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Tuesday 15 April 2014
People Reminded of Stiff Penalties for Violation Tax Laws as Filing Deadline ApproachesRead the Press Release
Several Ohioans have been found guilty and sentenced to prison for violating federal tax laws over the past few months, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, said Kathy Enstrom, Special Agent in Charge of IRS Criminal Investigation’s Cincinnati Field Office.
As the 2014 tax filing deadline approaches, these cases serve as reminders that there are civil and sometimes criminal penalties to filing erroneous tax returns.
“Tax day is not fun, but the vast majority of Americans who properly report and pay their fair share need to know that we will aggressively prosecute those who shirk or flaunt their obligations,” Dettelbach said.
“IRS Criminal Investigation takes violations of the tax law very seriously,” Enstrom said. “The investigative work done by Criminal Investigation is a part of an aggressive effort by the IRS to combat tax fraud on all fronts. With the April 15 tax deadline upon us, it is important for people to have confidence that when they pay their taxes, their neighbors, friends and co-workers are doing the same.”
Details on a few cases over the past year:
United States v. Gooch and Scott: Don P. Gooch and Gerard F. Scott, self-proclaimed “citizens of the world,” found guilty of conspiring to defraud the Internal Revenue Service out of more than $8 million. Gooch, 64, of East Cleveland, was sentenced to eight years in prison while Scott, 38, was sentenced to 10 years in prison .
In early 2011, Scott obtained a tax identification number for a purported trust (the Gerard Frank Scott Trust) and filed false Forms 1099-INT with the IRS stating that the trust had paid millions of dollars of interest income to Gooch, a woman identified at trial as Scott’s wife, and two other trusts purportedly set up by Scott and Gooch, from which a total of $17 million of taxes had purportedly been withheld. Based on those false 1099 forms, the conspirators caused false income tax returns to be filed for Gooch and Scott’s wife, and the two other trusts claiming false income tax refunds totaling approximately $8,033,930, according to court documents.
United States v. Mace: Brandon Mace, 35, of Canton was sentenced to more than six years in prison for claiming false income tax refunds totaling nearly $5.5 million. Mace filed the false claims while incarcerated on state charges. Mace pleaded guilty to two counts stating that he prepared and filed false income tax returns for the years 2008 and 2009 claiming false tax refunds in the amounts of $207,000 and $5,292,000, respectively.
United States v. Hall: A former Toledo medical doctor was sentenced to five years in prison after previously pleading guilty to crimes related to the dispensation of 1,300 pills of Oxycodone and fraudulently billing Medicaid for more than $78,000. Darrell A. Hall, 54, pleaded guilty to conspiracy to distribute a controlled substance, health care fraud and a tax count. He failed to pay $97,384.88 in taxes that he owed to the Internal Revenue Service owed on behalf of EDM Health Services, LLC, between 2007 and 2010, according to court records.
Niagara Falls Man Sentenced for Bringing a Gun into the Seneca Niagara CasinoRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Mashama Hill, 38, of Niagara Falls, N.Y., who was convicted of being a felon in possession of a firearm, was sentenced to 48 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Timothy C. Lynch, who handled the case, stated that on February 13, 2011, the defendant became upset with other patrons at a card table at the Seneca Niagara Casino and threatened to leave and return with a gun. The incident was reported to security and a short time later, Hill was observed on video surveillance returning to the casino in different clothing. Security personnel approached the defendant and ultimately located a loaded firearm.
The sentencing is the culmination of an investigation on the part of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, New York Field Office, the New York State Police - Seneca Niagara Gaming Detail, under the direction of Captain Daniel B. Hart and security personnel from the Seneca Niagara Casino.Navajo Man Sentenced to Federal Prison for Child Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Ronald Martinez, 39, an enrolled member of the Navajo Nation who resides in Borrego Pass, N.M., was sentenced this morning to 42 months in federal prison followed by five years of supervised release for his child sexual abuse conviction. Martinez will be required to register as a sex offender after he completes his prison sentence.
Martinez was arrested in April 2013, on an indictment charging him with two counts of aggravated sexual abuse and two counts of abusive sexual contact. According to the indictment, between 1996 and 2002, Martinez aided and abetted sexual contact and abuse with two child victims who had not attained the age of 12 years on the Navajo Indian Reservation.
On Nov. 20, 2013, Martinez pleaded guilty to the two aggravated child sexual abuse charges. According to Martinez’s plea agreement, in Sept. 2011, a 17-year-old victim reported being sexually abused by Martinez when she was five or six years old. The victim further reported that Martinez also abused another child during that same period in time. Martinez admitted abusing the two victims by directing a third child to sexually abuse and to sexually assault the two victims. Martinez also admitted threatening the two victims so that they would not reveal the abuse. Martinez admitted that the child who abused the two victims did so after being threatened by Martinez.
This case was investigated by the Gallup office of the FBI. It was prosecuted by Assistant U.S. Attorney Elaine Y. Ramirez as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Mishicot Man Sentenced for Marijuana CultivationRead the Press Release
James L. Santelle, the United States Attorney for the Eastern District of Wisconsin, announced that on April 14, 2014, Steven M. Pelnar (age: 50) of Mishicot, was sentenced to six months incarceration and three years’ probation by Chief United States District Judge William C. Griesbach. Pelnar had previously entered a guilty plea to a single-count of marijuana cultivation. According to the plea agreement and other documents filed with the court, Pelnar operated a marijuana grow operation on his Mishicot area farm and was tending to 330 marijuana plants at the time of his arrest.
The court also ordered Pelnar to pay a $5000 fine and entered an order of forfeiture for a twenty-acre parcel of land used to grow the drug. The forfeited land has a market value of approximately $50,000.
The case was investigated by Special Agents from the Drug Enforcement Administration and the Manitowoc County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Daniel R. Humble.
Milwaukee Area Woman Indicted for Wire, Mail, and Credit Card FraudRead the Press Release
James L. Santelle, the United States Attorney for the Eastern District of Wisconsin, announced that on April 15, 2014, a federal grand jury in Milwaukee returned an indictment charging Stacy T. Jenson of Waterford, Wisconsin, also known as Stacy T. Foote (age 50). Ms. Jenson is charged with seventeen counts of wire, mail, and credit card fraud in violation of Title 18, United States Code, Sections 1029(a)(2), 1341, and 1343. Ms. Jenson was formerly the owner and operator of Elite Sports, through which she organized and promoted sporting leisure time events in southeast Wisconsin.
The indictment alleges that during the period from approximately January 2009 until March 2012, Jenson carried out a scheme to defraud certain business entities, primarily her employer at the time, Industrial Electric Wire & Cable, Inc. (“IEWC”), of New Berlin, Wisconsin. During her employment there as an office assistant, IEWC made Jenson the company’s event planner, and in that capacity, gave her access to company credit cards and checks to use to arrange various company social events. As part of her scheme, Jenson allegedly used IEWC credit cards and checks for purposes other than those which the company had authorized, often for activities in connection with her separate and part-time “Elite Sports” business. The indictment further alleges that Jenson fraudulently obtained a $68,000 loan in connection with the scheme.
According to the indictment, Jenson fraudulently obtained the loan and used IEWC checks and credit cards for unauthorized purposes to steal more than 1.9 million dollars.
Each of the fifteen mail or wire fraud charges contained in the indictment carries a maximum possible penalty of up to twenty years in prison and a fine of up to $250,000, or both. Each of the two credit card fraud charges contained in the indictment carries a maximum possible penalty of up to ten years in prison and a fine of up to $250,000, or both.
This matter was investigated by the Federal Bureau of Investigation and has been assigned to Assistant United States Attorney Stephen A. Ingraham for prosecution.
The public is cautioned that an indictment is merely the formal method of presenting charges in federal court and does not constitute evidence of the defendant’s guilt. The defendant is presumed innocent until such time, if ever, as the government establishes her guilt beyond a reasonable doubt.
Michigan Resident Sentenced to 18 Months in Prison for Obstructing SEC InvestigationRead the Press Release
SAN FRANCISCO – Karim Iskander Bayyouk was sentenced today to 18 months in prison for obstructing an investigation by the Securities and Exchange Commission (SEC) into insider trading, announced U.S. Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
Bayyouk, 49, of Livonia, Mich., was found guilty by a jury on Sept. 3, 2013, of one count of obstruction of justice, in violation of 18 U.S.C. § 1505. The jury found that on or about May 31, 2007, Bayyouk obstructed and impeded an SEC investigation into securities fraud and insider trading relating to Biosite Incorporated securities. The guilty verdict followed a five-day jury trial before the Honorable Edward M. Chen, United States District Court Judge, in San Francisco.
Evidence at trial showed that on or about March 23, 2007, Bayyouk purchased approximately $100,000 in Biosite call options. Two days later, on March 25, 2007, Biosite announced it was merging with another company. After the merger announcement, Bayyouk sold the options and realized a profit of approximately $947,922. On or about May 31, 2007, attorneys from the SEC’s Division of Enforcement in San Francisco, Calif., conducted a telephone interview of Bayyouk as part of an insider trading investigation. During the interview, Bayyouk falsely stated, among other things, that he did not speak to anyone before investing in Biosite, that no one suggested Biosite to him, and that he did not suggest Biosite to his brother, who also traded Biosite call options on March 23, 2007. Evidence showed that the defendant traded in Biosite based on a tip from Bassam Salman, his brother-in-law.
On Sept. 30, 2013, in a separate trial, Salman was found guilty by a jury of one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 371, and four counts of securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff. On April 9, 2014, Salman was sentenced to three years in prison and ordered to pay $738,539.42 in restitution.
Judge Chen also sentenced Bayyouk to three-years of supervised released and ordered him to pay a $5,000 fine.
Adam A. Reeves and Robert S. Leach are the Assistant U.S. Attorneys prosecuting the case with the assistance of Maryam Beros, Rayneisha Booth, and Patricia Mahoney. The prosecution is the result of a lengthy investigation by the FBI with substantial assistance from the Division of Enforcement of the SEC’s San Francisco Regional Office.
(Bayyouk indictment )
Miami Attorney Charged with Not Filing Income Tax ReturnsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Steven E. Siff, of Davie, was charged in an information with three counts of failing to file an income tax return, in violation of Title 26, United States Code, Section 7203.
According to the information, since at least 1982, Siff worked as an attorney in the Miami office of an international law firm, first as an associate, then as a partner. Siff failed to file personal United States income tax returns since at least tax year 1997. Between 2001 and 2011, Siff earned approximately $8,248,401 in partnership profits. For tax years 2009 through 2011, Siff failed to make an income tax return reporting gross partnership income of $716,464, $705,967, and $694,449, respectively.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Bertha R. Mitrani.
An information is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mexican National Sentenced to Prison for Illegal Re-EntryRead the Press Release
Follow @SDILNewsThe United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that on Monday, April 14, 2014, Fausto Sotelo-Estrada was sentenced in U.S. District Court in East St. Louis, Illinois, to a three-year prison term for Illegal Re-Entry by an Aggravated Felon.
Sotelo-Estrada, 31, of Ixtapa, Mexico, admitted at his sentencing hearing that he had been previously convicted of narcotics trafficking in Circuit Court in Sangamon County, Illinois, in 2008. Sotelo-Estrada was deported to Mexico in 2012, after his release from state prison.
On August 14, 2013, Immigration and Customs Enforcement, (ICE) agents arrested Sotelo-Estrada in Madison County, Illinois. Sotelo-Estrada pled guilty in U.S. District Court in East St. Louis, Illinois, on December 4, 2013. Sotelo-Estrada has been continuously confined since his arrest.
The investigation which resulted in Sotelo-Estrada’s conviction was conducted by ICE agents assigned to the St. Louis, Missouri, field office.
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Manhattan U.S. Attorney Announces Lawsuit And$2 Million Civil Settlement with Academic Advantage, and Civil and Criminal Charges Against Former Academic Advantage Employees, in Scheme to Defraud Federal Government into Paying for Tutoring Services ThatRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Brian M. Hickey, the Special Agent-in-Charge of the Northeastern Region of the United States Department of Education’s Office of Inspector General (“ED-OIG”), today announced a number of civil and criminal actions relating to a fraudulent scheme to submit false claims for reimbursement on behalf of THE ACADEMIC ADVANTAGE (“ACADEMIC ADVANTAGE”), an educational services provider, in connection with a federally-funded program that provided after-school tutoring services to public school children. The civil actions announced today include: (1) the filing of a civil fraud lawsuit against ACADEMIC ADVANTAGE and nine of its former employees — ARLETTE HERNANDEZ, EDWIN GUZMAN, LUZ MERCEDES, NILSA DALMASI, KRISTIN JOYNER, RAYVON JONES, ALICIA MCKAY, TERESA OSORIO and AYESHA YOUNG (collectively, “INDIVIDUAL DEFENDANTS”) — in connection with the company’s submission of fraudulent claims for reimbursement between 2010 and 2012; (2) the settlement of the civil claims against ACADEMIC ADVANTAGE for $2 million and admissions of wrongdoing; and (3) the settlement of the civil claims against EDWIN GUZMAN and LUZ MERCEDES for $61,819 and $101,758, respectively, and admissions of wrongdoing. The criminal actions include: (1) the filing of a Criminal Complaint charging ARLETTE HERNANDEZ with fraud; and (2) the guilty pleas of EDWIN GUZMAN and LUZ MERCEDES to criminal fraud charges.
U.S. District Judge Lewis A. Kaplan approved the civil settlements with ACADEMIC ADVANTAGE, GUZMAN and MERCEDES yesterday. HERNANDEZ was arrested on March 5, 2014, and presented that day before U.S. Magistrate Judge James L. Cott. GUZMAN pled guilty to a Criminal Information before U.S. District Judge Andrew L. Carter on January 9, 2014, and MERCEDES pled guilty to a Criminal Information before U.S. Magistrate Judge Kevin N. Fox on February 6, 2014.
Manhattan U.S. Attorney Preet Bharara said: “With the actions announced today, we continue our push to clean up corruption in the tutoring of our school kids. Having previously exposed schemes by Princeton Review and TestQuest to fraudulently bill the government for tutoring services that they never provided, we now hold a third company, Academic Advantage, accountable for engaging in identical misconduct. And we also hold nine former employees of Academic Advantage to account – criminally, civilly or both – for their roles in the fraudulent billing scheme. This should serve as a reminder both to educational services providers and their employees that if they seek to cheat the system, we will hold them accountable.”
ED-OIG Special Agent-in-Charge Brian M. Hickey said: “The Supplemental Education Services (SES) program provides critical resources for deserving students who seek to improve their academic performance. The actions announced today against Academic Advantage and nine of its employees allege that Academic Advantage billed and retained SES payments for students it did not tutor. That is unacceptable. Tracking down those who would cheat this important program is a priority of our office.”
According to the Civil Complaint against ACADEMIC ADVANTAGE and the INDIVIDUAL DEFENDANTS, the allegations in the Criminal Complaint against HERNANDEZ, the Criminal Informations against GUZMAN and MERCEDES, and the Civil Settlements with ACADEMIC ADVANTAGE, GUZMAN, and MERCEDES, all of which were filed in Manhattan federal court:
From 2010 through 2012 (“Covered Period”), the New York City Department of Education (“NYCDOE”) received funds from the federal government to pay for Supplemental Educational Services (“SES”), which included after-school tutoring for students attending underperforming public schools. The NYCDOE entered into contracts with private entities to provide SES tutoring to students in New York City public schools. Students were eligible to receive SES tutoring if they met certain criteria, such as attending a school that had been identified as needing improvement or restructuring for at least two years. Private entities contracted by the NYCDOE to provide SES tutoring were required to have each student who attended a tutoring class sign a daily attendance sheet. A representative from the entity was also required to sign the attendance sheet, certifying that SES tutoring had been provided to all of the students whose signatures appeared on the attendance sheet.
ACADEMIC ADVANTAGE
During the Covered Period, ACADEMIC ADVANTAGE contracted with the NYCDOE to provide SES tutoring to students in New York City. ACADEMIC ADVANTAGE employed individuals whom it referred to as “Site Managers” to supervise its SES program at particular New York City public schools. The Site Managers supervised other employees, known as “Program Aides,” who were also assigned to those schools. Employees with the title “Director” supervised the Site Managers and Program Aides. Of the INDIVIDUAL DEFENDANTS, AYESHA YOUNG was a Director and the rest were Site Managers.
The Billing Scheme
During the Covered Period, ACADEMIC ADVANTAGE obtained federal funds by falsely reporting that it had provided SES tutoring to certain students when no SES tutoring had, in fact, been provided to those students. As part of the scheme, ACADEMIC ADVANTAGE repeatedly submitted to the NYCDOE bills for students who had not actually received any tutoring.
As part of the civil settlements, ACADEMIC ADVANTAGE admitted that:
- Site Managers routinely forged student signatures on daily attendance sheets to make it appear that more students had attended Academic Advantage’s SES tutoring classes than had, in fact, attended;
- Site Managers instructed Program Aides to forge student signatures on daily attendance sheets;
- Program Aides followed the instructions they received from those Site Managers and forged student signatures on daily attendance sheets;
- Site Managers and Program Aides instructed students to sign daily attendance sheets for SES tutoring classes that those Site Managers and Program Aides knew the students either had not attended or would not be attending; and
- Site Managers routinely signed false certifications on daily attendance sheets, falsely certifying that after-school tutoring had been provided to all of the students whose purported signatures appeared on the sheets, even though the Site Managers knew that tutoring had not been provided to many of those students.
ACADEMIC ADVANTAGE further admitted that some Directors knew – while others deliberately ignored or recklessly disregarded – that Site Managers and Program Aides were forging student signatures on daily attendance sheets or otherwise falsifying student attendance records. ACADEMIC ADVANTAGE also admitted that it used the falsified daily attendance sheets to prepare invoices that it then submitted in connection with its SES tutoring program, and that the invoices ultimately resulted in ACADEMIC ADVANTAGE being paid federal funds for SES tutoring that it never provided.
HERNANDEZ has been charged civilly and criminally with forging student signatures on daily attendance sheets, with instructing Program Aides to forge student signatures on daily attendance sheets, and with signing false certifications on daily attendance sheets. During the Covered Period, HERNANDEZ was observed by others forging student signatures on daily attendance sheets. She was also observed possessing a completed daily attendance sheet for a tutoring session that had not yet taken place. Moreover, during the Covered Period, there were more than 200 instances where HERNANDEZ reported students as being present for after-school tutoring on days when the students were absent from school.
In connection with his guilty plea and civil settlement, GUZMAN has admitted to forging student signatures on daily attendance sheets, to instructing Program Aides to forge student signatures on daily attendance sheets, and to signing false certifications on daily attendance sheets. GUZMAN has agreed to the entry of a judgment against him in the amount of $61,819.
Similarly, in connection with her guilty plea and civil settlement, MERCEDES has admitted to forging student signatures on daily attendance sheets and to signing false certifications on daily attendance sheets. MERCEDES has agreed to the entry of a judgment against her in the amount of $101,758.
The remaining INDIVIDUAL DEFENDANTS have been charged civilly with, among other things, forging student signatures on daily attendance sheets, prompting Site Managers or Program Aides to forge student signatures on daily attendance sheets, and/or signing false certifications on daily attendance sheets. The charges against them remain pending.
HERNANDEZ, 32, of New York, New York, was charged with one count of conspiring to make false statements and one count of making false statements, and faces a maximum sentence of 10 years in prison.
GUZMAN, 39, of New York, New York, pled guilty to one count of conspiring to make false statements, and LUZ MERCEDES, 48, of New York, New York, pled guilty to two counts of conspiring to make false statements and one count of making false statements. GUZMAN faces a maximum sentence of five years in prison, while MERCEDES faces a maximum sentence of 15 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
This is the third coordinated proceeding this Office has brought against New York City SES providers and their employees for falsifying attendance records and billing for tutoring they did not provide. In 2012 and 2013, this Office filed civil charges against The Princeton Review, Inc. (“Princeton Review”), and civil and criminal charges against several of its former employees. In 2013, this Office filed civil charges against TestQuest, Inc. (“TestQuest”), and civil and criminal charges against several of its former employees. Princeton Review settled the civil charges against it by admitting misconduct and committing to pay the Government up to $10 million. TestQuest settled with the Government for $1.75 million and admissions of wrongdoing. The following former employees of Princeton Review and TestQuest have pled guilty to criminal fraud charges, settled civil fraud charges, or both: Robert Stephen Green, Ana Azocar, Zorayma Azocar, Michael Logan, and Sandra Allen.
Mr. Bharara thanked the Office of the ED-OIG for its extraordinary assistance in this case.
The criminal cases are being handled by the Complex Frauds Unit, and Assistant U.S. Attorneys Joseph P. Facciponti and Christopher B. Harwood are in charge of the prosecution.
The civil cases are being handled by the Civil Frauds Unit, and Assistant U.S. Attorney Christopher B. Harwood is in charge of each of the matters.
The charges contained in the Criminal Complaint against HERNANDEZ are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Academic Advantage, et al. Complaint
U.S. v. Academic Advantage, et al. Settlement
U.S. v. Mercedes Court-Endorsed (Academic Advantage) Settlement Agreement
U.S. v. Arlette Hernandez Complaint
U.S. v. Luz Mercedes Information
U.S. v. Edwin Guzman InformationMan Accused of Threatening Senator Manchin Is Indicted by Federal Grand JuryRead the Press Release
Charleston, W.Va. – A 49-year-old man was indicted today by a federal grand jury in Charleston for threatening to murder United States Senator Joseph Manchin, III. According to the four-count indictment, Steven Anthony Major, of Barboursville, W.Va., is alleged to have made four separate threats to murder Senator Manchin from March 17 through March 20, 2014.
Major was arrested on Friday, March 21, 2014, on a federal criminal complaint. The complaint alleged that Major made multiple calls to Senator Manchin’s Charleston and D.C. offices. During the calls, Major identified himself and made violent threats against Senator Manchin and his family members.
Major faces up to 10 years in prison on each count, if convicted.
The investigation was conducted by the Federal Bureau of Investigation, the United States Capitol Police, and the West Virginia State Police. Assistant United States Attorney Haley Bunn is in charge of the prosecution.
Click here for a copy of the indictment.
Note: The charge contained in the indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
Lincoln Man Sentenced for Conspiracy to Distribute Crack CocaineRead the Press Release
United States Attorney Deborah R. Gilg announced that on April 15, 2014, Markham Deshay Jones, age 46 of Lincoln, was sentenced to 77 months in prison for conspiracy to distribute and possess with intent to distribute cocaine base (crack cocaine) between January of 2011 and February of 2012. Following the prison term, Jones will serve six years on supervised release. He was also ordered to pay a $100 special assessment.
An investigation showed that Jones was responsible for the distribution of at least 28 grams (approximately one ounce) of cocaine base, also known as crack cocaine, in the Lincoln area between January of 2011 and February of 2012.
The matter was investigated by the Lincoln/Lancaster County Narcotics Task Force, which includes officers of the Lincoln Police Department, the Lancaster County Sheriff's Department, the Federal Bureau of Investigation, (FBI), and the University of Nebraska-Lincoln Police Department.
Liberty County Man Sentenced for Child PornographyRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 70-year-old Daisetta, Texas man has been sentenced to five years in federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Kenneth Claude Davenport pleaded guilty on Sep. 25, 2013 to possession of child pornography and was sentenced to 60 months in federal prison today by U.S. District Judge Thad Heartfield.According to information presented in court, on Mar. 16, 2011, law enforcement officers executed a search warrant at Davenport’s residence in Liberty County, Texas during which two computers and a hard drive were seized. A forensic examination of the computers and equipment revealed 20 videos containing approximately 1,500 images of child pornography. These images included prepubescent minors engaging in sexually explicit conduct, including depictions of violence and minors engaging in sexually explicit conduct with adults. Davenport admitted to using the computer to download and view child pornography approximately twice a week. Davenport was indicted by a federal grand jury on June 20, 2013 and charged with child pornography violations.
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This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the U.S. Secret Service, Houston Field Office Internet Crimes Against Children Task Force and the Liberty Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.Latrobe Woman Charged with Income Tax EvasionRead the Press Release
PITTSBURGH - A resident of Latrobe, Pa., has been indicted by a federal grand jury in Pittsburgh on charges of income tax evasion, United States Attorney David J. Hickton announced today.
The four-count indictment named Debra J. Feather as the sole defendant.
According to the indictment, during the years 2007 through 2010, the defendant’s joint federal tax returns were false since they failed to declare substantial income and thus resulted in substantial additional tax owing to the United States.
The law provides for a maximum total sentence, at each count, of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Leo M. Dillon is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Justice Department Sues to Shut Down Alabama Tax Return PreparersRead the Press Release
The United States has requested that the federal district court in Montgomery, Ala., permanently bar Tonja Renee Toney and Jenika Williams from preparing federal income tax returns for others, the Justice Department announced today.
According to the complaint, which was filed yesterday in the U.S. District Court for the Middle District of Alabama, Toney and Williams each prepared tax returns as employees of Premier Tax in Montgomery in 2007 and 2008, and both pleaded guilty to charges related to their work at Premier Tax. The complaint further alleges that both prepared false and fraudulent tax returns after being interviewed by Internal Revenue Service (IRS) agents in connection with their activities at Premier Tax.
The complaint alleges that both defendants have knowingly prepared federal income tax returns for customers that understated the customers’ tax liability by reporting false income in order to inflate the taxpayer’s claim to an Earned Income Tax Credit.
Return-preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2014 . The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website . An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Tonja Renee Toney, et al.
Complaint for Permanent InjunctionJury Finds Defendant Guilty of Felony Federal Firearm and Drug Distribution OffensesRead the Press Release
Following a one-day trial before District Court Judge Callie V. S. Granade, a jury returned a guilty verdict on April 15, 2014 against Lawrence Perrier for federal firearm and drug trafficking offenses. He faces a mandatory minimum penalty of 15 years imprisonment.
The case was investigated by the Mobile County Sheriff’s Office in conjunction with the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Special Assistant United States Attorney Dominic A. Rossetti and Assistant United States Attorney Gregory Bordenkircher. The sentencing for Mr. Perrier has been set for July 14, 2014.
Hogsett Announces Indictment of Putnam County Reserve DeputyRead the Press Release
Sheriff’s son provided false testimony before federal grand jury in investigation alleging excessive force by colleague
INDIANAPOLIS - U.S. Attorney Joseph H. Hogsett and the Special Agent in Charge of the Federal Bureau of Investigation Indianapolis Division, Robert A. Jones, announced the arrest of Andrew Fenwick, a/k/a “Mo”, age 24, of Greencastle, Indiana. Fenwick serves as a Reserve Deputy with the Putnam County Sheriff’s Department (PCSD) and is the son of Putnam County Sheriff Steve Fenwick.
A federal grand jury indictment, unsealed this morning, charges Fenwick with three counts of false declarations made by Fenwick before it. The indictment alleges that Fenwick provided false testimony during an investigation into alleged activity of excessive force of PCSD Deputy Terry Joe Smith. On March 4, 2014, the grand jury returned an indictment alleging that Smith had used excessive force against citizens on four occasions in his capacity as a PCSD Deputy. The charges against Smith remain pending and are currently set for trial on April 28, 2014.
The grand jury indictment alleges that Fenwick provided material false statements with respect to (1) the degree to which Fenwick used force to assist Smith in the apprehension of an individual near Moore’s Bar in Greencastle on November 6, 2011, (2) whether Fenwick had seen a police report prepared by Smith concerning Smith’s use of force against another individual at the Cloverdale Truck Stop on December 28, 2013, and (3) whether the victim of Smith’s use of force at the Cloverdale Truck Stop had struck Fenwick with a closed first before Smith used physical force against this individual.
"Just one month ago, I was here discussing the conduct of a Putnam County Sheriff’s deputy involving allegations of the mistreatment of citizens in his custody,” said Hogsett. “Interfering with an investigation will not be tolerated by this office and we will hold those who do so, fully accountable. These charges allege that Mr. Fenwick chose to lie rather than assist authorities as they investigated allegations of excessive force by a law enforcement officer who has taken an oath to ‘serve and protect’,” Hogsett asserted.
Hogsett praised the outstanding law enforcement work by the Federal Bureau of Investigation. The FBI is a leading partner in the U.S. Attorney's Public Integrity Working Group, which was launched in April 2012 with the stated purpose of aggressively investigating allegations of misconduct and wrongdoing by public officials in Indiana.
According to Assistant United States Attorneys Bradley A. Blackington and MaryAnn T. Mindrum, who are prosecuting the case for the government, Smith could be sentenced to up to five years in federal prison for each count, and could also face significant fines and federal supervision for up to three years once he has served his prison term.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
High-Ranking Member of Black P-Stones Gang Pleads Guilty to Racketeering Conspiracy and Firearm ChargesRead the Press Release
April 15,2014NORFOLK, Va. – Marcellus N. Williams Jr., a.k.a. “Math,” “P-Shooter,” “Manny,” 27, of Newport News, pleaded guilty today to racketeering conspiracy, as well as possessing and discharging a firearm in furtherance of a crime of violence.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; David A. O’Neil, Acting Assistant Attorney General for the Justice Department’s Criminal Division; and Royce E. Curtin, Special Agent in Charge of the Federal Bureau of Investigation’s Norfolk Field Office, made the announcement after the plea was accepted by United States Magistrate Judge Tommy E. Miller.
Williams was charged in a superseding indictment returned on December 9, 2013, with racketeering conspiracy, two counts of conspiracy to commit murder in aid of racketeering, two counts of attempted murder in aid of racketeering, two counts of possessing and discharging a firearm in furtherance of a crime of violence, and conspiracy to distribute and possess with intent to distribute marijuana. Williams faces a maximum penalty of 20 years in prison on the racketeering conspiracy charge and a mandatory consecutive sentence of ten years to life in prison on the firearm charge when he is sentenced on July 10, 2014, in Norfolk.
In a statement of facts filed with his plea agreement, Williams admitted that he was a member of a violent street gang called the Black P-Stones, also referred to as the P-Stone Bloods and Cobra Stones, which operated as a criminal enterprise located primarily in the Beechmont, Courthouse Green, and Woodview neighborhoods in the Denbigh area of Newport News. The Black P-Stones engaged in various criminal activities including murders, robberies, illegal drug trafficking, and obstruction of justice. Williams joined the gang in approximately 2002 and held the rank of “First Superior.” As the First Superior, Williams approved, planned, and participated in criminal activities, including attempted murders, robberies, attempted robberies, and drug trafficking. On April 27, 2008, Williams and co-conspirators participated in a shooting in broad daylight on Warwick Boulevard in Newport News targeting a rival gang member. Several bullets were fired at the rival gang member, wounding the rival in the right shoulder, right jaw, and neck areas. On December 10, 2008, Williams and co-conspirators planned a shooting in Williamsburg to retaliate against a rival gang member who exhibited disrespect toward Williams’s girlfriend. During the shooting, approximately seven to eight bullets were fired at the rival gang member’s home, with bullets entering the home’s living room and front door while two people were inside. On March 9, 2009, Williams and co-conspirators planned a shooting in Newport News to retaliate against members of the rival “10-1 Mafia Crips” gang for damaging the reputation of the P-Stones. Several bullets were fired at a 10-1 Mafia Crip member’s home, with one bullet nearly striking one of the people inside.
The investigation of this case was led by the FBI’s Safe Streets Peninsula Task Force, with the assistance of the Newport News Police Department and the James City County Police Department. Assistant United States Attorney Eric M. Hurt and Trial Attorney Louis A. Crisostomo of the Organized Crime and Gang Section in the Justice Department’s Criminal Division are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Hawaii Man Sentenced to Prison for Filing False Claim for Tax Refund and Filing False Retaliatory Liens Against Four Federal OfficialsRead the Press Release
Francis E. Chandler III was sentenced by U.S. District Judge Susan Oki Mollway late yesterday to serve 37 months in prison and ordered to pay $3,066,629 in restitution for filing a false claim for tax refund and false retaliatory liens against four federal government officials, the Justice Department and Internal Revenue Service (IRS) announced today.
According to court documents, Chandler filed a fraudulent 2007 federal income tax return seeking a tax refund of $3,969,012 based on his false claim of interest income and tax withholding of $6,222,850. In April 2010, a federal grand jury indicted Chandler for filing the false claim against the United States. Shortly after his indictment and in retaliation for the performance of their official duties, Chandler knowingly filed false liens in Hawaiian public records against the property of two federal judges, the U.S. Attorney and an Assistant U.S. Attorney who were involved in the prosecution of his false claims case. On Feb. 11, 2013, pursuant to a plea agreement, Chandler pleaded guilty to one count of filing a false claim against the United States and one count of filing a false retaliatory lien against four government officials.
“This sentence shows that those who seek to obtain fraudulent refunds by participating in bogus schemes risk prosecution, incarceration and substantial financial consequences,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “This sentence should also send a loud message that retaliating against government officials who are simply doing their jobs will not be tolerated.”
“With the income tax filing deadline today, this sentencing is a stark reminder that there is no secret formula to evade one's tax obligation,” said Special Agent in Charge Kenneth Hines of IRS-Criminal Investigation in the Pacific Northwest. “When individuals seek to abuse the tax system by claiming bogus senseless tax refunds, they steal not only from the U.S. Treasury, they in effect steal from every one of us who pays taxes. Chandler then tried to intimidate the very officials charged with upholding the law by filing retaliatory liens against them. That sort of brazen tactic is simply illegal.”
Assistant Attorney General Keneally commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and of Tax Division Senior Litigation Counsel Jen E. Ihlo and Trial Attorney Matthew J. Kluge, who prosecuted the case.
More information about the Tax Division and its Tax Defier Initiative can be found at the division website.
Hattiesburg Man Pleads Guilty to Production of Child Pornography and Possession of Child PornographyRead the Press Release
Hattiesburg, Miss - Grantham Armstrong Mitchell, 20, of Hattiesburg, pled guilty in U.S. District Court today to production of child pornography and possession of child pornography, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen.
Mitchell admitted producing a video of himself and a minor child engaging in sexually explicit conduct in Orange Beach, Alabama in 2012. Mitchell also possessed numerous images and videos of minor children, as young as twelve years old, engaging in sex with adults.
The investigation in this case began when a complaint was received from the National Center for Missing and Exploited Children regarding possible child pornography being uploaded to a Dropbox account via the Internet. An investigation was conducted by members of the FBI’s Child Exploitation Task Force (CETF) which is comprised of special agents of the FBI and investigators from the Mississippi Attorney General’s Office and the Rankin County Sheriff’s Office. The investigation led to the execution of a search warrant for a computer and other electronic devices owned by Mitchell. A forensic review of the computer determined that it contained images and videos of suspected child pornography and led to the identity of the minor child in the video produced by Mitchell.
“A top priority of the Justice Department is to vigorously prosecute those who choose to steal the innocence of young children,” said U.S. Attorney Davis. “Working with our law enforcement partners, we will continue to locate and bring charges against those who participate in the victimization of children.”
FBI Special Agent in Charge Daniel McMullen stated: “The CETF reflects the FBI’s commitment to advancing its approach to law enforcement to effectively combat evolving threats. By ensuring that investigators with complementary missions are working alongside one another—sharing intelligence, conducting meshed operations, combining physical resources—the FBI enhances its ability to protect children.” McMullen recognized the substantial and invaluable assistance provided by the other law enforcement agencies involved in the investigation which led to this arrest in this case. He thanked the Office of Mississippi Attorney General Jim Hood and the Rankin County Sheriff’s Office for their dedication to the case and to the Child Exploitation Task Force.
“It is an honor and privilege to be a part of this federal task force, which strengthens our fight against child predators in our state,” said Mississippi Attorney General Jim Hood.
Rankin County Sheriff Bryan Bailey stated: “We are proud to be a part of this Task Force to help protect children, not only in Rankin County, but throughout the state of Mississippi. We appreciate the good relationships we have developed with the State and with the FBI through Rankin County’s participation in the Child Exploitation Task Force.”
Grantham will be sentenced on July 21, 2014 at 9:00 a.m. by U.S. District Judge Keith Starrett. He faces a minimum of fifteen years and a maximum of thirty years in prison for production of child pornography, and a maximum of ten years in prison for possession of child pornography.
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Harrison County Men Indicted on Federal Drug ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistELKINS, WEST VIRGINIA — Two men from Harrison County have been indicted on federal drug charges alleging the illegal distribution of prescription painkillers.
United States Attorney William J. Ihlenfeld, II, announced that Jason MARPLE, age 35, of Clarksburg, West Virginia, and Casey SEARCY, 33, of Salem, West Virginia, were named in a three-count Indictment today charging them each with “Conspiracy to Possess with Intent to Distribute and to Distribute Oxycodone” and “Distribution of Oxycodone.” MARPLE was also charged with “Possession of a Firearm in Furtherance of a Drug Trafficking Crime.”
MARPLE and SEARCY each face up to twenty years in prison on the conspiracy and the distribution charges and MARPLE faces a minimum term of five years in prison on the firearm charge. Both men are in custody based upon criminal complaints issued at the end of March containing similar allegations.
The case will be prosecuted by Assistant United States Attorney Shawn A. Morgan, and was investigated by the Greater Harrison County Drug & Violent Crime Task Force. An indictment is merely an accusation and the defendant is presumed innocent unless and until proven guilty.
Greenbush Resident Pleads Guilty to Bath Salt Distribution ConspiracyRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Jessica
Bryden, 22, of Greenbush, Maine, pleaded guilty today in U.S. District Court in Bangor to
conspiracy to possess with the intent to distribute and to distribute MDPV, a chemical compound
commonly referred to as “bath salts” or “monkey dust.”According to court records, the members of the conspiracy illegally distributed MDPV in
Penobscot County and elsewhere between April and December 2011. Prior to October 21, 2011,
MDPV was classified as a controlled substance analogue. On that date, it was reclassified as a
Schedule I controlled substance. The defendant packaged and distributed MDPV to other
members of the conspiracy who were selling the drug in the Bangor area. She also collected
payments for the drug from other members of the conspiracy.
The defendant faces up to 20 year in prison, a $1,000,000 fine, or both. She will be
sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
Bryden is one of four defendants charged as part of the conspiracy. Co-defendants
Matthew Tardiff, 27, of Old Town, Maine, and Adam Hathorn, 36, and Tina Keaton, a/k/a
“Fumble” 32, both of Bangor, previously pled guilty to the conspiracy charge and await
sentencing.
The case was investigated by the Maine Drug Enforcement Agency with assistance from
the U.S. Drug Enforcement Administration.Four Sentenced for Meth DistributionRead the Press Release
POCATELLO – Co-defendants Antonio Tamez, 39, of American Falls, Idaho, Jesse Short, 33, and Imelda Ramos, 36, both of Pocatello, Idaho, and Dominga Tamez, 68, of American Falls, Idaho, were sentenced today in United States District Court for possession with intent to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced.
U.S. District Judge Edward J. Lodge sentenced Antonio Tamez to 88 months, followed by five years of supervised release and 100 hours of community service; Jesse Short to 36 months, followed by four years of supervised release; Imelda Ramos to 24 months, followed by three years of supervised release and 80 hours of community service; and Dominga Tamez to 12 months, followed by three years of supervised release. The defendants pleaded guilty to the charges on January 22, 2014.
According to the plea agreements, on May 14, 2013, Antonio Tamez arranged by phone to deliver methamphetamine to an undercover officer. Tamez then met with the undercover officer in Heyburn, Idaho, where the defendant distributed in excess of fifty grams of actual methamphetamine. On May 3, 2013, Jesse Short arranged by phone with a confidential informant, who was working on the behest of law enforcement, to deliver methamphetamine. Short then met with the informant in Pocatello, Idaho, where he delivered in excess of five grams of actual methamphetamine to the informant. On May 3, 2013, Imelda Ramos traveled with a co-defendant to Pocatello, Idaho, with methamphetamine. There Ramos delivered to an informant in excess of fifty grams of actual methamphetamine. On May 21, 2013, Dominga Tamez drove co-defendants to deliver methamphetamine to a location in Heyburn, Idaho. At that location the co-defendants delivered methamphetamine to an undercover officer. In a post arrest interview Tamez admitted she knew she was driving the co-defendants to deliver methamphetamine.
Co-defendant Federico Cervera, 58, of Blackfoot, Idaho, is set for sentencing on May 12, 2014. He pleaded guilty on January 22, 2014, to possession with intent to distribute methamphetamine. He faces 10 years to life in prison, a maximum fine of $10 million, and at least five years of supervised release.
The case is the result of a joint investigation led by the Idaho State Police with assistance from the Bannock County Sheriff’s Office, Pocatello Police Department, Minidoka County Sheriff’s Office, Cassia County Sheriff’s Office, Bingham County Sheriff’s Office, Blackfoot Police Department, American Falls Police Department, and Power County Sheriff’s Office.
Fort Collins Man Appears in Court for Tax Evasion ChargesRead the Press Release
DENVER – Brian Eugene Annis, age 55, of Fort Collins, Colorado, was indicted by a federal grand last week on charges of tax evasion, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Annis appeared in court today for his initial appearance before U.S. Magistrate Judge Kristen L. Mix, where he was advised of the charges pending against him. He is scheduled to be arraigned Magistrate Judge Mix’s courtroom on April 18, 2014 at 1:30 p.m.
According to the indictment, from 2001 through at least the end of 2010, Annis was a resident of Fort Collins, Colorado and for those years he willfully did not file personal federal income tax returns. From at least on or about April 15, 2002, and continuing until at least March 21, 2010, Annis willfully evaded the payment of federal income taxes due and owing by him for the tax years 2001 through 2006, in an amount totaling approximately $131,307, plus interest and penalties allowed by law, by committing and causing to be committed affirmative acts of tax evasion.
Particularly, in 2004 Annis paid Creative Consulting Group and J.H. $2,100 to create an “International Business Trust” called Glacier Mountain Holdings and to appoint J.H. as the “Managing Fiduciary Party.” In December 2004 Annis and his spouse signed a Grant Deed to convey to Glacier Mountain Holdings their “equitable interest” in their personal residence located in Fort Collins, Colorado. In December 2005, a Grant Deed signed by J.H. conveyed back to Annis and his spouse the “equitable interest” in their personal residence.
In August 2006, the IRS mailed Annis multiple correspondences, which included substitute returns for the tax year 2001 and 2002 that the IRS prepared for Annis informing him that he owed the IRS taxes in the amount of $22,640 and $25,145, respectively.
In September 2006, Annis sent two letters to the IRS, for the two corresponding tax years aforementioned. In both letters, Annis disputed that he was subject to federal income taxes. In response to further correspondence by the IRS Annis sent the IRS additional letters stating: “I do not agree with any of the findings/adjustments in your letter dated 20-Oct-2006…. The federal income tax is an excise tax on privileged pursuits, not on common-occupation labor. As a private sector worker engaged only in un-privileged activity, compensation for my ‘common wage’ labor is outside the scope/jurisdiction of the federal income tax.” Throughout the course of the next several months into 2007, Annis sent similar correspondence to the IRS.
In November 2007, Annis sent J.H. an email in which Annis stated, “For now, we need to get the house back into the trust……I don’t know when the IRS is going to do an asset search (maybe they already have).” On December 4, 2007, Annis and his spouse signed a Grant Deed to convey to Glacier Mountain Holdings their “equitable interest” in their personal residence. Between at least December 4, 2007, and March 21, 2010, Annis annually paid Creative Consulting Group and J.H. to maintain Glacier Mountain Holdings.
“As we are all aware, today is tax day and most Americans will have fulfilled their tax obligation by the end of the day. Those individuals who commit tax fraud are merely stealing money and creating an unfair tax burden on honest tax paying citizens. Rest assured, IRS Special Agents will continue doing their job to ensure honest individuals do not have to pick up the tab of those committing tax evasion,” said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.
Annis was charged with; one count of tax evasion, which carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000 per count; four counts of failure to file a tax return, which carries a penalty of not more than 1 year in federal prison, and a fine of up to $100,000, per count.
This case was investigated by Internal Revenue Service – Criminal Investigation and prosecuted by Assistant U.S. Attorney Pegeen D. Rhyne.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.Former IRS Worker Charged in Tax FraudRead the Press Release
Lora Lewis, 51, of Philadelphia, PA, a former Internal Revenue Service employee, was charged today by information with one count of filing false income tax returns, announced United States Attorney Zane David Memeger. Lewis worked as a contact representative for the IRS in the Philadelphia office.
According to the information, between 2007 and 2011, Lewis was receiving unemployment compensation which she did not report on her income tax returns; claimed tax credits which she was not eligible to claim, such as the first time home buyers credit, the earned income tax credit and the education credit; and deductions, such as IRA contributions that were never made, in order to reduce her taxable income. Lewis allegedly defrauded the government of $39,000.
If convicted, Lewis faces three years in prison, restitution to the IRS, a fine of up to $250,000, one year of supervised release, and a $100 special assessment.The case was investigated by the Internal Revenue Service Criminal Investigations, and the Treasury Inspector General for Tax Administration (TIGTA). It is being prosecuted by Assistant United States Attorney Virgil B. Walker.
Click here to view the indictment
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Detroit Public Library Official Pleads Guilty to BriberyRead the Press Release
A former Detroit Public Library official pleaded guilty to bribery charges today, U.S. Attorney Barbara L. McQuade announced.
Joining McQuade in the announcement were Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Detroit Field Office, and Carolyn Weber, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation.
Timothy Cromer, 47, of West Bloomfield, the library's Chief Administrative and Technology Officer from 2006 to 2013, pleaded guilty before U.S. District Judge George Caram Steeh to bribery and conspiracy to commit bribery.
Cromer was charged with taking more than $1.4 million in bribes and kickbacks from contractors of the library.
According to the indictment, Cromer helped co-defendant James Henley create a business in 2007 called Core Consulting & Professional Services, and then arranged for Core to win a bid to provide information technology services to the library. The contract, along with various change orders and extensions that Cromer approved, caused the library to pay Core $1.8 million.
Cromer is also charged with receiving kickbacks from Ricardo Hearn, who is also charged in the indictment. Cromer was charged with approving no-bid professional services contracts for Hearn’s company, Cubemation, LLC, to perform information technology services for the library from 2008 until 2010. According to the indictment, Cubemation received about $2.8 million in payments from the Detroit Public Library. In total, Cromer is alleged to have accepted more than $1.4 million in kickbacks from Henley and Hearn.Through his plea, Cromer admitted that he received a bribe from Henley, and that he conspired with Hearn to commit bribery. A sentencing date will be set by the court. Codefendants Henley and Hearn previously pleaded guilty to conspiracy to commit bribery, and are scheduled to be sentenced on June 3, 2014.
United States Attorney McQuade said, "Our public libraries exist to enrich our citizens, not to generate profits for the officials who work there. Today's guilty plea to bribery charges reflects a betrayal to the honest public servants who have dedicated themselves to the Detroit Public Library and the people they serve."
“In cases like this, where a government official takes bribes and abuses a position of trust, it amounts to stealing directly from the community,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Public libraries serve a special purpose in enriching our communities, and government officials are entrusted with a great responsibility toward our citizens. The FBI Detroit Field Office, in concert with our local, state and federal partners, will continue to pursue those who breach the public’s trust, and hold them accountable under the law for their actions.”"The sizeable amount of the kickbacks Cromer received represents the degree to which he was cheating the public," said IRS Acting Special Agent in Charge Carolyn Weber. "It is unacceptable to help yourself to public funds, but if you do IRS-Criminal Investigation will be there to seek justice on behalf of the citizens of Detroit."
The case was investigated by agents of the FBI and the IRS. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Julie Beck.Former City of Marietta Employees and Landlords Indicted for Section 8 Housing FraudRead the Press Release
ATLANTA - Shantel Bowens, Debbie Bailey, and Babatunde “Babs” Abass have been arraigned on charges of stealing funds from the federal Housing Choice Voucher Program, also known as “Section 8,” which provides rental assistance to low-income families.
“These defendants stole federal funds designed to help families afford safe and decent housing,” said United States Attorney Sally Quillian Yates. “In addition, the two defendants who were employed by the City of Marietta violated the public trust by abusing their positions in order to divert public money for their own use.”
“This indictment should send a strong message that HUD-OIG will aggressively pursue landlord fraud, especially when it is facilitated by persons in positions of public trust,” said Lester Fernandez, Special Agent in Charge for Region 4, U.S. Department of Housing and Urban Development – Office of Inspector General. “In partnership with state and local law enforcement and federal agencies, we are deeply committed to ensuring that scarce resources are not diverted to those who seek to enrich themselves. We will continue to seek program accountability and promote honest stewardship of taxpayer funds by grantees entrusted with taxpayer monies.”
“We always deeply regret the theft of public funds, but I am grateful that we have highly qualified City employees, whom we can count on to alert us to issues such as these,” said Mayor Steve Tumlin. “It is important to note that City Staff uncovered these discrepancies which were vigorously investigated by our own Police Department and in turn given to Federal authorities. The City strongly supports the prosecution of those responsible and we seek to ensure this type of crime never happens again.”
“The City of Marietta takes our responsibility to be good shepherds of Federal funds very seriously,” said Marietta Police Chief Dan Flynn. “Thus when our internal auditing process uncovered irregularities with Section 8 funds our City staff promptly referred the matter to the Marietta Police Department. When the police department investigation confirmed possible theft by former employees, we promptly notified our Federal HUD partners and the U.S. Attorney’s Office, and together we worked to expose the entire theft scheme and bring the responsible individuals into the criminal justice system. Overall, we appreciate the seamless cooperative manner in which our local and Federal partnership functioned and we fully support the U.S. Attorney’s Office in the on-going prosecution of this case. We believe it will send the right message that we are united and will not tolerate any theft of public funds.”
According to United States Attorney Yates, the charges, and other information presented in court: Bowens and Bailey were employed by the City of Marietta and were responsible for administering landlord and tenant enrollment for Section 8 participants in Marietta. To defraud the Section 8 program, Bowens and Bailey first identified former tenants who had been terminated from the program and reactivated the tenants’ accounts. They specifically chose tenants who were listed as unemployed or as having very low incomes, which would result in larger Section 8 payments.
Bowens and Bailey then altered computer records, linking the terminated tenants to Abass and Tunji “Chris” Imoukhuede, who were already registered as Section 8 landlords. As a result, the falsified computer records indicated that the terminated tenants were residing at properties purportedly owned by Imoukhuede and Abass. In fact, Imoukhuede and Abass did not own or rent the properties, and they were not the landlords of the terminated tenants.
As a result of Bowens’ and Bailey’s falsification of landlord, tenant and rental property information, federal Section 8 payments were issued to bank accounts controlled by Imoukhuede and Abass. In turn, Imoukhuede and Abass each withdrew the money and kept approximately 40 percent for himself. Each landlord then gave approximately 60 percent of the stolen funds to Brown, who split that amount with Bowens.
The scheme took place from January 2011 through June 2013. During that period, Marietta’s Housing Choice Voucher Program received over $4 million annually in Section 8 funds from the United States Department of Housing and Urban Development. As a result of the fraud, Bowens, Bailey, Imoukhuede and Abass obtained over $230,000 in federal funds.
In addition, from January 2010 through June 2013, Bowens arranged for a landlord enrolled in the Section 8 program to receive funds for a fictional tenant who was purported to be Bowens’ aunt. In fact, Bowens herself moved into the landlord’s property and lived there rent-free for over three years. Bowens’ housing costs, paid for through Section 8, totaled over $40,000.
Shantel Bowens, Debbie Bailey, Tunji “Chris” Imoukhuede, and Babatunde “Babs” Abass were indicted by a federal grand jury on March 25, 2014. Tunji Imoukhuede will be arraigned at a later date.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case was investigated by the U.S. Department of Housing and Urban Development Office of the Inspector General, the City of Marietta, and the Marietta Police Department.
Assistant United States Attorney Shanya J. Dingle is prosecuting the case.
This is part of an effort underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Former Chief Finance Officer Admits to Stealing Nearly $4 Million from His Employer and Pleads Guilty to Mail FraudRead the Press Release
CHARLOTTE, N.C. – The former Chief Finance Officer (CFO) of a Mint Hill-based company has admitted to stealing approximately $4 million from his former employer and has pleaded guilty to mail fraud, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Nathan Thomas Mroz, 39, of Charlotte, entered his formal guilty plea on Monday, April 14, 2014, before U.S. Magistrate Judge David S. Cayer.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to filed court documents and court proceedings, from 2005 to 2013, Mroz was employed by an HVAC company as financial controller and later as CFO and had access to the company’s funds and books and records. Court documents show that over the course of his employment, Mroz exploited his position to create fake accounts payable invoices and to generate corresponding payments, which Mroz directed to himself or mailed to various credit cards he maintained. According to court documents, to cover up his scheme, Mroz fraudulently categorized the bogus company payments as legitimate business expenses in the company’s books and records. Court filings reflect that Mroz spent the stolen money on a wide array of personal expenditures, including vacations to Disneyland and Europe, luxury vehicles, private school tuition, jewelry and to purchase a $115,000 home for his nanny. In all, court documents indicate that Mroz stole approximately $4 million from his former employer.
Mroz pleaded guilty to one count of mail fraud and was released on bond. At sentencing, he faces a maximum prison term of 20 years and a $250,000 fine. As part of his plea agreement, Mroz has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendant has not been set yet.
The investigation was handled by the FBI. The prosecution for the government is being handled by Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte.
April is National Financial Literacy MonthIn 2004, April was officially designated National Financial Literacy Month, to raise public awareness on the importance of personal financial education and to promote access to tools and information so individuals can better protect themselves from financial fraud.
The U.S. Attorney’s Office for the Western District of North Carolina reminds the public that financial scams come in different forms: Ponzi schemes, mortgage fraud, corporate fraud, investor fraud, credit card fraud, identity theft, telemarketing scams and fraudulent charity solicitations are some of the most common schemes. Prosecuting financial fraud continues to be a priority for the U.S. Attorney’s Office however, becoming educated consumers and investors is the public’s first line of defense against predatory schemes and financial scams.
Additional information on common financial schemes and financial literacy resources are available at:
• U.S. Department of Justice – Financial Fraud Enforcement Task Force www.stopfraud.gov
• Federal Bureau of Investigation – Common Fraud Schemes www.fbi.gov/scams-safety/fraud
• U.S. Department of Treasury - Financial Literacy and Education Commission www.mymoney.gov
• U.S. Department of Justice – U.S. Trustee Program www.justice.gov
Following Mass Shooting Incidents, Attorney General Holder Urges Congress to Approve $15 Million to Train Law Enforcement Officers for 'Active Shooter' SituationsRead the Press Release
Following the recent tragedies at a Jewish Community Center outside of Kansas City and at Ft. Hood, Attorney General Eric Holder urged Congress Tuesday to approve $15 million in funding for active shooter training for law enforcement officers to ensure they have the tools they need to effectively respond to threats, protect themselves, and save innocent lives.
“In the face of this urgent and growing threat – when the lives of innocent people are at stake – those who stand on the front lines need our full and unwavering support," Holder said in a video message posted on the Justice Department's website. "This critical funding would help the Justice Department ensure that America’s police officers have the tools and guidance they need to effectively respond to active shooter incidents whenever and wherever they arise."
“Over the last decade, the Justice Department and the FBI have helped provide cutting-edge active shooter training to 50,000 front-line officers. In the video message, Holder said continuing this training is critical since the patrol officers who arrive first on the scene are increasingly being relied on to respond directly to active shooters rather than wait for SWAT teams.”
The complete text of the Attorney General’s video message is below:
“Between 2000 and 2008, the United States experienced an average of approximately five active shooter incidents every year. Since 2009, this annual average has roughly tripled. Earlier this month, Fort Hood suffered the second mass shooting that community has experienced in just five years. And in a separate incident over the weekend, a gunman opened fire at a Jewish Community Center just outside of Kansas City.
“The Justice Department has concluded that federal hate crimes charges are appropriate in this case, and in the months ahead, we will do everything in our power to ensure that justice is served for every victim.
“But each of these tragic events is a heartbreaking reminder that mass shootings are all too common. And they have become increasingly deadly.
“As a nation, we must confront this alarming rise and all of its underlying causes – honestly, factually, and without regard for political consequence. We must deal with these incidents whenever they happen – but, just as importantly, we must prevent them whenever we can.
“Today’s Department of Justice committed to doing just that. We’re more determined than ever to prevent mass shootings. The FBI’s Behavioral Threat Assessment Center, which supports state, local and campus safety stakeholders, has worked diligently to respond to a nearly 200 percent increase in requests for assistance in the last year, and to help detect and mitigate potential active shooter situations.
“But we must also be prepared to respond quickly and effectively to active shooter incidents if and when they do occur. And in today’s world, the first response must often be led not by SWAT teams or specialized police units – but by the very first patrol officers to arrive on the scene.
“That’s why all law enforcement officers must have the best equipment and most up-to-date training to confront these situations – to stop active shooters in their tracks, to protect themselves, and to save innocent lives.
“Over the last decade, the Justice Department and the FBI have helped provide cutting-edge active shooter training to 50,000 front-line officers, more than 7,000 on-scene commanders, and over 3,000 local, state, and federal agency heads. This vital work must continue – but to provide training, we need adequate funding.
“Today, I am urging Congress to approve President Obama’s request for $15 million for active shooter training and other officer safety initiatives. This critical funding would help the Justice Department ensure that America’s police officers have the tools and guidance they need to effectively respond to active shooter incidents whenever and wherever they arise.
“Every day, America’s federal, state, local, and tribal law enforcement officials perform their duties with integrity, courage, and extraordinary valor. In the face of this urgent and growing threat – when the lives of innocent people are at stake – those who stand on the front lines need our full and unwavering support. The safety of the American people demands it. And the men, women, and children whose lives are impacted by active shooters every year deserve nothing less.”
The full video message is available at http://www.justice.gov/agwa.php.
Florida Resident Pleads Guilty to Violent Crimes Linked to Debt DisputeRead the Press Release
A Florida resident who threatened family members over a $20,000 debt and used firebombs to torch one home and threaten another, pleaded guilty today to a variety of charges, announced U.S. Attorney Jenny A. Durkan. SANG NGOC UNG, 54, of Margate, Florida pleaded guilty to Collection of Extension of Credit by Extortionate Means, Interstate Travel in Aid of Racketeering Activity, Unlawful Possession of a Destructive Device and Carrying a Firearm During and in Relation to a Crime of Violence. In his plea agreement UNG admits that in the early morning hours of June 10, 2013 he set fire to his relative’s home on S. Cloverdale Street in Seattle. The fire extensively damaged the home and forced the homeowner, her adult children and a friend to flee through a window and the garage. Shortly after that fire, investigators went to a second home associated with the family and discovered a destructive device that had not ignited. When sentenced by U.S. District Judge Richard A. Jones on July 25, 2014, prosecutors will recommend no more than 25 years in prison and the defense can recommend no less than 5 years. Judge Jones is not bound by the recommendations and can impose any sentence allowed by law.
According to records in the case, UNG had been pressuring family members in Seattle about $20,000 he believes is owed to him. Family members had attempted to pay some of the money, but UNG reportedly continued to threaten them if the debt was not paid. In mid-May 2013, UNG arrived in the Seattle area and again began pressuring the family to repay the debt. On June 9, 2013, UNG was observed attempting to contact people at both homes. The fire and the destructive device that failed to ignite were discovered the next day. Cell phone records place UNG in the Seattle area during the time the fire and destructive device were set. Evidence on the destructive device ties him to the scene. UNG returned to the Seattle area in July 2013 and was arrested by Seattle Police and ATF agents. At the time of his arrest UNG had a firearm in his possession and admits that he was armed during the criminal conduct in this case.
The case is being investigated by the Seattle Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The case is being prosecuted by Assistant United States Attorney Todd Greenberg.Florida Man Sentenced on Money Laundering ChargeRead the Press Release
Forfeits Nearly $10 Million Generated by Illegal Gambling Business
ALBANY, NEW YORK - Philip Gurian, 52, of Boca Raton, Florida, was sentenced today in United States District Court in connection with his previous guilty plea to conspiracy to commit money laundering, announced United States Attorney Richard S. Hartunian, Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division, and Toni M. Weiracuh, Special Agent-in-Charge, Internal Revenue Service - Criminal Investigation Division, New York Field Office. United States District Judge Mae A. D’Agostino sentenced Gurian to time served, to be followed by supervised release for 3 years, and to pay a $100,000 fine. Gurian had been incarcerated since his arrest on April 10, 2013. As part of his plea agreement and sentence, Gurian also forfeited a total of about $9,974,307.
A co-defendant, Michele Lasso-Barraza, 30, of Parkland, Florida, was sentenced to probation earlier this month in connection with her role in the gambling enterprise and money laundering conspiracy. She forfeited her interest in $8 million and was ordered to pay a $25,000 fine. Lasso-Barraza, a Panamanian citizen, was also deported as a result of her conviction.
Gurian operated a large-scale illegal gambling business using internet websites which allowed bettors to place thousands of wagers from the capital area of New York, Florida, Indiana, California, Texas, and Nevada. Gurian and Lasso-Barraza laundered in excess of $8 million generated from the illegal gambling business by causing wire transfers to offshore accounts in Panama, Andorra, and the Cayman Islands. Some of the offshore accounts were in the names of sham entities and corporations created by Lasso-Barraza on behalf of Gurian.
Gurian was charged as the result of a joint investigation initiated by the Albany County Sheriff’s Office, and joined by the Albany County District Attorney’s Office, the Saratoga District Attorney’s Office, the Federal Bureau of Investigation, the Internal Revenue Service- Criminal Investigation, the Broward County Money Laundering Task Force, and the office of the United States Attorney for the Northern District of New York.
The case was prosecuted by Assistant United States Attorney Robert A. Sharpe.
Derby Credit Union Manager Sentenced Three Years for FraudRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Debra Kinney, 59, of Derby Vermont was sentenced to three years imprisonment yesterday, followed by five years of supervised release. Kinney also was required to pay full restitution, and a forfeiture judgment of $250,000 was entered against her.
Debra Kinney was the manager of the Border Lodge Credit Union in Derby, Vermont. In November 2012, the Federal Bureau of Investigation, along with state and federal bank regulators, searched the credit union and seized the documents and operations of the financial institution based on evidence of widespread fraud and misappropriation of accountholders’ funds. After an ensuing investigation, the manager of the credit union, Kinney, was indicted for misappropriation of credit union funds. Federal credit union regulators permanently shut down and liquidated the assets of the credit union.
Debra Kinney pled guilty to the federal fraud charges in January, 2014. At the sentencing hearing yesterday before Judge William K. Sessions III in Burlington and in court papers, the United States asserted that Kinney had defrauded Border Lodge Credit Union accountholders of over $633,000. Kinney’s acts of embezzlement occurred over a period of years. According to court papers, Kinney would frequently write checks to herself or for her benefit or for that of family members drawn from credit union accountholders without authorization. A subsequent financial investigation determined she removed hundreds of thousands of dollars from multiple accountholders. All told, the investigation revealed improprieties with 33 different accounts.
All of the losses of individual accountholders were insured by the National Credit Union Administration which insures credit union accounts up to $250,000. As part of the liquidation of the credit union, the National Credit Union Administration paid accountholders for losses they suffered. To date, Kinney has not paid any restitution.The case was investigated by the Federal Bureau of Investigation with significant assistance from the National Credit Union Administration and the Vermont Department of Financial Regulation.
Conspirators in Two Android Mobile Device App<br /> Piracy Groups Plead GuiltyRead the Press Release
Members of two different piracy groups engaged in the illegal distribution of copies of copyrighted Android mobile device applications have pleaded guilty for their roles in separate schemes, each designed to distribute more than one million copies of copyrighted apps.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement.
Thomas Pace, 38, of Oregon City, Ore., pleaded guilty today to one count of conspiracy to commit criminal copyright infringement and is scheduled for sentencing on July 9, 2104. According to the information filed on Jan. 24, 2014, Pace and his fellow conspirators identified themselves as the Appbucket Group, and from August 2010 to August 2012, they conspired with other members of the Appbucket Group to reproduce and distribute more than one million copies of copyrighted Android mobile device apps, with a total retail value of over $700,000, through the Appbucket alternative online market without permission from the copyright owners of the apps. Two other defendants charged in the information – Thomas Dye and Appbucket Group leader Nicholas Narbone – pleaded guilty to the same charge in the information on March 10 and March 24, 2014, respectively.
Kody Jon Peterson, 22, of Clermont, Fla., pleaded guilty on April 14, 2014, to one count of conspiracy to commit criminal copyright infringement. According to the information filed on Jan. 23, 2014, Peterson and his fellow conspirators identified themselves as the SnappzMarket Group, and from May 2011 until August 2012, Peterson conspired with other members of the SnappzMarket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps, with a total retail value of over $1.7 million, through the SnappzMarket alternative online market without permission from the software developers and other copyright owners of the apps. A sentencing date has not yet been scheduled.
The investigation was conducted by the FBI. The prosecution is being handled by Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher Bly of the Northern District of Georgia. Significant assistance was provided by the CCIPS Cybercrime Lab and the Criminal Division’s Office of International Affairs.Computer Sciences Corporation to Pay $1.1 Million to Resolve False Claims Act AllegationsRead the Press Release
Baltimore, Maryland – Computer Sciences Corporation, Inc., a defense contractor headquartered in Falls Church, Virginia, has agreed to pay the United States $1.1 million to resolve allegations under the civil False Claims Act that the company falsified qualifications of its employees in order to bill for labor charges at rates higher than allowed under a government contract.
The settlement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Major General David Quantock, Provost Marshal General of the Army and Commanding General of the U.S. Army Criminal Investigation Command.Computer Sciences Corporation designs and operates satellite and wireless network solutions and security systems for government and private sector customers. Prior to January 1, 2008, the U.S. Army Communication Electronics Command (CECOM), which is headquartered at Aberdeen Proving Ground, Maryland, awarded Computer Sciences a contract to provide information technology support to government assets and locations worldwide.
The settlement resolves allegations that Computer Sciences Corporation submitted false resumes for employees to qualify them for higher paying positions, thereby falsely increasing the amount of money for labor charged by Computer Sciences. These claims relate to services rendered between January 16, 2008 and January 15, 2012 under a specific task order of an information technology services contract administered by the Army CECOM.
“When defense contractors can enrich themselves at taxpayers’ expense by falsely representing that they provided expensive services, the government must be vigilant in pursuing fraudulent claims,” said U.S. Attorney Rod J. Rosenstein.The claims settled by this agreement are allegations, and there has been no determination of liability.
U.S. Attorney Rod J. Rosenstein thanked the Defense Contract Audit Agency for their assistance in the investigation. This case was handled by Assistant U.S. Attorney Thomas Barnard.Chelsea Man Charged with Attempting to Issue Fraudulent IdentificationRead the Press Release
BOSTON – A Chelsea man was charged today with conspiring to fraudulently issue identification documents and aggravated identify theft.
Leonel Sanchez, 52, was indicted in connection with a scheme to produce false identification documents. From December 2012 through January 2013, it is alleged that Sanchez bribed an employee of the Massachusetts Registry of Motor Vehicles in connection with a scheme to issue Massachusetts driver’s licenses to individuals who presented fraudulently obtained, but valid, Puerto Rican identification documents in identities other than their own.
This indictment is the most recent development in investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; and Cheryl Garcia, Acting Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Canyon County Man Sentenced for Aggravated Identity Theft and Possessing Several False ID DocumentsRead the Press Release
BOISE – Jordan Schoo, 34, of both Nampa and Grangeville, Idaho, was sentenced today in United States District Court to 39 months in prison for identity theft by possession of five or more false identification documents and aggravated identity theft, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Schoo to pay $8,703 in restitution, and serve three years of supervised release following his prison term. During the supervised release, Schoo will have substantially limited access to computers and the internet. He was charged in an 11-count indictment filed in federal court in Boise on August 14, 2013.
According to the plea agreement, Schoo admitted that on March 20, 2013, he knowingly possessed nine false and fraudulent Idaho driver’s licenses, each with his own photograph but with the identifying information of actual people, such as names, dates of birth, and driver’s license numbers. Schoo possessed a tenth false identification with a different person’s photograph. According to the plea agreement, Schoo used, and intended to use, the documents to purchase goods on credit from various businesses participating in interstate commerce, such as Best Buy.
Schoo obtained the means of identification of people he impersonated from a number of sources, including that of a former roommate from Colorado. Schoo also used the means of identification taken from his mother’s business. He used the various false identities that he possessed to purchase goods from both local and on-line retailers, including a 60” television and a car audio and security system. Schoo also obtained credit cards in the names of various victims. As part of the scheme, he opened and maintained a mailbox under a false name at a commercial mailbox store.
United States Attorney Wendy Olson stated that, “Today’s sentence sends a firm message that those who victimize others by stealing their identities and causing them financial loss will be punished swiftly and severely,” said Olson. “The United States Attorney’s Office is committed to protecting the financial security of the citizens of Idaho and will pursue identity theft offenders and hold them accountable for the extensive damage that they cause to victims. I commend the cooperative law enforcement efforts that brought this case to a successful conclusion.”
The case was investigated by the United States Postal Inspection Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Grangeville Police Department.
Buffalo Woman Sentenced for Tax ConspiracyRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Emma Mills, 38, of Buffalo, N.Y., who was convicted of conspiracy to file false claims with the Internal Revenue Service, was sentenced to 30 months in prison by U.S. District Court Judge Richard J. Arcara. The defendant was also ordered to pay restitution totaling $35,519.00 to the Internal Revenue Service and $6,976.00 to the NYS Department of Taxation and Finance.
Assistant U.S. Attorney Trini E. Ross, who handled the case, stated that the defendant conspired with others, including John Tally, to defraud the Internal Revenue Service by creating false and fictitious W-2 forms. The forms were created by obtaining identification information from other persons. The fabricated W-2’s were submitted to the IRS with false tax returns, on which undeserved refunds and tax credits were claimed.
John Tally, 52, of Buffalo, N.Y., who was convicted of fraud and making counterfeit money, was sentenced to 30 months in prison on March 3, 2014.
“On this particular day, Americans everywhere will file their income taxes,” said U.S. Attorney Hochul. “While the vast majority of Americans discharge this obligation honestly, those who would defraud the system should know that our Office will vigorously prosecute any individuals who file false information, in an effort to obtain taxpayer funds to which they are not entitled.”
IRS Criminal Investigation Acting Special Agent-in-Charge Shantelle P. Kitchen said, “Today, as the tax season comes to a close, Americans who file honest and accurate returns can be assured that their government will hold those who do not pay their fair share accountable. The sentencing of Ms. Mills and last month’s sentencing of her co-conspirator, John Tally, are timely examples of the resolve of IRS Criminal Investigation and the United States Attorney’s Office to investigate and prosecute those who defraud our tax system.”
The conviction is the result of an investigation on the part of Special Agents of the Internal Revenue Service, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.Beaumont, Texas, Attorney Pleads Guilty to Tax ViolationRead the Press Release
SHREVEPORT, La. – U.S. Attorney Stephanie A. Finley announced that Craig J. Schexnaider, of Beaumont, Texas, entered a guilty plea Monday before U.S. Magistrate Judge Zack Hawthorn to one count of failing to file an income tax return.
According to evidence presented at the guilty plea, Schexnaider an attorney licensed to practice law in the State of Texas, had gross income in calendar year 2008 of approximately $140,000, an amount in excess of the $3,500 minimum that triggered the requirement to file a federal income tax return. And, even after he requested a six-month extension for the filing of his 2008 federal individual income tax return and the Department of the Treasury approved his request and granted an extension until October 15, 2009, Schexnaider willfully failed to file his 2008 federal individual income return by October 15, 2009 as required by law.
Today’s guilty plea resulted from an Information that was filed in November 2013 charging Schexnaider with four counts of failing to file income tax returns when he had the following in gross income: $73,920 in 2007; $143,797 in 2008; $110,669 in 2009; and $43,740 in 2010. As a result of today’s plea agreement, the government will dismiss the remaining counts after sentencing.
Schexnaider faces one year in prison and a $100,000 fine for one count of failing to file an income tax return. A sentencing date has not been set.This case is the result of an investigation by IRS Criminal Investigation. Assistant U.S. Attorney William Flanagan is prosecuting the case.
Beaumont, Texas, Attorney Pleads Guilty to Tax ViolationRead the Press Release
SHREVEPORT, La. – U.S. Attorney Stephanie A. Finley announced that Craig J. Schexnaider, of Beaumont, Texas, entered a guilty plea Monday before U.S. Magistrate Judge Zack Hawthorn to one count of failing to file an income tax return.
According to evidence presented at the guilty plea, Schexnaider an attorney licensed to practice law in the State of Texas, had gross income in calendar year 2008 of approximately $140,000, an amount in excess of the $3,500 minimum that triggered the requirement to file a federal income tax return. And, even after he requested a six-month extension for the filing of his 2008 federal individual income tax return and the Department of the Treasury approved his request and granted an extension until October 15, 2009, Schexnaider willfully failed to file his 2008 federal individual income return by October 15, 2009 as required by law.
Today’s guilty plea resulted from an Information that was filed in November 2013 charging Schexnaider with four counts of failing to file income tax returns when he had the following in gross income: $73,920 in 2007; $143,797 in 2008; $110,669 in 2009; and $43,740 in 2010. As a result of today’s plea agreement, the government will dismiss the remaining counts after sentencing.
Schexnaider faces one year in prison and a $100,000 fine for one count of failing to file an income tax return. A sentencing date has not been set.This case is the result of an investigation by IRS Criminal Investigation. Assistant U.S. Attorney William Flanagan is prosecuting the case.
Austin Area Man Sentenced to Federal Prison for A String of RobberiesRead the Press Release
In Austin today, 52-year-old Randall David Reed of Dripping Springs, TX, was sentenced to 15 years in federal prison for six robberies, including five banks and one grocery store, and brandishing a firearm during and in relation to a crime of violence announced United States Attorney Robert Pitman and Acting FBI Special Agent in Charge Aaron C. Rouse.
In addition to the prison term, United States District Judge Lee Yeakel ordered that Reed pay restitution totaling $32,430 and be placed under supervised release for a period of three years after completing his prison term.
On February 5, 2014, Reed pleaded guilty to five counts of bank robbery, one count of violating the Hobbs Act (robbery which affects interstate commerce), and the firearm charge. According to court records, Reed admitted that he committed the following robberies:
- February 28, 2013 -- Randalls grocery store (2000 block of West Ben White Blvd. in Austin) – $3,000
- March 25, 2013 – Pioneer Bank (100 block of Wonder World Dr. in San Marcos) – $8,312
- May 3, 2013 – Prosperity Bank (12000 block of Research Blvd. in Austin) – $2,200
- May 21, 2013 – Northstar Bank (1500 block of West 35th St. in Austin) – $3,552
- July 3, 2013 – Broadway Bank (13400 block of US Hwy 281 in San Antonio) – $1,500
- July 26, 2013 – Benchmark Bank (1500 block of West 35th St. in Austin) -- $13,866
Furthermore, Reed admitted to carrying a handgun during all of the robberies and even brandishing a handgun during the July 26, 2013, robbery.
This case was investigated by agents with the Federal Bureau of Investigation and the police departments from Austin, San Marcos and San Antonio. Assistant United States Attorney Matthew B. Devlin prosecuted this case on behalf of the Government.
April 15Th Brings Indictment for Six Women in Identity Theft and Tax Fraud SchemeRead the Press Release
Memphis, TN – Six Memphis women were charged today with a total of 41 counts of fraud related to filing false income tax returns and identity theft, announced U.S. Attorney Edward L. Stanton III and Christopher A. Henry, Special Agent in Charge, Nashville Field Office, IRS-Criminal Investigations.
Melissa Harris, age 35; Erin Crutcher, age 27; Angela Jacocks, age 40; Breunca Sutton, age 28; Jennifer Freeman, age 38; and Vivian Sholar, age 34; were indicted for conspiracy to steal government funds, stealing government funds through the filing of false income tax returns, and aggravated identity theft.
According to the indictment, between August 6, 2010 and July 27, 2011, the women unlawfully obtained personal identifying information of victims, including high school students, and used this information to electronically file false federal income tax returns claiming refund amounts. They filed over 800 false returns, and directed over $1,300,000 of the generated refunds into the bank accounts of Crutcher, Jacocks, Sutton, Freeman and Sholar. Each of the conspirators received part of the refunds for their personal benefit and use.
Harris is charged with one count of conspiracy, 20 counts of theft of government funds and 20 counts of aggravated identity theft.
Crutcher, Jacocks, Sutton, Freeman, and Sholar are each charged with one count of conspiracy, four counts of theft of government funds and four counts of aggravated identity theft.
The conspiracy charge carries a penalty of up to five years in prison. The theft of government funds charges carries a penalty of up to 10 years in prison. The aggravated identity theft charges carry a mandatory two year sentence to be served consecutively.
“The facts as outlined in the indictment insult the tens of millions of honest citizens who play by the rules and file their taxes in a timely and accurate manner,” said U.S. Attorney Stanton. “Anyone who participates in such a scheme should understand there is be a price to be paid and that our office will seek to collect in full.”
“Individuals who commit refund fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law. IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney’s Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and show blatant disregard to the harm caused to the victims of their schemes,” said Special Agent in Charge Henry.
This case was investigated by the United States Secret Service and the Internal Revenue Service-Criminal Investigative Division. Assistant United States Attorney Stephen Hall is prosecuting the case for the government.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.Abilene Man Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
ABILENE, Texas — Steven Edward Robb, 59, of Abilene, Texas, appeared today before U.S. Magistrate Judge E. Scott Frost, in federal court in Abilene, and pleaded guilty to one count of receipt of child pornography. Robb, who is on bond, faces a maximum statutory penalty of not less than five years or more than 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. A sentencing date was not set. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
According to documents filed in the case, in July 2013, Robb knowingly received two video files depicting minor females engaging in sexually explicit conduct.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Abilene Police Department are investigating. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.
Monday 14 April 2014
Worcester Man Pleads Guilty to Stealing Government MoneyRead the Press Release
BOSTON - A Worcester man pleaded guilty today in U.S. District Court in Worcester today to participating in a scheme to steal more than $110,000 from the federal government.
Marvin Lubin, 22, pleaded guilty before U.S. District Court Judge Timothy S. Hillman to theft of public money. In March 2014, Lubin was charged in a felony information. Sentencing is scheduled for July 7, 2014.
In early 2013, Lubin and a co-conspirator, Sniders Jean-Jacques, recruited several individuals to work as couriers in a scheme to steal and launder Social Security and IRS tax refund payments. Lubin hosted a meeting in his home in Worcester, which included Jean-Jacques and several of the couriers. At the direction of Lubin and Jean-Jacques, the couriers opened bank accounts in Massachusetts in the names of fake businesses. On various dates in 2013, illegally obtained Social Security benefits and IRS refunds were directly deposited into the accounts. At the direction of Lubin or Jean-Jacques, the couriers immediately withdrew the money in cash, and then delivered the cash as instructed by Lubin or Jean-Jacques. In some instances, couriers brought cash directly to Lubin. Jean-Jacques or Lubin would typically authorize the couriers to retain a portion of the stolen money as payment for their courier services.
On Oct. 10, 2013, during the execution of a search warrant of Lubin’s home, law enforcement agents recovered, among other things, a debit card associated with one of the bank accounts opened in the name of a fake business, and a list of 375 names, dates of birth, and Social Security numbers. On the same date, law enforcement agents interviewed Lubin, who admitted to his role in this scheme. Jean-Jacques was arrested on March 18, 2014.
The investigation so far has determined that as part of this scheme, Social Security payments totaling $11,689 were illegally obtained under the identities of 14 victims, and IRS payments totaling $98,610 were illegally obtained under the identities of 20 victims.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Stephen Marks, Acting Special Agent in Charge of the U.S. Secret Service; Phillip Coyne, Special Agent in Charge of U.S. Health and Human Services, Office of the Inspector General, Office of Investigations; and Chief Gary J. Gemme of the Worcester Police, made the announcement today. The case is being prosecuted by Timothy Landry of Ortiz’s Major Crimes Unit.
West Plains Man Pleads Guilty to Receiving, Distributing Child PornRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a West Plains, Mo., man pleaded guilty in federal court today to receiving and distributing child pornography over the Internet.
James A. Harrison, 53, of West Plains, pleaded guilty before U.S. Magistrate Judge David P. Rush to the charge contained in a Feb. 26, 2014, federal indictment.
By pleading guilty today, Harrison admitted that he downloaded child pornography from Web sites, and that he received and distributed child pornography through peer-to-peer file-sharing networks.
A Missouri State Highway Patrol trooper was conducting an undercover operation on Jan. 28, 2013, when he identified Harrison’s computer as sharing images of child pornography over the Internet through a peer-to-peer file-sharing network. The next day, the trooper downloaded a video of child pornography from Harrison’s computer. On Feb. 26, 2013, Harrison’s computer was still connected to the file-sharing network and had 10 files available for sharing that were known child pornography files. Law enforcement officers executed a search warrant at Harrison’s residence and seized a laptop computer, a desktop computer, a hard drive and various digital media storage devices.
Investigators examined Harrison’s computers and digital media storage devices and found 474 child pornography videos and 560 images of child pornography (that ranged in age from three years old to 13-14 years old).
Under federal statutes, Harrison is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the Missouri State Highway Patrol, the Joplin, Mo., Police Department, the Cassville, Mo., Police Department and the Southwest Missouri Cyber Crime Task Force.
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."West Branch Man Pleads Guilty to Distributing Child PornographyRead the Press Release
A man who distributed child pornography pled guilty today in federal court in Cedar Rapids.
Brady Verlo, age 22, from West Branch, Iowa, was convicted of one count of distribution of child pornography.
At the plea hearing, Verlo admitted that, between June 2013 and December 2013, he distributed child pornography. In a plea agreement, Verlo admitted that he distributed depictions of child pornography that previously had been transported to him through the Internet and cell phone messaging services. In the plea agreement, Verlo also admitted that he possessed over 20,000 images and 900 videos of child pornography.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Verlo was taken into custody by the United States Marshal after the guilty plea and will remain in custody pending sentencing. Verlo faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, a $100 special assessment, and supervised release for 5 years to life following his imprisonment.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by Homeland Security Investigations, the Iowa City Police Department, and the West Branch Police Department.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 14-9.
Virginia Man Charged with Misuse of Government Credit CardRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A former supervisor with the U.S. Department of Homeland Security has been charged with misusing his government-issued credit card at a West Virginia casino.
United States Attorney William J. Ihlenfeld, II, announced that GENE PROTOGIANNIS, 55 years old of Lovettsville, Virginia, was indicted on forty-five counts of wire fraud. The acts are alleged to have occurred in 2013 when PROTOGIANNIS used his official government credit card to obtain cash advances at the Hollywood Casino in Charles Town, West Virginia. The total amount of cash alleged to have been withdrawn by PROTOGIANNIS at the casino was $115,853.55.
PROTOGIANNIS, who will appear in Federal Court in Martinsburg on April 16, 2014, at 9:30 for his initial appearance, faces up to twenty years in prison along with a fine of up to $250,000 on each count. The actual sentence imposed will be based upon the Federal Sentencing Guidelines and the criminal history of the PROTOGIANNIS, if any. An indictment is only an accusation and the defendant is presumed innocent until and unless proven guilty.
PROTOGIANNIS was the Acting Director of the Tactical Operations Division for the U.S. Customs and Border Protection, a division of the Department of Homeland Security, at the time that these crimes allegedly occurred.
The case will be prosecuted by Assistant United States Attorney Paul T. Camilletti and was investigated by the West Virginia State Police.
U.S. Attorney Ihlenfeld urges anyone with information regarding public corruption in their community to call the West Virginia Public Corruption Hotline at 855-WVA-FEDS (1-855-982-3337), or to send an email to [email protected].
Utah Man Charged with Federal Hate Crime for Threatening Interracial FamilyRead the Press Release
The Department of Justice announced today that an information was filed charging Robert Keller, 70, with interfering with the housing rights of three members of an interracial family because of the family members’ races and because the family members were living in Hurricane, Utah.
Keller has been charged with two counts of criminal interference with a right to fair housing. More specifically, the information alleges that Keller wrote a note to two Caucasian family members of an interracial family threatening to kill them if they did not make their African-American family member leave their home and the community. The first count alleges that Keller’s threats interfered with the housing rights of the Caucasian residents to associate in their home with their African-American family member, and the second count alleges that Keller’s threats interfered with the African-American resident’s right to occupy the home.
If convicted, Keller faces a statutory maximum penalty of one year in prison on each count.
This case is being investigated by the Salt Lake City Division of the FBI in cooperation with the Hurricane City Police Department. It is being prosecuted by Trial Attorney Saeed Mody of the Civil Rights Division and Assistant U.S. Attorney Carlos Esqueda for the District of Utah.
An information is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Utah Man Charged with Federal Hate Crime for Threatening Interracial FamilyRead the Press Release
SALT LAKE CITY - The U.S. Attorney’s Office in Utah and the Department of Justice announced Monday that an information has been filed charging Robert Keller, 70, with interfering with the housing rights of three members of an interracial family because of the family members’ races and because the family members were living in Hurricane, Utah.
Keller has been charged with two misdemeanor counts of criminal interference with a right to fair housing. More specifically, the information alleges that Keller wrote a note to two Caucasian family members of an interracial family threatening to kill them if they did not make their African-American family member leave their home and the community. The first count alleges that Keller’s threats interfered with the housing rights of the Caucasian residents to associate in their home with their African-American family member, and the second count alleges that Keller’s threats interfered with the African-American resident’s right to occupy the home.
A summons will be issued to Keller to appear in federal court. If convicted, Keller faces a statutory maximum penalty of one year in prison on each count.
This case is being investigated by the Salt Lake City Division of the FBI in cooperation with the Hurricane City Police Department. It is being prosecuted by Trial Attorney Saeed Mody of the Civil Rights Division and Assistant U.S. Attorney Carlos Esqueda for the District of Utah.
An information is merely an accusation, and the defendant is presumed innocent unless proven guilty.
U.S. Broker-Dealer Ceo and Managing DirectorCharged in Manhattan Federal CourtFor Massive International Bribery SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, David O’Neil, the Acting Assistant Attorney General for the Criminal Division of the United States Department of Justice, and George Venizelos, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the arrests and indictment of BENITO CHINEA and JOSEPH DEMENESES, the former Chief Executive Officer and former Managing Director, respectively, of a United States broker-dealer (the “Broker-Dealer”), on felony charges arising from a conspiracy to pay bribes to Maria De Los Angeles Gonzalez De Hernandez (“Gonzalez”), who was a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (“BANDES”). CHINEA and DEMENESES, working with others, arranged the bribe payments to Gonzalez in exchange for her directing BANDES’s financial trading business to the Broker-Dealer. DEMENESES was also charged with participating in a conspiracy to obstruct justice by concealing facts about the scheme from the U.S. Securities and Exchange Commission (“SEC”) during a periodic examination of the Broker-Dealer.
CHINEA, 47, was arrested today in Manalapan, New Jersey, where he resides, and DEMENESES, 44, was arrested today in Fairfield, Connecticut, where he resides. Both defendants were presented today in Manhattan federal court before Judge Denise L. Cote.
Manhattan U.S. Attorney Preet Bharara said: “These two defendants, senior executives at a U.S. brokerage firm, are the fifth and sixth people to be charged in an alleged conspiracy to corrupt the trading business of a state-run economic development bank of Venezuela. They are alleged to have bribed a willing officer at the bank to steer its overseas trading business to the defendants’ brokerage firm, reaping millions for these defendants and their partners in crime. This Office will not tolerate the kind of outright bribery and concealment that characterized this scheme.”
Acting Assistant Attorney General O’Neil said: “These senior Wall Street executives are accused of paying six-figure bribes to an official in Venezuela to secure foreign business for their firm. Today’s charges show once again that we will aggressively pursue individual executives, all the way up the corporate ladder, when they try to bribe their way ahead of the competition.”
FBI Assistant Director-in-Charge George Venizelos said: “As alleged in the indictment, Chinea and Demeneses bribed Gonzalez to secure bank Bandes's financial trading business. Demeneses compounded the Broker-Dealer's illegal activities by conspiring to obstruct an investigation by regulators. The arrests today of Chinea and Demeneses should be a reminder to all those in the business community that engaging in bribery schemes to secure business and make a profit is illegal. Together with our law enforcement partners, the FBI will continue to investigate bribery and fraud at all levels.”
According to the allegations in the Indictment unsealed today, and other documents previously filed in Manhattan federal court:
Background on the Broker-Dealer and BANDES
At all times relevant to the charges, CHINEA was the chief executive officer and DEMENESES was a managing director in the Broker Dealer, which was headquartered in New York, with offices in Miami, Florida. In 2008, the Broker-Dealer established a group called the Global Markets Group, which included DEMENESES, Ernesto Lujan (“Lujan”), and Tomas Alberto Clarke Bethancourt (“Clarke”), and which offered fixed income trading services to institutional clients. One of the Broker-Dealer’s clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance. The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding. Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged BANDES a mark-up on purchases and a mark-down on sales.
The Bribery Scheme
From 2008 through 2012, CHINEA and DEMENESES, along with Lujan, Clarke, Jose Alejandro Hurtado (“Hurtado”), and Gonzalez, participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer, including CHINEA and DEMENESES, split the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES. Agents and employees of the Broker-Dealer, including CHINEA, DEMENESES, Lujan, Clarke and Hurtado, devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.
To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places. For example, DEMENESES, Lujan and Clarke used an account in Switzerland to transfer at least $1.5 million to an account Gonzalez controlled in Switzerland. In addition to Gonzalez receiving the bribe payments, CHINEA and DEMENESES, as well as other coconspirators, received millions in proceeds from the scheme.
The Conspirators’ Efforts to Obstruct the SEC Examination
Finally, beginning in or about November 2010, the SEC commenced a periodic examination of the Broker-Dealer, and from November 2010 through March 2011, the SEC’s exam staff made several visits to the Broker-Dealer’s offices in New York, New York. In or about early 2011, DEMENESES discussed with others that the SEC was examining the Broker-Dealer’s relationship with BANDES and that the SEC was asking questions regarding certain emails and other information that its exam staff had discovered. DEMENESES, Lujan, Clarke, and Hurtado agreed that they would take steps to obstruct justice by concealing the true facts of the Broker-Dealer’s relationship with BANDES, including by deleting emails.
Previously, on May 3, 2013, Gonzalez, along with two employees of the Broker-Dealer, Clarke and Hurtado, were arrested on charges relating to this bribery scheme. On June 12, 2013, a managing director of the Broker-Dealer, Lujan, was arrested on related charges as well. Each of these four defendants has since entered guilty pleas pursuant to cooperation agreements.
A chart containing the charges and maximum penalties for CHINEA and DEMENESES is attached below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised DOJ’s Criminal Division and the FBI for their work in the investigation. He also thanked the SEC for its assistance in this case and noted that the investigation is continuing. In a separate action, the SEC announced civil charges against CHINEA and DEMENESES.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Harry A. Chernoff and Jason H. Cowley, and Fraud Section Deputy Chief James Koukios and Trial Attorney Maria Gonzalez Calvet are in charge of the prosecution. Assistant United States Attorney Carolina Fornos is responsible for the forfeiture aspects of the case.
Additional information about the Justice Department’s FCPA enforcement efforts can be
found at www.justice.gov/criminal/fraud/fcpa.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Click here to view chart(s)
U.S. v. Chinea & Demeneses Indictment
U.S. Attorney's Office Reminds Public to be Aware of Tax Identity Theft during Tax SeasonRead the Press Release
SHREVEPORT/LAFAYETTE/ALEXANDRIA/LAKE CHARLES/MONROE, La. –United States Attorney Stephanie A. Finley joins the IRS and other federal agencies to raise awareness about a growing problem of identity theft as it relates to tax refund fraud. As the federal tax filing deadline approaches, extensions are granted and the state tax season continues. The Western District of Louisiana U.S. Attorney’s Office has also prosecuted individuals for related tax crimes.
Nationwide tax ID theft fraud is estimated to cost the U.S. Treasury more than $5 billion annually. The IRS has made tax identity theft a top priority and has hired new staff to explore new technologies and adopted new procedures to fight it. In fiscal year 2013, the IRS initiated 1,492 identity theft related criminal investigations, an increase of 66 percent over investigations initiated in fiscal year (FY) 2012. Indictments and sentencing doubled in FY 2013 and the average prison term was more than three years.
Stolen Identity Refund Fraud (SIRF) is reported to have affected more than 550,000 taxpayers from 2008 through May of 2012. In FY 2013, the Department of Justice filed more than 580 indictments or informations charging more than 880 defendants with SIRF-related crimes. In its efforts to prosecute fraudulent tax return preparers and promoters nationwide, the Tax Division has obtained court orders to stop more than 60 preparers and promoters doing business all over the United States.
Tax identity theft normally occurs when someone files a tax return using other people’s personal information, like a Social Security number, to get an income tax refund from the IRS. It also can happen when someone uses a Social Security number to get a job or claims someone else’s child as a dependent on a tax return. Victims usually do not realize that their identity has been stolen until they do their taxes. The IRS will contact the victim saying that more than one tax return was filed using their Social Security number, or that IRS records show they received wages from an employer they do not know.
In an effort to combat law breakers in the Western District of Louisiana, which represents 42 of Louisiana’s 64 parishes, criminal charges have been filed against those who have filed fraudulent tax documents and those who have stolen other people’s identities.
Tax related cases prosecuted in the Western District since April 15, 2013 are:Roderick Caldwell, 33, of Shreveport, pleaded guilty on September 26, 2013, to theft of income tax refunds. Caldwell deposited the fraudulently obtained refunds into accounts he held with Suntrust and Capital One Bank. On January 8, 2014, he was ordered by U.S. District Judge Donald E. Walter to pay back the $51,000.
Lashanda E. Harris, 38, of Natchitoches, La., pleaded guilty on October 29, 2013. She was a tax preparer in Natchitoches and assisted customers in preparing false tax returns. As part of the scheme, Harris received “kickbacks” from the customers. She was sentenced on January 31, 2014, by U.S. District Judge Dee D. Drell, to 18 months in prison and was ordered to pay $101,795 in restitution.
Francis C. Broussard 54, of West Monroe, La., pleaded guilty April 19, 2013. He filed personal tax returns in 2009 for years 2005 to 2008 using documents containing false information in an attempt to receive a total of 9.7 million in refunds to which he was not entitled. Broussard, who is a lawyer, did not receive the requested refunds. He was sentenced February 3, 2014 by U.S. District Court Judge Robert G. James to 28 months in prison and three years of supervised release.
Leo Cortez Vinson, 40, of Shreveport, pleaded guilty September 1, 2011. In early 2009, Vinson prepared 22 Form 1040 tax returns for the 2008 tax year containing false information and claiming $91,141 in refunds. The IRS issued $79,396 of these refunds caused by the filing of the fraudulent tax returns. On average Vinson received between $1,000 and $1,500 per tax return. Vinson recruited inmates from different prisons to supply Social Security numbers for the false returns and paid them $100 for their information. He was sentenced on November 14, 2013 by U.S. District Court Judge Tom Stagg to 36 months in prison and one year of supervised release.
William Loftin Jr., 71, of Bossier City, La., pleaded guilty July 2, 2013. Loftin filed taxes on April 14, 2008 for the 2007 calendar year U.S. Individual Income Taxes due. Under Section C of the form 1040, Lofton reported that for the gross receipts and sales that two of his businesses, Executive Consultants and EDGEAR LLC, made $2.4 million in 2007. Loftin admitted the numbers were false. The actual amount was $4.6 million, which is a difference of $2.2 million. He was sentenced on November 14, 2013 by U.S. District Judge Tom Stagg to one year of probation and to pay $50,000.
Larry Bruce, 61, Leesville, La., pleaded guilty January 29, 2013. Bruce admitted to being responsible for not paying payroll taxes owed to the Internal Revenue Service while working as the financial officer for EMI in Leesville from 2003 to 2007. Bruce was sentenced on May 13, 2013 by U.S. District Judge Richard T. Haik to five years in prison and three years of supervised release. He was also ordered to pay restitution in the amount of $294,070.98 to the IRS.
Gary Scott, 61, of Lafayette, pleaded guilty December 18, 2012. Scott earned more than $2.4 million in gross receipts between 2004 and 2009, and failed to file timely tax returns for those years. In an attempt to avoid paying his tax liability and evade assessment of future income taxes, Scott intentionally hid assets and went to great lengths to remove those assets out of his name. He was sentenced on April 16, 2013 by U.S. District Judge Elizabeth E. Foote to two years in prison, three years of supervised release and ordered to pay $362,961.65 in restitution to the IRS in unpaid taxes.
There are a number of ways for tax identity thieves to get personal information, to include:
- going through trash or stealing mail from a home or car;
- sending phony emails that look like they’re from the IRS asking for personal information;
- misusing clients’ information or passing it along to identity thieves by employees of businesses.
Tax payers can take the following precautions to safeguard their identity:
sign tax forms or ensure that they are transmitted electronically;- do not carry your Social Security number in your purse or wallet; and
- do not respond to threats received over the phone, through emails or by way of texts from those portraying to be IRS employees.
“I want to thank all of the agencies who have worked on these cases,” Finley stated. “Thanks also to private citizens for their efforts in reporting tax related crimes and guarding their tax information from criminals. Through the combined efforts of the public and agencies on a federal, state and local level, this type of fraud can be shut down and justice served upon those who abuse the tax laws and take advantage of law abiding citizens and their customers who place their trust in them.”
“Seeking out and prosecuting individuals who commit violations of the tax laws is the main focus of the work we do at IRS Criminal Investigation, “said Gabriel Grchan, Special Agent in Charge, IRS-CI, New Orleans Field Office. “We greatly appreciate the U.S. Attorney Stephanie Finley for her commitment to the prosecution of these cases. It is my hope that the legal actions undertaken in this district will further assure the taxpaying citizens of our country that IRS – CI is fully engaged in the war against those who attempt to steal from the U.S. Treasury.”
To protect yourself this tax season, it is important to know the ways that the IRS will and will not contact you if they have concerns. If you receive a letter from the IRS, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. The IRS does not initiate collection action by way of phone. For additional tips on how to protect your identity, or if you think that you are a victim of fraud, go to www.irs.gov.
For those who have had their identity stolen and used for fraud, the IRS will issue a special PIN to use for filing taxes. Information on the PIN program is available at www.irs.gov/uac/Newsroom/IRS-Combats-Identity-Theft-and-Refund-Fraud-on-Many-Fronts-2014. Please visit the FTC at ftc.gov/idtheft and the IRS at irs.gov/identitytheft for more information about tax identity theft.
Two Brothers Sentenced for Drug Dealing in Annapolis and BaltimoreRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Ernst Harmon, age 37, of Annapolis, Maryland, today to 198 months in prison, and his brother Dontaye Harmon, age 40, of Baltimore, Maryland to 125 months in prison, both followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine base. Judge Hollander also ordered Harmon to forfeit a 2004 Land Rover truck, a 1999 Dodge Caravan and $4,050 in cash.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Annapolis Police Chief Michael A. Pristoop; Anne Arundel County Police Chief Kevin Davis; Commissioner Anthony W. Batts of the Baltimore Police Department; U.S. Marshal Johnny Hughes; and Anne Arundel County State’s Attorney Anne Colt Leitess.
"We are proud of the excellent work and partnerships that resulted in removing two violent offenders from our streets," said Annapolis Police Chief Michael Pristoop. "This is significant for public safety in Annapolis."
According to their plea agreements, from at least July 2012 until June 2013, Ernst and Dontaye Harmon conspired with their brother, Donwand Harmon, Damian Brown and others to distribute cocaine base to a number of individuals in the Baltimore and Anne Arundel County, Maryland areas.
On July 31, 2012, Baltimore City Police officers stopped Ernst Harmon for a traffic violation. The police seized a hollowed-out cigar filled with raw marijuana and $4,050 from Ernst, and 140 grams of cocaine base and additional raw marijuana from a hidden compartment in his vehicle.
Dontaye Harmon worked with Ernst Harmon to run a drug shop operating out of the projects located at 920 President Street in Annapolis. Law enforcement saw Ernst and Dontaye outside the drug shop regularly making hand-to-hand transactions with customers. Pursuant to a court authorized wiretap on Ernst’s cell phone, law enforcement overheard Ernst arranging sales of cocaine base directly with customers, or instructing customers to deal with Dontaye. Ernst was also overheard calling Dontaye on multiple occasions to warn him that the police were coming, or were outside the drug shop. On two occasions in November 2012 and February 2013, investigators used an individual to purchase a total of 36.9 grams of cocaine base directly from Ernst and Dontaye at the drug shop. On a third occasion in January 2013, the individual made a controlled purchase of 27.2 grams of cocaine base from Ernst at the drug shop.
It was reasonably foreseeable to Ernst and Dontaye that the conspiracy distributed at least 280 grams of cocaine base.
Ernest Harmon also faces attempted murder charges in Anne Arundel County Circuit Court for the September 9, 2012 shooting of two individuals in Annapolis.
Donwand Cuppatino Harmon, age 37, of Annapolis, Maryland, previously admitted that he was responsible for distributing at least a kilogram of heroin during the conspiracy. Judge Hollander sentenced Donwand Harmon on February 7, 2014 to 210 months in prison, and ordered him to forfeit $27,895 in cash, a 2010 Porsche Panamera, a 2008 Mercedes Benz CL550, and jewelry, including a Breitling wrist watch with a diamond face and band.
Damian Brown also pleaded guilty to the drug conspiracy on February 3, 2014, and is scheduled to be sentenced on June 17, 2014 at 11:00 a.m.
United States Attorney Rod J. Rosenstein praised the ATF, Annapolis Police Department, Anne Arundel County Police Department, Baltimore Police Department, U.S. Marshals Service and Anne Arundel County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Kenneth S. Clark and Scott Lemmon who prosecuted this Organized Crime Drug Enforcement Task Force case.