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Thursday 17 April 2014
Activity for April 15, 2014Read the Press Release
Wyoming Woman Charged with First Degree
U.S. Attorney for the District of Wyoming Christopher A. Crofts announced today that on April 15, 2014, Ardis Sierra Enos, 20, an Eastern Shoshone tribal member, appeared in federal court on a Complaint charging her with one count of First Degree Murder in violation of 18 U.S.C. '' 1111 and 1153. The charge against Enos stems from her actions in the death of her newborn infant on March 26, 2014 at her home on the Wind River Reservation. Enos is facing a potential sentence of life imprisonment, and could be ordered to pay restitution, a fine and special assessment. A complaint is only an accusation. In every criminal case, the accused is presumed to be innocent until proven guilty, and the government always has the burden of proving guilt beyond a reasonable doubt.
Wednesday 16 April 2014
Wood County Man Sentenced for Firearms ViolationRead the Press Release
Department of Justice
Office of Public AffairsProject Safe Neighborhoods sends Convicted Felon to Federal Prison For Possessing a Stolen Firearm
TYLER, Texas - A 29-year-old Dike, Texas man has been sentenced to federal prison for firearms violations in the Eastern District of Texas announced U.S. Attorney John M. Bales today.
Kerry Lynn Sanders pleaded guilty on December 4, 2013, to possessing a stolen firearm and was sentenced to 120 months in federal prison today by U.S. District Judge Leonard Davis.
According to information presented in court, on March 19, 2013, Sanders was stopped by Wood County Sheriff’s Deputies due to an outstanding arrest warrant. The deputies arrested Sanders and performed an inventory of Sanders’ vehicle. During the inventory, the deputies discovered a 20gauge, pump-action shotgun behind the driver’s seat. Sanders admitted that he knowingly possessed the shotgun without the consent of the owner, and with the intent to deprive the owner of the shotgun.
Sanders was indicted by a federal grand jury on September 25, 2013, for possessing the shotgun after having been previously convicted of multiple felony crimes including Theft, Attempted Evading Arrest with a Vehicle, Possession of a Controlled Substance, and Aggravated Robbery. Federal law prohibits the possession of stolen firearms and further prohibits convicted felons from owning or possessing firearms or ammunition.
This conviction is yet another important outcome from Project Safe Neighborhoods (PSN), a national priority of the United States Department of Justice. PSN is designed as a partnership between federal and local law enforcement to reduce violent crime and gun-related crime through the vigorous enforcement of the criminal provisions of the federal firearms laws.
This case was investigated by ATF and the Wood County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney Jim Noble.
####West and Hardy Plea Guilty to ForgeryRead the Press Release
OXFORD, Miss - Felicia C. Adams, United States Attorney for the Northern District of Mississippi, Craig Caldwell, Special Agent in Charge of the United States Secret Service, and Special Agent in Charge Gabriel L. Grchan, Internal Revenue Service, Criminal Investigation announced that:
Sadie West, 35, of Greenwood, Mississippi, and Mary Ann Hardy, 38, of Greenville, Mississippi, pled guilty on April 15, 2014 before United States District Judge Sharion Aycock, in Aberdeen, Mississippi. Both West and Hardy pled guilty to count one of an indictment, charging each with conspiracy to pass United States Treasury checks bearing a forged endorsement or signature as well as conspiracy to pass forged commercial checks.
West remains out on a pre-existing bond while Hardy is being detained pending sentencing, which will take place following the completion of a presentence report. At sentencing, West and Hardy face a maximum possible penalty of five years imprisonment, a $250,000 fine, and three years supervised release.
Malcolm Alexander, 39, and Jacarda Lawrence, 39, both of Greenville, recently pled guilty to similar charges in this matter. Alexander pled guilty to one count of conspiracy and one count of passing a forged commercial check while Lawrence pled guilty to one count of passing a forged commercial check. Alexander faces a maximum possible penalty of five years imprisonment on the conspiracy charge and ten years imprisonment on the forged commercial check charge, a $250,000.00 fine on each charge, and three years supervised release on each charge. Lawrence faces a maximum possible penalty of ten years imprisonment, a $250,000 fine, and three years supervised release. Lawrence remains out on a pre-existing bond while Alexander is being detained pending sentencing.
Gabriel L. Grchan, Special Agent in Charge for the Internal Revenue Service, Criminal Investigation stated:
"We are pleased with the guilty pleas entered by Sadie West, Mary Hardy, Malcolm Alexander, and Jacarda Lawrence. Conspiracies to steal from the U.S. Treasury cause great detriment to our nation's economy and discourage honest taxpayers who pay their fair share. I would like to thank our law enforcement partners and the Office of the United States Attorney for their roles in the investigation and prosecution of this case."
This case was investigated by the United States Secret Service and the Internal Revenue Service, Office of Inspector General and is being prosecuted by Assistant United States Attorney Robert Mims.
Victor Man Charged with Failing to File Income Tax ReturnsRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Christopher Wheeler, 46, of Victor, N.Y., was charged in a three-count information with willfully failing to file tax returns for 2007, 2008 and 2009. The charges carry a maximum sentence of three years in prison and a $75,000 fine.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Wheeler had gross income of approximately $4,600,000 in 2007, $5,600,000 in 2008, and $1,600,000 in 2009, but failed to file timely tax returns with the Internal Revenue Service to report this income.
The charges are the culmination of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Utah Man Pleads Guilty to Religious-Motivated Attack on Synagogue and Gun ChargesRead the Press Release
Macon Openshaw, 21, pleaded guilty in the U.S. District Court for the District of Utah today to a federal civil rights crime relating to a bias-motivated weapons discharge aimed at a local synagogue and to two unlawful gun possession charges.
During the plea proceedings, Openshaw admitted that late at night on a date in 2012, he fired three rounds from a Walther .22 caliber handgun at the Congregation Kol Ami synagogue in Salt Lake City because of its religious character, hitting the unoccupied structure’s second floor window casing and the exterior wall of the synagogue. Openshaw also admitted to possessing a handgun with a destroyed serial number, which was the same handgun he used to shoot the synagogue. He also admitted to possessing several firearms and ammunition while he was subject to a protective order.
“Religiously-motivated violence tears at the fabric of our diverse society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Today, and in the future, the department stands vigilant to confront and eradicate violence based on a person’s religion, and we will continue to vigorously prosecute those who commit crimes born of hate.”
“Every citizen living in Utah has a right to be free from intimidation and threatening conduct,” said U.S. Attorney David B. Barlow. “The U.S. Attorney’s Office in Utah has a strong history of prosecuting those who violate the civil rights of others.”
Openshaw entered into a plea agreement whereby he would be sentenced to 60 months incarceration. As part of his plea agreement, Openshaw agreed to pay restitution to the synagogue to repair the damage caused by his actions.
Openshaw is scheduled to be sentenced on July 15, 2014, by U.S. District Judge Tena Campbell.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Carlos Esqueda of the U.S. Attorney’s Office for the District of Utah and Trial Attorney Nicholas Durham of the Civil Rights Division’s Criminal Section.
Utah Man Pleads Guilty to Religious-Motivated Attack on Synagogue and Gun ChargesRead the Press Release
SALT LAKE CITY - Macon Openshaw, 21, pleaded guilty in the U.S. District Court for the District of Utah Wednesday to a federal civil rights crime relating to a bias-motivated weapons discharge aimed at a local synagogue and to two unlawful gun possession charges.
During the plea proceedings, Openshaw admitted that late at night on a date in 2012, he fired three rounds from a Walther .22 caliber handgun at the Congregation Kol Ami synagogue in Salt Lake City because of its religious character, hitting the unoccupied structure’s second floor window casing and the exterior wall of the synagogue. Openshaw also admitted to possessing a handgun with a destroyed serial number, which was the same handgun he used to shoot the synagogue. He also admitted to possessing several firearms and ammunition while he was subject to a protective order.
“Religiously-motivated violence tears at the fabric of our diverse society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Today, and in the future, the department stands vigilant to confront and eradicate violence based on a person’s religion, and we will continue to vigorously prosecute those who commit crimes born of hate.”
“Every citizen living in Utah has a right to be free from intimidation and threatening conduct,” said U.S. Attorney David B. Barlow. “The U.S. Attorney’s Office in Utah has a strong history of prosecuting those who violate the civil rights of others.”
Openshaw entered into a plea agreement whereby he would be sentenced to 60 months incarceration. As part of his plea agreement, Openshaw agreed to pay restitution to the synagogue to repair the damage caused by his actions. Openshaw is scheduled to be sentenced on July 15, 2014, by U.S. District Judge Tena Campbell.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Carlos Esqueda of the U.S. Attorney’s Office for the District of Utah and Trial Attorney Nicholas Durham of the Civil Rights Division’s Criminal Section.
Union Official Cashed Dues Checks and Used the Money for HimselfRead the Press Release
PITTSBURGH – A resident of Venango County pleaded guilty in federal court to a charge of union embezzlement, United States Attorney David J. Hickton announced today.
David L. Barr, 50, of Emlenton, PA, pleaded guilty to one count before United States District Court Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Barr, the Financial Secretary-Treasurer of the Local No. 99 of the Glass, Molders, Pottery, Plastics & Allied Workers International Union, AFL CIO, CLC, stole approximately $5,688.40 from the union by cashing 19 employer dues remittance checks belonging to the labor organization and converting the monies to his own personal use during the period from April 9, 2010 through Sept. 22, 2011.
Judge Cercone scheduled sentencing for Sept. 2, 2014, at 11:30 A.M. The law provides for a maximum total sentence of not more than 5 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.
Pending sentence, the court released Barr on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The Department of Labor, Office of Labor Management Standards, conducted the investigation that lead to the prosecution of Barr.
U.S. Attorney's Office, PharMerica Enter into Settlement AgreementRead the Press Release
ROANOKE, VIRGINIA – United States Attorney Timothy J. Heaphy announced today that the United States Attorney’s Office for the Western District of Virginia has entered into a civil settlement agreement with PharMerica Corporation regarding the unlawful dispensation of schedule II controlled substances.
PharMerica, a non-public pharmacy in Vinton, Va., fills prescriptions for patients in long term care facilities and operates pursuant to a certificate of registration issued by the Drug Enforcement Administration [DEA].
In accordance with the DEA’s regulatory authority over registered pharmacies, a DEA Diversion Task Force investigator examined the schedule II prescriptions filled by PharMerica’s Vinton pharmacy between May 8, 2008 and July 22, 2009. This investigation revealed 228 occasions whereas PharMerica’s Vinton pharmacy violated the Controlled Substance Act [CSA].
“The problem of prescription drug abuse and addiction continues to plague communities across Virginia,” United States Attorney Timothy J. Heaphy said today. “To minimize the risk of abuse, we must do all we can to ensure that everyone in the chain of distribution of prescription drugs follows proper procedures. Our newly-formed DEA Diversion Task Force is doing this important work and will continue to enforce the laws governing prescription drugs in the Western District of Virginia.”
The United States Attorney’s Office for the Western District of Virginia and PharMerica agreed that PharMerica would pay the United States $213,283 or $935.45 for each violation of the CSA. PharMerica also agreed to maintain a program to ensure future compliance with the CSA, including that schedule II controlled substances only be dispensed pursuant to valid prescriptions. In investigating this matter, the United States Attorney’s Office found that PharMerica’s 228 CSA violations represented only three percent of its total schedule II prescriptions filled between May 8, 2008 and July 22, 2009.
Had this matter not been settled through a civil settlement, the United States was prepared to prove in a civil suit that PharMerica’s Vinton pharmacy violated the CSA on 228 occasions when it:
- 25 times dispensed Schedule II controlled substances where the practitioners’ signatures were never obtained on prescriptions.
- 38 times dispensed schedule II controlled substances from emergency boxes in long-term care facilities with no valid prescription within seven days.
- 20 times emergency dispensed schedule II controlled substances with no valid prescription within seven days.
- 14 times dispensed schedule II controlled substances without practitioners’ signatures when dispensed or in non-emergency situations dispensed schedule II drugs after the prescription had expired.
- 27 times dispensed schedule II controlled substances without the patients’ correct addresses on the prescription.
- 104 dispensed schedule II controlled substances without the practitioners’ correct names, correct DEA registration numbers and correct prescribing dates on the prescriptions.
This matter was investigated by the Drug Enforcement Administration and prosecution by Assistant United States Attorney Thomas Eckert.
Two More Charged in Gang-related Kidnapping of Father of State Prosecutor in North CarolinaRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that two more defendants were charged with Conspiracy to Kidnap in violation of Title 18, United States Code, Section 1201(c), in connection with the kidnapping of Frank Arthur Janssen of Wake Forest, North Carolina. These two new charges are in addition to the six already charged with engaging in a conspiracy to seize, kidnap, and abduct Frank Janssen from Wake Forest, North Carolina and transport him to Atlanta, Georgia. Janssen is the father of a Raleigh, North Carolina prosecutor who prosecuted a Blood member in state court.
Mr. Walker stated, “My office will continue to pursue everyone involved with this crime. This deliberate attack on our judicial system cannot be tolerated.”
According to the investigation, Blood member Kelvin Melton, a/k/a Dizzy, a/k/a Old Man, 49, used a cell phone that he illegally possessed while serving a life sentence in North Carolina’s Polk Correctional Institution in Butner, to transmit instructions and threats to Mr. Janssen’s wife and to co-conspirators in the plot. Specifically, Melton gave instructions on how to kill Mr. Janssen and dispose of his body. Mr. Janssen was taken from his home against his will on April 5, 2014. Through a coordinated effort involving many federal, state, and local law enforcement agencies, the FBI’s Hostage Rescue Team rescued Mr. Janssen at 11:55 pm on April 9, 2014 at a residence in Southeast Atlanta. The two new charges are against JAKYM TIBBS and JOHN DOE, a/k/a “Quan”, a/k/a “Kirkwood Quan”. The others already charged with kidnapping in this case are Jenna Paulin Martin, 21, Tiana Maynard, a/k/a Tiana Brooks, 30, Jevante Price, a/k/a Flame, 20, Michael Montreal Gooden, a/k/a Hot, 21, and Clifton James Roberts, 29. These five had their detention hearings in Atlanta yesterday and all were ordered held without bond. Jenna Paulin Martin and Tiana Maynard waived their probable cause hearings and will be extradited to North Carolina. It is of note that Mr. Janssen’s daughter is a state prosecutor who prosecuted Melton in Raleigh, North Carolina. This investigation is ongoing.
If convicted of this charge, each defendant faces a maximum sentence of life imprisonment and a fine of up to $250,000.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The case is being investigated by the FBI Charlotte, FBI Atlanta, the Wake Forest Police Department, the North Carolina State Bureau of Investigation with assistance by the Durham County Sheriff’s Office, Raleigh Police Department, Durham Police Department, North Carolina Alcohol Law Enforcement, Garner Police Department, North Carolina Highway Patrol, RDU Police, City County Bureau of Investigation, the Cobb County Police Department, Alpharetta Police Department, Atlanta Police Department, and the Georgia Bureau of Investigation. The United States Attorney’s Office for the Eastern District of North Carolina is handling the prosecution of these cases with assistance from the United States Attorney’s Office for the Northern District of Georgia.
Two Mexican Citizens Charged with Illegal ReentryRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania and the U.S. Department of Homeland Security, Immigrations and Customs Enforcement, Enforcement and Removal Operations (ERO) announced today that a 29-year-old native and citizen of Mexico has been charged with illegal reentry into the United States.
According to United States Attorney Peter Smith, Santos Aguilar-De Leon, age 29, a native and citizen of Mexico, in the United States illegally was charged in a one-count indictment by a federal grand jury in Harrisburg today.
The indictment alleges that Aguilar-De Leon, an alien who has previously been arrested and deported from the United States in February 2010, did knowingly and unlawfully reenter the United States and was apprehended in Dauphin County, Pennsylvania.
If convicted, Aguilar-De Leon faces a maximum sentence of up to two years’ imprisonment and a $250,000 fine.
In a separate case a 30- year-old native and citizen of Mexico was charged with Improper Entry by Alien into the United States.
Jose Hernandez-Barrientos, a native and citizen of Mexico, in the United States illegally was charged in a one-count information filed with the Court in Harrisburg on April 14, 2014.
The information alleges that Hernandez-Barrientos, an illegal alien, did enter the United States at any time or place other than as designated by immigration officers and was found in the United States in York County, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, Hernandez-Barrientos faces a maximum sentence of up to 6 months imprisonment and a $5,000 fine.
In both cases, investigation was conducted by the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO). The cases are being prosecuted by Special Assistant United States Attorney Brian G. McDonnell.
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 two 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.
Two from Northeast Ohio Sentenced to Prison for Persuading Minor to Engage in Sexually Explicit ConductRead the Press Release
Two men from Northeast Ohio were both sentenced to more than eight years in prison after pleading guilty to two counts of inducing a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of that conduct, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Randall S. Allman, 38, of Strongsville, and Shawn M. Kadras, 34, of Cleveland, on two occasions in February 2013, did persuade, induce, entice and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of the conduct, according to the indictment.
Kadras was sentenced to 110 months in prison while Allman was sentenced to 97 months in prison.
The case was prosecuted by Assistant United States Attorney Michael A. Sulivan following an investigation by the Federal Bureau of Investigation’s Safe Streets Task for and the Summit County Sheriff’s Office.
Two Former Pharmaceutical/Medical Technology Executives Sentenced for Their Roles in Insider Trading SchemeRead the Press Release
Pair Netted More Than $1.4 Million in Illicit Profits over Five Years
NEWARK, N.J. - Two former pharmaceutical and medical technology firm executives were sentenced today for their involvement in an extensive insider trading network that repeatedly exploited non-public material information for financial gain, U.S. Attorney Paul J. Fishman announced.
Mark Cupo, 53, of Morris Plains, N.J. was sentenced to 16 months in prison and Mark Foldy, 44, also of Morris Plains, N.J. was sentenced to two years of probation, including six months of home confinement with electronic monitoring. Cupo previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a seven-count information charging him with two counts of conspiracy to commit securities fraud and five counts of securities fraud. Foldy previously pleaded guilty before Judge Hayden to a four-count information charging him with one count of conspiracy to commit securities fraud and three counts of securities fraud. Judge Hayden imposed both sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2007 to 2012, Cupo, who was an executive at Sanofi-Aventis, a global pharmaceutical company based in New Jersey, repeatedly obtained non-public material information from his friend and former employee, John Lazorchak, 43, of Long Valley, N.J., who was director of financial reporting at Celgene Corp., another global pharmaceutical company based in New Jersey. The inside information included non-public merger and acquisition plans, quarterly earnings results, and a regulatory application decision. Cupo would pass the information to his friends, Lawrence Grum, 50, of Livingston, N.J., and Michael Castelli, 50, of Morris Plains, N.J., who would then execute numerous profitable trades based on that information and share the profits with Cupo and Lazorchak.
During the course of the multi-year insider trading operation, Cupo divulged inside information to Grum and Castelli regarding then-confidential plans by his own employer, Sanofi-Aventis, to acquire Chattem Inc. Grum and Castelli traded on the Chattem-related inside information prior to its public announcement, reaping substantial profits.
Foldy, a friend and high school classmate of Lazorchak, was a marketing executive at Stryker Corp., a leading medical technology business with a major division located in New Jersey. Through the course of his employment at Stryker, Foldy learned of Stryker’s then-confidential plans to acquire Orthovita Inc. Foldy leaked news of the planned acquisition to Lazorchak prior to public announcement, and Lazorchak, in turn, passed the inside information to Cupo. Cupo informed Grum and Castelli of the impending deal so that they could trade ahead of the public announcement of the Orthovita acquisition for substantial profits.
Foldy also received inside information from Lazorchak regarding Celgene’s planned acquisition of Pharmion Corp. and profitably traded on the Pharmion-related inside information. Foldy passed inside information on to a family member and friend.
In addition to the prison terms, Judge Hayden sentenced Cupo to two years of supervised release.
Cupo and Foldy are the third and fourth defendants charged with participating in this insider trading network to be sentenced. On April 9, 2014, Grum was sentenced to one year and one day in prison and Castelli was sentenced to nine months in prison. Lazorchak is scheduled to be sentenced by Judge Hayden on April 22, 2014, and another conspirator and high school friend of Lazorchak, Michael Pendolino, is scheduled to be sentenced by Judge Hayden on May 5, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentences. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel M. Hawke.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
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Defense counsel:
Cupo: Joseph J. Bell Esq. and Joseph J. Bell IV Esq., Rockaway, N.J.
Mark Foldy: Jonathan Marks Esq., New York
John Lazorchak: Lawrence S. Lustberg Esq., Newark
Lawrence Grum: Scott A. Resnik Esq., New York
Michael Castelli: Daniel Zinman Esq. and Daniel Stein Esq., New York
Michael Pendolino: James S. Friedman Esq., NewarkTwo Former Officers at Roxbury Correctional Institution Sentenced in Connection with Assault of an InmateRead the Press Release
Two former correctional officers at Roxbury Correctional Institution (RCI) in Hagerstown, Md., were sentenced today in connection with the March 9, 2008, assault of Kenneth Davis, an inmate. U.S. District Judge James K. Bredar sentenced Jeremy McCusker to serve 21 months in prison. Walter Scott Steele was ordered to serve four months in prison and to complete 40 hours of community service.
Jeremy McCusker previously pleaded guilty to deprivation of rights under color of law and conspiring to obstruct justice. Walter Scott Steele also pleaded guilty to conspiring to obstruct justice as well as making false statements to federal authorities.
Both McCusker and Steele testified for the prosecution at the federal trial of former RCI officer James Kalbflesh, who was convicted for his role in the assault of Davis that took place during a midnight shift and in the subsequent cover up.
During their testimony at Kalbflesh’s trial and in court documents filed in connection with their respective guilty pleas, McCusker and Steele each admitted that they were present when other officers at RCI met during the midnight shift and agreed to assault Davis in retaliation for a prior incident involving Davis and another officer. McCusker and other correctional officers then entered Davis’ cell and assaulted the inmate while Steele and another officer watched the assault.
Later, Steele, McCusker and other officers met at a restaurant and agreed on a story to cover up their involvement in, or knowledge of, the midnight shift’s assault on Davis. On Feb. 12, 2013, Steele met with federal authorities and provided false information regarding the incident.
“The overwhelming majority of correctional officers serve their communities with honor and professionalism,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Justice Department will aggressively prosecute those who engage in criminal misconduct.”
To date, 16 current or former officers at RCI have been convicted in connection with a series of assaults that Davis suffered on March 8-9, 2008. Four former RCI officers still await sentencing before Judge Bredar.
The case was investigated by the Frederick Resident Agency of the FBI, and prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division of the Department of Justice, with the assistance of Assistant U.S. Attorney Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.
Two Former Cook County Board of Review Analysts Sentenced to Prison for Accepting A Bribe to Arrange Property Tax ReductionsRead the Press Release
CHICAGO ― Two former analysts for the Cook County Board of Review were sentenced today for accepting $1,500 to facilitate reducing by more than $10,000 the property taxes on three residential properties. THOMAS HAWKINS was sentenced to 24 months in prison and JOHN RACASI was sentenced to 18 months in prison after they were convicted of federal conspiracy, bribery, and fraud charges. They were captured scheming with others to facilitate reducing property tax assessments in exchange for bribes in undercover recordings that were played at their week-long trial last October in U.S. District Court.
Hawkins, 50, and Racasi, 53, half-brothers and both of Chicago, were analysts on the staff of one of the three Board of Review commissioners in September 2008, when they accepted the $1,500 bribe payment. Each of the three commissioners has analysts who handle residential property tax appeals and at least two of the three commissioners’ analysts must agree in order to reduce the Cook County Assessor’s property tax assessments.
“Offenses like [these], betray the citizens who pay property taxes in Cook County and who expect the process in place for assessing property values and appealing those property tax assessments to operate fairly and legitimately,” Assistant U.S. Attorneys Margaret J. Schneider and Michael T. Donovan, argued at sentencing.
According to the evidence at trial, Ali Haleem, a former Chicago police officer who began cooperating with the FBI in July 2008 and is awaiting sentencing on other federal charges, was introduced to Hawkins, who, in turn, introduced him to Racasi. Haleem recorded numerous meetings and telephone conversations with both defendants in which they discussed facilitating property tax assessment reductions in exchange for bribes.
In September 2008, Haleem, Hawkins and Racasi discussed the specifics of the bribe Haleem would pay for reducing tax assessments on properties in Chicago, Burbank, and Tinley Park. On Sept. 11, 2008, Hawkins and Racasi agreed to reduce the assessed values on properties Haleem owned in Chicago and Burbank, as well as a property in Tinley Park owned by another individual, for three years beginning with the 2008 tax year. Hawkins and Racasi provided Haleem with analysis sheets for these properties, which could be used to calculate the tax savings that a property owner would realize over the three-year period. In return for the $1,500 bribe, Hawkins and Racasi promised Haleem a total tax savings for the three properties over the threeyear period of at least approximately $10,000. The payment was made on Sept. 17, 2008, when Haleem met with Hawkins and Racasi and handed the money to Racasi. Hawkins assured Haleem that Racasi would later provide Hawkins with his share of the money.
Hawkins and Racasi also facilitated a reduction in property tax assessments on 11 condominium units in Chicago, expecting to receive bribe payments that Haleem would collect from the property owners once the reductions were verified.
The sentences were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The FBI=s Chicago City Public Corruption Task Force led the investigation with assistance from the Chicago Police Department’s Internal Affairs Division, which is a task force member.
Two Defendants Sentenced for $100 Million Nationwide Tax Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Alabama man and a California woman were sentenced in federal court today, in separate but related cases, for their roles in a tax fraud conspiracy that attempted to receive nearly $100 million in fraudulent refunds from the IRS. Co-conspirators from eight states were involved in filing fraudulent tax returns in the largest federal false claims case that has ever been prosecuted in Missouri.
Billy Ray Hall, 75, of Newton, Ala., was sentenced by U.S. District Judge Brian C. Wimes to three years and one month in federal prison without parole. The court also ordered Hall to pay $1,141,062 in restitution.
Maria Haro Campos, 43, of Vista, Calif., was sentenced by U.S. District Judge Howard F. Sachs to 20 months in federal prison without parole.
Conspirators prepared and filed a total of 284 fraudulent tax returns from July 1, 2008, to Sept. 21, 2011. Each of the returns contained false claims that the taxpayer listed was due a refund due to over-withholding of taxes, based on fictitious forms 1099-OID. In actuality, the clients had not received interest income from the banks and lenders listed on their Forms 1099, nor had any money been over-withheld. Conspirators claimed that a total of $96 million dollars in fraudulent tax refunds were due. The IRS mistakenly paid out $3.5 million on these fraudulent claims.
On Dec. 18, 2013, Hall pleaded guilty to participating in a conspiracy to defraud the United States by filing fraudulent tax returns. Hall admitted that he was a regional manager for a fraudulent Form 1099-OID scheme led by co-defendant Gerald A. Poynter, also known as “Brother Jerry Love,” 48, of Kansas City, Mo.
Hall introduced people to Poynter and encouraged them to participate in the OID process, either as a tax filer or as a branch manager. He also gathered information from some filers and provided it to Poynter. As Poynter’s regional manager, Hall had at least four branch managers beneath him. Hall had at least 20 clients of his own, resulting in at least 51 individual income tax returns claiming $14.28 million in fraudulent refunds. Of those, the IRS paid out $1,141,062 in fraudulent refunds.
Poynter and Hall conducted a training seminar in December 2008 at the Doubletree Hotel in Atlanta, Ga.. At the seminar, Poynter gave a presentation outlining his “OID process,” during which he pointed out that the IRS would issue refunds even if the name listed on the OID form was Spongebob Squarepants or Spiderman. Poynter told attendees they would use a rented office rather than process the OID returns at home to avoid their homes being raided by the FBI. He talked about attracting attention from IRS criminal investigators, and he provided pointers on how to avoid that outcome. Poynter also joked that his going to prison was a possibility. Despite hearing these statements, Hall continued to be involved. Hall sponsored other meetings where Poynter provided information to third parties concerning the OID process. Hall spoke about OIDs at another seminar with Poynter in Monroe, La. Hall admits that he ignored the many red flags that Poynter’s process was too good to be true and was in fact illegal.
On April 7, 2011, Campos pleaded guilty to her role in the conspiracy. Campos acted as the southern California branch manager for Poynter. She recruited new clients and facilitated their 1099-OID processes. She collected tax information and up-front fees, which she forwarded to Poynter for processing.
Campos furthered the conspiracy by aiding two of her clients in obtaining a total of $1,207,349 in fraudulent refunds. Campos unsuccessfully attempted to obtain refunds in the amount of at least $21 million for other clients. In total, Campos introduced at least 10 individuals or married couples to the conspiracy, including one couple who received a fraudulent refund of $805,749.
Campos traveled to Kansas City, Mo., from California on several occasions to meet with Poynter for training and to deliver records. Campos knew that Poynter’s scheme was fraudulent, and was intended to defraud the U.S. Treasury of millions of dollars. When interviewed by law enforcement, Campos admitted that she was aware of problems caused by Poynter’s 1099-OID scheme and that she continued to participate in the conspiracy even after she knew it was illegal.
Poynter was sentenced on March 13, 2014, to 13 years in federal prison without parole after pleading guilty to his role in the conspiracy and to filing a fraudulent tax return. The court also ordered Poynter to pay $951,930 in restitution to the government.
Hall and Campos are among 12 defendants who have pleaded guilty, including Kristi Jones, 41, of Riverside, Mo.; Shirley Oyer, 72, of Overland Park, Kan.; Jennifer Wilson, 37, of Cumming, Ga.; Mark J. Murray, 52, of Newton, Ala.; John V. Perdido, 58, of Temecula, Calif.; Earl Lee Davis, 55, of Monroe, La.; Robert E. Morris, 68, of Rocklin, Calif.; and Karen A. Olson, 42, of Wood Dale, Ill. Marian Fine-Kennedy, 36, of Eugene, Ore., pleaded guilty in a separate but related case.
In addition, Nkosi Gray, 40, of New Fairfield, Conn., and Kimberly Johnson, 43, of Chickamauga, Ga., were each convicted at trial of filing false claims for a tax refund. Gray and Johnson each filed fraudulent tax returns that falsely claimed refunds due to over-withholding of taxes. Gray received a $278,874 refund and Johnson filed a claim for a $61,959 refund on behalf of another person.
1099-OID Tax Fraud Scheme
Conspirators utilized 1099-Original Issue Discount forms as part of their scheme.
These forms are legitimately used by tax filers who must pay taxes on income they receive from the interest on their bond investments. Tax on certain bonds must be paid as income accrues. Bond holders receive annual forms, called 1099-Original Issue Discount (OID), from the debt issuers. Bond holders then file these OID forms with the IRS, along with their income tax forms.
However, the scheme described in the indictments utilized the 1099-OID forms in a nonsensical manner. Clients of the conspirators, working with their branch managers, assembled financial documents such as mortgage and loan statements, car payments, foreclosure records, bank statements, credit card statements, and other records of debt and spending. Poynter and his staff used this debt information – rather than any actual bond income – to prepare and/or finalize false tax returns and improperly calculated Forms 1099-OID.
These tax returns falsely claimed that the filers had received income from bond proceeds and that federal income tax had been withheld. The fraudulent returns claimed the government had over-withheld taxes from the clients’ OID bond income, making the clients appear entitled to more than $96 million in tax refunds.
In reality, Poynter’s clients had not earned – or paid tax on – any bond income. No bond payer had issued any 1099-OID forms. Instead, the bond income that was listed was calculated by what the indictment describes as an “arbitrary and capricious formula.” Conspirators simply added up the taxpayers’ debts and spending and listed those creditors as “payers” of bond interest.
OID Fraud Web Site
A Web site has been established to provide information about the status of this investigation. Updates about this investigation and related cases will be posted at www.justice.gov/usao/mow/divisions/OIDfraud.html
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by IRS-Criminal Investigation.
Twinsburg Man Sentenced to Nearly Five Years in Prison for Tax FraudRead the Press Release
A Twinsburg man was sentenced to nearly five years in prison and ordered to pay approximately $1.2 million in restitution for his role in a tax-fraud conspiracy, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, IRS-Criminal Investigation Special Agent in Charge.
Brian D. Krantz, 47, previously pleaded guilty to one count of conspiracy to make false claims for income tax refunds and five counts of making such false claims. U.S. District Judge Sara Lioi sentenced him to 57 months in custody.
“Those individuals who engage in this type of financial fraud should know they will not go undetected and will be brought to justice,” Dettelbach said.“This sentence sends an important message to America’s taxpayers who play by the rules that we have no tolerance for those who make up their own rules,” Enstrom said.
The conspiracy included filing false income tax returns claiming false refunds totaling more than $8.8 million. Based on those false claims, the U.S. Treasury issued 17 refund checks totaling approximately $3,615,586 payable to Krantz and various corporations controlled by Krantz and his co-conspirator, Bryan D. McCallum, according to the court documents.
Krantz owned and controlled two corporations that engaged in financial services and/or real estate investment business activities. McCallum, of Parma Heights, worked as an accountant/ bookkeeper at the companies, according to court documents.
From approximately April 2009 through June 8, 2010, Krantz and McCallum conspired to make false claims for tax refunds using income tax returns filed with the IRS in the names of Krantz, companies formed by Krantz and McCallum, and several “shelf” companies purchased by Krantz. A “shelf” company is a corporate or other formal non-operating business entity established for the purpose of being held for sale to another person, according to court documents.
The scheme involved the use of fake IRS Forms 2439, titled “Notice to Shareholder of Undistributed Long-Term Capital,” purportedly issued by some of the shelf companies to the persons and companies in whose names the false returns were filed. A Form 2439 is to be issued by a regulated investment company (RIC) or real estate investment trust (REIT) to report undistributed capital gains and taxes withheld from those gains on behalf of RICs or REITs shareholders. Under federal tax law, RICs and REITs are entities that are not taxed on their earnings but instead pass those earnings to their shareholders who, in turn, have the obligation to report those earnings and any resulting tax liabilities on the shareholders’ income tax returns. The returns filed pursuant to the conspiracy claimed substantial amounts of Form 2439 withholding credits, when, in fact, none of the companies listed as RICs or REITs on the forms were actually RICs or REITs or had any undistributed capital gains or withheld taxes, according to court documents.
Krantz used more than $1 million of the refund proceeds to finance a real estate venture he established with other partners, known as Phoenix Ventures Partners LLC. Krantz and McCallum misled Krantz’s real estate partners to believe that a group of Colorado-based hard money lenders had provided the funds.
McCallum previously pleaded guilty to a two-count information charging him with the same false claims conspiracy and with making 30 false claims. He was sentenced to three years in prison and ordered to pay approximately $1.2 million in restitution.
The government’s case was prosecuted by Assistant United States Attorneys John M. Siegel and Justin J. Roberts, following an investigation by the Internal Revenue Service, Criminal Investigation.
Twenty-Seven Defendants Indicted in Drug, Homicide and Money Laundering Case in Federal Court in MilwaukeeRead the Press Release
United States Attorney James L. Santelle announced today that an indictment was unsealed in federal court charging 27 defendants in a poly-drug conspiracy case which also includes homicide, money laundering, and firearms offenses.
The following defendants are charged with conspiracy to distribute controlled substances, including heroin, crack cocaine, marijuana, and five kilograms or more of cocaine: Kevin R. Arms (40), John Bailey (37), Trevan Brown (29), Cecil Arms (70), Timothy Cunningham (44), Maurice Handy (42), Roosevelt Lee (40), Phillip Moffett (32), Brandon Owens (30), Joe Parker (73), Sam Spears (37), Roger Walker (33), and Carl Wilson (41). In addition, John Cleveland (38), Demerius Sholar (28), Ronnie Reid (45), Kyle Carrington (22), and Brandon Trotter (27) are charged with possession with intent to distribute or distribution of controlled substances.
Kevin R. Arms, John Bailey, and Phillip Moffett are charged with causing death by discharge of a firearm. John Cleveland, Roosevelt Lee, Brandon Owens, Roger Walker, Carl Wilson, Kyle Carrington, Brandon Trotter are charged with possession of firearms in furtherance of drug-trafficking offenses.
Kevin R. Arms, Cecil Arms, Kevin C. Arms (21), Shenese Arms (33), Shenita Arms-Nicholas (33), and Tremell Nicholas (34) are charged with money laundering offenses.
Malik Danun (28) is charged with obstruction of justice. Ricky Shaw (38) and Patricia Arms (65) are both charged with misprision of a felony. Katilia Jackson (26) and Brenda Arms (55) are both charged with maintaining a drug-involved premises. All of the defendants currently reside in Milwaukee, except for Kevin R. Arms (Pewaukee), Ricky Shaw (Atlanta, GA) and Malik Danun (Atlanta, GA).
Today, law enforcement officers arrested 18 of these defendants. Three were already in custody. Six are still at large, including: Trevan Brown, John Cleveland, Ronnie Reid, Demerius Scholar, Sam Spears, and Roger Walker. In addition, law enforcement executed eight search warrants and recovered 31 firearms and approximately $143,000.
The defendants were charged based on a multi-year investigation by law enforcement officers from the U.S. Department of Justice, Drug Enforcement Administration, the Milwaukee Police Department, the Wisconsin Department of Revenue, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, assisted by the Wisconsin Department of Justice- Division of Criminal Investigations, and the Milwaukee High Intensity Drug Trafficking Area (HIDTA) Heroin Task Force.
Law enforcement agencies assisting with today’s arrests include the U.S. Marshals Service, Waukesha Metro Drug Unit, and the Milwaukee County Sheriff’s Department.
The drug conspiracy and firearms offenses are all punishable by up to life in prison. The other offenses have lower maximum penalties, including: money laundering (20 years); maintaining a drug involved premises (20 years); possession with intent to distribute or distribution of controlled substances (20 years); obstruction of justice (20 years); and misprision of a felony (3 years).
This case is being prosecuted by Assistant U.S. Attorneys Erica O’Neil and Brian Resler.An indictment is merely the formal method of charging an individual and does not constitute inference of his or her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.
Three Indicted on Federal ChargeOf Bank Robbery in Pomona, KSRead the Press Release
KANSAS CITY, KAN. – A federal grand jury returned indictments here today against three people who are charged with robbing a bank in Pomona, Kan., U.S. Attorney Barry Grissom said.
Caleb Jeffcoat, 26, Quenemo, Kan.; Christel Collins, 37, Quenemo, Kan.; and Robert Martin, 39, Quenemo, Kan., were charged with one count of bank robbery. The indictment alleged that on March 19, 2014, they robbed the Goppert State Service Bank at 118 East Franklin Street in Pomona.
If convicted, they face a maximum penalty of 20 years in federal prison and a fine up to $250,000. The Franklin County Sheriff’s Office, the Ottawa Police Department, the KBI, the Franklin County Attorney’s Office and the FBI investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
OTHER INDICTMENTS
Luis Angel Sanchez-Cruz, 32, Baldwin Park, Calif.; Daniel Flores, 34, Perris, Calif.; and Evelyn Rose Cardenas, 23, Perris, Calif., are charged with one count of conspiracy to distribute heroin and methamphetamine, one count of possession of heroin with intent to distribute and one count of possession of cocaine with intent to distribute. The crimes are alleged to have occurred from April 1 to April 5, 2014, in Kansas City, Kan.
If convicted, they face a penalty of not less than 10 years in federal prison and a fine up to $10 million. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Sheri McCracken is prosecuting.
Chester Bragg, 36, is charged with failure to register as required by the federal Sex Offender Registration and Notification Act. The crime is alleged to have occurred starting in December 2013 in Wyandotte County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The U.S. Marshal Service investigated. Assistant U.S. Attorney Kim Martin is prosecuting.
Scott Meinert, 49, Tonganoxie, Kan., is charged with one count of possession of child pornography. The crime is alleged to have occurred March 25, 2013, in Tonganoxie, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Kim Martin is prosecuting.
Javier Zambrano-Sanchez, 39, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and cocaine, nine counts of distributing various amounts of methamphetamine and five counts of distributing various amounts of cocaine. The crimes are alleged to have occurred in 2012 and 2013 in Johnson and Wyandotte counties.
If convicted, he faces a penalty of not less than 10 years in federal prison and a fine up to $10 million on the conspiracy charge. Sentences on the other counts vary: Not more than 20 years, not less than five years, not less than 10 years, depending on the count. The FBI investigated. Assistant U.S. Attorney Sheri McCracken is prosecuting.
Miguel Lozoya-Serrano, 40, a citizen of Mexico who has been living in Wichita, Kan., is charged with one count of unlawfully re-entering the United States after being deported. He was found March 18, 2014, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Roberto Martinez-Bahena, 43, a citizen of Mexico who has been living in Liberal, Kan., is charged with unlawfully re-entering the United States after being deported. He was found March 27, 2014, in Seward County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Vincente Diaz-Gomez, 21, a citizen of Mexico, is charged with one count of unlawfully transporting aliens who were in the United States illegally, and one count of unlawfully re-entering the United States after being deported. The indictment alleges that on April 5, 204, he transported six such aliens in Seward County, Kan.If convicted, he faces a maximum penalty of five years and a fine up to $250,000 on the transportation charge, and a maximum penalty of two years and a fine up to $250,000 on the other count. Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Oscar Sanchez-Valencia, 27, a citizen of Mexico, is charged with one count of making a false statement to the government, three counts of misusing a Social Security number, seven counts of aggravated identity theft, two counts of making a false claim of U.S. citizenship, and one count of using false documents. The crimes are alleged to have occurred in 2012, 2013 and 2014 in Barton County, Kan.
Upon conviction, the crimes carry the following penalties:
Making a false statement, misusing a Social Security number: A maximum penalty of five years in federal prison and a fine up to $250,000.
Aggravated identity theft: A mandatory consecutive two years and a fine up to $250,000 on each count.
Making a false claim of citizenship: A maximum penalty of three years and a fine up to $250,000.
Using false documents: A maximum penalty of 15 years and a fine up to $250,000.Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Howard D. Franks, 59, Osage City, Kan., is charged with one count of theft of Social Security benefits. The crime is alleged to have occurred from 2010 to 2013 in Osage County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Social Security Administration – Office of Inspector General investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Ladonna I. Hensley, 44, Americus, Kan., is charged with one count of Social Security benefits fraud. The crime is alleged to have occurred from 2007 to 2011 in Lyon County, Kan.
If convicted, she faces a maximum penalty of five years in federal prison and a fine up to $250,000. The Social Security Administration – Office of Inspector General investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Three California Residents Arrested, Charged with Sex Trafficking of an Orlando MinorRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment against Vincent Hudson, a/k/a “Goldie,” (44, Stockton, CA), Patricia Poulson, a/k/a “Moët Diamonds,” (22, Stockton, CA), and Jessica McCrary, a/k/a “Amber Snow” (20, Stockton, CA). Hudson is charged with conspiracy to commit sex trafficking of a minor, sex trafficking of a minor, transporting a minor to engage in prostitution, and two counts of commission of a felony offense involving a minor when required to register as a sex offender. Poulson and McCrary are charged with conspiracy to commit sex trafficking of a minor. If convicted, each faces a maximum penalty of life in federal prison.
All three individuals were arrested in the Eastern District of California and will make their initial appearances at the federal courthouse in Sacramento, California.
According to the indictment, between on or about November 8, 2013 and December 18, 2013, the above named individuals recruited, enticed, and transported “Minor A” from Orlando, Florida to Louisiana and, ultimately, California for the purpose of engaging in prostitution. The indictment further alleges that Hudson committed the offenses after being required to register as a sex offender.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the Metropolitan Bureau of Investigation. It will be prosecuted by Assistant United States Attorney David Haas.
(Download Factual Basis )
The Office of the United States Attorney Reaches Settlement with Miron Construction Company, Inc. and Corporate OfficersRead the Press Release
United States Attorney James L. Santelle today publicly released a Non-Prosecution Agreement between the Office of the United States Attorney for the Eastern District of Wisconsin and Miron Construction Company, Inc., David G. Voss, Jr., and Dean J. Basten. Voss is half owner of Miron Construction and serves as its President and Chief Executive Officer. Basten serves as Miron’s Secretary, Treasurer, and Chief Financial Officer. Miron Construction Company, Inc. is headquartered in Menasha, Wisconsin, with regional offices throughout Wisconsin and in Iowa, Michigan, and Minnesota. Miron employs more than 1,200 individuals at its various offices and in 2013 reported sales in excess of $680 million.
The Non-Prosecution Agreement brings to a conclusion a multi-year investigation by the Federal Bureau of Investigation (FBI) of Miron’s billing practices in Wisconsin public school construction projects, Miron’s financial reporting practices in these and other construction projects, and Voss’s and Basten’s role in these billing and financial reporting practices.
United States Attorney Santelle stated that, among other things, the three-year Non-Prosecution Agreement: (1) calls for the appointment of a Monitor to oversee Miron’s operations during the period of the Agreement; (2) requires Miron to pay $4 million to the federal government, which the United States Attorney’s Office will use to compensate five separate school districts; (3) requires Miron, in all future construction contracts, to disclose to its customers the actual labor rates it is charging the customer; (4) ends a practice known within Miron as “cost smoothing” so as to accurately report its costs, revenues, and income on individual construction projects; (5) replace its current accounting and auditing firm; and (6) adopt a document retention policy that is consistent with industry practices and in compliance with its construction contracts.
In releasing the agreement, Santelle stated: “In addition to obtaining restitution for the named school districts and appointing a Monitor to review Miron’s business operations, the other important consideration in reaching this agreement is the potential impact on more than 1,200 Miron employees—who were uninvolved in and unaware of the allegations that prompted the FBI investigation and resulted in this resolution. If this matter had proceeded into a litigation posture, the jobs of all of those employees and those of many other individuals with jobs dependent on the business that Miron generates would be in peril.”
Santelle further stated that this was the first time that the U.S. Attorney’s Office had ever required an entity to agree to Monitor oversight. “I am confident that the business monitoring, financial compensation, contract disclosure, accounting modification, and other critical terms and conditions of this agreement accomplish justice for the parties involved and collectively address well the interests of the people we serve,” Santelle noted.
This matter was investigated by special agents of the Green Bay and Milwaukee Offices of the Federal Bureau of Investigation. Assistant United States Attorneys Carol L. Kraft and Joseph R. Wall oversaw the investigation and led the negotiations that resulted in the Non-Prosecution Agreement.
For additional information, contact Public Information Officer Elizabeth Makowski at (414) 297-1774.
# # #(Miron Non-Prosecution Agreement )
The Executive Office for Immigration Review Releases FY 2013 Statistics Yearbook with Revised Reporting MethodologyRead the Press Release
FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced that it has released its Fiscal Year (FY) 2013 Statistics Yearbook. As announced on its website on October 1, 2013, EOIR has been working to enhance its external data reporting by changing the way it analyzes and reports its data. The new statistical methodology is featured in the FY 2013 Statistics Yearbook, an annual compilation of data that examines respondents' cases by nationality, language, and disposition, and provides detailed information surrounding asylum cases.
In September 2011, EOIR convened an internal data working group to evaluate the collection and analysis of data and to assist in EOIR's annual effort to improve the agency's most significant data report. The conclusions of that working group were consistent with recommendations from the Department of Justice's Office of Inspector General in October 2012.
"Our new methodology will allow us to be more responsive to external statistics requests and to provide more transparency into EOIR's daily operations," said EOIR Director Juan P. Osuna. "These changes will make the FY 2013 Statistics Yearbook an even more useful tool than in years past."
The new statistical methodology revises the manner in which matters received and completed at EOIR are counted so that that the number of new receipts and initial case completions will provide as close an approximation as possible to the number of new individuals coming into EOIR immigration courts, and the number of motions and bonds will show additional work in existing cases.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Tennessee Substance Abuse Treatment Facility Agrees to <br /> Resolve False Claims Act Allegations for $9.25 MillionRead the Press Release
The Department of Justice announced today that CRC Health Corp. (CRC) has agreed to pay $9.25 million to the federal government and the State of Tennessee to settle allegations that CRC knowingly submitted false claims by providing substandard treatment to adult and adolescent Medicaid patients suffering from alcohol and drug addiction at its facility in Burns, Tenn. CRC, based in Cupertino, Calif., is a nationwide provider of substance abuse and mental health treatment services.
“Medicaid patients who enter residential treatment programs for alcohol and drug addiction deserve to have treatment provided by qualified personnel according to the appropriate standard of care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will not tolerate health care providers who prioritize profit margins over the needs of their patients.”
CRC owns and operates a residential substance abuse treatment facility in Burns, Tenn., called New Life Lodge. The government alleged that, between 2006 and 2012, New Life Lodge billed the Tennessee Medicaid program (TennCare) for substance abuse therapy services that were not provided or were provided by therapists who were not properly licensed by the state of Tennessee. The government also alleged that New Life Lodge failed to make a licensed psychiatrist available to patients at the facility, as required by the state’s regulations; failed to maintain patient-staffing ratios required by Tennessee Department of Mental Health regulations and billed for Medicaid patients in excess of the state-licensed bed capacity at the facility. In addition, the government alleged that New Life Lodge double-billed Medicaid for prescription substance abuse medications given to residents at the facility. New Life Lodge currently is not treating Medicaid patients at its facility.
“Substance abuse of varying levels is rampant here and across the country,” said U.S. Attorney for the Middle District of Tennessee David Rivera. “Fortunately, when needed, Medicaid or TennCare covers substance abuse treatment and certain mental health assistance. When those services are required, the government will ensure that the treatment is provided with the highest possible quality of care to those patients. Anything less is unacceptable.”
“Safeguarding TennCare’s mental and behavioral health support system is a particular focus of this office,” said Tennessee Attorney General Bob Cooper.
The allegations covered by the settlement were raised in a lawsuit filed by Angie Cederoth, who was previously employed in New Life Lodge’s billing department, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and to receive a share of any recovery. Cederoth will receive $1.5 million as her share of the settlement proceeds.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
“Providers of health care services must not place profits above patients,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “This was a vulnerable population of individuals who were seeking treatment for their substance abuse problems. We will pursue these cases in order to ensure proper treatment is afforded to those seeking treatment.”
The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, the Federal Bureau of Investigation, the Tennessee Attorney General’s Office, the Tennessee Bureau of Investigation and the Department of Health and Human Services Office of Inspector General.
“The FBI is committed to investigating allegations of wrongdoing and false claims related to federally funded health care programs,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the FBI. “The resolution of this matter is the result of the hard work by the individual investigators and the coordinated effort of all the agencies involved.”
“This resolution is indicative of a great collaborative effort to combat egregious and fraudulent activity against health care, which ultimately impacts everyone in Tennessee,” said Director of the Tennessee Bureau of Investigation Mark Gwyn.
The lawsuit is captioned U.S. ex rel. Cederoth v. CRC Health Corporation Inc. , CV-3-11-00897 (M.D. Tenn.). The claims asserted against the defendants are allegations only, and there has been no determination of liability.
Tennessee Substance Abuse Treatment Facility Agrees to Resolve False Claims Act Allegations for $9.25 MillionRead the Press Release
New Life Lodge in Burns, Tennessee at Center of Allegations
U.S. Attorney David Rivera announced today that CRC Health Corporation (CRC) has agreed to pay $9.25 million to the United States and the State of Tennessee to settle allegations that CRC knowingly submitted false claims by providing substandard treatment to adult and adolescent Medicaid patients suffering from alcohol and drug addiction at its facility in Burns, Tennessee. CRC, based in Cupertino, California, is a nationwide provider of substance abuse and mental health treatment services.
“Substance abuse of varying levels is rampant here and across the country,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “Fortunately, when needed, Medicaid or TennCare covers substance abuse treatment and certain mental health assistance. “When those services are required, that treatment must be provided with the highest possible quality of care to those patients. Anything less is unacceptable.”
CRC owns and operates a residential substance abuse treatment facility in Burns, Tennessee, called New Life Lodge. The United States alleged that, between 2006 and 2012, New Life Lodge billed the Tennessee Medicaid program for substance abuse therapy services that were not actually provided or were provided by therapists who were not properly licensed by the State of Tennessee. The United States also alleged that New Life Lodge failed to make a licensed psychiatrist available to patients at the facility, as required by the state’s regulations, failed to maintain patient-staffing ratios required by the Tennessee Department of Mental Health regulations, and billed for Medicaid patients in excess of the state-licensed bed capacity at the facility. In addition, the United States alleged that New Life Lodge caused Medicaid to be double-billed for prescription substance abuse medications given to residents at the facility. New Life Lodge is not currently treating Medicaid patients at its facility.
“Medicaid patients who enter residential treatment programs for alcohol and drug addiction deserve to have treatment provided by appropriately qualified personnel according to the appropriate standard of care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will not tolerate health care providers who prioritize profit margins over the needs of their patients.”
“The FBI is committed to investigating allegations of wrong doing and false claims related to federally- funded health care programs,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The resolution of this matter is the result of the hard work by the individual investigators and the coordinated effort of all the agencies involved.”
“Providers of health care services must not place profits above patients,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services- Office of Inspector General in Atlanta. “This was a vulnerable population of individuals who were seeking treatment for their substance abuse problems. We will pursue these cases in order to ensure proper treatment is afforded to those seeking treatment.”
Director Mark Gwyn of the Tennessee Bureau of Investigation said, “This resolution is indicative of a great collaborative effort to combat egregious and fraudulent activity against health care, which ultimately impacts everyone in Tennessee.”
The allegations covered by the settlement were originally raised in a lawsuit filed by Angie Cederoth, who was previously employed in New Life Lodge’s billing department, under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for the submission of false claims and to receive a share of any recovery. Ms. Cederoth will receive a payment of $1,526,260.01 as her share of the settlement proceeds.
The investigation of this matter reflects a coordinated effort among the, the U.S. Attorney’s Office for the Middle District of Tennessee; the Commercial Litigation Branch of the Justice Department’s Civil Division; the Tennessee Attorney General’s Office; the FBI; the Tennessee Bureau of Investigation; and the Department of Health and Human Services’- Office of Inspector General.
The lawsuit is captioned U.S. ex rel. Cederoth v. CRC Health Corporation, Inc.3-11-CV-00897 (M.D. Tenn.).
The claims asserted against the defendants are allegations only, and there has been no determination of liability.
Sioux Falls Man Appears in Federal Court on Attempted Commercial Sex Trafficking ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for Attempted Commercial Sex Trafficking.
James Anthony Murphy, age 21, was indicted on April 8, 2014. He appeared before U.S. Magistrate Judge John E. Simko on April 9, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory minimum of 15 years in custody and a maximum of life imprisonment, a $250,000 fine, a mandatory minimum of 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Murphy attempted to recruit, entice and obtain a person who had not attained the age of 14 years, and knowing that the person would be caused to engage in a commercial sex act.
The charge is merely an accusation and Murphy is presumed innocent until and unless proven guilty.
The investigation is being conducted by the South Dakota Internet Crimes Against Children Task Force, the South Dakota Division of Criminal Investigation, Sioux Falls Police Department, Minnehaha County Sheriff’s Office, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, and the Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Murphy was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for June 17, 2014.
Sioux Falls Man Appears in Federal Court on Attempted Commercial Sex Trafficking ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for Attempted Commercial Sex Trafficking.
Elijah Wilson, age 24, was indicted on April 8, 2014. He appeared before U.S. Magistrate Judge John E. Simko on April 10, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory minimum of 15 years in custody and a maximum of life imprisonment, a $250,000 fine, a mandatory minimum of 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Wilson attempted to recruit, entice and obtain a person who had not attained the age of 14 years, and knowing that the person would be caused to engage in a commercial sex act.
The charge is merely an accusation and Wilson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the South Dakota Internet Crimes Against Children Task Force, the South Dakota Division of Criminal Investigation, Sioux Falls Police Department, Minnehaha County Sheriff’s Office, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, and the Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Wilson was released on bond pending trial. A trial date has been set for June 17, 2014.
Seven Individuals from Wagner Indicted for Distribution of MethamphetamineRead the Press Release
United States Attorney Brendan V. Johnson announced that a second group of individuals from Wagner, South Dakota, have been indicted by a federal grand jury for Conspiracy to Distribute Methamphetamine and Maintaining a Drug-Involved Premises. The first group was indicted in December 2013 and included five people.
Helen Ann Archambeau, age 55; Desmond Basil Heth, age 35; Cindy Lynn Schunk, age 37; Natasha Ann Archambeau, age 32; Mona Fay Winckler, age 58; Leslie Lee French, 31; and Brenda Evette Alonzi, age 53, were indicted on March 5, 2014, for Conspiracy to Distribute Methamphetamine. Additionally, Helen Archambeau and Winckler were also indicted for Maintaining a Drug-Involved Premises.
All defendants appeared before U.S. Magistrate Judge John E. Simko on various dates in March and April and pled not guilty to the Indictment.
The maximum penalty upon conviction of Conspiracy to Distribute Methamphetamine is up to 20 years in custody and/or a $1 million fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered. The maximum penalty upon conviction of Maintaining a Drug-Involved Premises is up to 20 years in custody and/or a $500,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely an accusation and all defendants are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, the South Dakota Division of Criminal Investigation, Bureau of Indian Affairs, and the Charles Mix County Sheriff’s Office. Special Assistant U.S. Attorney Jennifer D. Mammenga is prosecuting the case.
All parties except for French have been released on bond. French is currently in the custody of the U.S. Marshals Service. The trial has been set to commence on Tuesday, July 1, 2014.
Rochester Men Charged with Robberies of Tops MarketsRead the Press Release
ROCHESTER, N.Y. – U.S. Attorney William J. Hochul, Jr., announced today that Tyrelis Austin, 22, of Rochester, N.Y., was charged by criminal complaint with the robbery of three Tops Marketplace stores in 2012, 2013 and 2014. The charge carries a maximum penalty of 20 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Douglas E. Gregory, who is handling the case, stated that Austin is charged with the November 25, 2012 robbery of the Tops store located at 1100 Jefferson Road in Henrietta; the July 29, 2013 robbery of the Tops store located at 3507 Mt. Read Boulevard in Greece; and, the March 28, 2014 robbery of the Tops store located at 270 East Main Street in Avon, New York. According to the complaint, on each occasion, the defendant threatened to shoot store employees if they did not comply with his request to empty the cash registers located at the service desks of each store.After robbing the Tops store in Avon, Austin led deputies with the Monroe County Sheriff’s Department on a high speed chase on Route 390 northbound. Ultimately, the defendant’s vehicle crashed into a ditch on Route 390 near the Chili Avenue exit. Deputies arrested Austin at the scene and discovered a large amount of cash, as well as the black hooded sweatshirt, wig and baseball cap that he wore into the store. Deputies also discovered two handwritten notes which stated “put all the money in the bag or I will shoot you.” In a post-arrest statement to police, Austin admitted his involvement in all three robberies.
Austin’s arrest follows the January 4, 2014 apprehension of the defendant’s cousin, Derek Stanin, 21, also of Rochester. Stanin is accused of robbing the Tops Marketplace store located at 3507 Mt. Read Boulevard in Greece. In that case, store clerks were able to introduce marked bills and a GPS tracker into the monies turned over to Stanin. The GPS tracker allowed law enforcement to quickly locate Stanin hiding in a parked vehicle. Police located a large sum of case as well as clothes that Stanin wore during the robbery. The defendant was also found to be in possession of a replica .357 pellet gun in his right pant leg. Similar to Austin, Stanin was also charged with robbery.
The criminal complaint is the culmination of an investigation by Special Agents of the Federal Bureau of Investigation, the Monroe County Sheriff’s Department, under the direction of Patrick O’Flynn, the Avon Police Department, under the direction of Chief Gary Benedict, and the Greece Police Department, under the direction of Chief Patrick Phelan.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Puerto Rico Man Detained in Illegal Shipment of Firearms CaseRead the Press Release
St. Thomas, USVI – United States Magistrate Judge Ruth Miller today ordered the detention of Emmanuel Benel Cuadrado, 24, of Puerto Rico, who was arrested Sunday at the Cyril E. King Airport on St. Thomas and charged with illegally shipping firearms into the Virgin Islands, United States Attorney Ronald W. Sharpe announced.
Benel Cuadrado made his initial appearance in District Court before U.S. Magistrate Judge Ruth Miller on Monday, and was ordered held without bail pending today’s detention and preliminary hearing. According to documents filed in District Court, Customs and Border Protection officers and agents of Homeland Security Investigations intercepted a brown box that Benel Cuadrado placed on a Jet Blue flight traveling from Puerto Rico to St. Thomas on April 13th. The package contained three firearms, one Glock and two Smith and Wesson firearms. The three firearms were removed from the box and replaced with two fake firearms, and the box was allowed to continue on to St. Thomas. Upon Jet Blue’s arrival in St. Thomas, Benel Cuadrado retrieved the brown box from the airport’s baggage claim area.
If convicted, Benel Cuadrado faces a statutory maximum sentence of five years in prison. This case was investigated by Homeland Security Investigations. It is being prosecuted by Assistant U.S. Attorney Everard E. Potter.
The public is reminded that a criminal complaint is merely a charging document and is not evidence of guilt. A defendant is presumed innocent until proven guilty.
Public Corruption Indictments Returned in Hammond Federal CourtRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana- United States Attorney David Capp announced today two indictments naming Keith Soderquist, the Mayor of Lake Station.
The first indictment charges Soderquist, age 44, and his wife, Deborah Soderquist, age 55, who was employed as the administrative assistant to Mayor Soderquist.
The indictment alleges a conspiracy between Keith and Deborah Soderquist to commit wire fraud in connection with financial transactions involving the Mayor’s campaign finance account and the Lake Station Food Pantry account. These accounts were allegedly utilized by the Soderquists to obtain cash for personal expenses, including gambling activities at casinos in Indiana and Michigan.
The indictment also charges both Keith and Deborah Soderquist with filing false tax returns for the years 2010, 2011 and 2012. The basis for the tax charges is their failure to disclose the money they took from the campaign and food pantry account that they converted to their own personal uses.
The second indictment names Keith Soderquist, Deborah Soderquist, and Miranda Brakley, age 33, a former employee of Lake Station. Brakley is charged in Count 1 of the second indictment with theft of funds from Lake Station from August 1, 2011 through July 31, 2012. Brakley is also charged in Count 2 with bankruptcy fraud for failing to disclose certain payments received from Lake Station on her bankruptcy schedules.
Keith and Deborah Soderquist are charged in Count 3 of the second indictment for being accessories after the fact. That Count alleges that, after knowing that Brakley had committed the theft alleged in Count 1, they assisted Brakley in order to hinder and prevent Brakley’s apprehension, trial and punishment.
The last count alleges that Keith and Deborah Soderquist structured a series of financial transactions in order to avoid the reporting requirements under federal law. The indictment alleges that in December 2012, the Soderquists obtained $15,000 from an individual. They instructed that individual to write three checks in amounts less than $10,000 (the reporting requirement under federal law) and to back date two of those checks. From December 8-12, 2012, those checks were cashed at different branches of JP Morgan Chase bank.
The investigation which led to the second indictment was initiated after a State Board of Accounts audit disclosed missing funds that had been posted as bond money with the Lake Station City Court.
United States Attorney David Capp stated, “These indictments are part of this office’s ongoing public corruption investigation. Today’s indictments were the result of an extensive investigative effort by the FBI, IRS and ISP. This investigative team will continue to investigate allegations of abuse of the public trust.”
The Soderquists and Brakley are expected to surrender to authorities at the Hammond federal courthouse Thursday morning.
This case is a result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service and the Indiana State Police.This case will be prosecuted by Assistant United States Attorneys Joshua Kolar and Philip Benson.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.Ponzi Schemer Charged with Criminal Contempt for Lavish Spending and Other Violations of Court OrdersRead the Press Release
BOSTON - A West Roxbury man was charged on April 10, 2014, with criminal contempt for violating an asset freeze and other court orders entered in a civil case brought by the United States Securities and Exchange Commission.
Steven Palladino, 57, was charged in an Information with twenty-five counts of criminal contempt.
The Information alleges that from May 2013 through November 2013, Palladino willfully violated court orders in the United States Securities and Exchange Commission’s civil case when he incurred thousands of dollars in credit card charges and cash advances – including charges at high-end restaurants – and did not deposit the proceeds of cash advances into an escrow account established by the Court. In addition, Palladino is alleged to have violated the same court orders in June 2013 when he sold a truck he owned and did not deposit the proceeds into the escrow account established by the Court. The Information also alleges that Palladino violated another court order that commanded Palladino to undo his transfers of luxury vehicles to his wife and the subsequent encumbrance of those luxury vehicles with approximately $137,000 in new loans by November 22, 2013.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. United States Attorney Ortiz also expressed appreciation for the significant assistance of the United States Securities and Exchange Commission. The case is being prosecuted by Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.
The details contained in the Information are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Today’s announcement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s Securities and Commodities Fraud Working Group. The interagency FFETF was created to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.
Pasadena Man Sentenced to 300-month Prison Term in Multimillion Dollar Investment Fraud SchemeRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – Gary Lynn McDuff, 59, was sentenced to 300 months in prison today for his role in conspiring to defraud investors of almost $11 million in an investment fraud scheme and laundering the proceeds in the Eastern District of Texas, announced U.S. Attorney John M. Bales. United States District Judge Richard A. Schell also ordered the payment of over $6.5 million in restitution to the victims of the fraudulent scheme. McDuff’s fellow conspirators, Gary Lancaster, 62, of Oregon, and Robert Reese, deceased, of Carmel, California, previously pleaded guilty and were sentenced to terms of imprisonment for their roles in the scheme.
According to evidence presented during the federal trial, McDuff and Lancaster agreed to create the Lancrorp Investment Fund, to draft a prospectus for the Fund, and to solicit investments from individuals across the United States. While McDuff controlled the operation, Lancaster agreed to serve as the “front” since McDuff could not possess a securities license or sell securities because of a past felony conviction. McDuff recruited Reese to help sell the investment despite the fact that Reese had been barred by the State of California from selling securities. McDuff, Lancaster, and Reese made numerous false representations to their investors in order to induce payments, including representations that the Fund would only invest in A+ or A1 rated bonds, that the principal of each investment would be insured and never at risk, and that Lancaster had experience operating this type of investment. McDuff, Lancaster, and Reese never disclosed McDuff’s felony conviction or Reese’s securities ban. McDuff then laundered the criminal proceeds in order to promote the operation of the fraudulent scheme. After hearing the evidence, the jury needed just six minutes to convict McDuff on the conspiracy and laundering charges.
“This significant sentence reflects how seriously we take investment fraud. We will not tolerate false representations being made to investors in order to take their money,” said U.S. Attorney Bales.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service and prosecuted by Assistant United States Attorneys Shamoil T. Shipchandler and Camelia Lopez.
####Ozark Man Sentenced to 15 Years for Meth ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that three south Missouri residents were sentenced in federal court today for their roles in a conspiracy to distribute methamphetamine.
Noe Moreno-Malagon, 36, a citizen of Mexico residing in Ozark, Mo., Rita J. Vera, 35, of Monett, Mo., and Paul E. Allen, 58, of Purdy, Mo., were sentenced in separate appearances before U.S. Chief District Judge Greg Kays. Moreno-Malagon was sentenced to 15 years in federal prison without parole, which must be served consecutively to his prison sentence in an unrelated state case. Moreno-Malagon must also forfeit to the government $32,000 and four firearms (with miscellaneous ammunition) that were seized by law enforcement officers.
Vera was sentenced to five years in federal prison without parole. Allen was sentenced to seven years in federal prison without parole.
On Nov. 15, 2013, Moreno-Malagon pleaded guilty to leading a multi-pound methamphetamine conspiracy operating in the Springfield area but also covering Polk, Christian and Taney Counties. The case began when couriers were intercepted in New Mexico and Texas with 4-kilogram loads of methamphetamine. The couriers indicated that the methamphetamine was going to Springfield. The federal investigation included controlled buys and additional seizures of methamphetamine, firearms and cash.
On Dec. 3, 2012, a search warrant was executed in Morrisville, Mo. During the search, DEA agents located 338.1 grams of pure methamphetamine, as well as a handgun and a rifle. The DEA also conducted a search at a Springfield residence believed to be a stash house for the organization. At that location, agents found 123.6 grams of pure methamphetamine.
Moreno-Malagon supplied Vera and Allen with methamphetamine. On Feb. 13, 2012, federal law enforcement agents seized 362 grams of pure methamphetamine from Allen in Ozark, Mo. Additionally, on June 22, 2012, 224.4 grams of pure methamphetamine was seized from another co-defendant. In addition to the seizures, two controlled buys were made on March 27, 2012 and April 12, 2012. In March, 125.1 grams of pure methamphetamine was purchased, and in April, 117.5 grams of pure methamphetamine was purchased.
On Sept. 3, 2013, Allen pleaded guilty to his role in the drug-trafficking conspiracy. Vera pleaded guilty to her role in the conspiracy on June 20, 2013.
This case is being prosecuted by Assistant U.S. Attorney Gary Milligan. It was investigated by the Drug Enforcement Administration, IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Missouri State Highway Patrol, and task force officers from the Greene County, Mo., Sheriff’s Department, the Christian County, Mo., Sheriff’s Department, the Ozark, Mo., Police Department, the Springfield, Mo., Police Department, the South Central Drug Task Force and COMET (the Combined Ozarks Multijurisdictional Enforcement Team).Oglala Man Pleads Not Guilty to Felony Child Abuse and NeglectRead the Press Release
United States Attorney Brendan V. Johnson announced that an Oglala, South Dakota, man has been indicted by a federal grand jury for Felony Child Abuse and Neglect.
Leon Eagle, age 21, was indicted on March 18, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on April 4, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 15 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Eagle abusing a child who had not attained the age of seven years old in September 2012 at Oglala.
The charge is merely an accusation and Eagle is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman is prosecuting the case.Eagle was released on bond pending trial. A trial date has been set for June 10, 2014.
New Haven Man Sentenced to Five Years in Prison for Distributing HeroinRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PIERRE GALAN, also known as “P.L.O.,” 28, of New Haven, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 60 months of imprisonment, followed by four years of supervised release, for trafficking heroin.
According to court documents and statements made in court, this matter stems from “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven. Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms. More than 100 individuals were charged as a result of the investigation.
On December 6, 2013, GALAN pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin.
GALAN’s criminal history includes one prior felony firearms conviction.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments have provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]New Haven Man Sentenced to 15 Months in Prison for Escaping from Federal CustodyRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that MICHAEL BEVERLY, 37, formerly of New Haven, was sentenced yesterday by Senior U.S. District Judge Ellen Bree Burns in New Haven to 15 months of imprisonment, followed by three years of supervised release, for escaping from federal custody.
According to court documents and statements made in court, on June 17, 2013, BEVERLY escaped from custody in the Watkinson House Residential Reentry Center in Hartford. BEVERLY was serving a 77-month term of imprisonment imposed following his 2008 conviction in federal court for possession of ammunition by a convicted felon. He was apprehended approximately two weeks later by the U.S. Marshals Service and returned to custody.
The 15-month sentence imposed yesterday will run consecutively to the undischarged term of imprisonment BEVERLY was serving on his 2008 conviction.
This case was investigated by the U.S. Marshals Service and the New Haven Police Department, and was prosecuted by Assistant U.S. Attorney Christopher Mattei.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Mt. Oliver Grocer Admits Defrauding Food Stamp ProgramRead the Press Release
PITTSBURGH - A Pittsburgh-area grocer pleaded guilty in federal court to fraud charges United States Attorney David J. Hickton announced today.
Emile Bizimungu, 32, pleaded guilty to one count of wire fraud and one count of food stamp fraud before Senior United States District Judge Gustave Diamond.
In connection with the guilty plea, the court was advised that Bizimungu was the owner of Dollar Grocery, a retail food store formerly located on Brownsville Road in Mt. Oliver Borough. The defendant's retail store participated in the United States Department of Agriculture's Supplemental Nutrition Assistance Program, commonly known as the Food Stamp Program. Food stamp recipients could purchase eligible food items using food stamp benefit cards at the defendant's retail store. As a condition of participation in the Food Stamp Program, Bizimungu certified that he would comply with all rules and regulations of the program and was aware that program rules strictly prohibit the exchange of food stamp benefits for cash and/or ineligible items. Despite this knowledge, on multiple occasions, the defendant exchanged food stamp benefits for cash on a discounted basis, usually giving the customers only .50 cents on the dollar for their food stamp benefits. The defendant also permitted food stamp customers to purchase ineligible items with food stamp benefits and accepted food stamp benefits as payment on credit accounts and loans.
Judge Diamond scheduled sentencing for Aug. 11, 2014 at 10 a.m. The law provides for a total sentence of 25 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the defendant’s bond.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Office of the Inspector General for the United States Department of Agriculture and the Department of Homeland Security, Homeland Security Investigations conducted the investigation that led to the prosecution of Bizimungu.
Montezuma County Man Indicted for Child Pornography and Marijuana DistributionRead the Press Release
DENVER – Stephen Paul Redwood, age 31, of Montezuma County, Colorado, was placed into federal custody based on a grand jury indictment on child pornography and marijuana distribution charges, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Redwood was indicted by a federal grand jury in Durango, Colorado on April 3, 2014. He surrendered on April 10, 2014 in Denver, and appeared before a U.S. Magistrate Judge that afternoon, where he was advised of his rights and the charges pending against him. Yesterday, April 15, 2014, Redwood had a detention hearing and arraignment. He is due back in court tomorrow, April 17, 2014 at 11:00 a.m. for a further discussion regarding detention.
According to the indictment, between July 7, 2012 and November 24, 2013, Redwood transported and shipped child pornography within interstate commerce, using any means, including a computer. Further, on August 25, 2012, January 21, 2013, August 14, 2013, and December 3, 2013, the defendant knowingly received child pornography, also by computer. On January 15, 2014, Redwood was found in possession of child pornography.
In addition to the child pornography charges, between October 31, 2013 and January 15, 2014, Redwood did knowingly and intentionally distribute and possess with intent to distribute marijuana. On January 15, 2014, Redwood did knowingly and intentionally manufacture and possess with intent to manufacture marijuana.
During the course of the investigation, the FBI determined that Redwood was receiving, transporting, and possessing child pornography. On January 15, 2014, FBI agents, working with the Colorado Bureau of Investigation (CBI), Immigration and Customs Enforcement (ICE) Homeland Security Services (HSI), United States Marshals Service, Montezuma County Sheriff’s Office and the Cortez Police Department, executed a search warrant at Redwood’s residence. In addition to the computer and computer media they found, which contained child pornography, agents also found a marijuana grow, including dried marijuana ready for use and live marijuana plants. During a detention hearing, the government proffered to the court that Redwood sold marijuana to a 14 year old and other minors as well.
Redwood faces one count of transportation of child pornography and four counts of receipt of child pornography which carries a penalty of not less than 5 years, and not more than 20 years in federal prison, as well as not more than a $250,000 fine for each count. He faces, one count of possession of child pornography, which carries a penalty of not more than 10 years in federal prison. He faces one count of distribution of marijuana and one count of manufacture/cultivation of marijuana, each count of which carries a penalty of not more than 5 years in federal prison, and up to a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation (FBI) with the assistance of the Colorado Bureau of Investigation (CBI), Immigration and Customs Enforcement (ICE) Homeland Security Services (HSI), United States Marshals Service, Montezuma County Sheriff’s Office and the Cortez Police Department.
Redwood is being prosecuted by Assistant U.S. Attorney Todd Norvell, based in the Colorado U.S. Attorney’s Durango Branch Office. Assistant U.S. Attorney Alecia Riewerts Wolak is providing support in Denver.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Mission Man Charged with First Degree Burglary and Attempted RobberyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man has been indicted by a federal grand jury for First Degree Burglary and Attempted Robbery.
Joshua Daniel Peneaux, age 18, was indicted on April 8, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on April 10, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 25 years in custody and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about March 30, 2014, in Mission, Peneaux and others entered and remained in an occupied structure and did by force, violence and intimidation, attempt to take things of value from the victim.
The charge is merely an accusation and Peneaux is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Tim Maher is prosecuting the case.
Peneaux was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Middlesex County, N.J., Man Sentenced to 18 Months in Prison for Scheme to File Fraudulent Tax ReturnsRead the Press Release
NEWARK – A Middlesex County, N.J., man was sentenced today to 18 months in prison for his role in filing fraudulent income tax returns and illegally receiving approximately $500,000 in refunds, U.S. Attorney Paul J. Fishman announced.
Badatunde Olugbake, 55, of Perth Amboy, N.J., previously pleaded guilty before U.S. District Judge Jose L. Linares to a three-count information charging him mail fraud, filing false claims against the United States, and receiving stolen government funds. Judge Linares imposed the sentence today in Newark federal court.According to documents filed in this case and statements made in court:
From February 2008 through December 2010, Olugbake was involved in a scheme to file false and fraudulent tax returns to obtain tax refund checks. Olugbake deposited more than $400,000 in tax refunds as part of that scheme into bank accounts he controlled.
Through the unauthorized use of names and Social Security numbers of unsuspecting victims, along with false addresses, statements concerning income and dependents, and claims for refunds, Olugbake manipulated tax returns so that the purported claimants qualified for the Earned Income Credit. Olugbake then mailed the fraudulent returns to the IRS. The IRS processed the false returns as if they were legitimate and issued refund checks that were mailed to the fraudulent addresses associated with the returns, where the checks were retrieved by Olugbake and deposited into bank accounts under his control.
In addition to the prison term, Judge Linares sentenced Olugbake to three years of supervised release and ordered him to pay $500,422 in restitution.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation under the direction of Acting Special Agent in Charge Jonathan D. Larsen, and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Criminal Division and Assistant U.S. Attorney Jacques S. Pierre of the U.S. Attorney’s Special Prosecutions Division in Newark.
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Defense counsel: Vincent J. Nuzzi Esq., Dover, N.J.
Mexican National Residing in Twin Falls Sentenced to PrisonRead the Press Release
Luciano Chavez-Morales convicted of being an illegal alien in possession of firearms and possessing methamphetamine with the intent to distribute
Boise B Luciano Chavez-Morales, 27, of Mexico, was sentenced today to serve 87 months in prison for one count of possession of methamphetamine with intent to distribute and one count of being an illegal alien in possession of firearms. Chief U.S. District Judge B. Lynn Winmill also sentenced the defendant to serve five years of supervised release, pay a $400 fine, and a $200 special assessment. Chavez-Morales was also ordered to forfeit the two illegally possessed firearms and $5000 in cash proceeds. The defendant pleaded guilty on January 22, 2014.
According to the plea agreement, Chavez-Morales, a citizen of Mexico, sold one ounce of methamphetamine to an undercover Special Agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives, on July 30, 2013, in a grocery store parking lot in Twin Falls, Idaho. Chavez-Morales sold another ounce of methamphetamine to the undercover agent on August 5, 2013. On August 16, 2013, Chavez-Morales agreed to sell the undercover agent four ounces of methamphetamine. Before the deal could take place, Chavez-Morales was arrested and a search warrant was served at his residence in Twin Falls. The search warrant discovered approximately 113 grams of pure methamphetamine and two loaded firearms in Chavez-Morales’s bedroom. One of the firearms was reported stolen out of Las Vegas, Nevada. At the time Chavez-Morales possessed the firearms, he was illegally present in the United States. Chavez-Morales will be deported to Mexico after serving his prison sentence.
The case was investigated by Twin Falls Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives.
The case was prosecuted as part of Idaho’s Project Safe Neighborhoods Program, which seeks to reduce gun violence in Idaho.
Mansfield Man Sentenced for Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Mansfield, Mo., man was sentenced in federal court today for receiving and distributing child pornography over the Internet.
Mathew Taylor Cox, 49, of Mansfield, was sentenced by U.S. Chief District Judge Greg Kays to eight years in federal prison without parole. The court also ordered Cox to forfeit to the government a desktop computer, two computer hard drives and 938 CDs and DVDs that contain images and videos of child pornography.
On Sept. 4, 2013, Cox pleaded guilty to one count of receiving and distributing child pornography (between May 1, 2008, and March 31, 2011) and one count of possessing child pornography (on Dec. 20, 2011).
This case was prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the FBI, the Nixa, Mo., Police Department and the Missouri State Highway Patrol.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Manhattan U.S. Attorney Files Civil Rights Lawsuit Against Major Real Estate Developer and Architects to Remedy Pattern and Practice of Inaccessible Design and Construction of New York City Apartment BuildingsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States filed a federal civil rights lawsuit in Manhattan federal court alleging that THE DURST ORGANIZATION, INC. (“DURST”), a major real estate developer based in New York City, has engaged in a pattern and practice of developing rental apartment buildings that are inaccessible to persons with disabilities. The suit alleges that DURST, along with its affiliate THE HELENA ASSOCIATES, LLC, and the architecture firm, FXFOWLE ARCHITECTS, P.C., designed and constructed the Helena, a Manhattan building with 595 rental apartment units, in violation of the design and construction provisions of the federal Fair Housing Act. The relevant provisions of the Fair Housing Act have been in effect since March 1991, and the Helena was built in 2005. The suit additionally alleges that, as evidenced by the inaccessible conditions at the Helena, DURST engaged in a pattern and practice of discriminatory conduct, which may result in inaccessible conditions at DURST’s other rental properties in New York City, and that unless DURST’s discriminatory practices are enjoined, the inaccessible conditions at the Helena will likely be repeated in current projects, including rental complexes at 855 Avenue of the Americas and on West 57th Street between 11th and 12th Avenues.
Manhattan U.S. Attorney Preet Bharara said: “This is now the eighth lawsuit we have filed in recent years to address the failure of real estate developers in New York City to comply with the law. Today’s lawsuit demonstrates our continued commitment to ensuring that the long-established federal laws that protect the rights of people with disabilities to accessible housing are enforced. Developers and architects who show an unwillingness to design and construct housing that complies with the law can no longer seek to evade the consequences of their actions.”
According to the allegations contained in the Complaint and other information in the public record:
DURST has been involved in real estate development in New York City for decades. In addition to The Helena, DURST has developed several other multi-family dwellings in Manhattan, including The Epic in the Chelsea neighborhood of Manhattan, 1214 Fifth Avenue on the Upper East Side, and several buildings along Front Street in Lower Manhattan.
DURST has engaged in a pattern and practice of developing its rental properties without regard to their accessibility to people with disabilities. For example, at The Helena, which is located on Manhattan’s Upper West Side, DURST designed and constructed a complex, which contains 595 rental apartment units and public and common use areas, with scores of inaccessible conditions. These conditions include excessively high thresholds that interfere with accessible routes in the common areas and within individual units, kitchens that lack sufficient width for maneuvering by people in wheelchairs, electrical outlets and mailboxes that are not fully usable by people in wheelchairs, and bathrooms that lack sufficient clear floor space for people in wheelchairs to maneuver.
To ensure that DURST’s current and future residential housing developments are accessible to people with disabilities and to redress its history of non-compliance with the Fair Housing Act, the United States seeks a court order enjoining DURST from designing and constructing multi-family housing, such as 855 Avenue of the Americas, without the accessibility features required by federal law and requiring DURST to retrofit the inaccessible conditions at all the rental properties it has developed to make them accessible. The United States also seeks damages for persons harmed by DURST’s unlawful practices, and a civil penalty to vindicate the public interest.
In addition, the United States asserts claims against FXFOWLE ARCHITECTS, P.C., based on their inaccessible designs for The Helena. Specifically, the United States seeks to enjoin FXFOWLE ARCHITECTS, P.C., from designing multi-family housing without the accessibility features required by federal law, as well as damages for persons harmed by their inaccessible designs and civil penalties.
This case is being handled by the Office’s Civil Rights Unit. Assistant U.S. Attorneys Li Yu, Carina H. Schoenberger, Emily E. Daughtry, and Jessica Jean Hu are in charge of the case.
U.S. v. Durst Organization, Inc. et al Complaint
Lower Brule Man Sentenced for Assaulting, Resisting, or Impeding A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lower Brule, South Dakota, man convicted of Assaulting, Resisting, or Impeding a Federal Officer was sentenced on April 14, 2014, by U.S. District Judge Roberto A. Lange.
Dru Peterson, age 26, was sentenced to 8 months of custody, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Peterson was indicted by a federal grand jury on November 14, 2013. He pled guilty on January 22, 2014.
The conviction stems from an incident on September 3, 2013, when officers were dispatched to Peterson’s home because of an active tribal warrant. Peterson answered the door, saw the officers, and attempted to shut the door and flee. The officers caught up with Peterson, and a physical struggle ensued between him and the officers, with Peterson actively trying to escape. At one point, Peterson put his hand in his front pocket, gripping an unknown object. He ultimately took a syringe out of his pocket. The officers directed him to drop it, but he continued to refuse and there was another physical struggle, until the officers were finally able to place him in handcuffs. As the result of the struggles, the officers received scrapes and abrasions, but none were seriously injured
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Peterson was immediately turned over to the custody of the U.S. Marshals Service.
Local Artist Pleads Guilty to ObsecenityRead the Press Release
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Lawrence F. Brose, 62, of Buffalo, N.Y., pleaded guilty before U.S. Judge William M. Skretny, to importation or transportation of obscene matters. The charge carries a maximum penalty of five years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Michael DiGiacomo, who is handling the case, stated that the investigation against the defendant began after a German police agency contacted United States Immigration and Customs Enforcement and advised them that an IP address in the United States downloaded some images of suspected child pornography. ICE Special Agents determined that the IP address was registered to Brose. Agents met with the defendant and during the meeting, Brose admitted to viewing images. An examination of the defendant’s computer resulted in agents finding various images, including one of a minor male less than 16 years of age engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The plea was the culmination of an investigation on the part of Special Agents of United States Immigration and Custom Enforcement, Homeland Security Investigations, under the direction of James C. Spero.
Sentencing is scheduled for August 13, 2014 at 10:00 a.m. before Judge Skretny .Justice Department Settles Sex Discrimination Lawsuit Against California Department of Corrections and RehabilitationRead the Press Release
The Department of Justice announced today that it has entered into a settlement agreement that, if approved by the court, will resolve allegations that the California Department of Corrections and Rehabilitation (CDCR) discriminated against an employee because of his sex in violation of Title VII of the Civil Rights Act of 1964.
The department filed its complaint against CDCR in July 2013, in the U.S. District Court for the Central District of California. The complaint alleged that Joe Cummings, a male cook with CDCR, was sexually harassed by a female co-worker and that CDCR failed to take timely steps both to end the harassment and to remedy it. Title VII prohibits discrimination in employment because of sex, which includes sexual harassment, as well as because of color, national origin, race and religion.
According to the complaint, Cummings’s co-worker made frequent unwanted sexual advances toward Cummings for more than a year. The complaint alleges that the co-worker frequently made lewd and sexually suggestive comments to Cummings that he explicitly rejected as unwelcome. The complaint further alleges that the co-worker’s inappropriate verbal communications with Cummings escalated, over time, to unwanted physical contact. According to the complaint, Cummings and other CDCR personnel complained numerous times to CDCR supervisors about the harassment, but CDCR failed to take timely remedial action to both end the harassment and to discipline the harasser. The complaint alleges that CDCR’s failure to take timely action to address sexual harassment violates both Title VII and CDCR’s own anti-harassment policy, which requires its supervisors to prevent sexual harassment and to promptly address complaints of sexual harassment.
Under the terms of the settlement agreement, CDCR must pay Cummings $50,000 in compensatory damages and restore leave that he indicated he used to try to avoid the alleged harasser. CDCR must also maintain appropriate anti-harassment and anti-retaliation policies and procedures. In addition, CDCR must provide appropriate training for its personnel on these policies and procedures.
“It is illegal to harass someone because of sex, regardless of the sex of the victim or the harasser,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Title VII gives all employees the right to work in an environment that is free of sexual harassment, and the Civil Rights Division will continue to vigorously enforce that right.”
“Sexual harassment in the workplace is simply intolerable,” said U.S. Attorney André Birotte Jr. “Today's settlement with the California Department of Corrections and Rehabilitation helps ensure continued compliance and furthers our efforts to stamp out employment discrimination.”
This case was litigated by Senior Trial Attorneys Raheemah Abdulaleem and Trevor Blake of the Civil Rights Division’s Employment Litigation Section, with assistance from Assistant U.S. Attorney Robyn-Marie Lyon Monteleone for the Central District of California.
More information about Title VII and other federal employment laws is available at this website. The continued enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Department of Justice is available on its website.
Jury Convicts Christian County, Kentucky Man for Stealing Trade Secrets from His Former EmployerRead the Press Release
PADUCAH, KY– A Christian County, Kentucky man was convicted by a federal jury for stealing trade secrets announced David J. Hale, United States Attorney for the Western District of Kentucky.
Defendant Phillip Lee Groves, was convicted on April 11, 2014, following a ten-day trial, for stealing trade secret information owned by White Drive Products, Inc., located in Hopkinsville, Kentucky. Groves stole the trade secret information while employed by the manufacturing company.
The theft took place between November 30, 2007 and September 22, 2008. At trial, the United States presented evidence that proved defendant Groves, without authorization, copied and transferred onto a USB portable hard drive approximately 30,000 files on February 22d and February 27th, 2008, which Groves intended to use as part of his employment with a White Drive Competitor. On May 5, 2008, defendant Groves resigned his job with White Drive Products, Inc., and on May 12, 2008, Groves began employment with the competitor.
Defendants Gregory Lee Wampler and Eric Dale Tinderholt were acquitted of charges by the jury.
Defendant Groves faces no more than 40 years in prison, three years of supervised release and a fine of $1,000,000. He will be sentenced by Senior District Judge Thomas B. Russell on July 23, 2014 at 11:00 AM in Paducah.
This case was prosecuted by Assistant United States Attorney Marisa Ford and was investigated by the Federal Bureau of Investigation (FBI).
Judge Sends Two Men to Prison for Participating in Cocaine Trafficking ConspiracyRead the Press Release
PITTSBURGH - A Pittsburgh resident and a resident of Oakland, Calif., have been sentenced in federal court on their convictions of violating federal narcotics and money laundering laws, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed a sentence of five years imprisonment followed by five years supervised release on Earl Lamar, 40, of Pittsburgh, Pa., and a sentence of 10 years imprisonment followed by five years supervised release on Roscoe Simpson, 39, of Oakland, Calif..
The IRS-Criminal Investigations joined the DEA as major partners in the investigation of the current case with the valuable assistance of multiple other federal, state and local law enforcement agencies. The investigation revealed a major cocaine distribution conspiracy which resulted in cocaine being transported to Pittsburgh and other areas from 2000 through 2010. The evidence at trial established that the conspiracy involved more than 2000 kilograms of cocaine and millions in laundered drug money. Prior to the summer of 2007, the conspiracy utilized packages of cocaine being shipped via the US mail or various common carriers from California to recipients in Pittsburgh. Documents and evidence revealed the large number of packages of cocaine shipped to the conspirators, as well as the packages of drug money being shipped back. Multiple seizures of both money and cocaine packages occurred. For example, on June 7, 2007 Postal Inspectors intercepted six kilograms of cocaine from the mail that was earmarked for the conspiracy. On Aug. 5, 2007, Postal Inspectors also seized a package containing $99,850.00 intended for a co-defendant.
The conspiracy began using couriers to transport cocaine to Pittsburgh and money back to California. The investigation has revealed that between 2007 and 2010 at least 11 different couriers took approximately 100 flights for the conspiracy. These involved the transportation of cocaine to the Pittsburgh end of the conspiracy and the transportation of drug money back to California. Again, multiple packages of both money and cocaine were intercepted. For example, in February of 2008 a co-defendant boarded a plane in Oakland bound for Pittsburgh with cocaine in his luggage. It was later learned that his bag contained 19 kilograms of cocaine. The co-defendant was observed, along with others, looking for the bag in Pittsburgh and he also filed a claim for the bag. On Aug. 8, 2009, more than $335,000 in cash, part of approximately $700,000 that was sent on this occasion, was seized from the luggage of a conspirator.
During other times, the conspiracy arranged transportation of cocaine or money by means such as chartered private flights and vehicles including tractor trailers. Individuals Indicted thus far involve many different roles within the conspiracy. Some conspirators are suppliers, couriers or recipient drug dealer/distributors. Other conspirators played a variety of roles such as: shipping or receiving packages; arranging for couriers, flights and flight payments; money launderers; and those who circumvented security procedures at airports.
Assistant United States Attorneys Ross E. Lenhardt, Michael L. Ivory and Gregory J. Nescott prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service – Criminal Investigations, Drug Enforcement Administration, Pennsylvania Attorney General and many other federal, state and local law enforcement agencies for the investigation leading to the successful prosecution of Lamar and Simpson.
Jefferson County Woman Convicted on Methamphetamine Related ChargesRead the Press Release
Follow @SDILNewsA Jefferson County woman was convicted on April 15, 2014, on methamphetamine related charges following a two day jury trial, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Julia Ann Snow, 52, of Mt.Vernon, Illinois, was convicted on all five counts (other counts involved other persons) in a federal indictment. Count 1 charged that from on or about June 2010, until on or about September 19, 2012, in Jefferson County, Snow and others conspired to knowingly and intentionally manufacture more than 50 grams of methamphetamine. Count 4 charged that on July 5, 2012, Snow knowingly possessed equipment, chemicals, products, or materials used to manufacture methamphetamine. Counts 5, 6, and 7 charged that Snow knowingly possessed pseudoephedrine, knowing and having reasonable cause to believe that the pseudoephedrine would be used to manufacture methamphetamine, on three separate dates (December 16, 2011, August 25, 2011, and July 29, 2010).
Snow faces penalties ranging from a minimum of five years to a maximum of forty years in federal prison, up to a $5,000,000 fine, and at least 4 years supervised release to follow incarceration. Snow’s sentencing has been set for August 14, 2014, in Benton.
The investigation in this case was conducted by the Joint Narcotics Unit of the Mt. Vernon Police Department and the Jefferson County Sheriff’s Department.
The case is being prosecuted by Assistant United States Attorney George Norwood.
Jacksonville Men Charged in Tax Fraud SchemeRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III, announces the return by a grand jury of an indictment charging Juan Miguel Ruiz and Roberto Bisono with conspiracy and theft of government property in connection with the cashing of numerous federal income tax refund checks that were issued on false and fraudulent tax returns. The conspiracy count carries a maximum penalty of 5 years in federal prison, and each of the 17 theft counts carries a maximum penalty of 10 years in prison. The indictment also notifies Ruiz and Bisono that the United States intends to seek a money judgment of approximately $711,000, the proceeds of the charged criminal conduct.
According to the indictment, between November 2011 and April 2012, Bisono obtained U.S. Treasury checks that were mailed to bogus taxpayers in New York, based on false and fraudulent tax returns. The indictment alleges that Bisono then furnished 111 such checks to Ruiz. The indictment further alleges that Ruiz, who operated a check cashing business on Beach Boulevard, deposited the checks into his business bank account in Jacksonville. Ruiz then took proceeds from the deposits by making cash withdrawals and by writing checks payable to cash. He also allegedly wrote checks to Bisono and other persons associated with Bisono.
On April 15, 2014, Bisono had an initial appearance and arraignment before U.S. Magistrate Judge Joel B. Toomey and was released on bond. On March 19, 2014, Ruiz made his initial appearance before U.S. Magistrate Judge James R. Klindt and was released on bond. A trial has been scheduled for June 2014 before United States District Judge Marcia Morales Howard.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Jacksonville office of the Internal Revenue Service-Criminal Investigation. It will be prosecuted by Assistant United States Attorney Dale R. Campion.
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International Narcotics Trafficker Sentenced in Manhattan Federal Court to 17 Years in Prison for Conspiring to Distribute One Ton of Cocaine Using A U.S.-Registered AircraftRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that RAWSON EDWARD WATSON, a citizen of the United Kingdom, was sentenced today in Manhattan federal court to 17 years in prison for conspiring to distribute approximately 1,000 kilograms of cocaine using an aircraft registered in the United States. WATSON arrived in the Southern District of New York on November 9, 2012, from the Dominican Republic, where he was apprehended on December 15, 2011. WATSON pled guilty in September 2013 before U.S. District Judge Richard J. Sullivan, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara stated: “Rawson Edward Watson admitted to conspiring to use a U.S.-registered plane to distribute more than a ton of cocaine, worth over $30 million. As a result of today’s sentence, the defendant will spend 17 years in prison for his crime.”
According to the Indictment to which WATSON pled guilty, statements in open court, and other court documents:
In late 2011, WATSON traveled to the Dominican Republic and worked with others to arrange a private aircraft registered in the United States to be flown with cocaine from the Dominican Republic to Belgium. For almost two months, WATSON coordinated with various co-conspirators in the Dominican Republic and elsewhere to ensure that the cocaine was safely loaded onto the aircraft and transported out of the country without detection from law enforcement. On December 15, 2011, the day on which the flight ultimately was scheduled to depart, Watson was arrested at an airport in the Dominican Republic after he had boarded the U.S.-registered aircraft dressed as a flight attendant. The aircraft was loaded with suitcases containing approximately 1,000 kilograms of cocaine. The DEA has estimated that the quantity of cocaine on board the aircraft where WATSON was arrested has a wholesale market value of at least $30,000,000.
WATSON, 48, was sentenced to 17 years in prison with no supervised release to follow. WATSON faced a mandatory minimum sentence of 10 years in prison.
Mr. Bharara praised the investigative work of the New Jersey Division of the DEA, the Caribbean Division of the DEA, and the DEA Dominican Republic Country Office. Mr. Bharara also thanked the Government of the Dominican Republic for its assistance, and the U.S. Department of Justice, Office of International Affairs.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Shane T. Stansbury, Michael D. Lockard, and Anna M. Skotko are in charge of the prosecution.