison. A date for sentencing has not yet been set.
This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Christopher A. Eason.Chicago Man Surrenders After Being Indicted in Alleged Conspiracy to Illegally Traffic Guns from Indiana to ChicagoRead the Press Release
CHICAGO ― A Chicago man self-surrendered to law enforcement authorities today on federal charges alleging that he conspired with others to buy at least 43 firearms in Indiana and illegally transport those firearms to Chicago for sale. The new defendant, WINSTON GERALDS, allegedly conspired with previous defendant David Lewisbey and others in the interstate gun trafficking conspiracy.
Geralds, 24, also known as “Worm,” was indicted on one count each of conspiracy and dealing firearms without a federal license, and two counts each of illegally transporting firearms across state lines and interstate travel to sell guns without a license. He pleaded not guilty to the charges after presenting himself with his attorney for arraignment in U.S. District Court. He was taken into federal custody and a detention hearing was scheduled for 1:30 p.m. Friday before U.S. Magistrate Judge Geraldine Soat Brown in Federal Court.
Geralds was charged in a seven-count indictment returned by a federal grand jury on May 28. A co-defendant, MAURICE STRICKLAND, 26, of Chicago, was charged with one count of being a felon-in-possession of a firearm. Strickland, also known as “Reece,” was arrested on June 9, pleaded not guilty, and remains detained in federal custody.
The indictment alleges that Geralds accompanied Lewisbey on multiple trips to Crown Point, Ind., and Indianapolis between April 21-23, 2012, and purchased firearms at gun shows and other venues. It adds they illegally brought the firearms to Chicago, where they sold no fewer than 43 guns to previous defendants, who then sold the guns to an individual who was cooperating with ATF agents. All of those guns were recovered by law enforcement.
Lewisbey, 24, of South Holland; Levaine Tanksley, 29, of Chicago; and Charles Lemle, 28, of Chicago, were previously convicted of various firearms offenses and sentenced. Michael Hall, 29, of Chicago, is awaiting sentencing.
Geralds allegedly accompanied Lewisbey and participated in each of the gun transactions on April 21-23, 2012, and conspired with him in illegally selling the firearms across the state line. At the time, Strickland lived in a residence in the 6800 block of South Langley Avenue where Tanksley sold some of the guns he bought from Lewisbey. Strickland was charged with illegally possessing a firearm on April 22, 2012, because of a previous felony conviction.
The indictment against Geralds and Strickland was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Carl Vasilko, Special Agent-in- Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Chicago Office of the Federal Bureau of Investigation, the Chicago Police Department, and the Illinois State Police assisted in the investigation, which was conducted with the Chicago High Intensity Drug Trafficking Task Force (HIDTA).
Conspiracy and dealing firearms without a federal license each carry a maximum sentence of five years in prison, while each count of illegally transporting firearms across state lines, and interstate travel to sell guns without a license carry a maximum penalty of 10 years in prison. The felon-in-possession count against Strickland carries a maximum sentence of 10 years in prison. Each count carries a maximum fine of $250,000. 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. Attorneys Christopher Parente and Bethany Biesenthal.
Indictment
Burlington County, N.J., Man Charged with Bank Fraud for Running Multi-Million Dollar Check-Kiting SchemeRead the Press Release
TRENTON, N.J. – A Burlington County, N.J., man was arrested this morning for allegedly orchestrating a large scale check-kiting scheme that caused $8.8 million in losses to three banks in New Jersey, U.S. Attorney Paul J. Fishman announced.
Luis G. Rogers Sr., 71, of Beverly, N.J., is charged by complaint with one count of bank fraud. He is scheduled to make his initial appearance today in Trenton federal court before U.S. Magistrate Judge Tonianne J. Bongiovanni.
According to the complaint:
Rogers was the chief executive officer of Lease Group Resources Inc. (LGR), an office equipment leasing company based in Mount Holly, N.J., and was also the principal of several other business entities (the LGR Entities). From November 2012 through April 2013, Rogers maintained and controlled numerous checking accounts in the names of the LGR Entities at three separate banks: Liberty Bell Bank, Roma Financial, and Susquehanna Bank.
Rogers allegedly engaged in what is known as a “check-kiting” scheme – creating artificial balances in his bank accounts by causing checks to be written against the accounts knowing the money was not there to cover them. Rogers would allegedly deposit the checks into other accounts he controlled to artificially inflate the balances of those accounts. Rogers, or others acting on his behalf, allegedly deposited hundreds of millions of dollars into the LGR Entities’ accounts, amounts that far exceeded LGR’s annual revenues. In April 2013, the banks discovered the scheme and either returned or dishonored many of the pending checks and charged back the amounts of the checks against the LGR Entities’ accounts. This resulted in the accounts being overdrawn and the banks sustaining millions of dollars in losses. Specifically, Liberty Bell lost $3.7 million, Roma Bank lost $2.1 million, and Susquehanna lost $3 million.
The charge of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations in the complaint are merely accusations, and the defendant is considered innocent unless proven guilty.14-230
Rogers, Luis Complaint
Buffalo Man Sentenced for Being an Accessory After the Fact to a False Statement Under the Clean Air Act Related to Kensington Towers ProjectRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul announced today that Henry Hawkins, 45, of Buffalo, N.Y., who was convicted of a misdemeanor charge of being an accessory after the fact to a false statement under the Clean Air Act, was sentenced to one year probation by U.S. Magistrate Judge Jeremiah J. McCarthy.
Assistant U. S. Attorney Aaron J. Mango, who handled the case, stated that the defendant was employed by JMD Environmental, Inc. (JMD) as an air sampling technician and a project monitor, and was certified by the New York State Department of Health to conduct asbestos project monitor and air sampling duties. From June 9, 2009 to January 11, 2010, co-defendants Johnson Contracting of WNY, Inc. (Johnson Contracting), Ernest Johnson, and Rai Johnson, conducted asbestos abatement activities at six buildings at the Kensington Towers Apartment Complex in Buffalo. During the abatement process, co-defendant Rai Johnson created daily project logs to document the progress at Kensington Towers. The logs are documents required to be maintained under the Clean Air Act.
At the conclusion of the abatement for building B-2 by Johnson Contracting, Rai Johnson wrote in his daily project log that all material containing asbestos had been removed from the boiler room, when in truth, all asbestos had not been removed. Thereafter, on August 25, 2009, the defendant conducted a visual inspection of the boiler room at building B-2 and issued a satisfactory visual inspection, when in truth, the defendant was aware that all asbestos had not been removed. In doing so, the defendant acted as an accessory after the fact to the false statement made by the Johnson defendants.
This is the first defendant to be sentenced as part of the Kensington Towers asbestos abatement project. In addition to Ernest and Rai Johnson, other defendants who have been convicted include JMD project monitors Evan Harnden, Chris Coseglia and Brian Scott; and current and former public officials responsible for certifying the project’s compliance with applicable laws and regulations, including Donald Grzebielucha, William Manuszewski, and Theodore Lehmann. The remaining defendants will be sentenced before U.S. District Court Judge Richard J. Arcara.
The plea is the culmination of an investigation on the part of Special Agents of the U.S. Environmental Protection Agency - Criminal Investigation Division, under the direction of Acting Special Agent-In-Charge, Vernesa Jones-Allen; Special Agents of the Federal Bureau of Investigation; Special Agents of the U.S. Department of Housing and Urban Development - Office of Inspector General, under the direction of Special Agent-In-Charge Christina Scaringi; and Investigators of the New York State Department of Environmental Conservation Police, BECI, under the direction of Captain Frank Lauricella. Additional assistance was provided by the New York State Department of Labor, Asbestos Control Bureau.Broward Resident Convicted in Social Security Theft SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Thomas Caul, Special Agent in Charge, Social Security Administration (SSA), Office of Inspector General, announce that Diana Cunningham, 56, of Pembroke Pines, pled guilty to two counts of theft of government funds, in violation of Title 18, United States Code, Section 641. The defendant faces up to ten years in prison, three years of supervised release, a $250,000 fine, and restitution as to each count. The defendant’s sentencing hearing is scheduled for September 2, 2014 at 1:30 p.m. in front of U.S. District Judge William P. Dimitrouleas.
According to information presented in court, from approximately May 2003 to August 2013, the defendant falsely represented to the Social Security Administration that she was caring for and providing housing for a disabled child in Florida. The defendant falsified numerous forms and attestations to the SSA regarding the child’s whereabouts and welfare. An investigation by the SSA’s Office of Inspector General revealed that the child was living in Massachusetts and not being cared for by the defendant. Further investigation revealed that the defendant did not provide any financial support for the disabled child. Over the years, the defendant received over approximately $80,000 in payments from the SSA.
Mr. Ferrer commended the investigative efforts of SSA’s Office of Inspector General. This case is being prosecuted by Assistant U.S. Attorney Randy Katz.
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.
Blackfeet Law Enforcement Officer Sentenced to PrisonRead the Press Release
GREAT FALLS - The United States Attorney's Office announced that during a federal court session in Great Falls, Montana, on June 23, 2014, before U.S. District Judge Brian M. Morris, Michael Connelly, Sr., 57, of Browning, was sentenced to a term of 24 months imprisonment, three years supervised release, and a special assessment of $125.
U.S. Attorney Mike Cotter said the conviction and sentence of Blackfeet Law Enforcement Officer Connelly represents the office's dedication to ensuring that no defendant escapes justice. "Society bestows upon law enforcement officers a tremendous amount of power and trust. Officers are typically the best stock in which to invest such tools. But sometimes an officer abuses the power that society has so generously and graciously given to him. When that unfortunate step is taken, the justice system must ensure that the officer is prosecuted, punished, and no longer able to misuse his position."
Officer Connelly was sentenced for receiving oral sex in his patrol vehicle while armed and on duty. The victim reported that Officer Connelly took her to a secluded place and threatened her with jail if she did not provide oral sex. When interviewed about the encounter, Officer Connelly lied to the FBI, telling agents that he never told the victim that she could either provide oral sex or go to jail. In a second interview, Officer Connelly admitted that he made such a statement.
A jury convicted Officer Connelly of a Civil Rights Violation and False Statement to a Federal Agent. In a Sentencing Memorandum, Assistant U.S. Attorney Ryan G. Weldon stated "Officer Connelly was a law enforcement officer and tribal prosecutor for decades. He knows that he cannot extract oral sex from passengers in his patrol vehicle, abuse his power as a law enforcement officer, or lie to the FBI. Knowing all of those things, Officer Connelly still committed the crimes."
The Court sentenced Officer Connelly to 24 months of imprisonment, with three years of supervised release to follow. Because there is no parole in the federal system, the truth in sentencing guidelines mandate that Connelly will likely serve all of the time imposed by the court. In the federal system, Connelly does have the opportunity to shorten the term of custody by earning credit for good behavior. However, this reduction will not exceed 15% of the overall sentence.
This investigation was conducted by the Federal Bureau of Investigation.
Asherton Man Sentenced to 20 Years in Federal Prison for Receiving Child PornRead the Press Release
In Del Rio this afternoon, 60-year-old Abel De Leon of Asherton, TX, was sentenced to 20 years in federal prison followed by five years of supervised release for receiving child pornography announced United States Attorney Robert Pitman and Homeland Security Investigations (HSI) Special Agent in Charge Janice Ayala.
Court records reflect that HSI agents who were conducting an investigation into on-line exploitation of minors executed a search warrant at the defendant’s residence in November 2012 and seized several DVDs, a computer and related equipment. A subsequent forensics examination of the seized items revealed the presence of over 100 videos and images depicting sexual exploitation of pre-pubescent children.
On June 5, 2013, De Leon pleaded guilty to one count of receipt of child pornography. By pleading guilty, De Leon admitted to receiving child pornography since approximately 2012, including 48 videos via the Internet.
“This 20-year sentence sends a clear message that those who exploit children in any way will face serious consequences,” said Special Agent in Charge Janice Ayala, HSI San Antonio. “Preventing and investigating crimes against children is a high priority for HSI. We will continue to dedicate law enforcement resources to identify and bring to justice child predators who traumatize and victimize children.”
This case was investigated by special agents with HSI and prosecuted by Assistant United States Attorneys Matthew H. Watters, Katherine Nielsen, and Meghan McCalla.
Arlington Man Sentenced for Counterfeiting ViolationsRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 58-year-old Arlington, Texas, man has been sentenced for counterfeiting violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Cloyd Ray Knight, III pleaded guilty on May 9, 2013 to passing counterfeit bills and was sentenced to 69 months in federal prison today by U.S. District Judge Leonard Davis.
According to information presented in court, Knight began manufacturing counterfeit $100 United States Federal Reserve Notes at his home in Arlington sometime in 2004-2005. He developed a manufacturing process that included using newspaper print paper, painting the paper with acrylic, printing a simulated watermark on the paper, printing a simulated security thread on the paper, printing a front and rear image on the paper, and spraying the notes with a dulling coat. The process changed over time based on his experience and experimentation. After printing the counterfeit $100 bills, Knight would pass or use the counterfeit bills to purchase goods and then receive change in legitimate bills from retail stores located in east Texas and west Louisiana. Considered one of the largest digital counterfeiters in recent history, Knight successfully passed more than $400,000 in counterfeit $100 bills.
Knight was indicted by a federal grand jury on January 23, 2013. After pleading guilty in May 2013, he absconded. Knight was then rearrested in January 2014.
This case was investigated by the United States Secret Service and was prosecuted by Assistant U.S. Attorney Frank Coan.
Anderson County Man Sentenced for Child PornographyRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 50-year-old Palestine, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Alvin Westley pleaded guilty on Jan. 9, 2014 to possession of child pornography and was sentenced to 156 months in federal prison today by U.S. District Judge Leonard E. Davis.According to information presented in court, on Jan. 26, 2011, Westley knowingly possessed child pornography. At the time of the offense, Westley was a registered sex offender having been previously convicted of three counts of indecency with a child. Westley was indicted by a federal grand jury on Oct. 23, 2013, and charged with federal child pornography violations.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the U.S. Department of Homeland Security - Homeland Security Investigations (DHS-HSI), the Texas Department of Public Safety – Criminal Investigations Division, and the Anderson County Sheriff's Office. Assistant U.S. Attorney Nathaniel C. Kummerfeld prosecuted this case.Albuquerque Man Sentenced to Twelve Years for Violating the Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Timothy Patrick Shanks, 39, of Albuquerque, N.M., was sentenced this morning to 144 months in federal prison followed by three years of supervised release for his conviction on firearms charges. The sentence was announced by U.S. Attorney Damon P. Martinez, 2nd Judicial District Attorney Kari E. Brandenburg, Special Agent in Charge Bernard J. Zapor of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Bernalillo County Sheriff Dan Houston.
Shanks was arrested on July 3, 2013, on a criminal complaint charging him with being a felon unlawfully in possession of a firearm. According to the criminal complaint, on June 24, 2013, the Bernalillo County Sheriff’s Office and ATF executed a search warrant at Shanks’ residence and recovered a firearm believed to have been used in the armed robbery of a Dollar General store located at 3211 Coors Blvd. SW on June 22, 2013. On July 25, 2013, Shanks was indicted and charged with being a felon in possession of a firearm, violating the Hobbs Act by committing an armed robbery of a business engaged in interstate commerce, and brandishing a firearm in relation to a crime of violence.
Thereafter, Shanks was charged in a superseding indictment with the following six crimes: (1) being a felon in possession of a firearm and ammunition on June 22, 2013, (2) violating the Hobbs Act by committing an armed robbery of a business engaged in interstate commerce on June 22, 2013, (3) brandishing a firearm in relation to a crime of violence, (4) distributing methamphetamine on May 9, 2013, (5) being a felon in possession of a firearm on May 21, 2013, and (6) being a felon in possession of a firearm on June 3, 2013. The superseding indictment alleged that all six offenses were committed in Bernalillo County, N.M.
On Feb. 19, 2014, Shanks pleaded guilty to Counts 3 and 5 of the superseding indictment charging him with brandishing a firearm during a crime of violence and being a felon in possession of a firearm. In his plea agreement, Shanks admitted brandishing a revolver when he robbed the Dollar General store on June 22, 2013. He also admitted possessing a 9 mm caliber rifle on May 21, 2013. Shanks acknowledged that he was prohibited from possessing firearms or ammunition because he previously had been convicted of possession of a controlled substance with intent to distribute, and of possession of a controlled substance.
This case was investigated by the Albuquerque office of ATF and the Bernalillo County Sheriff’s Office with assistance from the 2nd Judicial District Attorney’s Office. It was prosecuted by Assistant U.S. Attorney David M. Walsh as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Air Conditioner Thief Pleads Guilty to Violating Clean Air ActRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO – Martin C. Eldridge III, 35, Columbus, pleaded guilty in U.S. District Court to violating the Clean Air Act when he cut the tubing on air conditioning units he was stealing and released a regulated refrigerant into the environment.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Randall K. Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency (U.S. EPA), Franklin County Prosecuting Attorney Ron O’Brien and Columbus Police Chief Kim Jacobs announced the plea entered today before U.S. Magistrate Judge Elizabeth Preston Deavers.
According to court documents, Eldridge and others stole at least 49 air conditioner units between August and October 2013 in order to sell the copper and parts from the units at scrap yards. When he cut the tubing that connected the air conditioner to the business or residence, a refrigerant known as HCFC-22 was released. The refrigerant is regulated under the Clean Air Act because it poses a significant threat to the Earth’s ozone layer. HCFC-22 is also known as R-22 and sold under the trade names of Freon, Genetron, Arcton and Forane.
Eldridge pleaded guilty to one count of knowingly venting HCFCs into the environment. Under terms of the plea agreement, Eldridge will serve 31 months in federal prison. The plea agreement recommends that Eldridge serve the federal sentence concurrent with his state sentence on the theft charges. Eldridge has been in state custody since October 2, 2013. Following prison time, Eldridge will be under court supervision for 12 months during which time he must perform 200 hours of community service. Senior U.S. District Judge James L. Graham will review the terms of the plea agreement before determining whether or not to accept the agreed-to sentence and schedule a date for sentencing.
“The release of ozone depleting substances can cause serious harm to public health, including skin cancer, cataracts, and suppression of the immune system,” said Randall K. Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Ohio. “The defendant’s continual theft of air conditioner parts was illegal and a clear violation of the Clean Air Act. As this defendant has learned, anyone who thinks that breaking the law is worth the risk should think again.”
U.S. Attorney Stewart said this is the first federal case of its kind in the Southern District of Ohio. He commended the cooperative investigation by the Columbus Division of Police and U.S. EPA and the scrap metal theft task force, as well as Assistant U.S. Attorney J. Michael Marous and Special Assistant U.S. Attorneys Heather B. Robinson with Franklin County Prosecutor O’Brien’s Office and Brad Beeson with the U.S. EPA, who prosecuted the case.
# # #Additional Tax Charges Filed Against Philadelphia ManRead the Press Release
PHILADELPHIA - William Bucci, 57, of Philadelphia, PA, was charged today by Superseding Indictment with four counts of making and subscribing false federal income tax returns, announced United States Attorney Zane David Memeger. The indictment alleges that Bucci underreported his income for the tax years 2007 through 2010.
If convicted the defendant faces a maximum possible sentence of 12 years in prison, a fine of up to $1 million, and up to three years of supervised release.
The case was investigated by the Internal Revenue Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David J. Ignall.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525
23 June 2014
Virginia Man Pleads Guilty to Using Facebook to Entice Minors from Across the Country to Produce Child PornographyRead the Press Release
RICHMOND, Va. – Cameron Scot Bivins-Breeden, 21, of King George County, Va., pleaded guilty today to production of child pornography and enticement of a minor.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after the plea was accepted by United States District Judge John A. Gibney.
Bivins-Breeden was indicted on April 15, 2014, by a federal grand jury on production of child pornography, in violation of 18 U.S.C. § 2251, and enticement of a minor, in violation of 18 U.S.C. § 2422. He faces a maximum penalty of life imprisonment when he is sentenced on September 22, 2014.
In a statement of facts filed with his plea agreement, Bivins-Breeden admitted to enticing 38 juvenile females located across the country, ranging from 11 to 17 years old, to produce child pornography. As part of the scheme, Bivins-Breeden contacted the victims via Facebook on his iPhone posing as a juvenile female and enticed them to produce child pornography. After the juvenile victims produced the pornographic images, they sent them to Bivins-Breeden over the internet. When the victims refused to produce additional child pornography images, Bivins-Breeden threatened to send the previously obtained images to the victims’ friends, family, and schoolmates on Facebook. In total, Bivins-Breeden admitted to sending 95 child pornography images in an effort to convince victims he was, in fact, a juvenile female and causing victims to produce 45 child pornography images.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Erik S. Siebert and Commonwealth of Virginia, Office of the Attorney General, Assistant Attorney General and Special United States Attorney Samuel Fishel are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Venezuelan Man Arrested for Threatening Newtown Residents After School Shooting TragedyRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that WILFRIDO A. CARDENAS HOFFMAN, 30, of El Hatillo, Venezuela, was arrested on June 21 in Miami on a federal criminal complaint charging him with making numerous threatening phone calls to residents of Newtown, Connecticut, shortly after the Sandy Hook Elementary School shooting tragedy in December 2012.
On May 20, 2013, CARDENAS HOFFMAN was charged in a criminal complaint with transmitting threats in interstate or foreign commerce to injure the person of another. According to the complaint, a redacted copy of which was unsealed today, CARDENAS HOFFMAN made numerous phone calls to residents of Newtown on December 16, 2012, two days after the shooting that claimed 26 lives at Sandy Hook Elementary School in Newtown. In one of the telephone calls, HOFFMAN allegedly stated: “This is Adam Lanza. I’m gonna [expletive] kill you. You’re dead. You’re dead. You hear me? You’re dead.” In another phone call, HOFFMAN allegedly stated: “This is Adam Lanza. I’m gonna kill you. You’re dead. With my machine gun. You’re dead [expletive].”
CARDENAS HOFFMAN was arrested on Saturday as he transitioned through Miami International Airport en route to Mexico from Venezuela. He made his initial appearance today before U.S. Magistrate Judge William C. Turnoff in the Southern District of Florida and is scheduled to return to court on Thursday at 10 a.m. for a detention hearing.
UPDATE: On July 16, 2014, CARDENAS HOFFMAN appeared before U.S. Magistrate Judge Joan G. Margolis in New Haven. He waived his right to a probable cause hearing for 60 days and was ordered to undergo a psychiatric evaluation. He has been detained since his arrest on June 21.
Newtown residents who believe that they received a threatening call are encouraged to call Lori Vernali, the Victim/Witness Coordinator for the U.S. Attorney’s Office, at 203-821-3818.
“This complaint charges that Cardenas Hoffman made dozens of threatening telephone calls to residents of Newtown when they were suffering from one of the worst tragedies in our nation’s history,” stated U.S. Attorney Daly. “Threatening such vulnerable people is reprehensible and inhuman criminal conduct. Further, it inappropriately stressed law enforcement resources at a critically demanding time. This case demonstrates the resolve of our office and the FBI to arrest individuals who believe that international boundaries will protect them from prosecution in the United States.”
“The motivation to catch criminals runs deep within the FBI, but the pursuit of criminals who prey on innocent victims motivates agents like nothing else,” stated FBI Special Agent in Charge Ferrick. “That someone can so callously prey on a community with such hate and vitriol is beyond comprehension. This arrest, a year and a half after the Newtown tragedy, speaks to the unrelenting commitment and compassion for victims and their families and sends an important warning to those inclined to commit similar crimes. The FBI’s reach is exceptionally far and wide and equally enduring.”
The charge of transmitting threats in interstate or foreign commerce carries a maximum term of imprisonment of five years and a fine of up to $250,000.
U.S. Attorney Daly stressed that the filing of a criminal complaint is not evidence of guilt. The charges in a criminal complaint are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Edward Chang and Krishna Patel, with the assistance of the U.S. Attorney’s Office for the Southern District of Florida and Assistant U.S. Attorney Sarah Schall.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Twenty-Two Springfield Men Indicted on Federal and State Drug and Firearm OffensesRead the Press Release
BOSTON – Twenty-two Springfield men were charged today in federal and state court with either distributing a controlled substance or unlawfully possessing a firearm and ammunition.
Separate federal indictments alleging the distribution of crack cocaine were returned against Alberto Correa-Martinez, 27, and Stephen Tavernier, 28; Sherad Therrien, 24; David Faust, 26; Richard Freedman, 29; Jayson Green, 35; Aaron Smith, 30; Theo Waldron, 39; Dimitri Major, 36; and one other individual known to law-enforcement. Therrien was also charged for being a felon in possession of a firearm and ammunition.
Luis Oppenheimer, 25, and Jose Vargas, 27, were charged with distributing and possessing with intent to distribute heroin.
If convicted on these charges, all of the above-listed individuals face a maximum of 20 years in prison, six years of supervised release and a $250,000 fine.Nagee Jones, 22 and Jason Patterson, 30, were charged in separate indictments for being felons in possession of firearms and ammunition. If convicted on these charges, Jones and Patterson face a maximum of a lifetime in prison, a lifetime of supervised release, and a $1 million fine.
Separate Hampden County Superior Court indictments were returned against Christian Paret, 20, and Ricarte Burgos, 35, who were indicted on drug trafficking charges; Paret was also indicted for unlawful possession and sale of firearms and ammunition. Christopher McCollough, 33, and one other individual known to law-enforcement who is a fugitive, were indicted for distributing narcotics. The fugitive is additionally charged with being a subsequent offender and habitual offender, which, if convicted, carries a potential penalty of 15 years in state prison.
Luis Reyes, Steve Hollowman, Jermain Davis, and Tarryl Green were all charged in Springfield District Court with distributing illegal narcotics, which, if convicted, carries a potential penalty of 10 years in state prison.“Today’s arrests are the result of our close collaborations with the Springfield Police, the Massachusetts State Police, and the Hampden County Sheriff’s Office,” said United States Attorney Carmen M. Ortiz. “We stand united with our local and state partners in this and future public-safety initiatives to ensure Springfield is the safe and vibrant community its citizens deserve.”
United States Attorney Ortiz; Hampden County District Attorney James Orenstein; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Boston Field Division; Michael Ferguson, Acting Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Springfield Police Commissioner John Barbieri; Massachusetts State Police Superintendent Colonel Timothy P. Alben; Hampden County Sheriff Michael Ashe; and United States Marshal John Gibbons; made the announcement today.
The cases were investigated by the Federal Bureau of Investigation=s Western Massachusetts Gang Task Force; Bureau of Alcohol, Tobacco, Firearms and Explosives Task Force; Drug Enforcement Administration; Massachusetts State Police; Springfield Police Department; and Hampden County Sheriff’s Office; in a concerted effort to combat the illegal drug trafficking and violence in Springfield.
The details contained in the indictments are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Treasurer for Fire District, Road District Sentenced for Embezzling $1.5 MillionRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former treasurer of both the Wellington Napoleon Fire Protection District and Special Road District was sentenced in federal court today for a fraud scheme in which he embezzled more than $1.5 million from the two districts.
Leland Ray Kolkmeyer, 59, of Wellington, Mo., was sentenced by U.S. District Judge Gary A. Fenner to three years in federal prison without parole. Kolkmeyer must surrender to the Bureau of Prisons to begin serving his sentenced on Aug. 7, 2014. The court also ordered Kolkmeyer, who has already paid $1 million in restitution, to pay an additional $530,159 in restitution, which represents the total amount he embezzled from the two districts.
On Nov. 20, 2013, Kolkmeyer pleaded guilty to two counts of mail fraud. Kolkmeyer was elected treasurer of both the road district and the fire district in 1998. He resigned from both positions in February 2013. The offices of both the fire district and the road district are located in Wellington.
Kolkmeyer embezzled $939,485 from the Wellington Napoleon Special Road District and $590,674 the Wellington Napoleon Fire Protection District, for a total theft of $1,530,159.
According to court documents, Kolkmeyer told investigators that he used the money he had stolen by doing $50,000-$60,000 in remodeling of his house. Kolkmeyer also stated he purchased various vehicles over the course of the time that he would not have been able to purchase without the money. Kolkmeyer also stated he helped his daughter remodel her home for about $25,000-$30,000. Kolkmeyer stated he helped with his son's wedding expenses and estimated that each wedding for his children cost $40,000-$50,000.
Kolkmeyer also told investigators that he did not declare any of the stolen income to the IRS.
Road District Fraud Scheme
Kolkmeyer admitted that he stole approximately $900,000 from the road district from August 1998 to Feb. 12, 2013. Kolkmeyer made checks payable from the road district’s bank account to himself and others for his own benefit without the knowledge, authorization or consent of the road district. The government alleges that Kolkmeyer fraudulently transferred $939,485 from the road district’s bank account to his own bank account or to pay bills on his behalf.
Kolkmeyer, in his position as treasurer of the road district, made false statements and material omissions to the Special Road District Board concerning the checks that were made payable to himself and to others on his behalf.
Fire District Fraud Scheme
Kolkmeyer also admitted that he stole more than $500,000 from the fire district from August 1998 to Feb. 17, 2013. The government alleges that Kolkmeyer fraudulently transferred $590,674 from the fire district bank accounts to his own bank account or to pay bills on his behalf.
Kolkmeyer, in his position as treasurer of the fire district, made false statements and material omissions to the Fire Protection District Board concerning the checks that were made payable to himself and to others on his behalf.
This case was prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI.Three Former Georgia Correctional Officers Convicted for Offenses Related to Beating of Inmate and Ensuing Cover-UpRead the Press Release
The Justice Department announced that Christopher Hall, a former sergeant for the Correctional Emergency Response Team (CERT) at Macon State Prison (MSP) in Oglethorpe, Georgia, and two former CERT officers, Ronald Lach and Delton Rushin, were convicted on Friday night by a federal jury on federal offenses related to the beating of an MSP inmate in 2010 and the cover-up that followed. Three other defendants, James Hinton, Derrick Wimbush and Tyler Griffin, were acquitted of related charges.
Ronald Lach was one of several MSP officers who participated in a retaliatory beating against an inmate as their form of punishment for the inmate’s prior misconduct. Lach was convicted of violating the inmate’s rights, conspiring to obstruct justice after the assault and obstruction of justice. Hall and Rushin were convicted of conspiring to obstruct justice and obstruction of justice.
In related cases, five former MSP officers have pleaded guilty to various charges in connection with a series of beatings of inmates in 2010 at Macon State Prison, and the cover-up that followed.
“Eight former corrections officials from Macon State Prison now stand convicted for their involvement in beating inmates and in the coordinated cover-ups that followed each assault,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “These officers betrayed the public trust by using their official positions to commit violent civil rights abuses and then tried to cover up their crimes. The Department of Justice will continue to prosecute vigorously corrections officers who use their power to violate federal law.”
These cases were investigated by the Macon Resident Agency of the FBI, with the support of the Georgia Bureau of Investigation. The cases were prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd for the Civil Rights Division, with the assistance of the U.S. Attorney’s Office in Macon.
St. Louis Man Sentenced on Federal Drug ChargeRead the Press Release
St. Louis, MO – ELIJAH BOYKINS of St. Louis, Missouri, was sentenced to 33 months imprisonment for possession with the intent to distribute heroin. Boykins appeared before Judge Henry E. Autrey in U.S. District Court in St. Louis.
According to his March plea agreement, St. Louis police found approximately one ounce of heroin divided into more than 100 doses at Boykins’ home in St. Louis while executing a search warrant on February 10, 2014. Additionally, more than $3,000 in cash was found and was forfeited as part of the plea agreement. Boykins, who was on federal supervised release for a 2007 weapons offense, also had his supervision revoked in that case as a result of the new case.
The case was investigated by the St. Louis Metropolitan Police Department. Tom Albus handled the case for the U.S. Attorney’s Office.
St. Leonard’s Man Sentenced to 20 Years in Prison for Sexually Exploiting A Minor to Produce PornographyRead the Press Release
Took 24 Sexually Explicit Pictures of a Prepubescent Girl
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced David Wayne Sweet, Jr., age 24, of St. Leonard, Maryland today to 20 years in prison followed by supervised release for life for sexually exploiting a minor to produce child pornography. Judge Titus ordered that upon his release from prison, Sweet 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 William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Calvert County Sheriff Mike Evans; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; and Calvert County State’s Attorney Laura Martin.
According to his plea agreement, on September 19, 2013, the Calvert County Sheriff’s Drug Enforcement Unit executed a search warrant at Sweet’s residence based on alleged drug violations. Sweet’s cell phone was seized which contained 24 sexually explicit images of a prepubescent girl taken between June and September 2013. Sweet had deleted the pictures, but law enforcement officials recovered all of the images.
Sweet was arrested on September 27, 2013. Sweet admitted that he inappropriately touched the victim while she was sleeping and took the photos.
On April 16, 2014, Sweet pleaded guilty to a second degree sex offense in Calvert County Circuit Court. His sentencing in the state case is scheduled for July 11, 2014 at 9:00 a.m.
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 HSI Baltimore, Calvert County Sheriff’s Office, Maryland State Police Internet Crimes Against Children Task Force and Calvert County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi O’Malley, who prosecuted the case.
Spencerport Man Pleads Guilty to Tax ChargeRead the Press Release
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Jay Chapman, 47, of Spencerport, N.Y., pleaded guilty before U.S. District Judge David G. Larimer, to filing a false income tax return. The charge carries a maximum penalty of three years in prison, a $100,000 fine or both.
Assistant U.S. Attorney Bradley E. Tyler, who is handling the case, stated that in 2007, the defendant filed a personal income tax return but failed to report business income in the amount of $118,971.
Sentencing is scheduled for September 17, 2014 before Judge Larimer.
The sentencing is the culmination of an investigation on the part the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.Repeat Offender Sentenced to 180 Months for Abusive Sexual ContactRead the Press Release
Spokane – Today, Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Senior United States District Court Judge William Fremming Nielsen sentenced Steven Ray St. Peter, age 22, to 180 months imprisonment for abusive sexual contact occurring on June 12, 2012. St. Peter will be under court supervision for 60 months after he is released from federal prison.
St. Peter's charge stems from his abuse of a minor child on the Colville Indian Reservation in 2012. On June 12, 2012, the family of the 9 year-old victim reported the sexual contact to the Colville Tribal Police who began a search for St. Peter. Witnesses told police they saw St. Peter running away from the scene of the crime. St. Peter was arrested shortly thereafter in a near-by residence in Omak by Colville Tribal Police Officers. S t. Peter pled guilty on March 19, 2014.
Michael Ormsby stated, "Sexual abuse will not be tolerated within any of the four Indian Reservations in the Eastern District of Washington. This District's Federal and Tribal law enforcement partners are ever-vigilant when investigating sexual abuse crimes. Their tireless efforts resulted in the successful prosecution of St. Peter and prevented other minor victims from being victimized by him. Today's sentence plainly reflects the seriousness of this type of crime."
This investigation was conducted by the Federal Bureau of Investigation and the Colville Tribal Police Department. The case was prosecuted by Matthew F. Duggan, Assistant U.S. Attorney for the Eastern District of Washington.
13-CR-00018-WFN
Randolph County Man Sentenced for Methamphetamine ConspiracyRead the Press Release
Follow @SDILNewsOn June 19, 2014, Samuel S. Jacobs, a/k/a “Simple Sam,” 40, of Steeleville, Illinois, was sentenced in United States District Court in Benton on a one-count indictment charging conspiracy to manufacture methamphetamine, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois.
Jacobs, who had previously pled guilty to the methamphetamine offense, was sentenced to 48 months in federal prison, to be followed by 3 years’ supervised release, and fined $200. The offense occurred between 2010 and November 2012, in Jackson and Randolph Counties. Evidence at the plea and sentencing hearings established that Jacobs supplied pseudoephedrine to others for use in the manufacture of methamphetamine. At sentencing, the district court found that Jacobs was responsible for unlawfully possessing more than 100 grams of pseudoephedrine. Co-defendants Patsy Pelate and Julie Keller were previously sentenced to prison terms of 84 months and 97 months, respectively, for their roles in the methamphetamine conspiracy.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Randolph County Sheriff’s Office, Perry County Sheriff’s Office, Murphysboro Police Department, and Drug Enforcement Administration.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Perry County Man Pleads Guilty to Methamphetamine ConspiracyRead the Press Release
Follow @SDILNewsOn June 19, 2014, a Perry County, Illinois, man pled guilty to an indictment, charging conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Brandon K. Loftis, 38, of Pinckneyville, pled guilty to the one-count indictment charging conspiracy to manufacture methamphetamine. The offense occurred between 2012 and June 2013 in Perry, Jackson, Randolph, Franklin, and Williamson Counties. Evidence at the plea hearing established that Loftis was involved with others in the manufacture of methamphetamine. Other persons supplied Loftis with pseudoephedrine pills for the purpose of manufacturing methamphetamine. During an April 10, 2012, search warrant at Loftis’ Mulkeytown residence, agents located meth-making materials. Co-defendants Samantha J. Plumlee, 28, of Buckner, and April Rollinson, 35, of Centralia, have previously pled guilty to their roles in the methamphetamine conspiracy and are awaiting sentencing. Loftis, Plumlee, and Rollinson each face a term in federal prison of up to 20 years, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Illinois State Police/Southern Illinois Drug Task Force, Murphysboro Police Department, DuQuoin Police Department, Pinckneyville Police Department, Illinois State Police Methamphetamine Response Team, and Drug Enforcement Administration.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Owner of Home Health Company Pleads Guilty to Role in $6.5 Million Health Care Fraud SchemeRead the Press Release
The owner and operator of Nestor’s Health Services, Inc. (Nestor HH), a now-defunct Miami home health care agency, pleaded guilty today in connection with a $6.5 million health care fraud scheme.
Acting Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Acting Special Agent in Charge Brian Martens of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.
Cruz Sonia Collado64, of Homestead, Florida, pleaded guiltybefore U.S. District Judge Robert N. Scola in the Southern District of Florida to one count of conspiracy to offer and pay health care kickbacks and to defraud the United States, and to one count of offering and paying health care kickbacks.
Collado was an owner and operator of Nestor HH, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
According to court documents, Collado and her co-conspirators operated Nestor HH for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided. As the owner and operator of Nestor HH, Collado paid kickbacks and bribes to patient recruiters, in return for those recruiters providing patients to Nestor HH for home health care and therapy services that were not medically necessary, and in many instances, were not provided. Collado would then fraudulently bill the Medicare program for home health care services on behalf of these recruited patients, which Collado knew was in violation of federal criminal laws.
From approximately March 2009 through at least January 2014, Nestor HH submitted more than $6.5 million in claims for home health services, and fraudulently obtained more than $6.1 million before the fraud was exposed.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorneys Anne P. McNamara and A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Owner of Home Health Company Pleads Guilty to Role in $6.5 Million Health Care Fraud SchemeRead the Press Release
The owner and operator of Nestor’s Health Services, Inc. (Nestor HH), a now-defunct Miami home health care agency, pleaded guilty today in connection with a $6.5 million health care fraud scheme.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Acting Special Agent in Charge Brian Martens of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.
Cruz Sonia Collado, 64, of Homestead, Florida, pleaded guilty before U.S. District Judge Robert N. Scola in the Southern District of Florida to one count of conspiracy to offer and pay health care kickbacks and to defraud the United States, and to one count of offering and paying health care kickbacks.
Collado was an owner and operator of Nestor HH, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
According to court documents, Collado and her co-conspirators operated Nestor HH for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided. As the owner and operator of Nestor HH, Collado paid kickbacks and bribes to patient recruiters, in return for those recruiters providing patients to Nestor HH for home health care and therapy services that were not medically necessary, and in many instances, were not provided. Collado would then fraudulently bill the Medicare program for home health care services on behalf of these recruited patients, which Collado knew was in violation of federal criminal laws.
From approximately March 2009 through at least January 2014, Nestor HH submitted more than $6.5 million in claims for home health services, and fraudulently obtained more than $6.1 million before the fraud was exposed.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorneys Anne P. McNamara and A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
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.
Owner of Florida Stock Lending Firm Sentenced to 10 Years in Prison for His Part in $100 Million Fraud SchemeRead the Press Release
Jeffrey R. Spanier, former owner of Amerifund Capital Finance, LLC located in Boca Raton, Florida, was sentenced today by U.S. District Judge Roger T. Benitez to serve 10 years in federal prison and pay almost $20.7 million in restitution for his role in a $100 million stock loan fraud scheme that bilked victims all over the world.
Spanier was also ordered to forfeit several million dollars in assets that were the proceeds of the fraud, including cash and securities held in brokerage accounts, and a luxury home in Florida. The case was investigated by the FBI.
Spanier was indicted on April 13, 2012, along with Douglas McClain Jr. and James Miceli. All were charged with multiple counts of conspiracy, mail fraud, wire fraud, securities fraud, and money laundering. On May 31, 2013, a federal jury returned guilty verdicts on all counts in the indictment against McClain. Miceli committed suicide shortly before that trial. On December 20, 2013, a separate jury found Spanier guilty on multiple counts of conspiracy, mail fraud, wire fraud, and securities fraud.
According to trial testimony, Spanier, through his entity Amerifund Capital Finance, partnered with McClain, Miceli, and Argyll Equities, and together with his partners fraudulently induced corporate executives to pledge millions of dollars’ worth of stock the executives held in publicly traded companies as collateral for loans by falsely representing that the borrowers' stock would not be sold unless there was a default on the loan.
The evidence presented at trial showed that Argyll, the purported lender, had no cash to lend and instead survived for years by immediately selling borrowers stock on the day after the stock was pledged as collateral. The proceeds from the sale of the stock were used to fund the loans creating the appearance that Argyll had plenty of cash to lend.
The evidence also showed that Spanier, McClain, and others fraudulently induced the borrowers to make monthly interest payments on their loans by falsely representing that their collateral was safe and would be returned as long as they did not default. At the end of the loan terms, the borrowers paid off their loans. Instead of returning the stock to the borrowers, Spanier and McClain kept the money and provided false excuses about why they could not return their stock.
The evidence further showed that the unauthorized sales of stock held by insiders of publicly traded companies caused the stock price to plummet which defrauded purchasers of these publicly traded securities who purchased stock through public stock exchanges.
During the trial, the government offered testimony from several executives, many of whom had faithfully paid off their loans over a period of years, completely unaware that their stocks had been sold. All testified about the frustration, emotional stress and grief they experienced when they unsuccessfully attempted to recover their stock once the loan balance was paid, and ultimately realized they were the victims of a massive fraud. Victims were located in the United States, Canada, Mexico, Panama, China, England, and Belgium.
The jury rejected defense claims that Spanier was merely a broker who was unaware of the fraud scheme.
U.S. Attorney Laura Duffy praised the efforts of the FBI for its investigation of the case and described today’s sentence as a fitting end to a brazen deception. “Jeffrey Spanier not only stole tens of millions of dollars from his own clients, but he victimized the public market when his actions caused stock prices to plummet. This significant sentence means Spanier’s days driving a Bentley and living in a gated country club community at the expense of others will soon be a distant memory.”
FBI Special Agent in Charge, Daphne Hearn, commented, “Today's sentencing ensures that Mr. Spanier is being held accountable for his illegal and unscrupulous actions. The FBI is committed to pursuing those who illegally line their pockets at the expense of the public.”
DEFENDANT Case Number: 12CR0918BEN Jeffrey R. Spanier Age: 49 City: Delray Beach, Florida CHARGESCount 1: Conspiracy (Title 18, United States Code, Section 371): Counts 2-7 Mail Fraud (Title 18, United States Code, Section 1341
INVESTIGATING AGENCY
Counts 8-18 Wire Fraud (Title 18, United States Code, Section 1343)
Count 19 Securities Fraud (Title 15, United States Code, Sections 78j(b) and 78ff)Federal Bureau of Investigation
*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
One Sentenced to 8 Years in Prison and Three Others Plead Guilty in Child Exploitation CasesRead the Press Release
FRESNO, Calif. — One defendant was sentenced and three others pleaded guilty to child exploitation offenses in separate cases in federal court today, United States Attorney Benjamin B. Wagner announced.
“As these cases make clear, identifying, arresting and prosecuting those who go online to download and distribute sexually explicit images of children is a top priority for HSI and its federal and local enforcement partners,” said Tatum King, acting special agent in charge for HSI San Francisco. “Many child predators mistakenly believe the anonymity of the Internet shields them from detection, but as these defendant learned firsthand, cyberspace is not a refuge from justice.”
Bakersfield Man Sentenced to 8 Years in Prison (1:13-cr-241 LJO)
Bradley James Ghilarducci, 67, was sentenced to eight years and one month in prison for receiving child pornography. According to court documents, between February and August 2012, Ghilarducci received images through the Internet of minors engaged in sexual activity. This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Kern County Sheriff’s Office. Assistant United States Attorney Michael G. Tierney prosecuted the case.Tuolumne County Man Pleads Guilty (1:13-cr-00396 AWI)
Curtis Benjamin Hults, 63, of Twain Harte pleaded guilty to four counts of sexual exploitation of a minor and one count of receipt of child pornography. According to the plea agreement, between May 1, 2008, and October 8, 2012, Hults created images of four different minors engaging in sexually explicit conduct, stored them on a digital camera, and then transferred them to a computer. Hults also downloaded from the Internet more than 600 images of minors engaged in sexually explicit conduct, some of whom were prepubescent and some of the images depicted violence.Hults is scheduled to be sentenced on September 2, 2014. He faces 15 to 30 years in prison for each of the four counts of sexual exploitation of a minor and five to 20 years in prison for the receipt of child pornography charge. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. This case is the product of an investigation by the FBI, the Visalia Police Office, the Tulare County District Attorney’s Office, and the Tuolumne County Sheriff’s Office.
Turlock Man Pleads Guilty (1:14-cr-012-LJO)
Jeffrey Randall Metcalfe, 47, pleaded guilty to one count of receiving and distributing child pornography. According to court documents, between January 2012 and December 1, 2013, Metcalfe used a website to communicate with persons interested in exchanging images of child pornography. He knowingly received and distributed more than 600 images of child pornography, some of which were images of violence and prepubescent minors.Metcalfe is scheduled to be sentenced on September 15, 2014. He faces 15 to 40 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Turlock Police Department.
Former Bakersfield Resident Pleads Guilty to Sharing Child Pornography (1:13-cr-146 AWI)
Robert Aron Sprenkle, 36, of Baltimore, Md., pleaded guilty to one count of receiving and distributing child pornography in Kern County, between September 29, 2012, and November 4, 2012. An indictment was returned on April 18, 2013, and Sprenkle was arrested in Clearwater, Fla. where he had relocated. He was released on bond and relocated again to Baltimore. Sprenkles was taken into custody after his guilty plea today and is set for sentencing on September 15, 2014. He faces a sentence of five to 20 years in prison, a potential lifetime term of supervised release, and a $250,000 fine. This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).These cases were 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Northern Illinois Man Pleads Guilty to Crack Cocaine ConspiracyRead the Press Release
Follow @SDILNewsOn June 19, 2014, Albert Wesley, a/k/a “Boogie,” a/k/a “Boog,” 29, of South Holland, Illinois, pled guilty to a one-count indictment charging conspiracy to distribute crack cocaine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. The offense occurred between 2012 and April 2013, in Williamson and Jackson Counties. Evidence at the plea hearing established that Wesley was involved with others in the distribution of crack cocaine and that he sometimes fronted crack cocaine to others for re-distribution. During the investigation, Wesley sold crack cocaine to a confidential source working for law enforcement. Wesley faces a term of imprisonment of up to 20 years, to be followed by 3 years’ supervised release, and a $1,000,000 fine. Wesley is currently being held without bond pending an October 23, 2014, sentencing hearing.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Murphysboro Police Department, Carbondale Police Department, and Drug Enforcement Administration. The Williamson County State’s Attorney’s Office and Jackson County State’s Attorney’s Office also assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Niagara Falls Contractor Sentenced for Conspiring to Defraud HUDRead the Press Release
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Walter Heinrich Weiss, 61, of Niagara Falls, N.Y., who was convicted of conspiring to make a false statement in a HUD transaction, was sentenced to one year of probation by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney James P. Kennedy, Jr., who handled the case, stated that the defendant was an employee of John Gross at David Gross Contracting, Inc. (Gross Contracting). Weiss conspired with John Gross and other employees of Gross Contracting to prepare and submit false and fraudulent bids and estimates which purported to be from competitors of Gross Contracting. Specifically, the employees would maintain, within their offices, and on their computers, blank letterhead for various competing companies. The letterhead was used to prepare false and fraudulent estimates and/or job bids which were higher than bids submitted by Gross Contracting.
In one instance, following significant flooding which resulted from a water main break during the spring of 2009, a Niagara Falls resident contacted Gross Contracting for an estimate for repair work on the resident’s home. Unbeknownst to the homeowner, Gross Contracting, in addition to its own bid, also submitted a false and fraudulent bid which appeared to be from a competitor. The fake bid was submitted with the intention of manipulating and defrauding the HUD grant program that was ultimately used to pay Gross Contracting’s $2,545.00 bill for the repairs.
In January 2012, John Gross was sentenced to 33 months in prison. The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.
New London Man Pleads Guilty to Federal Gun ChargeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MAURICE L. MILLIGAN, 35, of New London, pleaded guilty today before U.S. Magistrate Judge Thomas P. Smith in Hartford to one count of possession of a firearm by a previously convicted felon.
According to court documents and statements made in court, at approximately 11:30 p.m. on April 22, 2013, New London Police received reports of shots fired in the vicinity of a convenience store located on Ocean Avenue near the intersection of Evergreen and Sherman Streets. Responding officers did not find any victim of the shooting, but did locate and seize four spent 9mm Winchester shell casings in the immediate area. The investigation determined that two males had had a verbal altercation inside the convenience store and, shortly thereafter, a number of shots had been fired outside the business. Review of video from inside and outside the store led to the identification of MILLIGAN as the probable shooter.
On April 25, 2013, New London Police observed MILLIGAN sitting in the driver’s seat of a parked vehicle. Officers ordered MILLIGAN to exit the car and saw that he was wearing a bullet-proof vest. Officers then searched the vehicle and recovered from under the driver’s seat a Glock, Model 17, 9mm semi-automatic pistol with an obliterated serial number. The handgun was loaded with 19 rounds of Winchester 9mm ammunition. Further examination of the gun revealed that the serial number on the frame of the weapon had been removed.
A ballistics comparison made of the shell casings recovered on the night of April 22 with the Glock seized from under the driver’s seat of the car MILLIGAN was driving on April 25 established that the Glock was the weapon that fired the shots.
Prior to April 2013, MILLIGAN had been convicted in the Queens County (N.Y.) Supreme Court of third degree criminal possession of a loaded firearm and second degree robbery.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce. It is also a violation of federal law for a convicted felon to wear protective body armor, and for an individual who has been convicted of a violent felony offense to possess body armor.
MILLIGAN is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on September 10, 2014, at which time he faces a maximum term of imprisonment of 10 years. He has been detained since his arrest on April 25, 2013.
This matter has been investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New London Police Department and the Office of the State’s Attorney for the Judicial District of New London. The case is being prosecuted by Assistant U.S. Attorney John H. Durham.
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(203) 821-3722 [email protected]New Jersey U.S. Attorney Files Civil Suit Seeking Forfeiture of $1.7 Million Seized from New York-Based ExporterRead the Press Release
Cellular Next LLC Allegedly Participated in Drug Money Laundering
Through Black Market Peso ExchangeNEWARK, N.J. - The United States filed a civil forfeiture complaint today seeking to forfeit $1,742,289, previously seized from cellular phone wholesale company Cellular Next LLC, which allegedly represents narcotics proceeds laundered through the Black Market Peso Exchange (BMPE), U.S. Attorney Paul J. Fishman announced.
According to the complaint filed today in Newark federal court:
Cellular Next, which operates out of New York and Miami and is registered as a business entity in New Jersey, has a history of receiving narcotics proceeds. Drug Enforcement Administration (DEA), New York Drug Enforcement Task Force (NYDETF) and Immigration and Customs Enforcement, Homeland Security Investigations (HSI) undercover agents have sent wire transfers of such proceeds to the company at the direction of BMPE brokers based in Colombia.
The BMPE is a currency exchange system which uses illegal drug proceeds in the United States to pay for goods that then are shipped to Colombia. It is the primary method used by Colombian narcotics traffickers to launder their illicit funds. The recipients in Colombia pay for those goods in pesos, which are then forwarded to the narcotics traffickers. The system allows narcotics traffickers to launder and transport their narcotics dollars through the United States financial system by using domestic accounts held by businesses or individuals doing business in the United States. Seizure and forfeiture actions are aimed at disrupting and destroying the flow of these narcotics dollars by targeting the domestic accounts and the entities that receive these illicit funds.
Representatives of Cellular Next have, on numerous occasions, received narcotics proceeds without asking for the appropriate identification or filing the appropriate paperwork to comply with the Bank Secrecy Act, which was designed to combat money laundering. Cellular Next has a history of having its bank accounts closed by financial institutions for misuse, for having allowed large numbers of structured cash deposits from at least 2010 through 2013.
One money laundering customer sent the $1.7 million the government seeks to forfeit to Cellular Next LLC using BMPE.
U.S. Attorney Fishman credited the New York Drug Enforcement Task Force, comprising agents and officers from DEA New York, New York City Police Department and New York State Police; and agents and officers of U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the ongoing investigation.
The government is represented by Assistant U.S. Attorney Evan S. Weitz of the U.S. Attorney's Office Asset Forfeiture and Money Laundering Unit.
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Cellular Next Complaint
New Jersey Man Sentenced to Two-Year Prison TermRead the Press Release
For Prostituting Girlfriend, Who He Physically Abused
Second Man Sentenced to Six Months in Prison for Aiding in the ProstitutionWASHINGTON – Leschon Gonzales, 25, of Atlantic City, N.J., was sentenced today to a two-year prison term for prostituting and abusing his girlfriend multiple times last year, and Cornell Ford, 42, of Washington, D.C., was sentenced to a six-month prison term for aiding in the prostitution activities, U.S. Attorney Ronald C. Machen Jr. announced.
The men pled guilty in April 2014 in the Superior Court for the District of Columbia. Gonzales pled guilty to two counts each of pandering, procuring, and simple assault. Ford pled guilty to one count of pandering. Both were sentenced by the Honorable Michael Ryan. Upon completion of their respective prison terms, each will be placed on probation for 12 months.
According to the government’s evidence, Gonzales, also known as “Smoov,” began dating the 22-year-old victim in the summer of 2013. On June 30, 2013, he and the victim met Ford at Union Station. From there, Ford advised Gonzales where to take the victim to prostitute herself. Gonzales took the victim to the location Ford advised, an area in the District of Columbia known for prostitution, and instructed the victim how to behave with customers. The victim complied, and after she sold her body for sex, Gonzales took the money. When the victim stated that she did not want to sell herself, Gonzales struck her multiple times. Over the next several days, Gonzales arranged, via online advertisements, for the victim to engage in sexual acts for money throughout the District of Columbia. Gonzales received all of the proceeds.
On Oct. 25, 2013, the victim and Gonzales were again in the District of Columbia with Ford. Gonzales chose the victim’s clothing and Ford drove Gonzales and the victim to the same area they had gone in June. Ford instructed Gonzales exactly where the victim should walk to pick up customers. As a result, the victim engaged two customers in transactions for oral sex. Gonzales received all of the money from those transactions. The next evening, they went to another area of the District of Columbia, and the victim had several customers. When the victim did not return with as much money as expected, Gonzales grabbed her and put her in the car.
A few days later, on Oct. 30, 2013, Gonzales and the victim were in Union Station when the victim told Gonzales that she was not going back on the street to sell her body. Gonzales grabbed her by the arm and dragged her out of Union Station. Gonzales let go of her, and she ran back into Union Station to hide in a restroom. From inside the restroom, she called her mother, who notified police. Gonzales was arrested as he approached the women’s restroom, where the victim had been hiding. Ford was identified through additional investigation.
In announcing the sentence, U.S. Attorney Machen commended the work performed by those who investigated the case from the Metropolitan Police Department. He also praised the work those who handled the case for the U.S. Attorney’s Office, including Victim/Witness Advocate Veronica Vaughan and Paralegal Specialist Jason Manuel. Finally, he commended the efforts of Assistant U.S. Attorney Jeff T. Cook, who investigated the matter.
14-148New Jersey Man Sentenced to Two-Year Prison TermRead the Press Release
For Prostituting Girlfriend, Who He Physically Abused
Second Man Sentenced to Six Months in Prison for Aiding in the ProstitutionWASHINGTON – Leschon Gonzales, 25, of Atlantic City, N.J., was sentenced today to a two-year prison term for prostituting and abusing his girlfriend multiple times last year, and Cornell Ford, 42, of Washington, D.C., was sentenced to a six-month prison term for aiding in the prostitution activities, U.S. Attorney Ronald C. Machen Jr. announced.
The men pled guilty in April 2014 in the Superior Court for the District of Columbia. Gonzales pled guilty to two counts each of pandering, procuring, and simple assault. Ford pled guilty to one count of pandering. Both were sentenced by the Honorable Michael Ryan. Upon completion of their respective prison terms, each will be placed on probation for 12 months.
According to the government’s evidence, Gonzales, also known as “Smoov,” began dating the 22-year-old victim in the summer of 2013. On June 30, 2013, he and the victim met Ford at Union Station. From there, Ford advised Gonzales where to take the victim to prostitute herself. Gonzales took the victim to the location Ford advised, an area in the District of Columbia known for prostitution, and instructed the victim how to behave with customers. The victim complied, and after she sold her body for sex, Gonzales took the money. When the victim stated that she did not want to sell herself, Gonzales struck her multiple times. Over the next several days, Gonzales arranged, via online advertisements, for the victim to engage in sexual acts for money throughout the District of Columbia. Gonzales received all of the proceeds.
On Oct. 25, 2013, the victim and Gonzales were again in the District of Columbia with Ford. Gonzales chose the victim’s clothing and Ford drove Gonzales and the victim to the same area they had gone in June. Ford instructed Gonzales exactly where the victim should walk to pick up customers. As a result, the victim engaged two customers in transactions for oral sex. Gonzales received all of the money from those transactions. The next evening, they went to another area of the District of Columbia, and the victim had several customers. When the victim did not return with as much money as expected, Gonzales grabbed her and put her in the car.
A few days later, on Oct. 30, 2013, Gonzales and the victim were in Union Station when the victim told Gonzales that she was not going back on the street to sell her body. Gonzales grabbed her by the arm and dragged her out of Union Station. Gonzales let go of her, and she ran back into Union Station to hide in a restroom. From inside the restroom, she called her mother, who notified police. Gonzales was arrested as he approached the women’s restroom, where the victim had been hiding. Ford was identified through additional investigation.
In announcing the sentence, U.S. Attorney Machen commended the work performed by those who investigated the case from the Metropolitan Police Department. He also praised the work those who handled the case for the U.S. Attorney’s Office, including Victim/Witness Advocate Veronica Vaughan and Paralegal Specialist Jason Manuel. Finally, he commended the efforts of Assistant U.S. Attorney Jeff T. Cook, who investigated the matter.
14-148Moldovan Man Sentenced for Internet FraudRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Dumitru Doban, 27, of Moldova, who was convicted of wire fraud conspiracy, was sentenced to 46 months in prison and ordered to pay $257,489 in restitution by U.S. District Judge Frank P. Geraci, Jr.
Assistant U.S. Attorney Brett A. Harvey, who handled the case, stated that Doban, a citizen of Moldova, a country in Eastern Europe between Romania and Ukraine, participated in a conspiracy to defraud purchasers of motor vehicles over the Internet. As part of the scheme, vehicle advertisements were placed online via websites such as eBay, autotrader.com, and autotraderclassics.com. Potential buyers responded by e-mail to the advertisements and were be contacted by individuals identifying themselves as the listed sellers of the vehicles. E-mail correspondence occurred between the two parties with descriptions of the vehicles, negotiations of the purchase price, shipping information, and purchase information. Once an agreement was reached for the purchase of the vehicles, the buyers were instructed to utilize a third party, such as eBay Motors and Google Wallet, to conduct the transaction. These third-party websites (bogus and unrelated to legitimate third party websites) were made to look legitimate.
After signing up for the third-party websites, the buyers were sent e-mails directing them to send wire transfers for the purchase price, plus shipping costs, to bank accounts that were opened by Doban in Rochester, Columbus, Ohio, Alexandria, Virginia, and Birmingham, Alabama, using fake names and false Czech Republic passports. After the buyers sent the wire transfers to the bank accounts, Doban sent the money overseas, primarily to the Ukraine and Moldova, through bank-to-bank wire transfers and money transfer services, or withdrew the money from the accounts. The prospective online buyers never received any of the vehicles supposedly offered for sale as part of the scheme.
A total of 18 people, who hailed from various states (including California, Nevada, North Carolina, and Arizona) and Canada, were victims of the Internet fraud scheme. Those victims transferred a total of $257,489 to the bank accounts opened by the defendant. As part of the plea agreement, the defendant admitted that the overall conspiracy – which included similar fraudulent conduct by a co-conspirator, Alexandru Turcan, in the Northern District of New York -- involved losses of more than $400,000 but less than $1,000,000.
The United States Attorney’s Office is prosecuting another individual, Vasile Leu, also a citizen of Moldova, for allegedly participating in the same Internet fraud scheme. A federal grand jury returned an indictment charging Leu with wire fraud conspiracy on September 24, 2013. The case is still pending.
The conviction was the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation.Mercer County, N.J., Man Admits Robbery ConspiracyRead the Press Release
TRENTON, N.J. - A Mercer County, N.J., man today admitted his role in the March 2013 robbery of a commercial establishment, U.S. Attorney Paul J. Fishman announced.
Felix M. Lugo, 39, formerly of Trenton, N.J., pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit Hobbs Act robbery.
According to documents filed in this case and statements made in court: Lugo conspired with Arturo Delacruz, 35, and Samuel Matias Cruz, 33, both of Trenton, to rob the Rapido Flores Multiservices Agency in Trenton. Lugo and Cruz committed the robbery, during which at least one victim was physically assaulted and restrained. Lugo and Cruz stole more than $6,000 and fled the scene in a vehicle driven by Delacruz.
Delacruz and Cruz were previously arrested by special agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) on criminal complaints charging each with one count of conspiracy to commit Hobbs Act robbery. Those charges remain pending.
The Hobbs Act conspiracy to which Lugo pleaded guilty carries a maximum potential penalty of 20 years in prison, as well as a maximum fine of $250,000, or twice the gross gain or loss arising out of the offense. Sentencing is scheduled for Oct. 6, 2014.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge Stephanie R. Shoemaker; the Mercer County Prosecutor’s Office, under the direction of Prosecutor Joseph L. Bocchini Jr.; the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi; troopers from N.J. State Police, under the direction of Col. Rick Fuentes; the Trenton Police Department, under the direction of Police Chief Ralph Rivera Jr.; and the Westampton Police Department, under the direction of Police Chief Ricky W. Smith, for their investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit in Newark.
14-228Defense counsel: Henry E. Klingeman Esq., Newark
Lugo, Felix Information
Mercer County Man Pleads Guilty to Possessing Child PornographyRead the Press Release
Bluefield, W.Va. – A 50-year old Mercer County man faces up to 20 years in prison after pleading guilty today to possession of child pornography, United States Attorney Booth Goodwin announced. Charles Edward Lawrence of Princeton, West Virginia, entered a guilty plea before Senior United States District Court Judge David A. Faber in Bluefield.
Following an undercover operation, law enforcement authorities executed a search warrant on Lawrence’s home on October 10, 2013. Authorities seized videos from the home that depicted prepubescent minors having sex or performing sexual acts. Lawrence maintained the child pornography on a USB flash drive. Lawrence is scheduled to be sentenced on October 27, 2014, at 11:00 a.m. in Bluefield.
The West Virginia Internet Crimes Against Children Task Force, the Mercer County Sheriff’s Department, the Southern Virginia Internet Crimes Against Children Task Force, and the Tazewell County Sheriff’s Office conducted the investigation. Assistant United States Attorney Lisa G. Johnston is in charge of the prosecution.
This case is being brought as part of U.S. Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia.
Massachusetts Man Pleads Guilty to Computer Hacking and Credit Card TheftRead the Press Release
A Massachusetts man pleaded guilty today to hacking into computer networks around the country – including networks belonging to law enforcement agencies, a local police department and a local college – to obtain highly sensitive law enforcement data and alter academic records. He also pleaded guilty to obtaining stolen credit, debit and payment card numbers.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Carmen M. Ortiz of the District of Massachusetts, Special Agent in Charge Vincent Lisi of the FBI’s Boston Division and Colonel Timothy P. Alben of the Massachusetts State Police made the announcement.
On June 2, 2014, Cameron Lacroix, 25, of New Bedford, Massachusetts, was charged by a criminal information with two counts of computer intrusion and one count of access device fraud. Lacroix entered his guilty plea today before U.S. District Court Judge Mark Wolf of the District of Massachusetts. He pleaded guilty to both counts in the information and agreed to serve a four-year prison sentence.
According to the plea agreement, b etween May 2011 and May 2013, Lacroix obtained and possessed payment card data for more than 14,000 unique account holders. For some of these account holders, Lacroix also obtained other personally identifiable information, including the account holders’ full names, addresses, dates of birth, social security numbers, email addresses, bank account and routing numbers and lists of merchandise the account holders had ordered.
Lacroix also admitted to hacking into a computer server operated by a local Massachusetts police department in September 2012, and then accessing an e-mail account belonging to its chief of police. Additionally, Lacroix admitted to repeatedly hacking into law enforcement computer servers containing sensitive information including police reports, arrest warrants, and sex offender information, between August 2012 and November 2012. Lacroix also admitted to using stolen credentials to access and change information in the servers of Bristol Community College on multiple occasions between September 2012 and December 2013.
Judge Wolf set Lacroix’s sentencing for Oct. 27, 2014.
The case was investigated by the FBI Boston Division Cyber Task Force. The case is being prosecuted by Senior Trial Attorney Mona Sedky from the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the District of Massachusetts. The Department of Justice and the U.S. Attorney’s Office would like to thank Bristol Community College for its cooperation during this investigation.Marijuana Cultivators SentencedRead the Press Release
FRESNO, Calif. — Three men were sentenced today for their involvement in two separate marijuana cultivation operations based in Kern and Inyo Counties, according to U.S. Attorney Benjamin B. Wagner.
1,387 Pounds of Processed Marijuana/338 Marijuana Plants Seized from Arvin Grow (1:13CR28 AWI)
Bernabe Hernandez, aka Juan Hernandez Marin, aka Raul Hernandez, aka Bernabe Villa-Lobos, 54, of Arvin, was sentenced following his guilty plea on March 31, 2014, to one and a half years in prison and ordered to forfeit $178,179 to the United States. According to court documents, Hernandez is the owner and resident of a 29 acre parcel on Wheeler Ridge Road in Arvin where Kern County Sheriff deputies found and seized 1,387 pounds of processed marijuana and 338 marijuana plants during the execution of a search warrant there. They also found scales, packaging material, and ammunition.The case was investigated by the U.S. Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Kern County Sheriff’s Office. Assistant U.S. Attorney Karen Escobar handled the criminal case and Assistant U.S. Attorney Heather Mardel Jones handled the forfeiture of assets.
3,855 Marijuana Plants/350 Pounds of Processed Marijuana/Illegal Pesticides/Six Firearms Seized in Connection with Inyo National Forest Grow (1:13-cr-340 LJO)
Jose Santoyo-Aguilar (Santoyo), 26, of Michoacàn, Mexico, and Jose Salvador Garcia Rodriguez (Garcia), aka Christopher Lee Headspeth, 23, of Guanajuato, Mexico, were sentenced following their guilty pleas earlier this year. Santoyo was sentenced to five years and 10 months for his role in supplying equipment and supplies to a marijuana cultivation site in the Inyo National Forest. Garcia was sentenced to two and a half years in prison for working at the grow site. Both were also ordered to pay $6,572 in restitution to the U.S. Forest Service for damage caused to the public land as a result of their cultivation operation. Upon completion of their prison sentences, Santoyo and Garcia face deportation to Mexico.
According to court documents, U.S. Forest Service agents found a marijuana cultivation operation in the Hogback Creek area of the Inyo National Forest. The load vehicles were tracked to several stash houses in Riverside County. Ultimately, agents executed four search warrants at the grow site and three residences in Riverside County.
On April 14, 2014, a third defendant in this case, Javier Rios Morales, of Jalisco, Mexico, was sentenced to two and a half years in prison.
Agents seized 3,405 marijuana plants, 350 pounds of processed marijuana, three air rifles, two digital scales, 2,200 pounds of trash, and illegal pesticides, at the Hogback Creek grow site. Photos of a dead bear and fox were also found in the cameras of one of the growers who was arrested and prosecuted in Inyo County. According to U.S. Forest Service biologists, the photos do not depict natural deaths and the foaming on the mouth of the dead bear is consistent with poisoning caused by the illegal pesticides.
Agents in Riverside County seized two pounds of methamphetamine, a methamphetamine laboratory, five firearms, $10,000 in cash, and two pounds of marijuana from a stash house in Moreno Valley. Agents seized another 450 marijuana plants at a stash house in Homeland. At another stash house in Romoland, agents seized a firearm, marijuana shake and residue, and shipping labels consistent with the shipment of marijuana to Chicago.
This case was investigated by the U.S. Forest Service, U.S. Drug Enforcement Administration (DEA), Homeland Security Investigations of Immigration and Customs Enforcement, Inyo County Sheriff’s Office, and Riverside County Sheriff’s Office. Assistant United States Attorney Karen A. Escobar handled the federal prosecution.Leader of Largest Counterfeit Goods Conspiracy Ever Charged Sentenced to 10 Years in PrisonRead the Press Release
NEWARK, N.J. – One of the leaders of a massive, international counterfeit goods conspiracy was sentenced today to 120 months in prison for his role in the scheme, U.S. Attorney Paul J. Fishman announced.
Hai Dong Jiang, a/k/a “Jimmy,” a/k/a “Dong,” 37, of Staten Island, N.Y., previously pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of conspiracy to traffic in counterfeit goods.
According to documents filed in this case and statements made in Court:
From November 2009 through February 2012, Dong Jiang and his co-defendants ran one of the largest counterfeit goods smuggling and distribution conspiracies ever charged by the Department of Justice. The defendants and others conspired to import hundreds of containers of counterfeit goods – primarily handbags, and footwear, and perfume – from China into the United States in furtherance of the conspiracy. These goods, if legitimate, would have had a retail value of more than $300 million.
The counterfeit goods were manufactured in China and smuggled into the United States through containers fraudulently associated with legitimate importers, with false and fraudulent shipping paperwork playing a critical role in the smuggling scheme. Some of the conspirators created and managed the flow of false shipping paperwork between China and the United States, and supervised the importation of counterfeit goods, and others controlled the importation of the counterfeit goods into the United States.
Other conspirators managed the distribution of counterfeit goods once those goods arrived in the United States. After importation, the counterfeit goods were delivered to warehouses, and distributed throughout New York, New Jersey, and elsewhere. Certain conspirators paid large amounts of cash to undercover law enforcement officers to assist in the removal of counterfeit goods from the port.Some conspirators acted as wholesalers for the counterfeit goods, supplying retailers who sold counterfeit goods to customers in the United States. Other conspirators were money structurers, who arranged for cash to be wired to China in amounts small enough to avoid applicable financial reporting requirements, to evade detection of the smuggling scheme and related proceeds.
Law enforcement introduced several undercover special agents (collectively, the UCs) to the conspirators. The UCs purported to have unspecified “connections” at the port, which allowed the UCs to release containers that were on hold and pass them through to the conspirators. The conspirators paid the UCs for these “services.” In total, during the course of this investigation, the conspirators provided the UCs more than $2 million.UCs recorded dozens of phone calls and in-person meetings with various conspirators. The investigation also utilized several court-authorized wiretaps of telephones and electronic communications.
Dong Jiang served as one of the directors of the smuggling scheme. Dong Jiang ordered counterfeit merchandise from China; negotiated shipments of counterfeit goods from China; arranged for payment for that merchandise and supervised the distribution of that merchandise in and around the New York/New Jersey area.
In addition to the prison term, Judge Salas sentenced Dong Jiang to two years of supervised release ordered forfeiture of cash and property as described in the plea agreement (attached).
U.S. Attorney Fishman praised special agents of Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s sentencing.The government is represented by Assistant U.S. Attorneys Andrew Pak and Zach Intrater of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark and Nicholas Grippo of the U.S. Attorney’s Office in Trenton.
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Defense counsel: Joseph Conway Esq., Mineola, N.Y.Dong Jiang, Hai Plea Agreement
Lawyer Sentenced for Stealing Client FundsRead the Press Release
PHILADELPHIA - Gomer Thomas Williams, 54, of Philadelphia, PA, was sentenced today to 24 months in prison and ordered to pay restitution for a scheme to defraud clients of the legal firm where he worked. Williams was an attorney and associate with the Philadelphia law firm, Spector Gadon & Rosen (“Spector”). Between 2007 and 2012, Williams defrauded four of his trust and estate clients of approximately $503,361 by diverting funds from his clients’ accounts to his personal accounts, and by overbilling his clients for legal work that was not performed. He pleaded guilty in March to one count of wire fraud.
For the trusts, Williams was the trustee, and, for the estates, Williams was the administrator and/or executor. Williams exercised complete control over the victim-clients’ funds, including controlling their checking accounts. Williams abused his fiduciary position in transferring funds from their accounts to pay his own personal expenses, including his mortgage.
In addition to the prison term, U.S. District Court Judge Legrome Davis ordered restitution in the amount of $503,361, three years of supervised release, and a $100 special assessment.
The case was investigated by the FBI and is being prosecuted by First Assistant United States Attorney Louis D. Lappen.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Lake Orion Man Sentenced for Filing False Tax ReturnsRead the Press Release
Edward Weglarz of Lake Orion, Michigan has been sentenced for willfully filing a false Federal Income Tax return, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Acting Special Agent in Charge Carolyn Weber, of the Internal Revenue Service, Criminal Investigations.
Weglarz pleaded guilty on Tuesday, December 17, 2013. On June 23, 2014, U.S. District Judge Gerald E. Rosen, sentenced Weglarz to six months confinement at a community corrections center. Weglarz will also be required to serve a term of three years of supervised release following completion of the prison term and perform 120 hours of community service as a volunteer at Focus Hope.
Weglarz stipulated that the tax loss to the government is $ 86,581, and has agreed to pay that amount in restitution to the United States.
According to court documents, Weglarz operated Eastern Market Tanker Leasing (EMT) of Dearborn, Michigan. EMT was engaged in interstate trucking and Weglarz, as the president, controlled its operations and finances. For the tax years 2006, 2007 and 2008, Weglarz caused EMT to pay more than $600,000 in personal expenses for himself and disguised the payments in EMT’s books and records as legitimate business expenses. Weglarz also diverted EMT’s funds to Multivest Properties, another company that he controlled and falsely classified these payments as legitimate EMT business expenses. These deliberate actions by Weglarz caused EMT’s corporate net income and tax liability to be understated. Because Weglarz and EMT did not report the payments on the behalf of Weglarz, his personal income was also understated, falsely reducing his gross income and individual tax liability.
“The prosecution and sentencing of Mr. Weglarz, who diverted corporate funds for his benefit and then intentionally filed false corporate and individual income tax returns, is a fundamental element in maintaining public confidence in our tax system,” said Acting Special Agent in Charge Carolyn Weber.
Weglarz was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated by special agents of the IRS-Criminal Investigation and was prosecuted by Assistant U.S. Attorney Christopher Varner.
Lackawanna Man Pleads Guilty to Drug ChargesRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Kenneth Sweat, 26, of Lackawanna, N.Y., pleaded guilty to possession with intent to distribute and distribute crack cocaine before U.S. District Judge Richard J. Arcara. The charges carry a maximum penalty of 20 years in prison, a fine of $1,000,000, or both.
Assistant U.S. Attorney John M. Alsup, who is handling the case, stated that on February 18, 2013 and February 25, 2013, the defendant sold 36 grams of crack cocaine to a confidential source working with the Drug Enforcement Administration and Lackawanna Police.
The plea is the culmination of an investigation by the Lackawanna Police Department, under the direction of Chief James Michel, and the Drug Enforcement Administration, under the direction of James J. Hunt, Acting Special Agent in Charge, New York Field Division.
Sentencing is scheduled for October 6, 2014, before Judge Arcara.Hedge Fund Portfolio Manager Sentenced in Manhattan Federal Court to Four Years in Prison for Fraudulent Scheme to Inflate Value of Hedge FundRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL BALBOA, formerly a portfolio manager for Millennium Global Emerging Credit Fund (“MGEC” or the “Hedge Fund”), was sentenced to four years in prison today in Manhattan federal court for carrying out a fraudulent scheme to undermine the independent valuation process relating to the Hedge Fund, and to overvalue the assets of the Hedge Fund. BALBOA was previously found guilty by a jury on December 18, 2013, following a two-and-a-half-week trial, of conspiring to commit securities fraud, conspiring to commit wire fraud, and with committing securities fraud, wire fraud, and investor adviser fraud. He was sentenced today by U.S. District Judge Paul A. Crotty.
Manhattan U.S. Attorney Preet Bharara stated: “Michael Balboa has been held to account for his blatant fraud, inflating the valuation of securities in the hedge fund and falsely representing them as independent valuations. When his employer and regulators became suspicious and began to inquire, Balboa told more lies to cover his tracks.”
According to the Superseding Indictment filed in Manhattan federal court, other court documents, and the evidence presented at trial:
From December 2006 to October 2008, BALBOA served as the portfolio manager for the Hedge Fund. The Hedge Fund’s strategy was to invest in a portfolio of corporate and sovereign debt instruments in emerging countries. The Hedge Fund utilized an independent valuation agent (the “IVA”) to determine the Hedge Fund’s “net asset value” (“NAV”), which is the value of the Hedge Fund’s assets, less liabilities and estimated costs of sale/liquidation. The Hedge Fund’s manager, the entity that employed Balboa, represented to investors that sources independent from Balboa would provide prices to the IVA for each security held in the Hedge Fund for purposes of determining the NAV on a monthly basis. For example, in one due diligence questionnaire sent on March 7, 2008, to a potential investor, the Hedge Fund noted that “[t]here are no assets valued in house” and that the “fund has appointed an independent valuation agent” to calculate the NAV of the Hedge Fund.
The proof at trial demonstrated that, contrary to representations made to investors about the independent valuation process, BALBOA provided inflated prices for a security referred to as the Nigerian Oil Warrant. These prices were used for the Hedge Fund’s monthly valuation. BALBOA accomplished this by instructing Gilles DeCharsonville (“DeCharsonville”) and Samuel Pratt (“Pratt”), two co-conspirators with whom BALBOA worked, to provide the IVA with those values while falsely representing that the values were generated independently by DeCharsonville and Pratt. For example, in 2008, although the Nigerian Oil Warrant traded at a price no higher than $239, BALBOA directed DeCharsonville and Pratt to provide the IVA with marks ranging from approximately $525 to $3,500. The IVA then used these falsely inflated marks to compute the Hedge Fund’s monthly NAV, which, in turn, as of August 2008, caused the NAV to be overstated by approximately $80 million. These false values were then sent to investors by means of monthly newsletters, among other types of communications.
The evidence at trial also showed that after Balboa’s employer, the Hedge Fund’s Bermudian court-appointed liquidator, and U.S. and foreign securities regulators all began to investigate the scheme, BALBOA took steps to conceal his involvement in this scheme. For example, BALBOA sent DeCharsonville false justifications to support the inflated valuations so that they would be conveyed to BALBOA’s employer, and later, to U.S. and foreign securities regulators.
In addition to the prison term, Judge Crotty sentenced BALBOA, 45, who currently resides in Melville, New York, and formerly resided in the United Kingdom, to three years of supervised release. BALBOA was also ordered to forfeit $2.23 million and to pay a $500 special assessment fee and restitution in excess of $390 million.
Mr. Bharara praised the work of USPIS, which investigated this case. He also thanked the U.S. Securities and Exchange Commission for its assistance in the investigation.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jason H. Cowley and David I. Miller, and Special Assistant United States Attorney William T. Conway are in charge of the prosecution.
Guatemalan Man Sentenced to 16 Months for FraudRead the Press Release
Contact: Halsey B. Frank
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Sergio
Suhum, also known as Sergio Suhum-Nacho, 26, a citizen of Guatemala illegally present in the United States, who most recently resided in Brunswick, Maine, was sentenced in U.S.
District Court by Judge D. Brock Hornby to 16 months in prison for social security fraud, immigration document fraud, false personation of an American citizen, and theft of government benefits. He was also ordered to pay $1,354 in restitution. He pled guilty in February 2014.According to court records, from at least March 2008, the defendant lived and worked in
Maine using the identity of an actual United States citizen who resided in Texas. The defendant bought a fraudulent Texas birth certificate and Social Security card in the victim’s name. He used the victim’s identity to obtain a Maine identification card and to apply for a Maine driver’s license; to obtain employment at DeCoster Egg Farm, Moark Farms, and Days Inn; to apply for
Mainecare and Supplemental Nutrition Assistance Program (SNAP) benefits; and to obtain about
$1,500 in SNAP benefits before his crimes were discovered.
At sentencing, the victim said that the defendant’s use of his identity caused him numerous problems. He was denied credit cards and had difficulty getting a car loan. Maine
Revenue Services sent him dunning letters for failing to file returns and pay taxes in Maine. The
Texas Department of Public Safety repeatedly threatened to revoke his commercial driver’s license because of OUI convictions that the defendant accumulated in Maine which also jeopardized the victim’s job driving vehicles in Texas oil fields. He was detained for hours at the border after visiting relatives in Mexico because of a warrant issued on the basis of the defendant’s activities in Maine. In imposing sentence, Judge Hornby noted that the problems that the defendant caused the victim were people’s worst nightmare and caused a great deal of anxiety and stress.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland
Security Investigations; the U.S. Department of Health and Human Services, Office of the
Inspector General; the Social Security Administration, Office of the Inspector General; and the
Maine Department of Health and Human Services.Galveston Resident Pleads Guilty to Stealing Deceased Benefits for More Than A DecadeRead the Press Release
GALVESTON, Texas – John Stephen Davis, 64, of Galveston, has pleaded guilty to embezzlement and theft of federal government benefits, announced United States Attorney Kenneth Magidson.
Davis admitted during his plea that he obtained a power of attorney over the bank account of an individual on March 4, 2003, just weeks before her death on April 18, 2003. He further admitted he did not notify the government about the death so funds would continue to be deposited into that account. He also did not notify the bank about the woman's death in order to retain his access to the account. Davis admitted he used the benefit payments for his own personal needs and expenses.
“Davis took advantage of the trust placed in him by the deceased in order to defraud the Government," said Inspector General Patrick E. McFarland, U.S. Office of Personnel Management - Office of the Inspector General (OPM - OIG). "Davis stole from hardworking American taxpayers when he committed theft against these two federal programs, and he is now paying the price.”
As part of his plea agreement, Davis was ordered to forfeit $385,632.15, the amount he illegally received as part of the scheme.
Davis entered his guilty plea today before U.S. Magistrate Judge John R. Froeschner. If the plea is accepted by U.S. Circuit Judge Greg Costa, sitting in designation, he will be sentenced Sept. 9, 2014. At that time, he faces up to 10 years in federal prison and a possible $250,000 fine.
The investigation leading to the charges in this case was conducted by the Social Security Administration – Office of Inspector General (OIG ) and Office of Personnel Management – OIG. Assistant United States Attorney Julie Redlinger is prosecuting the case.
Former Union Official Pleads Guilty to Embezzling More Than $190,000 in FundsRead the Press Release
JC Stamps, a former union official, pleaded guilty today to embezzling more than $190,000 from two labor organizations he founded and an employee benefit plan.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Ronald C. Machen Jr. for the District of Columbia andSpecial Agent in Charge Bill Jones of the U.S. Department of Labor’s Office of Inspector General - Office of Labor Racketeering and Fraud Investigations Washington Region made the announcement.
Stamps, 67, of Upper Marlboro, Maryland, pleaded guilty to one count of theft from an employee benefit plan. The Honorable Chief Judge Richard W. Roberts of the District Court for the District of Columbia scheduled sentencing for Sept. 17, 2014. Stamps has also agreed to pay $194,611 in restitution and is subject to a forfeiture money judgment in the amount of $84,745.
Stamps, a retired detective from the Metropolitan Police Department (MPD), founded two labor organizations based in Washington, D.C.: the National Union of Protective Services Associations, which represented private security guards, and the National Union of Law Enforcement Associations, which represented police officers. In addition, he founded a security guard firm, Stamps Associates, which also was based in Washington, D.C.
According to court documents, between 2004 and 2008, Stamps devised a scheme to defraud and embezzle money in several ways from the unions and the National Union of Protective Services and Employers Health and Welfare Fund (Health and Welfare Fund), an employee benefit plan for which Stamps was a trustee.
In 2007 and 2008, for example, Stamps used money from the Health and Welfare Fund’s bank account to pay American Express for a total of $48,541 in credit card charges for personal purchases and union expenses. None of these charges were related to the administration and operation of the Health and Welfare Fund. Instead, they paid for personal expenses, such as hotel stays, furniture, men’s fragrances, clothing, other retail purchases and online services, and for union expenses, including hotel rental charges (for a holiday party) and automobile rentals.
Also, according to court documents, from 2006 to 2008, Stamps caused the withdrawal of $36,203 from the Health and Welfare Fund’s bank account to pay an attorney for legal expenses incurred by the unions – and not for the fund’s intended purpose.
In addition to the theft and embezzlement from the Health and Welfare Fund, Stamps stole and embezzled at least $109,866 from the unions from 2004 to 2008. According to court documents, more than half of this money was used to cover debts of Stamps Associates, Stamps’ security guard company. Other money was used for personal expenses and fraudulent salary payments for Stamps’ close personal friend, who is identified as “Person A” in court documents. “Person A” was nominally the sole owner of Stamps Associates, although Stamps controlled the company.
The case was investigated by the Department of Labor’s Office of Inspector General and Office of Labor Management Standards and Employee Benefits Security Administration. The case was prosecuted by Trial Attorney Kelly Pearson of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Ellen Chubin Epstein of the U.S. Attorney’s Office for the District of Columbia.Former Union Official Pleads Guilty to EmbezzlingRead the Press Release
More Than $190,000 in Funds
Defendant Spent Thousands on Hotel Stays, Clothing, Other Personal ExpensesWASHINGTON – JC Stamps, a former union official, pled guilty today to embezzling more than $190,000 from two labor organizations he founded and an employee benefits fund.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Bill Jones,Special Agent in Charge for the Washington Region of the U.S. Department of Labor’s Office of Inspector General - Office of Labor Racketeering and Fraud Investigations.
Stamps, 67, of Upper Marlboro, Md., pled guilty to one count of theft from an employee benefit plan. The Honorable Chief Judge Richard W. Roberts scheduled sentencing for Sept. 17, 2014. The charge carries a statutory maximum of five years in prison and potential financial penalties. Under federal sentencing guidelines, Stamps faces a likely range of 18 to 24 months in prison and a fine of up to $40,000. He also has agreed to pay $194,611 in restitution and is subject to a forfeiture money judgment in the amount of $84,745.
Stamps, a retired detective from the Metropolitan Police Department (MPD), founded two labor organizations based in Washington, D.C.: the National Union of Protective Services Associations, which represented private security guards, and the National Union of Law Enforcement Associations, which represented police officers. In addition, he founded a security guard firm, Stamps Associates, which also was based in Washington, D.C.
According to a statement of offense, signed by the defendant as well as the government, between 2004 and 2008, Stamps devised a scheme to defraud and embezzle money in several ways from the unions and the National Union of Protective Services Health and Welfare Fund.
In 2007 and 2008, for example, Stamps used money from the health and welfare fund’s bank account to pay American Express for a total of $48,541 in credit card charges for personal purchases and union expenses. None of these charges were related to the administration and operation of the health and welfare fund. Instead they paid for personal expenses, such as hotel stays, furniture, men’s fragrances, clothing, other retail purchases, and online services, as well as for union expenses, including hotel rental (for a holiday party) and automobile rentals.Also, according to the statement of offense, from 2006 to 2008, Stamps caused the withdrawal of $36,203 from the health and welfare fund bank account to pay an attorney for legal expenses incurred by the unions – and not for the fund’s intended purpose.
In addition to the theft and embezzlement from the health and welfare fund, Stamps stole and embezzled at least $109,866 from the unions from 2004 to 2008. According to the statement of offense, more than half of this money was used to cover debts of Stamps Associates, the security guard company. Other money was used for personal expenses and fraudulent salary payments to an individual identified only as “Person A” in the court documents. “Person A,” who is described in the statement of offense as a close personal friend of Stamps, was nominally the sole owner of Stamps Associates, although Stamps controlled the company.
This case was investigated by the U.S. Department of Labor’s Office of Inspector General, as well as the Labor Department’s Office of Labor Management Standards and Employee Benefits Security Administration. Assistance was provided by Assistant U.S. Attorney Anthony Saler, who is handling forfeiture issues; Paralegal Specialist Donna Galindo; former Paralegal Specialists Shanna Hays, Lenisse Edloe, and Nicole Wattelet, all of the U.S. Attorney’s Office for the District of Columbia.
The case is being prosecuted by Assistant U.S. Attorney Ellen Chubin Epstein of the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Kelly Pearson of the Department of Justice’s Organized Crime and Gang Section.
14-149Former Union Official Pleads Guilty to EmbezzlingRead the Press Release
More Than $190,000 in Funds
Defendant Spent Thousands on Hotel Stays, Clothing, Other Personal ExpensesWASHINGTON – JC Stamps, a former union official, pled guilty today to embezzling more than $190,000 from two labor organizations he founded and an employee benefits fund.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Bill Jones,Special Agent in Charge for the Washington Region of the U.S. Department of Labor’s Office of Inspector General - Office of Labor Racketeering and Fraud Investigations.
Stamps, 67, of Upper Marlboro, Md., pled guilty to one count of theft from an employee benefit plan. The Honorable Chief Judge Richard W. Roberts scheduled sentencing for Sept. 17, 2014. The charge carries a statutory maximum of five years in prison and potential financial penalties. Under federal sentencing guidelines, Stamps faces a likely range of 18 to 24 months in prison and a fine of up to $40,000. He also has agreed to pay $194,611 in restitution and is subject to a forfeiture money judgment in the amount of $84,745.
Stamps, a retired detective from the Metropolitan Police Department (MPD), founded two labor organizations based in Washington, D.C.: the National Union of Protective Services Associations, which represented private security guards, and the National Union of Law Enforcement Associations, which represented police officers. In addition, he founded a security guard firm, Stamps Associates, which also was based in Washington, D.C.
According to a statement of offense, signed by the defendant as well as the government, between 2004 and 2008, Stamps devised a scheme to defraud and embezzle money in several ways from the unions and the National Union of Protective Services Health and Welfare Fund.
In 2007 and 2008, for example, Stamps used money from the health and welfare fund’s bank account to pay American Express for a total of $48,541 in credit card charges for personal purchases and union expenses. None of these charges were related to the administration and operation of the health and welfare fund. Instead they paid for personal expenses, such as hotel stays, furniture, men’s fragrances, clothing, other retail purchases, and online services, as well as for union expenses, including hotel rental (for a holiday party) and automobile rentals.Also, according to the statement of offense, from 2006 to 2008, Stamps caused the withdrawal of $36,203 from the health and welfare fund bank account to pay an attorney for legal expenses incurred by the unions – and not for the fund’s intended purpose.
In addition to the theft and embezzlement from the health and welfare fund, Stamps stole and embezzled at least $109,866 from the unions from 2004 to 2008. According to the statement of offense, more than half of this money was used to cover debts of Stamps Associates, the security guard company. Other money was used for personal expenses and fraudulent salary payments to an individual identified only as “Person A” in the court documents. “Person A,” who is described in the statement of offense as a close personal friend of Stamps, was nominally the sole owner of Stamps Associates, although Stamps controlled the company.
This case was investigated by the U.S. Department of Labor’s Office of Inspector General, as well as the Labor Department’s Office of Labor Management Standards and Employee Benefits Security Administration. Assistance was provided by Assistant U.S. Attorney Anthony Saler, who is handling forfeiture issues; Paralegal Specialist Donna Galindo; former Paralegal Specialists Shanna Hays, Lenisse Edloe, and Nicole Wattelet, all of the U.S. Attorney’s Office for the District of Columbia.
The case is being prosecuted by Assistant U.S. Attorney Ellen Chubin Epstein of the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Kelly Pearson of the Department of Justice’s Organized Crime and Gang Section.
14-149Former Teamsters Official Sentenced on Bribery ChargeRead the Press Release
Michael Townsend, age 69, of Dearborn Heights, Michigan, a former business agent and trustee of Teamsters Local 337, was ordered to pay a fine of $18,000 as a result of his felony conviction on union bribery charges, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Special Agent in Charge James Vanderberg, Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and L. Joe Rivers, Regional Director, Department of Labor, Employee Benefits Security Administration.
Townsend was also ordered to serve two years supervised release during his sentencing hearing today before U.S. District Judge Arthur J. Tarnow in Detroit.
According to court records, from 2005 through 2008, Townsend took quarterly cash bribes totaling $18,000 from an officer of LaGrasso Brothers Produce, Inc. in Detroit in exchange for protecting the company from unionizing efforts by Teamsters Local 337.
In February 2014, Judge Tarnow sentenced Sam LaGrasso Produce, Inc. to a fine of $500,000. The court also required the company to make quarterly donations of $1,500 to a local non-profit food bank for five years – an amount equivalent to the bribe payments made by the company. Sam LaGrosso Produce operates in the Eastern Market area of Detroit.
The case was investigated by agents and officers of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations and the Department of Labor, Employee Benefits Security Administration. It is being prosecuted by Assistant United States Attorneys David Morris and Mark Chutkow.
Former Lohn I.S.D. Business Manager Admits to Stealing More Than $500,000 from the School DistrictRead the Press Release
Patty E. Smith, age 58, of Lohn, TX, faces up to 15 years in federal prison and full restitution for embezzling more than $500,000 from the Lohn Independent School District (LISD) announced United States Attorney Robert Pitman and Internal Revenue Service-Criminal Investigation Special Agent in Charge R. Damon Rowe, Dallas Division.
Appearing before United States Magistrate Judge Mark Lane in Austin on Friday, Smith pleaded guilty to one count of tax evasion and one count of theft from an organization receiving federal funds. By pleading guilty, Smith admitted that between September 2006 and September 2012, she stole LISD funds totaling $507,528.82 and used it for her personal benefit. She also admitted to evading paying taxes on the embezzled funds, which constituted taxable income, by not disclosing it to the IRS on her yearly Income Tax returns.
According to the factual basis filed in this case, Smith did not have signature authority over any LISD financial accounts, however, she had sufficiently gained the trust of the person with signature authority to the point that that person signed blank checks for funds that Smith would subsequently complete and make payable to either “cash” or fictitious payees. Smith concealed her activities by recording false check amounts in the check register. For years 2007 through 2011, Smith’s willful evasion of taxes on the funds she stole from LISD resulted in the underpayment of income tax in the amount of approximately $129,400.
Smith is on bond pending sentencing. Sentencing is scheduled for August 11, 2014, before United States District Judge Lee Yeakel.
This case was investigated by special agents with the Internal Revenue Service-Criminal Investigation with the assistance of the Texas Rangers. Assistant United States Attorney Matthew Devlin is prosecuting this case on behalf of the Government.