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5 June 2014
Bank Manager Admits Stealing Tens of Thousands of Dollars from J.P. Morgan ChaseRead the Press Release
San Diego bank manager Mark Masiglat pleaded guilty in federal court today, admitting that he secretly siphoned $36,000 from J.P. Morgan Chase’s general ledger through dozens of unauthorized cash withdrawals.
In entering his plea, Masiglat acknowledged that he embezzled the funds between January 2011 and August 2012, while employed as the Assistant Branch Manager at a J.P. Morgan Chase branch in Point Loma. The bank’s deposits are insured by the Federal Deposit Insurance Corporation.
“Corrupt bankers cannot be allowed to treat federally-insured accounts as their own personal piggy bank,” said U.S. Attorney Laura Duffy. “My office will not tolerate abuse of the public’s trust in our financial institutions. I want to thank the FBI for its commitment to ensuring the integrity of our local banks.”
Masiglat is scheduled to be sentenced by Judge Battaglia on August 22, 2014 at 9:00 a.m.
DEFENDANT Mark Masiglat CHARGESEmbezzlement by a Bank Employee – Title 18, U.S.C., Section 656
INVESTIGATING AGENCY
Maximum penalty: 30 years’ imprisonment and $1 million fineFederal Bureau of Investigation
*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Baltimore Man Sentenced to 17 Years in Prison for Armed Robbery SpreeRead the Press Release
Committed 22 Armed Robberies of Stores and Businesses
Baltimore, Maryland - U.S. District Judge Marvin J. Garbis sentenced Quindell Ryeshawn Gardner, age 22, of Baltimore, Maryland today to 17 years in prison, followed by five years of supervised release, for a commercial robbery conspiracy and possession of a firearm in furtherance of a crime of violence. Judge Garbis also ordered Gardner to pay restitution of $4,291.
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; Chief James W. Johnson of the Baltimore County Police Department; and Anne Arundel County Police Chief Kevin Davis.
According to his plea agreement, Gardner, Tavon McPhaul and others robbed stores in the Baltimore area. After deciding which place to rob, the conspirators would steal a car to use during the robbery. They also used a gun during the robberies to steal cash and cigarettes.
Gardner admitted that he committed approximately 22 armed robberies and co-conspirator McPhaul participated in 12 of those robberies, with Gardner going into the store to commit the robbery and McPhaul driving the getaway vehicle. Between June 28 and July 4, 2012, Gardner and McPhaul robbed five Baltimore area convenience stores, including a convenience store in the 6300 block of Eastern Avenue in Baltimore on July 4, 2012. Gardner used a short-barreled shotgun in each of the robberies.
Gardner was arrested following two convenience store robberies on July 4, 2012, after a car chase. Gardner’s clothing matched that of the individual who participated in both robberies that day. McPhaul, who was driving the getaway car, escaped on foot. While running, McPhaul attempted to wipe the firearm clean with a blanket. A sawed-off shotgun was recovered along the path of McPhaul’s escape. The vehicle driven by McPhaul during the robbery was found to be stolen.
Tavon McPhaul, also age 22, of Baltimore, previously pleaded guilty to the same charge and was sentenced to 145 months in prison and was also ordered to pay restitution of $4,291.
United States Attorney Rod J. Rosenstein praised the FBI, the Baltimore City and Baltimore County Police Departments and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Benjamin M. Block, who prosecuted the case.
Bakersfield Owner of Catholic Website Indicted for Tax EvasionRead the Press Release
FRESNO, Calif. — The owner of a Catholic-interest news and information website was arrested at his home in Bakersfield this morning charged with tax evasion, United States Attorney Benjamin B. Wagner announced. A federal grand jury brought the four-count indictment last week, and it was unsealed today after the arrest.
Michael Galloway, 59, of Bakersfield, owns and operates the website for Catholic Online. According to court documents, Galloway generated revenue by selling advertising and hosting to faith-based businesses.
For tax years 2003 through 2006, the indictment alleges that Galloway improperly deducted personal expenses as business expenses, including his homeowner’s association fees for his personal residence, car payments and insurance, utilities and cable service for his personal residence, department store credit card bills, tile work, and personal legal fees. In addition, Galloway deducted payroll expenses for his employees including federal and FICA withholdings, but kept the withholdings and failed to remit them to the IRS.
For the four charged years, Galloway reported an income of $13,241 (2003); $28,846 (2004); -$60,438 (2005); and -$37,438 (2006), yet paid personal bills during those years of $167,318 (2003); $170,004 (2004); $135,941 (2005); and $178,458 (2006). Cumulatively, the indictment alleges that he underreported his and his spouse’s taxable income during those years by $1,006,167, resulting in an additional tax due and owing of $234,473. The indictment also alleges that he made false statements to IRS agents in 2010 when they interviewed him about his income, in an attempt to evade assessment of income taxes.
Galloway was arraigned in federal court in Bakersfield this afternoon. He pleaded not guilty and was released on his own recognizance. His next court appearance will be in federal court in Fresno on June 23, 2014 at 1:00 p.m.
This case is the product of an investigation by IRS Criminal Investigation. Assistant United States Attorney Megan A. S. Richards is prosecuting the case.
If convicted, Michael Galloway faces a maximum statutory penalty of five years in prison on each count and a $100,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Authorities Make Arrests in Connection with Odessa-Based Methamphetamine Distribution OperationRead the Press Release
Federal, state and local authorities have arrested 29 individuals--24 who face federal and five who face state charges--in connection with an Odessa-based methamphetamine distribution operation announced United States Attorney Robert Pitman, Drug Enforcement Administration Special Agent in Charge Will Glaspy and Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist. Authorities are still searching for nine defendants charged in connection with this methamphetamine distribution operation. A list of federal defendants is below.
On May 28, 2014, a federal grand jury in Midland returned 14 sealed indictments charging 22 of those arrested with conspiracy to possess with intent to distribute methamphetamine. Seven of the indicted defendants--Fuller, Rendon, Harless, Crosson, Merritt, Powell and Daniels--are also charged with one substantive count of possession with intent to distribute methamphetamine. Those indictments were unsealed earlier today. In addition, defendants Smith, Simes and Tolbert, who were already in custody prior to today, were indicted by the federal grand jury prior to last month for possession with intent to distribute a controlled substance.
Authorities allege that under the direction of ringleader 41–year-old Shawn Allen Niece of Odessa, the defendants participated in a methamphetamine distribution scheme since September 2013 that included the supply of methamphetamine from San Diego, CA; Las Vegas, NV; and, Dallas, TX, to Niece and others in Odessa for distribution throughout the Permian Basin.
In addition to the indicted defendants, authorities arrested six other individuals this morning—one charged by a federal criminal complaint for possession with intent to distribute “crack” cocaine; the other five were arrested based on state parole violations or outstanding warrants.
During this investigation, authorities seized over eleven pounds of methamphetamine, several firearms, over $62,000 in United States Currency and other assets.
“Methamphetamine is a destructive poison that has horrific consequences to the quality of life in any community,” said Drug Enforcement Administration Special Agent in Charge Will Glaspy. “Together with our local and federal law enforcement partners, DEA is holding meth traffickers accountable. We are seizing their profits, shutting down their distribution networks, and putting these dealers where they belong, behind bars.”
Upon conviction, the defendants face between ten years and life in federal prison; between five and 40 years in federal prison; or, up to 20 years in federal prison.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are innocent unless proven guilty in a court of law.
This case resulted from a joint Organized Crime Drug Enforcement Task Force (OCDETF) investigation conducted by the Drug Enforcement Administration, Federal Bureau of Investigation, Homeland Security Investigations (HSI) and the U.S. Marshals Service together with the Ector County Sheriff’s Office, Midland County Sheriff’s Office, Midland Police Department, Odessa Police Department, and the Texas Department of Public Safety. Assistant United States Attorney V. LaTawn Warsaw is prosecuting this case on behalf of the Government.
DEFENDANTS ARRESTED TODAY (16)
NAME AGE RESIDENCE STATUTORY PENALTY
Jonathan Leelind Hensley (aka GG) 26 Las Vegas, NV 10 years to life imprisonment
Shawn Allen Niece 41 Odessa, TX 10 years to life imprisonment
Shonda Tennille Crosson 37 Odessa, TX From 5 to 40 years in prison
Christina Gayle Collier 26 Odessa, TX From 5 to 40 years in prison
Jarrett Tate Fuller 34 Amarillo, TX Up to 20 years imprisonment
Jason Mac Rendon 37 Amarillo, TX Up to 20 years imprisonment
David Lane McGill (aka Doughboy) 31 Odessa, TX Up to 20 years imprisonment
Dustin Alan Richey 23 Odessa, TX Up to 20 years imprisonment
Sean David Luna 34 Odessa, TX 10 years to life imprisonment
Gabriel Coca 22 Odessa, TX 10 years to life imprisonment
Annette Jessica Brown 31 Odessa, TX 10 years to life imprisonment
Manuel Urbina 35 Odessa, TX From 5 to 40 years in prison
Cristopher Jedidiah Perdue 29 Odessa, TX From 5 to 40 years in prison
Erica Marie Mitchell 33 Odessa, TX From 5 to 40 years in prison
Brandy Leeann Zaliauskas 39 Midland, TX Up to 20 years imprisonment
(aka Brandy Leeann Carson)
** Charles Eugene Anderson, Jr. 30 Odessa, TX Up to 20 years imprisonmentALREADY IN CUSTODY PRIOR TO TODAY (8)
NAME AGE RESIDENCE STATUTORY PENALTY
Michael James Brewer (aka Levi) 43 Odessa, TX 10 years to life imprisonment
Phillip Ray Powell 24 Odessa, TX From 5 to 40 years in prison
Joseph Ray Collier 33 Odessa, TX Up to 20 years imprisonment
Trey Matthew Lopez 23 Odessa, TX 10 years to life imprisonment
Raymond Earl Mims 43 Odessa, TX Up to 20 years imprisonment
Clyde Smith, Jr. 54 Odessa, TX From 5 to 40 years in prison
Walter Simes 31 Odessa, TX From 5 to 40 years in prison
Cheryl Tolbert 34 Odessa, TX From 5 to 40 years in prisonFUGITIVES (9)
NAME AGE RESIDENCE STATUTORY PENALTY
***J. Weslee Dan Harless 36 Odessa, TX Up to 20 years imprisonment
***Joshua Lynn Merritt 32 Odessa, TX From 5 to 40 years in prison
***Angelee Danielle Daniels 32 Odessa, TX From 5 to 40 years in prison
***Dylan James Holloway 22 Odessa, TX Up to 20 years imprisonment
***Kaycie Ray Lewis 27 Odessa, TX Up to 20 years imprisonment
Omar Addimm Hensley 23 Las Vegas, NV 10 years to life imprisonment
James Louis Crutcher (aka Seven) 28 San Diego, CA 10 years to life imprisonment
Abrea Ebony Ponce 20 San Diego, CA 10 years to life imprisonment
Dionna Nadine Horton 23 San Diego, CA 10 years to life imprisonmentCharles Anderson was arrested this morning and charged by criminal complaint with possession with intent to distribute “crack” cocaine.
*** Defendants have since been apprehended and are no longer considered fugitives.
Aubrey Lee Price, Former Bank Director Who Faked His Own Death, Pleads Guilty to Bank, Wire and Securities FraudRead the Press Release
STATESBORO, GA – Earlier today, Aubrey Lee Price, 47, pleaded guilty to bank, securities and wire fraud to resolve charges brought in the Southern District of Georgia and the Eastern District of New York relating to a multi-million dollar fraud scheme that Price executed to defraud dozens of investors and a federally insured bank. Based upon his guilty pleas, Price now faces up to 30 years in prison, millions of dollars in fines, and millions of dollars in restitution to the victims of his fraud. Today’s guilty plea took place before the Honorable B. Avant Edenfield, Senior United States District Judge for the Southern District of Georgia.
Southern District of Georgia United States Attorney Edward J. Tarver and Eastern District of New York United States Attorney Loretta E. Lynch announced the guilty pleas.
According to court filings and evidence presented at the guilty plea hearing, in 2010, an investment group controlled by Price invested approximately $10 million in the failing Montgomery Bank & Trust (“MB&T”), an FDIC-insured financial institution in Ailey, Georgia. Price was then made a director of MB&T and put in charge of investing the bank’s capital. Price told MB&T officials that he would invest the bank’s capital in U. S. Treasury securities, but instead, over the next eighteen months, Price embezzled over $21 million in capital from MB&T, and lost much of it by investing in risky equity securities and options. To cover up his fraud, Price provided MB&T officials with bogus account statements and other false documents which falsely indicated the bank’s capital was safely held in an account at a financial services firm, when in truth, most of the money was gone.A further investigation of Price revealed that between June 2009 and June 2012, Price also defrauded numerous individuals who had invested in two investment funds Price managed, PFG LLC (“PFG”) and the Montgomery Growth Fund (“Montgomery Growth”). Price raised approximately $51 million from approximately 115 investors from across the country, and unsuccessfully invested funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price posted fake account statements on a secure PFG web site that fraudulently reflected fictitious assets and fabricated investment returns.
In mid-June 2012, Price sent acquaintances “suicide letters” in which he admitted he had defrauded MB&T Bank and his PFG investors, and suggested that he planned to kill himself by throwing himself off a high-speed ferry boat after it left the coast of Florida. As a result of the suicide claim, the United States Coast Guard searched to no avail for Price’s body. Shortly after sending the letters, Price disappeared. After a several-month search, on December 31, 2013, Price was arrested after he presented a false identification to a member of the Glynn County Georgia Sheriff’s Department office during a routine traffic stop in Brunswick, Georgia.
U. S. Attorneys Tarver and Lynch credited the Federal Bureau of Investigation (FBI) in Georgia, under the direction of Special Agent in Charge Britt Johnson, and in New York, under the direction of Assistant Director in Charge George Venizelos, with the investigation leading to today’s guilty pleas. They also thanked the United States Attorney’s Office for the Southern District of Florida; the United States Attorney’s Office for the Northern District of Georgia; the Securities and Exchange Commission (SEC), Atlanta Regional Office; the Federal Deposit Insurance Corporation (FDIC); the Federal Reserve Board; the Office of Inspector General; the United States Coast Guard; the United States Department of Labor; the Lowndes County Georgia Sheriff’s Department; the Glynn County Georgia Sheriff’s Department; the Toombs County Georgia Sheriff’s Department; and the Marion County Florida Sheriff’s Department for their cooperation and assistance in the investigation and prosecution of Price.
The Government is represented by Assistant United States Attorneys Brian T. Rafferty, T. Shane Mayes, and First Assistant United States Attorney James D. Durham of the U. S. Attorney’s Office for the Southern District of Georgia, and Assistant United States Attorneys Shannon C. Jones and Brian Morris of the U. S. Attorney’s Office for the Eastern District of New York.
This prosecution was the result of efforts by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U. S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.The Defendant: AUBREY LEE PRICE
Age: 47
Valdosta, GeorgiaS.D.G.A. Docket No. 612-CR-10
E.D.N.Y. Docket No. 13-CR-058Aubrey Lee Price, Former Bank Director Who Faked His Own Death, Pleads Guilty to Bank, Wire and Securities FraudRead the Press Release
STATESBORO, GA – Earlier today, Aubrey Lee Price, 47, pleaded guilty to bank, securities and wire fraud to resolve charges brought in the Southern District of Georgia and the Eastern District of New York relating to a multi-million dollar fraud scheme that Price executed to defraud dozens of investors and a federally insured bank. Based upon his guilty pleas, Price now faces up to 30 years in prison, millions of dollars in fines, and millions of dollars in restitution to the victims of his fraud. Today’s guilty plea took place before the Honorable B. Avant Edenfield, Senior United States District Judge for the Southern District of Georgia.
Southern District of Georgia United States Attorney Edward J. Tarver and Eastern District of New York United States Attorney Loretta E. Lynch announced the guilty pleas.
According to court filings and evidence presented at the guilty plea hearing, in 2010, an investment group controlled by Price invested approximately $10 million in the failing Montgomery Bank & Trust (“MB&T”), an FDIC-insured financial institution in Ailey, Georgia. Price was then made a director of MB&T and put in charge of investing the bank’s capital. Price told MB&T officials that he would invest the bank’s capital in U. S. Treasury securities, but instead, over the next eighteen months, Price embezzled over $21 million in capital from MB&T, and lost much of it by investing in risky equity securities and options. To cover up his fraud, Price provided MB&T officials with bogus account statements and other false documents which falsely indicated the bank’s capital was safely held in an account at a financial services firm, when in truth, most of the money was gone.
A further investigation of Price revealed that between June 2009 and June 2012, Price also defrauded numerous individuals who had invested in two investment funds Price managed, PFG LLC (“PFG”) and the Montgomery Growth Fund (“Montgomery Growth”). Price raised approximately $51 million from approximately 115 investors from across the country, and unsuccessfully invested funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price posted fake account statements on a secure PFG web site that fraudulently reflected fictitious assets and fabricated investment returns.
In mid-June 2012, Price sent acquaintances “suicide letters” in which he admitted he had defrauded MB&T Bank and his PFG investors, and suggested that he planned to kill himself by throwing himself off a high-speed ferry boat after it left the coast of Florida. As a result of the suicide claim, the United States Coast Guard searched to no avail for Price’s body. Shortly after sending the letters, Price disappeared. After a several-month search, on December 31, 2013, Price was arrested after he presented a false identification to a member of the Glynn County Georgia Sheriff’s Department office during a routine traffic stop in Brunswick, Georgia.
U. S. Attorneys Tarver and Lynch credited the Federal Bureau of Investigation (FBI) in Georgia, under the direction of Special Agent in Charge Britt Johnson, and in New York, under the direction of Assistant Director in Charge George Venizelos, with the investigation leading to today’s guilty pleas. They also thanked the United States Attorney’s Office for the Southern District of Florida; the United States Attorney’s Office for the Northern District of Georgia; the Securities and Exchange Commission (SEC), Atlanta Regional Office; the Federal Deposit Insurance Corporation (FDIC); the Federal Reserve Board; the Office of Inspector General; the United States Coast Guard; the United States Department of Labor; the Lowndes County Georgia Sheriff’s Department; the Glynn County Georgia Sheriff’s Department; the Toombs County Georgia Sheriff’s Department; and the Marion County Florida Sheriff’s Department for their cooperation and assistance in the investigation and prosecution of Price.
The Government is represented by Assistant United States Attorneys Brian T. Rafferty, T. Shane Mayes, and First Assistant United States Attorney James D. Durham of the U. S. Attorney’s Office for the Southern District of Georgia, and Assistant United States Attorneys Shannon C. Jones and Brian Morris of the U. S. Attorney’s Office for the Eastern District of New York.
This prosecution was the result of efforts by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U. S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
AUBREY LEE PRICE
Age: 47
Valdosta, Georgia
S.D.G.A. Docket No. 612-CR-10
E.D.N.Y. Docket No. 13-CR-058
Allenwood Inmate Charged with Filing False Liens Against Bureau of Prisons OfficialsRead the Press Release
The United States Attorney for the Middle District of Pennsylvania, announced that charges have been filed against Marc E. Barrett of Stamford, Connecticut.
According to United States Attorney, Peter Smith, Barrett, age 39, is charged in a one-count information with filing false liens in Connecticut and North Carolina state courts against several Bureau of Prisons officials, while incarcerated at the FCC-Allenwood Medium.
The investigation was conducted by the Federal Bureau of Prisons Special Investigative Services, and the Federal Bureau of Investigation, Williamsport Resident Agency. Assistant United States Attorney Wayne P. Samuelson is assigned to prosecute the case.
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 statues and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is ten years imprisonment, and a fine of $250,000. 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.Albuquerque Construction Company Owner Sentenced to Prison for Defrauding Federal Program for Service-Disabled VeteransRead the Press Release
ALBUQUERQUE – Max R. Tafoya, 64, the owner of an Albuquerque-area construction company, and his son-in-law, Tyler Cole, 41, of Los Ranchos de Albuquerque, N.M., were sentenced this afternoon for defrauding a federal program that sets aside federal contracts for businesses owned by service-disabled veterans.
Tafoya was sentenced to 57 months in federal prison to be followed by a year of supervised release while Cole was sentenced to a 37-month term of imprisonment followed by a year of release. Tafoya was ordered to pay $1,350,000, the proceeds fraudulently obtained as the result of the criminal activity, to the United States, with Cole being jointly liable for $500,000 of that amount.
“Today Max Tafoya and Tyler Cole were held accountable for abusing a program that seeks to fulfill our obligation to provide disabled veterans with benefits designed to ease the losses and disadvantages they have incurred as a consequence of disabilities they sustained while serving our country,” said U.S. Attorney Damon P. Martinez. “This prosecution is part of a nationwide effort to protect service-disabled veterans who own small businesses by tightening controls to prevent fraud and abuse.”
“Our agency remains committed to protecting the integrity of the programs that provide business opportunities to those who have struggled and sacrificed for our freedom. Today, individuals who seek to follow in the footsteps of Tafoya and Cole are on notice that justice will be served,” said Acting Inspector General of the VA, Richard J. Griffin.
Tafoya and Cole were charged in Feb. 2012, in an indictment alleging that the two men obtained almost $11 million in federal contracts by falsely claiming that Tafoya’s company, M.R. Tafoya Construction, Incorporated (Tafoya Construction), was qualified to participate in the U.S. Department of Veterans Affairs’ (VA) Service-Disabled Veteran Owned Small Business (SDVOSB) Program. A superseding indictment filed in March 2013, added charges of witness tampering and obstruction of justice against Tafoya.
The SDVOSB Program was established pursuant to the Veterans Entrepreneurship and Small Business Development Act of 1999, to achieve a government-wide goal to increase the number of government contracts awarded to small businesses owned and operated by service-disabled veterans. The Veterans Benefits, Health Care, and Information Technology Act of 2006 gave SDVOSBs the highest priority in contracting preferences for VA contracts awarded to small businesses. A small business must be both owned and controlled by one or more service-disabled veterans to qualify as an SDVOSB. Generally, a small business is owned and controlled by a service-disabled veteran when the veteran directly owns at least 51% of the business, holds the highest officer position in the business, and manages and administers the business’s day-to-day operations.
On Nov. 12, 2013, Tafoya and Cole each entered guilty pleas to Counts 1 and 2 of the superseding indictment charging them with conspiracy and committing a major fraud against the United States.
In entering his guilty plea, Tafoya admitted that between 2009 and 2010, Tafoya Construction was awarded five contracts valued at an aggregate amount of $10,984,189 that required the company to hold SDVOSB status. During that period, Tafoya, a veteran without any service-connected disability, owned 100% of Tafoya Construction stock. Tafoya admitted obtaining the lucrative contracts by paying his step-brother Andrew Castillo, a service-disabled veteran who works and resides in Florida, a $600 weekly fee to allow Tafoya Construction to use Castillo’s name and service-disabled status in its bids for SDVOSB contracts. Tafoya acknowledged asking Cole to complete certifications stating that Tafoya Construction was a SDVOSB and submit them to the VA so that Tafoya Construction could obtain SDVOSB contracts. Tafoya also admitted that he drew up a number of false documents designed to create the appearance that Castillo was the majority owner and controller of Tafoya Construction, when in fact he did not own or operate the company, and that Cole forged Castillo’s signature on the documents.
Tafoya also admitted that in Feb. 2011, he lied to a VA investigator to support the fraudulent claim that Tafoya Construction was a SDVOSB. Tafoya made the following false statements to the investigator: (1) that Castillo paid $100,000 to purchase 51% of Tafoya Construction; (2) that Castillo worked in Tafoya Construction’s Albuquerque office; (3) that Castillo was working at a VA construction site in Santa Fe that day; and (4) that Castillo personally signed the VA contracts and bonding paperwork on the SDVOSB contracts awarded to Tafoya Construction. Tafoya also admitted traveling to Florida later in Feb. 2011, to meet with Castillo for the purpose of creating fraudulent documents in an attempt to cover up their fraudulent scheme. Tafoya subsequently submitted these fraudulent documents to a federal grand jury in July 2011.
In his plea agreement, Cole admitted serving as manager of Tafoya Construction from 2008 to 2011, and participating in Tafoya’s illegal scheme to defraud the United States by falsely claiming that Tafoya Construction was a SDVOSB. Cole admitted to filling out and submitting certifications to the VA that falsely claimed that Tafoya Construction was owned by Castillo, a service-disabled veteran. Cole further admitted signing Castillo’s signature on bids and other paper work submitted to the VA and on documents created to make it appear that Castillo was the 51% owner of Tafoya Construction.
As a result of Tafoya’s and Cole’s fraudulent scheme, from 2009 to 2010, the VA awarded Tafoya Construction five contracts in the aggregate amount of $11,568,999 for work at the Fort Bliss National Cemetery, the Santa Fe National Cemetery, the Fort Logan National Cemetery, and the Jefferson Barracks National Cemetery.
Castillo entered a guilty plea in Oct. 2011, to a conspiracy charge. He remains on conditions of release pending his sentencing hearing, which is scheduled for June 19, 2014.
This case was investigated by the Office of Inspector General of the U.S. Department of Veterans Affairs and is being prosecuted by Assistant U.S. Attorneys C. Paige Messec and Tara C. Neda. Assistant U.S. Attorney Cynthia L. Weisman assisted with the forfeiture proceedings in this case.
"Home Alone 3"Read the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, and Gerald Roy, Special Agent in Charge, United States Department of Health and Human Services, Office of Inspector General, Office of Investigations for Region 7 (Kansas City office), announced today indictments arising out of Operation Home Alone 3. The indictments constitute a third wave of charges that targets the abuse of a Medicaid program in Illinois that provides personal assistants to Medicaid recipients to assist them with general household activities and personal care. The program is intended for recipients under 60 years of age and is designed to reduce Medicaid expenditures by avoiding more expensive institutional care, including nursing home care.
In May of 2012 and again in July of 2013, during the first two phases of Operation Home Alone, 29 defendants, including both Medicaid beneficiaries and the personal assistants, who claimed to have been providing personal assistant services, were charged with fraud. In this third round announced today, fourteen additional defendants have been indicted, bringing the total number of defendants to 43. The fourteen individuals named today reside throughout southern Illinois and have been charged in twelve separate indictments by a Federal Grand Jury in Benton, Illinois, with the offense of Health Care Program Fraud. The charges carry a maximum penalty of 10 years imprisonment, a $250,000 fine, and up to 3 years of supervised release.
In all cases, the false claims were submitted to the program after the first round of prosecutions. Four of the defendants made false claims against the program after the second round of indictments and widespread media coverage. One of the four specifically admitted having seen news reports of our crackdown on this type of fraud but went ahead and submitted the false claims anyway.
"Many of these individuals just don’t get it - they either don’t care or don’t believe me when I say we will continue to investigate and root out those defrauding the program," said U.S. Attorney Stephen R. Wigginton. "Federal and state law enforcement in Illinois have spoken forcefully and with one voice against the abuse of a program vital to the health of Illinoisans, but those who are abusing this needed program just don't seem to be listening. Ignore us at your peril." Wigginton added.
"The Office of Inspector General of the Department of Health and Human Services is determined to get the attention of these program abusers" said Special Agent in Charge Gerald Roy. “With the adverse impact on this state’s budget and the larger issue of patient abuse, personal care service fraud will continue to be the focus of my office. Working together with our law enforcement partners at the Illinois State Police-Medicaid Fraud Control Bureau and the FBI, we will continue to investigate these cases and submit them for prosecution until this widespread abuse stops," said Roy.
“These cases are critical to ensuring the integrity of the home-care program that provides vital services for many of our most vulnerable residents,” said Attorney General Lisa Madigan.
Due to numerous complaints concerning the Home Services Program, law enforcement agencies in southern Illinois originally initiated Operation Home Alone to investigate and hold accountable individuals perpetrating fraud against the Home Services Program. As was true of the charges brought in rounds one and two, these indictments allege that the charged individuals exploited the Home Services Program and received Medicaid funds to which they were not entitled. Those charged in this wave of indictments include four defendants where the personal assistant or customer were in jail or prison during the times the services were supposed to be performed, six defendants where the personal assistant or the customer was in the hospital, three cases where the defendant was working full time jobs while the services were supposed to be performed and one case where the customer was dead and the personal assistant continued billing for months after the death of the customer.
The persons charged in this wave, their ages, and their last known city of residence are:
Connie D. Evans, age 50, Belleville, Illinois
Quincy O. Gamble, age 39, Cahokia, Illinois
Jody R. Wooters, age 46, Centralia, Illinois
Felicia M. Gibson, age 47, East St. Louis, Illinois
Beatrice L. Randall, age 59, East St. Louis, Illinois
Charlietta M. Lee, age 51, Marion, Illinois
Tamekia L. Hall, age 39, East St. Louis, Illinois
Maurice L. Burks, age 43, East St. Louis, Illinois
Christopher W. Spivey, age 30, Olney, Illinois
Angel D. Jones, age 50, Collinsville, Illinois
Lawrence M. Thigpen, 53, Collinsville, Illinois
Lakeshia W. White, age 23, Centreville, Illinois
Margaret R. Teriet, age 31, Mount Vernon, Illinois
Maketa N. Davis, age 33, East St. LouisAn Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
The purpose of the program is laudable - keep Medicaid recipients in their home and out of more costly institutional settings. These prosecutions show that there are individuals who, by their actions, take money from the thousands of deserving customers and harm the reputation of those personal assistants who are doing everything right. Cases in this round of indictments include the following:
• Personal assistant boyfriend claimed to be providing services for his girlfriend, first while she, the customer, was in the hospital and then continued filing claims for 560 hours of services for six months after she had passed away.
• Personal assistant claimed to be providing personal assistant services to her boyfriend while she was in jail and prison. Together, they claimed over one thousand hours of personal assistant services during the periods where she was incarcerated.
• Personal assistant claimed that she performed over 450 hours of personal assistant services for the customer during times that she was employed at a full time job and over 140 hours where she was not only working a job at another location, but the customer was also receiving kidney dialysis.
• Medicaid recipient who agreed to split the proceeds with the personal assistant who performed little or no services.
We have seen dozens of instances in which the State of Illinois paid for ghost employees and fictitious services, hence the reason why we are calling this initiative "Home Alone."
Nationwide, one of the biggest fraud problems in the Medicaid program has been these personal assistant programs, particularly in cases that allow the Medicaid recipient to control the selection and payment of personal care attendants. In most of these cases, the personal care assistant is a relative or family friend, who often is a ghost employee. In a typical fraud scenario, the scam payments made by the State of Illinois are split between the Medicaid recipient and the ghost employee.
According to an Office of Inspector General report released in December, 2012, Medicaid costs for personal care services in 2011 totaled $12.7 billion, a thirty five percent increase since 2005. The U.S. Department of Labor projects that the employment of personal assistants and home health care workers will grow by 46 percent by 2018. U.S Department of Health and Human Services, Office of Inspector General: Personal Care Services, Trends, Vulnerabilities, and Recommendations for Improvement, OIG-12-12-01 (November 2012). Home personal care is one of the fastest growing job categories in the country. However, the OIG’s report points to numerous problems in Medicaid personal care services that leave it vulnerable to improper payments, abuse, and fraud, including lack of training standards, uneven oversight of services provided, and failure to implement prepayment controls to prevent improper or fraudulent payments.
Operation Home Alone 3 investigations were conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation, and the Illinois State Police Medicaid Fraud Control Bureau Collinsville, DuQuoin and Sterling Offices. The cases are being prosecuted by Assistant United States Attorneys Ranley R. Killian and William E. Coonan and Special Assistant United States Attorney Michael J. Hallock.
4 June 2014
West Virginia Pharmacy Pays $2 Million for Improper Dispensing of PainkillersRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Matthew Lyman, Public Affairs Specialist/Community Outreach CoordinatorWHEELING, WEST VIRGINA – A West Virginia pharmacy and several of its employees have paid $2 million to end a Federal investigation into its operation.
United States Attorney William J. Ihlenfeld, II announced today a $2 million civil settlement with Judy’s Drug Store, Inc., Darin Judy, Emily Judy, Kimberly Arbaugh and Casey Watts.
Judy’s Drug Store is a privately owned pharmacy located in Petersburg, Grant County, West Virginia. Darin Judy is a manager of the Drug Store. Emily Judy is the president of Judy’s Drug Store, Inc. and works as a pharmacist. Arbaugh and Watts both work there as pharmacists.
As part of the settlement Judy’s Drug Store and the identified individuals have paid $2 million to the United States to settle accusations the Drug Store repeatedly filled prescriptions for controlled substances, such as oxycodone and hydromorphone, not written for legitimate medical purposes. The pharmacists filled these prescriptions outside the scope of professional practice.
“This is another important step in our efforts to prevent prescription painkillers from being diverted and used for improper purposes,” said U.S. Attorney Ihlenfeld. “We used both our criminal and civil authority to accomplish our mission in this case, and we would have sought criminal charges against one of the pharmacists involved had he not passed away.”
The federal investigation into Judy’s Drug Store arose after the U.S. Attorney’s Office prosecuted and obtained a conviction against Hardy County, West Virginia physician, Rajan Masih, in 2011. Dr. Masih was convicted of distributing controlled substances for other than legitimate medical purposes and outside the scope of professional practice. Dr. Masih wrote many of the prescriptions for controlled substances improperly filled by Judy’s Drug Store.
“Today’s settlement serves as a warning to those who are driven by greed that distracts them from their responsibilities to the very communities in which they live and work. The citizens of Grant County should be able to walk their streets and go about daily activities with their families without fear or exposure to drug related activity resulting from suspect dispensing of controlled substance pharmaceuticals,” said Karl C. Colder, Special Agent in Charge of the U.S. Drug Enforcement Administration, Washington, D.C. Field Division.
Assistant United States Attorney Alan G. McGonigal handled this matter, in coordination with the Office of the Inspector General of the U.S. Drug Enforcement Agency.
WNY Muslim Community Leader Receives National Attorney General AwardRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. was in Washington, D.C. today as Dr. Khalid Qazi received the Attorney General’s Citizen Volunteer Service Award for Community Service for his outstanding volunteer contributions to the mission of the Justice Department.
Dr. Qazi, a local physician and past president of the Muslim Public Affairs Council in Western New York, received the award during the 28th Annual Attorney General’s Volunteer Awards ceremony in Washington. He was honored for his work to establish a positive, working relationship between Federal, State and local law enforcement and the Muslim Community.
“In a post 9/11 world, Dr. Qazi has been instrumental in helping to build bridges between local law enforcement agencies and leaders and members of the Muslim Community,” said U.S. Attorney Hochul. “Dr. Qazi has helped to break down walls that often prevented meaningful communication and forge a relationship of trust and hope.”
Dr. Qazi has been working with the United States Attorney’s Office for several years, serving as a liaison between the USAO and the local Muslim Community. For instance, Dr. Qazi works closely with U.S. Attorney Hochul on the BRIDGES Program which was established to build better relationships between the Muslim Community in Western New York and the law enforcement community.
U.S. Attorney Hochul cited the following accomplishments in his nomination of Dr. Qazi for the award:
A job fair for youth in the local Muslim community.
The Citizen Volunteer Service Award was established to honor citizen volunteers who assist the Justice Department in serving the public interest.
A commemoration of the 10th Anniversary of September 11, 2001.
Sensitivity training for local Customs and Border Protection officers.
A panel discussion for members of the Muslim Community regarding surveillance conducted by the New York City Police Department in the local Muslim community.Violent Felon Sentenced to over 22 Years in PrisonRead the Press Release
BATON ROUGE, LA –U.S. Attorney Walt Green announced that U.S. District Judge Shelly D. Dick sentenced CHRISTOPHER L. BROWN, age 35, of Baton Rouge, Louisiana, today to 270 months imprisonment and 5 years of supervised release following imprisonment for his role in a home invasion conspiracy aimed at stealing 12 kilograms of cocaine and killing anyone that stood in the way.
The defendant’s sentence arises from his guilty pleas in January 2014 for conspiring to possess with the intent to distribute five (5) kilograms or more of cocaine, in violation of Title 21, United States Code, Section 846; possessing firearms in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A); and possessing a firearm while a convicted felon, in violation of Title 18, United States Code, Section 922(g)(1).
BROWN’s co-defendant, CHRIS E. WILLIAMS, was previously sentenced on April 30, 2014, to 270 months also.
U.S. Attorney Green praised the hard work of the Bureau of Alcohol, Tobacco and Firearms (ATF) and the East Baton Rouge Violent Crimes Unit. He also stated: “The U.S. Attorney’s Office and our federal, state, and local partners will continue to devote whatever resources are necessary to aggressively identify, investigate, and prosecute those violent career offenders who plague our streets, threaten our families, and destroy our neighborhoods.”
This investigation was conducted by the ATF and the East Baton Rouge Violent Crimes Unit which includes the Baton Rouge Police Department, East Baton Rouge Parish Sheriff’s Office, and Louisiana State Police. The matter is being prosecuted by Assistant United States Attorney Jennifer Kleinpeter who also serves as a Deputy Chief in the Criminal Division.
United States Attorney Wigginton Announces Press EventRead the Press Release
Follow @SDILNewsStephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that there will be a press event held tomorrow, Thursday, June 5, 2014, at 2:00 p.m., at the Office of the United States Attorney for the Southern District of Illinois, located at Nine Executive Drive, Fairview Heights, IL, 62208-1344, concerning the announcement of new charges in the continuing investigation of fraud in the Personal Assistant Program previously identified as “Operation Home Alone.”
Media are advised to have press credentials and to arrive in sufficient time to allow for security screening prior to the event.
United States Attorney Announces Sentencing of Investment Advisorwho Defrauded Carmel, Indiana VictimsRead the Press Release
Ohio man sentenced to prison for operating a fictitious investment company which bilked over $650,000 from investors
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced today the sentencing of an Ohio resident, to 58 months (nearly 5 years) in federal prison by U.S. District Judge Tanya Walton Pratt. David Bridges, 37, admitted guilt to charges that he devised a scheme to fraudulently obtain money from investors in order to enrich himself. He used his position as an investment advisor to solicit investors with promises that money they invested would be used for the purchase of investment and insurance products. The losses incurred by all victims total over $650,000. Several of the victims of this scheme have been long-time residents of Hamilton County, specifically, Carmel, Indiana.
This matter began in November, 2012, when Carmel Police were notified of alleged irregularities. Carmel Police then contacted representatives of the Federal Bureau of Investigation, who have led the investigation since that time.
“The United States Attorney’s Office will aggressively pursue the prosecution of those individuals who bilk Hoosier out of their hard-earned retirement funds through fraud,” said Hogsett. “Stealing the hard-earned money that Hoosiers plan to retire on is inexcusable.”
Bridges admitted that he created a bogus company, SD Capital LLC, to convince investors to purchase annuity contracts at SD Capital and/or roll over their IRA accounts maintained elsewhere to a purported IRA account managed by SD Capital. From December 2009 through April 2012, the investors, on the advice of Bridges, wrote checks to SD Capital for the investment products. Bridges deposited these checks into his own bank account.
Bridges represented to his investors that he had purchased the investment products with their money. However, Bridges instead used the money he received for his personal benefit, including the payment of personal expenses incurred through gambling and purchases at grocery stores, gas stations, and retail shops.
According to Assistant U.S. Attorney MaryAnn T. Mindrum, who prosecuted the case for the government, Bridges was also sentenced to three (3) years of supervised release at the end of his prison term, and must pay over $500,000 in restitution to the victims.
This case is the result of a collaborative investigation by the FBI and Carmel Police Department.
Unemployed Middle River Woman Sentenced to Prison in $546,785 Fraudulent Tax Refund SchemeRead the Press Release
Recruited Individuals Who Did Not Owe Taxes Because They Had Little Or No Earned Income
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Tonia Patrice Lawson, age 43, of Middle River, Maryland, today to 10 months in prison, followed by three years of supervised release, for her role in a conspiracy to obtain fraudulent tax refunds. Judge Bennett also ordered Lawson to pay restitution of $546,785.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein, Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Kathryn Jones, U.S. Department of Transportation, Office of Inspector General, Washington Regional Office.
“Criminal conspiracies involving fraudulent refund identity theft schemes damage the integrity of the U.S. financial system and can seriously impact the lives of those victimized. We as taxpayers ultimately pay the price for the greed of these unscrupulous criminals,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “IRS-CI, along with our law enforcement partners and the Maryland United States Attorney's Office, will continue to utilize every tool available to investigate those who conspire to victimize members of our community for their own personal gain.”
According to Lawson’s plea agreement, from February 2010 through April 2013, Lawson, who was unemployed, conspired with her daughters Kiara Skipwith and Jasmine Thomas and with Sheila Anderson-Cloude, to prepare fraudulent tax returns. The defendants recruited individuals who did not owe taxes because they had little or no earned income, and convinced these individuals that they could obtain a substantial refund and therefore should file a federal individual income tax return. Generally, Lawson, Skipwith and Thomas recruited prospects for the scheme, using a variety of methods, including paying referral fees to those who brought recruits to them.
Lawson, Skipwith and Thomas provided the recruits’ personal information to Anderson-Cloude, who would prepare the fraudulent return. The recruits did not provide any income information. False wages and educational expenses were used to falsely claim tax credits. Lawson, Anderson-Cloude, Skipwith, and Thomas misled the recruits by telling them that the refunds they had received were smaller than the refund amounts Anderson-Cloude had actually listed on the fraudulent returns. The “profit” for Lawson and her co-conspirators was the difference between the refund claimed on each tax return and the smaller amount actually paid to the recruit.
Over the course of the scheme, Lawson conspired in the filing of 84 fraudulent tax returns with a resulting loss to the government of $546,785.
Sheila Anderson-Cloude, age 34, of Notthingham, Maryland, Jasmine L. Thomas, age 26, of Baltimore; and Kiara A. Skipwith, age 24, of Parkville, Maryland, previously pleaded guilty to their roles in the scheme. Thomas and Skipwith were each sentenced to three years’ probation and ordered to pay restitution of $90,579 and $199,722, respectively. Anderson-Cloude is scheduled to be sentenced on July 29, 2014.
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 IRS Criminal Investigation and DOT-OIG for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory R. Bockin, who prosecuted the case.
Two Guilty of Racketeering in Chinese Restaurant Employment Referral ConspiracyRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A man and woman have pleaded guilty to racketeering violations in connection with an employment referral conspiracy in the Eastern District of Texas, announced U.S. Attorney John M. Bales and Brian M. Moskowitz, special agent in charge of Homeland Security Investigations in Houston today.
Lina Sun, 54, and Chenglun Ma, 57, both of Houston, pleaded guilty to RICO conspiracy on June 3, 2014 before U.S. Magistrate Judge Keith Giblin.
According to court documents, two employment referral businesses operating out of Houston recruited unauthorized aliens, mostly from Mexico and Central America, for work in the Chinese restaurant industry. These workers routinely worked 12 hours a day, six days a week, they were not paid overtime, not permitted to receive tips or gratuities, and were paid in cash by the restaurants. The restaurants profited by avoiding payment of employment taxes and did not provide any benefits such as health insurance, vacation or sick time. Workers were paid far less than minimum wage, did not receive health examinations, food safety training, or any job training at any time while employed.
Additionally, these workers were subject to unfavorable living arrangements provided by the restaurant operators, either at the operator’s residence or at another off-site residential location. Living arrangements were overcrowded and sometimes consisted of air mattresses or floors for sleeping. For instance, 18 people were found to be housed in a 2000 square foot house.
Federal indictments were returned on Nov. 7, 2013, charging 32 individuals with RICO conspiracy and conspiracy to transport, harbor, and encourage and induce aliens to reside in the United States.
Sun and Ma each face up to 20 years in federal prison at sentencing. Sentencing dates have not been set.
"I congratulate the investigative team on what is surely a signature accomplishment,” said U.S. Attorney Bales. “The defendants abused the aliens who came looking for work and they abused our nation's immigration laws. Now they will be held accountable under the law and then what good will their ill-gotten riches be?" We will continue to be vigilant."
"Those who think that they can build their businesses on a foundation of corrupt and illegal activities will eventually see those enterprises crumble," said SAC Moskowitz. "Today's pleas cap a multi-year investigation of the Hong Li Job Agency and the Tai Shan Employment Agency by HSI and our partners in the Eastern District of Texas that weakened the business foundations and brought down these two enterprises."This case is being investigated by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) offices in: Houston, Dallas, San Antonio and New Orleans; U.S. Customs and Border Protection, Office of Air and Marine; U.S. Marshals Service; and Police Department’s in Houston, Port Author and Beaumont. This case is being prosecuted by Assistant U.S. Attorneys in Beaumont.
#######Two Defendants Sentenced to Prison for Different Fraud Schemes Involving Car Sales and the InternetRead the Press Release
In two separate cases, federal defendants have been sentenced to prison terms for conducting fraudulent car sales over the internet, announced U.S. Attorney Jenny A. Durkan. The two cases involve the theft and sale of stolen cars, and the sale of non-existent vehicles by using various websites.
JUAN CARLOS DE LA CRUZ PIOTE, 48, a native of Spain, was sentenced Tuesday June 3, 2014, to 32 months in prison. DE LA CRUZ PIOTE was a member of a scheme to scam prospective purchasers of cars, boats, and RVs by using false internet postings and fake payment processing programs. He was arrested in New York on July 22, 2013, when he tried to enter the U.S. from Romania. DE LA CRUZ PIOTE and his co-schemers opened multiple bank accounts in the Western District of Washington, which were used to accept more than $700,000 from victims who thought they were using a secure payment method to purchase vehicles advertised on the internet. In fact, the advertised vehicles were never delivered, and the money was quickly wired out of the country or withdrawn from the accounts as cash. The conspirators set up the accounts with business names such as GMC AUTOS, LLC, CARS CONSULTANTS, LLC, AUTO FINANCIAL, LLC and MGA ENGINES, LLC, and would advertise various vehicles on legitimate websites such as Craig’s List or Autotrader.com. The conspirators created counterfeit PayPal paperwork and web pages, or would have the victims make the payment through a service they created and called “Amazon Payments” – but the service was in no way associated with Amazon.com. The use of these names was a way to lull the purchasers into thinking they were dealing with a legitimate online seller.
On Friday, May 30, 2014, DUC LONG TRAN VU, 26, of Vancouver, Washington was sentenced to nine months in prison for his role in a scheme to steal cars in Oregon, create fake title documents, and sell them to unsuspecting customers in Washington State after advertising them on Craigslist or other internet sites. VU, a former engineering student at the University of Washington, was involved in at least two sales of stolen cars. A 2007 Volvo XC 90 was stolen right out of the driveway of a Portland home and sold via Craigslist to a couple in Tacoma. The couple took precautions – examining the title, checking the VIN number and getting VU’s identification when they met him in a public place. Still, when they went to transfer title they discovered the car had been reported stolen. The couple was out $15,000.
In a second incident, two Seattle brothers were stopped by Kent police in a 1998 Honda Civic that had been stolen in Oregon and advertised on Craigslist. Not knowing whether the brothers were involved in the theft, police did a felony stop – ordering the men out of the car with guns drawn. Fortunately, the brothers had made a cell phone video of the man who sold them the car and took a photo of his identification. Police were able to identify VU even though the identification used a fake name. The stolen car was returned to the owner.
The case against DE LA CRUZ PIOTE and his co-schemers was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the FBI. The VU case was investigated by the FBI, the Washington State Patrol and the Kent Police Department.
Both cases were prosecuted by Assistant United States Attorney David Reese Jennings.
Toledo Man Faces Drug and Firearms ChargesRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced an indictment was filed against Michael J. McDuffey, age 31, of Toledo, Ohio.
The indictment charges McDuffey with possession of a firearm in furtherance of a drug trafficking crime and being a felon in possession of a firearm on April 4, 2014. The indictment also charges McDuffey with three counts of possession with intent to distribute a controlled substance on April 1, 2014 and April 4, 2014.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agencies in this case are the Federal Bureau of Investigation, Toledo, Ohio, and the Toledo Metro Drug Task Force. The case is being handled by Assistant United States Attorney Noah P. Hood.
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 Man Faces Child Pornography ChargesRead the Press Release
An indictment was filed charging Jason H. Quinney age 39, of Toledo, Ohio, with receipt and distribution of child pornography and possession of child pornography, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the United States Secret Service, Toledo, Ohio. The case is being handled by Assistant United States Attorney Michael J. Freeman.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Tennessee, Virginia, and North Carolina Methamphetamine Cooks Sentenced to Federal PrisonRead the Press Release
GREENEVILLE, Tenn. – Three individuals were sentenced on June 4, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge, for their involvement in a conspiracy to manufacture methamphetamine. John G. Reece, II, 33, of Bristol, Va., was sentenced to serve 132 months in federal prison, to be followed by five years of supervised release. Benjamin T. Morefield, 33, of Mountain City, Tenn., was sentenced to serve 119 months in federal prison, to be followed by five years of supervised release. John D. Reece, 35, of Boone, N.C., was sentenced to serve 118 months in federal prison, to be followed by five years of supervised release. There is no parole in the federal system.
A total of 20 individuals, including the three sentenced yesterday, were indicted in May 2013 for conspiring to manufacture methamphetamine and possessing equipment, chemicals, materials, and products to be used in the manufacture of methamphetamine. Seven individuals named in the indictment were also charged with distributing methamphetamine. All others charged in this case have been adjudicated guilty and will be sentenced later this year. /p>
The charges stem from a lengthy investigation spanning from August 2006 to May 2013 involving a conspiracy by these individuals to obtain pseudoephedrine and other products needed to manufacture methamphetamine in the Eastern District of Tennessee, Western District of North Carolina, and Western District of Virginia. The pseudoephedrine and other products were then used to manufacture methamphetamine utilizing the “shake and bake” method. The methamphetamine was used and distributed in the Eastern District of Tennessee.
According to the information contained in their plea agreements on file in U.S. District Court, all three of the individuals sentenced yesterday were methamphetamine cooks and had manufactured substantial quantities of methamphetamine. In their plea agreements, John G. Reece, II, and Morefield each admitted that they had conservatively manufactured at least 50 but less than 150 grams of actual methamphetamine. John D. Reece admitted in his plea agreement that he had conservatively manufactured 76.3 grams of actual methamphetamine.
“This case is an example of the effectiveness of coordinated law enforcement investigations. These individuals conspired in three different jurisdictions to manufacture methamphetamine. We greatly appreciate the efforts of the law enforcement agencies involved in all three jurisdictions to ensure that this case was successfully prosecuted to protect our communities from the dangers associated with the manufacture of methamphetamine,” said U.S. Attorney William C. Killian.
This investigation was a result of the collaborative efforts of the Johnson County Sheriff’s Office, First Judicial District Drug Task Force, Tennessee Methamphetamine and Pharmaceutical Task Force, and Drug Enforcement Administration. Assistant U.S. Attorneys Suzanne Kerney-Quillen and Caryn Hebets represent the United States.
This case was brought as a part of the Organized Crime and Drug Enforcement Task Force (OCDETF), the centerpiece of the Department of Justice=s drug supply reduction strategy that attacks major drug trafficking and money laundering organizations.
Strongsville Pharmacist Charged with Illegally Selling OpioidsRead the Press Release
A federal grand jury returned a 53-count criminal indictment yesterday charging pharmacist Osama Salouha, age 41, his wife Samah Salouha, age 36, both of Strongsville, Ohio, and pharmacist Sbeih Sbeih, age 45, of North Olmsted, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Osama Salouha was charged with using his pharmacies, Southside Pharmacy in Lorain and Medicine Center Pharmacy in Elyria, to sell opioids and opiates illicitly.
Osama Salouha, a pharmacist, was charged with 16 counts related to the dispensation of controlled substances, as well as two money laundering counts, six tax counts, 12 structuring counts and two counts of making false statements to law enforcement.
Samah Salouha was charged with one count each of structuring and false statements.
Sbeih Sbeih, a pharmacist, was charged with one money laundering count and four tax counts.
“The opioid and heroin epidemic in this state is fueled by drug dealers out to make money,” Dettelbach said. “Whether the evidence leads to a cartel, a stash house or behind a pharmacy counter, we will follow it, and we will hold these profiteers accountable.”
“Hiding income, structuring financial transactions to avoid currency requirements and filing false returns is not tax planning; it’s tax fraud. It’s a felony offense that carries severe consequences,” said Kathy Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The IRS stands ready to partner with all law enforcement agencies to pursue individuals who commit these types of crimes that damage our community and the integrity of our tax system.”
The indictment alleges that Osama Salouha used his pharmacist’s license to illegally distribute Schedule II controlled substances like oxycodone and oxymorphone to customers at Southside Pharmacy in Lorain, Ohio, and Medicine Center Pharmacy in Elyria, Ohio. Mr. Salouha also made false statements to law enforcement about his prescription drug distribution.
“Pharmacists are licensed to dispense controlled substances to real patients with legitimate prescriptions," said Denise Foster, Group Supervisor DEA Cleveland Resident Office Tactical Diversion Squad. "It is alleged that these individuals abused their positions of trust and endangered the lives of countless people by illegally distributing opiate painkillers throughout Northeastern Ohio. Despite their professional status, these individuals elected to use their pharmaceutical training to feed the habits of drug abusers and acted just like the street corner drug dealers."
Osama Salouha and his co-owner of Southside Pharmacy, Sbeih Sbeih, also engaged in a conspiracy to launder money to conceal the proceeds to avoid transaction reporting requirements. And Osama Salouha committed international money laundering through wire transfers to bank accounts overseas.
Osama Salouha and Sbeih conspired to defraud the IRS by concealing their income on their corporate and individual income tax returns, which understated the amount of income that Southside Pharmacy was earning. Mr. Salouha made false statements to law enforcement about his income tax.
Osama and Samah Salouha engaged in structuring cash deposits to bank accounts to avoid the generation of currency transaction reports, and Mrs. Salouha made false statements to law enforcement about her efforts to structure the deposit of cash.
If convicted, a defendant’s sentence will be determined by the Court after reviewing 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.
This case was investigated by the Drug Enforcement Administration, the Internal Revenue Service, the Federal Bureau of Investigation, Ohio Board of Pharmacy, Ohio Bureau of Criminal Investigations, the Akron Police Department, Cuyahoga County Sheriff’s Office, Lake County Drug Task Force, Summit County Sheriff’s Office, Lorain County Drug Task Force, Strongsville Police Department, MEDWAY Drug Enforcement Agency, and the Cleveland Heights Police Department.
The case is being handled by Assistant United States Attorneys Michael Collyer and Linda Barr.
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.
St. Paul Man Pleads Guilty to Bank RobberyRead the Press Release
MINNEAPOLIS — Last week in federal court, a 47-year-old St. Paul man pleaded guilty to robbing two banks. Maurice Dixon specifically pleaded guilty to two counts of Bank Robbery. Dixon, who was indicted on December 17, 2013, entered his guilty plea before United States District Court Judge John R. Tunheim on May 29, 2014.
In his plea agreement, Dixon admitted that on November 4, 2013, he walked into the University Avenue branch of TCF Bank in St. Paul and gave a teller a note demanding money. Following the robbery, an audit conducted by TCF Bank determined that the bank had suffered a loss of $768. Dixon also admitted that on November 9, 2013, he robbed the Lexington Parkway North branch of TCF Bank in the same manner. Following the robbery, Dixon was apprehended a short distance from the bank. When the defendant was taken into custody, he was found to have $175 on his person.
In addition to the November 4 and November 9 bank robberies, Dixon also admitted that he robbed another TCF Bank in Minneapolis on November 5, and between October 10, 2013 and November 9, 2013, engaged in a robbery spree where he robbed several retail establishments, including numerous Subway locations, a White Castle, and a Little Caesar’s Pizza restaurant.
“These repeated robbery cases are particularly troublesome,” stated United States Attorney Andrew M. Luger. “I am pleased that police were able to connect these robberies and end the defendant’s spree.”
This case is the result of an investigation by the St. Paul Police Department, the Minneapolis Police Department, the Woodbury Police Department, the Roseville Police Department, and Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Kevin S. Ueland.St. Louis County Man Indicted on Tax and Weapons ChargesRead the Press Release
St. Louis, MO – JOEY D. WOOD was indicted for allegedly filing six false tax returns for himself and three others claiming refunds totaling over $27,000 for tax years 2011 and 2012.
According to the indictment, Wood filed false tax returns for himself claiming refunds for 2011 and 2012, and filed false returns claiming refunds for three other people for the same years. The indictment also alleges that on May 17, 2013, Wood was in possession of one or more firearms. Due to a previous felony conviction, he is prohibited from owning or possessing firearms.
Wood, St. Louis County, MO, was indicted by a federal grand jury on six felony counts of filing false tax returns and one felony count of being a previously convicted felon in possession of a firearm. The indictment was returned May 28th, but remained sealed until the arrest of the defendant earlier today.If convicted, each of the tax counts of the indictment carries a maximum penalty of five years in prison and/or fines up to $250,000, the firearms charges carries a maximum of 10 years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by IRS Criminal Investigation, the St. Louis County Police Department and the Missouri Department of Revenue. Assistant United States Attorney Steven Muchnick is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Solon Couple Sentenced to Prison for Medicaid FraudRead the Press Release
A Solon couple that owned an ambulette company was sentenced to prison and ordered to pay restitutuion for defrauding Ohio Medicaid, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Ohio Attorney General Mike DeWine.
Temeca Hamilton was sentenced to 33 months in prison after pleading guilty to nine counts of health care fraud and one count of witness tampering. Antwain Hamilton was sentenced to 30 months in prison after pleading guilty to nine counts of health care fraud.
The court ordered both defendants to pay $823,283 in restitution.
The Hamiltons, both 37, operated their business Star Medical out of Maple Heights, Ohio.
“The punishment in this case reflects the brazen fraud in which these defendants engaged. Even after they knew they were under investigation, they kept defrauding the Medicaid program. Now, it is the defendants who must pay for their corrupt actions,” Dettelbach said.
“In some cases, our investigation found that this couple billed for ambulette runs that they claimed they made at the same time that they were vacationing out of state,” said Attorney General DeWine. “These individuals took lavish trips with the money that they weren’t entitled to and didn’t work for, and now they must pay the price by repaying those funds and serving jail time.”
Ambulette services contract with the Ohio Medicaid program to transport patients in vehicles known as ambulettes. An ambulette is a specially equipped van designed for wheelchair passengers. Medicaid pays ambulette operators for driving Medicaid patients to and from Medicaid-covered appointments, so long as: (1) the patient rides in a wheelchair; (2) a medical doctor certifies the need for the wheelchair and ambulette; and (3) the ambulette itself otherwise meets safety specifications.
The defendants were convicted of illegally charging Medicaid for rides of patients who did not use or need wheelchairs and for billing Medicaid for ambulette attendants, when no such attendants were used by Star Transport. The defendants also billed Medicaid for transports that never occurred, including instances when the defendants were taking Caribbean cruises and vacationing in Hawaii, Cancun, Mexico, and Las Vegas. Both defendants also continued to submit fraudulent billing after Medicaid suspended payments and after the U.S. Attorney’s Office sent them a letter informing them that they were targets of a federal criminal investigation. Temeca Hamilton tampered with a witness, a Medicaid recipient, by asking the witness to tell law enforcement that she been receiving transportation services from Star Transport for the last five years, which was false.
The case was prosecuted by Assistant U.S. Attorney Michael L. Collyer and Special Assistant U.S. Attorney Constance Nearhood, an Assistant Attorney General for the State of Ohio, after an investigation by Ohio Attorney General Mike DeWine’s Medicaid Fraud Control Unit and the Office of the Inspector General, United States Department of Health and Human Services.
Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477. To learn more about health care fraud prevention and enforcement go to www.medicare.gov
Shooting Range Owner Indicted for Illegal Firearms SalesRead the Press Release
RENO, Nev. – A federally-licensed firearms dealer and owner of an indoor shooting range in Reno, Nev., was indicted today by the federal grand jury on charges that he unlawfully sold multiple firearms, including guns with obliterated serial numbers and machine guns, to undercover ATF agents at his business in April and May 2014, announced Daniel G. Bogden, United States Attorney for the District of Nevada and Joseph M. Riehl, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
“Federally licensed firearms dealers are entrusted to uphold federal laws pertaining to the importation, manufacture and sales of firearms,” said U.S. Attorney Bogden. “We will be especially vigilant in our investigations and prosecutions of firearm dealers who consciously choose to violate these laws.”
James David Harwin, 59, of Reno, is charged in a six-count federal indictment with one count of illegal sale by a federally licensed dealer to an out-of-state resident, one count of possession of a firearm with an obliterated, removed or altered serial number, three counts of transfer of a firearm in violation of the National Firearms Act, and one count of obliteration, alteration, or removal of the serial number of a firearm. Harwin, who was previously charged by criminal complaint, is currently in federal custody, and is scheduled for an arraignment and plea on June 12, 2014, at 3:00 p.m. If convicted, he faces up to five years in prison on the illegal sale charge and up to 10 years in prison on each of the other five counts, as well as fines of up to $250,000 on each count.
According to the allegations in the criminal complaint and indictment, James Harwin and Safe Shot LLC possessed a Federal Firearms License to manufacture and sell firearms. Safe Shot LLC did business as the Safe Shot Indoor Shooting Range, located at 9425 Double R Boulevard in Reno. On or about April 17, 2014, Harwin unlawfully sold four handguns to two undercover ATF agents who told Harwin they were residents of Sacramento, Calif. One of the handguns had an obliterated serial number. On May 2, 2014, Harwin sold a machine gun with an obliterated serial number to the undercover ATF agents, and on May 29, 2014, Harwin unlawfully sold a Street Sweeper shotgun and three machine guns to the undercover agents. Harwin removed the serial numbers on one of the machine guns in the presence of the undercover agents.
“ATF is charged with ensuring compliance of all applicable laws and regulations as it relates to licensed federal firearms dealers,” said Special Agent in Charge Riehl. “We will aggressively pursue those individuals, including federally licensed dealers who try to circumvent and violate the federal firearms laws, in an effort to protect the public and prevent unlawful machine guns and other firearms from getting into the hands of criminals.”
This case is being prosecuted by Assistant U.S. Attorney Megan Rachow and investigated by ATF.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.Serial Bank Robber Pleads GuiltyRead the Press Release
Marcus Akiem Ricketts, 37, of Boyertown, PA, pleaded guilty yesterday to four armed bank robberies in Pennsylvania and using and carrying a firearm during a crime of violence. Ricketts was charged, federally, with four robberies: on June 8, 2010, at the Sovereign Bank, located at 258 East High Street, Pottstown, Pennsylvania; on January 24, 2012, at the Citizens Bank, located at 209 Lancaster Avenue, Devon, Pennsylvania; on April 12, 2012, at the First Niagara Bank, located at 502 State Avenue, Emmaus, Pennsylvania; and on July 2, 2012, at the Manufacturers and Traders Trust Company (“M&T Bank”), formerly located at 760 North Pottstown Pike, in Exton, Pennsylvania. In addition to those robberies, Ricketts pleaded guilty to seven others. The banks were located in Bucks, Berks, Chester, Delaware, Lehigh, and Montgomery counties. Ricketts admitted to committing 11 total bank robberies, six of which were pending investigation.
Ricketts faces 25 years in prison including a seven year mandatory term, five years of supervised release, a fine of up to a $1.25 million, a $500 special assessment and restitution of approximately $194,436. A sentencing hearing is scheduled for September 17, 2014.This case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, the Chester County Sheriff’s Department, the Chester County Detectives, and the police departments for Easttown Township, Emmaus, Lower Merion, Pottstown, Uwchlan, Shillington Township, Warminster, and West Whiteland, Pennsylvania. In addition, the District Attorney’s offices for the counties of Berks, Bucks, Chester, Lehigh and Montgomery were also involved in the investigation. This case is being prosecuted by Assistant United States Attorneys Jeffery W. Whitt and Jessica Natali.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Rochester Man Pleads Guilty to Resisting Impeding Secret Service AgentsRead the Press Release
ROCHESTER, N.Y. C U.S. Attorney William J. Hochul, Jr., announced today that Christopher Ludwig, 31, of Rochester, N.Y., pleaded guilty to resisting and impeding officers before U.S. District Judge Charles J. Siragusa. The charge carries a maximum penalty of one year in prison, a fine of $100,000, or both.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that on April 26, 2012, the defendant called the Monroe County Board of Elections and made a threatening remark concerning President Barack Obama. On May 3, 2012, when Special Agents with the United States Secret Service went to Ludwig’s residence, he forcibly resisted and impeded efforts to place him under arrest.
The plea is the culmination of an investigation on the part of the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast.
Sentencing is scheduled for September 5, 2014 at 9:15 a.m. before Judge Siragusa.Richmond Developer Pleads Guilty to Unlawful Transfer of A False Identification Document and Aggravated Identity TheftRead the Press Release
RICHMOND, Va. – Billy Gene Jefferson, Jr., 52, of Richmond, Va., pleaded guilty today to Unlawful Transfer of a False Identification Document and to Aggravated Identity Theft. He faces a maximum penalty of 15 years’ imprisonment on the Unlawful Transfer charge, to be followed by a mandatory 2 year consecutive sentence for the Aggravated Identity Theft. He also faces a fine of up to $500,000 and 3 years of supervised release at the time of sentencing. In the plea documents, the United States also reserved the right to argue for an upward variance or departure at sentencing based on the defendant’s obstruction of justice and related conduct that formed the basis for the allegations in Count One of the indictment.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; Gary Barksdale, Inspector in Charge of the United States Postal Inspection Service, Washington, D.C. Division; and Colonel W. Steven Flaherty, Superintendent of Virginia State Police, made the announcement after the plea was accepted by United States District Judge John A. Gibney, Jr.
At this time, Jefferson is also awaiting sentencing on Case No. 3:13CR221. In that case on December 19, 2013, Jefferson pleaded guilty to Major Fraud Against the United States and Engaging in Unlawful Monetary Transactions. For those charges, he faces a maximum penalty of 20 years in prison, restitution to the victims, a fine of up to $500,000, and three years of supervised release when he is sentenced on September 9, 2014. In supplemental plea documents filed in that case today, the parties removed a previous provision that called for an agreed sentencing recommendation to the Court. The United States also reserved the right to argue for an upward departure or variance for the defendant’s conduct that formed the basis for the United States’ Motion for Hearing Regarding Defendant’s Breach of Plea Agreement. The parties revised procedures to determine the final restitution amount depending on the final resolution of an IRS audit on a portion of the federal losses.
In the Statement of Facts filed in connection with today’s guilty plea, Jefferson admitted that on October 26, 2013, he created and transferred a false identification document, namely an Arkansas Driver’s License in the name of “Actual Person” (the individual referenced in the pending indictment is Jefferson’s brother, J.W.J.) with the defendant’s photograph, knowing that the document was produced without lawful authority. The defendant agreed that the Arkansas Driver’s License was of the type intended and commonly accepted for identifying an individual that was not issued under the authority of the State of Arkansas. Jefferson, posing as the “Actual Person” (referring to J.W.J.) on the fraudulent Arkansas Driver’s License, caused the email transfer of the identification and other documents to representatives from Aircraft Management Group, Inc. (AMG Jets). The transfer was in relation to the defendant’s attempt to charter a one-way flight to Cranfield, England, with a scheduled departure date of November 2, 2013. In connection with the Aggravated Identity Theft portion of the plea, the defendant admitted that he transferred, possessed, and used “Actual Person’s” (referring to J.W.J.) name and date of birth in connection with attempting to secure the charger flight. The defendant admitted that he did not have the “Actual Person’s” authority or permission to use the name and date of birth for these purposes.
This case was investigated by the Internal Revenue Service Criminal Investigation Division, Federal Bureau of Investigation Richmond Office, the United States Postal Inspection Service, and the Virginia State Police. The Virginia Department of Historic Resources also assisted law enforcement in the investigation. Assistant United States Attorneys Michael Gill and Wingate Grant and Special Assistant United States Attorney Patrick Dorgan are prosecuting the case on behalf of the United States.
This investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is comprised of several federal and state agencies, including the Virginia Attorney General’s Office. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force (FFETF), an interagency national task force.
The FFETF 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.
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.Portland Man Sentenced for Distributing Child PornographyRead the Press Release
VICTORIA, Texas – Richard R. Montez, 32, been ordered to prison following his conviction on one count of distribution of child pornography, announced United States Attorney Kenneth Magidson. Montez pleaded guilty Feb. 18, 2014.
Today, Senior U.S. District Judge John D. Rainey considered the need to protect the public and deter future criminal conduct and handed Montez a sentence of 97 months in federal prison. The sentence will be immediately followed by 10 years of supervised release during which time he will have to comply to comply with numerous requirements designed to restrict his access to children and the Internet. Montez will also be ordered to register as a sex offender.
The FBI had identified Montez in an undercover operation out of Tulsa, Okla. He had been on a file sharing network with 214 suspected files of child pornography he had made available for sharing.
On Oct. 24, 2013, FBI agents and local officers executed a federal search warrant on his Portland home. At that time, Montez admitted to using a file sharing network to acquire child pornography.
Forensic analysis of a laptop Montez owned led to the discovery of more than 500 images and more than 250 videos of child pornography.
Previously released on bond, Montez was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
FBI investigated with the assistance of the Corpus Christi Police Department – Internet Crimes Against Children Task Force and the Portland Police Department.
This case, prosecuted by Assistant United States Attorney Lance Duke, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Philadelphia Store Owner Sentenced to 30 Months’ Imprisonment for Smuggling Elephant Ivory from AfricaRead the Press Release
Earlier today, Victor Gordon was sentenced before Judge Kiyo A. Matsumoto in U.S. District Court in Brooklyn, New York, to 30 months’ imprisonment, to be followed by 2 years of supervised release, for smuggling elephant ivory into the United States. As part of that sentence, the court ordered Gordon to pay a fine of $7,500 and to forfeit $150,000, along with the approximately one ton of elephant ivory that was seized by agents from Gordon’s Philadelphia store in April 2009.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Honora Gordon, Special Agent in Charge of the U.S. Fish and Wildlife Service’s Northeast Region Office of Law Enforcement.
“The illicit trade in elephant ivory has created an environmental crisis in Africa and is fueling the development of organized criminal groups around the world,” said United States Attorney Lynch. “For this reason, the United States has committed itself, through international treaties and domestic law, to preventing the flow of illegal ivory through and within our borders. This prosecution – which resulted in the seizure and forfeiture of one of the largest known caches of illegal elephant ivory in the United States and the imprisonment of the person who acquired and attempted to profit from it – is emblematic of that commitment.” Ms. Lynch commended the agents and inspectors of the Fish and Wildlife Service for their outstanding efforts in leading the investigation.
As is described in the government’s sentencing memorandum, over a period of at least nine years, the Gordon acquired more than 400 pieces of carved elephant ivory, valued at approximately $800,000. On four occasions beginning in 2006, Gordon paid a smuggler to acquire ivory directly from Africa and then unlawfully secret it into the United States through John F. Kennedy International Airport. In some instances, Gordon stained the ivory and directed the smuggler to create false receipts in order to make it appear that the ivory had been lawfully acquired before international and U.S. law imposed strict regulations on the importation of elephant ivory in 1989. Over the years, Gordon sold tens of thousands of dollars of carved ivory to customers from his Philadelphia store, and prior to the search of the store in April 2009, was attempting to sell his business, including the ivory collection, for $20 million.
Gordon’s sentence caps an eight-year investigation that has yielded nine convictions in this district for smuggling and Lacey Act offenses relating to the illegal importation and sale of elephant ivory.
The government’s case was prosecuted by Assistant United States Attorneys Darren A. LaVerne and Claire Kedeshian.
The Defendant:
Victor Gordon
Age: 71
Penn Valley, Pennsylvania
E.D.N.Y. Docket No. CR-11-517 (KAM)
Permian Basin Law Enforcement and Medical Community Getting the Word Out on the Dangers Associated with Designer DrugsRead the Press Release
Federal, state and local law enforcement and medical authorities in the Permian Basin, led by United States Attorney Robert Pitman, Midland County District Attorney Teresa Clingman and Ector County District Attorney Bobby Bland are getting the word out about the dangers associated with synthetic cannabinoids, also known as “synthetic marijuana” and synthetic cathinones, sometimes called “bath salts.”
These synthetic drugs, often referred to as designer drugs, are novel psychoactive substances clandestinely produced to mimic the effects of marijuana, cocaine, methamphetamine, and MDMA. There is no industrial or medical use for these substances. Clandestine chemists duplicate the technical sophistication used by the legitimate drug research community to manufacture new substances which are increasingly popular among recreational drug users. The manufacturers and sellers of synthetic drugs often attempt to mislead users about the legality of the drugs and market the drugs to young people.
Synthetic cannabinoids, also known as synthetic marijuana, “Spice,” “K2,” or “Kush,” comprise a large family of chemically unrelated structures functionally similar to THC, the primary psychoactive ingredient in organic marijuana. When ingested, synthetic cannabinoids may produce less, equivalent or more psychoactive activity than THC, but often with pronounced and dangerous side-effects. Synthetic cannabinoid products consist of plant matter that is sprayed with a mixture of acetone and synthetic cannabinoid chemical compounds. These chemicals are unregulated, often produced in China, and imported to the United States where they are then applied to plant matter to render them ingestible. Generally, the product is packaged in foil baggies which falsely state that the product is “herbal incense” and “not for human consumption” in an attempt to avoid prosecution. The product may be sold in brick and mortar “smoke shops,” convenience stores, adult book stores, as well as, over the Internet. Synthetic cannabinoid products are marketed under many different names, including “Scooby Snax,” “Hysteria,” “Mad Monkey,” “Sexy Monkey,” and “Devil Eye.”
Texas poison centers report that between January 2012 and April 2014, there were 2,179 exposures to synthetic cannabinoids. The Texas Poison Center Network warns that the alarming health effects from using these drugs include severe agitation and anxiety; racing heartbeats and high blood pressure; nausea and vomiting; muscle spasm, seizure, and tremors; intense hallucinations and psychotic episodes and suicidal and other harmful thoughts and/or actions.
“Let me be clear about this. This is not marijuana. These are chemical substances that are, to the user, completely unknown and that pose potentially serious health risks. There have been reports in our own community of people, especially young people, who have had potentially serious health effects from their use,” stated U.S. Attorney Pitman. He added, “To the owners and operators of convenience stores and smoke shops who sell illegal designer drugs, we are here to tell you that this is just the beginning of our effort to enforce the law with respect to the sale of these potentially dangerous substances. To people in the community who think that designer drugs are a safe and legal option, we hope that this will provoke an understanding not just that they are illegal, but that you are playing a game of Russian roulette when you put these unregulated and unknown chemicals into your body.”
Last week, Jared William Roach, a 29-year-old former Odessa retailer, pleaded guilty to one count of possession of a synthetic cannabinoid with intent to distribute. By pleading guilty, Roach admitted to possessing “Hysteria Black” in his store, Smoke Alley, in May of last year. The contents of “Hysteria Black” included both a controlled substance as well as a controlled substance analog. Roach faces up to 20 years in federal prison.
Kelly Jay Duarte, the 22-year-old former proprietor of Urban City, a retail business in Odessa, faces up to 20 years in federal prison after pleading guilty last month to one count of possession of a synthetic cannabinoid with intent to distribute. By pleading guilty, Duarte admitted that in May 2013, synthetic cannabinoids packaged under the names of “Diablo,” “KMA,” “Mad Hatter,” and “Hypnotic Haze” were knowingly sold to customers at his business in violation of federal law. Duarte is scheduled to be sentenced on August 14, 2014, before United States District Judge Robert A. Junell in Midland.
Synthetic cathinones, which are structurally and pharmacologically similar to amphetamine, MDMA, and other related substances, are central nervous system stimulants and are sold in retail stores, on the internet, and in head shops as “bath salts,” “plant food,” or “jewelry cleaner.” Synthetic cathinone users report symptoms of increased heart rate, agitation, hypertension and hallucinations. Like the cannabinoids, the ingredients are not disclosed, the production is unregulated and there are significant batch to batch variances.
The United States Attorney’s Office prosecuted and convicted Jimmy Wright, the former owner of B & L adult bookstore in Odessa, of the federal felony criminal offense of possession with intent to distribute the synthetic cathinone, MDVP. Wright was sentenced to a 20-month term of imprisonment. He recently died in prison.
Oakland Man Sentenced to Four Years in Prison for Selling Historic Gold Jewelry Box Stolen from Oakland MuseumRead the Press Release
OAKLAND, Calif. – Andre Taray Franklin was sentenced yesterday to four years in prison for knowingly receiving and then selling an historic gold jewelry box stolen from the Oakland Museum of California, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
Franklin pleaded guilty on March 7, 2014. According to the plea agreement, Franklin admitted that, in early 2013, in exchange for money, he gave a jewelry box that he knew had been stolen from the Oakland Museum of California, located at 1000 Oak Street in Oakland, Calif., to another individual.
The jewelry box was stolen from the Oakland Museum on January 7, 2013. The jewelry box was made of California gold and adorned with gold veined quartz, and had been made between 1869 and 1878. The box was recovered by the Oakland Police Department on March 6, 2013, from a business in Oakland and from the individual to whom Franklin sold the jewelry box.
“This prosecution, conviction, and sentence send a strong message that the U.S. Attorney’s Office values greatly, and will fight to protect, the museums and cultural institutions in Oakland and the Bay Area that maintain and display historic items for the public to enjoy,” states U.S. Attorney Melinda Haag.
Franklin, 46, of Oakland, was indicted by a federal grand jury on May 23, 2013, for theft of major artwork and unlawful concealment and disposition of stolen major artwork, in violation of 18 U.S.C. §§ 668(b)(1) and (b)(2).
The sentence was handed down by The Honorable Jeffrey S. White, United States District Court Judge. Judge White also sentenced the defendant to a 3-year period of supervised release.
Assistant U.S. Attorney Brian C. Lewis prosecuted this case with the assistance of Legal Assistant Janice Pagsanjan. This prosecution is the result of an investigation by Oakland Police Department and the FBI.
(Franklin criminal complaint )
(Franklin indictment )
Nigerian Fugitive Arrested for Health Care Fraud ViolationsRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas — A 43-year-old Nigerian fugitive has been arrested at a Houston airport and will now face federal health care fraud violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Vivian Yusuf, of Port Harcourt, Nigeria, the former owner of Ivy Health Care Supply, a Houston area medical supply company, was arrested on June 3, 2014 at George Bush Intercontinental Airport in Houston. Yusuf had been indicted for conspiracy to commit health care fraud, health care fraud, and aggravated identity theft and a fugitive since March 2011.
According to the indictment, from June 2007 through May 2009, Yusuf, Aghaegbuna “Ike” Odelugo, James Reese, and others carried out a scheme to defraud Medicare through the marketing of power wheelchairs and accessories, as well as “ortho kits,” which primarily consisted of a bag of orthotic items, including braces, wraps, and supports, and a heat lamp or heat pad. As part of the scheme, the defendant and her co-conspirators illegally obtained protected health information, including names, dates of birth, and Medicare numbers from elderly individuals. Yusuf and her co-conspirators supplied beneficiaries with kits and power wheelchairs which were not prescribed or otherwise authorized by a physician and which were not wanted by the beneficiaries. Claims were submitted by the defendant and her co-conspirators for approximately 790 beneficiaries located primarily in Texas and Louisiana. In some instances, physicians’ signatures were forged and false claims were submitted to Medicare in the names of Medicare beneficiaries who were deceased. By means of fraudulent billing practices, the defendant and her co-conspirators unlawfully submitted false and fraudulent claims to Medicare of more than $3.4 million and obtained more than $1.6 million.
Yusuf appeared in federal court in Houston for an initial appearance and is being transferred to the Eastern District of Texas.
Odelugo and Reese were indicted for their involvement in similar health care fraud schemes. "Ike" Odelugo pleaded guilty to conspiracy to commit health care fraud, health care fraud, and money laundering and was sentenced to 72 months in federal prison. The loss to Medicare as a result of Odelugo’s scheme was approximately $9.9 million. James Reese pleaded guilty to health care fraud and tax evasion and was sentenced to 180 months in federal prison. The loss to Medicare as a result of Reese’s scheme was approximately $8.6 million.
If convicted, Yusuf faces up to 10 years in prison for each count of conspiracy and health care fraud and up to 2 years in prison for each count of aggravated identity theft. A grand jury indictment is not evidence of guilt.This case is being investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), and the Federal Bureau of Investigation (FBI). Assistant U.S. Attorney Nathaniel C. Kummerfeld is prosecuting this case.
#######New Haven Man Pleads Guilty to Federal Gun Charge, Faces at Least 15 Years in PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES BROWN, 34, of New Haven, pleaded guilty today before Senior U.S. District Judge Alfred V. Covello in Hartford to one count of possession of a firearm by a previously convicted felon.
According to court documents and statements made in court, on December 28, 2012, New Haven Police responded to a 911 call of a domestic dispute involving a weapon. Officers arrived at the identified residence and BROWN, who was in the bedroom, was taken into custody. A subsequent search of the bedroom revealed a loaded Smith and Wesson revolver hidden under the mattress of the bed.
Forensic analysis of the firearm revealed DNA that matched BROWN’s DNA.
BROWN’s criminal history includes convictions for unlawful restraint in the first degree, robbery in the second degree, robbery in the third degree, and sale of a controlled substance. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
The charge of possession of a firearm by a previously convicted felon ordinarily carries a maximum term of imprisonment of 10 years. However, BROWN is subject to the Armed Career Criminal Act, a federal law imposing severe penalties for firearm or ammunition possession by persons who have been convicted of at least three violent felonies or serious drug offenses. A defendant who qualifies as an Armed Career Criminal faces a minimum term of imprisonment of 15 years and a maximum term of life.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven Police Department. The case is being prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.
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U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Monroe County Man Charged with Heroin Trafficking ConspiracyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a criminal Information was filed in U.S. District Court in Scranton today charging a Monroe County resident with participating in a conspiracy to distribute heroin during November 2013 through April 2014.
According to United States Attorney Peter Smith, the Information alleges that Kerion Johnson, age 40, conspired with others to distribute and possess with intent to distribute heroin in Monroe County and elsewhere.
The charge stems from an investigation by special agents of the Federal Bureau of Investigation and the Pennsylvania State Police.
Johnson faces a potential maximum sentence of 20 years in prison and a $1 million fine if he is convicted of the charge.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
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 20 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Mobile County Man Sentenced to 60 Months for Possession with Intent to Distribute 31 Grams of Crack CocaineRead the Press Release
The United States Attorney Kenyen Brown announces that Jermaine Dickinson, a 30 year old resident of Mobile, was sentenced today. Mr. Dickinson pled guilty on March 5, 2014, to possession of 31 grams of crack cocaine with the intent to distribute it.
Officers of the Mobile Police Department investigated the case and presented it to the U.S. Attorney=s Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.
Millvale Police Officer Charged with Unlawfully Using A Taser on A Handcuffed PersonRead the Press Release
PITTSBURGH - A Pittsburgh resident has been indicted by a federal grand jury in Pittsburgh on a charge of deprivation of rights under color of law, United States Attorney David J. Hickton announced today.
The one-count indictment, returned on June 3, named Nicole Murphy, 30, as the sole defendant.
According to the indictment, on Sept. 21, 2012, Nicole Murphy, while acting under color of law as a police officer with the Millvale Police Department, deprived an individual identified as T.S. of the constitutional right to be free from unreasonable seizure, by deploying a Taser in both drive and probe-stun modes on T.S.’s person while he was handcuffed.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Middlesex County, N.J., Man Admits Saddle Brook Bank RobberyRead the Press Release
NEWARK, N.J. – A Middlesex County, N.J., man today admitted robbing a TD Bank in Saddle Brook, N.J., U.S. Attorney Paul J. Fishman announced.
Jorge Rodriguez, 46, of South River, N.J., pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of bank robbery.
According to documents filed in this case and statements made in court:
Rodriguez admitted using a BB air pistol to rob a TD Bank in Saddle Brook on April 19, 2013. Rodriguez entered the bank wearing a disguise, which included a hat with a dreadlocks wig attached to it. During the robbery, Rodriguez brandished the BB air pistol, handed a bag to a bank teller and said, “Give me the money or I’ll shoot. You have two seconds.” The teller complied and Rodriguez then fled the bank with the bag of money, which also included a dye pack. Rodriguez was apprehended shortly after the robbery, after the dye pack exploded.
The bank robbery count carries a maximum sentence of up to 20 years in prison and a fine of up to $250,000. Sentencing is scheduled for Sept. 23, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, along with the Saddle Brook Police Department and the Bergen County Prosecutor’s Office for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Josh Hafetz and David M. Eskew of the Criminal Division of U.S. Attorney’s Office in Newark.
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Defense counsel: Patrick McMahon Esq., Assistant Federal Public Defender, Newark
Rodriguez, Jorge Information
Michigan Man Sentenced to Four Years in Federal Prison for Firearm ViolationRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Thomas Glenn Speck, 37, of Fostoria, Michigan, was sentenced in federal court in Beckley to four years in prison for being a felon in possession of a firearm. Speck pleaded guilty in January 2014, admitting that on March 28, 2012, he possessed a 12-gauge shotgun at a residence where he was staying in Harper, Raleigh County, West Virginia. The firearm was found during an investigation of a confrontation between members of the Avengers Motorcycle Club and West Virginia State Troopers. Speck is prohibited from possessing firearms because he was convicted of the felony offenses of unarmed robbery and second degree home invasion in Michigan in 1999. He is currently serving a prison sentence of three to ten years in Michigan on a 2012 conviction of third degree fleeing and eluding a police officer. The federal sentence will be served after the Michigan sentence is complete.
Speck’s sentence was imposed by United States District Judge Irene C. Berger. The case was investigated by the West Virginia State Police and the Federal Bureau of Investigation. The prosecution was handled by Assistant United States Attorney John File.
Miami Man Pleads Guilty to Identity Theft and Tax Refund Fraud ChargesRead the Press Release
RICHMOND, Va. – Junior Jean Merilia, 33, of Miami, Florida, pleaded guilty today to conspiracy to commit mail and wire fraud and aggravated identity theft.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Thomas J. Kelly, Special Agent in Charge of Internal Revenue Service, Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson.Merilia was indicted on June 4, 2014 by a federal grand jury on a single count of conspiracy to commit mail and wire fraud. He faces a maximum penalty of twenty-two years in prison when he is sentenced on November 21, 2014.
According to the statement of facts in support of the plea and other court documents, Merilia is a co-conspirator of Ramoth Jean, who has already been prosecuted in connection with this matter. Jean was stopped by Henrico County Police in August 2012 as he removed items from a storage unit that had been rented in the name of a Florida resident without that person’s knowledge or authorization. A search of the unit yielded hundreds of cards bearing the personal identifying information of persons around the United States, pre-paid debit cards, and laptop computers used in this scheme. The pre-paid debit cards were issued in connection with tax refunds from tax returns filed on-line using stolen personal identifying information. Many of those returns were filed from hotels in the Richmond area.
Papers linked with Merilia were found in the storage unit. Merilia acknowledged in the statement of facts that he hired a website designer who created websites through which personal identifying information was stolen, via sham employment postings, for use in connection with the scheme. In addition, Merilia made ATM withdrawals in the Miami area using debit cards connected with some fraudulently filed tax returns.
On January 9, 2014, Judge Hudson sentenced Ramoth Jean to a 114 month term of incarceration following his guilty pleas to conspiracy and aggravated identity theft charges.
This case was investigated by the Internal Revenue Service—Criminal Investigations, the U.S. Postal Inspection Service, Social Security Administration—Office of Inspector General, and the Henrico County Police Department as members of the Metro-Richmond Identity Theft Task Force. Prosecutions for the Task Force are handled by the United States Attorney’s Office and the Office of the Attorney General for the Commonwealth of Virginia. Assistant U.S. Attorney Michael C. Moore is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14-cr-73.
Mexican Nationals Charged with Illegal ReentryRead the Press Release
Two Mexican nationals were indicted on charges of unlawful reentry to the United States, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Juan Ramon Valadez-Lara, age 26, is accused of unlawfully reentering the United States on May 12, 2014.
Joel Noe Fabian-Vazquez, age 27, of Mexico, , is accused of unlawfully reentering the United States on May 21, 2014.
The cases are not related.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in these cases is the Department of Homeland Security, Customs and Border Protection, Port Clinton, Ohio. They are being handled by Assistant United States Attorney Noah P. Hood.
Manhattan U.S. Attorney Files Civil Injunction Lawsuit Against New York Lawyer to Block Promotion of Abusive Tax Shelter TransactionsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John Dalrymple, Deputy Commissioner for Services and Enforcement for the Internal Revenue Service (IRS), announced today that the United States filed a civil injunction complaint in Manhattan federal court alleging that HAROLD LEVINE, an attorney in New York, has promoted abusive tax shelters while serving as a partner and head of the tax practice group in the New York office of the law firm Herrick Feinstein LLP. LEVINE currently is a partner and chair of the tax practice group in the New York office of the law firm Moritt Hock & Hamroff LLP.
The Complaint asserts that LEVINE promoted, implemented and/or participated in at least 90 unlawful tax schemes designed to cheat the Government out of hundreds of millions of dollars in tax liability. According to the Complaint, LEVINE, operating together with other known tax-shelter promoters, used companies with phony losses on their books to shield millions of dollars of income garnered by other companies disposing of their assets. The Complaint alleges that, in an attempt to disguise the illegitimacy of these transactions, LEVINE knowingly told lies or caused the corporations involved in these unlawful transactions to tell lies concerning the supposed tax benefits of the transactions. As set forth in the Complaint, LEVINE received more than $5 million in fees as a result of his participation in these unlawful tax avoidance schemes. The Complaint seeks to bar LEVINE from organizing, promoting or selling any tax shelters that allegedly use an intermediary-type transaction or state tax credits designed to reduce or eliminate tax liabilities in the future, as well as any other plans or arrangements intended to secure tax benefits or unlawfully evade tax liabilities in exchange for fees. LEVINE may be subject to penalties in the future based on the fraudulent tax shelter conduct alleged in the Complaint.
Manhattan U.S. Attorney Preet Bharara said: “Those who promote illegal tax avoidance schemes are not simply committing a fraud on the United States Government. They are taking advantage of the hard-working, honest Americans who pay their share in taxes when the bill comes due. This Office will not tolerate those who unlawfully seek to game the system in order to evade their tax obligations.”
IRS Deputy Commissioner for Services and Enforcement, John Dalrymple, said: "This action demonstrates that the IRS will pursue those who cheat the tax system no matter how sophisticated or intricate the transactions may be. The vast majority of U.S. taxpayers pay their fair share. We owe it to them to stop tax cheating in whatever form it takes."
According to the allegations contained in the Complaint:
The abusive tax shelter transactions promoted by Levine include “intermediary transactions,” in which the corporate income taxes on the gains received from the sale of corporate assets are illegally avoided for the benefit of shareholders, and “state tax credit transactions,” in which a real estate project owner avoids paying taxes on the gains from the sale of the transferable state tax credits it earns or receives. Levine formed and/or used five corporations – termed “promoter entities” – to carry out these schemes. These promoter entities would acquire the asset-selling corporations and eliminate their capital gains tax using the promoter entities’ phony losses. With respect to the 90 unlawful transactions charged in the complaint, the promoter entities improperly deducted over $515 million in bad debt losses on their tax returns. The government estimates that the tax loss resulting from their promotion of the tax schemes at issue in this case exceeds $129 million, not including penalties and interest, virtually all of which may now be uncollectible due to the lack of assets remaining in the tax-avoiding corporations.
In particular, LEVINE promoted, implemented, and/or participated in over a dozen intermediary transactions, notwithstanding public IRS notices and regulations warning that the IRS considers such transactions “tax avoidance transactions,” and may challenge the tax results of any such transaction and assert penalties on those who promote or participate in them. LEVINE therefore attempted to disguise the true nature of the transactions to avoid IRS enforcement efforts. In addition, LEVINE also promoted, implemented, and/or participated in about 75 abusive state tax credit transactions which, similar to the intermediary transactions, were structured to permit real estate project owners to evade substantial tax liability while allowing LEVINE and others to profit from a portion of the tax savings.
This case is being handled by the Office’s Tax and Bankruptcy Unit. Assistant U.S. Attorneys Alicia M. Simmons and Tara M. La Morte are in charge of the case.
U.S. v. Harold Levine
Luzerne County Man Sentenced to More Than 14 Years in Prison for Drug TraffickingRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a former Kingston resident was sentenced today to serve 175 months in prison by U.S. District Court Judge Robert D. Mariani for distributing heroin and cocaine during a four-year time period.
According to United States Attorney Peter Smith, the defendant, James Featherstone, age 34, previously admitted to distributing cocaine and heroin on multiple occasions in Luzerne County during January 2009 through September of 2013, and possessing a firearm in connection with his drug trafficking.
The charge against Featherstone resulted from an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Pennsylvania State Police, Kingston Police, and the Luzerne County District Attorney’s Office.
Featherstone must also serve three years on supervised release following his prison sentence faces and pay a $100 special assessment.
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Local Cell Head of A Major Methamphetamine Distribution Conspiracy Is Sentenced to 20 Years in Federal PrisonRead the Press Release
DALLAS — The local cell head of a major methamphetamine distribution conspiracy that operated in the Dallas-Fort Worth metroplex and elsewhere since October 2012, was sentenced this afternoon in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Gerardo Cisneros, aka “Tatuado,” “Gera,” and “Jerry,” was sentenced by U.S. District Judge Jorge A. Solis to serve a total of 20 years in federal prison. Cisneros, 27, previously agreed to forfeit five vehicles and a firearm.
Cisneros pleaded guilty in October 2013 to one count of conspiracy to possess with intent to distribute and to distribute methamphetamine and one count of conspiracy to commit money laundering. He has been in custody since his arrest in August 2013 when special agents with the Drug Enforcement Administration (DEA) and other law enforcement members executed numerous arrest warrants for defendants charged in the methamphetamine conspiracy as outlined in a federal indictment returned the previous month. The conspiracy involved Cisneros’s mother, who has been arrested, and his sister, who is a fugitive. The methamphetamine was imported into the U.S. from Mexico, and it was delivered to the Dallas area for distribution.
According to documents filed in the case, Cisneros acted as the local cell head of the conspiracy. He worked with co-defendants to set up a receipt and distribution center for controlled substances, including methamphetamine and marijuana. Cisneros admitted that he received and distributed methamphetamine in multi-kilo quantities, collected money from his customers and returned money to his supply source in Mexico. Cisneros admitted sending money to Mexico via couriers to conceal the nature, location, source, ownership or control of the drug proceeds.
Cisneros also admitted conspiring to launder money by depositing drug proceeds into multiple bank accounts so that the money could ultimately be withdrawn by individuals in Mexico in order to conceal or disguise the nature, location, source, ownership or control of the drug proceeds.
Cisneros further admitted he used drug proceeds to purchase a 2006 Chrysler 300, a 2009 Honda Accord, a 2007 Ford Edge, a 2010 Chevrolet Camaro, a 2009 Mercedes and his residence on Marilyn Lane in Arlington. He also admitted that the automobiles, residence and property at this location were used to facilitate drug trafficking.
Twenty-four defendants were charged in the conspiracy. The case against one defendant was dismissed and two defendants are awaiting trial. All other captured defendants have pleaded guilty and are awaiting sentencing.
This Organized Crime and Drug Enforcement Task Force (OCDETF) case was investigated by the DEA, the Dallas Police Department, Grand Prairie Police Department, Garland Police Department, Rockwall Police Department and the Arlington Police Department.
Assistant U.S. Attorney George Leal is leading the prosecution with assistance from Assistant U.S. Attorneys Brian Poe and John DeLaGarza.
Las Cruces Man Sentenced to Seventeen and a Half Years in Federal Prison for Child Porn and Firearms ConvictionsRead the Press Release
ALBUQUERQUE – Juan Lorenzo Barela, Jr., 40, of Las Cruces, N.M., was sentenced today in Las Cruces federal court in two separate criminal cases. Barela was sentenced to 210 months in federal prison followed by five years of supervised release for his conviction on child pornography charges. Barela also was sentenced to 120 months in prison followed by three years of supervised release in a separate case for being a felon in possession of a firearm. The sentences are to be served concurrently. Barela will be required to register as a sex offender after he completes his prison sentence.
Barela was arrested in Oct. 2010 based on two separate criminal complaints. The first complaint charged Barela with distributing, receiving and possessing visual depictions of minors engaged in sexually explicit conduct, and the second charged him with being a felon in possession of firearms and ammunition. Barela has been in federal custody since his arrest.
In Jan. 2011, Barela was indicted in the child pornography case and charged with distributing child pornography in July 2010 and with possessing child pornography in Sept. 2010. Also in Jan. 2011, Barela was indicted and charged with unlawfully possessing firearms and ammunition in Sept. 2010. At the time, Barela was prohibited from possessing firearms and ammunition because he previously had been convicted of residential burglary and larceny in 1997 and of embezzlement in 2003 in the 3rd Judicial District Court for the State of New Mexico.
According to court filings, in July 2010, law enforcement authorities initiated an investigation that revealed that an IP Address subscribed to Barela at his Las Cruces residence was being used to distribute and receive child pornography. On Sept. 14, 2010, Barela was interviewed by law enforcement officers while a search warrant was executed at his residence. During the interview, Barela admitted downloading and possessing child pornography. Forensic examinations of computers and computer-related media seized from Barela’s residence confirmed that they contained child pornography images and videos. During the execution of the search warrant, the officers also seized seven firearms and approximately 1227 rounds of ammunition.
In Aug. 2011, Barela pled guilty to being a felon in possession of firearms and ammunition. Immediately before he was sentenced today, Barela entered a guilty plea to the indictment in the child pornography case.
These two cases were investigated by the Las Cruces office of Homeland Security Investigations, the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New Mexico State Police, the Las Cruces Police Department and the U.S. Marshals Service. The cases were prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The Operation also was brought as a part of the New Mexico Interstate Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 64 federal, state and local law enforcement agencies associated with the ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Kathy Winters Pleads Guilty to Embezzlement from Alcoa City SchoolsRead the Press Release
KNOXVILLE, Tenn. – On May 19, 2014, a one-count information was filed in U.S. District Court in Knoxville, charging Kathy Ann Winters, 58, of Harriman, Tenn., with wilfully and knowingly embezzling more than $1,000 from the U.S. Department of Education. On June 4, 2014, Winters appeared in U.S. District Court and pleaded guilty to the charges in the information. Sentencing has been set for 1:30 p.m., Oct. 7, 2014.
According to a plea agreement on file with the U.S. District Court, Winters was the federal projects administrative assistant for Alcoa City School District, and treasurer of both the East Tennessee Attendance Supervisors Association (ETASA) and Tennessee Attendance Supervisors Steering Committee (TASSC). While serving in these roles, investigators determined that Winters took funds belonging to the three entities by creating false invoices that demanded payment payable to TASSC or ETASA, forging an approving official’s signature to the false invoices, and forwarding the forged, false invoices to the City of Alcoa for payment. Once the City of Alcoa rendered check payments based on the false invoices, Winters endorsed the checks, and either deposited the funds into her personal account or into the TASSC or ETASA account and then withdrew the money through ATM withdraws and checks made payable to herself.
In addition to the invoice scheme, Winters misused Alcoa City School District credit cards by making unauthorized personal charges on the credit cards and falsified travel reimbursement requests for unauthorized travel. In both instances, Winters forged signatures of approving officials, and submitted the credit card billing statements and travel claims to the City of Alcoa for payment. Winters also caused various bank charges, including overdraft fees, ATM fees, and service charges to be assessed against TASSC and ETASA. The investigation revealed a total loss of $428,076.94, between the three entities. The investigation revealed further that the Alcoa City School District loss included federal government grant money paid to the school district for special education expenses.
On Apr. 4, 2013, during a consensual and voluntary interview, Winters admitted to the fraud and provided a written statement to investigators.
Investigative agencies involved in this investigation include the Tennessee Comptroller’s Office, Financial and Compliance Unit and Tennessee Bureau of Investigation. Assistant United States Attorneys Brooklyn Sawyers and Steve Cook are representing the United States.
James Nathaniel Watts Charged with Killing Two Employees and Critically Injuring One During Attempted Armed Robbery of First National Bank in CairoRead the Press Release
Follow @SDILNewsA Federal Grand Jury sitting in Benton returned an indictment today charging James Nathaniel Watts, 29, of Cairo, Illinois, with Attempted Armed Bank Robbery Resulting in Death announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. The indictment alleged that during the commission of his attempted robbery of the First National Bank in Cairo on May 15, 2014, Watts killed two bank employees and critically injured a third. The indictment also charged Watts with being a felon in possession of a firearm.
Watts was previously charged in federal court on Friday, May 16th in a Criminal Complaint with the firearm offense. An affidavit attached to the complaint alleged that Watts illegally possessed a .380 caliber semi-automatic pistol on May 15th and that the firearm was found in his possession following a high-speed chase in Cairo during which Watts was driving the stolen car of one of the employee-victims from the attempted robbery. Watts was denied bond on that charge and remanded to the custody of the United States Marshal to await action by the Grand Jury.
Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
The indictment returned by the Grand Jury also contains special findings rendering Watts eligible for the death penalty if he is convicted by a jury of the attempted robbery resulting in death offense. Under United States Department of Justice policy, however, the decision on whether or not to seek that penalty will be made at a later date and only after a comprehensive review process designed to ensure nationwide consistency in the application of the federal death penalty. If the death penalty is not sought, a conviction on that count will result in a mandatory sentence of life imprisonment without the possibility of parole.
If convicted of the firearm offense, Watts faces up to an additional 10 years’ imprisonment, a $250,000 fine, and 3 years of supervised release to follow any term of incarceration imposed.
Watts will next appear for arraignment on the indictment at the United States District Courthouse in Benton at a date and time to be set by the Court. He will remain in the custody of the United States Marshal until that time.
The case is being prosecuted by Assistant United States Attorneys James M. Cutchin and George A. Norwood.
Jackson Co. Woman Sentenced to 17.5 Years in Prison on Child Pornography ChargesRead the Press Release
ASHEVILLE, N.C. – A Jackson County woman was sentenced on Tuesday, June 3, 2014, to serve 210 months in a federal prison for producing, receiving, possessing and distributing child pornography, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, U.S. District Judge Martin Reidinger also ordered Kimberly Rachael Moore, 31, of Tuckasegee, N.C. to serve under court supervision the rest of her life upon release from prison and to register as a sex offender.
Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Jimmy Ashe of the Jackson County Sheriff’s Office join U.S. Attorney Tompkins in making today’s announcement.
In December 2012, a federal criminal indictment charged Moore with one count of production of child pornography, one count of possession of child pornography, one count of receipt of child pornography and four counts of distribution of child pornography. Moore pleaded guilty to the charges in May 2013. According to court filings and proceedings, during the investigation detectives discovered an extensive collection of child pornography, as well as a computer hard drive, an email account, and online photo sharing accounts.
Moore is in federal custody and will be transferred into custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation into Moore was handled by HSI and the Jackson County Sheriff’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.projectsafechildhood.gov.
Indictment: Kansas Firearms Distributor Paid Bribes and Kickbacks to Glock ExecutivesRead the Press Release
TOPEKA, KAN. – A Kansas firearms distributor was indicted today on federal charges of paying more than $1 million in bribes and kickbacks to executives of the company that manufactures Glock pistols, U.S. Attorney Barry Grissom said.
John Sullivan Ralph, III, 40, Olathe, Kan., who was owner of Global Guns & Hunting Inc. of Olathe, Kan., doing business as OMB Guns, is charged with one count of conspiracy, 11 counts of wire fraud and10 counts of money laundering.
The indictment alleges Ralph secretly paid executives of Glock to receive preferential treatment over other distributors of firearms, including directing potential customers to his company, giving his company priority access to limited products, steering government contracts and sales to government agencies of firearms and accessories to his company, and providing confidential Glock information to him.
The following co-defendants are charged with the same counts as Ralph:James “Craig” Dutton, 42, Acworth, Ga., who was the Assistant National Sales Manager for Glock. The American headquarters of Glock, Inc., is in Smyrna, Ga.
Lisa Delaine Dutton, 42, Acworth, Ga., who was Craig Dutton’s wife, and who formed a company called Supreme Solutions LLC. She is alleged to have concealed payments of bribes and kickbacks.
Welcome D. “Bo” Wood, Jr., 65, Oviedo, Fla., who was the Eastern Regional Manager for Glock.
Paula Ann Wood, 63, Oviedo, Fla, who was Bo Wood’s wife, and who formed a company called Tropical Marketing & Consulting LLC. She is alleged to have concealed payments of bribes and kickbacks.According to the indictment, most of Glock’s pistols are sold to independent firearm distributors who have contracts with Glock to resell its pistols. The allocation of Glock pistols was important because the demand frequently exceeded the supply.
Glock created two different sales channels for purposes of licensing its distributors. One channel was for sales to law enforcement agencies. Independent distributors were authorized to resell Glock pistols to law enforcement agencies within a specific geographic territory. The other channel was for the commercial market. Distributors of commercial market products were not restricted to a particular geographic area.
Glock used a Universal Product Code to differentiate pistols that were sold for resale to law enforcement agencies (blue label products) from pistols sold for resale to the commercial market (red label products). The price list for pistols intended for resale to law enforcement agencies is lower due to the fact law enforcement agencies routinely buy in bulk and are often subject to bidding processes.
The indictment alleges Wood and Dutton provided Ralph with equipment and software to allow him to convert firearms sold with the law enforcement discount (blue label) to firearms sold at the premium price to the commercial market (red label). Ralph is alleged to have sold at least 14,000 pistols to commercial buyers – including Cabela’s – which Glock sold to Ralph for resale to law enforcement agencies.
The indictment alleges that from 2003 to 2009 Ralph used the U.S. Postal Service to send and receive approximately 140 bribes and kickbacks that were delivered to defendants Lisa Dutton and Paula Wood. Between 2009 and 2011, the indictment alleges, Ralph used wire transfers to send approximately 80 bribes and kickbacks.
Upon conviction, the crimes carry the following penalties: Conspiracy: A maximum penalty of 30 years in federal prison and a fine up to $1 million.
Wire fraud: A maximum penalty of 30 years in federal prison and a fine up to $1 million on each count.
Money laundering: A maximum penalty of 20 years and a fine up to $50,000 on each count.The FBI investigated. Assistant U.S. Attorney Richard Hathaway is prosecuting.
OTHER INDICTMENTS
Yong Jin Zhang, 55, who is in federal custody, and Yu Lan Su, 50, who is in federal custody, are charged with one count of transporting a person in interstate commerce for the purpose of prostitution, and one count of harboring a person for the purpose of prostitution at Life Long Foot Massage, also known as Asian Foot Relax Massage, at 5620 S. W. 29th Street; and 2955 S.W. McClure Road, No. 310, in Topeka, Kan. The crimes are alleged to have occurred from March 14 to May 21, 2014, in Topeka, Kan.
The defendants initially were charged in a criminal complaint filed May 22, 2014, in U.S. District Court in Topeka.
If convicted, they face a maximum penalty of 10 years in federal prison and a fine up to $250,000 on each count. Homeland Security Investigations investigated. Assistant U.S. Attorney Randy Hendershot is prosecuting.
Christopher B. Medlock, 28, who is in custody, is charged with one count of escaping from the Mirror Residential Reentry Center in Topeka, Kan. The crime is alleged to have occurred May 6, 2014.
If convicted, he faces a maximum penalty of five years in federal prison and a fine up to $250,000. The U.S. Marshals Service investigated. Assistant U.S. Attorney Randy Hendershot is prosecuting.
Juan O. Whitaker, 32, who is in custody, is charged with one count of unlawful possession of a firearm after a felony conviction, and one count of unlawful possession of a sawed off shotgun. The crimes are alleged to have occurred May 1, 2014, in Saline County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000 on each count. The Salina Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Randy Hendershot is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
ICON Telecom, Its Owner, and A Former Associate Charged in $25 Million Fraud in Federal Wireless Telephone Subsidy ProgramRead the Press Release
Oklahoma City, Oklahoma – WESLEY YUI CHEW, of Edmond, Oklahoma, his company, ICON TELECOM, INC., also of Edmond, and OSCAR ENRIQUE PEREZ-ZUMAETA, of Cancun, Mexico, have been charged with crimes involving more than $25 million of fraudulent claims against the federal Lifeline telephone program, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma, and David L. Hunt, Inspector General of the Federal Communications Commission ("FCC").
Background
The current Lifeline Program, which was created in 1985, furthers the FCC’s mission to provide all Americans with access to a basic level of telephone service. Since 2005, Lifeline has provided subsidies to participating telephone companies not only for landline service, but also for wireless service for qualifying low-income customers. The Universal Service Administrative Company ("USAC") administers the Lifeline Program on behalf of the FCC and under detailed federal regulations. To pay for the program, USAC collects fees from telephone companies, which often pass the fees on to customers as "universal service charges" on monthly telephone bills.
Most participating wireless telephone companies receive a subsidy of $9.25 per month for each qualifying low-income customer. If a qualifying customer lives on "Tribal Lands," however, the company receives $34.25 for each qualifying customer. Much of Oklahoma includes Tribal Lands that qualify for the higher monthly subsidy.
Participating telephone companies file forms with the FCC, prior to receiving reimbursement, that report the number of Lifeline eligible subscribers that have been served by the companies. Companies must also file annual reports by January 31 to certify that customers who received Lifeline service at an earlier date remain eligible for the program.
Icon Telecom, owned exclusively by Chew, participated in the wireless Lifeline Program from July 2011 until September 2013. It is alleged that in September 2011, Icon reported fewer than 2,200 wireless customers who qualified for the Lifeline program. By November 2012, that number had grown to 135,364. It is alleged that Icon always claimed subsidies at the "Tribal Lands" rate of $34.25 per customer per month. Although it had fewer than ten full-time employees, it is alleged that Icon received a total of $58,283,329 through the Lifeline Program during 2011, 2012, and 2013.
It is further alleged that to recruit new customers, Icon relied almost exclusively on PSPS Sales LLC, which Perez-Zumaeta owned and operated. Icon paid PSPS Sales from $7.00 to $15.00 for each new customer. From December 2011 through April 2013, Icon paid more than $1,040,000 to PSPS Sales.
Information Charging Chew and Icon Telecom
Chew has been charged with money laundering for his transfer of $20,455,829.10 on April 9, 2013, from an Icon account to a personal account. If convicted, Chew faces up to 10 years in prison and a fine of $250,000 or twice the amount of the criminally derived property involved in the transfer, whichever is greater.
Icon is charged with making a false statement to USAC. Specifically, it is alleged that USAC auditors asked Icon on May 6, 2013, to provide 58 specific customer recertification forms as part of a Lifeline audit. It is alleged that in the absence of legitimate forms, Icon created false recertification forms, fabricated the subscribers’ signatures on the forms, and electronically submitted the fictitious forms to USAC in response to the audit. If convicted, Icon faces up to five years of probation, a fine of up to $500,000, and mandatory restitution.
The information also seeks forfeiture of the $20,455,829.10 involved in the money-laundering transaction.
Indictment Charging Perez-Zumaeta
Perez-Zumaeta has been charged in a ten-count indictment. Count One alleges that Perez-Zumaeta conspired with Chew and Icon to defraud USAC and the FCC of more than $25 million. Counts 2 - 6 allege wire fraud. Three of these counts relate to payments from USAC to Icon of over $7 million each. Counts 7 - 10 charge money laundering based on deposits of criminal proceeds into a PSPS Sales bank account.
In general, the indictment alleges that Perez-Zumaeta directed PSPS Sales personnel to use phone books to come up with names and addresses for bogus Lifeline customers and to dispose of telephones registered to fake customers by selling them on the street for approximately $5 each. Perez-Zumaeta is also alleged to have instructed PSPS Sales personnel to fabricate signatures of fictitious customers on approximately 40,000 recertification forms and to cover up the fabrications by using different pens, different hand-writing styles, and different formats for dates.
If convicted, Perez-Zumaeta could be imprisoned for 20 years on each of the conspiracy and wire-fraud counts and 10 years on each of the money-laundering counts. He would also be subject to a fine of up to $250,000 on each count, and mandatory restitution. Furthermore, the indictment seeks forfeiture of all proceeds of the alleged fraud and all property involved in the money-laundering transactions.
Perez-Zumaeta was arrested on April 25, 2014, at the San Francisco airport and is currently in federal custody. On May 16, he was ordered detained pending further proceedings after the Court found he presented a risk of flight.
Investigative Agencies
"Although this program was designed to help low-income Americans have basic access to phone service, these individuals, and their companies, allegedly exploited the system to line their own pockets," said U.S. Attorney Coats. "All of us must be concerned when programs like this are abused and defrauded. I commend the FCC-Inspector General, FBI, and IRS Criminal Investigation for their cooperation and coordination in this investigation."
Said FCC Chairman Tom Wheeler, "The FCC’s adoption of tough, enforceable rules in 2012 to combat waste, fraud and abuse in Lifeline is paying off. Lifeline provides a link to jobs, family and emergency services for Americans who cannot afford phone service. I thank the Office of the Inspector General and our partners in the U.S. Attorney’s Office, IRS, and FBI for fighting fraud so that Lifeline can continue to help low-income Americans afford the basic phone service that most consumers take for granted."
This case is the result of an investigation by the Office of Inspector General for the Federal Communications Commission, the Federal Bureau of Investigation, and IRS Criminal Investigation. The cases are being prosecuted by Assistant U.S. Attorneys Chris M. Stephens and Scott E. Williams.
The public is reminded that these charges are merely accusations and that the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt. Reference is made to the information, the indictment, and other public filings for further information.