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Tuesday 22 April 2014
Mercer County, N.J., Man Sentenced to More Than 17 Years in Prison for Producing Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Mercer County, N.J., man was sentenced today to 210 months in prison for producing images of child sexual abuse by coercing a minor victim to stream explicit content to him over the Internet, U.S. Attorney Paul J. Fishman announced.
Fredy Arbito, 31, of Hightstown, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of production of child pornography. Judge Shipp also imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
During his guilty plea proceeding, Arbito admitted that between July 2011 and January 2013, he made contact with a young girl over a video chat messaging system and coerced her to engage in sexually explicit conduct for the purpose of transmitting it live over the Internet. Arbito also admitted keeping copies of the video on his own computer.
Arbito was initially charged with possession of child pornography, apprehended by local authorities in Panama and returned to the United States where he was arrested by special agents of Department of Homeland Security’s Immigration and Customs Enforcement, Homeland Security Investigations (HSI) in April of 2013.
In addition to the prison term, Judge Shipp also sentenced Arbito to serve a lifetime of supervised release. Arbito is also required to register as a sex offender.
U.S. Attorney Fishman praised special agents of the HSI, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation.
Defense counsel: James R. Lisa Esq., Jersey City, N.J.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
14-141Memphis Women Plead Guilty to Tax Fraud Scheme Using Identities of Deceased PersonsRead the Press Release
Memphis, TN – A tax fraud scheme that featured returns filed on behalf of deceased individuals resulted in a pair of guilty pleas, announced U.S. Attorney Edward L. Stanton III.
Nakita Brooks, 31, and Cheryl Wright, 30, both of Memphis, each pleaded guilty to one count of conspiracy to defraud the government through the filing of false income tax returns.
According to the facts presented in the indictment and revealed during sentencing hearings, beginning as early as February 2010 through at least November 2011, Brooks and Wright filed hundreds of false returns using the personal identifying information of deceased individuals, including social security numbers.
In addition to filing false returns, Wright and Brooks also set up tax return services using stolen identities as the preparers of the returns. In 2010, the name of the company used to prepare the returns was Rattler’s Tax Pals. In 2011, the name of the company used to prepare the returns was Taxes Express. Three individuals, including a nine-year old girl from Indiana, had their tax information fraudulently listed as the preparers for these companies.
At least $462,619.31 was deposited into accounts under the control of Brooks and Wright. The total loss is estimated to be $1 million to $2.5 million. The conspiracy count carries a penalty of up to 10 years in prison and a fine of up to $250,000.
Brooks will be sentenced on July 11, 2014, and Wright will be sentenced on July 24, 2014. Both will appear before U.S. District Judge John T. Fowlkes, Jr.
This case was investigated by IRS-Criminal Investigations. Assistant U.S. Attorney David Pritchard represented the government.Memphis Pair Indicted for Half-Million Dollar Mortgage and I.D. Fraud SchemeRead the Press Release
Memphis, TN – Marcus Payne, 44, of Memphis, TN, and Booker Smith, 30, of Memphis, TN, were indicted by a federal grand jury on April 16, 2014 on seven counts related to a mortgage fraud and identity theft scheme, announced U.S. Attorney Edward L. Stanton III.
Payne and Smith were each charged with one count of conspiracy to commit mail, wire and bank fraud; two counts of wire fraud; two counts of bank fraud; one count of mail fraud; and one count of aggravated identity theft.
According to the facts alleged in the indictment, between December 2008 and May 2009, Payne and Smith committed multiple acts of bank, wire and mail fraud as part of a scheme to fraudulently enrich themselves, by applying for mortgage loans to purchase residential properties using someone else’s personal identifying information, including social security numbers. As a result of the conspiracy and scheme, more than $500,000 was fraudulently obtained from Fifth Third Bank and CitiBank.
The aggravated identity theft charge carries a penalty of two years in prison consecutive to any other sentence. Each of the other charges carries a penalty of up to 30 years in federal prison. There is no parole in the federal prison system.
This case was investigated by IRS-Criminal Investigations and the FBI. Assistant U.S Attorney Brian Coleman is representing the government.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.Last Defendant Found Guilty in $30 Million Bakersfield Mortgage Fraud SchemeRead the Press Release
FRESNO, Calif. — A federal jury in Fresno, returned a verdict today in the trial of Julie Dianne Farmer, 45, of Bakersfield, finding her guilty of conspiracy to commit mail fraud, wire fraud and bank fraud, and two counts each of mail fraud and wire fraud, United States Attorney Benjamin B. Wagner announced. The charges stem from her involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007.
“The jury’s verdict marks the end of a long and thorough investigation that resulted in the conviction of 14 defendants before this trial even began,” said U.S. Attorney Wagner. “The fraud perpetrated at the Crisp, Cole & Associates real estate firm harmed neighborhoods, local builders, consumers, and lenders. This office has earned a national reputation for mortgage fraud prosecutions, and we will continue to bring to justice anyone who commits these crimes.”
“Today’s verdict is a bittersweet end to our extensive investigation into the large-scale conspiracy of Crisp, Cole & Associates, also known as Crisp & Cole Real Estate (CCRE), and Tower Lending in the Bakersfield area. While millions in restitution have been ordered to be paid and a total of 14 individuals will spend time in prison for the crimes they committed, the damage that was done to the real estate industry and community in Bakersfield area will continue to have a negative impact for years to come,” said Supervisory Special Agent Jose Moreno of the Sacramento FBI’s Bakersfield resident agency.
According to evidence brought at trial, between January 2004 and September 2007, Farmer conspired with David Crisp, Carl Cole, and other co-defendants to commit mail fraud, wire fraud, and bank fraud, and to defraud mortgage loan companies and federally insured financial institutions of money and property, by means of materially false and fraudulent pretenses, representations, and promises. Farmer was Crisp & Cole Real Estate’s (CCRE) chief operations officer and managed CCRE’s business operations and business accounts. She and co-defendants David Crisp and Carl Cole oversaw and managed the conspiracy to defraud the lenders, and directed co-defendants and others in furtherance of the conspiracy. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due.Farmer is scheduled to be sentenced on July 14, 2014. She faces a maximum penalty of 30 years in prison and a $1 million fine for conspiracy to commit mail fraud, wire fraud and bank fraud; 20 years in prison and a $250,000 for mail and wire fraud. 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 Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.
Each of Farmer’s co-defendants has previously entered pleas of guilty for their roles in the scheme and several have been sentenced. Carl Cole and David Crisp, were each sentenced to 17 years and seven months in prison. Caleb Cole was sentenced to five months in prison, and Jennifer Crisp was sentenced to five years’ probation. Jayson Peter Costa was sentenced to six and a half years in prison. Sentencing dates for the remaining defendants are as follows: Michael Angelo Munoz on May 5, 2014; Jeriel Salinas on May 12, 2014; and Sneha Mohammadi on June 9, 2014. Robinson Nguyen has completed his 27-month sentence.
Before David Crisp, Carl Cole, and the other defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to this scheme. Three are scheduled to be sentenced on June 2, 2014: Jerald Allen Teixeira, Megan Balod, and Christopher Lance Stovall. Kevin Patrick Sluga and Leslie Sluga are scheduled to be sentenced on May 27, 2014.
This case was done in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.Jury Convicts Three Chiropractors and One Recruiter in Staged Automobile Accident SchemeRead the Press Release
93 defendants have been charged to date in Operation Sledgehammer I-VIWifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, and Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, announced that after a six-week trial before U.S. District Judge Kenneth A. Marra, a federal jury in West Palm Beach convicted defendants Kenneth Karow, 54, chiropractor, of West Palm Beach, Hermann J. Diehl, 44, chiropractor, of Miami, Hal Mark Kreitman, 50, former chiropractor, of Miami Beach, and Joel Antonio Simon Ramirez, 29, staged automobile accident recruiter, of West Palm Beach, for their participation in a massive staged automobile accident scheme based in Palm Beach and Miami-Dade Counties.
All of the defendants were convicted of one count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1341, all in violation of Title 18, United States Code, Section 1349; and one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1), all in violation of Title 18, United States Code, Section 1956(h). Defendant Karow was convicted of 48 substantive counts of mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2, and 11 substantive counts of money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii) and 2. Defendant Diehl was convicted of two substantive counts of mail fraud and three substantive counts of money laundering. Defendant Kreitman was convicted of 21 substantive counts of mail fraud and two substantive counts of money laundering. Defendant Simon-Ramirez was convicted of eight substantive counts of mail fraud and one substantive count of money laundering.
According to the superseding indictment, these four defendants were charged with defrauding insurance companies out of Personal Injury Protection (“PIP”) insurance payments through the use of the United States Mails. This indictment alleges that the fraud was committed in a number of ways, including: (1) by soliciting licensed chiropractors, including defendants Karow and Diehl, who would serve as the “named owners” of chiropractic clinics although others would maintain financial control over the businesses in order to avoid Florida’s licensing restrictions; (2) by recruiting individuals to participate in staged automobile accidents or persons who had been in real automobile accidents but who had not suffered any injuries to attend chiropractic clinics and make claims for reimbursement for treatments that were neither needed nor received; (3) submitting fraudulent claims to insurance companies stating that the bills were for treatments that were medically necessary and were actually received when neither was true; (4) submitting claims to insurance companies without attempting to collect co-pays and deductibles from the insureds and without disclosing that fact to the insurance companies; and (5) converting the money collected from the insurance companies to cash which would be used to pay recruiters, patients, and other participants, and to enrich the members of the conspiracy.
This Superseding Indictment was the latest in a series of federal and state charges that have been part of a four-year investigation into a massive staged automobile accident/fraudulent chiropractic clinic scheme based in Palm Beach and Miami-Dade Counties. The joint federal and state law enforcement investigation, dubbed Operation Sledgehammer, has resulted in charges filed against 93 defendants for their participation in this automobile insurance fraud scheme. Of those 93 defendants, 57 have been charged federally by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $11 million to the defrauded insurance companies. With today’s verdicts, 51 of those 57 defendants have been convicted by jury or by guilty plea. The remaining six defendants are fugitives. Another thirty-six defendants have been charged by the Palm Beach County State Attorney’s Office.
According to the evidence presented at trial, between October 2006 and December 2012, the defendants and their co-conspirators staged automobile accidents and thereafter caused the submission of false insurance claims through chiropractic clinics they controlled. To execute the scheme, the true owners of the chiropractic clinics allegedly recruited individuals, who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics. The defendants, including Simon Ramirez, also recruited individuals, whom they referred to as “Macho” and the “Hembra” or the “Perro” and “Perra,” to participate in the accidents, and others to help the clinics launder the insurance proceeds. The defendants also hired complicit chiropractors, including Diehl, Karow and Kreitman, and therapists who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Thereafter, complicit clinic employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services. Twenty-one clinics participated in this scheme.
The defendants face a maximum sentence of 20 years in prison each count of conspiracy to commit mail fraud, substantive mail fraud, conspiracy to commit money laundering, and substantive money laundering. Restitution to the victims of these offenses is mandatory. Sentencing for all four defendants is set for July 3, 2014 before Judge Marra in West Palm Beach.
Mr. Ferrer commended the efforts of the FBI, IRS-CI, the Florida Division of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force for their outstanding work in this case. Mr. Ferrer also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance in this investigation. This case was handled by Assistant U.S. Attorneys A. Marie Villafaña and E.J. Yera.
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.
Jackson County Man Pleads Guilty to Trafficking Oxycodone and Stolen Firearm ChargesRead the Press Release
Defendant Caught with Hydrocodone, Cash and Stolen Firearms
CHARLESTON, W.Va. – A Jackson County man who possessed hydrocodone and stolen firearms pleaded guilty today to federal charges, announced U.S. Attorney Booth Goodwin. Hubert Dwayne Messer, 43, pleaded guilty to conspiracy to distribute oxycodone and possession of stolen firearms in federal court in Charleston.
In February of 2013, the Jackson County Sheriff’s Department executed a search warrant at Messer’s Stonelick Road residence in Gay, West Virginia and seized hydrocodone, more than $35,000, and five stolen firearms. Messer admitted distributing oxycodone in and around Jackson County from at least 2004 until February 2013.
Messer faces up to 30 years in federal prison when he is sentenced on August 6, 2014.
The Jackson County Sheriff’s Department conducted the investigation. Assistant United States Attorney Joshua Hanks is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District. The case is also brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Hudson County, N.J., Woman Federally Charged with Robbing Three Banks in Three WeeksRead the Press Release
NEWARK, N.J. – A woman who allegedly robbed three banks in three-week span has been charged federally in connection with the spree, U.S. Attorney Paul J. Fishman announced.
Valeria Parziale, 34, of Harrison, N.J., is charged by complaint with three counts of bank robbery in connection with two robberies in Newark and one in Harrison in January and February of 2014. She was arrested by the Newark Police Department and charged on Feb. 24, 2014, by the Essex County Prosecutor’s Office with related crimes. The U.S. Attorney’s Office is adopting the case for federal prosecution.
Parziale is expected to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint filed in this case:
Parziale robbed a Valley National Bank in Harrison on Jan. 30, 2014; a Wells Fargo bank in Newark on Feb. 14, 2014; and a Popular Community Bank in Newark on Feb. 20, 2014. During each robbery, Parziale handed the teller a note demanding cash and threatening to use a gun.
Parziale’s notes contained threatening language including, “I Have A Gun! Don’t Be Stupid!” She wore sunglasses and a wig to commit the Newark Wells Fargo robbery and a dark, hooded jacket and gloves to the bank in Harrison.
Each of the bank robbery charges carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to the arrest and charges. He also thanked the Newark, Kearny and Harrison Police Departments for their excellent work in this case.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and the allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
14-136
Defense counsel: Assistant Federal Public Defender John Yauch Esq., Newark
Parziale, Valeria Complaint
Hogsett Announces Maximum Sentence Imposed on Illegal Firearm Manufacturing OperationRead the Press Release
Hendricks County man charged with illegal possession of 175 firearms, 59,000 rounds of ammunition and 35 fully automatic machineguns
INDIANAPOLIS- Joseph H. Hogsett, the United States Attorney, announced today the sentencing of a Hendricks County man on federal firearms charges. Jackie Richardson, 49, was sentenced to ten years imprisonment on one count of being a felon in possession of a firearm and one count of unlawfully possessing a machinegun.
“Never in the three and one half years that I have served as the United States Attorney have we prosecuted a felony possession case more egregious and dangerous as this,” said Hogsett. “The danger posed by the presence of an illegal gun manufacturing operation to the citizens of Hendricks County is unacceptably disconcerting.”
Richardson was arrested on December 17, 2011, by Hendricks County Sheriff’s Department (HCSD) deputies following a 9-1-1 call reporting a domestic violence incident at Richardson’s residence in Coatesville, Indiana. When deputies responded to the residence, they uncovered evidence of an illegal firearms manufacturing operation and contacted the ATF. During a joint search of Richardson’s property, ATF agents and HCSD deputies recovered approximately 175 firearms along with various firearms parts and over 59,000 rounds of ammunition. ATF experts at the Firearms Technology Branch in Martinsburg, WV, later determined that 35 of the recovered firearms were fully automatic machineguns.
At the time of his arrest, Richardson was prohibited by federal law from possessing any firearms or ammunition by virtue of his multiple prior felony convictions, including convictions in Indiana state court for felony battery and theft in January and April of 1998, respectively and a prior felony conviction for possession of a firearm by a convicted felon (SDIN) in March of 1999. Prior to being prosecuted for the most recent federal violations, Richardson was convicted in Hendricks County Superior Court of felony intimidation stemming from a domestic violence incident in December of 2011.
This prosecution comes as part of the U.S. Attorney’s Violent Crime Initiative (VCI), and is the result of a collaborative investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hendricks County Sheriff’s Department.
Announced in March of 2011, the Violent Crime Initiative represents a district-wide strategy to work with local law enforcement and county prosecutors to combat drug traffickers and criminals that use and carry firearms in their illegal activities. The VCI has produced a dramatic increase in the number of gun-related charges brought federally. In the year preceding the initiative, there were just 14 defendants charged with federal gun crimes by the U.S. Attorney’s Office. In the nearly three years since, more than 314 defendants have been charged.
“Through our Violent Crime Initiative, and in working with our law enforcement partners here in Central Indiana, we’re sending a united message that illegally-armed felons will face the full force of federal law,” Hogsett added. “Prior to the initiative, this office prosecuted one gun crime a month, now we are aggressively prosecuting more than two per week.
According to Assistant U.S. Attorney Matt Rinka, who prosecuted this case for the government, Richardson faces three years of supervised release following his sentence.
Harrisburg Man Sentenced to Prison on Firearms Charges as Part of On-Going Partnership to Prosecute Violent CrimeRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Harrisburg man was sentenced today, in federal court in Scranton by Senior United States District Judge Sylvia H. Rambo, to serve 235 months in prison on the charge of possession of a firearm by a convicted felon and possession of a stolen firearm.
According to United States Attorney Peter Smith, a jury found Carlos C. Hill, age 42, of Harrisburg, guilty of possession of a firearm by a convicted felon in March 2013.
The charges were the result of an on-going partnership between the Dauphin County District Attorney’s Office and the U.S. Attorney’s Office announced in August 2012 to respond to a surge of violent crime within the city. The charges against Hill arose from an incident in which, after Hill brandished a stolen firearm at a female victim in the 1600 Block of Park Street in Harrisburg, the firearm was subsequently recovered by the Harrisburg Police Bureau.
In addition to the prison term, Senior Judge Rambo also ordered that Hill supervised by a probation officer for five years following his release from prison.
Hill was indicted by a federal grand jury on September 26, 2012, after an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and Harrisburg Police Bureau.
The case was prosecuted by Assistant United States Attorney Meredith A. Taylor.
****Harrisburg Businessman Arrested and Charged with Federal Tax FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Paul Biko, age 61 and Maura Mia Whetsel, age 31, both of Harrisburg, Pennsylvania were arrested today on federal tax fraud charges involving failure to pay to the IRS or account for approximately $200,000 withheld from wages of employees.
According to United States Attorney Peter Smith, beginning in or about April 2006 through in or about January 2010, Biko and Whetsel, Biko’s daughter, allegedly conspired to impede and obstruct the IRS in the assessment, computation and collection of federal employment taxes. The alleged objectives of the tax conspiracy were to not fully pay over to the IRS the employment taxes Biko withheld from employees and then convert these funds for other business and personal uses. Biko was the Chief Officer of Clearview of Harrisburg, Clearview Landscaping and Clearview Builders. Whetsel was the firms’ Director of Finance and bookkeeper.
The Superceding Indictment also charges Biko and Whetsel with 8 counts of failing to truthfully account for and pay over to the IRS the employment taxes Biko withheld from his employees.
Biko and Whetsel were charged earlier this month in initial and superceding indictments that were sealed until the defendants were taken into custody today. Their initial appearance was held today before Magistrate Judge Susan E. Schwab. The case has been assigned to Chief District Judge Christopher C. Conner. Both defendants were released under pretrial supervision.
The investigation was conducted by the Internal Revenue Service Criminal Investigations. Prosecution is assigned to Assistant United States Attorney Joseph J. Terz.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 5 years imprisonment, a term of supervised release following imprisonment, and a $250,000 fine for Count 1 and 5 years imprisonment, a term of supervised release following imprisonment, and a $10,000 fine for each count of Count 2 through 8. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Fraudster Homebuilder Pleads Guilty to Defrauding Investors of More Than $22 Million and to Evading More Than $1.4 Million in Tax PaymentsRead the Press Release
Baltimore, Maryland - Patrick J. Belzner, a/k/a “Patrick McCloskey,” age 45, of Glen Arm, Maryland, pleaded guilty late yesterday to a wire fraud conspiracy, wire fraud and tax evasion.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“For over a decade, through a combination of lies and deceit, Patrick Belzner and his coconspirators caused serious financial harm to their victims. These individuals were focused on their own personal gratification with no regard for the consequences of their actions,” said Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office. “Holding cheats such as Belzner accountable for their misdeeds, is critically important to maintaining the integrity of our economy.”
According to Belzner’s plea agreement, from 2009 through August 2011, Belzner, a home builder, worked for a real estate development business known as the McCloskey Group, LLC, owned by Brian McCloskey, who was also a home builder. During that time, Belzner conspired with McCloskey, Maryland attorney Kevin Sniffen and others to defraud investors through a fraudulent investment scheme.
Specifically, Belzner and the conspirators advised wealthy individuals and investment advisers that in order for the McCloskey Group to obtain loans for commercial real estate projects, the loan broker required that large sums of money be deposited in an escrow bank account to show “liquidity.” They further falsely represented that the funds would be maintained under the control of Sniffen, a licensed attorney and escrow agent; would not be used for any other purpose; and that the money would be returned to the investor, either upon the funding of the loan or after a specified period of time. In return for this temporary use of the investor's funds, Belzner and McCloskey promised to pay substantial fees or interest.
Instead, Belzner admitted that he directed McCloskey to remove the investors’ funds soon after they had been deposited into the escrow account. Belzner and McCloskey then used the stolen funds to pay for their personal and business expenses, as well as to make partial repayments to earlier lenders, to pay fees to some of the victim investors to keep them from demanding the return of their money, and to pay the loan broker for its supposed work and expenses in attempting to locate financing sources.
Belzner and his co-conspirators attempted to conceal the fraud by: issuing false bank statements regarding the amount of escrowed funds; falsely representing in emails and by phone the balance of escrow funds and the date when the investors’ money would be returned; and returning part of the victim’s investment using funds fraudulently obtained from other investors. Belzner also wrote scripts for the conspirators to use in telephone conversations or in written communications to lull the victims and their representatives into believing that their escrow monies were safe and would be returned to them as promised in the escrow agreements, as well as to persuade victims not to pursue demands or legal action for the immediate return of their funds.
The government contends that Belzner and his conspirators' fraudulent scheme caused losses in excess of $22 million to more than 10 victim investors.
Belzner also pleaded guilty to evasion of assessed tax payments. In 1995, 1996 and 1998, Belzner stole $1,111,304.78 from his employer at the time, and in 1998, he stole $186,146.71 from another employer, none of which he reported as income on his tax returns for those years. A subsequent IRS audit of those tax years resulted in the assessment of additional taxes, interest and penalties against Belzner of $1,150,935.25 for the 1995 and 1996 tax years and $246,424.50 for the 1998 and 1999 tax years.
To avoid paying those taxes, Belzner admitted that between January 2006 and June 2011, he intentionally concealed income and assets from the IRS and made no payments on his tax debt. For example, Belzner placed his residences, other real estate and automobiles, in the names of corporations that he formed. Belzner paid his personal expenses from bank accounts he opened in the names of the corporations, including his mortgage, ground rent for a vacation home, construction costs on a house that he built, car payments, Ravens season tickets, and private school tuition. Belzner used individuals to act as “straw purchasers” for property that he acquired and to conduct financial and other transactions on his behalf. At Belzner’s direction, McCloskey Group employees and others also cashed more than $175,870 in company checks made payable to them, returning the cash to Belzner or using the cash to pay Belzner's creditors. Belzner also arranged for the McCloskey Group to pay many of his personal living expenses, rather than issuing him salary checks. For example, between January 2009 and June 2011, the McCloskey Group paid more than $1.5 million of Belzner’s personal expenses, including health and life insurance premiums, car, personal loan and mortgage payments, and utility and cable bills. In February 2006 and again in January 2009, Belzner submitted forms to the IRS falsely claiming that he did not have sufficient income to make any payments on the assessed back taxes, penalties and interest. The total amount of assessed tax, interest and penalties owed by Belzner as of August 2013 was $2,619,870.
Belzner faces a maximum sentence of 20 years in prison each for wire fraud and for conspiracy; and a maximum of five years in prison for evasion of assessed tax payments. U.S. District Judge James K. Bredar has scheduled sentencing for September 3, 2014 at 10:00 a.m.
Brian McCloskey, age 42, of Baltimore and Kevin Sniffen, age 52, of Phoenix, Maryland have each pleaded guilty to their roles in the conspiracy and are awaiting sentencing.
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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the FBI and IRS – Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Jefferson M. Gray and Kathleen O. Gavin, who are prosecuting the case.
Former Pharmaceutical Executive Sentenced to 16 Months in Prison for Central Role in Insider Trading SchemeRead the Press Release
Defendant and Conspirators Netted $1.4 Million in Illicit Profits over Five Years
NEWARK, N.J. - A former executive of a pharmaceutical technology firm was sentenced today to 16 months in prison for playing a central role in an insider trading scheme that repeatedly exploited non-public material information for financial gain, U.S. Attorney Paul J. Fishman announced.
John Lazorchak, 43, of Long Valley, N.J., previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a six-count information charging him with one count of conspiracy to commit securities fraud and five counts of securities fraud. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Lazorchak was director of financial reporting at Celgene Corp., a global pharmaceutical company based in New Jersey. Mark Cupo, 53, of Morris Plains, N.J., a friend and former boss of Lazorchak, held a similar position at Sanofi-Aventis, another New Jersey-based global pharmaceutical company. Another conspirator, Mark Foldy, 44, of Morris Plains, a friend and high school classmate of Lazorchak, was a marketing executive at Stryker Corp., a leading medical technology business with a major division located in New Jersey.
In their respective positions, Lazorchak, Cupo, and Foldy became privy to certain material information, including merger and acquisition plans, and – with respect to Lazorchak – quarterly earnings results and decisions on regulatory applications, before such information was made public.
From 2007 to 2012, Lazorchak regularly disclosed non-public information about Celgene’s anticipated corporate acquisitions, numerous quarterly earnings results, and regulatory news to Cupo with the expectation that Cupo would pass the information to a “friend” who would trade in the securities of Celgene or its target acquisition companies and then share the profits with Lazorchak and Cupo.There were, in fact, two “friends” to whom Cupo passed non-public material information: Lawrence Grum, 50, of Livingston, N.J., and Michael Castelli, 50, of Morris Plains, N.J. Both Grum and Castelli traded on the inside information and made more than half a million dollars in profits apiece. Grum and Castelli also passed certain Celgene inside information to friends and family members.
Lazorchak funneled information about Celgene’s anticipated acquisition of Pharmion Corp. in 2007 to his high-school friends, Foldy and Michael Pendolino, 44, a New Hampshire-based chiropractor. In the months leading up to the deal, Foldy and Pendolino traded on the inside information for a profit and broadened the insider trading network by tipping family members and other friends.
In May 2010, Lazorchak informed Cupo of Celgene’s then-confidential plans to acquire Abraxis BioScience Inc. After receiving the information from Cupo, Grum and Castelli purchased Abraxis stock and sold it immediately after the June 30, 2010, acquisition announcement. Grum and Castelli collectively made more than $150,000 in profits and paid thousands of dollars in cash to Cupo, to be shared with Lazorchak.
Between February and March 2011, Foldy informed Lazorchak of Stryker’s then-confidential plans to acquire Orthovita Inc. as payback for the Pharmion deal back in 2007. Foldy also tipped other friends and family members about the Orthovita deal.
Lazorchak passed the Orthovita tip to Pendolino and Cupo. Pendolino not only traded on the Pharmion-related inside information himself, but also passed it on to another high school friend. Cupo gave the information to Grum and Castelli, who traded for substantial profits and gave a cash portion back to Cupo, for distribution amongst Cupo, Lazorchak, and Foldy.
Over the course of the five-year scheme, the conspirators collectively reaped more than $1.4 million in illicit profits by trading ahead of at least 11 corporate news events that Lazorchak or Cupo revealed to them prior to public announcement.
In addition to the prison term, Judge Hayden sentenced Lazorchak to two years of supervised release and ordered him to forfeit $3,000.
Lazorchak is the fifth defendant charged with participating in this insider trading network to be sentenced. On April 9, 2014, Grum was sentenced to one year and one day in prison and Castelli was sentenced to nine months in prison. On April 16, 2014, Cupo was sentenced to 16 months in prison and Foldy was sentenced to two years of supervised release with six months of home confinement and electronic monitoring. The sixth and final charged defendant, Michael Pendolino, is scheduled to be sentenced by Judge Hayden on May 5, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentences. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel M. Hawke.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Today’s sentencing 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. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
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Defense counsel:
John Lazorchak: Lawrence S. Lustberg Esq. and Amanda B. Protess, Esq., Newark
Mark Cupo: Joseph J. Bell Esq. and Joseph J. Bell, IV Esq., Rockaway, NJ
Lawrence Grum: Scott A. Resnik Esq., New York
Michael Castelli: Daniel Zinman Esq. and Daniel Stein Esq., New York
Mark Foldy: Jonathan Marks Esq., New York
Michael Pendolino: James S. Friedman Esq., NewarkFormer Northern Kentucky School Superintendent Sentenced for Embezzling MoneyRead the Press Release
COVINGTON, KY - The former superintendent for the Dayton Independent School District has been sentenced to two years in federal prison for embezzling school funds during his tenure.
U.S. District Judge David L. Bunning sentenced William Rye, 66, of Wilder, Ky., for embezzlement. Under federal law, Rye will have to serve at least 85 percent of his prison sentence and following his release he will be under the supervision of the U.S. Probation Office for three years. Following the sentencing, Rye was released on his own recognizance and ordered to report on June 2 to a prison facility designated by the Bureau of Prisons. Rye has already paid full restitution in the amount of $193,149.22.
Rye pled guilty in December 2013 and admitted that, between 2004 and 2012, he embezzled approximately $193,149.22 from the Dayton Independent School District, while serving as school superintendent. The Dayton School District annually receives in excess of $10,000 in federal funds.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Laura K. Voorhees represents the federal government in this case.
Former Loan Officer Admits Role in Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. – A Middlesex County, N.J., man today admitted his role in a large-scale mortgage fraud scheme that caused millions of dollars in losses, U.S. Attorney Paul J. Fishman announced.
Delio Coutinho, 71, of Colonia, N.J., pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
From March 2008 through June 2012, Coutinho and his co-defendants conspired with each other and others to release liens on encumbered properties via fraudulently arranged short sale transactions. This allowed Coutinho and his co-defendants to profit from new fraudulent mortgage loans obtained on the properties from other mortgage lenders. To complete the short sale transactions, Coutinho and his co-defendants submitted materially false closing and other documents to mortgage lenders. They submitted fraudulent mortgage loan applications to lenders to obtain new loans on properties in and around Elizabeth, N.J., including a property on Fulton Street.
Coutinho was a loan officer at a northern New Jersey mortgage brokerage company, and he submitted false documents in support of the schemes. Co-defendants included Jose Luis Salguero Bedoya, 37, of Elizabeth, a real estate investor who, along with his girlfriend, Yazmin Soto-Cruz, 33, of Elizabeth, provided much of the funds used by the defendants to perpetuate their fraudulent schemes. Christopher Ju, 28, of Edison, N.J., negotiated the fraudulent short sale real estate transactions. In all, Coutinho and the others obtained approximately $2 million in illegal mortgage proceeds.
The conspiracy count to which Coutinho pleaded guilty carries a maximum potential penalty of 30 years in prison and a $100,000 fine.
U.S. Attorney Fishman credited the FBI Newark Mortgage Fraud Task Force, which includes special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Housing and Urban Development, Office of Inspector General, Northeast Region of Investigations, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Inspector General Michael P. Stephens; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy L. Romero; special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano Gregory, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark, and Charlton A. Rugg of the Narcotics/OCDETF Unit.
Today’s guilty plea is part of efforts 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. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
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Defense counsel: Michael A. Robbins Esq., West Orange, N.J.
Coutinho, Delio Information
Former Federal Correctional Officer Please Guilty to Sexual Relations with InmateRead the Press Release
TALLAHASSEE, FLORIDA -- Angel Santiago, 43, of Ambrose, Georgia, pleaded guilty today to knowingly engaging in a sexual act with a federal prisoner. The plea was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida, and Teresa M. Gulotta-Powers, Special Agent in Charge, United States Department of Justice Office of the Inspector General, Miami Field Office.
Plea documents reflect that, while working as a correctional officer at the Federal Correctional Institution in Tallahassee, Santiago developed a romantic relationship with a female inmate. Several times a month between 2010 and 2012, Santiago would enter the inmate’s cell in the early morning hours and have sexual intercourse with her.
Santiago faces a maximum sentence of 15 years in federal prison. He is also subject to a term of supervised release of five years to life. Sentencing will be held July 10, 2014, in federal district court in Tallahassee.
The case was investigated by the United States Department of Justice Office of the Inspector General. It is being prosecuted by Assistant U.S. Attorney Karen Rhew-Miller.
Former Dawson Springs Letter Carrier Sentenced to Prison Term for Destroying and Delaying the Delivery of at Least 44,900 Pieces of MailRead the Press Release
OWENSBORO, Ky. – A former United States Postal Service Employee from Dawson Springs, Kentucky was sentenced on April 17, 2014 to six months in prison followed by six months of home incarceration for destroying, hiding and delaying the delivery of at least 44,900 pieces of mail announced David J. Hale, United States Attorney for the Western District of Kentucky.
William “Brent” Morse, age 34, also was ordered to pay $14,808.01 by Chief Judge Joseph H. McKinley Jr., for losses suffered by individual residents and a local bank and for losses to two businesses which attempted to mail commercial circulars during the time period when defendant Morse did not deliver the United States Postal Service (USPS) mail.
In court, Morse admitted that for a two year period, beginning around March 2011, until March 30, 2013, when he resigned from the USPS, he destroyed at least 1,000 pieces of undelivered USPS mail and stored at least 44,900 pieces of undelivered mail at his deceased mother’s home and at rented storage facilities located in Dawson Springs. The majority of the undelivered mail was meant for delivery in the Dawson Springs community. The USPS has since delivered the recovered mail. Morse was charged in a single count, grand jury indictment, on August 14, 2013. He was not charged with stealing the contents of the undelivered mail.
This case was prosecuted by Special Assistant United States Attorney Sungtae Kang and the case was investigated by the United States Postal Inspection Service with assistance from the Dawson Springs Police Department.
Former Accounting Assistant Pleads Guilty to Federal Charge in $144,000 Theft from Non-Profit-Defendant Created and Processed False Expense Reports-Read the Press Release
WASHINGTON - Tabitha Harley-Williams, 34, pled guilty today to a federal charge stemming from the theft of more than $144,000 from a non-profit organization where she worked as an accounting assistant, announced U.S. Attorney Ronald C. Machen Jr. and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
Harley-Williams, of Upper Marlboro, Md., pled guilty in the U.S. District Court for the District of Columbia to one count of interstate transportation of stolen property. The Honorable Senior Judge Gladys Kessler scheduled sentencing for July 15, 2014. The charge carries a statutory maximum of 10 years in prison and financial penalties. Under federal sentencing guidelines, Harley-Williams faces a likely range of 12 to 18 months of incarceration, as well as a fine of up to $30,000. Under the plea agreement, Harley-Williams also must pay restitution to the non-profit. Finally, she is subject to an additional forfeiture money judgment.
According to the government’s evidence, the non-profit, identified in court documents as “Company A,” is an organization recognized by the U.S. Department of Education and the Council for Higher Education Accreditation for the accreditation of professional, technical and occupational career education programs. Harley-Williams began working there in 2008 as an accounting assistant. Part of her responsibilities included processing reimbursement requests from employees for travel and entertainment expenses.
In or around October 2012, Harley-Williams began creating false expense reports on behalf of other employees that appeared to be legitimate expenses. After Harley-Williams received supervisory approval to process these false expense reports, she changed the wire payment request information sent to “Company A’s” bank to reflect her own bank account information, rather than the account information of the employee for whom Harley-Williams had submitted the false expense reports. Between October 2012 and April 2013, Harley-Williams processed approximately 38 transactions in this manner, directing a total of $144,113 to her personal bank account. Harley-Williams had no legitimate rights to any of the funds. She left the non-profit in May 2013, and the transactions were later discovered in a budget review.
In announcing the plea, U.S. Attorney Machen and Assistant Director in Charge Parlave commended those who investigated the case from the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Donna Galindo, Corinne Kleinman, and Angela Lawrence, and Assistant U.S. Attorneys Catherine K. Connelly and Anthony Saler, who handled forfeiture issues. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Richard DiZinno, who investigated and prosecuted the matter.
14-092Five Convicted on Federal Drug ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistELKINS, WEST VIRGINIA – Five individuals entered pleas of guilty before U.S. Magistrate Judge John S. Kaull on drug-related charges.
United States Attorney William J. Ihlenfeld, II, announced that Chad Edward CUTRIGHT, age 28, and Natusha Jewell BIGGINS, age 25, of Montrose, West Virginia, entered pleas of guilty to “Possession of Pseudoephedrine to be used in the Manufacture of Methamphetamine.” CUTRIGHT and BIGGINS each face up to 20 years in prison. This case was prosecuted by Assistant U.S. Attorney Stephen D. Warner and investigated by the Barbour County Sheriff’s Department and the West Virginia State Police.
Ihlenfeld also announced that Lennox BUCKLEY, age 39, of Morgantown, West Virginia, entered a plea of guilty to “Distribution of more than 50 kilograms of Marijuana” As part of the plea, BUCKLEY will forfeit a 2002 Lexus ES 300 and $7,011 which constitutes proceeds from the illegal activity. The United States also intends to seek a $70,000 money judgment. BUCKLEY faces up to 20 years in prison.
Melvin SANDERS, age 56, formerly of New York, entered a plea of guilty to “Possession with Intent to Distribute Cocaine.” SANDERS faces up to 20 years in prison.
The BUCKLEY and SANDERS cases were investigated by the Greater Harrison County Drug & Violent Crime Task Force, the West Virginia State Police-Bureau of Criminal Investigations, the United States Postal Inspection Service, the Drug Enforcement Administration and the United States Marshals Service.
Beth Ann BROWN, age 36, of French Creek, West Virginia, entered a plea of guilty to “Possession with Intent to Distribute Marijuana.” BROWN faces up to five years in prison. This case was investigated by the West Virginia State Police-Bureau of Criminal Investigations and the United States Postal Inspection Service.
The BUCKLEY, SANDERS and BROWN cases were prosecuted by Assistant U.S. Attorney Andrew R. Cogar.
Federal Court Bars New York Man from Promoting Alleged Tax SchemeRead the Press Release
A federal court has permanently barred Ramesh Sarva, a certified public accountant in Little Neck, N.Y., from promoting and selling an alleged nationwide tax scheme, the Justice Department announced today. Judge Josephine L. Staton of the U.S. District Court for the Central District of California entered the permanent injunction order yesterday, to which Sarva consented.
According to the complaint, welfare benefit plans permit companies to pool together and make monetary contributions toward the purchase of life insurance for the benefit of each company’s employees or principals. Participants in legitimate welfare benefit plans may be able to deduct the full amount of their plan contributions as a business expense. The complaint alleged that Sarva falsely informed his customers that the welfare benefit plans he promoted were legal, but in fact, Sarva has been promoting plans that illegally permitted his customers to both claim substantial tax deductions for their plan contributions and later access the full cash value of their plan contributions by taking out loans against the life insurance policies purchased. The complaint alleged that Sarva’s promotion of these unlawful welfare benefit plans deprived the U.S. Treasury of significant amounts of tax and subjected his customers to audits and IRS scrutiny.
The injunction order bars Sarva from promoting and selling any purported welfare benefit plans. The court also ordered Sarva to provide the United States with a list of his customers and to send copies of the injunction order to his customers.
In the past decade, the Justice Department’s Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Kenneth Elliott, et al.
Complaint for Permanent Injunction and Other Relief
Stipulated Order of Permanent InjunctionEnvironment and Natural Resources Division Releases FY 2013 Accomplishments ReportRead the Press Release
The Justice Department’s Environment and Natural Resources Division (ENRD) today released its Fiscal Year (FY) 2013 Accomplishments Report, detailing its work alongside other federal agencies, U.S. Attorneys’ Offices, and state, local and tribal governments to enforce environmental and wildlife laws, protect our nation’s natural resources and ensure that all Americans enjoy clean air, water and land.
In the last fiscal year, the Justice Department continued carrying out its commitment to environmental justice to ensure the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental and natural resources laws and policies. The division’s work advancing the goals of environmental justice is illustrated in a separate chapter of the report.
“The Environment Division’s work to protect our air, land and water from pollution is as critical to our nation’s health, security, and sustainability as it has ever been,” said Deputy Attorney General James M. Cole. “As we face significant challenges from climate change, in developing alternative and sustainable sources of energy and addressing pollution to protect public health and the environment, we are grateful to the division and its attorneys for the work they do each day on behalf of the American people and future generations of Americans.”
“As this report shows, every day, the division works with client agencies, U.S. Attorneys’ offices, and state, local and tribal governments to enforce federal environmental, natural resources, and wildlife laws,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “It also defends federal agency actions and rules when they are challenged in the courts, keeping the nation’s air, water, and land free of pollution, promoting military preparedness and national security, and supporting responsible stewardship of America’s forests, wildlife and other natural resources. The division also handles a broad array of important matters affecting Indian tribes and their members. Across all this work, we strive to ensure that all Americans enjoy clean air, water and land, implementing the department’s deep commitment to environmental justice.”
In FY 2013, the division secured over $1.78 billion in civil and stipulated penalties, cost recoveries, natural resource damages and other civil monetary relief, including almost $637 million recovered for the Superfund. The division obtained almost $6.5 billion in corrective measures, through court orders and settlements, to protect the nation’s air, water and other natural resources. It concluded 53 criminal cases against 87 defendants, obtaining nearly 65 years in confinement and over $79 million in criminal fines, restitution, community service funds and special assessments. Finally, the handling of defensive and condemnation cases closed in fiscal year 2013 saved the United States an estimated $6.8 billion.
Among other highlights included in the FY 2013 Accomplishments report:
Accountability for the Deepwater Horizon Oil Spill
The division’s top civil enforcement priority remains the ongoing civil litigation and trial stemming from the April 20, 2010 explosion and fire that destroyed the Deepwater Horizon offshore drilling rig in the Gulf of Mexico and triggered a massive oil spill. In December 2010, the United States brought a civil suit against BP, Anadarko, MOEX, and Transocean for civil penalties under the Clean Water Act and a declaration of liability under the Oil Pollution Act, as part of multidistrict litigation in the U.S. District Court for the Eastern District of Louisiana.
Thus far, the department has secured over $1 billion in civil penalties through Deepwater Horizon settlements (with MOEX and Transocean), as well as far-reaching injunctive relief that should make Transocean’s deepwater drilling safer in the Gulf of Mexico.
The department tried the first phase of the U.S. case against the remaining defendants (addressing the cause of the disaster and liability) for nine weeks from February through April 2013, as part of a mass trial in which thousands of private plaintiffs also tried parts of their cases relating to liability and fault. The second phase of the U.S. case (principally addressing how much oil was discharged into the Gulf) took place over three weeks in September and October 2013. Both phases have been submitted to the district court for decision. The district court in New Orleans has scheduled the third phase of trial in this matter, addressing assessment of civil penalties, to begin in January 2015.
Addressing Climate Change
Over the past year, the division made important contributions to combating the effects of climate change. In January 2011, the Environmental Protection Agency’s (EPA’s) regulations governing motor vehicle emissions of greenhouse gases took effect, triggering not only mobile source regulation, but also regulation of the largest stationary sources in accordance with EPA’s greenhouse gas tailoring rule. As of September 2012, the D.C. Circuit in Coalition for Responsible Regulation v. EPA upheld the agency’s greenhouse gas-related regulatory actions in their entirety. Challengers filed nine separate petitions for writs of certiorari with the U.S. Supreme Court. In July 2013, the Department’s Office of the Solicitor General, working closely with Division and client agency attorneys, filed an opposition to the petitions for certiorari. On Oct. 15, 2013, the Supreme Court granted certiorari on six of the petitions, which were consolidated and limited to a single issue: “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” The court denied the remaining three petitions, and rejected consideration of numerous additional issues raised by the petitions that were partially granted. In February 2014, the Supreme Court heard oral argument in the case.
In March 2013, the D.C. Circuit affirmed the district court’s decision in In re Polar Bear Endangered Species Act Listing, thereby upholding the U.S. Fish and Wildlife Service’s 2008 listing of the polar bear under the Endangered Species Act as a threatened species throughout its range. The listing decision was based primarily on the polar bears’ dependence on arctic sea ice for their survival, existing and projected reductions in the extent and quality of sea ice habitat due to global climate change, and the inadequacy of existing regulatory measures to preserve the species.
In a settlement reached with the United States in September 2013, Safeway, the nation’s second largest grocery store chain, agreed to pay a $600,000 civil penalty and to implement a corporate-wide plan to significantly reduce its emissions of ozone-depleting substances from refrigeration equipment at over 650 of its stores nationwide, at an estimated cost of $4.1 million. The settlement resolves allegations that Safeway violated the Clean Air Act by failing to promptly repair leaks of HCFC-22, a hydrochlorofluorocarbon that has a global warming potential that is 1,800 times more potent than carbon dioxide. This first-of-its-kind settlement should also serve as a model for comprehensive solutions across a company.
Combatting Wildlife Trafficking
The department has long been a leader in the fight against wildlife trafficking. Over the last year, the department engaged fully in the administration’s effort to combat wildlife trafficking through its role as one of the three agency co-chairs of the Presidential Task Force on Wildlife Trafficking, established by President Obama’s July 2013 Executive Order—Combating Wildlife Trafficking. In the past decade, wildlife trafficking has escalated into an international crisis, making it both a critical conservation concern and a threat to global security. Beyond decimating the world’s iconic species, this illegal trade threatens international security. Transnational criminal organizations, including some terrorist networks, armed insurgent groups and narcotics trafficking organizations, are increasingly drawn to wildlife trafficking due to the exorbitant proceeds from this illicit trade.
The task force emphasizes the need for a “whole of government” approach to combating this problem and identifies three key priority areas: (1) strengthening domestic and global enforcement; (2) reducing demand for illegally traded wildlife at home and abroad; and (3) strengthening partnerships with foreign governments, international organizations, nongovernmental organizations, local communities, private industry, and others to combat illegal wildlife poaching and trade.
The division works with U.S. Attorneys’ offices around the country and federal agency partners (such as the U.S. Fish and Wildlife Service and the National Oceanic and Atmospheric Administration) to combat wildlife trafficking under the Endangered Species Act and the Lacey Act, as well as statutes prohibiting smuggling, criminal conspiracy and related crimes. In fiscal year 2013, a prominent example of the division’s robust prosecution of illegal wildlife trafficking was “Operation Crash,” an ongoing multi-agency effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the illegal trafficking of endangered rhinoceros horns. This initiative has resulted in multiple convictions, significant jail time, penalties and asset forfeiture.
Read more about the Justice Department’s involvement in the fight to end wildlife trafficking: www.justice.gov/enrd/6329.htmEast St. Louis Post Office Supersivor Pleads Guilty to Stealing PackagesRead the Press Release
Follow @SDILNewsThe United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Jane Johanna Emily, a/k/a Jane Moeller, 41, of St. Louis, Missouri, pled guilty in federal district court on April 22, 2014, to charges that she opened and stole packages from the U.S. Mail.
The federal grand jury charged Emily with Obstruction of Mail, Theft of U.S. Mail by a Postal Employee, and Opening of Mail. Each charge carries a maximum penalty of 5 years in prison, a $250,000 fine, and up to 3 years of supervised release. The sentencing hearing is set for August 8, 2014.
The case was investigated by agents of the U.S. Postal Service, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Liam Coonan.
Driver in Car Crash Sentenced to over 3 Years in Prison for Involuntary ManslaughterRead the Press Release
Driver was Drunk When Passenger was Ejected from the Vehicle During a Crash
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Josue Balbino Ruiz Reyes, age 20, of Hyattsville, Maryland today to 37 months in prison, followed by three years of supervised release, for involuntary manslaughter in connection with the death of a passenger in Reyes’ vehicle resulting from a car collision.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Acting Chief of Police Robert D. Maclean of the U.S. Park Police.
According to his plea agreement, on August 22, 2013 at about 5:30 a.m., Ruiz Reyes drove with a female passenger in his SUV from the Glen Burnie area southbound on the Baltimore-Washington Parkway. He had been drinking alcohol earlier that morning and the previous night. Near the route 197 exit, he lost control of his SUV and drove onto the shoulder of the highway. His SUV rolled over completely and landed upright, breaking all the windows and ejecting the passenger. Ruiz Reyes drove away.Numerous motorists called 911 to report the accident. The U.S. Park Police found Ruiz Reyes driving his badly damaged vehicle on the ramp from the Parkway to Powder Mill Road, about four miles south of the location of the crash. Four police cruisers forced the vehicle to a stop. The right side of the SUV was completely smashed. The passenger side door would not open. Ruiz Reyes told the police he had two beers earlier. He was shirtless, and had minor bruises and cuts on his body. Ruiz Reyes was taken to the hospital where a blood test was given. His blood-alcohol level was .10 grams of alcohol per 100 mL of blood.
Meanwhile, U.S. Park Police officers at the scene of the roll-over found the passenger’s body lying in the grass, where she had been ejected from the SUV. She was pronounced dead. Ruiz Reyes told police that the passenger had gotten out of the car on the side of the road voluntarily. His Maryland driving privileges were suspended.
United States Attorney Rod J. Rosenstein praised the U.S. Park Police for its work in the investigation and thanked Assistant U.S. Attorney Hollis R. Weisman, who prosecuted the case.Defendant Pleads Guilty to Hurricane Ike FraudRead the Press Release
ATLANTA – Angela Pratt Avery pleaded guilty in federal court to fraudulently obtaining FEMA assistance funds intended for the victims of Hurricane Ike.
“These defendants lied by claiming they were victims of Hurricane Ike in 2008 and, based on those lies, stole over $50,000 in disaster relief funds that were intended for the true victims,” said United States Attorney Sally Quillian Yates. “The Disaster Fraud Task Force was created in 2005 to target those fraudsters who would seek to turn the tragedy of a natural disaster into an opportunity to enrich themselves at the expense of the American people.”
“I am pleased by today’s guilty plea. DHS-OIG will continue its commitment towards working with this U.S. Attorney's Office and our law enforcement partners to identify and aggressively investigate these egregious violations,” said James Ward, Special Agent in Charge, Office of Investigations, Atlanta, Department of Homeland Security, Office of the Inspector General. “In the future, DHS-OIG will remain vigilant in seeking prosecutions in such cases to uphold the integrity of our Federal Emergency Programs, which are intended for law abiding citizens."
According to United States Attorney Yates, the charges and other information presented in court: Avery, 45, of Lawrenceville, Ga., and two co-defendants, John A. Wheeler, 57, and Melody Lockett Carter, 49, both of Wilmerding, Pa., worked together to file three fraudulent FEMA claims for Hurricane Ike disaster relief funds. The defendants filed the claims in September 2008 and January 2009, falsely claiming that Avery and Carter lived at a West Ventura Drive address in Galveston, Texas, at the time of Hurricane Ike and that their personal property had been damaged by the storm. In fact, all three defendants lived in Norcross, Ga., at the time of Hurricane Ike and were not victims of the storm. The defendants received over $50,000 in disaster assistance from FEMA based on their fraud.
On September 13, 2008, Hurricane Ike made landfall near Galveston, causing widespread damage along the Texas, Louisiana, Mississippi, and Florida coastlines and the surrounding areas. After Hurricane Ike struck the Texas coastline, FEMA provided financial disaster assistance to displaced individuals who resided in various counties in Texas. Those individuals could make an application for disaster assistance funds by filing a claim with FEMA that included the Texas address where they were living at the time of the hurricane.
Avery pleaded guilty to one count of theft of government money. On January 10, 2014, Wheeler and Carter each pleaded guilty to one count of theft of government money. Sentencing for the defendants has not yet been scheduled.
This case is being investigated by Special Agents of the U.S. Department of Homeland Security, Office of Inspector General.
Assistant United States Attorney Stephen H. McClain is prosecuting the case.
In September 2005, the Attorney General established the Disaster Fraud Task Force to deter, detect, and prosecute disaster-related federal crimes such as charity fraud, identity theft, procurement fraud, and insurance fraud related to the Hurricane Katrina disaster. As multiple disasters occurred in subsequent years, the Task Force expanded its mandate to all types of disaster fraud. The Task Force, chaired by Acting Assistant Attorney General David O’Neil of the Criminal Division, includes the FBI, the Postal Inspection Service, the U.S. Secret Service, the Federal Trade Commission, the Securities and Exchange Commission, federal Inspectors General, and various representatives of state and local law enforcement.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Corrections Officer Arrested on Federal Bribery ChargeDefendant Accused of Accepting Money in Return for Smuggling Contraband to InmateRead the Press Release
WASHINGTON – Darren Malry, 51, a corrections officer, has been arrested and charged with bribery following an undercover FBI investigation in which he allegedly accepted money for smuggling contraband into the District of Columbia’s Correctional Treatment Facility.
The charge was announced by U.S. Attorney Ronald C. Machen Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas N. Faust, Director of the District of Columbia Department of Corrections.
Malry was arrested by the FBI on April 21, 2014 and appeared today in the U.S. District Court for the District of Columbia. He pled not guilty and was released on personal recognizance pending a hearing on May 6, 2014.
At the time of his arrest, Malry worked for the Corrections Corporation of America (CCA) as a corrections officer at the Correctional Treatment Facility. CCA, a private company, has a contract to provide services to the D.C. Jail
According to the charging documents, on March 11, 2014, Malry met with an undercover FBI agent in the parking lot of a shopping center in Greenbelt, Md. The undercover agent gave Malry a cellphone, cigarettes, and rolling papers for Malry to deliver to an inmate housed at the Correctional Treatment Facility. The undercover agent also provided Malry with $750 in cash at that meeting, which was given in exchange for Malry smuggling the contraband into the facility and delivering it to the inmate. The FBI recovered the contraband from the inmate shortly after Malry gave the items to the inmate in the inmate’s jail cell.
Malry met again with the undercover FBI agent on April 21, 2014 at a restaurant in the same shopping center in Greenbelt. At that meeting, the undercover agent gave Malry cigarettes and several packages of a substance resembling marijuana. The undercover agent also provided Malry with $600 in cash, which was in exchange for Malry smuggling the contraband into facility for the same inmate. Malry subsequently was arrested.
A criminal complaint is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until, and unless, proven guilty.
The case is being investigated by the FBI’s Washington Field Office, with assistance from the District of Columbia Department of Corrections Office of Investigative Services. It is being prosecuted by Assistant U.S. Attorney Richard DiZinno, of the Fraud and Public Corruption Section of the U.S. Attorney’s Office, with assistance from Assistant U.S. Attorneys Catherine K. Connelly and Allessandra Stewart, of the Asset Forfeiture and Money Laundering Section.
14-093Columbiana Man Faces Federal Firearms ChargesRead the Press Release
A federal grand jury returned a four-count indictment charging Brent See, age 37, of Columbiana, Ohio, with possession of unregistered firearms and being in the business of manufacturing firearms, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Count 1 of the indictment charges that on or about July, 2013 through January, 2014, See was engaged in the business of manufacturing and dealing in silencer firearms, without a license.
Counts 2 through 4 of the indictment charge that See was in possession of a silencer, not registered to him, on or about September 3 and December 13, 2013, and January 10, 2014.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Postal Inspection Service. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Clarksburg Man Plead Guilty to Federal Firearms ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – A West Virginia pawn shop owner has pleaded guilty to a federal gun charge and for lying to ATF agents.
United States Attorney William J. Ihlenfeld, II, announced that MARTIN L. QUEEN, age 51, of Clarksburg, entered pleas of guilty to “Possession of Stolen Firearms” and two counts of “Making Materially False Statements and Representations.” U.S. District Judge Irene M. Keeley took the plea. QUEEN, who is free on bond pending sentencing, faces up to twenty years in prison. The case was prosecuted by Assistant U.S. Attorney Shawn A. Morgan and was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
In other court matters, a 28-year old Clarksburg resident was sentenced to prison by Judge Keeley. Dominic SUTHERLIN was sentenced to 37 months in prison and three years of supervised release due to his conviction for “Possession of a Firearm by an Unlawful Drug User/Addict.” SUTHERLIN will self-report to prison in May. The case was prosecuted by Morgan and investigated by the Greater Harrison County Drug and Violent Crime Task Force and the Harrison County Sheriff’s Department.
Tony HAWK, age 30, and Marquis Anton BROOKS, age 32, inmates at FCI Morgantown entered pleas of guilty and were each sentenced to 3 months in prison, to run concurrently to HAWK’s current 100-month sentence and BROOKS’ current 60-month sentence for “Possession of a Prohibited Object,” when staff at the correctional institution recovered cell phones from both inmates.
Keegan Chance VANTUYL, age 31, an inmate at USP Hazelton, entered a plea of guilty to “Assault with a Dangerous Weapon with Intent to do Bodily Harm.” VANTUYL aided and abetted another inmate in the assault of an inmate by striking and cutting the victim with a sharp object. VANTUYL faces up to twenty years in prison.
The HAWK, BROOKS, and VANTUYL cases were prosecuted by Assistant United States Attorney Brandon S. Flower and investigated by the Special Investigative Services Unit at FCI Morgantown and USP Hazelton.
Finally, Timothy PETITTO, age 37, of Fairmont, West Virginia, entered a plea of guilty to “Possession of Child Pornography.” PETITTO, who is in custody pending sentencing, faces up to 20 years in prison. This case was prosecuted by Assistant U.S. Attorney Stephen L. Vogrin and investigated by Homeland Security Investigations.
City of New Orleans Agrees to Settlement to Resolve Housing Discrimination LawsuitRead the Press Release
The Justice Department announced today that the U.S. District Court for the Eastern District of Louisiana approved its settlement with the city of New Orleans regarding a housing discrimination lawsuit late yesterday.
Under the settlement, the city agrees to permit the conversion of the former Bethany Nursing Home, located at 2535 Esplanade Avenue, into 40 units of affordable housing. Half of the units in the new Esplanade complex will be designated as permanent supportive housing and will be reserved for formerly homeless persons with disabilities. In addition, the settlement commits New Orleans to developing additional supportive housing for 350 persons with disabilities over the next three years.
“We are very pleased to have worked constructively with New Orleans to reach an agreement that will not only enable the Esplanade to be built, but that will also provide additional permanent supportive housing for 350 persons with disabilities in New Orleans,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.
“Nondiscriminatory housing is a fundamental right of the citizens of New Orleans, and this settlement agreement continues the efforts to rebuild and improve a housing inventory ravaged by Hurricane Katrina,” said U.S. Attorney Kenneth Allen Polite Jr. for the Eastern District of Louisiana. “I applaud the cooperative efforts of the city and the department to reach a resolution that is in the best interests of persons with disabilities, who are amongst the most vulnerable members of our community.”
In addition to the development of 350 additional permanent supportive housing units, the settlement requires that the city agree to provide all appropriate permits for the Esplanade, amend its Comprehensive Zoning Ordinance to allow permanent supportive housing, continue its work to prepare and implement a reasonable accommodation policy approved by the United States, conduct fair housing training for key city officials and be subject to reporting requirements.
The State Bond Commission, which was also named as a defendant, is not a party to the settlement. On March 20, 2014, the Bond Commission voted not to approve a settlement. As a result, the Justice Department has moved to reopen the litigation against the Bond Commission and the court has scheduled a status conference for June 26, 2014.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Title II of the Americans with Disabilities Act prohibits governments from discriminating on the basis of disability in administering their zoning laws. More information about the Civil Rights Division and the laws it enforces is available at the division website
City of New Orleans Agrees to Settlement to Resolve Housing Discrimination LawsuitRead the Press Release
The Justice Department announced today that the U.S. District Court for the Eastern District of Louisiana approved its settlement with the city of New Orleans regarding a housing discrimination lawsuit late yesterday.
Under the settlement, the city agrees to permit the conversion of the former Bethany Nursing Home, located at 2535 Esplanade Avenue, into 40 units of affordable housing. Half of the units in the new Esplanade complex will be designated as permanent supportive housing and will be reserved for formerly homeless persons with disabilities. In addition, the settlement commits New Orleans to developing additional supportive housing for 350 persons with disabilities over the next three years.
“We are very pleased to have worked constructively with New Orleans to reach an agreement that will not only enable the Esplanade to be built, but that will also provide additional permanent supportive housing for 350 persons with disabilities in New Orleans,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.
“Nondiscriminatory housing is a fundamental right of the citizens of New Orleans, and this settlement agreement continues the efforts to rebuild and improve a housing inventory ravaged by Hurricane Katrina,” said U.S. Attorney Kenneth Allen Polite Jr. for the Eastern District of Louisiana. “I applaud the cooperative efforts of the city and the department to reach a resolution that is in the best interests of persons with disabilities, who are amongst the most vulnerable members of our community.”
In addition to the development of 350 additional permanent supportive housing units, the settlement requires that the city agree to provide all appropriate permits for the Esplanade, amend its Comprehensive Zoning Ordinance to allow permanent supportive housing, continue its work to prepare and implement a reasonable accommodation policy approved by the United States, conduct fair housing training for key city officials and be subject to reporting requirements.
The State Bond Commission, which was also named as a defendant, is not a party to the settlement. On March 20, 2014, the Bond Commission voted not to approve a settlement. As a result, the Justice Department has moved to reopen the litigation against the Bond Commission and the court has scheduled a status conference for June 26, 2014.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Title II of the Americans with Disabilities Act prohibits governments from discriminating on the basis of disability in administering their zoning laws. More information about the Civil Rights Division and the laws it enforces is available at the division website <http://www.justice.gov/crt>.
(Download Agreement )
Career Criminal Gets 140 Month SentenceRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WV – A Wheeling man with a lengthy criminal history was sentenced to serve the next decade in federal prison for selling crack cocaine.
United States Attorney William J. Ihlenfeld, II, announced that Emanuel “Sammy” BANKS, age 40, was sentenced to 140 months in prison and three years of supervised release for “Distribution of Crack Cocaine.” BANKS’ sentence was enhanced due to his significant criminal history, which includes prior felonies for “Bringing Stolen Property into the State, “Aggravated Robbery”, “Receiving Stolen Property”, “Unlawful Assault”, and “Distribution of Cocaine Base within 1000 Feet of a Playground.”
BANKS was sentenced by U.S. District Judge Frederick P. Stamp, Jr., who also ordered the forfeiture of $4,990 in U.S. currency seized from BANKS. BANKS was remanded to the custody of the U.S. Marshal pending designation to a Federal prison. This case was prosecuted by U.S. Attorney Ihlenfeld.
In other court proceedings, Ihlenfeld announced that Jerome Melvin ROSS, age 23, of Wheeling, was sentenced to 31 months in prison and six years of supervised release for “Distribution of Crack Cocaine within 1,000 Feet of Riverview Towers.” ROSS, who is free on bond, will self-report to prison. This case was also prosecuted by Ihlenfeld.
Nicole GUST, age 20, of Bellaire, Ohio, was sentenced to 12 months and 1 day in prison and three years of supervised release for “Distribution of Crack Cocaine.” GUST was remanded to the custody of the U.S. Marshal pending designation to a Federal prison.John M. WAKIM, age 57, of Wheeling, entered a plea of guilty before Judge Stamp to “Mantaining a Drug-Involved Premise.” WAKIM owned a garage in Wheeling and allowed others to use the location to store drugs and conduct drug-related activities. WAKIM, who is free on bond pending sentencing, faces up to 20 years in prison.
Ronald Gene VANCE a/k/a “Sammy,” age 63, of Columbus, Ohio, entered a plea of guilty before U.S. Magistrate James E. Seibert to “Conspiracy to Distribute Oxycodone.” VANCE, who is free on bond, faces up to 20 years in prison.
The BANKS, ROSS, GUST, WAKIM, and VANCE cases were investigated by the Ohio Valley Drug & Violent Crime Task Force (OVDTF), consisting of officers and agents from the Wheeling Police Department, the Ohio County Sheriff’s Department, West Virginia State Police-BCI, and the Drug Enforcement Administration. The cases were prosecuted by Assistant U.S. Attorney Randolph J. Bernard. The OVDTF is an Appalachia HIDTA funded unit.Rocci WADE, age 59, of Moundsville, West Virginia, was sentenced to 97 months in prison and three years of supervised release for “Conspiracy to Possess with Intent to Distribute and to Distribute Oxycodone” and “Distribution of Oxycodone.” WADE, who was sentenced by U.S. District Judge John P. Bailey, was part of a five person conspiracy that distributed painkillers in the Moundsville area between 2010 and 2013. WADE is in custody pending designation to a Federal prison. The case was prosecuted by Bernard and was investigated by the Marshall County Drug Task Force which includes officers and agents from the Moundsville Police Department, the Marshall County Sheriff’s Department, and the Drug Enforcement Administration. The Marshall County Drug Task Force is an Appalachia HIDTA funded unit.
Finally, Dallas ACOFF, age 25, of Wheeling, entered a plea of guilty before Judge Stamp to “Escape.” On January 17, 2014, ACOFF escaped from the custody of the Bannum Place halfway house where he was serving the remainder of his 41-month sentence for the distribution of crack cocaine. ACOFF, who is in custody pending sentencing, faces five years in prison. This case was investigated by the U.S. Marshals Service.
Butte County Man Sentenced for Mortgage Fraud SchemeRead the Press Release
SACRAMENTO, Calif., — United States District Court Judge John A. Mendez sentenced Johnny Eugene Grivette Jr., 39, of Magalia, today to four and a half years in prison for his participation in a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.
On July 10, 2012, Grivette pleaded guilty to conspiracy to commit mail fraud and money laundering. According to the plea agreement, Grivette was manager of Advantage Financial Partners of California (AFP), a company that bought residential properties at market prices and then sold them to straw buyers who were investors in a purported investment program. Once AFP bought the properties, it paid commissions to an appraiser who would appraise them for significantly higher than the true market value. This allowed the homes to be financed for the straw buyers at loan-to-value ratios significantly higher than the limits lenders authorized. If the straw buyers had to make down payments on the properties sold by AFP, the money was quickly reimbursed to them by AFP without the lenders' knowledge.
This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Paul A. Hemesath prosecuted the case.
"Victims of mortgage fraud may include the banks which loan the money, but also include all homeowners and would-be homeowners who end up paying for this type of fraud," said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. "IRS-CI is committed to pursuing those who line their pockets with profits from these schemes."
Grivette's sentencing marks another event in a series of prosecutions related to Loomis Wealth Solutions, a "wealth-building" program offered to the public in California, Illinois, Washington, and elsewhere, from 2006 through 2008. According to indictments, persons connected to Loomis Wealth Solutions are alleged to have committed various acts of fraud and money laundering.
In related cases, Dawn Powers, 43, of Lincoln, and John Hagener, 77, of Granite Bay, pleaded guilty to conspiracy charges on March 4, 2014. Powers was a manager at Loomis Wealth Solutions, and Hagener was a manager of entity known as the Naras Funds, which was an investment fund related to Loomis Wealth Solutions. They are scheduled for sentencing on June 10, 2014. On September 11, 2012, Christopher Warren, 31, formerly of Sacramento, was sentenced to 14 and a half years in prison for his role in the scheme. Warren was a manager of a lending company related to Loomis Wealth Solutions. On April 15, 2014, Scott Cavell, a partner of Warren's, pleaded guilty to wire fraud, which was unrelated to his employment at Loomis Wealth Solutions. He is scheduled for sentencing on July 22, 2014.
There are five defendants remaining in the criminal case related to Loomis Wealth Solutions: Lee Loomis, 56, of Granite Bay; Darren Fehst, 45, of Halifax, Nova Scotia; Peter Woodard, 45, of Ventura; Joseph Gekko, 45, of Yorba Linda; and Michael Llamas, 29, of Tracy. A trial is scheduled for October 6, 2014, before the Honorable John A. Mendez. The charges against them are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Buffalo Man Pleads Guilty to Gun ChargeRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul announced today that Damone Holcombe, 28, of Buffalo, N.Y., pleaded guilty today before United States Magistrate Judge Leslie G. Foschio to possession of a firearm by an unlawful user of a controlled substance. The charge carries a maximum penalty of up to 10 years in prison and a $250,000 fine.
Assistant U. S. Attorney Frank T. Pimentel, who is handling the case, stated that on September 21, 2011, Erie County Sheriff’s deputies executed a search warrant at the defendant’s residence on Grant Street in Buffalo and found, among other items, a 7.62mm semi-automatic rifle, a digital scale with cocaine and marijuana residue on it, and a bag of marijuana in Holcombe’s pants pocket.
This is the last of five convictions stemming from an investigation into the activities of the Almighty Latin King and Queen Nation street gang on the West Side of Buffalo in 2011.
The guilty plea is the result of an investigation by Special Agents of the Federal Bureau of Investigation’s Safe Streets Task Force under the direction of Special Agent in Charge Brian P. Boetig, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, and the Erie County Sheriff’s Office, under the direction of Sheriff Timothy B. Howard.
Sentencing will be in front of United States District Judge William M. Skretny on a date to be determined.Bristol Man Pleads Guilty to Bath Salts ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On Apr. 22, 2014, Harry Joseph Cannon, 50, of Bristol, Tenn., pleaded guilty before the Honorable R. Leon Jordan, U.S. District Judge, to conspiring to distribute, and possess with the intent to distribute, assorted Schedule I controlled substances, and Schedule I controlled substance analogues, commonly known as “bath salts” or “spice”.
Sentencing is set for 10:30 a.m., Aug. 19, 2014, in U.S. District Court, Greeneville. He faces up to 20 years in prison. Federal sentences are not parolable.
From March 2011 to October 2013, Cannon conspired with various other persons to distribute, and possess with the intent to distribute “bath salts” and “spice”. Canon sold these substances from his store, 420 Emporium, in Bristol, Tenn. During the investigation, law enforcement conducted a series of undercover drug purchases from Cannon and 420 Emporium. Those purchases led to federal search warrants being executed on two separate occasions in March 2012 and October 2012. In both instances, agents recovered extensive amounts of Schedule I controlled substances, and Schedule I controlled substance analogues. Most of these drugs were already prepackaged for resale. Numerous firearms were also recovered.
This long term investigation was the product of a partnership between the Bristol Tennessee Police Department, Second Judicial District Drug Task Force, Sullivan County Sherriff’s Office, and the Drug Enforcement Administration. Special Assistant U.S. Attorney Nick Regalia represented the United States.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Barberton Woman Indicted for Failing to Register as Sex OffenderRead the Press Release
Susan L. Kathan, aka Susan Dent, aka Susan Shover, aka Susan Davis, 57, of Barberton, Ohio, was indicted today by a federal grand jury for failure to register and update registration as required under the Sex Offender Registration and Notification Act, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The United States Marshals Service in Cleveland, Ohio conducted the investigation. The case is being prosecuted by Assistant United States Attorney Justin Seabury Gould.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial, in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Baltimore Man Sentenced to over 24 Years in Prison for Producing Child Pornography and Attempting to Entice A Minor to Have SexRead the Press Release
Also Encouraged His Ex-Wife to Distribute Child Pornography
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced David Ralph Fisher, age 43, of Baltimore, today to 293 months in prison, followed by lifetime supervised release, for producing child pornography and attempting to coerce and entice a minor to engage in sexually explicit activity. Judge Bredar ordered that upon his release from prison, Fisher must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.
According to his plea agreement and court documents, David Fisher repeatedly requested that his ex-wife, Lori Fisher, produce sexually explicit photos of two minor girls, which she did on at least two occasions between August and December of 2008. Lori Fisher took the photos on her cell phone, then texted the images to David Fisher, who saved the images on his cell phone and computers.
On November 4, 2012, the Baltimore Police Department received information that images and videos of child pornography were observed on David Fisher’s external hard drive at his residence. The external hard drive was provided to police. Many files depicting minors engaged in sexually explicit conduct were found.
A search warrant was subsequently executed at David Fisher’s residence on November 20, 2012, and computers, cell phones and other items were seized. Sexually explicit email messages with attachments were recovered in which Fisher solicited child pornography from other individuals, and shared child pornography from his collection. Also, in February 2013, law enforcement confirmed that some of the sexually explicit images found on David’s computer and cell phone were images of the two minor girls that Lori Fisher had photographed and sent to David. In all, over 2,200 images and 100 videos of minors engaged in sexually explicit conduct, including prepubescent minors, were recovered.
On March 14, 2013, a Baltimore Police detective working undercover contacted David Fisher on Facebook, posing as a 14 year old female. Between March 14 and April 11, 2013, David Fisher communicated with the undercover detective through Facebook and email, often using a computer at a public library because of law enforcement’s seizure of his home computer. David Fisher asked the undercover detective to send him sexually explicit photos, and sent the undercover detective sexually explicit photographs of himself. Fisher also gave the undercover detective his cell phone number and proposed meeting to engage in sexual activity. A meeting was arranged for April 11, 2013. Fisher was arrested when he arrived at the meeting.
Lori Fisher, age 46, of St. Cloud, Florida, and formerly of Bel Air, Maryland, previously pleaded guilty to distribution of child pornography and faces a minimum of five years and a maximum of 20 years in prison at her sentencing scheduled for June 11, 2014 at 9:30 a.m. As part of her plea agreement, Lori Fisher will be required to register as a sex offender in the place where she resides, where she is an employee, and where she is a student, under the Sex Offender Registration and Notification Act (SORNA).
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok, who prosecuted the case.
Monday 21 April 2014
United States Citizen Extradited from the Netherlands Pleads Guilty to Offenses Related to Sexual Exploitation of A MinorRead the Press Release
FRESNO, Calif. —Christopher David Robinette, 43, of Amsterdam, Netherlands, pleaded guilty today to nine counts related to the sexual exploitation of a minor, United States Attorney Benjamin B. Wagner announced.
Robinette, who is a United States citizen, pleaded guilty to eight counts of sexual exploitation of a minor and one count of transporting a minor in interstate or foreign commerce for purposes of engaging in criminal sexual activity. According to court documents, Robinette traveled on dates between September 2004 and August 2006 from various locations to the Fresno area to sexually exploit a minor and produce digital still and video images of the abuse. The sexual abuse took place in California, including the Fresno area, as well as in Mexico and Costa Rica. Robinette’s crimes were detected shortly after he uploaded images of child pornography, including images he produced, to a Microsoft SkyDrive account.
Robinette is scheduled for sentencing on July 14, 2014, by Senior United States District Judge Anthony W. Ishii. Robinette faces potential prison terms of 15 to 30 years for each sexual exploitation count and 10 years to life for transportation of a minor. For all counts, there is a potential $250,000 fine, and a lifetime term of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The National Center for Missing & Exploited Children in Alexandria, Virginia assisted in coordinating information for a law enforcement response. This case is the product of an investigation by the Korps Landelijke Politie Diensten (Dutch National Police), the Amsterdam Amstelland Police Department (Amsterdam local police) with assistance from the Federal Bureau of Investigation’s offices in The Hague and Amsterdam, Washington, D.C., and Fresno as well as the Fresno Police Department. Assistant U.S. Attorney David Gappa and Child Exploitation and Obscenity Section (CEOS) Trial Attorney Maureen Cain are prosecuting the case.
The United States Department of Justice’s Office of International Affairs and CEOS, as well as the Dutch Ministry of Justice, assisted in coordinating Robinette’s extradition to Fresno. The United States Marshals Service returned Robinette to Fresno, and he has been detained as a flight risk and danger to the community since his initial court appearance on December 26, 2012.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet safety education.
United State Settles False Claims Act Allegations Against Otterbox for $4,300,000Read the Press Release
DENVER – The United States Attorney’s Office for the District of Colorado and the Department of Homeland Security, U.S. Customs and Border Protection, announce that OtterBox, a Colorado corporation headquartered in Fort Collins, has paid $4,300,000 to the United States to resolve allegations that OtterBox violated the False Claims Act and the Tariff Act of 1930, as amended, by knowingly underpaying customs duties owed to the United States.
OtterBox sells protective cases for smartphones and tablets. Between 2006 and 2011, OtterBox manufactured many of its products overseas, and then imported those products into the United States for distribution and retail sale. OtterBox was responsible for the submission of entry documents to Customs and for the payment of any customs duties owed on those imported products.
The United States alleged that from January 1, 2006 through December 31, 2011, OtterBox knowingly omitted the value of “assists” from the dutiable value OtterBox declared to Customs on entry documents for imported products. The United States further alleged that OtterBox knowingly made or caused to be made false statements in other documents submitted to Customs concerning the value of assists, and the customs duties OtterBox owed on the value of those assists, for products that OtterBox imported between January 1, 2006 through December 31, 2011. According to the United States, as a result of OtterBox’s omissions and false statements concerning the value of assists for its imported products, OtterBox knowingly underpaid customs duties it owed to the United States.
The settlement stems from a lawsuit filed by a former OtterBox employee in 2011 under seal pursuant to the qui tam provisions of the False Claims Act. The False Claims Act empowers private citizens with knowledge of fraud against the United States to present those allegations to the government by bringing a lawsuit on behalf of the United States under seal. If the investigation substantiates those allegations, the private citizen is entitled to share in any recovery. Of the $4,300,000 OtterBox paid to the United States, the United States paid $830,000 to the former employee who filed the qui tam lawsuit.
“America’s economic security and prosperity are at the heart of U.S. trade law,” said United States Attorney John Walsh. “Customs duties are a significant source of revenue for the United States, and this settlement demonstrates that the Department of Justice will zealously enforce their lawful collection.”
“Trade enforcement is a priority for U.S. Customs and Border Protection due to the significant role that it plays in the economic security of the United States,” said Richard Di Nucci, Acting Assistant Commissioner for the Office of International Trade. “CBP is responsible for facilitating the legitimate flow of trade, while enforcing the laws against the evasion of duties that protect against unfair trade practices.”
The claims settled by this agreement are allegations only. There has been no determination of liability.
The agreement was negotiated by Assistant U.S. Attorney Amanda Rocque.
Two Men Indicted for Dealing Methamphetamine and Marijuana in Ravenna; Federal Firearms Charges Also FiledRead the Press Release
A seven-count indictment was filed charging Dustin Shepherd, aka “Rev,” age 31, of Ravenna, Ohio, and Christopher Ferry, aka “Skinny,” age 21, of Newton Falls, Ohio, with conspiracy and possession with intent to distribute methamphetamine and marijuana, and firearms violations, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Count 1 of the indictment charges that from in or about October 2013 through March 2014, Shepherd and Ferry conspired to distribute more than 50 grams of methamphetamine and less than 50 kilograms of marijuana in the Ravenna, Ohio, area and elsewhere. It was part of the conspiracy that Shepherd supplied marijuana and methamphetamine to Ferry for distribution in and around Ravenna, Ohio, according to the indictment.
Count 3 of the indictment charges that on or about March 14, 2014, Ferry possessed with the intent to distribute methamphetamine.
Counts 4 and 5 of the indictment charge that on or about March 28, 2014, Shepherd possessed with the intent to distribute more than 50 grams of methamphetamine and marijuana.
Counts 2 and 6 of the indictment charge that on or about February 27 and March 28, 2014, Shepherd possessed more than 50 various firearms and more than 24,000 rounds of ammunition, despite having been previously convicted of commercial burglary and possession for sale of a controlled substance, in the Tehama County Superior Court of California.
Count 7 of the indictment charges that on or about March 28, 2014 Shepherd possessed a firearm while committing a drug trafficking crime, that is, possessing with the intent to distribute methamphetamine and marijuana.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted with the combined efforts by the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Postal Inspection Service; Ohio State Highway Patrol; Illinois State Police; Portage County Drug Task Force, and the Akron City Police Department. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Toledo Woman Sentenced to Three Years in Prison for Sex Trafficking Involving A MinorRead the Press Release
A Toledo woman was sentenced to three years in prison for interstate sex trafficking involving a minor, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office.
Amber Ginter, aka Amber Mendoza, age 36, transported a minor from Ohio to Michigan in December 2009 with the purpose that the minor engage in commercial sexual activity, according to the court documents.
“This case is another stark reminder that human trafficking exists in our district and in our collective back yard,” Dettelbach said. “It’s a reminder that we need to be better neighbors and ask questions if something looks suspicious.”
Anthony said, “The sexual human trafficking of minors for profit is an injustice that will not be tolerated. The FBI continues to aggressively pursue and bring to justice those who violate the rights of our most vulnerable of the community.”
This case is being prosecuted by Assistant U.S. Attorney James V. Moroney, following an investigation by the Toledo Resident Agency of the FBI and the Northwest Ohio Violent Crimes Against Children Task Force. The task force is made up of members of the FBI, Toledo Police Department, Perrysburg Township Police Department, Lima Police Department, Oregon Police Department, Fulton County Sheriff’s Office, Ottawa County Sheriff’s Office, Ohio State Highway Patrol, and the Bureau of Criminal Investigation.
Three Defendants Charged in Manhattan Federal Court in Connection with $33 Million Art Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Shantelle P. Kitchen, the Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of a twelve-count Indictment charging JOSE CARLOS BERGANTINOS DIAZ, JESUS ANGEL BERGANTINOS DIAZ, and PEI SHEN QIAN with orchestrating a $33 million scheme to create and sell paintings that they pretended were painted by world-famous artists but were, in fact, created by QIAN. The Indictment further charges JOSE CARLOS BERGANTINOS DIAZ and JESUS ANGEL BERGANTINOS DIAZ with laundering the proceeds of the fraud, and charges JOSE CARLOS BERGANTINOS DIAZ with hiding international bank accounts and millions of dollars in illicit income from the IRS. QIAN is also charged with lying to FBI agents investigating the scheme. JESUS ANGEL BERGANTINOS DIAZ and JOSE CARLOS BERGANTINOS DIAZ were arrested on April 14, 2014, and April 18, 2014, respectively, in Spain, and QIAN is believed to be located in China. The case has been assigned to U.S. District Court Judge Sidney H. Stein.
Manhattan U.S. Attorney Preet Bharara said: “Today’s charges paint a picture of perpetual lies and greed. As alleged, the defendants tricked victims into paying more than $33 million for worthless paintings which they fabricated in the names of world-famous artists. The Bergantinos Diaz brothers then laundered and hid their illegal proceeds overseas. With today’s Indictment, the defendants must now answer for their alleged roles as modern masters of forgery and deceit.”
FBI Assistant Director-in-Charge Venizelos said: “As alleged, a meeting on a New York street corner would lead to a worldwide art fraud scheme that netted the defendants more than $33 million over two decades. The charges announced today show the many facets the conspirators went through to peddle fraudulent creations as famous artwork to be sold for a large profit. These charges also show the FBI’s commitment to investigate and bring to justice those who use fraud as a means to make money.”
IRS Special Agent-in-Charge Shantelle Kitchen said: “This indictment represents a significant accomplishment in the unravelling of a major international art fraud conspiracy with underlying complex financial criminal activity. The Internal Revenue Service has made international tax administration a top priority and this investigation illustrates the government's resolve in uncovering, investigating and prosecuting tax evasion and money laundering schemes with international implications. Furthermore, it reminds the public that the proceeds from illegal sales, in this case, the sale of counterfeit paintings, can be taxable.”
According to the allegations contained in the Indictment unsealed today in Manhattan federal court:
From the early 1990’s through at least June 2009, JOSE CARLOS BERGANTINOS DIAZ, JESUS ANGEL BERGANTINOS DIAZ, PEI SHEN QIAN, and Glafira Rosales engaged in a scheme to create and sell paintings that they pretended were painted by world-famous abstract expressionist artists, including Mark Rothko, Jackson Pollock, Willem de Kooning, Richard Diebenkorn, Robert Motherwell, Barnett Newman, Sam Francis, and Franz Kline, among others (the “Fake Works”). By knowingly and falsely claiming that the Fake Works were painted by these famous artists, JOSE CARLOS BERGANTINOS DIAZ, JESUS ANGEL BERGANTINOS DIAZ, QIAN, and Rosales were able to trick purchasers into paying tens of millions of dollars in total for many of the Fake Works which, as the defendants and Rosales well knew, were essentially worthless. In fact, the Fake Works were created by QIAN, with guidance from Rosales and the other defendants.
JOSE CARLOS BERGANTINOS DIAZ first met QIAN on a street corner in Manhattan, where QIAN was selling paintings. Thereafter, QIAN created the Fake Works at the request of, and in exchange for payments from, JOSE CARLOS BERGANTINOS DIAZ, JESUS ANGEL BERGANTINOS DIAZ, and Rosales.
JOSE CARLOS BERGANTINOS DIAZ purchased canvases of old paintings at flea markets, and stained newer canvases with tea bags, which he gave to QIAN to create the Fake Works, and thereby create the false appearance that the Fake Works had been created decades earlier. In addition, JOSE CARLOS BERGANTINOS DIAZ, JESUS ANGEL BERGANTINOS DIAZ, and Rosales created false provenances (i.e., historical ownership records) for particular Fake Works in order to dupe purchasers into believing that those Fake Works were painted by particular famous artists, instead of by QIAN. All told, the defendants earned more than $33 million from the scheme to create and sell the Fake Works.
Further, to conceal the illegal nature and origin of the proceeds from the scheme, JOSE CARLOS BERGANTINOS DIAZ, JESUS ANGEL BERGANTINOS DIAZ, and Rosales laundered the fraud proceeds by transferring them through foreign and domestic bank accounts that they controlled. JOSE CARLOS BERGANTINOS DIAZ also hid over $7 million of his illicit income from the IRS and knowingly failed to report the existence of his foreign bank accounts, as required by law.
Finally, during an interview with FBI agents investigating the scheme, QIAN falsely claimed, among other things, that he did not recognize Rosales’s name, that QIAN was unfamiliar with the names of certain artists (including artists whose names QIAN had repeatedly signed on paintings he created in order to trick purchasers into believing those artists had created the paintings), and that QIAN had never attempted to create paintings mimicking the style of certain abstract expressionist artists.
JOSE CARLOS BERGANTINOS DIAZ, 58, of Sands Point, New York, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, one count of conspiracy to commit money laundering, and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. He is also charged with one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison, three counts of filing false tax returns, each of which carries a maximum sentence of three years in prison, and four counts of willful failure to file a Report of Foreign Bank and Financial Accounts, each of which carries a maximum sentence of five years in prison.
JESUS ANGEL BERGANTINOS DIAZ, 65, of Lugo, Spain, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, one count of conspiracy to commit money laundering, and one count of money laundering.
PEI SHEN QIAN, 75, of Queens, New York, is charged with one count of conspiracy to commit wire fraud and one count of wire fraud. He is also charged with one count of making false statements to agents of the FBI, which carries a maximum of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Rosales was previously charged in Indictment 13 Cr. 518. On September 16, 2013, Rosales pled guilty to all nine counts of the Indictment. Rosales awaits sentencing before the U.S. District Judge Katherine P. Failla.
Mr. Bharara praised the outstanding efforts of the FBI and IRS-CI in the investigation, which he noted is ongoing.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Jason P. Hernandez and Stanley J. Okula, Jr., are in charge of the prosecution.
The charges and allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Bergantinos Diaz, et al. Indictment
Three Counterfeiters ChargedRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that two individuals from Chugiak, Alaska, and a third from Anchorage, Alaska, have been charged in two separate indictments with multiple counts of passing counterfeit money. Two of the defendants are also charged with conspiring to make and pass counterfeit money.
Eugene David Downey, Jr., 42, of Anchorage, Alaska, is charged in a four-count indictment as the sole defendant passing counterfeit money at several stores in the Anchorage area.
Matthew Lee Daley, 28, of Chugiak, Alaska, is charged in a seven-count indictment together with Christa Louise Speiser, 30, also of Chugiak, who is charged in four of the seven counts with making and passing counterfeit money in the Eagle River area, and also for conspiring together to do so.
According to the indictment, between August and November 2013, Downey passed several counterfeit $50 bills at stores in the Anchorage area.
The indictment against Daley and Speiser charges that on November 7, 2013, the two passed several counterfeit $100 bills at stores in the Eagle River area. Daley and Speiser are charged with making the counterfeit money using a computer and laptop at their residence, and conspiring to make and pass counterfeit money.
In both cases the counterfeit money was made of genuine Federal Reserve Notes, $1 and $5 bills, that were bleached and reprinted with $50 and $100 bills. The cases do not appear to be related.
Downey is currently in state custody. Daley was arrested on these charges on Friday, and an arrest warrant has been issued for Speiser.
“Each year hundreds of counterfeit bills are passed in Anchorage causing financial hardship to those who unwittingly accept them as payment. Counterfeiting is a serious crime, and it is important that we deter those who would consider creating or using fake currency,” stated Kevin Feldis, Chief of the Criminal Division at the U.S. Attorney’s Office.
The law provides for a maximum total sentence of 20 years in prison and a fine of $250,000 or both, according to Aunnie Steward, Assistant U.S. Attorney, who presented the case to the grand jury. Under federal sentencing statutes, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The United States Secret Service and the Anchorage Police Department conducted the investigation leading to the indictments in these cases.Ten Defendants Charged in Separate Federal Cases Alleging A Total of More Than $1.27 Million in Social Security FraudRead the Press Release
CHICAGO ― Ten Chicago and area defendants were charged in separate federal criminal cases with stealing a total of more than $1.27 million from the federal government by fraudulently obtaining Social Security benefits. Six of the defendants allegedly engaged in the fraud by using false identities. These individuals either applied for Social Security benefits under multiple names or worked under one name and applied for benefits using another name, according to the charges. Other defendants allegedly continued to receive benefits from the account of a beneficiary who they knew was deceased and no longer entitled to receive payments. The cases were announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and William Cotter, Special Agent-in-Charge of the Chicago Office of the Social Security Administration Office of Inspector General.
In the false identity cases, the charges allege that those six defendants obtained Social Security benefits by claiming they were disabled or otherwise unable to maintain employment while simultaneously working and earning wages using a different identity.
SSA administers the payment of benefits from the United States to qualified individuals under various programs, including the Old-Age and Survivors Insurance (OASI) program, the disability insurance program, and the supplemental security income program (SSI). The OASI program provides monthly cash benefits to retired individuals and to the surviving family members of individuals who had worked and were insured under the Social Security Act based on contributions from earnings. The SSI program provides monthly cash benefits to aged, disabled, and blind individuals who have assets and income levels that fall below certain levels.
The criminal cases were filed this month in U.S. District Court in Chicago. Eight defendants were indicted by a federal grand jury and two were charged in criminal informations, each on one felony count of theft of government funds. Seven defendants pleaded not guilty at their arraignments in U.S. District Court and the remaining three are scheduled to be arraigned this week.
“Stealing from the Social Security trust fund hurts the millions of hardworking Americans who contribute to the Social Security system,” Mr. Fardon said. “We will vigorously pursue those who abuse the system, so that we can protect those who legitimately need it.”
Each defendant faces a maximum penalty of 10 years in prison and a $250,000 fine. If convicted, restitution is mandatory and the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. The public is reminded that indictments and informations contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The defendant and the total fraud amount alleged in each case follow:
DAVID BAILOG, also known as “David Conti” and “David Bailey,” 45, of Chicago
Loss amount: $43,422
(Assistant U.S. Attorney Christopher Parente)SHARIA BRYANT, a/k/a “Sharia Bailey,” 64, of Chicago
Loss amount: $69,241
(Special Assistant U.S. Attorney Bill Thomas)IMOGENE DAVIS, a/k/a “Imogene Neely,” 63, of Chicago
Loss amount: $91,566
(AUSA Timothy Storino)RONNIE DAVIS, a/k/a “Ronnie Wofford,” 67, of Chicago
Loss amount: $101,872
(AUSA Derek Owens)SHERRI MARSHALL, a/k/a “Sherri Williams,” 49, of Chicago
Loss amount: $43,189
(AUSA Kelly Greening)PATRICIA McQUEEN, 58, of Chicago
Loss amount: $203,505
(SAUSA Thomas)BETSY MINOR, 63, of Oak Lawn
Loss amount: $369,188
(SAUSA Thomas)SIMONIA PATTERSON, 39, of Chicago
Loss amount: $130,929
(SAUSA Thomas)LEIN SCOTT, a/k/a “Barry Scott,” 64, of Chicago
Loss amount: $126,919
(AUSA Ryan Fayhee)SHIRLEY SIMMONS, 50, of Chicago
Loss amount: $95,247
(SAUSA Thomas)Sex Offender Sentenced to Federal Prison, Baltimore Men Guilty of Heroin ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A sex offender from Ohio has been sentenced to federal prison for failing to register as required by law.
U.S. Attorney William J. Ihlenfeld, II, announced that CHARLES F. WADDELL, age 37, of Coal Grove, Ohio, was sentenced to 30 months in prison and 40 years of supervised release for “Failure to Register as a Sex Offender.” Judge Gina M. Groh imposed the sentence. WADDELL is in custody pending his designation to a Federal prison. This case was prosecuted by Assistant U.S. Attorney Andrew R. Cogar and investigated by the United States Marshals Service.
In other matters before Judge Groh, MICHELLE BROWN, age 35, of Martinsburg, was sentenced to 57 months in prison and three years of supervised release for the “Distribution of Crack Cocaine.” BROWN, who is free on bond, will self-report to Federal prison. The case was prosecuted by Assistant U.S. Attorney David J. Perri and investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, the Berkeley County Sheriff’s Department, and the Jefferson County Sheriff’s Department.
Judge Groh sentenced STACEY L. WILLIAMSON, age 48, of Flintstone, Maryland, to two years of probation and ordered her to make restitution in the amount of $1,737.49 to the United States Postal Service. WILLIAMSON was previously convicted of the felony offense of “Theft of Government Funds.” This case was prosecuted by Assistant U.S. Attorney Jarod J. Douglas and investigated by the United States Postal Inspection Service.
The following individuals entered pleas before U.S. Magistrate Judge James E. Seibert:
Keyyon Robert Cornish JOHNSON, age 24; Sean Tavon STOGDON, age 23; Marquese Tavon WARD, age 23; and Marcel EDMONDS, age 23, all of Baltimore, Maryland, entered pleas of guilty to “Possession with Intent to Distribute Heroin.” JOHNSON and STOGDON, who are free on bond, and WARD and EDMONDS, who are in custody, each face up to 20 years in prison.
Darnell Leon PLAINES, age 24, of Martinsburg, entered a plea of guilty to “Conspiracy to Distribute More than 28 Grams of Crack Cocaine.” As part of his plea, PLAINES will forfeit $3,612 which constitutes proceeds from the illegal activity. PLAINES, who is in custody pending sentencing, faces up to 40 years in prison.
Nicholas James HALL, age 23, of Martinsburg, entered a plea of guilty to “Possession with Intent to Distribute Heroin.” HALL, who has a prior felony drug conviction, faces up to 30 years in prison.
Timico Constine JOHNSON, age 44 and Kenneth An’Bon WANG, age 28, of Martinsburg entered pleas of guilty to “Distribution of Crack Cocaine.” JOHNSON and WANG each face up to 20 years in prison.
These cases were also investigated by the Eastern Panhandle Drug & Violent Crime Task Force, and prosecuted by Douglas.
Shannon Marie BROADWATER, age 32, of Piedmont, West Virginia, entered a plea of guilty to “Illegal Use of the Internet to Facilitate the Distribution of Crack Cocaine.” As part of her plea, BROADWATER will also forfeit her interest in $3,968 which constitutes proceeds from the illegal activity. BROADWATER, who is free on bond pending sentencing, faces up to 4 years in prison. This case was investigated by the Potomac Highlands Drug & Violent Crime Task Force, consisting of officers from the Federal Bureau of Investigation, and the West Virginia State Police - Bureau of Criminal Investigations.Seven Convicted in Firearms Trafficking ConspiracyRead the Press Release
CORPUS CHRISTI, Texas - Seven Houston residents have pleaded guilty for their roles in a conspiracy to traffic dozens of AK-47 variant rifles from the Houston area to Mexico, announced United States Attorney Kenneth Magidson along with Robert Elder, special agent in charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Today, Javier Resendez, 29, entered a guilty plea before U.S. Magistrate Judge Janice Ellington. Abel Lopez, 34, Arturo Garcia, 30, Roberto Santana Mears, 22, Mary Bel Deanda, 39, Martha Gonzales, 41, and Angel Aquino-Pineda, 27, previously pleaded guilty at varying times before U.S. Magistrate Judges Ellington and Jason Libby.
“These convictions are examples of ATF’s continuing effort to stop the illegal flow of firearms to the hands of violent offenders, said Elder. “This is a continuation of ATF’s Frontline initiative working with our state and local partners in the fight against violent crime.”
In 2013, the Kingsville Specialized Crimes and Narcotics Task Force conducted a traffic stop on a truck driven by Aquino-Pineda in Kingsville and located 35 AK-47 variant rifles and $26,000 concealed in a false compartment. Seven of the rifles had obliterated serial numbers. Aquino-Pineda admitted his role was to transport the firearms from Houston to McAllen. The firearms would then be transported to Mexico.
ATF agents traced the firearms to Houston purchasers Deanda, Gonzales and Mears, who admitted they were “straw purchasers” for Resendez. Resendez indicated Garcia recruited him to purchase firearms for Lopez and that the firearms would be taken to Mexico. Resendez then recruited Deanda and Gonzales to “straw purchase” the firearms on his behalf. Mears admitted he was also a “straw purchaser” for Lopez.
On Jan. 24, 2014, agents executed a warrant at Lopez’s residence and located two Norinco, Model MAK90, 7,62x39mm AK-47 style rifles; one Baretta, Model 3032, Tomcat .32 caliber pistol; and $955. Lopez told agents that Garcia and Mears had purchased several firearms for him and that the firearms were to be sent to Mexico.
Lopez, Garcia, Deanda, Gonzalez and Mears are set for sentencing July 11, 2014, before U.S. District Judge Nelva Gonzales Ramos. Judge Ramos will sentence Resendez July 18, 2014. Aquino-Pineda, charged and convicted in a separate, but related indictment, is set for sentencing before U.S. District Judge Hayden Head June 12, 2014.
All defendants face up to five years in federal prison as well as a possible $250,000 fine. Resendez also pleaded to being a felon in possession of a firearm and Lopez also pleaded guilty to being an illegal alien in possession of a firearm. Both will also face an additional 10 years and another possible $250,000 fine for these convictions.
Mears, Deanda, Gonzales remain on bond. The others have been in federal custody since their arrest and will remain in custody pending their sentencing hearings.
ATF investigated with the assistance of the Kingsville Specialized Crimes and Narcotics Task Force. Assistant U.S. Attorneys Hugo R. Martinez and Jeffery D. Preston are prosecuting the case.
Seevers Pleads Guilty to Attempted Murder and Aggravated Sexual Abuse by ForceRead the Press Release
KNOXVILLE, Tenn. - William E. Seevers, 48, appeared in U.S. District Court on Apr. 21, 2014, and pleaded guilty to one count of attempted murder and one count of aggravated sexual abuse by force. Sentencing has been set for 2:00 p.m., Aug. 21, 2014, before the Honorable Thomas Varlan, U.S. District Court Judge.
A federal grand jury returned an indictment against Seevers in December 2013 alleging that in June 2012 Seevers attempted to kill an individual in the Great Smoky Mountains National Park by stabbing her in the neck with a knife. Additionally, Seevers engaged in sexual activity with the individual by use of force and placing her in fear of death by holding her at knife point and stabbing and punching her when she attempted to flee from him.
This investigation was conducted by the National Park Service and Federal Bureau of Investigation. Assistant U.S. Attorney Jennifer Kolman represents the United States.
Repeat Offender Pleads Guilty to Trafficking MethamphetamineRead the Press Release
Charleston Man Caught with Pills, Heroin, Crack, Guns and Ammunition
CHARLESTON, W.Va. – A Charleston man with several drug trafficking and violent felony convictions who possessed oxycodone, heroin, methamphetamine, cocaine base (crack) and numerous firearms pleaded guilty today to a federal drug charge, announced U.S. Attorney Booth Goodwin. Donnell Dwayne Diego, 35, pleaded guilty to conspiracy to distribute methamphetamine in federal court in Charleston.
In October of 2012 police searched Diego’s residence on Central Avenue in Charleston and seized oxycodone, crack, and two firearms. In June and July of 2013, Diego sold methamphetamine near his residence to an informant. Police arrested Diego after one undercover drug purchase on July 11, 2013. Following the arrest, police again searched the residence and seized more than 50 grams of methamphetamine, more than 50 grams of heroin, ammunition, and in excess of $9,000.00 cash. Diego admitted bringing methamphetamine and heroin from California to sell in and around Charleston.
On November 5, 2013, task force officers at the San Diego International Airport in San Diego, California seized $22,350.00 cash from Diego’s carryon bag as he disembarked from his flight. On November 18, 2013, task force officers in Nicholas County, West Virginia executed a search warrant at Diego’s Scenic Highway residence in Summersville following several undercover methamphetamine purchases from an individual staying at the residence. Police seized fifteen firearms, more than 30 grams of methamphetamine, nearly 10 grams of heroin, and $16,387 cash. Diego was arrested a short distance away from the residence after a police tactical squad disabled his vehicle by shooting it.
Diego had been previously convicted of several felony offenses in California including burglary and grand theft in 2003 and drug trafficking in 2004 and 2007. He faces up to 30 years in federal prison when he is sentenced on August 7, 2014.
The Metropolitan Drug Enforcement Network Team (MDENT) in Charleston, the Central West Virginia Drug Task Force in Summersville, the San Diego Integrated Narcotic Task Force in San Diego, California and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney Joshua Hanks is in charge of the prosecution.
Philadelphia Man Convicted of Sex TraffickingRead the Press Release
PHILADELPHIA – A federal jury, today, returned guilty verdicts against Rahim McIntyre, 34, of Philadelphia, PA, who was charged with three counts of sex trafficking. McIntyre, a/k/a “King Kobra,” caused Internet advertisements to be created in which he advertised various females as available for purchase for purposes of prostitution. The advertisements featured pictures of the females, scantily clad, a description of each female, and a phone number to call to arrange a meeting with a female employed by McIntyre as a prostitute. McIntyre was convicted of using force and coercion to cause the women to engage in prostitution.
A sentencing hearing is scheduled for July 21, 2014. The defendant faces a maximum possible sentence of life imprisonment, with a minimum mandatory of 15 years, a $750,000 fine, five years up to a lifetime of supervised release and a $300 special assessment.
McIntyre’s brother, Rashaad McIntyre, was charged in December 2012 with sex trafficking of minors and production of child pornography. He pleaded guilty and is awaiting sentencing.
The case was investigated by the Federal Bureau of Investigation, with assistance from the Pennsylvania State Police Criminal Intelligence Center, and the Philadelphia First Judicial Court Warrant Unit. It is being prosecuted by Assistant United States Attorney Michelle Morgan.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Ohio Woman Pleads Guilty to Stealing $150,000 in Federal Hud FundsRead the Press Release
Huntington, W.Va. – Connie Lynn Whitley, 51, of South Point, Ohio, plead guilty today to embezzling $150,000 from an apartment complex that received federal funds announced U.S. Attorney Booth Goodwin. Whitley was the manager of the Uptowner Inn’s public housing apartments in Huntington, West Virginia. The apartments were subsidized by the United States Department for Housing and Urban Development (HUD). HUD provided federal funds to pay a portion of the market rent at the apartments for qualifying tenants. Beginning in the summer of 2009 and continuing until September of 2013, Whitley wrote checks to herself from the apartments’ HUD accounts. In total, Whitley stole more than $150,000 in federal HUD funds. She faces a maximum penalty of up to ten years in prison when she is sentenced on July 28, 2014.
The West Virginia State Police conducted the investigation assisted by the Federal Bureau of Investigation and Department for Housing and Urban Development.
Ogdensburg Orthodontist Sentenced to 97 Months Imprisonment for Attempting to Defraud the Irs Out of $36 Million DollarsRead the Press Release
ALBANY, NEW YORK – GLENN RICHARD UNGER, 62, of Ogdensburg, New York, was sentenced to 97 months imprisonment by Senior U.S. District Judge Thomas J. McAvoy, and ordered to pay $200,000 in restitution, announced Richard S. Hartunian, United States Attorney, Northern District of New York, and Kathryn Keneally, Assistant Attorney General of the Tax Division. On October 21, 2013, a U.S. District Court jury convicted UNGER of the following offenses: obstructing and impeding the Internal Revenue Service (IRS); filing false claims against the United States; tax evasion; and passing fictitious obligations.
The evidence at trial showed that:
• UNGER, a former orthodontist, engaged in a multi-year scheme to obstruct and impede the IRS by filing numerous false and fraudulent claims with the IRS for payment of a refund of taxes totaling approximately 36 million dollars. Between 2007 and 2011, UNGER filed 14 false tax returns claiming that he earned substantial income reported on IRS Forms 1099-OID, had substantial withholdings on that income, and was entitled to 36 million dollars in tax refunds. Despite numerous warning letters from the IRS that his returns were frivolous, he continued filing false tax returns.
• UNGER also attempted to evade payment of taxes he owed to the IRS. During 2004 and 2005, UNGER earned income and failed to file tax returns reporting that income. The IRS assessed taxes for those two years and also assessed penalties for filing frivolous tax returns. After the IRS filed a tax lien against UNGER, he attempted to file a false document with the Saratoga County Clerk’s office attempting to release the lien.
• UNGER also attempted to pay off a debt to another orthodontist with a fictitious document purported to be worth $200,000.
United States Attorney Hartunian said, "This lengthy prison sentence shows that tax defiers like Unger who use bogus tax schemes and pay debts with fictitious documents will be punished for their crimes. No one can set himself above the law for personal financial gain."
“Those who commit tax fraud by filing false and frivolous tax returns or failing to pay taxes risk criminal prosecution resulting in prison,” said Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division. “This sentence serves as one more example that tax defier conduct may result in severe repercussions, including imprisonment, restitution orders and fines.”
This prosecution resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigation, New York Field Office, the Federal Bureau of Investigation, Albany Field Office, the New York State Police, and the Treasury Inspector General for Tax Administration. The case was prosecuted by Assistant United States Attorney Ransom P. Reynolds (NDNY) and Jeffrey Bender (DOJ Tax Division).
Newport News Man Pleads Guilty to Drug ConspiracyRead the Press Release
NEWPORT NEWS, Va. – Salvatore Lopiccolo, age 35 of Newport News Va., pleaded guilty today to Conspiracy to Distribute Analogues, Cocaine, Cocaine Base, Methylone, Marijuana, Psilocybin and drug paraphernalia.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by United States District Judge Magistrate Judge Douglas Miller in Newport News.
Lopiccolo was indicted by a federal grand jury on November 14, 2013. He faces a maximum penalty of 20 years imprisonment and a fine of $1,000,000 when he is sentenced on July 24, 2014 in Norfolk, VA.
In a statement of facts filed with the plea agreement, the defendant was responsible for conspiring with others to distribute and possess with intent to distribute a variety of drugs and drug analogues from Bonsai Pipe and Tobacco. Multiple controlled purchases of cocaine, crack cocaine, marijuana, methylone, psilocybin, drug analogues and drug paraphernalia were made from Bonsai, the defendant and Bonsai employees.
This case was investigated by Homeland Security Investigations, the Internal Revenue Service – Criminal Investigations, the United States Postal Inspection Service, the Virginia State Police Tri-Rivers and Peninsula Task Forces the United States Air Force Office of Special Investigations and the York County Sheriff’s Office. Assistant United States Attorney Eric M. Hurt is 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.Naples Man Sentenced to More Than 12 Years for Armed Robbery of Florida Community BankRead the Press Release
Fort Myers, Florida – U.S. District Judge John E. Steele today sentenced Marikevies McNichols (29, Naples) to 12 years and 10 months in federal prison for an armed bank robbery of the Florida Community Bank located at 5240 Golden Gate Parkway, in Naples, Florida, on November 28, 2012. McNichols’ co-defendant, Doodley Nazaire (24), also of Naples, received an identical sentence on September 30, 2013. Nazaire was arrested on November 29, 2012. McNichols was subsequently arrested on June 12, 2013.
Both men were originally indicted on January 23, 2013. Nazaire pleaded guilty to the offense in June 2013. McNichols pleaded guilty on January 8, 2014.According to court documents, on November 28, 2012, at approximately 7:54 AM, McNichols and Nazaire robbed the Florida Community Bank on Golden Gate Parkway, as the bank was preparing to open. Nazaire and McNichols forced their way into the bank and held two bank employees at gunpoint, while they robbed the bank. Nazaire and McNichols ordered the bank employees to give them money from different locations within the bank, while Nazaire kept the employees at gunpoint. After the money was gathered, as directed by McNichols and Nazaire, the employees were ordered into an office and directed to lie on the floor. McNichols and Nazaire fled the bank with a sum of money, attempted to bury the money nearby, and continued their flight. Law enforcement later located and recovered the majority of the money, where it had been partially buried.
This case was investigated by Federal Bureau of Investigation and the Collier County Sheriff’s Office. It was prosecuted by Assistant United States Attorney David G. Lazarus.