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Thursday 10 April 2014
Carbon County Man Sentenced to Prison for Federal Cocaine Trafficking ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Carbon County man was sentenced today, in federal court in Scranton by Senior United States District Judge Edwin M. Kosik, to serve 37 months in prison on the charge of aiding and abetting the distribution of cocaine.
According to United States Attorney Peter Smith, Alexander “Butch” Sommers, age 48, of Summit Hill, Carbon County, previously pleaded guilty to assisting others in distributing crack cocaine and powder cocaine in the Carbon County area between January 2011 and December 2012.
In addition to the prison term, Senior Judge Kosik also ordered that Sommers be supervised by a probation officer for four years following his release from prison.
Sommers was indicted by a federal grand jury on October 30, 2012, after an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Nesquehoning and Lansford Police Departments in Carbon County.
Previously, Victoria Argott, age 34, of Lansford, Carbon County, the former girlfriend of Sommers, was sentenced to 40 months in federal prison for participating in the same cocaine trafficking conspiracy.
The case was prosecuted by Assistant United States Attorney Robert J. O’Hara.
California Man Receives 10-Year Federal SentenceRead the Press Release
EUGENE, Ore. – Victor Rivera-Cruz, 39, of Orange County, California, was sentenced today by U.S. District Court Chief Judge Ann Aiken to a 10-year prison term for possession with the intent to distribute methamphetamine. Following his release from prison, Rivera-Cruz will be on supervised release for five years.
In April 2012, the Oregon State Police conducted a traffic stop of defendant’s vehicle near Glenwood, Oregon. A search of the vehicle revealed nearly four pounds of methamphetamine. Rivera-Cruz’ criminal history includes convictions in 2001 and 2002 for possession of controlled substances, and convictions in 2005 for possession for sale of heroin, cocaine, methamphetamine and marijuana, felon in possession of a firearm, and child abuse.
This case was investigated by the Eugene Resident Office of the Drug Enforcement Administration and the Oregon State Police. Assistant United States Attorney Jeffrey Sweet prosecuted the case.
Burlington Man Sentenced for Child Exploitation OffenseRead the Press Release
The Office of the United States Attorney for the District of Vermont stated today that Kevin Gallagher, 32, of Burlington, Vermont, was sentenced on April 7, 2014, in United States District Court in Burlington, Vermont, to serve six months imprisonment following his guilty plea to one count of possession of child pornography. United States District Judge William K. Sessions III also ordered the defendant to serve six months of home incarceration as part of a five-year term of supervised release, and to pay a $100 special assessment.
According to court records, law enforcement was conducting undercover operations on a file-sharing network, and discovered a computer later identified as belonging to Gallagher was offering to share image files depicting child pornography. Law enforcement seized Gallagher’s computer pursuant to a search warrant on February 1, 2013, and discovered nearly 400 images and videos depicting child pornography on it.
United States Attorney Coffin commended the work of the Vermont Attorney General’s Office, the Vermont Internet Crimes Against Children Task Force, and Homeland Security Investigations, Department of Homeland Security. Gallagher was represented by John Pacht of Hoff Curtis. The case was prosecuted by Assistant United States Attorney Barbara A. Masterson.
United States Attorney Coffin noted that this prosecution is part of the U.S. Department of Justice's Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney=s Offices and the Internet Crimes Against Children Task Force, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Brooklyn Fish Processors Ordered to Comply with Sanitation RemediesRead the Press Release
After a bench trial handled by the Department of Justice, the U.S. District Court for the Eastern District of New York has entered an injunction against New York City Fish Inc., Maxim Kutsyk, Pavel Roytkov and Leonid Staroseletesky under the federal Food, Drug and Cosmetic Act (FDCA). The court found that each of the defendants had violated the FDCA in the past and that the court had “scant assurance” that defendants would comply with food safety laws going forward. The defendants manufacture ready-to-eat fishery products, including smoked salmon and mackerel, and operate out of a food processing facility located at 738 Chester Street in Brooklyn.In its verdict, the court found that each of the defendants had failed to keep the Chester Street Facility in compliance with current Good Manufacturing Practices, failed to keep records necessary to evaluate food safety and processed fish in a way that could lead to Listeria monocytogenes (L. mono) contamination. People who eat food contaminated with this bacterium can contract the disease listeriosis, which can be serious—even fatal—for vulnerable groups such as newborns and those with impaired immune systems. Complications from the disease can also lead to miscarriage. The court also found that, during several inspections dating back to 2006, FDA testing revealed the presence of L. mono in the facility.
The court ordered injunction provides for important remedies. Among other provisions, the injunction prohibits defendants from operating the Chester Street Facility until an independent laboratory and an independent sanitation expert develop a Listeria Monitoring Program satisfactory to the FDA and until the FDA is satisfied that defendants will fully comply with that program on an ongoing basis. The facility cannot begin operating again until defendants have cleaned and sanitized the Chester Street Facility and laboratory testing shows that L. mono is no longer present in the facility.The lawsuit was handled by Trial Attorney Adrienne Fowler of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Elliot M. Schachner of the Eastern District of New York, with the assistance from FDA Assistant Chief Counsel for Enforcement Julie Dohm.
Benson Man Sentenced on Narcotics Distribution and Weapons ChargesRead the Press Release
GREENVILLE - United States Attorney Thomas G. Walker announced that today, FELIX A. OKAFOR, 53, of Benson, North Carolina, was sentenced by Senior United States District Judge Malcolm J. Howard to 3,157 months (approximately 263 years) and 6 years of supervised release. OKAFOR was convicted of 25 drug and firearms offenses including conspiracy to distribute 100 grams of heroin and 100 kilograms of marijuana, four counts of distribution of marijuana, six counts of distribution of heroin, distribution of drugs within 1000 feet of a school, and 11 counts of possession of a firearm during a drug trafficking crime.
During a four day trial that concluded on July 11, 2013, the government presented evidence that between on or about November 8, 2011, through on or about January 11, 2012, OKAFOR sold various quantities of marijuana and heroin multiple times to a confidential informant at the defendant’s convenience store, the Flying Eagle, in Benson, North Carolina. OKAFOR possessed a gun in his pocket during each of these transactions. Additionally, the defendant used the Flying Eagle to cut and package the drugs to sell. The store was within 1000 feet of Benson Middle School.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives the North Carolina State Bureau of Investigation, the Johnston County Sheriff’s Office and North Carolina Alcohol Law Enforcement (ALE). Assistant United States Attorney Ethan A. Ontjes prosecuted the case.
Beaver County Prescription Drug Ring Leader Guilty of Violating Firearms, Narcotics and Burglary LawsRead the Press Release
PITTSBURGH – After hearing seven days of testimony from more than 33 witnesses, and after deliberating for nine hours, a federal jury of seven men and five women found David Best guilty of 11 counts of violating federal firearms, narcotics and burglary laws, United States Attorney David J. Hickton announced today.
David Best, 28, of Coraopolis, Pa., was tried before United States District Judge Arthur J. Schwab in Pittsburgh, Pennsylvania.
According to Assistant United States Attorney Eric S. Rosen, who prosecuted the case, the evidence presented at trial established that Best conspired together with others, from in and around July 2011, and continuing thereafter to in and around May 2013, to distribute and possess with intent to distribute large quantities of oxycodone and Opana, both of which are Schedule II controlled substances. Additionally, on April 18, 2013 and April 30, 2013, Best distributed oxycodone and oxymorphone, in the form known as Opana to a confidential informant. These sales were captured on videotape. The evidence presented at trial demonstrated that David Best was the leader of this Beaver County based drug trafficking organization which, over the course of the conspiracy, possessed with the intent to distribute and distributed Schedule II prescription drugs with an estimated street value of more than $600,000.
The jury also determined that on three separate occasions, Dec. 1, 2011, Sept. 26-27, 2012, and Feb. 15, 2013, Best burglarized the MedFast pharmacy in Baden, Pa.,, and from that pharmacy, stole a number of Schedule II controlled substances, including: fentanyl, oxymorphone, including in the form known as Opana, Ritalin, oxycodone, including in the form known as Oxycontin, methylphenidate, Vyvanse, morphine sulfate, Roxicet, Focalin, methylphenidate, hydromorphone, methadone, and meperidine. On two occasions, Best chiseled through the wall of the neighboring China Garden restaurant into the pharmacy, and on the third occasion, Best broke into the Bo-Rics hair salon, and from there, burrowed directly into the MedFast controlled substances cabinet. Best stole these controlled substances in order to distribute them.
Finally, the jury convicted David Best of carrying and brandishing a loaded revolver during and in relation to his drug trafficking conspiracy on June 20, 2012. The jury determined that Best held two men hostage at gunpoint after he lured them to his Economy Township home under the guise that he had a large stash of drugs and drug proceeds in his room. Best suspected that these two men were conspiring to steal his drug proceeds, so he preemptively attacked and held them hostage at gunpoint. The jury also found that Best possessed this firearm in furtherance of his drug trafficking conspiracy.
Judge Schwab scheduled sentencing for Sept. 15, 2014, at 9:30 a.m. On the drug distribution charges, the law provides for a maximum sentence of up to 20 years in prison on each count and a fine of up to $1,000,000. On the pharmacy burglary charges, the law provides for a maximum total sentence as to each count of up to 20 years in prison and a fine of up to $250,000. These sentences can be imposed concurrently or consecutively to each other. Finally, for the firearms charge, the Court must impose a mandatory minimum sentence of seven years imprisonment, a maximum of life imprisonment, and a fine of up to $250,000. The firearms sentence must be imposed consecutively to all other sentences, including those for drug distribution. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant. Pending sentencing, the court continued the detention of David Best.
The Drug Enforcement Administration and the Economy Borough and Cranberry Township Police Departments conducted the investigation that led to the prosecution and conviction of David Best.
Baltimore Prescription Drug Trafficker Sentenced to 5 Years in PrisonRead the Press Release
Was a Member of a Drug Trafficking Conspiracy Based out of the Paschall Auto Body Shop;
Loaned His Truck to Others to Use in Commercial RobberiesBaltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Richard Ashbrook, age 51, of Baltimore, today to five years in prison followed by three years of supervised release for conspiring to distribute oxycodone.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Howard County Police Chief William McMahon; Chief James W. Johnson of the Baltimore County Police Department; Anne Arundel County Police Chief Kevin Davis; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Commissioner Anthony W. Batts of the Baltimore Police Department."The big picture about today's sentencing of Mr. Ashbrook is that prescription drug trafficking in Maryland is a growing problem," stated Gary Tuggle, DEA Assistant Special Agent in Charge. “As a result of the illegal abuse of opiate based drugs like oxycodone, a wider epidemic of opiate addiction has developed in Maryland. We now have a new sub culture of opiate addicted individuals; individuals who now turn to heroin to feed their habits all because of prescription drug abuse."
According to his plea agreement, from the spring of 2012 to July 2013, Ashbrook illegally sold prescription pills, often OxyContin and Percocet, to David Paschall and others. David Paschall operated Paschall’s Auto Body Shop, formerly located at 801 Desoto Road in Baltimore. Ashbrook knew that the business was operating as a hub for the sale of illegal narcotics - mostly oxycodone, but also heroin, cocaine and other illegal drugs. Ashbrook sold oxycodone to David Paschall that was either prescribed to him, or which he had illegally obtained from others. Ashbrook sold more than 14,930 milligrams of oxycodone, which is roughly 1,000 15mg pills. He further admitted that members of the conspiracy distributed between 14.93 and 59.70 grams of oxycodone.Ashbrook also knew of other illegal conduct being committed by his coconspirators and others. David Paschall and others borrowed Ashbrook’s truck to use in commercial burglaries. On April 8, 2013, law enforcement overheard Ashbrook warning David Paschall about the light coming on when the truck doors are open, and suggesting that Paschall use a screwdriver to pop out the light, to avoid detection by law enforcement.
David Paschall, age 54, of Catonsville, Maryland, and his son, Chad Paschall, age 28, of Baltimore, pleaded guilty in February 2014 to conspiring to distribute oxycodone and two counts of conspiring to commit bank burglary. The Paschalls admitted to committing commercial burglaries in Maryland, Virginia, West Virginia and Pennsylvania. According to their plea agreements, the Paschalls conspired to steal cash, money orders, stamps, silver bars, jewelry, cigarettes, lottery tickets, prescription drugs, food, beverages, safes, laptop computers, cell phones, electronics, vehicles and other valuable items from gas stations, convenience stores, banks, credit unions and other commercial establishments.
At their sentencing, David and Chad Paschall face a maximum sentence of 20 years in prison and a $1 million fine for the drug conspiracy, and five years in prison for the bank larceny conspiracy. David Paschall has agreed to forfeit $500,000, his ownership interest in Paschall’s Auto Body Shop and his residence, three firearms and his vehicle. Chad Paschall has agreed to forfeit $250,000, his interest in his residence, four firearms and ammunition.
To date, a total of 12 defendants charged in the drug and burglary conspiracies have pleaded guilty to their participation in the criminal activities. Charges remain pending against four other defendants.
United States Attorney Rod J. Rosenstein commended the DEA, Howard County Police Department, Baltimore County Police Department; Anne Arundel County Department, ATF, Department of Health and Human Services - Office of Inspector General; Coast Guard Investigative Service and Baltimore Police Department for their work in the investigation. Mr. Rosenstein also praised the many local and state agencies in Virginia, West Virginia and Pennsylvania for their assistance in the investigation.
Mr. Rosenstein thanked Assistant United States Attorneys David I. Sharfstein and Andrea L. Smith, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Baldwin County Meth Cook Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Anthony David Granger, 31, of Robertsdale, was sentenced to 54 months imprisonment in federal court today for his participation in a conspiracy to manufacture methamphetamine. Granger pled guilty to the charge in November of 2012, and was released from custody on conditions. His conditions of release were revoked when he tested positive for the use of illegal drugs. At the sentencing hearing today, United States District Court Judge Callie V. S. Granade denied Granger’s request to receive credit for “acceptance of responsibility” under the United States Sentencing Guidelines, finding that his use of illegal drugs while under conditions of release did not show an affirmative acceptance of responsibility or a turning away from criminal behavior. Judge Granade also ordered that Granger undergo drug treatment while in prison and after his release on a four-year term of supervision, which will follow his imprisonment. She did not impose a fine, but ordered that Granger pay the $100 special mandatory assessment.
The case was investigated by the Baldwin County Sheriff’s Office, the Baldwin County Drug Task Force and the Loxley Police Department. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
Baldwin County Meth Cook Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Richard Littrell, Jr., 27, of Robertsdale, was sentenced to 84 months imprisonment on Wednesday, April 9, for his participation in a conspiracy to manufacture methamphetamine from 2009 through 2012. Littrell pled guilty to the charge in federal court in 2013 before United States District Court Judge Callie V. S. Granade. Judge Granade also ordered that Littrell serve a five-year term of supervised release following his release from imprisonment. The judge ordered that Littrell undergo drug treatment both during his incarceration and while on supervised release. Judge Granade did not impose a fine, but ordered that Littrell pay the $100 special mandatory assessment.
The case was investigated by the Baldwin County Drug Task Force, the Baldwin County Sheriff’s Office, and the Loxley Police Department. It was prosecuted in the United States Attorney's Office by Assistant United States Attorney Gloria Bedwell.
Wednesday 9 April 2014
Wickliffe Man Charged Faces Child Pornography ChargeRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today that William Lintala, 31, of Wickliffe, Ohio, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct.
The indictment charges that from in or about March 27, 2010, through on or about October 22, 2013, Lintala knowingly received and distributed, by computer, numerous computer files, which contained visual depictions of real minors engaged in sexually explicit conduct, and possessed an Intel i5 tower computer, a Western Digital hard drive, and a Kingwin Brand USB external hard drive that contained child pornography on November 5, 2013.
If convicted, the sentence in this case will be determined by the Court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Carol M. Skutnik. The case was investigated by the Federal Bureau of Investigation, Painesville Office.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Westbrook Man Convicted of PerjuryRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Joel
Dudley, 29, of Westbrook, was convicted yesterday after a two-day jury trial in U.S. District
Court in Portland of making a false declaration to a federal court.According to court records and evidence introduced at trial, in April of 2013, Dudley
testified at a hearing on a motion to suppress statements he made during an interview with law
enforcement agents in connection with an investigation of him for possession of child
pornography. At the suppression hearing held in U.S. District Court in Portland, Dudley falsely
testified that he repeatedly invoked his right to counsel during the interview, but that agents
continued to question him in violation of his constitutional rights. Today’s guilty verdict
reflected the jury’s conclusion that Dudley’s suppression hearing testimony was knowingly false
and material to, or capable of influencing the outcome of, the hearing at which he testified.
On February 25, 2014, Dudley was convicted of possession of child pornography after a
two-day jury trial in U.S. District Court. Dudley will be sentenced on both cases after completion
of a pre-sentence investigation report by the U.S. Probation Office. He faces a maximum
sentence of up to 10 years and a fine of up to $250,000 on the child pornography charge, and a
maximum sentence of up to 5 years and a fine of up to $250,000 on the false declaration charge.The investigation was conducted by U.S. Immigration and Customs Enforcement’s
Homeland Security Investigations and the Westbrook Police Department.West Orange, N.J., Woman Sentenced to 30 Months in Prison for Stealing Nearly $100,000 from an Elderly WomanRead the Press Release
TRENTON, N.J. – A West Orange, N.J., woman who defrauded an elderly victim of nearly $100,000 by taking the victim’s Social Security payments and secretly applying for a reverse mortgage on the victim’s home was sentenced today to 30 months in prison, U.S. Attorney Paul J. Fishman announced.
Shawn L. Craig, 47, previously pleaded guilty before U.S District Judge Michael A. Shipp to an information charging her with one count of mail fraud and one count of filing false personal federal income tax return for 2011 by not disclosing income, including money fraudulently obtained from her victim. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents in this case and statements made in court:
In November 2010 Craig entered into a general power of attorney with the victim, an elderly woman, to serve as her attorney-in-fact. Craig was trusted to act in the victim’s best interest and to arrange for the payment of the victim’s living expenses.
After gaining access to the victim’s bank accounts, Craig diverted a portion of the victim’s funds for her own benefit and the benefit of her family, including paying her automobile insurance; purchasing a bar and bar stools; making a tuition payment; and paying for entertainment at the Wachovia Center in Philadelphia. At the time Craig made those purchases, the funds in the victim’s accounts consisted primarily of the victim’s Social Security benefits.
In December 2010, Craig submitted an application in the victim’s name to a commercial lender for a reverse mortgage on the victim’s residence in East Orange. When the victim refused to sign a specific power of attorney permitting the closing of the reverse mortgage to go forward, Craig forged the victim’s signature on the document and presented it to the title agent at the title agent’s office in Morristown, N.J.
Craig used the money from the reverse mortgage to purchase items at retail establishments including Gucci, Coach, Nike, Apple, Footlocker and various other shoe stores; pay for meals and entertainment at restaurants, liquor stores and other establishments, including the Taj Mahal in Atlantic City, N.J., the Staples Center in Los Angeles and Amazing LA Tours in Santa Monica, Calif.; fund travel to, and stays at, hotels in New Jersey, California and Florida; and pay personal bills, including automobile insurance, gas and electric, cell phone and cable bills.
In June 2011, Craig was notified that the general power of attorney had been revoked, so she transferred the victim’s funds to a new bank account. In all, Craig misused approximately $99,000 of the victim’s funds.
Craig also admitted that she caused a tax preparer to prepare and electronically file with the IRS a false and fraudulent personal income tax return for tax year 2011 by not disclosing as income the funds that she had fraudulently obtained from the victim.
In addition to the prison term, Judge Shipp sentenced Craig to three years of supervised release, fined her $10,000 and ordered her to pay restitution of $75,663.
U.S. Attorney Fishman credited special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Region, under the direction of special Agent in Charge Christina Scaringi; the FBI, under the direction of Special Agent in Charge Aaron T. Ford; IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Maureen Nakly and Jacques S. Pierre of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
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Defense counsel: Thomas R. Ashley Esq., Newark
Vian Man Sentenced to 46 Months for Firearm PossessionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that CLENTON KENDALL MCCOY, age 51, of Vian, Oklahoma, was sentenced to 46 months of imprisonment, followed by 3 years of supervised release for being a Felon in Possession of a Firearm, in violation of Title 18, United States Code, Section 922(g)(1).
Charges arose from an investigation by the Sequoyah County Sheriff’s Office. The defendant was indicted in August, 2013 and pled guilty in September, 2013.
The Indictment alleged that on or about July 1, 2013, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, the following firearm, to-wit: one Harrington and Richardson .20 gauge single shot shotgun with no serial number, which had been shipped and transported in interstate commerce.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Edward Snow represented the United States.
Two Leaders of 'Red Breed Guerillas' Street Gang Sentenced to Lengthy Prison Terms for Drug and Gun PossessionRead the Press Release
NEWARK, N.J. – Two leaders of a Bloods street gang set known as the “Red Breed Guerillas” were sentenced today to prison terms for drug trafficking and illegal possession of weapons, U.S. Attorney Paul J. Fishman announced.
Kaseem Upshaw, a/k/a “Uzi Kaz”, 34, and Anthony Pearson, a/k/a “Iz”, 32, both of Newark, were sentenced to 130 and 128 months, respectively, in prison. Both pleaded guilty in November 2013 before U.S. District Judge Esther Salas to conspiracy to distribute heroin and being convicted felons in possession of eight firearms. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
On Sept. 1, 2011, law enforcement officials executed a search warrant on an apartment on Stratford Place in Newark. They recovered 2,440 envelopes of heroin and eight guns, including three semi-automatic rifles, four handguns, and one shotgun, as well as 400 rounds of ammunition. Pearson and Upshaw were charged in a superseding indictment with being leaders of the Bloods set known as the “Red Breed Guerillas,” which controlled the drug trade in that area of Newark, and with being responsible for maintaining that apartment as part of their heroin distribution efforts.
During their guilty pleas, both Pearson and Upshaw admitted that from March 1, 2011, through Sept. 1, 2011, they used the apartment on Stratford Place in Newark to store heroin that was eventually distributed on the street. They both admitted they were in possession of the eight firearms after having previously convicted of felonies in New Jersey Superior Court.
In addition to the prison terms, Judge Salas sentenced Upshaw and Pearson each to five years of supervised release.
U.S. Attorney Fishman credited Drug Enforcement Administration, under the direction of Special Agent in Charge Carl Kotowski; and Newark Police Department, under the direction of Police Director Sheilah A. Coley and Police Chief Ivonne Roman, for the investigation leading to today’s sentencings.
The Government was represented by Assistant U.S. Attorneys James Donnelly and Robert Frazer of the Organized Crime/Gangs Unit in Newark.
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Defense counsel:
Upshaw: James Patton Esq., Livingston, N.J.
Pearson: Michael Pedicini Esq., Chatham, N.J.Two Defendants Sentenced to Prison in Insider Trading SchemeRead the Press Release
NEWARK, N.J. – The two primary traders in an extensive insider trading network were sentenced to prison today for repeatedly using information divulged by insiders at pharmaceutical/medical technology firms operating in New Jersey, U.S. Attorney Paul J. Fishman announced.
Lawrence Grum, 50, of Livingston, N.J., was sentenced to one year and one day in prison and Michael Castelli, 50, of Morris Plains, N.J., was sentenced to nine months in prison. Grum previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with two counts of conspiracy to commit securities fraud and four counts of securities fraud. Castelli previously pleaded guilty before Judge Hayden to an information charging him with two counts of conspiracy to commit securities fraud and five counts of securities fraud. Judge Hayden imposed both sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2007 to 2012 Grum and Castelli executed numerous, profitable trades based on inside information fed to them by their friend, Mark Cupo, 53, of Morris Plains, who was an executive at Sanofi-Aventis, a global pharmaceutical company with United States operations based in New Jersey. Cupo, in turn, obtained much of the inside information from his friend and former employee, John Lazorchak, 43, of Long Valley, N.J., who was director of financial reporting at Celgene Corp., another global pharmaceutical company based in New Jersey. Lazorchak also obtained certain inside information from Mark Foldy, 44, of Morris Plains, a friend and former high school classmate of Lazorchak, who was a marketing executive at Stryker Corp., a leading medical technology business with a major division located in New Jersey.
During the course of the multi-year insider trading operation, Grum and Castelli regularly received from Lazorchak, via Cupo, material, non-public information about Celgene’s anticipated corporate acquisitions, numerous quarterly earnings results, and regulatory news, with the understanding that Grum and Castelli would trade based on the inside information and share their profits with Lazorchak and Cupo. Grum and Castelli also received inside information directly from Cupo regarding a corporate acquisition planned by Cupo’s employer, Sanofi, as well as inside information Cupo had obtained from Lazorchak regarding a Stryker acquisition. Lazorchak, in turn, had obtained the Stryker inside information from his friend, Foldy.
Grum and Castelli made efforts to conceal their involvement in insider trading by, for example, compiling binders of market research to try to provide an independent basis for their knowledge of confidential, material nonpublic information.
The material, non-public information available to Grum and Castelli enabled them to reap substantial profits by engaging in lucrative securities trading ahead of the public announcement of several corporate acquisitions, numerous quarterly earnings results, and regulatory news. In addition, they shared a portion of their profits with Lazorchak and Cupo for their respective roles in providing Grum and Castelli inside information.
In addition to the prison terms, Judge Hayden sentenced Grum and Castelli to two years each of supervised release.
Grum and Castelli are the last of the six defendants charged with participating in this insider trading network to plead guilty. The other four defendants: Lazorchak, Cupo, Foldy, and Michael Pendolino, 44, of Nashua, N.H., entered their guilty pleas before Judge Hayden on Oct. 7, 2013, and are awaiting sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty pleas. He also thanked the U.S. Securities and Exchange Commission=s Market Abuse Unit, under the direction of Daniel M. Hawke.The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel:
Lawrence Grum: Scott A. Resnik Esq., New York
Michael Castelli: Daniel Zinman Esq. and Daniel Stein Esq., New York
John Lazorchak: Lawrence S. Lustberg Esq., Newark
Mark Cupo: Joseph J. Bell Jr. Esq. and Joseph J. Bell, IV Esq., Rockaway, N.J.
Mark Foldy: Jonathan Marks Esq., New York,
Michael Pendolino: James S. Friedman Esq., NewarkTom's River, N.J., Chiropractor Admits Receiving Bribes for Patient ReferralsRead the Press Release
NEWARK, N.J. – A chiropractor with a practice in Toms River, N.J., admitted today to accepting bribes to refer a number of his patients to a New Jersey-licensed pain management physician, U.S. Attorney Paul J. Fishman announced.
Norman Eastburn, 48, of Jackson, N.J., pleaded guilty to an information charging him with one count of violating the Anti-Kickback statute. He entered his guilty plea before U.S. District Judge Stanley R. Chesler in Newark federal court.
According to documents filed in this case and statements made in court:
Eastburn was paid a cash fee per patient he referred to the pain management physician. As part of the scheme, the pair negotiated specific kickback amounts that would be paid based on which payor would be billed – Medicare or a private healthcare insurer – and what type of pain treatment would be rendered.
Eastburn indicated to the pain physician that a medical doctor’s involvement in pain procedures would increase Eastburn’s likelihood of being reimbursed by insurers. As an example, Eastburn recounted a prior situation in which he misled a patient by telling her that she required an injection that he did not then believe, in fact, was medically necessary, then then paid a doctor $500 in cash to administer it.
The violation of the Anti-Kickback statute carries a maximum potential penalty of five years in prison and a $250,000 fine. In addition, Eastburn has agreed to forfeit to the United States the money he was paid in bribes. Sentencing is scheduled for July 8, 2014.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, with the investigation.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
The government is represented by Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
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Defense counsel: Peter Carter Esq., Assistant Federal Public Defender, Newark
Eastburn, Norman Information
Three Iowa Men Indicted for Armed Robbery of Burlington Junction BankRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that three Iowa men were indicted by a federal grand jury today for the armed robbery of a Burlington Junction, Mo., bank.
Donald D. Kestner, Jr., 26, and Torrence Joseph O’Neill, also known as “Torry,” 26, both of Mt. Pleasant, Iowa, and Travis Joe Davis, 27, of Fort Dodge, Iowa, were charged in a three-count indictment returned by a federal grand jury in Kansas City, Mo.
Today’s indictment alleges that Kestner, O’Neill and Davis stole $12,282 from Citizens Bank and Trust, 102 W. Main St., Burlington Junction, Mo., on March 21, 2014.
Kestner, O’Neill and Davis were arrested shortly after the robbery occurred. A Maryville Department of Public Safety officer in an airplane piloted by a citizen spotted the three men walking and they were arrested by the Missouri State Highway Patrol. The vehicle used in the armed bank robbery was discovered hidden among some trees and three men were seen walking away from that vehicle.
Kestner and Davis are also charged with one count of aiding and abetting one another to brandish a firearm during a crime of violence.
Kestner is also charged with being a felon in possession of a firearm. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Kestner, who has a prior felony conviction for burglary, allegedly possessed a .45-caliber pistol.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Rudolph R. Rhodes, IV. It was investigated by the Nodaway County, Mo., Sheriff’s Department, the Maryville, Mo., Department of Public Safety, the Missouri State Highway Patrol, the Page County, Iowa, Sheriff’s Department and the FBI.Taquarius Ford Charged with Sex Trafficking by Force, Fraud, CoercionRead the Press Release
PORTLAND, Ore. — Taquarius Kaream Ford, also known as “Cameron,” has been indicted by a federal grand jury on sex trafficking and conspiracy charges. Ford has pled not guilty to all charges. Following a detention hearing today, U.S. Magistrate Court Judge Janice M. Stewart detained Ford, pending his trial. Trial is currently set for June 3, 2014, before U.S. District Court Judge Garr M. King.
The grand jury indictment alleges that Ford and a co-conspirator sex trafficked adult females in the District of Oregon and elsewhere, by force, fraud and coercion. In its’ court filings, the government alleges that Ford recruited young women in suburban shopping malls and elsewhere across the United States by posing as a modeling executive and promising them a modeling contract. He convinced young women to travel to Los Angeles, wined and dined them in Hollywood, and then told them that if they want to be models, they must first work for him as prostitutes. In one case, he recruited an 18-year-old girl at a suburban mall, flew her to Los Angeles, and took her to Hollywood parties. He then coerced her to work in his escort business, and when she protested, he forcibly raped her. Ford and his co-defendant also threatened to harm the victim’s family. Thereafter, defendants transported the victim to Portland for the purpose of prostitution, where she was rescued at an airport hotel by Port of Portland officers. Further investigation by the FBI’s Child Exploitation Task Force revealed that defendant had recruited other young women across the country into his “escort” business. The FBI has identified additional victims in Idaho, Arizona, and Georgia.
Sex trafficking by force, fraud, and coercion carries a mandatory minimum sentence of 15 years in prison, and a statutory maximum of life imprisonment. A criminal indictment is only an allegation and not evidence of guilt. Defendant is presumed innocent unless and until proven guilty.
The FBI urges anyone who was victimized by Taquarius “Cameron” Ford, to contact the Portland FBI office at (503) 224-4181.
The charges stem from a continuing investigation by the FBI and the Tigard Police Department, members of the FBI’s Child Exploitation Task Force. The case is being prosecuted by Assistant U.S. Attorney Stacie Fatka Beckerman, and Special Assistant U.S. Attorney Glen Ujifusa of the Multnomah County District Attorney’s Office.
Suffolk Man Indicted for Making Death ThreatsRead the Press Release
NORFOLK, Va. – David Gil Wilkinson, 43, of Suffolk, Va., was indicted by a federal grand jury today for making death threats against both the President and former First Lady Hillary Clinton.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and William Frantzen, Special Agent in Charge of the United States Secret Service’s Richmond Field Office, made the announcement.
Wilkinson faces a maximum penalty of 10 years if convicted.
According to an affidavit previously filed, Wilkinson, a retired Special Forces Navy Chief, called 911 in Southampton County claiming to be a FBI Agent on a secret mission. When officers responded Wilkinson told them that he was going to run for president and personally execute both the President and Hillary Clinton. Wilkinson was committed for an emergency mental health evaluation for 72 hours. Secret Service agents interviewed Wilkinson where he re-iterated his desire to execute the President and Hillary Clinton. When Wilkinson was released he drove to Henrico County, called 911 and told operators that President Obama was out, people needed to die, and he was part of a group that would take back America.
This case was investigated by the United States Secret Service. Assistant United States Attorney Joseph L. Kosky is prosecuting the case on behalf of the United States.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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.Steubenville Man Sentenced to 21 Years for Cocaine TraffickingRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA - A Steubenville, Ohio man will serve the next two decades in federal prison for his role in the distribution of cocaine in the Northern District of West Virginia and in Jefferson County, Ohio.
United States Attorney William J. Ihlenfeld, II, announced that MICHAEL T. MCGEE, age 43, of Steubenville, was sentenced to 262 months in prison at a hearing held today before U.S. District Court Judge Frederick P. Stamp, Jr. McGEE was convicted in January of the felony offense of “Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine” after a three-day jury trial.
MCGEE, who has prior convictions for armed robbery and cocaine and marijuana trafficking, was found by the jury to have conspired with co-defendant Ronald Snider and others to distribute cocaine from November of 2012 to June of 2013.
In announcing the sentence, U.S. Attorney Ihlenfeld praised the work of the Jefferson County, Ohio, Drug Task Force and the Drug Enforcement Administration. Ihlenfeld also commended the efforts of Assistant U.S. Attorney Robert H. McWilliams, Jr., who prosecuted the case.
State Audit Director Charged with Federal Program FraudRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that DELRICE J. AUGUSTUS, age 34, of Baton Rouge, Louisiana, has been charged in a Bill of Information with federal program fraud, in violation of Title 18, United States Code, Section 666(a)(1)(A).
AUGUSTUS is the Director of the Bureau of Auditing and Compliance Services for the Louisiana Department of Children and Family Services (DCFS). He is currently on leave from his position. DCFS leadership has cooperated fully with the investigation.
If convicted, AUGUSTUS faces up to 10 years imprisonment, a $250,000 fine, forfeiture of the proceeds from the offense, restitution, and up to 3 years of supervised release following a term of imprisonment. His initial appearance will be held on a date to be determined.
The Bill of Information alleges that, during the period from 2010 through March 2014, while serving as Audit Director of a state agency receiving over a billion dollars annually in federal funds, AUGUSTUS fraudulently misused government purchasing cards to obtain items for personal use for himself and others, including an installed dishwasher, televisions, movies, cameras, wireless audio systems, such as Sonos and Jawbone, gaming devices, such as Xboxes, Wii and Leapsters, mobile devices, such as I-Pads, Kindle Fires, and an I-Phone 5, Dyson vacuums, rental vehicles, hotel rooms, and fuel.
The matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana, the Louisiana State Police, the Louisiana Inspector General’s Office, and the Federal Bureau of Investigation.
NOTE: A Bill of Information is an accusation by the U.S. Attorney’s Office. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Sisters Arrested on Federal Tax Fraud ChargesRead the Press Release
BIRMINGHAM -- Federal authorities today arrested two sisters on charges that they worked together in their Taxes N More business in Tarrant to prepare fraudulent tax returns for themselves and others, often falsely claiming a credit for first-time homebuyers, announced U.S. Attorney Joyce White Vance and IRS, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.
A federal grand jury indicted LUGENIA L. "Gigi" CONNER, 31, of Trussville, and KANESHIA L. "Kiki" CONNER-GOODGAME, 34, of Birmingham, in late March on charges of conspiracy to defraud the United States by obstructing and defeating collection of income taxes by the Internal Revenue Service. The indictment also charges both sisters, individually, with assisting in the preparation and presentation of false and fraudulent returns for the 2008 tax year, and with making and filing false returns for themselves for 2008. The indictment was sealed until both women were arrested.
"Tax return preparers who concoct schemes to collect inflated refunds are stealing from the U.S. Treasury and cheating the millions of hard-working Americans who pay their due share of taxes each year," Vance said. "The U.S. Attorney's Office will continue to work with the IRS to prosecute tax fraud and protect the sanctity and integrity of the tax system."
"As filing season comes to an end, the arrests today should send a message that IRS Criminal Investigation will continue to enforce laws that protect the integrity of our tax system,” Hyman-Pillot said. “Refund fraud is not a victimless crime and it affects everyone who pays taxes. Honest taxpayers who file accurate returns can be assured that the government will pursue the individuals who attempt to defraud the United States tax system."According to the March indictment, Conner and Conner-Goodgame conducted their scheme as follows:
The sisters jointly owned and operated Taxes N More, where they worked together to obtain inflated refunds for their clients in 2009 by falsifying information submitted on clients' 2008 returns. The sisters claimed the First Time Home Buyer's Credit of up to $7,900 on returns they prepared for other taxpayers, knowing those taxpayers were not entitled to the credit. The women also prepared third-party tax returns claiming itemized deductions or business expenses that clients neither had provided information for, nor were entitled to receive.
Conner faces five counts of assisting in the preparation of fraudulent returns for falsely claiming a total of $93,683 in deductions and credits on returns she prepared for five different taxpayers. Conner-Goodgame faces two counts of the same charge for falsely claiming a total of $15,400 with the First Time Home Buyer's Credit for two tax clients.
Conner and Conner-Goodgame also each are charged with creating and submitting 2008 personal tax returns on which they claimed the homebuyers' credit, knowing they were not entitled to that deduction.
The Taxes N More business had a dramatic increase in both the number of returns prepared and the amount of refunds claimed from the 2007 to the 2008 tax year, according to the indictment. For the 2007 tax year, it says the sisters' business prepared 337 third-party tax returns, claiming $1.3 million in refunds. For the 2008 tax year, Taxes N More prepared 670 third-party returns, claiming $3.5 million in refunds.
IRS Criminal Investigation investigated the case, which Assistant U.S. Attorney Amanda Wick is prosecuting.
The public is reminded that an indictment is only a charge and defendants are presumed innocent. It is the government's responsibility to prove guilt beyond a reasonable doubt at trial.
Sentence of 70 Months in Prison for Marijuana ConspiracyRead the Press Release
PLATTSBURGH, NEW YORK – ALAIN FORGET, 43, was sentenced on April 4, 2014 by United States District Court Judge Glenn T. Suddaby to 70 months imprisonment and four years supervised release for conspiracy to possess with intent to distribute and to distribute more than one hundred (100) kilograms of marijuana announced United States Attorney Richard S. Hartunian.
On February 28, 2012, FORGET pled guilty to an information, charging conspiracy to possess with intent to distribute and to distribute a controlled substance, in violation of 21 U.S.C. §§846 and 841(b)(1)(B). FORGET participated in a large scale drug trafficking organization designed to import thousands of pounds of marijuana into the United States and he help generate millions of dollars in drug proceeds. In addition to personally smuggling loads of marijuana into the United States, FORGET assumed a leadership role within the organization, recruiting others into the smuggling scheme and directing their activities.
The investigation and prosecution of FORGET was the result of a joint investigation between the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), the New York State Police (NYSP), the United States Border Patrol (USBP), the Plattsburgh Police Department, and Clinton County Sheriff’s Office.
Any questions may be directed to Assistant U.S. Attorney John Duncan in Syracuse, New York at 315-448-0672.
Sentence of 120 Months in Prison for Marijuana ConspiracyRead the Press Release
PLATTSBURGH, NEW YORK – NICHOLAS VARACALLI, 66, was sentenced on April 3, 2014 by United States District Court Judge Glenn T. Suddaby to 120 months imprisonment and five years supervised release for conspiracy to possess with intent to distribute and to distribute more than one thousand (1,000) kilograms of marijuana announced United States Attorney Richard S. Hartunian.
On December 19, 2013, VARACALLI pled guilty to Count 1 of superseding indictment 10-CR- 534 (GTS), charging conspiracy to possess with intent to distribute and to distribute a controlled substance, in violation of 21 U.S.C. §§846 and 841(b)(1)(A). VARACALLI played a key role in an international drug smuggling organization designed to import thousands of pounds of marijuana into the United States and helped generate millions of dollars in drug proceeds. The defendant, along with co-defendant’s Denis Vachon and Jacques Perrault, was responsible for coordinating the acquisition and delivery of large quantities of marijuana, communicating with marijuana dealers in the United States to arrange marijuana shipments and receiving the proceeds of the transactions to pay the suppliers and other members of the organization.
On March 4, 2014, co-defendant Jacques Perrault pled guilty to Count 1 of superseding indictment 10-CR-534. Perrault is scheduled to be sentenced on July 10, 2014.
The investigation and prosecution of VARACALLI was the result of a joint investigation between the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), the New York State Police (NYSP), the United States Border Patrol (USBP), the Plattsburgh Police Department, and Clinton County Sheriff’s Office.
Any questions may be directed to Assistant U.S. Attorney John Duncan in Syracuse, New York at 315-448-0672
Ronald House Sentenced on Obstruction of Justice ChargesRead the Press Release
ALBANY, NEW YORK – Richard S. Hartunian, United States Attorney for the Northern District of New York, announced that RONALD L. HOUSE, 58, of Rochester, New York was sentenced today in Buffalo, New York on his November, 2013 conviction for three counts of obstruction of justice and one count of making materially false statements.
Hon. William M. Skretny, Chief United States District Judge for the Western District of New York sentenced House to 48 months imprisonment, 2 years supervised release and a money judgment of $32,000.
House’s conviction came after a jury trial in Buffalo, New York charging that he endeavored to obstruct justice on behalf of criminal defendants with cases pending in the United States District Court in Rochester. He was convicted of obstructing two cases by endeavoring to fraudulently attribute information to criminal defendants that they could use in exchange for sentencing leniency, and in one case, for pre-trial release. As to a third case he was also convicted of obstructing justice by making false representations to a United States Probation Officer in an effort to persuade the officer from filing a supervised release violation against the offender.
House was also convicted of making materially false statements to the then-director of a Rochester halfway house in order to obtain extra liberty for an inmate by falsely representing that the inmate was going to be with House at a church men’s group, while knowing that the inmate instead was going to use the time to spend time with a girlfriend.
HOUSE’s arrest and conviction are the result of an investigation by the Federal Bureau of Investigation - Buffalo Division, the Internal Revenue Service – Criminal Investigation, New York Field Office, the City of Rochester Office of Public Integrity, and the Rochester Police Department. The prosecution was handled by Northern District of New York Assistant U.S. Attorney Lisa Fletcher, who can be reached at 315-448-0672.
Robber Receives 20-Year Federal SentenceRead the Press Release
Four Banks and Two Motels Robbed During Crime Spree Last FallPORTLAND, Ore.- Andrew Frank Laviguer, 57, was sentenced today by Senior U.S. District Judge Robert E. Jones to 240 months in federal prison for the robbery of four banks and two motels in Oregon and Washington during August and September of last year. Laviguer pled guilty to the charges in November of 2013 and has been in custody since the time of his arrest on September 9, 2013.
Laviguer was sentenced for the following robberies: (1) August 14, 2013, armed robbery (replica firearm) of the Columbia Bank on NE Halsey Street in Portland, Oregon; (2) August 30, 2013, robbery of the Key Bank on 17th Avenue SW in Seattle, Washington; (3) September 4, 2013, robbery of the Sterling Savings Bank on Tacoma Mall Blvd. in Tacoma, Washington; (4) September 7, 2013, robbery of the Super 8 Motel on SW Parkway Avenue in Wilsonville, Oregon; (5) September 8, 2013, attempted robbery of the Roadway Inn on Astoria Way NE in Salem, Oregon; and (6) September 9, 2013, armed robbery (replica firearm) of the Wells Fargo Bank on NW 11th Avenue in Portland, Oregon.
Laviguer was arrested by Portland Police Bureau officers after he robbed the Wells Fargo Bank in September of 2013. Laviguer received a sentence of 180 months, following a 1992 Salem bank robbery. After serving that sentence and being released, he was convicted of robbing a bank in Gresham in 2007 and was sentenced to 77 months in prison. Following his release from the Federal Correctional Institution in Williamsburg, South Carolina, on July 9, 2013, he was ordered to report to the Lane County Work Release Center to begin his supervised release for the 2007 bank robbery. He failed to report and the robbery spree began less than one month later.
In order to achieve the 20-year sentence, Jones found that Laviguer was a “career offender” under federal sentencing law and departed upward from that sentencing range because of Laviguer’s aggravated criminal history and the number of robberies he committed.
This case was investigated by the FBI, the Portland Police Bureau, the King County Sheriff’s Office, the Tacoma Police Department, the Clackamas County Sheriff’s Office and the Salem Police Department. It was prosecuted by Assistant U.S. Attorney Fred Weinhouse.
Rapid City Man Indicted for Concealing Person from Arrest and False StatementRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Concealing Person from Arrest and False Statement.
Yellow Elk was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Justin Robert Yellow Elk, age 28, was indicted on March 18, 2014. He appeared before U.S. Magistrate Judge Veronica L. Duffy on April 7, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 5 years’ imprisonment and/or a $250,000 fine, 3 years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The indictment charges that Yellow Elk aided in concealing a man from arrest on a federal charge, and gave false statements to a federal agent during the investigation.
The charges are merely accusations and Yellow Elk is presumed innocent until and unless proven guilty.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Prison Time and Stiff Penalties Await Tax Fraudsters, Prosecutors WarnRead the Press Release
Tax Preparer Fraud, Identity Theft Among The 12 Most Common Tax Scams
CHARLOTTE, NC - With the deadline for filing income tax returns less than a week away, Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division (IRS-CI), jointly announce recent tax fraud prosecutions and caution potential tax fraudsters to think twice before they commit tax crimes.
“Prosecuting those who cheat the tax system remains a priority for my Office,” said U.S. Attorney Tompkins in making today’s announcement. “Taxes help pay for important services our communities rely on and tax cheats increase the burden on honest taxpayers who each year file accurate and timely tax returns and pay their tax obligations.” Ms. Tompkins urged tax payers to be vigilant in safeguarding their personal identities and to avoid being victims of tax scams by selecting reliable tax preparers and reporting suspected tax fraud. U.S. Attorney Tompkins also said, “Our experienced tax prosecutors and IRS criminal investigators work hand-in-hand to uncover tax fraud and hold tax cheats accountable for their actions.”
“During tax filing season, return preparers and taxpayers should be aware of the serious consequences facing those who aid or assist in the filing of fraudulent tax returns,” said IRS-CI Special Agent in Charge Hammett. “Those who fly in the face of the tax laws face investigation, prosecution, and if convicted, significant prison sentences and substantial fines.”
Tax Preparer Pleads Guilty to Tax FraudReginald B. Landrum, a Charlotte-area tax return preparer, pleaded guilty today to one count of aiding in the preparation of false tax returns. Court records show that between 2006 and 2010 Landrum prepared and submitted to IRS 58 false tax returns using false information, resulting in larger tax refunds for his clients. Court records show that Landrum used false Schedule C income and expenses, false Schedule A deductions, false wages, false dependents and other false items to prepare the fraudulent tax returns. The total tax loss associated with the 58 fraudulent tax returns Landrum prepared and filed is $229,691. At sentencing, Landrum faces up to three years in prison and a $250,000 fine. A sentencing date has not been set yet. (3:14-cr-46).
Other 2013 Tax ProsecutionsIn the last year, the U.S. Attorney’s Office, with the assistance of IRS-CI, has prosecuted numerous individuals for criminal tax violations. Tax enforcement prosecutions include:
Isaac H. Birch - On August 15, 2013, Isaac Birch, of Franklin, N.C., pleaded guilty to filing false and fraudulent statements with the U.S. Treasury. According to court documents, Birch filed false tax returns in 2007, 2008 and 2009 using fictitious IRS 199OID forms, through which he fraudulently obtained a refund in excess of $480,000. Birch is awaiting sentencing and faces a maximum prison term of three years and a $100,000 fine. (2:13-cr-00020).
Tega Burns - On January 14, 2014, Tega Burns, a/k/a Tega Foy, of Charlotte, was sentenced to 24 months in prison and two years of supervised release and was ordered to pay $306,972.43 as restitution, for committing tax fraud and mortgage fraud. Court records show that from 2007 to 2011, Burns was the owner of Family Homecare Services, which provided in-home care services in the Charlotte area. Court documents show that Burns did not pay a large part of the employment taxes owed for the relevant tax years and used nominees, including her son and her step-father, to hide funds from the IRS. Burns pleaded guilty to failure to account for and pay over employment tax and to making a false statement on a loan application. (3:12-cr-00198).
Candida Figueroa and Cathy Cisneros – On November 7, 2013, Candida Figueroa and Cathy Cisneros, both of Charlotte, were sentenced to prison time for obtaining false and fraudulent income tax refunds. Figueroa was sentenced to 30 months in prison and two years of supervised release, and Cisneros was sentenced to 37 months in prison and three years of supervised release. Figueroa and Cisneros pleaded guilty false claims conspiracy and were ordered to pay $1,658,477.67 as restitution. Court documents indicate that from January to July 2012, the defendants used fraudulent Individual Taxpayer Identification Numbers (ITINs), Mexican birth certificates and other false documents to file at least 1,104 fraudulent tax returns seeking refunds. IRS issued refunds totaling approximately $1.6 million, of which $136,334 has been recovered. (3:12-cr-00260). A third co-conspirator, Ana Portillo, of Charlotte, pleaded guilty to false claims conspiracy in May 2013 for participating in the same tax fraud scheme and is awaiting sentencing. Portillo faces a maximum prison term of 10 years, a $250,000 fine, or both. (3:12-cr-00389).
Teodoro Felix Hernandez – On November 10, 2013, Teodoro Felix Hernandez pleaded to false claims conspiracy. According to filed court documents, from February 2012 to May 2013, Hernandez conspired with others and defrauded the U.S. Treasury by obtaining false tax refunds using fraudulently obtained ITINs. The conspirators prepared and filed false returns using the ITINs and false wage, income, and withholding tax information and claiming multiple dependents, causing the U.S. Treasury to issue tax return checks. The checks were mailed to rural addresses in North Carolina, South Carolina and Georgia, at which the purported taxpayer did not live. According to the documents, Hernandez cashed approx. 109 fraudulent tax return checks with various money service businesses, the value of which totaled $428,065 in false refunds. Hernandez is currently released on bond and awaiting sentencing. He faces a maximum of 10 years in prison and a $250,000 fine. (3:12-cr-158).
James Wesley Hills, II – On March 3, 2014, James Wesley Hills, II, of Asheville, pleaded guilty to making false claims against the United States and aggravated identity theft. According to court documents, Hills gained access to personal identifying information of customers of Primerica, a financial products company, and between 2010 and 2011, he used the stolen information to file fraudulent tax returns. Hills filed at least 38 false tax returns in this manner and collected over $50,000 of stolen U.S. Treasury funds. Hills is awaiting sentencing. He faces a maximum prison term of five years for making false claims and a mandatory term of two years in prison for the aggravated ID theft charge, and a $250,000 fine. (1:14-cr-05).
Jacqueline Pucheta Juarez – On January 7, 2014, Jacqueline Pucheta Juarez pleaded to false claims conspiracy. According to filed court documents, from January 2012 to May 2013, Juarez and others conspired to defraud the U.S. Treasury by participating in a scheme to obtain false tax refunds, using fraudulently obtained ITINs. Juarez and others used these ITINs to prepare fraudulent federal tax returns seeking refunds based on false wage, income, and withholding tax information and by claiming multiple dependents. Based on the fraudulent tax returns, the U.S. Treasury issued tax return checks and mailed them to addresses in rural addresses in North Carolina, South Carolina and Georgia, at which the purported taxpayer did not live. Juarez cashed approx. 350 fraudulent tax refund checks at various money service businesses, the value of which totaled $1,271,377 in false refunds. Juarez is currently in federal custody and awaiting sentencing. She faces a maximum prison term of 10 years, a $250,000 fine, or both. (United 3:12-cr-157).
Yolanda Tiess Kitson - On October 28, 2013, Yolanda Tiess Kitson, of Augusta, Ga., pleaded guilty to false claims conspiracy. Court records show that Kitson conspired with Senita Dill and Ronald Jeremy Knowles to file fraudulent tax returns using stolen personal identifying information. Through her job as a contractor at the Eisenhower Army Medical Center at Fort Gordon in Augusta, Ga., Kitson stole personal information from patient records and passed it her sister, Dill, who used it to file false tax returns. The conspirators filed more than 1,000 false tax returns and received over $3.5 million of stolen U.S. Treasury funds. Dill and Knowles also pleaded guilty to similar charges. All three defendants are awaiting sentencing and face up to 10 years in prison and $250,000 in fines. (1:13-cr-31).
Nghia Ly – On October 2, 2013, Nghia Ly, of Waxhaw, N.C., pleaded guilty to tax evasion for the 2011 calendar year. According to court records, Ly owned half of Kim Sen Jewelry, Inc., d.b.a. KS Nail Supply (KSJ) in Charlotte. From 2007 through 2011, Ly concealed from the IRS some of his personal earnings from KSJ. Court records show that Ly failed to provide bank records and hid a large part of the gross receipts of KSJ from his tax return preparer. For years 2007 through 2011, KSJ earned additional gross receipts totaling more than $4.8 million which Ly failed to report on KSJ corporate tax returns. As a result of the unreported gross receipts, Ly had additional taxable income of $820,396. A sentencing has not been set. Ly faces a maximum sentence of five years in prison and a maximum fine of $250,000. (3:13-cr-00235).
Jessica Ordonez – On March 31, 2014, Jessica Ordonez, of Morganton, N.C., was charged with tax evasion and aiding and abetting the preparation and presentation of a false tax return. Beginning in 2002, Ordonez was the owner of Tax Pros (a/k/a “Ordonez Tax Services”), which offered tax preparation services, among other things. Court documents show that between 2004 and 2012 Ordonez prepared at least 100 false tax returns for 23 taxpayers, using fraudulent ITINs which entitled her clients to large fraudulent tax refunds, with an associated tax loss of at least $202,217. Ordonez also failed to report her own income on her individual tax returns for tax years 2009 to 2011, with a corresponding tax loss between $81,000 and $122,000. Ordonez’s formal plea hearing is scheduled for April 11, 2014. At sentencing, she faces five years in prison and a $250,000 fine for the tax evasion charge and three years in prison and a $250,000 fine for aiding and abetting the preparation and presentation of a false tax return. (3:14-cr-00071).
Edward Rosner – On September 12, 2013, Edward Rosner, of Charlotte pleaded guilty to tax evasion. According to the court records, from 2005 through 2009, Rosner concealed his personal earnings from the IRS by directing funds obtained from his employer to himself through bank accounts in the name a nominee company, New Start LLC, and by directing the transfer of funds to accounts in the name of another individual. During this same time period, Rosner failed to file tax returns, despite obtaining income totaling approximately $2.9 million. Rosner awaits sentencing and faces a maximum prison sentence of five years and a $250,000 fine. (3:13-cr-00172).
Nkhenge Shropshire – On October 15, 2013, Nkhenge Shropshire, a/k/a Konjay Shropshire, of Charlotte, pleaded guilty to conspiracy to defraud the IRS and to making false statements on a loan application. Court records show that from 2009 through 2012, Shropshire owned Tax Connections, a Charlotte tax return preparation business. From 2009 to 2011, Shrophsire aided and assisted in the preparation of more than 600 tax returns for clients which were e-filed with the IRS. Many of the tax returns prepared by Shropshire falsely included Schedule C losses and refundable education credits, which decreased the clients’ tax liabilities, therefore resulting in larger tax refunds and false Earned Income Tax Credits. The tax loss associated with the false education credits is more than $580,000. Shropshire directed that many of the fraudulent tax refunds be deposited into a business bank account she controlled, and kept a portion of the refund as payment for her services. On some occasions, Shropshire did not provide her clients with copies of their completed tax returns or gave them incomplete copies, so clients could know their returns contained false information. The defendant is awaiting sentencing, and faces a maximum sentence of five years in prison and a maximum fine of $250,000 for the conspiracy count and a maximum sentence of 30 years in prison and a $1 million fine for the false statement on a loan application charge. (3:13-cr-00248).
Kenneth Sumner – On January 16, 2014, Kenneth Sumner, of Charlotte, pleaded guilty to filing a false tax return. Court documents indicate that Sumner was the owner of a Charlotte sales company, Ken B. Sumner and Associates. From 2006 through 2010, Sumner failed to file timely tax returns with the IRS despite having the requisite income to file tax returns. In June 2010, Sumner filed his 2006 federal income tax return which omitted gross receipts from Sumner’s business totaling approximately $106,808. For tax years 2007 and 2008, Sumner failed to file timely income tax returns even though he earned approximately $318,433 and $337,090, respectively. A sentencing date has not been set. Sumner faces a maximum sentence of three years in prison and a $250,000 fine. (3:13-cr-00257).
Denise Swanson – On August 22, 2013, Denise Swanson, of Lenoir, N.C., pleaded guilty to tax evasion for tax year 2010. Court documents show that Swanson was the owner and operator of Bottomline Accounting, a tax preparation and bookkeeping business. From 2006 to 2012, Swanson performed tax preparation services for J.W. and K.W., and their business, C.B. (“the Clients”), and was responsible for making tax payments on their behalf. Swanson received money from the Clients to pay various tax obligations to the IRS and other state agencies. But instead of making the payments, Swanson embezzled the money and used it to pay for personal expenses. In total, Swanson embezzled approximately $839,830. Also, Swanson failed to report the embezzled income on her own individual tax returns for tax years 2006 through 2011. Swanson awaits sentencing and faces a maximum sentence of five years in prison and a $250,000 fine. (5:13-cr-61).
Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims. Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated ID theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.
The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against a wide range of tax schemes ranging from identity theft to return preparer fraud. The IRS has issued its annual “Dirty Dozen” which lists common tax scams that taxpayers may encounter, particularly during filing season. Taxpayers are urged look out for, and to avoid, the following common schemes:
• Identity theft • Pervasive Telephone Scams • Phishing • False Promises of “Free Money” from Inflated Refunds • Return Preparer Fraud • Hiding Income Offshore • Impersonation of Charitable Organizations • False Income, Expenses or Exemptions • Frivolous Arguments • Falsely Claiming Zero Wages or Using False Form 1099 • Abusive Tax Structures • Misuse of Trusts
Education is the best way to avoid these common schemes. To learn more about the Dirty Dozen scams and for help with recognizing and avoiding abusive tax schemes, the IRS offers educational material at www.irs.gov. Suspected tax fraud can be reported to the IRS using Form 3949-A found on the IRS.gov website.
Physical Therapy Clinics to Pay $2.78 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON - Two companies that operate physical therapy clinics in Washington, D.C., Virginia, and Maryland, along with three individuals associated with the businesses, have agreed to pay the United States $2.78 million to settle allegations that the firms’ billings to Medicare and the TRICARE health care program violated the False Claims Act.
The settlement was announced today by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C., and Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS).
The companies -- Alliance Rehabilitation, LLC and Active Physical Therapy Services, LLC -- submitted invoices to Medicare and TRICARE through a consolidated billing office in Fairfax, Va., that was managed and overseen by Geeta Trehan, of Virginia. The companies’ owners, Thomas Bray and Rajeev Gupta, both of Maryland, also managed the operations.
The settlement resolves allegations that, between January 2007 and August 2012, the companies submitted claims which falsely represented that the physical therapy services being billed were either rendered or directly supervised by the physical therapist identified on the claims by his or her National Provider Identifier (NPI) number. In fact, the physical therapist identified on the claim had no involvement in the services rendered. The settlement also resolves allegations that Alliance Rehabilitation, LLC, and Active Physical Therapy Services, LLC, sought payment from TRICARE for physical therapy services that were not provided by the physical therapist identified on the claim.
In addition to the False Claims Act settlement, the companies and Trehan, Bray, and Gupta have entered into a five-year Corporate Integrity Agreement with the U.S Department of Human Health and Services Office of Inspector General. That agreement imposes integrity obligations on each of the entities and individuals and requires them, among other things, to retain an independent review organization to review their coding, billing, and claims submissions to Federal health care programs.
“These physical therapy clinics overbilled the federal programs that provide health care to senior citizens and military families,” said U.S. Attorney Machen. “If health care providers want to be paid for their services with taxpayer dollars, they have to play by the rules. Americans deserve to know that they are getting their money’s worth. This nearly $2.8 million settlement is part of our continued fight to protect taxpayers and to ensure the integrity of federal health care programs.”
“When health care companies and the individuals who run them try to enrich themselves by misrepresenting the medical services they bill to taxpayer-funded health care programs, we will make sure they are held accountable for their deceptive schemes,” said Special Agent in Charge DiGiulio.
“The Defense Criminal Investigative Service seeks to hold those accountable who jeopardize the Department of Defense's objective to provide affordable and safe health care to the men and women serving in the armed forces,” said Special Agent in Charge Craig. “Current and former soldiers deserve adequate care. Health care providers who seek financial gain through inaccurate billing processes and irresponsible treatment of their patients will continue to be diligently investigated by DCIS agents in partnership with the DOJ and other law enforcement agencies. We are extremely pleased with the outcome of this investigation.”
The conduct at issue was brought to light through a lawsuit that was filed in the U.S. District Court for the District of Columbia by two former Alliance employees under the qui tam, or whistleblower provisions, of the False Claims Act. The False Claims Act is one of the government’s most powerful tools in the effort to combat fraud on federal programs. The Act allows private citizens to bring suit on behalf of the United States and share in any recovery obtained by the government. In this case, the two former Alliance employees will receive more than $400,000 as their share of the government’s recovery.
This settlement was the result of a coordinated investigative effort by the U.S. Attorney’s Office for the District of Columbia, the Department of Health and Human Services Office of Inspector General, and the Defense Criminal Investigative Service.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is United States ex rel. Angel and Natal v. Alliance Rehabilitation LLC et al., Civil Action No. 10-cv-02124 (D.D.C.).
14-083Physical Therapy Clinics to Pay $2.78 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON - Two companies that operate physical therapy clinics in Washington, D.C., Virginia, and Maryland, along with three individuals associated with the businesses, have agreed to pay the United States $2.78 million to settle allegations that the firms’ billings to Medicare and the TRICARE health care program violated the False Claims Act.
The settlement was announced today by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C., and Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS).
The companies -- Alliance Rehabilitation, LLC and Active Physical Therapy Services, LLC -- submitted invoices to Medicare and TRICARE through a consolidated billing office in Fairfax, Va., that was managed and overseen by Geeta Trehan, of Virginia. The companies’ owners, Thomas Bray and Rajeev Gupta, both of Maryland, also managed the operations.
The settlement resolves allegations that, between January 2007 and August 2012, the companies submitted claims which falsely represented that the physical therapy services being billed were either rendered or directly supervised by the physical therapist identified on the claims by his or her National Provider Identifier (NPI) number. In fact, the physical therapist identified on the claim had no involvement in the services rendered. The settlement also resolves allegations that Alliance Rehabilitation, LLC, and Active Physical Therapy Services, LLC, sought payment from TRICARE for physical therapy services that were not provided by the physical therapist identified on the claim.
In addition to the False Claims Act settlement, the companies and Trehan, Bray, and Gupta have entered into a five-year Corporate Integrity Agreement with the U.S Department of Human Health and Services Office of Inspector General. That agreement imposes integrity obligations on each of the entities and individuals and requires them, among other things, to retain an independent review organization to review their coding, billing, and claims submissions to Federal health care programs.
“These physical therapy clinics overbilled the federal programs that provide health care to senior citizens and military families,” said U.S. Attorney Machen. “If health care providers want to be paid for their services with taxpayer dollars, they have to play by the rules. Americans deserve to know that they are getting their money’s worth. This nearly $2.8 million settlement is part of our continued fight to protect taxpayers and to ensure the integrity of federal health care programs.”
“When health care companies and the individuals who run them try to enrich themselves by misrepresenting the medical services they bill to taxpayer-funded health care programs, we will make sure they are held accountable for their deceptive schemes,” said Special Agent in Charge DiGiulio.
“The Defense Criminal Investigative Service seeks to hold those accountable who jeopardize the Department of Defense's objective to provide affordable and safe health care to the men and women serving in the armed forces,” said Special Agent in Charge Craig. “Current and former soldiers deserve adequate care. Health care providers who seek financial gain through inaccurate billing processes and irresponsible treatment of their patients will continue to be diligently investigated by DCIS agents in partnership with the DOJ and other law enforcement agencies. We are extremely pleased with the outcome of this investigation.”
The conduct at issue was brought to light through a lawsuit that was filed in the U.S. District Court for the District of Columbia by two former Alliance employees under the qui tam, or whistleblower provisions, of the False Claims Act. The False Claims Act is one of the government’s most powerful tools in the effort to combat fraud on federal programs. The Act allows private citizens to bring suit on behalf of the United States and share in any recovery obtained by the government. In this case, the two former Alliance employees will receive more than $400,000 as their share of the government’s recovery.
This settlement was the result of a coordinated investigative effort by the U.S. Attorney’s Office for the District of Columbia, the Department of Health and Human Services Office of Inspector General, and the Defense Criminal Investigative Service.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is United States ex rel. Angel and Natal v. Alliance Rehabilitation LLC et al., Civil Action No. 10-cv-02124 (D.D.C.).
14-083Pennsylvania Woman Indicted on Drug and Gun ChargesRead the Press Release
Lynda Hang Vang, 46, of Akron, Pennsylvania was charged today by Indictment with attempted possession with intent to distribute Methylenedioxy-N-methylcathinone (“methylone”) and possession of a firearm in furtherance of a drug trafficking crime, announced United States Attorney Zane David Memeger.
If convicted, the defendant faces a maximum possible sentence of 25 years in prison, a fine of up to $1 million, and three years of supervised release.
The case was investigated by Immigration and Customs Enforcement (ICE) Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Yvonne Osirim.
Click here to view the indictment
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525New York Man Sentenced for Conspiring to Pass Counterfeit Currency in Western PennsylvaniaRead the Press Release
PITTSBURGH - A New York resident has been sentenced in federal court to five years probation, which includes 10 months of home detention with electronic monitoring, on his conviction of conspiracy and passing counterfeit currency, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Sean R. Marroquin, 26.
According to information presented to the court, Marroquin conspired to pass counterfeit currency in the Western District of Pennsylvania on or about March 9, 2013.
Assistant United States Attorney Shardul S. Desai prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Secret Service for the investigation leading to the successful prosecution of Marroquin.
National Crime Victim's Right Week 30 Years: Restoring the Balance of JusticeRead the Press Release
BUFFALO, N.Y.—The United States Attorney’s Office for the Western District of New York is commemorating National Crime Victim’s Rights Week. The week of April 6-12 commemorates our nation’s progress in advancing victims’ rights. This year’s theme—30 Years: Restoring the Balance of Justice—celebrates three decades of defending victims’ rights.
“As the chief law enforcement office in the Western District of New York, it is our job to enforce federal laws and bring criminals to justice,” said U.S. Attorney William J. Hochul, Jr. “While we will continue to focus on solving crime, we need be mindful that victims of crime often continue to suffer long after the jailhouse doors have been closed on the perpetrator. This week serves as an opportunity to commemorate victims nationwide, and to also give thanks for all who work on behalf of the oppressed and mistreated.”
In 1984, Congress passed the bipartisan Victims of Crime Act (VOCA), which created a national fund to ease victims’ suffering. Financed, not by taxpayers, but by fines and penalties paid by offenders, the Crime Victims Fund supports victim services, such as rape crisis and domestic violence programs and victim compensation programs that pay many of victims’ out-of-pocket expenses from the crime, such as counseling, funeral expenses, and lost wages.
The nation has made dramatic progress in securing rights, protections, and services for victims in other ways as well. Every state has enacted victims’ rights laws and all have victim compensation programs. More than 10,000 victim service agencies now help people throughout the country.
The following are examples of cases prosecuted by the United States Attorney’s Office in the last year which benefit victims of crime:
U.S. v TONAWANDA COKE
The Tonawanda Coke Corporation, which was convicted of 11 counts of violating the Clean Air Act and three counts of violating the Resource Conservation and Recovery Act by a federal jury in March 2013, was sentenced to pay a $12.5 million fine and five years probation. Tonawanda Coke also must pay $12.2 million to fund two environmental studies to help determine the extent of health and environmental impacts Tonawanda Coke has had in the community. In addition, Tonawanda Coke Environmental Control Manager, Mark L. Kamholz, 66, of West Seneca, N.Y., who was convicted of 11 counts of violating the Clean Air Act, one count of obstruction of justice and three counts of violating the Resource Conservation and Recovery Act, was sentenced to 12 months in prison and a $20,000 fine.
U.S. v ZAVERI
Ashvin Zaveri of Honeoye Falls, N.Y. was indicted on 16 counts of mail fraud, wire fraud and money laundering. Zaveri was specifically accused of defrauding investors who had invested approximately $35,000,000 in oil and natural gas exploration partnerships in Tennessee and Kentucky through his company Zaveri Oil & Gas, Ltd. The defendant died on August 27, 2010, a week before his plea was scheduled and the criminal case was abated. Nevertheless, the government was able to recover $8,938,322.93, most of which was returned to victims.U.S. v GIZZI
John P. Gizzi was convicted of filing false tax returns in 2008 and 2009. In addition, a corporation owned by Gizzi, Rochester Machinery Suppliers, Inc., was convicted of aiding and abetting the preparation of a false tax return. The defendant paid a total of $11,525,064 to the Government as fines and restitution in this case.
In addition to successful prosecutions in the courtroom, the Western District of New York collected $75,146,101 in criminal and civil actions and provided assistance to over 50,000 victims in Fiscal Year 2013. Criminal actions, which include fines and restitution, totaled $20,142,677.26, $20,004,017 of which was returned to victims of crime. The Office also collected $55,003,424 in civil actions, which include proceedings involving health care fraud, government fraud, foreclosures and more. These collections highlight the daily effort by our Office to ensure that victims are heard by the court and receive the restitution to which they are entitled.
In addition to these significant financial recoveries, the Office also helped numerous victims of crime as a result of multiple successful prosecutions involving violent crime, human trafficking, fraud, identity theft and more.Mortgage Broker Sentenced for Bank FraudRead the Press Release
Firas “Russ” Bachi, 41, of Waterford Township, Michigan, was sentenced to 24 months in prison and 2 years of supervised release for defrauding a bank in connection with 10 mortgage loans, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division, and Jeffrey Frost, Special Agent in Charge of the Detroit office of the U.S. Secret Service
In addition, United States District Judge Bernard A. Friedman ordered Bachi to pay restitution to JPMorgan Chase Bank in the amount of $885,000.
Bachi pleaded guilty to one count of bank fraud in October 2013. According to court records, Bachi was a mortgage broker based in Farmington Hills who did business under the name First Choice Finance. In 2007, he acquired distressed residential properties in the City of Detroit and placed them in the names of straw sellers. Bachi then caused the appraisals of the properties to be inflated and sold the properties to straw buyers. The sales to the straw buyers were funded by mortgage loans made by Washington Mutual Bank (subsequently acquired by JPMorgan Chase Bank) based on loan applications that inflated the incomes and assets of the straw buyers and misrepresented the source of the down payments. The loans went into default and the houses were foreclosed on.
The investigation of this case was conducted by special agents of the FBI and the U.S. Secret Service, and prosecuted by Assistant U.S. Attorney Stephen Hiyama.
Morrisville Man Sentenced for Receipt of Child PornographyRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, United States District Judge Terrence W. Boyle sentenced ROBERT LOWELL CASSIDY , 58, of Morrisville to 84 months imprisonment, followed by 7 years of supervised release and was ordered to pay a $10,000.00 fine.
CASSIDY was named in a Criminal Information filed on October 18, 2013 charging him with Receipt of Child Pornography, in violation of Title 18, United States Code, Section 2252(a)(2). On November 26, 2013, CASSIDY pled guilty to that charge.
According to the investigation, an undercover officer identified a computer belonging to CASSIDY that was involved with the distribution of online child pornography. A search warrant was executed on CASSIDY’s residence on April 27, 2013 and a computer, several hard drives, and multiple storage devices were seized. A complete forensic examination of CASSIDY’s computer equipment revealed 4,571 still images and 475 video files (475 videos x 75 images = 35,625 images) depicting the sexual exploitation of children.
Investigation of this case was conducted by the Morrisville Police Department and the Federal Bureau of Investigation. Assistant United States Attorney Ethan Ontjes prosecuted the case for the United States.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Morris County, N.J., Physician Admits Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
26th Defendant to Plead Guilty in Connection with Scheme
NEWARK, N.J. – A physician with a practice in Madison, N.J. admitted today to accepting bribes of $2,000 per month in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS) of Parsippany, N.J., its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Wayne Lajewski, 51, pleaded guilty today before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of accepting bribes.
According to documents filed in this and other cases and statements made in court:Lajewski admitted he accepted bribes of $2,000 cash per month over two years in return for referring patient blood specimens to BLS, for which BLS received more than $850,000.
The bribery count to which Lajewski pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for July 8, 2014. As part of his guilty plea, Lajewski agreed to forfeit $48,000, representing the bribes he received from BLS.
Including Lajewski, 26 people – including 15 physicians – have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
The investigation has recovered more than $7 million to date through forfeiture.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS– Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $535 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
14-121Defense counsel: Robert C. Scrivo Esq., Morristown, N.J.
Lajewski, Wayne Information
More Convictions in Relation to Progreso Bribery CaseRead the Press Release
HOUSTON – Jose Vela, 65, and his Michael Vela, 30, have entered guilty pleas to conspiracy and bribery concerning programs receiving federal funds, announced United States Attorney Kenneth Magidson. Also pleading guilty today in a separate, but related case was Orlando Vela, 33.
Jose and Michael Vela were originally charged along with Omar Vela and others based on their alleged participation in a scheme to create a “pay to play” public contracting system in Progreso. Today, they admitted they participated in the scheme from 2004 through 2013. Michael, Omar and Orlando are brothers and Jose is their father. Omar is the mayor of Progreso, while Michael was the president of the Progreso Independent School District Board (PISD) of Trustees.
From 2004 through 2013, PISD received more than $1 million per year in federal program grants and funds from the U.S. Department of Education. In order to obtain contracts from PISD or from the City of Progreso, contractors were required to pay bribes to Vela and others.
The Velas were able to extract bribes from contractors as a result of their political control of Progreso and PISD. As government officials, Michael and Omar had a level of control over local government. In addition, Jose Vela controlled the PISD School Board by rewarding board members who voted as he directed with bribe money. Through this control over the PISD Board, Jose Vela caused contracts with PISD to be awarded to contractors who were willing to pay him bribes and kickbacks in return. Omar and Michael Vela assisted their father by gathering bribe payments from contractors and delivering the payments to him. They were then given a portion of those monies.According to the plea agreement, during the time frame of the conspiracy, the Velas required a local architect, his firm, a construction company and the school board attorney to pay bribes and kickbacks to Vela and others in order to obtain work with PISD or the City of Progreso. In total, Jose, Omar and Michael extracted more than $300,000 in bribe payments.
In a separate, but related case, Orlando Vela entered a guilty plea to a criminal information charging him with theft from a program receiving federal funds. He is employed by PISD as a risk manager. In this role, he is responsible for directing and managing the school district’s risk management, loss control and safety programs. On May 11, 2012, Orlando Vela formed a company called Borderline Office Supplies which purported to be in the business of supplying office and janitorial products to school districts.
Between May 2012 and March 2013, Orlando Vela submitted invoices to PISD for products that Borderline did not actually supply to PISD. The business bank account showed no purchases of the products that it claimed to have resold to PISD. The payments on the fraudulent invoices were approved by PISD’s business manager, Orlando Vela’s wife, and totaled $12,874.42.
On Aug. 12, 2013, Orlando Vela received a subpoena requesting documents related to his business’s alleged purchases of products and subsequent sales to PISD. In response, he provided invoices from a company in Mexico that purported to show that Borderline had purchased the products in Mexico and resold to PISD. However, upon further investigation, agents learned those invoices were in fact fraudulent.
U.S. District Judge David Hittner, who accepted the pleas today, has set sentencing for July 25, 2014. At that time, all face up to 10 years in federal prison for the bribery involving federal programs convictions. Jose and Michael Vela also face up to five years in federal prison for the conspiracy. All convictions also carry as possible punishment a maximum fine of $250,000. All were permitted to remain on bond pending their hearings.
The investigation was conducted by the FBI. Assistant United States Attorney Robert S. Johnson is prosecuting the case.
Moore Resident Sentenced for Committing Disaster Benefits Fraud Following May 2013 TornadoRead the Press Release
Oklahoma City, Oklahoma –BLAKE LYNN SELF, 19, of Moore, Oklahoma, was sentenced today to serve three months in prison, 60 days in a halfway house, and 90 days home confinement for committing disaster benefits fraud in connection with the May 2013 tornados in Moore, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Self was ordered to pay $12,885.45 in restitution to FEMA and serve five years of supervised release at the conclusion of his confinement term.
Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the May 20, 2013, tornado affecting Cleveland County was declared a major disaster and the payment of disaster benefits was authorized. Self was indicted in November of 2013 and charged with submitting a false claim for monetary benefits to be paid by Federal Emergency Management Agency (FEMA) on June 14, 2013. Specifically, it was alleged that Self claimed to a FEMA inspector that his primary residence at the time of the May 20, 2013, tornado, was 916 S.W. 14th Street, in Moore, when in fact it was not his residence at that time.
Self pled guilty to committing benefits fraud on January 8, 2014.
This case was the result of an investigation by the U.S. Department of Homeland Security Office of Inspector General and was prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.
The public may report suspected disaster benefits fraud by contacting the Department of Homeland Security Office of Inspector General (www.oig.dhs.gov or by calling toll free 1-800-323-8603) or by calling the Disaster Fraud Hotline at 1-866-720-5721.
Mission Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on March 31, 2014, by U.S. District Judge Roberto A. Lange.
Eugene Featherman, age 25, was sentenced to 13 months in custody, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Featherman was indicted for Failure to Register as a Sex Offender by a federal grand jury on September 17, 2013. He pled guilty on February 10, 2014.
The conviction relates to a period of time between June 13, 2013, and December 18, 2013, when Featherman, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under federal law, knowingly failed to register and update his registration.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Marie H. Ruettgers prosecuted the case.
Featherman was immediately turned over to the custody of the U.S. Marshals Service.
Mission Man Charged with Burglary and AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man has been indicted by a federal grand jury for First Degree Burglary, Assault with a Dangerous Weapon, and Assault Resulting in Serious Bodily Injury.
Marlow Poor Thunder, age 18, was indicted on March 11, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on April 4, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 25 years in custody and/or a $250,000 fine, 5 years of supervised release, and up to $700 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about July 2, 2013, at Soldier Creek, Poor Thunder, and other defendants, unlawfully entered and remained in two residences, and assaulted a victim in one of the residences with a metal object, which resulted in serious bodily injury.
The charges are merely an accusation and Poor Thunder is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers is prosecuting the case.
Poor Thunder was remanded to the custody of the U.S. Marshals Service pending trial, which has been set for June 3, 2014.
Mission Man Charged with Burglary and AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man has been indicted by a federal grand jury for First Degree Burglary, Assault with a Dangerous Weapon, and Assault Resulting in Serious Bodily Injury.
Na’pe Young, a/k/a Nap’e Young, age 34, was indicted on March 11, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on April 4, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 25 years in custody and/or a $250,000 fine, 5 years of supervised release, and up to $700 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about July 2, 2013, at Soldier Creek, Young and other defendants unlawfully entered and remained in two residences and assaulted a victim in one of the residences with a metal object, which assault resulted in serious bodily injury.
The charges are merely an accusation and Young is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers is prosecuting the case.
Young was remanded to the custody of the U.S. Marshals Service pending trial, which has been set for June 3, 2014.
Miami-Dade Resident Sentenced in Identity Theft SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement's Homeland Security Investigations (ICE-HSI), and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Jean-Elguentino Cayo, 26, of Miami Gardens, was sentenced today to 37 months in prison, followed by three years of supervised release for his participation in a stolen identity scheme. Cayo previously pled guilty to one count of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2).
According to court documents, beginning in December 2012 through June 2013, the defendant sold approximately 400 names, dates of birth, and social security numbers belonging to other persons to a confidential informant and undercover law enforcement officer in exchange for money. The defendant had no authorization to traffic in the names, dates of births, and social security numbers belonging to other persons and acted with the intent to defraud.
Mr. Ferrer commended the investigative efforts of ICE-HSI and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mexican Man Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Adalid Ayala, 39, a Mexican native living in Chicago, Illinois, who was convicted of conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine, was sentenced to 130 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who is handling the case, stated that on February 13, 2012, the Buffalo Office of the Drug Enforcement Administration received a telephone call regarding an alleged drug trafficking conspiracy transporting and distributing 50 kilograms a month from Chicago to Buffalo. That information resulted in the arrest of seven defendants, including Ayala, all of whom have been convicted.
Also during the investigation, agents seized more than $550,000 in cash, approximately two kilos of cocaine, other drug paraphernalia, four weapons, and a Ford Mustang.
The conviction is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division.Maple Heights Man Indicted for Robbing Banks in Richmond Heights and Shaker HeightsRead the Press Release
A federal grand jury returned a three-count indictment charging Christian Emerson, age 20, of Maple Heights, Ohio, with armed bank robbery and brandishing a firearm during the commission of a felony, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Christian Emerson robbed a Huntington Bank in Richmond Heights, Ohio, and stole approximately $2,306.00 from the bank. The indictment further alleges that Christian Emerson robbed a Citizens Bank in Shaker Heights, Ohio, stole approximately $1,304.14 from the bank, and brandished a firearm during the commission of the robbery.
If convicted, Emerson’s sentence will be determined by the Court after review of factors unique to this case, including Emerson’s prior criminal record, if any, his role in the offense and the unique characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum
The case is being prosecuted by Assistant U.S. Attorney Adam J. Hollingsworth following an investigation by the Federal Bureau of Investigation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt
Manhattan U.S. Attorney Settles Civil Fraud Lawsuit Against Clothing Importers Engaged in A Scheme to Avoid Payment of Customs DutiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, 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”), and Robert E. Perez, Director of New York Field Operations for U. S. Customs and Border Protection (CBP), announced today that the United States has settled a civil customs fraud lawsuit against DANA KAY, INC. and SIOUNI & ZAR CORPORATION (d/b/a DANNY & NICOLE), two importers of women’s apparel, for cheating the United States out of millions of dollars in customs duties over the course of a decade through the use of false invoices. In the settlement, approved today in Manhattan federal court by U.S. District Judge Colleen McMahon, the defendants accepted responsibility for under-reporting the value of their imported merchandise and agreed to pay $10 million to the United States as damages and penalties under the False Claims Act.
Manhattan U.S. Attorney Preet Bharara said: “Our Office is committed to pursuing those who defraud the public for private gain. Here, as our complaint alleges, a whistleblower exposed a decade-long scheme to defraud the Government out of millions of dollars in customs duties. Through the settlement announced today, the companies responsible for this fraud will be held to account, by having to admit to their misconduct and pay $10 million in damages and penalties.”
ICE HSI Special Agent-in-Charge James T. Hayes, Jr. said: “Companies that circumvent our nation’s customs laws through the use of elaborate frauds cheat the American taxpayers and their law-abiding competitors simultaneously. These two importers should serve as an example that HSI is committed to ensuring a level playing field for all who work in the international trade industry.”
CBP Director of New York Field Operations Robert E. Perez said: “Working in partnership with HSI, our CBP officers, auditors, and import specialists demonstrated the highest level of professionalism, dedication to duty and vigilance in detecting the undervaluation of these imported goods into the United States.”
According to the Government=s Complaint filed in Manhattan federal court:
From approximately 2003 through 2012, DANA KAY, INC. and SIOUNI & ZAR CORPORATION engaged in a fraudulent scheme to avoid the payment of customs duties by presenting the Government with invoices that significantly understated the value of the imported apparel. The defendants paid their overseas manufacturers the full value of the apparel, but deducted a flat fee per garment set before calculating the duty on the apparel. The defendants then recorded only the lower value on the entry forms presented to the Government. Through this fraud, the defendants avoided paying millions of dollars in customs duties.
As part of the settlement, DANA KAY, INC. and SIOUNI & ZAR CORPORATION have admitted, acknowledged, and accepted responsibility for:
- presenting to the Government commercial invoices for women’s apparel being imported into the United States that reported less than the total value of the goods imported;
- paying apparel manufacturers an amount in excess of that recorded on the commercial invoice;
- paying the excess amount pursuant to a second invoice referred to as a “debit note”; and
- failing to disclose to the Government the amounts paid pursuant to the second invoices, instead reporting only the lesser amounts listed in the commercial invoices, which the Government then used to assess customs duties.
The allegations of fraud stated in the Complaint and admitted in the settlement agreement were first brought to the attention of the Government by a whistleblower, who filed a
lawsuit under the qui tam provisions of the False Claims Act. Those provisions allow private parties who have knowledge of fraud committed against the Government to file suit on behalf of the Government and share in any recovery. The United States may then intervene and file a complaint, as it did here.
Mr. Bharara thanked ICE HSI for its work on the case. He also thanked U.S. Customs and Border Protection for its assistance.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Jaimie L. Nawaday is in charge of the case.
Manhattan Physician Sentenced for Unlawfully Prescribing Prescription DrugsRead the Press Release
TOPEKA, KAN. A Manhattan, Kan., physician was sentenced Wednesday to five years in federal prison for unlawfully prescribing prescription drugs, U.S. Attorney Barry Grissom said.
Michael P. Schuster, 54, Manhattan, Kan., pleaded guilty to one count of conspiracy to distribute controlled substances.
In his plea, Schuster admitted the crime occurred from April 2007 to Aug. 2012, while he was doing business as Manhattan Pain and Spine at 1135 Westport Drive in Manhattan. To carry out daily operations at his clinic he employed up to 12 office staff members at a time, none of whom had lawful authority to distribute controlled substances. He directed and allowed staff members to distribute controlled substances to his patients using blank prescription pads he had signed in advance.
Investigators documented approximately 540 patients who received prescriptions for controlled substances while Schuster was out of his office, including times when he was traveling to Canada, Russia, South Africa, Uruguay, New York, Argentina, Chile, Paraguay, Brazil and Israel.
In addition to the prison sentence, Schuster agreed to pay restitution of $100,772 and a fine of $25,000. He also has agreed to forfeit his clinic building at 1135 Westport Drive, a 2012 Ford pickup and more than $11,000 contained in two bank accounts. He also agreed to a forfeiture money judgment of $400,000.
Furthermore, Schuster agreed to surrender his medical license, not to re-apply for a medical license in Kansas, to surrender his DEA registration number for prescribing controlled substances and not to re-apply for a DEA registration number.
According to court documents, the investigation began early in 2012 when the Riley County Police Department received reports that Schuster was issuing prescriptions for high dosages of scheduled drugs based on minimal or cursory physical examinations.
Grissom commended the Riley County Police Department; the FBI; the Department of Defense, Criminal Investigative Service (DCIS); the Department of Health and Human Services, Office of Inspector General (HHS-OIG); the Drug Enforcement Administration (DEA); the Department of Homeland Security - Homeland Security Investigations (DHS-HSI); the Diplomatic Security Service (DSS), Assistant U.S. Attorney Tanya Treadway, Assistant U.S. Attorney Jared Maag, and Special Assistant U.S. Attorney Robin Graham for their work on the case.Man Charged with Murder on the Meskwaki Nation SettlementRead the Press Release
Jonathan Curtis Youngbear, age 20, from the Meskwaki Nation Settlement, Iowa, has been charged with murder in “Indian Country.” The charge is contained in a Complaint filed on April 8, 2014, in United States District Court in Cedar Rapids.
The Complaint alleges that, on or about February 24, 2014, Youngbear murdered a person on the Meskwaki Nation Settlement near Tama, Iowa.If convicted, Youngbear faces a possible maximum sentence of life imprisonment, a $250,000 fine, and a $100 special assessment.
Youngbear appeared today in federal court in Cedar Rapids and was held without bond. Youngbear’s next appearance for preliminary and detention hearings is set for April 14, 2014, at 1:00 p.m.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
In 2010, the Department of Justice launched an initiative making public safety in tribal communities a top priority. The goal of the initiative is to help tribes build and sustain safe and secure communities across the country. Information about the initiative is available at http://www.justice.gov/tribal.
The case is being prosecuted by Assistant United States Attorneys Peter Deegan and Anthony Morfitt and was investigated by the Meskwaki Nation Tribal Police, the Tama County Sheriff’s Office, the Iowa Division of Criminal Investigation, and the Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/. The case file number is 14-mj-105.
Lawrence Man Charged with False ClaimAbout Taxes on Gambling WinningsRead the Press Release
KANSAS CITY, KAN. A Lawrence man has been charged with filing a false tax return, U.S. Attorney Barry Grissom said.
Bradley Stoneking, 30, Lawrence, Kan., was alleged to have made false statements in his income tax return for 2010. He falsely claimed federal tax withholdings on gambling winnings in the amount of approximately $330,000. In fact, the federal tax withholding on his gambling winnings was $300.
If convicted he faces a maximum penalty of three years in federal prison and a fine up to $250,000. The Internal Revenue Service investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Law Enforcement Officers Receive Victim Service AwardsRead the Press Release
United States Attorney Kevin W. Techau presented the 15th Annual Iowa Law Enforcement Victim Service Awards to three Iowa law enforcement officers. The awards were presented at a press conference held today at the United States Attorney’s Office in Cedar Rapids. Techau presented the awards on behalf of his office and the office of United States Attorney Nicholas Klinefeldt of the Southern District of Iowa.
The Law Enforcement Victim Service Awards are the highest federal honors in the State of Iowa for victim services provided by law enforcement. The awards are presented to law enforcement officers who have gone above and beyond the call of duty to show compassion and care for victims of crime. The Continuous Service Award recognizes a nominee who has provided help to victims for many years or developed an innovative program or policy that continues to serve crime victims. The Single Act Award recognizes officers who have provided exceptional assistance to crime victims in a specific case. Two awards are presented each year during National Crime Victims’ Rights Week; observed this year the week of April 6 through April 12.
The Continuous Service AwardThis year’s Continuous Service Award was presented to Investigator Corey Peiffer from the Cedar Rapids Police Department. Investigator Peiffer has worked for the Cedar Rapids Police Department for over sixteen years and, during that time, has proven himself as someone who is very caring and compassionate to those victimized by crime. Recently, Investigator Peiffer’s work investigating a reported sexual assault on a minor led to the arrest and conviction of Lucas Robinson. Robinson was an Internet predator who convinced young girls, between the ages of 10 and 17 years, to produce and send pornographic images of themselves to Robinson over the Internet. Due in large part to Investigator Peiffer’s work on this case, several other victims of Robinson’s were discovered. Robinson is now serving a 42-year prison sentence. Investigator Peiffer worked with law enforcement agencies across the country to make personal contact with Robinson’s victims and their families and ensure them that Robinson had been identified and arrested. His hard work and dedication in this case exemplifies the way he works with all victims of all types of crimes. Investigator Peiffer has a true passion for helping crime victims and holding their offenders accountable for their actions.
The Single Act AwardSingle Act Awards were presented to Special Agent Darrell Simmons from the Iowa Division of Criminal Investigation and Investigator Rodney Fiser from the Hiawatha Police Department for their work investigating the death of 17 month-old Kamryn Schlitter. Special Agent Simmons and Investigator Fiser combined their efforts to ensure that those responsible for her death were identified, charged and convicted. During their investigation, they never lost sight of the impact this crime had on Kamryn’s grieving family. “This team met with Kamryn’s family members and navigated the tender balance between consoling grief-stricken loved ones and gathering the factual information they needed to uncover the truth about what happened to Kamryn,” said U.S. Attorney Techau. As a result of their unyielding dedication of seeking justice for Kamryn, Zyriah Schlitter and Amy Parmer were charged and convicted. Both are now serving 50-year prison sentences. First Assistant Linn County Attorney Nick Maybanks said in nominating Special Agent Simmons and Investigator Fisher for this award, “We are eternally proud to have worked beside them.”
Without a doubt all of these law enforcement officers go “above and beyond” the call of duty to assist crime victims. Because of their dedication, our communities are better served. The U.S. Attorneys’ Offices in Iowa are proud to present the 2014 Law Enforcement Victim Service Awards to these individuals.KC Truck Driver Sentenced to 30 Years for Transporting a Minor for SexRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for transporting a child victim on a cross-country trip during which he sexually abused that victim and another child victim.
Jesse Luuloa Pier, 42, of Kansas City, was sentenced by U.S. District Judge Greg Kays to 30 years in federal prison without parole.
On Oct. 2, 2013, Pier pleaded guilty to transporting a minor across state lines to engage in criminal sexual activity. Pier – a commercial truck driver – admitted that he transported a minor victim on a cross-country trip with the intent to engage in sexual activity on several occasions between June 1 through 17, 2007.
On June 9, 2007, Pier and the child victim arrived in Elgin, S.C. Pier attended a party in Elgin, where he met a local minor boy. While staying overnight, Pier molested the minor, who informed authorities. Pier was charged in state court, pleaded guilty to criminal sexual conduct with a minor and was sentenced to 13 years in the South Carolina State Department of Corrections. Pier’s 30-year federal sentence will be served consecutively to his state imprisonment.
Pier committed abusive sexual acts on the minor victim in this case on at least two occasions after forcing him to watch a pornographic video.
This case was prosecuted by Assistant U.S. Attorney Patrick D. Daly. It was investigated by the FBI, the Abilene, Kan., Police Department and the Elgin, S.C., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."