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Monday 14 April 2014
Tulare County Man Sentenced to 17.5 Years in Prison for Marijuana Cultivation CrimesRead the Press Release
FRESNO, Calif. — U.S. District Judge Lawrence J. O’Neill sentenced Saul Antonio Morales, 49, of Alpaugh, today to 17 and a half years in prison for drug offenses relating to his involvement in a large marijuana cultivation operation that he maintained on his property, U.S. Attorney Benjamin B. Wagner announced.
On October 31, 2013, a federal jury found Morales guilty of conspiring to manufacture, distribute and possess with intent to distribute marijuana, manufacturing marijuana, possessing marijuana with intent to distribute, and maintaining drug-involved premises.
The government’s evidence at trial established that Morales, who was unemployed, was the owner of two 20-acre parcels and one residential property in the rural community of Alpaugh. In May 2012, during the execution of a search warrant at one of the parcels where Morales resided, members of the Sheriff’s Tactical Enforcement Personnel (STEP) unit of the Tulare County Sheriff’s Office located 4,011 marijuana plants, a processing room, and three firearms. The officers seized another 198 marijuana plants at another parcel and identified Morales’s stash house at the third property. According to court documents, Morales and his family members were involved in the distribution of marijuana to the state of Washington.
In sentencing Morales, Judge O’Neill enhanced Morales’ sentence based on his leadership role and possession of firearms, noting, “guns change everything.” Following the completion of his prison term, Morales will be placed on supervised release for a total term of five years, or will be subject to deportation to his native El Salvador.
Seven other people were prosecuted in this case, including Morales’s wife, Juliana Garcia Torres, 55, and son, Gerardo Alonso Morales, 23. They were both sentenced to three years and one month in prison. Bonifacio Cano Gutierrez, 20, of Colima, Mexico, was sentenced on January 6, 2014, to two years and six months in prison. He is subject to deportation to Mexico upon completion of his prison sentence. The remaining six co-defendants were sentenced to between 12 to 30 months in prison.
This case was the product of an investigation by the U.S. Drug Enforcement Administration and Tulare County Sheriff’s Office. Assistant United States Attorneys Karen Escobar and Christopher Baker prosecuted the case.
Three Shiprock Residents Sentenced to Federal Prison for Sexually Abusing a Navajo ChildRead the Press Release
ALBUQUERQUE – Three residents of Shiprock, N.M., were sentenced in federal court on Friday, April 11, 2014, for their convictions on child sexual abuse charges. Herbert Ben, Sr., 63, a member of the Navajo Nation, and Bruce Hamilton, 77, a non-Indian, each was sentenced to 48 months in prison, while Rosabelle Ben, 58, a member of the Jicarilla Apache Nation, was sentenced to 40 months in federal prison. Each will be on supervised release for five years and be required to register as a sex offender after completing his or her prison sentence.
The three defendants were arrested in May 2012, based on a criminal complaint alleging child sex abuse offenses. They subsequently were indicted and charged with sexual abuse of a child between the age of 12 and 16 years, and aiding and abetting the sexual abuse of a child, at a location within the Navajo Indian Reservation.
Herbert Ben, Sr., pled guilty on July 31, 2013, to sexual abuse of a minor and admitted sexually abusing the victim on a day between Aug. 2010 and Dec. 2011. On Aug. 19, 2013, Hamilton pled guilty to sexual abuse of a minor and admitted sexually abusing a Navajo child between the age of 12 and 15 years on a date between Aug. 2010 and Dec. 2011. Rosabelle Ben entered a guilty plea on Oct. 29, 2014, to being an accessory to sexual abuse of a minor and admitted making the victim available to Hamilton who sexually abused the victim.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. It was prosecuted by Assistant U.S. Attorneys Jacob A. Wishard and Novaline D. Wilson 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/.
Three Plead Guilty to String of Sawed-Off Shotgun Robberies in the City of RichmondRead the Press Release
RICHMOND, Va. – Alexander Edward Bell, 28, of Richmond, Va., pleaded guilty today to Interference with Commerce by Robbery and Using, Carrying, and Brandishing a Short-Barreled Shotgun During and In Relation to a Felony Crime of Violence. Bell’s coconspirators, Cevin Maurice Johnson, 26, of Richmond, Va., and Jaron Alphonz Minnicks, 21, of Richmond, Va., pleaded guilty to the same charges last week.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Washington Field Division; and Richmond Police Chief Ray J. Tarasovic made the announcement after the pleas were accepted by United States District Judge Henry E. Hudson.
Bell, Johnson and Minnicks were indicted on January 21, 2014, by a federal grand jury on charges of Interference with Commerce by Robbery and Using, Carrying and Brandishing a Firearm During and In Relation to a Felony Crime of Violence. All three men face a maximum penalty of 20 years’ imprisonment on the robbery charge and life imprisonment on the firearm charge when they are sentenced in July 2014. Bell and Minnicks agreed to recommend to the Court a sentence of 27 years of active incarceration. Johnson, who served primarily as a getaway driver, made no agreement regarding sentencing.
In a statement of facts filed with the plea agreement, Bell admitted that between October 20, 2013 and December 22, 2013, he committed the armed robberies of the Shop and Go on Mechanicsville Turnpike, Bruce’s Supermarket on Commerce Road, the Night & Day Mart located on Q Street, the One Stop Food Market located on Meadowbridge Avenue, the Clay Street Market located on N. 30th Street, the D.C. Food Market on Brookland Park Boulevard, and the Corner Express Mart on North Avenue, all located in the City of Richmond. Minnicks admitted to committing all but the Corner Express Mart robbery. Johnson admitted to committing all but the Shop and Go and Bruce’s Supermarket robberies. During each of these robberies, one or more of the men would enter the store brandishing a sawed-off shotgun and demand money, while another man would wait outside and serve as a getaway driver. Approximately $13,000 total was taken during the seven robberies.
This case was investigated by the ATF and the City of Richmond Police Department. Assistant United States Attorney Olivia L. Norman is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Three Charged with Conspiracy to Commit Credit Card Fraud in Jackson AreaRead the Press Release
SACRAMENTO, Calif. — An indictment was unsealed today charging three women with conspiracy to commit access device fraud and access device fraud, United States Attorney Benjamin B. Wagner announced.
According to the indictment, in October 2013, Amanda Nicole Nicoletti, 28, of Clovis; Brittney Janet Booth, 27, of Fresno; and Bobbi Jo Heiss, 27, of Oakhurst, collected more than 165 credit card numbers, 25 California driver’s licenses, and 25 social security numbers in the names of other individuals. The defendants then used that information to make numerous purchases in the Jackson area of jewelry, shoes, cigarettes, and other items using counterfeit credit cards that had been encoded with the stolen credit card numbers. Co-defendant Nicoletti is additionally charged with aggravated identity theft.
This case is the product of an investigation by the United States Secret Service, United States Postal Inspection Service, Jackson Police Department, and Angels Camp Police Department. Assistant United States Attorney Jared C. Dolan is prosecuting the case.
Heiss was arrested on April 11, 2014, and is expected to make her initial appearance in Fresno today. Nicoletti and Booth have not yet been apprehended.
If convicted, Nicoletti, Booth, and Heiss face a maximum statutory penalty of 10 years in prison and a $250,000 fine for access device fraud and five years in prison for conspiracy to commit access device fraud. If convicted of aggravated identity theft, Nicoletti faces a mandatory-minimum two years in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Tax Fraudsters Are Still at It the Old Fashioned Way TooRead the Press Release
ATLANTA – Last week Attorney General Eric Holder warned U.S. taxpayers to beware a “rising threat” of scammers seeking fraudulent federal tax refunds based on stolen identities, which he described as an “increasingly urgent problem.” He should know. Attorney General Holder has been the victim of identity theft himself.
“Tax cheats come in many different stripes,” said United States Attorney Sally Quillian Yates. “Some steal identities and use them to file fraudulent tax returns, while others file fraudulent tax returns in their own name. Either way, all hardworking citizens who pay their own fair share of taxes are the victims. As the tax filing deadline nears, we want to remind members of our community that we will investigate and prosecute tax fraud in all its various forms.”
Indeed, the U.S. Attorney’s Office for the Northern District of Georgia has prosecuted over 20 individuals over the last 12 months for so-called Stolen Identity Refund Fraud. These cases charge individuals who use third-party personal information – names, social security numbers, and dates of birth – to file false federal tax returns for refunds. Many times the victims, whose information is taken through internet scams or from public sources, do not realize that their identity has been stolen until they try to file a tax return of their own with the IRS, only to learn that someone else has already filed a tax return in their name.
"These unscrupulous defendants thought they had devised clever schemes to thwart the IRS and steal from American taxpayers" stated Veronica F. Hyman-Pillot. “As the defendants in these cases have learned, stealing from the American people will not be tolerated and you will be held accountable. IRS Criminal Investigation, along with its law enforcement and Department of Justice partner's, will continue to actively investigate those individuals who prey on unsuspecting victims and try to undermine the integrity of the U.S. tax system."“These cases affirm that the Department of Justice is committed to investigating and prosecuting all types of tax fraud,” said Assistant Attorney General for the Tax Division Kathryn Keneally. “I thank the U.S. Attorney’s Office and IRS-Criminal Investigation for their diligent efforts to fight tax fraud, and we in the Tax Division will continue to work with our law enforcement partners to bring tax cheats to justice.”
In addition to Stolen Identity Refund Fraud prosecutions, federal prosecutors in the Northern District of Georgia, in conjunction with the U.S. Department of Justice Tax Division, and Special Agents of the Internal Revenue Service Criminal Investigation, continue to investigate and prosecute more “traditional” tax fraud cases, where individuals are charged with fraudulently filing tax returns of their own.Current tax prosecutions include the following:
- Earlier this week, Kenneth and Kimberly Horner of Conyers, Ga., were arraigned before United States Magistrate Judge Gerrilyn G. Brill on an indictment that charges them with four counts of filing false personal and corporate tax returns for the years 2007 and 2008. The indictment alleges that the Horners, who owned and operated Topcat Towing and Recovery, Inc., materially underreported gross receipts or sales and total income on their corporate and personal tax returns, respectively.
- On April 29, 2014, Amberula Levitt, of East Point, Ga., is scheduled to be sentenced following her guilty plea in October 2013, to willfully filing false tax returns. According to the indictment and other information presented in court, Levitt operated Tax Time Tax Service (“Tax Time”), a tax preparation business with multiple locations throughout metro Atlanta. Levitt fraudulently under-reported the earnings from Tax Time on her personal tax returns. For the years 2004 through 2009, Levitt owes approximately $620,000 in back taxes to the IRS.
- On March 6, 2014, DeMarco Doxie of Peachtree City, Ga., was arraigned on a superseding indictment charging him with multiple wire and mail fraud counts, and four counts of filing false tax returns for the years 2008 through 2011. The indictment alleges that from June 2007 through August 2011 Doxie defrauded his employer by creating a fictitious company that he then used to submit to his employer numerous fraudulent invoices for payment. The indictment further charges that Doxie materially underreported his income on his personal income tax returns from 2008-2011.
And as an example of the long memory federal law enforcement can have, Ali Ibrahim, formerly of Tucker, Georgia, pled guilty on February 5, 2014 to federal tax evasion for underreporting his taxable income on his 1990 tax return. Ibrahim became a fugitive from justice following his indictment in January 2001, only to be arrested and extradited from Canada almost 13 years later in December 2013. Ibrahim was sentenced on March 26, 2014 to a time served sentence of approximately 18 months.
Members of the public are reminded that indictments only contain charges. A 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.
These cases are being investigated by the Internal Revenue Service Criminal Investigation.
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/.
Tarpon Springs Man Sentenced to More Than 10 Years for False Invoice SchemeRead the Press Release
Tampa, Florida – U.S. District Judge Steven D. Merryday today sentenced Otto Biltres (42, Tarpon Springs) to ten years and one month in federal prison for wire fraud and identity theft. As part of the sentence, the court also entered a money judgment in the amount of $2.7 million, the proceeds of the charged criminal conduct. Biltres pleaded guilty on November 25, 2013.
According to court documents, during a three-year period, Biltres, the owner of Biltres Staffing of Tampa Bay, LLC (Biltres Staffing), a temporary employee staffing company, submitted a series of false and fraudulent invoices to TempPay Inc., an Ohio based factoring company. “Factoring” is a financial transaction in which a business sells its accounts receivable (invoices) to a third party (the factor) at a discount. The factor advances a percentage of the face amount of the invoice to the business and collects the full amount from the customer in due course. The factor then pays the balance to the business minus the factor’s commission and other fees. The invoices in this case purportedly related to four companies to which Biltres was supplying temporary employees. In truth, Biltres’s company had no business relationship with those entities. In order to create the illusion that the bogus invoices were genuine, Biltres opened post office boxes, bank accounts, e-mail accounts and websites in the names of the purported client companies. He gradually increased the amounts of the fraudulent invoices over time, and used proceeds obtained through later fraudulent invoices to repay earlier fraudulent invoices. When the scheme was detected, TempPay suffered a loss in excess of $2.7 million.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Bob Mosakowski.
Students Learn About Gun SafetyRead the Press Release
OPELOUSAS, La. –The U.S. Attorney’s Office, the Baton Rouge Constable’s Office, and the Opelousas Police Department recently sponsored gun safety demonstrations at six St. Landry Parish elementary schools where students learned about the serious dangers of firearms.
The Louisiana Law Enforcement Gun Safety Program was held at Northeast Elementary, Park Vista Elementary, Grolee Elementary, J.S. Clark Leadership Academy, Southwest Elementary and South Street Elementary schools in Opelousas from March 10th to April 1st. The programs featured gun safety demonstrations by Baton Rouge Constables John Lawton and Brian Firmin, and Opelousas Police Chief Perry Gallow who spoke to the children about the dangers of juvenile gun use. U.S. Attorney Finley, along with members of her staff, Assistant U.S. Attorney Myers Namie, Law Enforcement Community Coordinator Mike Campbell, Contract Legal Technical Writer Henri LeJeune and Intelligence Specialist Aaron Broussard attended the events at different times and spoke to the children about the importance of taking the program seriously and the role of the U.S. Attorney’s office in prosecuting gun crimes.
The program not only brought students face-to-face with the dangers of firearms, but it also tested their knowledge of gun safety. The instructor showed the students various handguns and asked them if the weapons were real or fake. The students in many cases were unable to distinguish between real or fake guns because a number of them look, feel and weigh the same as real guns. At the end of the program, students watched as a .357 magnum fired a bullet into a watermelon inside of a protective enclosure. Students were instructed that weapons have to be handled safely, and that they should always let adults know if they can access guns.
“Safety of children in the Western District of Louisiana is of the utmost concern for this office,” Finley said. “Firearms are one of the leading causes of death of elementary school age children in this state. The Gun Safety Program helps educate students on how to react when finding a gun. This program can save a life. I want to thank the Baton Rouge Constables Office and the Opelousas Police Department for their commitment to the children of our community and their willingness to host these events.”
“I’m very grateful to the U.S. Attorney’s Office and the Baton Rouge Constables Office for helping to make this program possible,” Gallow said. “The partnership provides valuable information to children regarding guns and gun safety. The best information as well as the correct information saves lives, and that is our goal.”
Finley also said she hopes to have a Gun Safety Training Program for the Western District of Louisiana in the near future. The program would include trained instructors and a ballistics trailer to house the gun and watermelon used during the presentation.
The U.S. Attorney’s Office, Baton Rouge Constable’s Office, and the Opelousas Police Department sponsored the event. For more information about the program, contact U.S. Attorney’s Office Law Enforcement Coordinator Mike Campbell at 318-676-3600.
Statement by Attorney General Holder <br /> on Weekend Shootings in KansasRead the Press Release
WASHINGTON—U.S. Attorney General Eric Holder released the following statement Monday regarding the tragic shootings in Kansas yesterday:
“I was horrified to learn of this weekend's tragic shootings outside Kansas City. These senseless acts of violence are all the more heartbreaking as they were perpetrated on the eve of the solemn occasion of Passover.
“Justice Department prosecutors will work with their state and local counterparts to provide all available support and to determine whether the federal hate crimes statute is implicated in this case.“No matter what, we will do everything in our power to ensure justice is served in this case on behalf of the victims and their families. Our thoughts and prayers go out to all those affected by these heinous acts.”
Smuggler Gets Enhanced SentenceRead the Press Release
McALLEN, Texas ‐ Demetrio Vallejo, 41, of Edcouch, has been ordered to federal prison for nearly five years as a result of his conviction of smuggling undocumented aliens, announced United States Attorney Kenneth Magidson. Vallejo pleaded guilty Oct. 11, 2013.
Today, U.S. District Judge Randy Crane sentenced Vallejo to a sentence of 57 months imprisonment. The sentence was enhanced as the court took into consideration he had sexually assaulted a female undocumented alien and that a dangerous weapon was used during the assault. Following Vallejo’s prison term, he was further ordered to serve a three-year term of supervised release.
On June 29, 2013, deputies with the Hidalgo County Sheriff’s Office (HCSO) arrived at house in Edcouch. At that time, they encountered Vallejo and a female undocumented alien. The investigation resulted in the discovery that Vallejo had driven the undocumented alien and other undocumented aliens to a house where they were harbored and would also bring them food.
Co-defendants Esther Cano, 33, and George Love, 37, both of Weslaco, received respective sentences of 24 and six months for their roles in the alien smuggling conspiracy. Cano’s sentenced was enhanced because she had threatened two undocumented aliens after being arrested.
The investigation leading to the charges was conducted by Homeland Security Investigations and HCSO. Assistant United States Attorneys Kimberly Ann Leo and Kristen Rees prosecuted the case.
Salmon Man Pleads Guilty to Possession of Unregistered FirearmRead the Press Release
POCATELLO – Odin Ray Jarshaw, 56, of Salmon, Idaho, pleaded guilty today to one count of possession of an unregistered firearm, U.S. Attorney Wendy J. Olson announced. Jarshaw was indicted by a federal grand jury in Pocatello on October 23, 2013.
According to the plea agreement, on May 9, 2013, the defendant was in possession of a Vulcan Arms, model 47, 7.62 x 39 caliber rifle, with a sawed-off barrel, that was not registered to him in the National Firearms Registration and Transfer Record. According to the plea agreement, Jarshaw agreed to forfeit the sawed-off rifle and a fully automatic machine gun.
The charge is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Sentencing is set for July 7, 2014, before U.S. District Judge Edward J. Lodge at the federal courthouse in Pocatello.
The case was investigated by Lemhi County Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The case was prosecuted as part of Idaho’s Project Safe Neighborhoods Program, which seeks to reduce gun violence in Idaho.
S.F. Valley Woman Who Orchestrated Health Care Fraud Scheme That Submitted Nearly $25 Million in Bogus Bills Sentenced to over 7 YearsRead the Press Release
LOS ANGELES – A North Hollywood woman who worked in the health care industry was sentenced this afternoon to 76 months in federal prison for orchestrating a scheme that submitted nearly $25 million in fraudulent bills to Medicare for services and supplies that were medically unnecessary and sometimes were never provided.
Susanna Artsruni, 46, who formerly owned a durable medical equipment (DME) company and worked at a number of medical clinics in Los Angeles, was sentenced by United States District Judge Margaret M. Morrow.
Artsruni, who often used the names “Mary” and “Rose,” was sentenced after pleading guilty earlier this year to one count of health care fraud and one count of money laundering. In addition to the prison term, Judge Morrow ordered Artsruni to pay $9,624,556 in restitution to the Medicare program.
In a plea agreement filed in United States District Court, Artsruni admitted that she defrauded Medicare in a number of ways. In one part of the scheme, Artsruni had physician’s assistants at three Los Angeles medical clinics sign prescriptions and orders for medically unnecessary DME and diagnostic tests that were later referred to other Medicare providers that billed for the equipment and tests. Artsruni also caused the three clinics to bill Medicare for medically unnecessary services.
Artsruni fraudulently billed Medicare on behalf of her own DME supply company, Midvalley Medical Supply in Van Nuys, for medically unnecessary DME based on referrals from one of the three medical clinics.
In total, Artsruni caused more than $24.8 million in fraudulent claims to be submitted to Medicare, which paid more than $9.6 million on the bogus bills.
Artsruni also admitted that she wrote checks totaling more than $35,000 from the Midvalley bank account to three corporations that had no connection to the medical industry and apparently had not provided any legitimate business services to Midvalley. Artsruni admitted that she wrote these checks to conceal the nature of the funds as the proceeds of health care fraud and used the three corporations to launder these funds.
At the time that she worked at two of the clinics and wrote one of the checks to launder the proceeds of her fraud, Artsruni was free on bond in another health care fraud case. Although the terms of her pre-trial release in the 2008 case dictated that she not commit crimes and forbid her from working at medical facilities, Artsruni concealed her activities from her Pre-Trial Services Officer and engaged in the fraudulent conduct that led to most of the losses suffered by Medicare in the second case.
A second defendant in the case, Erasmus Kotey, a physician's assistant who worked with Artsruni in a medical clinic on North Vermont Avenue in Los Angeles, has pleaded guilty (see: http://www.justice.gov/usao/cac/Pressroom/2014/038.html) and is scheduled to be sentenced by Judge Morrow on September 8.
Charges also have been filed against three others associated with the money laundering and health care fraud schemes (see: http://www.justice.gov/usao/cac/Pressroom/2014/040.html). The three defendants in this case have pleaded not guilty and are scheduled to go on trial in early 2015.
All of these cases are the products of an investigation by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; and IRS - Criminal Investigation.
The cases were brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.
Release No. 14-043
Retired Buffalo Police Officer Pleads Guilty to Defrauding Injured on Duty ProgramRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Patrick S. O'Mara, 52, of Buffalo, N.Y., pleaded guilty to wire fraud before Chief U.S. District Judge William M Skretny. The charge carries a maximum penalty of 20 years in prison, a $250,000 fine or both.
Assistant U.S. Attorneys Trini E. Ross and John E. Rogowski, who are handling the case, stated that on February 16, 2004, the defendant, a Buffalo Police Officer, was placed on Injured on Duty Status (IOD) by the City of Buffalo. O'Mara was placed on IOD status for exacerbation of cervical and lumbar strains previously suffered while on duty. The defendant remained on IOD status until October 18, 2004 when he was ordered to return to light duty. O'Mara again claimed to have injured his right arm on March 21, 2005 while lifting two reams of copy paper. While the defendant did not report the injury to his superiors until 23 days later, the defendant was placed on IOD status once again on September 6, 2005 where he remained until he retired.
While the defendant's primary care physician did not recommend that O'Mara return to work, several independent medical exams concluded that the defendant was not permanently disabled. One doctor noted that the defendant walked into his office using a cane, but later witnessed O’Mara walking in the parking lot without any limp. In addition, the investigation determined that the defendant worked as a paid musical director and church organist during most, if not all, of the time that he has been on IOD status. Such work would have involved the use of his right arm.The defendant retired from the Buffalo Police Department effective March 31, 2012, following an independent medical exam and administrative hearing. During an interview with Special Agents from the Federal Bureau of Investigation on May 9, 2012, the defendant stated (among other things) that he was capable of performing light duty and had been playing the organ for a church. Nevertheless, the defendant stated there was no incentive to return to work on light duty status because, “it is demeaning to sit at a desk and answer phones and I consider it to be punishment,” and “the pay on IOD status which is without taxes is actually an incentive to stay off duty in IOD status.”
“The IOD program is an important way in which injured officers continue to receive compensation for their difficult and oftentimes heroic work,” said U.S. Attorney Hochul. “When the program is abused, however, more than taxpayers suffer. Those officers who remain faithfully at their post are forced to work longer hours, more often, and in turn have an even greater chance of experiencing injury. While the vast majority of officers are honest and exemplify the highest ideals of their profession, this Office will not hesitate to act when, as here, it finds evidence of fraud.”O'Mara's is one of two Buffalo Police Officers charged with defrauding the IOD Program. On May 9, 2012, Robert Quintana, who has been on IOD status since March of 2005, was arrested and also charged with mail and health care fraud. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the culmination of an investigation by Special Agents of the Federal Bureau of Investigation, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Sentencing is scheduled July 30, 2014 at 10:00 a.m. before Judge Skretny.Registered Sex Offender Pleads Guilty to Sending Obscene Material to A MinorRead the Press Release
WICHITA, KAN. A registered sex offender pleaded guilty Monday to sending obscene material to a minor while he was a patient at Larned State Hospital, U.S. Attorney Barry Grissom said.
Christopher M. Case, 34, pleaded guilty to one count of transferring obscene material to a minor. In his plea, he admitted that he resided in the Sexual Predator Treatment Program of Larned State Hospital when he committed the crime. In mid-2011 he obtained access to a smartphone, which he shared with other residents. In December 2011 and January 2012 he learned that another resident of the program was using the smartphone to communicate with a 13-year-old female via email and chat. The girl was in Montana.
On January 16, 2012, Case used the smartphone to send the girl video of himself masturbating.
Sentencing is set for June 30. Both parties have agreed to recommend a sentence of 20 years in federal prison. Grissom commended the Wichita Police Department's Internet Crimes Against Children Task Force, the Kansas Attorney General's office, Assistant U.S. Attorney Jason Hart and Steve Karrer of the Kansas Attorney General's Office for their work on the case.
Organizers of Long Running Marijuana Production and Distribution Ring Sentenced to PrisonRead the Press Release
The leader of a marijuana manufacturing and distribution conspiracy was sentenced today to five years in prison for drug and money laundering charges, announced U.S. Attorney Jenny A. Durkan. SCOTT JOHNSON, 48, of Bellingham, Washington also forfeited property in Whatcom County and Priest River Idaho, as well as multiple luxury vehicles, snowmobiles, boats and jet skis. JOHNSON also forfeited gemstones, a sculpture valued at $12,000, and seventeen firearms. JOHNSON and his cohorts admit they entered the marijuana conspiracy because of their greed. At sentencing, U.S. District Judge James L. Robart told JOHNSON, “you broke the law in a flagrant manner… you are a drug dealer and a criminal.”
According to filings in the case, JOHNSON was the leader of a group of marijuana cultivators and undertook sophisticated steps to market the marijuana across the country. He used others to transport the marijuana hidden in a motorhome. JOHNSON flew to New York on multiple occasions to finalize the sale to buyers in that city. Another leader in the organization, JAY WRIGHT, 50, also of Bellingham, was sentenced to three years in prison today. WRIGHT assisted in running the marijuana grows and served as the “number two” leader behind JOHNSON. Judge Robart told WRIGHT that he and others had been “ensnared by the lure of money, and there must be jail time to counteract that.”
Items forfeited in the case include: fourteen gemstones valued at $9,279; a 2012 Chevrolet Silverado 2500 LTZ; a 2009 Mercedes-Benz GL550; a 2009 Acura TL Sedan; a 2008 Honda Civic; a 2007 BMW 328i sedan; a 2004 Cadillac Escalade SUV; a 1997 Ford Expedition Eddie Bauer SUV; a forklift, backhoe, tractor, and snow blower; two motorcycles; seven snowmobiles; a 2000 Maxum Sport boat; a trailer valued at over $10,000; two wave runners; and 17 firearms seized in Bellingham and Priest River including hand guns, shot guns, and rifles.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved.
The case was investigated by the Drug Enforcement Administration (DEA), U.S. Marshal Service, and Washington State Patrol. The case was prosecuted by Assistant United States Attorney Mark Parrent.
Opelousas Man Sentenced to 180 Months in Prison for Possessing and Receiving Child PornographyRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced that former child psychiatrist Gary Jefferson Byrd, 72, of Opelousas, La., was sentenced on Friday by U.S. District Judge Elizabeth E. Foote to 15 years in prison and 10 years of supervised release for possessing and receiving child pornography.
At the two-day jury trial in October of 2013, witness testimony and documents admitted into evidence established that from February 2008 to April 2011, Byrd ordered 44 compact discs containing videos of child pornography from a Canadian company. United States Postal Inspectors executed a search warrant on Byrd’s home and found stacks of compact discs containing tens of thousands of images of child pornography that Byrd had downloaded from the internet. Byrd had also printed hundreds of images of child pornography that he kept in files in his bedroom.
Byrd was previously convicted in 1992 by a federal jury of possessing child pornography and served 10 years in prison for that crime. Prior to the 1992 conviction, his employment was as a child psychiatrist.
This case is part of Project Safe Childhood, a U.S. Department of Justice launched nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Postal Service Investigations conducted the investigation. Assistant U.S. Attorney John Luke Walker prosecuted the case.Opelousas Man Sentenced for Robbing and Assaulting Mail CarrierRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced that Brandon B. Handy, 33, of Opelousas, La., was sentenced Friday by U.S. District Judge Elizabeth E. Foote to 24 years in prison and five years of supervised release for assaulting and robbing a U.S. Postal Service contract carrier.
During a two-day trail in December of 2013, witness testimony and documents admitted into evidence established that Handy and another individual wearing masks and armed with a pistol robbed a U.S. Postal Service contract driver on August 13, 2011, at the Lawtell Post Office. Handy approached the driver from behind, grabbed him by the neck, and wrestled him to his knees while the other individual took a bag of mail from the employee’s truck. After Handy and the other individual fled the scene, the driver was transported to a nearby hospital where he was treated for injuries.
The U.S. Postal Inspection Service and the St. Landry Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Brett L. Grayson prosecuted the case.
Oakland Residents Charged in False Tax Refund Fraud SchemeRead the Press Release
OAKLAND – Akysha Rockwell made her initial appearance today and Paul Lamont Lee made his initial appearance on Friday, April 11, 2014, in federal court on a 20-count indictment charging them with conspiracy to file false claims, false claims, and identity fraud, announced U.S. Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
According to the Indictment, unsealed today, between Jan. 12, 2012 and July 16, 2012, Lee and Rockwell participated in a scheme to obtain and help others obtain refunds from the IRS based on false claims. To accomplish this scheme, Lee and Rockwell allegedly obtained names, social security numbers, and dates of birth for numerous people. The defendants then electronically filed federal income tax returns, in the names of these other people, claiming refunds derived from false tax credits, including the Earned Income Credit, the Additional Child Tax Credit, and the American Opportunity Credit.
Lee and Rockwell, both of Oakland, were indicted on March 13, 2014.
The maximum penalty for each count of conspiracy to file false claims, in violation of a Title 18, U.S.C § 286, is 10 years in prison and a fine of $250,000. The maximum penalty for each count of false claims, in violation of a Title 18, U.S.C § 287, is five years in prison and a fine of $250,000. The maximum penalty for each count of identity fraud, in violation of a Title 18, U.S.C § 1028(a)(7), is two years in prison and a fine of $250,000.
Assistant U.S. Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Please note, an indictment contains only allegations and, as with all defendants, Rockwell and Lee must be presumed innocent unless and until proven guilty.
(Lee & Rockwell indictment )
North Carolina Woman Pleads Guilty to Stealing Benefit Payments from Social Security AdministrationRead the Press Release
BOSTON - A North Carolina woman, formerly of Boston, was convicted for stealing more than $179,000 in benefit payments from the Social Security Administration.
Mary Ann Allen, 75, pleaded guilty today before U.S. District Court Judge Denise J. Casper to theft of public money. Sentencing is scheduled for July 16, 2014.
The Social Security Administration (SSA) began an investigation regarding disability benefit payments that were being paid to a deceased individual since June 1973. In 1983, those benefits were converted into retirement benefits. In 1982, the individual and Allen opened a joint bank account with Bank of America to which the individual’s SSA benefit checks were deposited. The only signatories on the account were the individual and Allen’s. Until November 2009, the SSA continued depositing the individual’s benefits, ranging in installments between $400 and $827, into that account.
Further investigation by the SSA revealed that on August 24, 1984, the individual died. However, because the SSA was not notified of individual’s death, benefit payments were deposited until November 2009. During that period of time the SSA deposited $179,926 into the account. Between August 1984 and November 2009, Allen withdrew these funds in Massachusetts and North Carolina and used them for personal use.
In 2010, Allen was interviewed by SSA agents in North Carolina when she admitted that after the individual’s death she continued to receive his benefit payments and continued to withdraw the funds.
Allen faces up to 10 years in prison, three years of supervised release, a fine of up to $250,000 and $179,926 in restitution to the Social Security Administration.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of U.S. Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The case is being prosecuted by Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Newport News Man Pleads Guilty to Participating in MurderRead the Press Release
NEWPORT NEWS, Va. – Mustafah Kalil Muhammad, 27, of Newport News, Va., pleaded guilty today use of a firearm resulting in the death of Lloyd Robinson on January 8, 2010.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Royce E. Curtin, Special Agent in Charge of the Federal Bureau of Investigation’s Norfolk Field Office, and Richard W. Meyers, Chief of Newport News Police, made the announcement after the plea was accepted by United States District Judge Raymond A. Jackson.
Muhammad was charged, along with others, in a superseding indictment returned in July, 2013, with interference with commerce by robbery and use of a firearm resulting in death.
Muhammad faces a maximum penalty of life in prison when he is sentenced on July 23, 2014, in Norfolk.Muhammad is alleged to be part of a criminal organization known locally as “Thug Relations,” alternatively known as “the Duct,” “Warwick Lawnz,” “TR,” and “from the Duct to the Lawnz,” a neighborhood gang operating in the Aqueduct Apartments, St. Michael’s Apartments, Mariner’s Landing Apartments, Heritage Trace Apartments, as well as Warwick Lawns, Warwick Town Home, Sharon Drive, and the Savage Drive areas of Newport News, Virginia. The alleged gang members are accused in the indictment of protecting their criminal enterprise and activities through murder, attempted murder, witness intimidation, robbery, and narcotics distribution. In a statement of facts filed with his plea agreement Muhammad admitted to his participation in the drug related home invasion and murder of Lloyd Robinson on January 8, 2010.
This investigation was led by FBI and the Safe Streets Task Force, with assistance from the Newport News Police and the Virginia State Police. Assistant United States Attorneys Howard J. Zlotnick and Lisa R. McKeel, and Special Assistant United States Attorney Jonathan A. Ophardt 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.
New York Attorney Stanley L. Cohen Pleads Guilty to Federal Tax ChargeRead the Press Release
SYRACUSE, NEW YORK - Stanley L. Cohen, an attorney with offices on Avenue D, New York City and Jeffersonville, New York, entered a guilty plea in United States District Court in Syracuse this morning to a felony offense of corruptly obstructing and impeding the Internal Revenue Service, according to United States Attorney Richard S. Hartunian and Acting IRS Criminal Investigations Special Agent-in-Charge Shantelle P. Kitchen.. Sentencing is scheduled in U.S. District Court on August 21, 2014 at 10:00 am before the Hon. Norman A. Mordue.
Under terms of a plea agreement, Cohen is to be sentenced to 18 months incarceration. He is also required within the next ten days to enter guilty pleas in the Southern District of New York to pending charges of failure to file income tax returns. As part of his agreement, Cohen is also required to pay all federal and state income taxes due and owing from the years 2005 through 2010. He has also waived any appeal and collateral attack of his conviction.
This case followed a lengthy investigation led by the Internal Revenue Service-Criminal Investigations, Syracuse Office. Investigators found that the defendant failed to file both federal and state tax returns for the years 2005-2010. In those years, he only filed a single extension to file his return and made only a modest payment towards taxes due and owing. He subsequently never filed state or federal tax returns for these six years.
In court, the government stated that its evidence revealed that in the tax year 2004, the last year Cohen filed an income tax return, he had claimed gross receipts of $289,000 when in fact investigators ascertained that he had deposits in excess of $426,000 for that year. Investigators determined that for the years 2004 through 2010, Cohen had deposits totaling $3,673,906.85 in his financial accounts.
In the course of the investigation, judicially authorized search warrants were executed at Cohen’s law office on Avenue D in New York City and his law office in his home in Jeffersonville, New York. Investigators found that essentially he kept no financial records regarding income or payment of fees from clients. From 2005 to 2010, he also failed to file either a 1099 or W2 for payments made to a law office assistant, who performed services for him during those years.
A search warrant executed on a safe deposit box that Cohen maintained in a bank in Jeffersonville, New York revealed that he had $50,000 in cash. Bank records revealed that Cohen accessed his safety deposit box 77 times from 2006 through 2008 and made deposits of cash totaling approximately $504,000 at that bank. Additional investigation revealed that approximately $183,500 of this amount was deposited by Cohen on days when he accessed his safety deposit box. On many occasions, Cohen made multi-thousand dollar cash deposits at the Jeffersonville bank and frequently exchanged small bills for $100 bills.
Additional evidence developed during the investigation revealed that Cohen made deposits of cash to his financial accounts as follows:
In 2004 he made in excess of $194,000 in cash deposits, in 2005 more than $237,000, in 2006 more than $321,000, in 2007 more than $395,000, in 2008 more than $405,000, in 2009, after the execution of the referenced search warrants, he deposited more than $54,000 and in 2010 more than $147,000 in cash. Many of these deposits were made in amounts under $10,000, thus avoiding the filing of currency transaction reports required under the law.
Investigators also found that Cohen would cause wire transfers of cash to his accounts to be made by clients, many of whom were residents of the Akwesasne Reservation. These wire transfers all made by MoneyGram from the Speedway Convenience Store located near the Reservation. The wire transfers totaled more than $643,000 between October 2004 and December of 2008.
United States Attorney Richard S. Hartunian stated, “As citizens, we all have an obligation to pay our fair share of taxes needed to support the United States. Stanley Cohen sought to avoid his tax obligations by consistently failing to file his federal and state tax returns over a six year period and by operating his law practice in a manner that corruptly hid millions of dollars in legal fees from the Internal Revenue Service. No citizen, especially an attorney, is above the law. The Internal Revenue Service has done a commendable job in helping to bring Mr. Cohen to justice.”
Acting Special Agent in Charge Shantelle P. Kitchen said, “The investigation and prosecution of individuals who brazenly attempt to obstruct the Internal Revenue Service and to prevent it from performing its mission is vital to maintaining public confidence in our tax system. In addition to serving as a warning to those who might contemplate similar activity, this outcome provides the honest American taxpayer with a timely reassurance that their government is committed to making sure that everyone pays their fair share.”
The case was investigated by the Internal Revenue Service-Criminal Investigations, Syracuse Office, the New York State Police and the Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorneys Stephen Green and John Duncan.
For further information please contact Assistant U.S. Attorney John Duncan at 315-448-0672.
Naples Resident Pleads Guilty in Treasury Check Cashing and Stolen Identity SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Ronald J. Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, announce that Victor Martinez Pantoja, 23, of Naples, pled guilty to one count of theft of government money, in violation of Title 18, United States Code, Section 64l, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2. Sentencing is scheduled for June 30, 2014 at 2:45 p.m. before U.S. District Judge Jose E. Martinez in Key West.
According to court documents, on November 21, 2013, Pantoja met with two FBl Under Cover Employees (UCEs) and negotiated a deal to cash fraudulently obtained U.S. Treasury income tax refund checks. During the meeting, Pantoja gave the UCEs three Treasury checks totaling $27,263 to be cashed, provided a copy of a counterfeited Florida driver license and social security card for each corresponding Treasury check, and forged the names of the individuals to endorse the back of each check. Pantoja obtained these U.S. Treasury checks by filing fraudulent tax returns using the identities of individuals who died in the previous tax year. He obtained the deceased individuals’ identities from the Internet.
Court documents also state that the UCEs agreed to cash the Treasury checks within three business days and to return $20,500 to Pantoja. On November 26, 2013, the UCEs gave Pantoja $20,500 as payment for the previous three Treasury checks. During this meeting, Pantoja provided the UCEs with 6 Treasury checks totaling $35,547, which were to be cashed by the UCEs.
Pantoja faces a maximum sentence of ten years in prison for the theft of government money charge, and a mandatory term of two years in prison, consecutive to any other term in prison, for the aggravated identity theft charge.
Mr. Ferrer commended the investigative efforts of FBI, IRS-CI, and the USPIS. This case is being prosecuted by Assistant U.S. Attorney Gera R. Peoples.
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.
Muskogee Man Pleads Guilty to Failure to Register as Sex OffenderRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that JUSTIN WAYNE RIGGS, age 26, of Muskogee, Oklahoma, pled guilty to Failure to Register as Sex Offender, in violation of Title 18, United States Code, Sections 2250(a)(1), 2250(a)(2)(A) and 2250(a)(3).
The charge arose from an investigation by the United States Marshal Service. The defendant was indicted in March, 2014.
The Indictment alleged that from in or about April 2013, until on or about October 16, 2013, in the Eastern District of Oklahoma, and elsewhere, the defendant, an individual required to register as a sex offender under the Sex Offender Registration and Notification Act, after having been Court-Martialed and convicted of felonies by the United States of America Department of the Army on or about May 6, 2011, for the offenses of knowing possession of images of child pornography and distribution of child pornography, knowingly failed to register and update his registration as required by the Sex Offender Registration and Notification Act.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the defendant’s guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion.
The statutory range of punishment is not more than 10 years imprisonment and/or up to a $250,000.00 fine. The defendant remains in the custody of the United States Marshal Service.
Assistant United States Attorney Edward Snow represented the United States.
Minneapolis Man Sentenced to 20 Years in Synthetic Drug ConspiracyRead the Press Release
FARGO – Acting U.S. Attorney Christopher C. Myers announced that on April 14, 2014, Casey Stevens Rosen, 24, Minneapolis, Minn., was sentenced before U.S. District Judge Ralph R. Erickson to serve 20 years in prison for conspiracy to possess and distribute analogues resulting in serious bodily injury or death.
The conspiracy involved the distribution of an illegal substance through an online business called Motion Resources which imported illegal psychedelic hallucinogens from several countries and sold them throughout the United States. Along with co-conspirator Andrew Spofford the hallucinogens were distributed throughout the Grand Forks, N.D., area. At least 13 others have been charged in connection with “Operation Stolen Youth.” Judge Erickson also ordered that Rosen pay a forfeiture of $100,000 in addition to paying $100 special assessment to the Crime Victims Fund and serve five years supervised release.
The case was investigated by Homeland Security Investigations, Drug Enforcement Administration, Food and Drug Administration, North Dakota Bureau of Criminal Investigations, and Grand Forks Police Department.
First Assistant U.S. Attorney Chris Myers prosecuted the cases.
Milwaukee Woman Pleads Guilty to Felony Tax Charges, Mail Fraud and Food Stamp FraudRead the Press Release
James L. Santelle, the United States Attorney for the Eastern District of Wisconsin, announced that on April 11, 2014, Tiffiny Harden (age 30) of Menomonee Falls, plead guilty before Judge Randa to filing false tax returns for over 20 taxpayers and fraudulently obtaining over $120,000 in tax refunds.
Court documents indicate that Harden sought tax refunds by claiming false incomes, false education credits and/or claiming false dependents for the taxpayers. Several of the taxpayers told law enforcement officials that they did not know Harden and did not know how she got their information. Others stated that Harden had offered to help them fill out their returns and they provided her with their identifying information, but never heard back from her. Many of the victims indicated that Harden had offered to fill out their tax returns for them, but had never provided her with the information regarding the employer, educational status, or the dependents listed in the returns using their identities. At least two taxpayers did not know that they were claimed as dependents.
Harden used the United States mail to receive and send false information to the IRS. In addition, during the time she was receiving the tax refunds, she also received food stamps. In order to receive this federal benefit, she claimed in her Food Share application to be homeless during that period and failed to disclose the fact that she had received over $100,000 from the fraudulent tax return scheme.
Based on this guilty plea, Harden faces up to 30 years in prison and fines of up to $510,000. Harden has also agreed to pay restitution to the IRS in the sum of $120,125.00 and $400 to the U.S. Department of Agriculture, Supplemental Nutrition Assistance Program.
Harden's sentencing is scheduled for July 31, 2014.
This case was jointly investigated by the IRS (Criminal Investigative Division), the United States Postal Inspection Service and the United States Department of Agriculture.Michigan Aquarium Employee Sentenced for Illegal Trafficking of Marine LifeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Tracy Dunn, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and Edward Grace, Deputy Assistant Director, U.S. Fish & Wildlife Service, Office of Law Enforcement, announce that Joseph Franko, 35, of Romulus, Michigan, was sentenced today in in Key West for conspiring to purchase, transport, harvest and sell sea fans, ornamental tropical fish and alligators, knowing the wildlife was taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, in violation of Title 16, United States Code, Sections 3372(a)(2)(A), 3372(a)(4), and 3373(d)(1) and (2), all in violation of Title 18,United States Code, Section 371.
United States District Judge Jose E. Martinez, who had previously accepted Franko’s guilty plea, imposed a sentence of five months in prison, followed by five months of home confinement with electronic monitoring, and a two year term of supervised release. The Court determined that he was unable to pay a criminal fine. At the conclusion of the hearing Franko was remanded into the custody of the U.S. Marshal’s Service. Franko’s co-defendant, Richard Perrin, 80, also of Romulus, was sentenced in April in the same case to a three year term of probation, a criminal fine of $15,000, and forfeiture of the vehicle used in the commission of the Lacey Act violations.
According to the indictment and joint factual statements submitted to the Court, during the period extending from December 2008 through approximately December 2011, Perrin and Franko engaged in a conspiracy to purchase, harvest, and transport marine life and reptiles from Florida to Michigan for sale through a business known as Tropicorium, Inc. Perrin was the owner of Tropicorium, engaged in the day-to-day management and operation of the corporation, while Franko was an employee. Tropicorium was organized in 1993 under the laws of Michigan with its principal place of business in Romulus. Tropicorium was engaged in the purchase and retail sale of marine life and reptiles, including sharks, marine invertebrates, sea fans (Gorgonia flabellum and Gorgonia ventalina), ornamental tropical fish, and alligators (Alligator mississippiensis).
The defendants admitted that they failed to acquire or possess the licenses required by Florida Statute for the marine life they harvested during multiple trips to the Florida Keys. Additionally, the sea fans taken by the defendants and sold in Michigan are prohibited from being harvested from the waters of the State of Florida or the Florida Keys National Marine Sanctuary. According to the Factual Statements, Perrin and Franko also made stops while en route to and from the Keys in the area of Big Cypress National Preserve, where they illegally poached juvenile alligators to sell through Tropicorium. Unknown to the defendants, on one occasion they actually sold a baby alligator and illegal sea fans from a Florida harvesting trip to an undercover Special Agent of the Fish & Wildlife Service. The two defendants also utilized a facility on Grassy Key as a maintenance base for their harvested marine life until they were ready to ship or transport the specimens to Michigan for sale.
Mr. Ferrer commended the investigative efforts of NOAA Office of Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement. Mr. Ferrer also thanked the Michigan Department of Natural Resources and the Florida Fish and Wildlife Conservation Commission. This case was prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Antonia Barnes.
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.
Manhattan U.S. Attorney Announces Seizure of Radio Equipment from Pirate Radio StationsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Travis LeBlanc, Acting Enforcement Bureau Chief of the Federal Communications Commission (“FCC”), announced the unsealing of two complaints seeking the forfeiture of radio transmission and production equipment allegedly used in the illegal broadcast of pirate radio stations on a total of four different FM frequencies, and further announced that on April 2, 2014, FCC agents and Deputy U.S. Marshals, pursuant to warrants, seized the radio transmission and production equipment identified in the two complaints.
The Communications Act of 1934 makes it unlawful to operate radio broadcasting equipment above certain low-intensity thresholds without having a license issued by the FCC, and authorizes the seizure and forfeiture of any equipment used with willful and knowing intent to broadcast without an FCC license.
FCC Acting Enforcement Bureau Chief Travis LeBlanc said: “As alleged, these pirate radio stations were for-profit businesses that broke the law to line their own pockets while disrupting legitimate broadcasters. They should be out of business and off the air.”
According to the two Complaints unsealed in Manhattan federal court, and various unsealed documents associated with the two warrants executed on April 2:
FCC agents identified a commercial space at 80-84 West 181st Street in the Bronx as the production studio for “Rika FM,” which illegally broadcasts its programming on 94.5 and 94.9 MHZ. FCC agents also identified a residence at 1370 St. Nicholas Avenue in Manhattan as the location of the radio transmission equipment by means of which “Rika FM” was illegally broadcast.
FCC agents also identified radio transmission equipment at a second residence at 1370 St. Nicholas Avenue in Manhattan that was being used to illegally broadcast on 95.3 MHZ and 100.1 MHZ.
Mr. Bharara praised the investigative work of the Federal Communications Commission and also thanked the United States Marshals Service for its assistance.
Assistant United States Attorney Arastu K. Chaudhury is in charge of these cases.
FCC Seizure Complaint 1
FCC Seizure Complaint 2Manchester Man Sentenced for Cocaine and Crack DistributionRead the Press Release
CONCORD, NEW HAMPSHIRE –Juan Parrilla, 39, of Manchester, New Hampshire, was sentenced in United States District Court for the District of New Hampshire to 42 months in prison, for engaging in the distribution of cocaine and possessing crack cocaine with the intention of distributing it, announced United States Attorney John P. Kacavas.
An undercover law enforcement officer of the Manchester Police Department engaged in numerous hand-to-hand purchases of cocaine from Parrilla beginning in October 2011. A search warrant was executed at Parilla’s residence in Manchester and law enforcement seized 117 grams of crack cocaine.
The investigation of Parrilla was conducted by members of the Manchester, New Hampshire, Police Department Special Investigations Unit and prosecuted by Assistant United States Attorney Terry Ollila.Manager of Hud Section 8 Housing Found Guilty in Manhattan Federal Court on All Counts Relating to Bribery and False StatementsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Christina Scaringi, the Special Agent-in-Charge of the Northeastern Region of the U.S. Department of Housing and Urban Development (“HUD”), Office of Inspector General (“OIG”), and James T. Hayes, Jr., the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), announced that NOVELETTE “PAT” CAMPBELL, a manager of the federally subsidized Tricham Houses in Manhattan, was found guilty on Friday, April 11, 2014, of accepting bribes in connection with federal program funds, conspiracy to accept bribes in connection with federal program funds, and four counts of false statements relating to HUD certifications. The investigation that led to CAMPBELL’s arrest and her conviction last week was undertaken by HUD-OIG. CAMPBELL was convicted after a one-week jury trial before U.S. District Judge George B. Daniels.
Manhattan U.S. Attorney Preet Bharara said: “As a unanimous jury found, for over a decade, Novelette “Pat” Campbell exploited her position as a manager of the Tricham Houses in Manhattan by illegally trading prime spots on the waiting list for federally subsidized apartments in exchange for cash. Her bribery scheme was uncovered by the dedicated investigators at HUD OIG and ICE HSI, and she now stands convicted after trial for her crimes.”
HUD OIG Special Agent-in-Charge Christina Scaringi said: “Friday’s verdict should send a strong message to those individuals who fail to exercise integrity in connection with HUD, we will vigorously pursue investigation and prosecution of all involved in order to maintain the integrity of our programs. Ms. Campbell’s case is especially egregious in that not only did she intentionally violate the Department's trust, she violated the trust of dozens of eligible families who followed the rules and waited years for a decent place to call home. Working in partnership with the U.S. Department of Homeland Security, Office of Homeland Security Investigations, the U.S. Attorney’s Office, and HUD OIG, we will continue to aggressively pursue allegations of corrupt management agent behavior.”
ICE HSI Special Agent-in-Charge James T. Hayes, Jr. said: “Instead of helping applicants who sought affordable housing, Ms. Campbell and her associates helped themselves to thousands of dollars in bribes and gifts from individuals who knew they were ineligible to receive government assistance. HSI and its law enforcement partners will continue to preserve the integrity of federally funded programs.”
According to the Indictment, as well as evidence presented at CAMPBELL’s trial:
From April 2000 through October 2011, CAMPBELL accepted bribes and engaged in a conspiracy to accept bribes from individuals who were not on a waiting list for subsidized housing at Tricham Housing. Rather than maintain the integrity of the waiting list and process applications in a first-come, first-serve basis as required by HUD, CAMPBELL sold spots on the waiting list for bribes. The people who paid bribes took apartments away from people who were on the waiting list for years, but never received apartments because CAMPBELL sold their spots for bribes. CAMPBELL accepted bribes ranging from $2,000 through $9,000, depending on the size of the apartment.
In addition, CAMPBELL falsified HUD certifications by falsely representing that all administrative procedures had been followed, when they had not, and, on two occasions, forged the signature of a tenant. CAMPBELL also altered original tenant applications for Section 8 housing to falsely add bribe payers as relatives of original applicants.
CAMPBELL, 55, of Bronx, New York, was convicted of six counts relating to accepting bribes in connection with federal program funds, conspiracy to accept bribes in connection with federal program funds, and four counts of false statements to HUD. The charges relating to accepting bribes in connection with federal program funds carry a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The count charging conspiracy to accept bribes in connection with federal program funds carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Each of the counts charging false statements funds carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. CAMPBELL is scheduled to be sentenced by Judge Daniels on August 12, 2014, at 10:00 a.m. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of HUD OIG and ICE HSI. He noted that the investigation is continuing.
This case is being handled by the Office’s General Crimes Section. Assistant U.S. Attorneys Carolina A. Fornos and Rahul Mukhi are in charge of the prosecution.
U.S. v. Novelette Campbell Indictment
Los Angeles Man Sentenced to Prison for Stealing Tuolumne County Couple’s Escrow FundsRead the Press Release
FRESNO, Calif. Steve Kessedjian, 51, of Los Angeles, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 21 months in prison for defrauding clients of escrow funds, United States Attorney Benjamin B. Wagner announced.
According to court documents, Kessedjian operated two businesses — Amerilend and Targa Escrow — to help clients secure refinanced home loans. In December 2007, a couple from Jamestown, Calif., used Amerilend services and applied for a loan to refinance their home and pay off their credit cards. After the victims’ first mortgage was paid off, the remaining loan proceeds were wired to Kessedjian’s Targa Escrow account. However, instead of disbursing the proceeds to the victims’ credit card companies as directed by the escrow instructions, Kessedjian took the funds for his own purposes. Several months after escrow closed, Kessedjian then made checks payable to the victims and their credit card companies, purportedly as repayment for their escrow funds he had taken. When the checks were presented to the bank, however, there were insufficient funds in Kessedjian’s account. As a further part of his scheme to defraud, Kessedjian caused the HUD-1 settlement statement to be changed to show no money being due out of escrow proceeds.
Kessedjian admitted in his plea agreement that his actions resulted in the Jamestown victims declaring bankruptcy because they could not make payments on both the larger refinanced loan Kessedjian’s company secured for them and the credit card debts that were to have been paid off with the funds taken by Kessedjian. As part of his sentence, Judge O’Neill ordered Kessedjian to pay $72,000 in restitution to the victims of his fraud scheme.
This case is the product of an investigation by the U.S. Secret Service and the Tuolumne County Sheriff’s Office. Assistant U.S. Attorneys Christopher Baker and Michael Tierney prosecuted the case.
Longview Man Sentenced to 27 Months in Prison for Illegal Sewage Dumping SchemeRead the Press Release
A Longview septic tank pumping business and its owner were sentenced today for multiple felony criminal violations of the Clean Water Act, announced U.S. Attorney Jenny A. Durkan. RAY CALDWELL, 60, and his company, ALL-OUT SEWER AND DRAIN SERVICE, INC., were found guilty in December 2013, following a bench trial before U.S. District Judge Benjamin Settle. CALDWELL was sentenced to 27 months in prison, three years of supervised release, and a fine of $250,000 for twenty-five counts of violating the Clean Water Act, six counts of mail fraud, and two counts of making false statements. The company shares in the $250,000 fine and will be on probation for three years. In May, Judge Settle will determine the amount of restitution owed by CALDWELL and the company. At the sentencing hearing Judge Settle said, “You saw an opportunity to essentially deprive public entities of money they were entitled to receive…. It’s very important to communicate to the community that if you engage in fraud on local government, you will realize consequences.”
“This defendant illegally dumped more than two million gallons of waste and pollutants into the sewer system,” said U.S. Attorney Jenny A. Durkan. “The company and its owner stole hundreds of thousands of dollars in public services and then embarked on an extended campaign of deceit to conceal the scheme. The crimes damaged the honest rate payers who dutifully paid for the services they used.”
According to records filed in the case, the defendants’ scheme to defraud the City of Longview, Cowlitz County, and the Three Rivers Regional Wastewater Authority went on for more than ten years. ALL-OUT was engaged in the business of pumping, hauling, and disposing of septic tank waste, grease trap waste, and industrial wastewater. Federal, state, and local regulations require that all trucked and hauled wastes of the type handled by ALL OUT be discharged to approve treatment facilities. It was ALL OUT’s practice to transport the waste to its facility in Longview where it was minimally treated and stored in a 10,000 gallon storage tank. While some of the tank contents were appropriately trucked to approved treatment facilities, a majority of the commingled waste was routinely dumped down an unauthorized sewer port located on the ALL OUT facility.
Based on video surveillance footage seized by law enforcement authorities, CALDWELL and his business partner, Randy Dingus, undertook the illegal discharges in the early morning hours, under the cover of darkness, to avoid being detected by passersby or unsuspecting employees. When a records review conducted by the City of Longview in 2010 threatened to expose the scheme, the defendants began submitting false documents underreporting the true volume of trucked and hauled waste. This deception worked until August 2012 when law enforcement surveillance activities prompted by citizen complaints revealed the early morning dumping.
On August 17, 2012, EPA criminal agents executed a search warrant at the ALL OUT facility and seized video footage from the company’s surveillance system. The footage depicted twenty-four separate illegal dumping incidents over a six week period in July and August of 2012. EPA criminal agents returned to the ALL OUT facility in the early morning of December 18, 2012 after receiving reports that the illegal dumping was still occurring. The agents arrested CALDWELL after observing him using large flexible hoses to dump waste from the storage tank directly into the sewer port.
CALDWELL was convicted of illegally dumping waste on each of the days captured on the video footage as well as the December 18, 2012 dumping event. CALDWELL was also convicted of using the mail system to further his scheme of defrauding the public utilities. Finally, CALDWELL was convicted for making false statements in a mandated user survey seeking information regarding ALL OUT’s discharges to the sewer system, and for lying to EPA agents when confronted in August 2012.
CALDWELL’s business partner, Randy Dingus, 54, had previously pleaded guilty to violating the Clean Water Act for his participation in the illegal dumping scheme. He was sentenced in January 2014 to 30 days in prison, two months of home detention, one year of supervised release, 40 hours of community service, and a $15,000 fine.
The case was investigated by the Environmental Protection Agency Criminal Investigation, with assistance from the Washington State Department of Ecology, Cowlitz County, the City of Longview, and the Three Rivers Regional Wastewater Authority. The case was prosecuted by Assistant United States Attorneys Jim Oesterle and Lawrence Lincoln.
Long Island Man Sentenced to Two Terms of Life in Prison for Conspiring to Murder Federal Judge and Federal ProsecutorRead the Press Release
BROOKLYN, N.Y. — U.S. Attorney William J. Hochul, Jr. announced today that Joseph Romano, 51, of Levittown, N.Y., was sentenced to two terms of life in prison for conspiring to murder the Assistant United States Attorney and the United States District Judge involved in his prior prosecution for fraud. The life terms of imprisonment were ordered to run consecutively to Romano’s 15-year sentence for fraud.
As the evidence proved at trial, the defendant agreed to pay $40,000 to an undercover police officer, who he thought was a hit-man, to kill the federal judge and prosecutor and also to cut off the victims’ heads in exchange for a “bonus.” In connection with the murder conspiracy conviction, the defendant also forfeited over $200,000.
“In an attempt to subvert the justice system, this defendant attempted to murder a sitting federal judge and a federal prosecutor” said U.S. Attorney Hochul. “Originally sentenced to 15 years for fraud, Joseph Romano will now spend the rest of his natural life behind bars because of his heinous crimes.
In February 2012, at the federal courthouse in Central Islip, New York, Romano was sentenced by the United States District Judge for the Eastern District of New York to 15 years in prison for engaging in an eight-year, multi-million dollar fraud involving the telemarketing of coins. The Assistant United States Attorney had successfully prosecuted Romano for this fraud. In August 2012, law enforcement authorities learned from another inmate at the Nassau County Correctional Center where Romano was being held that Romano was plotting to murder the United States District Judge and Assistant United States Attorney. The FBI then recorded a meeting between the inmate and Romano during which Romano described in detail his plans to torture, murder, and mutilate the United States District Judge and Assistant United States Attorney. During the subsequent investigation, two undercover law enforcement officers, posing as hit-men, met with Romano and Romano’s co-conspirator, Dejvid Mirkovic, numerous times at locations on Long Island, including the Correctional Center, to receive instructions regarding and down payments for the murders.
At the first meeting, which took place in August 2012, Romano offered to pay one of the undercover officers $3,000 to assault an individual with whom he had a financial dispute. At Romano’s direction, co-conspirator Mirkovic then met with the other undercover officer and paid him $1,500 as a down payment for the assault. In September 2012, after one of the undercover officers showed proof of the purported assault of the intended victim - in fact, a staged photograph and an identification card - Mirkovic paid the undercover officer the $1,500 balance.
Later that same day, Mirkovic again met with the undercover officer and relayed Romano’s instructions to murder the federal judge and prosecutor. He offered $40,000 for the commission of the two murders. In addition, Romano had Mirkovic instruct the undercover that Romano wanted the federal judge and prosecutor beheaded and the body of the prosecutor mutilated. Mirkovic further relayed that Romano would pay a “bonus” for those services. Over the following weeks, the undercover officer received $22,000 in cash down payments for the murders and was promised payment of the final $18,000 when the murders were completed. At the time of the arrests of Romano and Mirkovic on October 9, 2012, law enforcement officers recovered $18,000 in cash and a loaded 9mm semi-automatic handgun at Mirkovic’s residence in Lake Worth, Florida.In March 2013, Dejvid Mirkovic pleaded guilty to conspiracy to murder and was sentenced to 24 years in prison in August 2013.
Today’s sentence, imposed by United States District Judge John F. Keenan, was the latest development in an investigation handled by Special Agents and Task Force Officers of the Federal Bureau of Investigation, New York Office, under the direction of Assistant Director-in-Charge George Venizelos. The government’s case is being prosecuted by Assistant United States Attorneys Marshall L. Miller, Una A. Dean, and Brian Morris of the Eastern District of New York, under the supervision of U.S. Attorney William J. Hochul of the Western District of New York.Long Island Man Sentenced to Two Terms of Life in Prison for Conspiring to Murder Federal Judge and Federal ProsecutorRead the Press Release
Western District Press Release- Joseph Romano
Local Tax Preparer Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – EDWARD JONES (an individual not connected with the company Edward Jones) was indicted on multiple fraud charges involving his alleged scheme to use stolen identities to obtain federal tax refunds.
According to the indictment, between February 2009 and April 2012, Jones devised a scheme to defraud the Internal Revenue Service and financial institutions by enticing them to issue electronic tax refunds and prepaid debit cards in the identities of others. Jones represented himself as a federal income tax preparer and state property tax credit preparer. In that role, Jones obtained the names, birth dates, and social security numbers of individuals who desired him to prepare and electronically file federal income tax returns or state property tax credit forms. In order to maximize the refunds, Jones fraudulently claimed that the tax filers were self-employed individuals with unsubstantiated business deductions and entitled to earned income credit as a result of the misrepresentation that the tax filers had dependents. As a result of the misrepresentations, the tax returns prepared by defendant resulted in the fraudulent payment of substantial tax refunds. Furthermore, Jones misdirected some of the fraudulently obtained tax returns from the tax filers to himself by instructing the Internal Revenue Service to electronically deposit the tax refunds into prepaid debit card accounts he controlled.
"The IRS has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation.
Jones, St. Louis, Missouri, was indicted by a federal grand jury on two felony counts of mail fraud, two felony counts of making false claims and two felony counts of aggravated identity theft. The indictment was returned April 9. He appeared in federal court earlier today.
If convicted, each count of mail fraud carries a maximum penalty of 20 years in prison; each false claims count carries five years in prison; aggravated identity theft carries a mandatory two-year prison term; all with fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Internal Revenue Service Criminal Investigation. Assistant United States Attorney Tracy Berry is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Jury Convicts DBSI Principals of FraudRead the Press Release
U.S. Attorney Commends Work and Career of FBI SA Morse
BOISE - A federal jury in Boise today returned guilty verdicts against four DBSI principals, Douglas L. Swenson, Mark Ellison, David D. Swenson, and Jeremy S. Swenson on multiple fraud charges, announced U.S. Attorney Wendy J. Olson. The jury convicted Douglas Swenson, 65, of Eagle, Idaho, on thirty-four counts of wire fraud and forty-four counts of securities fraud. The jury convicted Ellison, 65, of Boise, David Swenson, 36, of Boise, and Jeremy Swenson, 41, of Meridian, on forty-four counts of securities fraud. The jury returned not guilty verdicts on the thirty-four wire fraud counts against Ellison, David Swenson and Jeremy Swenson and on two conspiracy counts. During the forty-two day trial, the United States presented evidence that the defendants publicly represented that DBSI was a profitable company and had a net worth in excess of $105 million when they knew that DBSI's real estate and non-real estate business activities were universally unprofitable.
No sentencing date has been set.
Olson issued the following statement after the verdict was returned:
“The jury’s verdicts finding Douglas Swenson, Mark Ellison, David Swenson and Jeremy Swenson guilty of fraud send a strong message that those who seek to induce investors to trust them, often with hundreds of thousands of dollars, have a clear obligation to be open and transparent and to make full disclosure about the financial condition of their business. Our financial system, indeed our markets, relies on such full disclosure. The U.S. Department of Justice is pleased that these defendants have been found responsible for the frauds they perpetrated and the losses they caused. They will have a firm restitution obligation to their defrauded victims, DBSI investors.
The jury’s verdicts show that the jurors listened carefully and thoughtfully to the evidence that was presented, the attorneys’ arguments and the Court’s instructions. They are to be commended for their long and deliberate service to our criminal justice system. They have performed an important duty in our democracy. I thank them.
I also commend the outstanding work of the trial team, AUSAs Ray Patricco, George Breitsameter, and Justin Whatcott, Tax Division trial attorney Mark Williams, paralegal Denise Price from my office and numerous others who provided support for the longest federal criminal trial in this district for at least two decades. Finally, I commend the work of the investigative agencies, and particularly the strong work of agents from IRS, criminal investigations and of FBI Special Agent Rebekah Morse. All of these outstanding federal government employees spent countless hours, sacrificing time with their families and loved ones, during challenging work conditions.
Having said that, let me be clear, the human price of this case was too high. FBI Special Agent Rebekah Morse was an outstanding agent and person. In her less than four years as an agent, all stationed in Boise, she played a critical role in almost every significant white collar prosecution, including three successful trials in the last twelve months. She displayed enormous integrity, intelligence, and honesty. She worked harder and better than any young, new agent I have seen in my more than 20 years as a federal prosecutor. Her vast ability was exceeded only by her great humor and joy. She was a tremendously warm and caring human being who held herself to the highest of standards, gave much to all around her and expected and asked for little in return.
As the United States has maintained in argument to the court and in its pleadings, we believe that Rebekah Morse was truthful in her responses to the Court and that a full examination of the facts warrants that conclusion. We understand and respect that the Court saw this differently. Rebekah Morse was greatly respected. She will be greatly missed.
We will not take any questions, and the United States will make no further statements in this case prior to the sentencing.”
Jury Convicts Amherst Man of Drug ChargesRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Jack Reid, III, 46, of Amherst, N.Y., was convicted following a jury trial before U.S. District Judge Richard J. Arcara, of conspiracy to possess with intent to distribute five kilograms or more of cocaine and possession with intent to distribute cocaine. The charges carry a mandatory minimum sentence of 20 years in prison, a maximum of life, and a fine of $20,000,000.
Assistant U.S. Attorneys Thomas S. Duszkiewicz and John M. Alsup, who handled the prosecution of the case, stated that beginning in 1990 through April 2012, the defendant utilized family members and others as drug couriers and distributors of multiple kilograms of cocaine. The cocaine was obtained from sources in Rochester, N.Y., New York City and Atlanta, Georgia. The cocaine was distributed in various areas throughout Erie and Niagara Counties. Throughout the course of the conspiracy, the defendant acquired and distributed in excess of 70 kilograms of cocaine.
In a forfeiture proceeding, the Government will be seeking $1,000,000 in United States currency including two residences owned by the defendant in Williamsville N.Y. and Amherst N.Y. as well as three properties in the City of Buffalo.
The verdict is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge James J. Hunt, New York Field Division, the Lackawanna Police Department, under the direction of Chief James Michel, and the Lockport Police Department, under the direction of Chief Lawrence Eggert.
Sentencing is scheduled for August 6, 2014, at 1:00 p.m. before Judge Arcara.Junction City Man Pleads Guilty to Child Porn ChargeRead the Press Release
TOPEKA, KAN. A Junction City man pleaded guilty Monday to a federal child pornography charge, U.S. Attorney Barry Grissom said.
Scott Deppish, 43, Junction City, Kan., pleaded guilty to one count of accessing child pornography with intent to view. In his plea, he admitted that that on Feb. 12, 2013, investigators served a search warrant and seized his desktop computer and two lose hard drives. They found images depicting prepubescent children engaged in sexual conduct. They also found images of a known victim in what is referred to as the “Abby” series, which were taken in the state of Idaho. They depict a very young prepubescent female engaged in sexual conduct with an adult male.
Sentencing is set for July 7. He faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Grissom commended the Junction City Police Department, Homeland Security Investigation and Assistant U.S. Attorney Christine Kenney for their work on the case.Jacksonville Child Sex Offender Faces Federal Charges for Producing and Possessing Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that a federal grand jury last week returned an indictment charging Christopher Richard Cloonan (44, Jacksonville) with three counts of using a minor to produce images depicting child pornography, one count of possessing child pornography, and three counts of committing a felony offense involving a minor while being required to register as a sex offender. As a result of his prior child sex convictions, Cloonan faces a mandatory sentence of life in federal prison on each of the four production counts, a mandatory minimum sentence of 10 years, up to 20 years’ imprisonment for the possession count, and additional terms of 10 years in prison for each of the sex offense counts.
Cloonan was arrested for his current offenses on March 12, 2014, at his residence in Jacksonville, and has been in custody on related state charges since that time.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent until, and unless, proven guilty.
This case was investigated by the Federal Bureau of Investigation in Jacksonville and Washington, D.C., the Jacksonville Sheriff’s Office, and the District of Columbia Metropolitan Police Department. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another 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.
(Download Factual Basis )
Indictment: Dangerous Synthetic Drugs Were Key to $16 Million in SalesRead the Press Release
KANSAS CITY, KAN. – An indictment unsealed here today alleges the owners of an Olathe-based business produced and sold dangerous controlled substances, and controlled substance analogues of THC (the active ingredient in marijuana) and methcathinones (stimulants) to rack up at least $16 million in sales in less than two years, U.S. Attorney Barry Grissom said.
The indictment alleges the conspirators sold products under exotic names including Pump It, Head Trip, Black Arts, Grave Digger, Voodoo Doll and Lights Out. Some of the drugs were manufactured in buckets with drill-powered immersion mixers and tried out on “testers” who helped tweak the recipes by reporting on the drugs’ effects.
The indictment alleges the conspiracy stretched from Kansas to Missouri, California, Texas, Georgia and Colorado, involving more than 15 companies with more than 40 financial accounts at more than 10 financial institutions.
“The indictment alleges the defendants were aware of – and even discussed – the potential harmful effects of the illegal substances they manufactured and distributed, including extreme physical reactions, overdoses and deaths,” said U.S. Attorney Barry Grissom.
Charged in the indictment are:
Tracy Picanso, 58, Olathe, Kan. and Roy Ehrett, 55, Olathe, Kan., who lived together in Olathe and were owners and operators of businesses including Retailing Specialists, Innovative Products 4U, The Outer Edge, Lakeridge Holdings, Monster Warehouse, Monster Distribution, Monster, 3P Distribution and Life Source.
Michelle Reulet, 34, and Michael Myers, 34, Montgomery, Texas, who owned Bully Wholesale, which was a large-scale independent wholesaler for The Outer Edge.
Michael Meyers, 34, Montgomery, Texas, who lived with Reulet in Houston.
Terrie Adams, 63, Denver, Colo., who packaged, marketed and distributed substances for Picanso and Ehrett.
Craig Broombaugh, 29, formerly of Huntington Beach, Calif., who worked as a “cook,” manufacturing synthetic cannabinoids.
Cindy McRoberts, 48, Lees Summit, Mo., who worked as an office manager in Olathe and Kansas City Mo., warehouses.
Christopher Freemyer, 46, Adrian, Mo., who worked as a delivery driver, accounts manager and warehouseman. He kept retail stores stocked.Charges in the indictment include: Conspiracy to possess with intent to distribute controlled substances and controlled substance analogues; distribution of Buphedrone, a controlled substance; distribution of synthetic cannabinoids, which are controlled substance analogues; distribution of Pentedrone, a controlled substance analogue; selling mislabeled drugs; selling misbranded drugs; and conspiracy to commit money laundering.
The indictment alleges conspirators marketed their products at trade shows held throughout the country that cater to the smoke shop industry. In addition, conspirators are alleged to have sold misbranded and counterfeit drugs including substances called “Swing Her,” and “Swing Him,” which they claimed had effects similar to Viagra. They are alleged to also have sold counterfeit Viagra and Cialis.
“Selling illegal prescription drugs, such as counterfeit Viagra and Cialis, to an unsuspecting public that believes them to be part of the legitimate drug supply chain, overseen by the FDA, places at risk the public’s health,” said Catherine A. Hermsen, Acting Special Agent in Charge, FDA’s Office of Criminal Investigation. “We commend our colleagues at the Drug Enforcement Administration and the United States Attorney’s Office for their contributions in unraveling the multiple components of this complex case.”
Investigating agencies include the Drug Enforcement Administration, the Food and Drug Administration – Office of Criminal Investigations, the Department of Homeland Security, Homeland Security Investigations, Customs and Border Protection, the FBI, the Overland Park Police Department, the Johnson County Sheriff’s Office, the Olathe Police Department, the St. Joseph Police Department and the Buchanan County Drug Strike Force.Idaho Aquarium Sentenced for Illegal Trafficking of Marine LifeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Tracy Dunn, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and Edward Grace, Deputy Assistant Director, U.S. Fish & Wildlife Service, Office of Law Enforcement, announce that Idaho Aquarium, Inc. (IAI), located in Boise, Idaho, was sentenced today in Key West for conspiring to harvest, transport, and sell spotted eagle rays and lemon sharks, knowing the marine life were taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, contrary to the federal Lacey Act, Title 16, United States Code, Sections 3372(a)(2)(A), and 3373(d)(1) and (2), all in violation of Title 18, United States Code, Section 371.
IAI, was sentenced by U.S. District Judge Jose E. Martinez, who had previously accepted the guilty plea from IAI, to pay a criminal fine of $10,000 and serve a term of probation of three years. The court added special conditions requiring IAI to submit a comprehensive Compliance Plan and to conduct annual audits of the corporate records by an independent auditor. Additionally, the Court ordered IAI to make alternative community service payments in the amount of $50,000 to the National Fish & Wildlife Foundation, a Congresionally-chartered charitable and non-profit organization. The payment is to be used by NFWF to promote research, management, education, conservation, and restoration of marine life and corals throughout the waters of the Florida Keys National Marine Sanctuary and the Florida Keys. IAI’s co-defendants, Ammon Covino, 40, formerly of Meridian, Idaho, and Christopher Conk, 40, formerly of Middleton, were sentenced on December 2, 2013 on the same offense. Covino was sentenced to one year and a day in prison, followed by two years of supervised release and was barred by the Court from any employment during that period that involves the possession, display, transportation, exhibition, purchase, or sale of wildlife. Conk, who cooperated with investigators, received a reduced sentence of four months in prison, followed by two years of supervised release and forfeiture of the vehicle used in the commission of the violation. As part of his sentence, 180 days of the supervised release is to be served in home detention under electronic monitoring. Conk also received the specific employment prohibition during his period of supervision. In imposing the prison sentences, Judge Martinez stated that the defendants conduct “strikes to the very heart of this area and the economy of this area.”
According to the indictment, joint factual statements submitted to the Court, and arguments at the sentencing hearings, during the period extending from March 2012 through approximately November 2012, IAI, Covino and Conk engaged in a conspiracy to purchase and transport wildlife from the Florida Keys to Idaho for exhibit at IAI in Boise. The wildlife included spotted eagle rays and lemon sharks, which required Florida licenses and permits never acquired by the participants in the deals. According to the Factual Statements, Covino and Conk were both at the time officers of the Aquarium, were individually advised of the requirements of the law, and nevertheless directed their Florida-based suppliers to ignore the law and make the shipments. Unknown to them the Florida business owner was cooperating with federal authorities and the phone conversations and text messages were recorded. Payment for the various specimens was made by credit cards held in IAI?s name. The defendants acknowledged that Covino and Conk’s illegal conduct was within the scope of their employment, and intended to benefit, at least in part, IAI.
Mr. Ferrer commended the investigative efforts of NOAA Office of Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement. Mr. Ferrer also thanked the Idaho Department of Fish & Game. This case was prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Antonia Barnes, with assistance from the U.S. Attorney?s Office for the District of Idaho.
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.
Huntington Man Robs Drug Dealer at Gun PointRead the Press Release
Robbery occurred at drug dealer’s 10th Street apartment in Huntington
Huntington, W.Va. – United States Attorney Booth Goodwin announced that Kamel Auntae Burris, 31, of Huntington plead guilty today in federal court in Huntington to using a firearm in furtherance of a crime of violence. In November of 2013, Burris, who was wearing a mask, robbed a known drug dealer at gun point. The robbery occurred at the drug dealer’s apartment on 10th Street in Huntington.
This case arose out of a joint law enforcement investigation of Kenneth Dewitt Newman and his organization for the distribution of illegal drugs in the Huntington area. The Newman organization was responsible for the distribution of cocaine, crack cocaine, heroin, prescription pills, MDMA (a street drug akin to Ecstasy) and marijuana. The investigation led to the indictment of 15 defendants, including Burris, for their various roles in the conspiracy. Burris has been described as an enforcer for the Newman organization. Burris faces up to life imprisonment and a $250,000 fine when he is sentenced on July 28, 2014.
The investigation was conducted by the Drug Enforcement Administration, Huntington Police Department, Metropolitan Drug Enforcement Network Team and Bureau of Alcohol, Tobacco, Firearms and Explosive. The case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Houston, Lafayette Men Sentenced for Roles in Drug Conspiracy Distribution RingRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced that German Caballero Rodriguez, 42, of Houston, and Tyrone James Thibeaux, 38, of Lafayette, were sentenced Friday by U.S. District Judge Elizabeth Foote for conspiracy with intent to distribute and distribution of cocaine. Rodriguez was sentenced to 100 months in prison and Thibeaux was sentenced to 135 months in prison. They will both serve five years of supervised release.
Rodriguez and Thibeaux, along with co-defendants John Dauphin, Glenn Charles and Fernellis Woods, were indicted in April of 2012 for conspiracy to possess with intent to distribute cocaine between August 2008 and April 2011. According to evidence presented at his guilty plea on June 13, 2013, Rodriguez supplied multi-kilogram quantities of cocaine from Houston to a large scale Lafayette drug trafficking/distribution organization that included Dauphin, Charles, Woods and Thibeaux. On December 9, 2013, Thibeaux pleaded guilty.
Woods was sentenced on October 18, 2013, to 135 months in prison; Charles was sentenced on December 12, 2013, to 71 months in prison; and Dauphin was sentenced on February 14, 2014, to 120 months in prison. All three are to serve five years of supervised release.
The Drug Enforcement Administration, the Carencro Police Department, the Houston Police Department and the Waller County Texas Sheriff’s Office participated in this investigation. Assistant U.S. Attorney Howard C. Parker prosecuted the case.
The defendants were arrested as part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Government Settles False Claims Act Allegations Against <br /> Kansas Cancer Treatment Facility and Its OwnerRead the Press Release
Hope Cancer Institute, a cancer treatment facility in Kansas, and Dr. Raj Sadasivan, the owner of Hope Cancer Institute, have agreed to pay $2.9 million to resolve allegations that they violated the False Claims Act by submitting claims to Medicare, Medicaid and the Federal Employee Health Benefits Program for drugs and services that were not provided to beneficiaries, the Department of Justice announced today.
“Billing Medicare and Medicaid for drugs that are not provided to beneficiaries contributes to the soaring costs of health care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Providers will be investigated aggressively and held accountable for falsely billing federal health care programs.”
The settlement resolves allegations that, between 2007 and 2011, Sadasivan and Hope Cancer Institute submitted claims to federal health benefit programs for the chemotherapy drugs Rituxan, Avastin and Taxotere that were not provided to federal health care beneficiaries. Sadasivan allegedly instructed the employees of Hope Cancer Institute to bill for a predetermined amount of cancer drugs at certain dosage levels, when lower dosages of these drugs were actually provided to beneficiaries. As a result of these instructions, Hope Cancer Institute submitted inflated claims to federal health care programs for drugs that were not actually provided to patients.
“Health care providers that try to make a quick buck by billing taxpayers for services never provided will instead pay a high price for their greed-fueled fraud," said Gerald T. Roy, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General. “We are dedicated to investigating and prosecuting these types of deceptive schemes.”The settlement resolves a lawsuit filed by Krisha Turner, Crystal Dercher and Amanda Reynolds, former employees of Hope Cancer Institute, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to file suit on behalf of the government and to share in any recovery.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with Sadasivan and Hope Cancer Institute was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Kansas and the U.S. Department of Health and Human Services Office of Inspector General. The False Claims Act suit was filed in the U.S. District Court for the District of Kansas and is captioned United States ex rel. Turner et al. v. Hope Cancer Institute, et al.
The claims settled by this agreement are allegations only; there has been no determination of liability.
Government Intervenes in Lawsuit Against Medical <br /> Equipment Supplier Orbit Medical Inc. and Former <br /> Vice President Jake KilgoreRead the Press Release
The government has intervened in a False Claims Act lawsuit against Orbit Medical Inc. and Jake Kilgore alleging that Orbit Medical’s sales representatives boosted power wheelchair and accessory sales by altering and forging physician prescriptions and supporting documentation, the Justice Department announced today. Orbit Medical is a durable medical equipment supplier based in Salt Lake City, Utah. Jake Kilgore is the former vice president and sales manager at Orbit Medical for the Western region of the United States.
“Medical equipment suppliers must bill federal health care programs accurately and honestly to ensure that federal dollars are used for individuals who truly need mobility devices,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department is committed to pursuing those who seek to abuse taxpayer-funded programs.”
Medicare pays for power wheelchairs for beneficiaries who cannot perform mobility- related activities of daily living in their home using other mobility assistance equipment, such as a cane, walker or power scooter. To qualify for reimbursement, a physician must conduct a face-to-face examination of the beneficiary and provide the supplier with a written prescription for a power wheelchair within 45 days of such an encounter, along with documentation that supports the medical necessity of the device. The prescription must be completed by the physician who performed the exam and must include the beneficiary’s name, the exam date, the diagnoses and conditions the wheelchair is expected to accommodate, the length of need and the physician’s signature.
The lawsuit alleges that Orbit Medical sales representatives, at Kilgore’s direction and encouragement, knowingly altered physician prescriptions and supporting documentation to get Orbit Medical’s power wheelchair and accessory claims paid by Medicare, the Federal Employees Health Benefits Plan and the Defense Health Agency. In particular, the lawsuit alleges that Orbit Medical sales representatives created documents to falsely establish that physicians examined beneficiaries in person; changed physicians’ prescriptions to falsely establish medical necessity for the power wheelchair or accessory; created or altered chart notes and other documents to falsely establish the medical necessity of the power wheelchair or accessory; forged physicians’ signatures on prescriptions and chart notes and added facsimile stamps to supporting documentation to make it appear as though physicians’ offices had sent the documents to Orbit Medical.
On Oct. 23, 2013, a federal grand jury in Utah indicted Jake Kilgore on three counts of health care fraud, three counts of false statements related to health care and three counts of wire fraud, all arising from his tenure with Orbit Medical.
“The government is intervening in this matter seeking to restore Medicare trust funds taken through the alleged use of falsified records and fraudulent billings, among other things,” said U.S. Attorney for the District of Utah David B. Barlow. “Health care fraud is aggressively pursued in Utah. Every effort is made to restore taxpayers' dollars taken through fraudulent conduct.”
“Our agency is dedicated to investigating health care fraud schemes such as this, which divert scarce taxpayer funds meant to provide for legitimate patient care,” said Gerald T. Roy, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General.
The allegations against Orbit Medical and Kilgore in this lawsuit were filed under the False Claims Act by two former Orbit employees, Dustin Clyde and Tyler Jackson. Under the act, private parties can sue for false claims on behalf of the government and share in any recovery. The act also permits the government to intervene in the whistleblowers’ suit, as the government did here.
The government’s intervention illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was a coordinated effort among the U.S. Attorney’s Office for the District of Utah, the Civil Division of the Department of Justice, the Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, the Office of Personnel Management and the Defense Health Agency. The lawsuit is captioned United States ex rel. Clyde; Jackson v. Orbit Medical; Kilgore, No. 2:10-CV-00297 (D. Utah).
The claims pursued by the government are allegations only; there has been no determination of liability.
Former Treasurer of Mayetta Fire DistrictSentenced for EmbezzlementRead the Press Release
TOPEKA, KAN. - The former treasurer of the Mayetta Rural Fire District #1 was sentenced Monday to 30 months in federal prison for embezzling from the district, U.S. Attorney Barry Grissom said. The defendant also was ordered to pay more than $427,000 in restitution.
At sentencing, U.S. District Judge Julie A. Robinson noted that the defendant created a dangerous situation by depleting fire department funds that should have been used to purchase fire equipment.
Richard P. Bontrager, 68, Holton, Kan., pleaded guilty to one count of embezzlement. In his plea, he admitted that in 2008 he began embezzling from the fire district by issuing checks with the forged signatures of members of the board of the fire district. The checks were made payable to R & S Services, a fictitious entity Bontrager created so he could deposit the fraudulent checks into his own account at Denison State Bank. From 2008 to 2012 he made approximately $427,042 in unauthorized transfers from the fire district’s accounts.
In addition, without the knowledge of the board of the fire district he falsified loan documents to obligate the fire district to monthly lease payments on a Polaris Ranger UTV and a 1988 Chevrolet 1-ton brush truck. He created false board minutes to make it appear the board had approved the lease payments.
Grissom commended the Jackson County Sheriff’s Office, the FBI and Assistant U.S. Attorney Richard Hathaway for their work on the case.Former Treasurer for Communications Workers of America Local 88329 Charged with Falsifying RecordsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a criminal Information was filed today in U.S. District Court in Scranton charging Robert Vargeson, age 46 of Galeton, Pennsylvania with falsification of financial records.
According to United States Attorney Peter Smith, Vargeson was responsible for the financial records of Communications Workers of America, Local Union 88329, and during 2012 – 2013, he falsified those records to conceal the fact that he had embezzled approximately $6,373 from the funds of the union.
If convicted, Vargeson faces a maximum penalty of one year incarceration and a $100,000 fine.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is one year imprisonment and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
The investigation was conducted by U.S. Department of Labor and prosecution is assigned to Assistant United States Attorney Lorna Graham.
****Former Hidalgo County Sheriff Pleads GuiltyRead the Press Release
McALLEN, Texas - Guadalupe Trevino, aka Lupe Trevino, 64, of McAllen, has entered a guilty plea a criminal information charging him with conspiracy to commit money laundering, announced United States Attorney Kenneth Magidson. Trevino was the former sheriff of Hidalgo County.
The investigation revealed that during 2011 and 2012, Trevino received cash contributions for his election campaign from alleged drug trafficker, Tomas “El Gallo” Gonzalez. Today, Trevino admitted he accepted the money, knowing it was from illegal activities. He admitted he accepted the monies directly and through others as donations to assist with his 2012 election campaign. Some of the monies received were subsequently deposited into bank accounts Trevino controlled and were comingled with other funds.During and after the transactions, Trevino and others acted to disguise and conceal the nature, location, source, ownership and control of the currency by filing false Candidate/Officeholder Campaign Finance Reports and producing other documents.
U.S. District Judge Micaela Alvarez, accepted the plea today and has set sentencing for July 17, 2014. At that time, Trevino faces up to 20 years in federal prison and $500,000 or twice the value of the property involved in the transaction.
On Friday, April 14, 2014, Trevino’s former chief of staff and campaign treasurer, Maria Patricia Medina, pleaded guilty to misprision of a felony, admitting she assisted Trevino in the concealment of the donations by falsifying election records. She faces up to three years in federal prison and a potential fine of $250,000.
The investigation leading to the charges was conducted by Homeland Security Investigations, Drug Enforcement Administration, Texas Department of Public Safety, Rangers Division and Internal Revenue Service – Criminal Investigation. Assistant United States Attorneys James Sturgis and Anibal Alaniz prosecuted the case.
Former Employee at Medistat Group, Associates, Inc., in Desoto, Texas, Sentenced to 33 Months in Federal Prison for Role in Health Care Fraud ConspiracyRead the Press Release
Jerry C. Bullard and Okey Nwagbara Submitted Nearly $600,000
in False and Fraudulent Claims to MedicareDALLAS — Jerry C. Bullard, 57, of Mesquite, Texas, was sentenced this afternoon, by U.S. District Judge Sam A. Lindsay, to 33 months in federal prison and ordered to pay $317,779 in restitution, following his guilty plea in February 2012 to one count of conspiracy to commit health care fraud. Bullard worked in the durable medical equipment department of Medistat Group Associates, Inc., an association of health care providers in Desoto, Texas. Judge Lindsay ordered that Bullard surrender to the Bureau of Prisons on July 15, 2014. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
A co-defendant in the case, Okey Nwagbara, formerly of Plano, Texas, pleaded guilty in January 2012 to three felony offenses related to his involvement in the health care fraud conspiracy as well as providing false information to obtain citizenship. Nwagbara was the owner and operator of Advanced Medequip and Supplies, Ltd., (Advanced) a durable medical equipment company that was located in Richardson, Texas. He is currently serving a 36-month federal prison sentence; after the completion of that sentence, he will be referred to U.S. Citizenship and Immigration Services (CIS) for deportation.
Bullard admitted that he entered into an agreement with Nwagbara to submit false and fraudulent claims to Medicare. Bullard accepted kickbacks from Nwagbara to direct business to Advanced and to sign durable medical equipment orders for Advanced. Upon receiving cash payments from Nwagbara, Bullard would sign “JRoy MD” on Medistat prescription pads, durable medical equipment information forms and certificates of medical necessity for enteral nutrition products falsely indicating, among other things, that the beneficiary required tube feeding, when in fact the beneficiary did not. Bullard and Nwagbara admitted that they submitted and caused to be submitted $583,688 in these types of false and fraudulent claims.
The case was investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. To learn more about the HEAT Strike Force, please visit: http://stopmedicarefraud.gov.
Assistant U.S. Attorneys Michael Elliott and Mindy Sauter were in charge of the prosecution.
Former Chief Administrative Officer for City of Bell Sentenced to Federal Prison for Cheating IRS to Avoid Taxes on Corrupt ActivitiesRead the Press Release
LOS ANGELES – Robert A. Rizzo, the former top administrator in the City of Bell who has admitted his role in a widespread municipal corruption scandal, was sentenced today to 33 months in federal prison in a tax fraud scheme designed to hide part of the massive income he was bilking from the small Los Angeles County city.
Rizzo was sentenced today by United States District Judge George H. King, who said Rizzo’s activities demonstrated “greed in cheating the taxpayers of the United States after cheating the citizens of Bell.” In issuing the 33-month prison term, Judge King ordered that it run consecutive to a prison term Rizzo is expected to receive Wednesday when he is sentenced in Los Angeles Superior Court in his corruption case.
Rizzo, 60, of Torrance, pleaded guilty in January to federal charges – conspiracy and filing a false federal income tax return with the Internal Revenue Service – in a scheme that resulted in hundreds of thousands of dollars in unpaid federal income tax. At today’s sentencing hearing, Judge King ordered Rizzo to pay $255,984 in restitution, a figure that equals the amount of unpaid taxes directly attributable to the defendant.
In his plea agreement, Rizzo admitted that he created a corporation to fraudulently claim losses on his income tax return, which served to illegally reduce his tax liability on the significant income he was receiving from the City of Bell. Rizzo also admitted claiming personal expenses as business deductions.
Rizzo’s “conduct can only be described as corrupt,” prosecutors wrote in a sentencing memo filed with the court. Not only did Rizzo fleece the City of Bell and its residents, he also bilked the Internal Revenue Service “in an extraordinary display of greed.”
According to court documents, Rizzo, sometime in 2002, created an S Corporation that he called R.A. Rizzo Incorporated (RARI). Rizzo was assisted in the scheme by co-conspirators that included his tax preparer, Robert J. Melcher, who has pleaded guilty to aiding and abetting the filing of a false tax return.
Rizzo used RARI to claim bogus losses in relation to a purported rental property in Auburn, Washington. RARI’s corporate tax return fraudulently deducted more than $571,530 in losses for the years 2006 through 2009.
Rizzo also admitted in his plea agreement that he used a RARI account to pay for more than $80,000 in personal expenses in 2009 and $120,000 in construction work on his residence in Huntington Beach in 2010. RARI’s tax returns falsely claimed that these expenses were related to rental property.
Rizzo “abused his position to fleece the City of Bell of hundreds of thousands of dollars that he paid to himself in excessive salary – monies that could have been spent for the benefit of the people he served,” according to the government’s sentencing memorandum. “But not satisfied with betraying the trust place in him by the city and its residents, in an extraordinary display of greed, [Rizzo] also found it necessary to cheat the IRS.”
Melcher, who as a result of his guilty plea faces a sentence of up to three years in prison, is scheduled to be sentenced on May 12 by Judge King.
The cases against Rizzo and Melcher are part of an ongoing investigation being conducted by special agents with IRS - Criminal Investigation and the Federal Bureau of Investigation.
Release No. 14-042a
Former Bryan Chiropractor and Clinic Owner Sentenced in $3 Million Automobile Insurance ScamRead the Press Release
HOUSTON – Chase Lindsey, 36, and Brittany Jessie, 25, have been sentenced to federal prison for engaging in a conspiracy to defraud various automobile insurance companies of more than $3 million, announced United States Attorney Kenneth Magidson. Lindsay and Jessie previously entered guilty pleas to conspiracy to defraud the insurance companies.
Jessie and Lindsey admitted they participated in a conspiracy along with Earlie Dickerson, 41, Marion Young, 43, and Edward Graham, 37, to defraud numerous auto insurance companies. The scheme involved the creation of fraudulent chiropractic bills for treatments which were never performed and used as support for fraudulent settlement demand letters sent to auto insurance companies.
Today, U.S. District Judge Kenneth Hoyt handed Lindsey and Jessie respective terms of 24 and 30 months in federal prison. Judge Hoyt further ordered Lindsey and Jessie to pay restitution to the insurance companies totaling $1.1 million and $1 million, respectively. Both will also serve two-year-terms of supervised release following completion of their prison terms.
Sanjoh & Associates represented clients allegedly injured in auto accidents. Lindsey agreed to provide medical evaluations of, and recommend treatment for, those patients in exchange for $2,000 in cash per month, which totaled approximately $58,000 during the course of the conspiracy. Jessie sometimes cashed checks and took the cash to Lindsey for payment.
For the clients he actually evaluated, Lindsey routinely recommended medically unnecessary therapeutic treatments. In some instances, Lindsey either never evaluated the patient or did so after the patient had already begun receiving treatments. The treatments, if done, were done by unlicensed, untrained and unqualified individuals whom Lindsey never supervised. Lindsey always prescribed the same six treatments but the patients usually received only two: ice/heat packs and electric stimulation. He prescribed the treatments be done 3-4 times per week for 5-6 weeks, but patients usually went once a week for 3-4 weeks. Lindsey also provided no follow-up treatments.
Jessie was instructed on which treatments to mark down in order for the billing to be approved and to alternate treatments on the billing so it did not look suspicious. At one point, Jessie provided a set of treatment guidelines to an employee at Private Chiropractic Care to follow which were needed for the billing of patients. Jessie instructed that employee to mark down patient treatments, even if the treatments were not done, because it was necessary for billing. Jessie further instructed the employee to have the patients initial off next to the fraudulent treatments as if they received them. Jessie also fraudulently marked down treatments and the patient's pain levels on treatment forms at the Sanjoh & Associates office when the patient had not received the treatment and prepared the false chiropractic billing statements at law firm.
The co-conspirators used four chiropractic clinics in the scheme. Lindsey started working at the first clinic, Texas Avenue Chiropractic Clinic, in February 2007 and continued until it closed on or about Sept. 1, 2007. After that, Lindsey was listed as the only chiropractor at H & E Chiropractic and Private Chiropractic Care, two businesses also involved in the conspiracy. After Private Chiropractic Care shut down in September 2009, Lindsey and others agreed to continue the fraud scheme by sending the law firm clients to Lindsey Chiropractic Care - Lindsey's chiropractic clinic. Clients were sent there until search warrants were executed in November 2009. Dickerson was the office manager of Sanjoh & Associates Law Firm. Jessie worked both at Sanjoh and Associates, as a tech at the chiropractic clinics and was the owner of Private Chiropractic Care. All the defendants reside in Bryan where all the businesses are also located.
Despite changing the name and location of the chiropractic clinic four times, the fraud scheme remained the same. Co-conspirators recruited individuals allegedly involved in auto accidents to be represented by the law firm who were then sent to Lindsey to be evaluated. Lindsey routinely prescribed medically unnecessary treatment which was provided, if at all, by unlicensed, untrained and unqualified individuals. Lindsey knew that most of the treatments were not being performed. Nonetheless, Lindsey allowed false and fraudulent chiropractic bills to be created under his name from each of the four clinics for treatments which were never performed.
The fraudulent bills were used as support for settlement demand letters sent to auto insurance companies which caused the insurance companies to issue settlement checks. Lindsey and Jessie acknowledged the scheme to defraud the automobile insurance companies resulted in the submission of more than $3 million in false billing claims. The insurance companies paid at least $1.2 million in false claims during 2007-2009.
Lindsey and Jessie were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
Young entered a guilty plea to one count of conspiracy and one count of wire fraud, while Graham and Dickerson were convicted following an eight-day trial of the conspiracy and 30 counts of mail fraud. Those three defendants are scheduled for sentencing on July 28, 2014.
The criminal charges are the result of a joint investigation by agents of the FBI and the National Insurance Crime Bureau. Assistant United States Attorney (AUSA) Al Balboni and Special AUSA Adrienne Frazior are prosecuting the case.Former Beaumont ISD Employees Guilty of Stealing over $4 MillionRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – The former Director of Finance and Comptroller of the Beaumont Independent School District (BISD) have pleaded guilty to federal charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Devin Wayne McCraney, 35, of Beaumont, pleaded guilty to the charge of fraud upon programs receiving federal funds today before U.S. District Judge Ron Clark.
Sharika Baksh Allison, 43, of Beaumont, pleaded guilty to the charge of conspiracy to commit fraud upon programs receiving federal funds today before Judge Clark.
According to information presented in court, McCraney, Director of Finance for BISD, and Allison, Comptroller for BISD, devised schemes in which they embezzled over $4 million from BISD. McCraney and Allison were indicted by a federal grand jury on Jan. 8, 2014.
“The guilty pleas are an important milestone, not just for the Government and the Defendants, but for citizens of Beaumont, said U.S. Attorney Bales. “Lately, much of the news coming from BISD has been disappointing but its mission to educate Beaumont’s children remains critically important. The joint task force will continue to diligently work to insure that individuals who are ripping off BISD and impugning both the mission, and the many good public servants who are committed to that mission, are held accountable.”
“These defendants knowingly and willfully abused their position of trust to steal education funds that were supposed to be used to provide services for the most innocent of victims – school children. That is unacceptable,” said Neil Sanchez, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s South Central Regional Office. “I’m proud of the work of OIG Special Agents and our law enforcement colleagues for holding these individuals accountable for their criminal actions.”
“The admission of guilt today by these defendants is one more step in the process of restoring the public’s faith and belief in law and order in our community,” said Jefferson County District Attorney Cory Crenshaw. “I sincerely hope the mission of our task force is made evident by these guilty pleas which allow our entire community to see clearly that we have people who allow their own greed to put the future of our children at great risk. We will continue in our goal to do what is required to bring all of those responsible to justice and I continue to ask that those with knowledge of wrongdoing within our school district to promptly come forward.”
McCraney faces up to 10 years in federal prison and restitution of $4,041,705.27. Allison faces up to 5 years in federal prison and restitution of up to $1,351,983.11. Sentencing dates have not been set.
This case is being prosecuted as part of the Joint Task Force established in March 2014 between the U.S. Attorney’s Office for the Eastern District of Texas and the Jefferson County District Attorney’s Office to investigate and prosecute major crimes – more specifically, violent crime and crimes related to the abuse of public trust in Jefferson County, Texas.
If you have any information related to this matter, please call the Federal Bureau of Investigation at 409-832-8571.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Education Office of Inspector General. This case is being prosecuted by Assistant U.S. Attorneys Christopher T. Tortorice and Joseph R. Batte.
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