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Monday 31 March 2014
West Virginia Man Sentenced to Prison for Traveling to Have Sex with Minor FemaleRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A West Virginia man was sentenced to a lengthy prison term for traveling across state lines to have sex with a minor female.
United States Attorney William J. Ihlenfeld, II announced ANTHONY ALLEN PENNINGTON, age 24 of Berkeley Springs, was sentenced to fourteen years prison and supervision for life as a result of his conviction for “Traveling in Interstate Commerce with the Intent to Engage in Illicit Sexual Conduct.”
PENNINGTON previously admitted that in May of 2013 he traveled from West Virginia to Pennsylvania with the intent to engage in sexual activity with a fifteen year old girl. PENNINGTON had texted with the victim that night and made arrangements to pick up the victim and her friend in Morgan County, West Virginia. The girls rode their bikes to an area where PENNINGTON picked them up and drove them to Pennsylvania. PENNINGTON had sexual intercourse with one of the girls and then returned them to West Virginia.
U.S. District Court Judge Judge Gina M. Groh enhanced PENNIGNTON’s sentence, finding that he was a repeat and dangerous sex offender based upon his conviction in 2010 for sexual assault in the third degree in Morgan County, West Virginia. In the prior case PENNINGTON was convicted of having sex with a female minor when he was 20 and the victim was 14.
PENNINGTON was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was prosecuted by Assistant U.S. Attorney Jarod J. Douglas and investigated by the Morgan County Sheriff’s Department.
Two Sentenced in Connection with Sunshine Pharmacy Health Care FraudRead the Press Release
Fort Myers, Florida – United States District Judge John E. Steele today sentenced Delmer Holmes Parrish (44) and Patricia Parrish (74), both of Naples, for their roles in a conspiracy to commit health care fraud that operated from Sunshine Pharmacy in Naples, Florida. Delmer Holmes Parrish, a licensed Pharmacist, was sentenced to two years in federal prison. Patricia Parrish was sentenced three years of probation, to include 120 days of home confinement, and ordered to pay a $5,000 fine. Both were also ordered to pay restitution to the United States in the amount of $351,358.14, the proceeds of the crime. Pursuant to their agreement, this amount was paid in full, immediately following the sentencing. As part of the plea agreement, Delmer Holmes Parrish also permanently relinquished his Pharmacist License to the State of Florida.
According to court documents, from in or around February 2009, through in or about July 2012, Delmer Holmes Parrish and Patricia Parrish participated in a conspiracy to defraud federal health care benefit programs out of approximately $351,358.14. Both, along with others, used Sunshine Pharmacy and Sunshine Solutions, both in Naples, to further their unlawful scheme to defraud the government. The co-conspirators submitted and caused claims to be submitted for reimbursement from the Medicaid, Medicare, and TRICARE programs for prescriptions not filled or provided to beneficiaries and recipients, including prescriptions for patients that had not been written or authorized by any duly licensed physician. In addition, the co-conspirators submitted and caused claims to be submitted for reimbursement for prescriptions for beneficiaries and recipients who were deceased. In carrying out the offenses, the conspirators also used the means of identification of individuals who were enrolled in the Medicaid, Medicare, or TRICARE programs without their knowledge or consent. The conspirators also took steps to hide and conceal the scheme to defraud. As a result of the scheme, the government was defrauded of approximately $351,358.14.
According to Brian Martens, Acting Special Agent in Charge of Health and Human Services, Office of Inspector General, in Tampa, “today’s sentencing, which is punctuated by the defendants’ having made 100% restitution to Medicare, clearly demonstrates the success of the Strike Force model.”
This case was brought as part of the Medicare Strike Force and was investigated by the United States Department of Health and Human Services, Office of Inspector General; Department of Defense, Defense Criminal Investigative Service; and the Drug Enforcement Administration with assistance from the Naples Police Department; Collier County Sheriff's Office; and the United States Secret Service. It was prosecuted by Assistant United States Attorney David G. Lazarus.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Topeka Man Sentenced for Robbery at Kaw Valley BankRead the Press Release
TOPEKA, KAN. - A Topeka man was sentenced Monday to two years in federal prison for robbing a Topeka bank, U.S. Attorney Barry Grissom said.
Cade Michael Sharples, 37, Topeka, Kan., pleaded guilty in U.S. District Court in Topeka to one count of bank robbery.
In his plea, he admitted that on Sept. 17, 2013, he robbed the Kaw Valley Bank at 3000 SE Croco Road in Topeka. Sharples gave the teller a letter saying, “I’m here to rob you. I have a gun. Do as I say and you won’t get hurt.” He left the bank with the money and walked to his car, which was parked in a stall at a carwash nearby. Police released surveillance video from the robbery and received tips leading them to Sharples. He was arrested in Council Bluffs, Iowa.
Grissom commended the Topeka Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.Three Convicted for Distribution of PainkillersRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Three people charged in connection with a Bridgeport, West Virginia, painkiller distribution ring have been convicted.
DAVID S. ROKISKY, age 46, of Tampa, Florida; his sister, Deborah M. TATE, age 56, of Tampa, and Nino L. MANCINO, age 43, of Fairmont, entered pleas of guilty to “Conspiracy to Possess and Distribute Hydrocodone” before Magistrate Judge John S. Kaull. As part of a related investigation, a federal search warrant was executed at Ms. Tate’s Fairmont residence and agents found packages containing hydrocodone pills which had been obtained through prescriptions in Florida and sent to Tate and Mancino for them to resale.
ROKISKY, TATE and MANCINO each face up to 10 years in prison. The case was prosecuted by Assistant United States Attorney John C. Parr and investigated by the Greater Harrison County Drug and Violent Crimes Task Force, which is comprised of officers and agents from the Bridgeport Police Department, the Clarksburg Police Department, the Drug Enforcement Administration, and the West Virginia State Police.
In other hearings before Judge Kaull:
JAUNITA FARNSWORTH, age 31, of Clarksburg and MARVIN PIERRE LEDBETTER, JR. a/k/a “MO,” age 28; and AMANDA LILLY DANIELS, age 25, of Michigan, entered pleas of guilty to “Possession with Intent to Distribute Oxycodone.” FARNSWORTH, LEDBETTER and DANIELS each face up to 20 years in prison.
Co-defendant WILLIAM MURPHY, age 24, of Clarksburg, entered a plea of guilty to “Use and Carry of a Firearm in Relation to a Drug-Trafficking Offense.” MURPHY possessed a Winchester shotgun in furtherance of a conspiracy to distribute oxycodone. MURPHY faces at least 10 years and up to life in prison. As part of the plea agreements, the defendants will forfeit firearms, ammunition and currency which was seized in December of 2013.
This case was prosecuted by Criminal Chief Shawn A. Morgan and investigated by the Greater Harrison County Drug and Violent Crime Task Force.
ANGELA NELSON, age 34, entered a plea of guilty to “Distribution of Heroin within 1,000 feet of a Protected Location.” NELSON faces up to 40 years in prison. Co-defendants FARRAH ECHARD, age 25, and GREG WILLIAMS, age 41, of Morgantown, entered pleas of guilty to “Distribution of Heroin.” ECHARD and WILLIAMS face up to 20 years in prison. This case was prosecuted by Wesley and investigated by the West Virginia State Police-Bureau of Criminal Investigations.
CHRISTOPHER VICKERS, age 24, of Clarksburg, entered a plea of guilty to “Distribution of Heroin within 1,000 feet of Monticello Avenue playground.” VICKERS faces up to 40 years in prison.
DAMIAN ALLEN, age 27, of Clarksburg, entered a plea of guilty to “Distribution of Crack Cocaine and Heroin within 1,000 feet of the Harrison Street Playground.” ALLEN faces up to 40 years in prison.
These cases were prosecuted by Assistant U.S. Attorney Andrew R. Cogar and investigated by the Greater Harrison County Drug and Violent Crime Task Force.
RONALD SNYDER, age 39, of Buckhannon, West Virginia, entered a plea of guilty to “Failure to Update Sex Offender Registration” and faces up to 10 years in prison. This case was prosecuted by Morgan and investigated by the United States Marshals Service and the West Virginia State Police.
CHRISTY D. RUBLE, age 32, of West Milford, West Virginia, former officer in charge of the West Milford post office, entered a plea of guilty to “Embezzlement” of $15,238.65 from postal accounts. RUBLE faces up to 10 years in prison and must make restitution of the monies embezzled. This case was prosecuted by Assistant U.S. Attorney Brandon Flower and investigated by the U.S. Postal Service, Office of Inspector General.
JEREMY NATHAN FERRARO, age 33, entered a plea of guilty to “Theft of Mail” and faces up to five years in prison. The case was prosecuted by Assistant U.S. Attorney Michael D. Stein and was investigated by the United States Postal Inspection Service.
Texas Man Sentenced for Theft of SSDI BenefitsRead the Press Release
Contact: Halsey B. Frank
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Carroll
Freemont Pennell, 69, currently of Cushing, Texas and formerly of Brunswick, Maine, was
sentenced in U.S. District Court by Judge George Z. Singal to 2 years of probation and ordered
to pay $29,512 in restitution for stealing Social Security Disability Insurance (SSDI) benefits.According to court documents, Pennell was pastor, president and spiritual leader of the
Word of God Fellowship Church in Brunswick for which he was paid a salary. In 1997, Pennell
applied for and obtained SSDI benefits after injuring his back while working in the shipping
department at Grumbacher Brush Company. To get those benefits, Pennell concealed his church
salary from the Social Security Administration by having the church pay it to his wife. As a
result, Pennell received $146,829 worth of SSDI benefits to which he was not entitled. The
court’s ability to award full restitution was limited by the five-year statute of limitations.
In fashioning his sentence, Judge Singal observed that Mr. Pennell was as much a thief as
someone who pickpockets parishioners. He corrupted his church and contributed to the public’s
cynical belief that its leaders are hypocrites. Nevertheless, Judge Singal found that probation
was appropriate for Mr. Pennell given his advanced age and serious health problems.
The investigation was conducted by Office of the Inspector General for the Social
Security Administration.Talladega Scrap Yard Owner Forfeits $1.3 Million for Financial StructuringRead the Press Release
BIRMINGHAM -- A Talladega scrap yard owner pleaded guilty today to structuring $119,400 in cash transactions, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.
EDWARD M. HINDMAN, 61, owner of Hindman's Wrecker Service & Salvage in Talladega, entered his guilty plea to one count of structuring before U.S. District Judge L. Scott Coogler. Hindman must forfeit $119,400 to the government as part of his plea agreement. He is scheduled for sentencing June 26.
Hindman also agreed to civilly forfeit $1,148,981 in a civil forfeiture action brought by the United States against money seized from Hindman's bank account in March 2011. In a Stipulation of Settlement filed today in the civil case, Hindman admitted no wrongdoing, but acknowledged that the government had reasonable cause to seize the money in 2011 and commence the forfeiture proceedings.
The U.S. Attorney's Office brought the criminal charge against Hindman in an information filed Thursday in U.S. District Court. His plea agreement with the government also was filed Thursday. Hindman acknowledges in the plea agreement that he intentionally structured, and directed others to structure, cash withdrawals at First National Bank Talladega in amounts less than $10,000 to avoid triggering the bank's requirement to file a Currency Transaction Report with the U.S. Treasury Department on all transactions greater than $10,000.
Between Feb. 23, 2011, and March 5, 2011, Hindman wrote, or directed others to write, 16 checks payable to "cash," which were cashed at the Talladega bank, according to his plea agreement. All the checks were just below the reporting requirement amount and totaled $119,400. The cash withdrawals were used to fund the operation of Hindman's salvage yard, according to his plea.
The Internal Revenue Service, Criminal Investigation Division, investigated the case. Assistant U.S. Attorney Amanda Wick is prosecuting the case and Assistant U.S. Attorney Jennifer Murnahan represents the government in the civil case.
Sikorsky Aircraft Corporation to Pay $3.5 Million to Settle Allegations Under the False Claims ActRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that SIKORSKY AIRCRAFT CORPORATION of Stratford, Conn., which manufactures Black Hawk helicopters and spare parts for the helicopters for the U.S. Military and for friendly nations has entered into a civil settlement in which it will pay $3.5 million to resolve allegations that it violated the False Claims Act arising from the submission of inflated costs in the pricing of spare parts.
The government alleges that from February 7, 2008 through September 8, 2011, Sikorsky failed to disclose accurate, complete and current cost and pricing data to the Army Aviation and Missile Life Cycle Management Command (“AMCOM”). AMCOM is one of the purchasing commands of the Army that is charged with purchasing spare parts for the Black Hawk.
The Truth In Negotiations Act requires that contractors disclose accurate, complete and current cost and pricing data to the government during the negotiation process. When determining the prices to be charged to the government, Sikorsky failed to disclose that it had lower prices for certain parts. As a result, the government paid artificially excessive prices for those parts.
The Black Hawk repair work was principally performed at the Corpus Christi Army Depot in Corpus Christi, Texas.
“In this era of shrinking defense budgets, it is particularly important to guard the public coffers and safeguard against the unnecessary expenditures of funds from American taxpayers,” said U.S. Attorney Daly. “Failure to disclose accurate, complete and current cost and pricing data created an uneven playing field in the negotiation process which tilted unfairly in Sikorsky’s favor.”
“Unethical decisions and instances of fraud occurring within the Defense contractor community continue to burden the U.S. Defense budget and puts U.S. military readiness at a disadvantage,” stated Craig W. Rupert, Special Agent in Charge, Defense Criminal Investigative Service (DCIS) Northeast Field Office. “With the current state of the economy, taxpayers can ill-afford to overpay for warfighter necessities required to carry out our Defense mission. This investigative effort and resulting settlement reflects DCIS’ commitment to safeguarding our military members and protecting the taxpayer’s interests by ensuring transparency and accountability in the Department of Defense procurement system.”
This investigation was conducted by the Defense Criminal Investigative Service, Defense Contract Audit Agency, Department of Defense Office of Inspector General-Audit Division, and the Defense Contract Management Agency. The investigation was led by Assistant U.S. Attorney Alan M. Soloway.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Seven Indicted in Florida in Mortgage SchemeRead the Press Release
Seven individuals have been indicted in the Southern District of Florida for their alleged participation in a mortgage fraud scheme in the Miami area.
The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Inspector General David A. Montoya of the Department of Housing and Urban Development and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency’s Office of the Inspector General.
A 19-count indictment, returned on March 13, 2014, by a federal grand jury and unsealed today, charges Miami-Dade County residents Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo with one count of conspiracy to commit wire and bank fraud. Some of those defendants have also been charged with bank fraud and wire fraud. Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez were taken into custody today and made their initial appearances before United States Magistrate Judge Jonathan Goodman in Miami, while the other three defendants remain at large.
As alleged in the indictment, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez owned or controlled various real estate properties in the Miami area. They enlisted mortgage brokers and other individuals, including Perez and Angulo, to recruit straw buyers to act as qualifying mortgage applicants to fraudulently purchase condominiums in the properties. The defendants prepared and caused to be prepared loan documents containing false statements and representations relating to the buyers’ income, assets and other information necessary to enable lenders to assess the buyers’ qualifications to borrow money, which induced the lenders to make loans to finance the condominiums. Luis Michael Mendez and Marie Mendez are alleged to have submitted their own fraudulent loan applications for two condominiums, and they, as well as Luis Mendez and Stavroula Mendez, advanced the buyers cash to close the transactions.
After the loans were funded, the defendants allegedly caused fraudulent payments to be made from the loan proceeds to pay kickbacks through shell companies to the brokers, recruiters and straw buyers, as well as to pay the mortgages to conceal the conspiracy. Eventually, the conspirators were unable to make mortgage payments, causing many of the condominium units to go into foreclosure and leading to losses by the lenders.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by HUD-OIG and FHFA-OIG. The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.Sentences Handed Down for Asbestos Abatement Violations at Former Air Force Base in Atwater, Calif.Read the Press Release
FRESNO, Calif. —Patrick Bowman, 47, of Los Banos, Calif.; and Rudolph Buendia III, 51, of Planada, Calif., were sentenced today for violating the asbestos work-practice standards of the National Emissions Standards for Hazardous Air Pollutants, United States Attorney Benjamin B. Wagner announced. United States District Judge Lawrence J. O’Neill sentenced Bowman to 27 months in prision, and Buendia to 24 months in prison.
Sentencing for Joseph Cuellar is currently scheduled for June 16, 2014. A restitution hearing as to all three defendants is also scheduled for June 16.
According to court documents, Joseph Cuellar was the administrative manager of Firm Build Inc., Patrick Bowman was its president, and Rudolph Buendia was its construction project site supervisor. From September 2005 to March 2006, Firm Build operated a demolition and renovation project in the former Castle Air Force Base in Atwater, California. They were to turn Building 325 into a mechanic training center for the Merced County Board of Education. The defendants hired local high school students from the Workplace Learning Academy in Merced to perform some of the renovation.
According to court documents, the students and other employees removed and disposed of approximately 1,000 linear feet of pipe insulation and additional tank insulation which the defendants knew contained regulated asbestos-containing material without utilizing proper protective equipment (in the form of Tyvek suits, full-face respirators, bootie or footwear coverings, gloves, hair hoods or caps, and shower equipment) or taking protective measures (wetting the asbestos containing materials, sealing the asbestos debris in secure plastic bags, using negative air pressure in the building) in violation of federal law. Asbestos became airborne during this illegal asbestos abatement. In performing the asbestos abatement project in this manner, defendants knowingly exposed Firm Build employees, Workplace Learning Academy students, as well as other subcontractors and their employees to hazardous airborne asbestos.
U.S. Attorney Wagner said: “Exposing student workers and subcontractors at a construction site to hazardous asbestos in order to cut corners and save money is not just reckless. The sentences imposed today should remind all who may be involved in handling such materials that disregarding federal environmental laws can result in prison time. I am grateful for the support of the investigations bureau of the Merced County District Attorney’s Office, and of Cal-EPA and the California Department of Justice, in the course of the investigation and prosecution of this case.”
“There is no safe level of exposure to asbestos,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “Directing student workers to illegally remove demolition debris containing asbestos, knowing they had neither the training nor the proper personal protective equipment, threatens their health and safety. EPA and its partner agencies will continue to protect those vulnerable to these crimes by vigorously prosecuting those who place profit above the public health and the environment.”
This case was the product of an investigation by the U.S. Environmental Protection Agency, assisted by Cal-EPA, the investigations bureau of the Merced County District Attorney, and the California Department of Justice. Assistant United States Attorneys Samuel Wong and Melanie Alsworth prosecuted the case.
Sapulpa Man Pleads Guilty to Possessing Child PornographyRead the Press Release
TULSA, Okla. — A Sapulpa man pleaded guilty in federal court today to possessing child pornography, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma. A total of at least 20,116 images and videos were found in the defendant’s possession.
Paul D. Edwards, 64, of Sapulpa, entered a plea of guilty before U.S. Magistrate Judge Paul J. Cleary to one (1) count of possession and attempted possession of child pornography and five (5) counts of receipt and attempted receipt of child pornography. Edwards is a former Certified Public Accountant for local municipalities and school districts. He has been unemployed since 2008.
According to court documents, in October of 2011, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Philadelphia office initiated an investigation into individuals utilizing an international website to distribute and collect child pornography. Between February and March of 2013, the HSI obtained log files from Russian law enforcement regarding a user profile which was later traced to Edwards’ residence. There were 20,116 images and videos collected from Edwards’ residence.
Edwards was charged on November 5, 2013. For Count 1, Edwards faces a maximum penalty of twenty (20) years and a $250,000 fine.
The case was investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The case is being prosecuted by Assistant United States Attorney Jeffrey Gallant on behalf of the United States.
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."
Riverside County Art Dealer Pleads Guilty in Federal Cyberstalking Case, Admitting He Extorted Victims with Threats of AttackRead the Press Release
LOS ANGELES – The owner of a Temecula art gallery who stalked, harassed and attempted to extort as much as $300,000 from art world professionals pleaded guilty today to two federal stalking charges.
Jason White, 43, of Temecula, pleaded guilty today in the cyberstalking case before United States District Judge Stephen V. Wilson.
As a result of today’s guilty pleas, White faces a maximum statutory sentence of 10 years in federal prison when he is sentenced on June 9.
White was arrested by the FBI on February 12 after engaging in a six-month stalking and extortion scheme that targeted art world professionals with whom he had had business relationships. When those business relationships ended, White posted derogatory information about his former associates on websites he had created, and then used threatening emails to demand hundreds of thousands of dollars in exchange for taking the websites down. White repeatedly made extortionate demands through harassing text messages and emails, and when his demands were not met, he threatened violence against the victim families.
In one part of the scheme, White targeted his former employer, an art publisher, as well as his supervisor at the art publisher’s company. After creating derogatory websites in the art publisher’s name, White allegedly sent threatening text messages to the art publisher, the publisher’s son, and his former supervisor, according to court documents. In a text message to his former supervisor, he threatened to find her family and make her pay with “fear, anguish, and pain.” On several occasions, White obtained pictures of her child and sent pictures of the child to the victim with comments such as “it will be very unfortunate if something was to happen to him.”
The case against White was investigated by the Federal Bureau of Investigation, Art Crime Team.
Release No. 14-037
Rio Arriba County Man Pleads Guilty to and is Sentenced for Driving While Intoxicated in the Carson National ForestRead the Press Release
ALBUQUERQUE – David J. Martinez, 36, of El Rito, N.M., pleaded guilty today in federal court to an aggravated driving under the influence misdemeanor charge, and was sentenced immediately thereafter.
Martinez was arrested on Sept. 27, 2013, and charged in a criminal complaint with aggravated driving under the influence of intoxicating liquor and several other misdemeanors and infractions for failing to comply with the New Mexico motor vehicle code and the U.S. Forest Service’s timber harvesting regulations. According to the criminal complaint, a U.S. Forest Service officer encountered Martinez in the Carson National Forest while Martinez was driving a pickup truck loaded with timber. The officer executed a traffic stop because the timber on Martinez’s truck was not properly tagged as required by law as a condition to lawfully harvest timber off of National Forest Systems lands. The officer determined that although Martinez had a timber removal permit, he was not in compliance with certain federal timber harvesting regulations.
During the traffic stop, the officer noted the smell of intoxicants coming from Martinez’s mouth as he talked, and observed that Martinez’s eyes were watery and blood-shot. In response to questioning by the officer, Martinez admitted he “was drinking a beer now,” and that he drank two beers before he was stopped. At the time, Martinez was concealing a 30-pack of beer that was missing 16 cans of beer under a coat on the front passenger seat of his truck. After Martinez failed standard field sobriety tests, the officer administered a preliminary breath test (PBT) to Martinez, which registered a breath alcohol content of .166. Thereafter, Martinez was given the opportunity to provide a breath sample at the New Mexico State Police office in Espanola, N.M. Although he was informed of the consequences of a refusal, Martinez refused to submit to a chemical test as required by New Mexico’s Implied Consent Act.
On Oct. 1, 2013, Martinez was charged in a four-count information with (1) aggravated driving under the influence, a Class A misdemeanor; (2) driving under the influence, a Class A misdemeanor; (3) driving with an open container of alcohol, an infraction; and (4) violating the terms and conditions of his timber harvesting permit, a Class B misdemeanor.
Today Martinez entered a guilty plea to Count 1 of a four-count superseding information charging him with aggravated driving under the influence, first offense. In entering his guilty plea, Martinez admitted that on Sept. 27, 2013, he was stopped by a U.S. Forest Service officer for failing to have a load tag on his timber-loaded truck while he was driving in the Carson National Forest. Martinez also admitted that he had been drinking beer before the stop and that he had an open container of beer in his truck cab when he was stopped. Martinez acknowledged that a PBT test confirmed that he had been drinking alcohol, and that he refused to take a breath test even though it meant that he could be charged with aggravated driving under the influence.
Immediately after entering his guilty plea, Martinez was sentenced to credit for the time he already has served in federal custody (four-days) followed by a year of supervised probation with special conditions. The special conditions of Martinez’s probation include the requirement that an ignition interlock device be placed on his vehicle for a year, that he attend DWI school and the Victims’ Impact Panel, and that he perform 24 hours of community service.
Special Agent in Charge Robin L. Poague of the Southwestern Region of the U.S. Forest Service said, “Federal regulations authorize Forest Service officials to enter orders permitting Forest Service officers to issue federal violation notices for violations of the state motor vehicle code on National Forest System lands and roads. This ensures consistent enforcement of the motor vehicle code throughout the state and across agencies. The current order authorizing Forest Service officers to issue federal violation notices in the Carson National Forest has been in place since May 2012. The prosecution of Martinez on this DUI charge was initiated pursuant to this authority.”
This case was investigated by the El Rito Ranger District of the U.S. Forest Service, with assistance from the New Mexico State Police, and is being prosecuted by Assistant U.S. Attorney William J. Pflugrath.
Ottawa Woman Sentenced for Peddling Rx DrugsRead the Press Release
KANSAS CITY, KAN. – An Ottawa woman was sentenced Monday to 30 months in federal prison for peddling prescription drugs, U.S. Attorney Barry Grissom said.
Brandi Bivens, 32, Ottawa, Kan., pleaded guilty to one count of conspiracy to distribute Oxycodone, Hydrocodone, Methadone and Morphine. In her plea, she admitted she conspired with her mother and co-defendant, Connie Edwards, as well as other co-defendants, from November 2007 to February 2012 to distribute prescription drugs.
The investigation began when the Franklin County Drug Enforcement Unit received information that Edwards was selling prescription drugs in Ottawa. Investigators set up surveillance and observed Bivens and Edwards picking up prescriptions at pharmacies. Investigators made undercover purchases of prescription drugs from them. State prescription drug records showed that from 2009 to August 2010, Bivens received 1,056 Morphine tablets, 351 Hydrocodone tablets, 432 Oxycodone tablets and 1,520 Oxycontin tablets.
Co-defendants include:
Grissom commended the Ottawa Police Department, the Franklin County Sheriff’s Office, the Kansas Bureau of Investigation, the Kansas Attorney General’s Office and Assistant U.S. Attorney Sheri McCracken for their work on the case.
Connie Edwards, who was sentenced to 300 months in federal prison.
Shirley Price, who was sentenced to 84 months.
Tamara Ledom, who was sentenced to 216 months.
Brittany Edwards, who was sentenced to 15 months.
Angela Mitchell, who was sentenced to probation for one year.Office Manager of Moberly, Missouri, Funeral Home Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – BEVERLY SUSAN RENE SMITH was indicted by a federal grand jury on charges involving her alleged theft of approximately $176,000 from Million-Taylor Funeral Home. These funds were intended to cover customer’s funeral expenses.
According to the indictment, Smith was hired by the original owner of the Million-Taylor Funeral Home (MTFH) in Moberly. James Taylor, Sr. hired Smith in 2001 as the office manager, a job she held from 2001 to June 2012. Her position included payroll expenses and expenses to vendors for the costs of funerals. She also received payment for funerals, which she recorded in a financial ledger. Additionally, she was required to report all of MTHF’s financial transactions to their accounting firm, Federated Funeral Directors of America (Federated). Smith also had access to MTHF’s banking, general fund and escrow accounts.
To pay for funeral expenses of a client, MTHF first used money from its general operating fund to cover these expenses. Then Smith was supposed to recoup payment for the funeral expenses from the representatives or family members of the deceased, from the life insurance of the deceased and/or from pre-needs insurance accounts of the deceased. When the payments were received, Smith was to deposit them back into the general fund. If she was not able to recoup full payment for funeral expenses of a client, she reported this information to Federated and informed them that the account was a bad account and that they should write it off as no further effort would be made to recoup payment for these expenses. This way she was able to conceal that she had stolen some client payments made for funeral expenses, which she deposited into the escrow account.
While James Taylor, Sr. operated MTHF, he allowed customers to pay money for their expected funeral expenses before they died. MTHF deposited this money into MTHF’s escrow account. He and Smith were the only employees who had access to the escrow account. The indictment alleges that after James Taylor, Sr. died in 2006, Smith concealed the existence of the escrow account from other MTHF employees. On several occasions Smith took the payments that were sent to MTHF for funerals, and instead of depositing them into the general fund, she deposited the funds into the escrow account. Smith was able to withdraw funds from the escrow account undetected to use for her personal use, including the purchase of clothing and jewelry. She hid the withdrawals by manipulating the financial records of MTHF.
Smith, Higbee, Missouri, was indicted by a federal grand jury on one felony count of wire fraud last Thursday, March 27. She appeared earlier today in federal court in St. Louis.
Additionally, upon a finding of guilt, Smith will be subject to a forfeiture allegation, which will require the forfeiture of all money and property derived from the illegal activity.
If convicted, this charge carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentence, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by the Federal Bureau of Investigation and the Missouri State Highway Patrol. Assistant United States Attorney Anthony Franks is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.New York City Man Pleads Guilty to Oxycodone Distribution ChargeRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that William
Waters, 32, of Bronx, New York, pleaded guilty in U.S. District Court in Bangor to possession
with the intent to distribute oxycodone.Court records reveal that on March 15, 2013, Waterville Police Department officers
encountered the defendant and Ebony Howard who they believed to be body-carrying a large
quantity of oxycodone tablets. Howard and Waters were taken to police headquarters where
Howard ultimately surrendered a package containing 645 oxycodone 30 mg tablets. Waters
admitted that he obtained the tablets in New York City and gave them to Howard who was doing
him a favor. Waters planned to distribute the drugs to Maine customers.
Waters faces up to 20 years in prison and a $1,000,000 fine. He will be sentenced after
the completion of a presentence investigation report by the United States Probation Office.The case was investigated by the Maine Drug Enforcement Agency and the Waterville
Police Department.Navajo Man Sentenced to Life in Prison for Sexually Abusing Three ChildrenRead the Press Release
PHOENIX– On March 31, 2014, Billy C. Young, 61, of Kayenta, Arizona, on the Navajo Nation, was sentenced by U.S. District Judge Stephen M. McNamee to life in prison. Young was found guilty by a federal jury on Jan. 15, 2014, of two counts of aggravated sexual abuse of a minor, one count of sexual abuse, and one count of sexual abuse of a minor.
U.S. Attorney John S. Leonardo stated, “Those who sexually abuse children rob them of their childhood and their innocence. This sentence ensures that Young will never again have the opportunity to harm another child.”The evidence at trial showed that Young molested three different girls, all under the age of 15 years old, over a 25 year period.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Christine Keller and Sharon Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-13-08084-PCT-SMM
RELEASE NUMBER: 2014-019_YoungFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Montgomery County Man Indicted for Deceptive Telemarketing Fraud Scheme That Allegedly Defrauded Clients of More Than $6.265 MillionRead the Press Release
Allegedly Engaged in Deceptive Practices To Offer Debt Management Services
Greenbelt, Maryland - A federal grand jury today returned a superseding indictment against Richard A. Brennan, age 42, of Clarksburg, Maryland, which added charges of conspiracy, mail, wire and telemarketing fraud, and filing false tax returns, to the several gun charges contained in the original indictment. The original indictment was returned under seal on March 5, 2012, and was unsealed on March 12, 2014, upon Brennan’s arrest.
The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Maryland Attorney General Douglas F. Gansler.
According to the superseding indictment, Brennan was an attorney who operated law offices and other businesses in Frederick, Maryland and elsewhere, that offered debt management and settlement services. Brennan’s firms recruited customers from around the United States through telemarketers.
In 2007, the Maryland Attorney General’s Office began an investigation into allegations that Brennan’s firms engaged in unfair and deceptive trade practices, including: that they sold debt management services to customers and administered debt management plans from their offices in Frederick, although they could not lawfully do so in Maryland; that they held themselves out as non-profit credit counseling agencies, when they were for-profit entities; and that the employees of Brennan’s firms almost always recommended that the debt clients enter into debt settlement plans that were profitable for Brennan’s firms, but not necessarily an appropriate resolution of the clients’ financial problems. In addition, Brennan’s firms represented to clients that the funds collected from debt clients would be placed in a trust account and used to administer the clients’ debt management plans, with payments made timely to the clients’ creditors. Instead, the funds were used to pay Brennan’s business operation and personal expenses and the firms did not make timely payments to clients’ creditors because of lack of funding in the trust account.
On October 18, 2007, Brennan signed an agreement with the Maryland Attorney General’s Office acknowledging that he was responsible for creating and implementing the alleged unfair or deceptive practices of his companies and agreed to “cease and desist” such practices and abide by the requirements set out in the agreement.
The eight count superseding indictment alleges that between October 19, 2007 and April 2010, Brennan conspired with others to continue to make false representations to new and existing debt clients to convince them to engage or retain Brennan’s firms to negotiate settlement of their debts with creditor companies. Brennan and his co-conspirators used telemarketing to execute the scheme and, in doing so, victimized at least 10 people over the age of 55. Brennan and his coconspirators would mail or email contracts and power of attorney forms to clients, which authorized Brennan’s companies to make periodic debits from their accounts, but which failed to make disclosures required under the agreement with the Attorney General’s office, and which omitted any mention of his restrictions from providing such services. Brennan allegedly deposited all funds debited from debt clients’ accounts into one account which he then used to pay the operating expenses of his firms, as well as to fund lavish personal expenses, including several luxury vehicles, international travel, exotic firearms and furnishings for his residence.
The superseding indictment alleges that to evade the restrictions in the agreement, Brennan renamed his firm multiple times and moved its physical operating location on several occasions. In addition, Brennan and co-conspirators allegedly formed new entities in order to open bank accounts using entity names besides those of Brennan’s firms in order to disguise ownership and avoid scrutiny from regulatory authorities.
According to the superseding indictment, Brennan used the deceptive practices to defraud debt clients over more than $6.265 million during the course of the conspiracy.
The superseding indictment also charges that Brennan filed false tax returns in 2006 and 2007. For example, the indictment alleges that in 2007, Brennan reported an adjusted gross income of negative $576,273.10 when he had unreported business receipts that year of at least $9,229,802.
Finally, Brennan faces four gun charges, including: that he illegally possessed 11 machineguns; transported a handgun from Maryland to a person in Virginia who was not a licensed importer; manufactured firearms without having registered as required by law; and possessed an unregistered sawed off shotgun.
Brennan faces a maximum sentence of 20 years in prison for the conspiracy and mail fraud counts; a maximum of 10 years in prison, consecutive to any other sentence, for using telemarketing to victimize ten or more people over the age of 55 in the course of committing the fraud conspiracy; a maximum of three years in prison for each of the two tax charges; and a maximum of 10 years in prison for each of the four firearms charges. An initial appearance and arraignment on the superseding indictment is scheduled for April 7, 2014, at 1:30 p.m. in U.S. District Court in Greenbelt. Brennan is released under the supervision of U.S. Pretrial Services.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised ATF, U.S. Postal Inspection Service, IRS-Criminal Investigation, and the Maryland Attorney General’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Adam K. Ake, who is prosecuting the case.
Members of Cocaine Trafficking Organization Indicted on Federal ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistPotomac Highlands Drug Task Force investigation leads to 73-count indictment
MARTINSBURG, WEST VIRGINIA – A large drug trafficking organization was disrupted as a result of a 73-count federal indictment charging cocaine trafficking and money laundering.
United States Attorney William J. Ihlenfeld, II, who announced the charges on Monday in Wheeling, said that the lead defendant in the case is Cedric Malachi JONES, also known as “BG”, 32 years old, of Palm Coast, Florida. JONES is charged with “Conspiracy to Distribute Cocaine and Cocaine Base,” “Conspiracy to Launder Monetary Instruments,” “Money Laundering,” “Distribution of Cocaine and Cocaine Base,” “Distribution of Cocaine and Cocaine Base within 1,000 Feet of a Protected Location,” and “Possession with Intent to Distribute Cocaine.”
JONES is alleged to be the leader of a group that caused controlled substances to be transported from other parts of the country to Keyser, West Virginia, for redistribution. JONES is also alleged to have laundered money that was generated as a result of the drug trafficking. JONES faces a total of 58 counts.
Others named in the indictment include:
- Ebony Ishia Haynes Jack, age 32, of Palm Coast, Florida
- Patrice Dominique Stephens a/k/a “Everett Backstreets,” 34, of Westernport, Maryland
- Paul Harland Ellis, 35, of Keyser, West Virginia
- Tequila L. Smith, 32, of Ranson, West Virginia
- Dixie Sherylann Layman, 40, of Keyser, West Virginia
- Sheena Collins, 26, of Oakland, Maryland
- Travis Sinclair Howard, 34, of Palatka, Florida
- Samaria Alice Clifford, 32, of Keyser, West Virginia- Robert Lee Jessie, 34, of Keyser, West Virginia
- Christopher Lee Redman, 30, of Keyser, West Virginia
- Adrian Nicholas Sanchez a/k/a “ACE,” 30, of Cumberland, Maryland
- Troy Aaron Wilt, 30, of Keyser, West VirginiaIf convicted, each defendant faces up to life in prison on the conspiracy charge, up to 20 years in prison on the money laundering charges, and up to forty years in prison on any sales of controlled substances that occurred near protected locations. Under the Federal Sentencing Guidelines the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. The charges contained in the Indictment are merely accusations, and each defendant is presumed innocent unless and until proven guilty.
This prosecution of this case is being handled by Assistant United States Attorney Jarod J. Douglas. It was investigated by the Potomac Highlands Drug & Violent Crime Task Force, which consists of officers from the Federal Bureau of Investigation and the West Virginia State Police - Bureau of Criminal Investigations.
Updates on the status of this case will be made by media releases as well as via the official Twitter feed of the United States Attorney’s Office, @NDWVnews.
Martinsburg Man Sentenced to Prison on Cocaine Trafficking ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A Martinsburg man was sentenced to federal prison for trafficking in crack cocaine.
United States Attorney William J. Ihlenfeld, II announced that TIMOTHY WILLIAMS, age 24, of Martinsburg, West Virginia was sentenced to 188 months in prison due to his conviction for “Conspiracy to Distribute Crack Cocaine.” U.S. District Court Judge Gina M. Groh applied enhancements to WILLIAMS’ sentence due to his possession of a firearm, his maintaining of a drug-involved premise and his use of violence.
WILLIAMS was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, the Berkeley County Sheriff’s Department, and the Jefferson County Sheriff’s Department.
In other matters before Judge Groh, THEOFANIS MAVROUDIS, age 46, of Charles Town, West Virginia, was sentenced to 63 months in prison and lifetime supervision due to his conviction for “Failure to Register as Sex Offender.” MAVROUDIS was remanded to the custody of the United States Marshal pending designation to a Federal institution. The case was investigated by the United States Marshals Service and prosecuted by Assistant U.S. Attorney Jarod J. Douglas.
CHERA SCHLEYCOLE, age 27, of Martinsburg, was sentenced by Judge Groh to 12 months in prison and three years of supervised release for “Straw Purchase of Firearms,” “Delivery of Firearm to a Convicted Felon,” and “False Statement to Law Enforcement Officers.” The case was investigated by the Berkeley County Sheriff’s Department and the ATF, and was prosecuted by Assistant U.S. Attorney Paul T. Camilletti.
In matters before Magistrate Judge James E. Seibert, MISTY ANN TARMAN, age 51, of Martinsburg, entered a plea of guilty to “Aiding and Abetting the Distribution of Crack Cocaine.” TARMAN faces up to 20 years in prison when she is sentenced. This case was investigated by the Eastern Panhandle Drug & Violent Crime Task Force and prosecuted by Douglas.GWEN LITTEN, age 33, of Kearneysville, West Virginia, entered a plea of guilty to “Theft of Government Money.” As part of her plea, LITTEN must make restitution to the Social Security Administration in the amount of $10,853.00. LITTEN, who is in custody pending sentencing, faces up to 10 years in prison. This case was investigated by the Social Security Administration, Office of Inspector General, and prosecuted by Douglas.
Marion, Indiana, Resident Gets 60 Years in Prison for Solicitation to Commit Murder and Attempted MurderRead the Press Release
JACKSONVILLE, FLORIDA – U.S. Attorney Pamela C. Marsh announced the sentencing today of Robert Eugene Spiker, 45, of Marion, Indiana, by U.S. District Court Judge Mark E. Walker. On January 17, 2014, Spiker pleaded guilty to two counts of Solicitation to Commit Murder of a Federal Judge and an Assistant United States Attorney, and one count of Attempted Murder of an Assistant United States Attorney. Spiker was sentenced today to a total of 60 years in prison, followed by three years of supervised release.
Spiker admitted that between March and April of 2013 he made numerous written threats and devised a plan to murder an Assistant United States Attorney and a Federal Magistrate Judge in Jacksonville, Florida. On separate occasions, Spiker attempted to solicit other individuals to kill the victims for payment or “in-kind” services. Spiker’s written threats and directives included his intention to attack the federal prosecutor in the courtroom. He also directed one assailant to kill the judge without regard to the presence of his family members: “If his family gets in the way, so be it.” Finally, on April 11, 2013, Spiker attempted to smuggle a metal “shank” into the courtroom for the purpose of murdering the federal prosecutor. Prior to his entry into the courtroom, Spiker was searched, and the weapon was confiscated.
This case was investigated by the Federal Bureau of Investigation, the U.S. Marshals Service, and the Baker County Sheriff's Office. The case was prosecuted by Assistant U.S. Attorney Frank Williams.
Manhattan U.S. Attorney Files and Simultaneously Settles Civil Fraud Lawsuit Against Broker and Distributor of Dairy Products for $1.26 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed and simultaneously settled a civil fraud lawsuit against a broker and a distributor of dairy products, alleging that defendants used false statements to buy federally subsidized dairy products. Specifically, the lawsuit alleges that HUGH HENLEY (“HENLEY”); two companies that Henley owns and operates, PRESTIGE PROTEINS and PRESTIGE MILK PROTEINS, LLC (collectively, “PRESTIGE”); and AGRI-DAIRY PRODUCTS, INC. (“AGRI-DAIRY”), defrauded the United States by conspiring to submit, and submitting, two false bids to the United States Department of Agriculture (the “USDA”) for the purchase of federally subsidized goods in 2009. As alleged in the Complaint, through those false bids, defendants fraudulently bought more than two million pounds of dairy products at federally-subsidized discount prices and unlawfully resold those products at market prices for substantial profits. The settlement requires defendants to admit to the false bidding, and collectively pay damages of $1,265,055. The settlement was approved Friday, March 28, 2014, by U.S. District Judge William H. Pauley.
Manhattan U.S. Attorney Preet Bharara said: “The federal government set up a program to help domestic manufacturing in the dairy industry by selling dairy products at federally subsidized low prices. The defendants engaged in lies and other deceptive conduct to skim product from this program so they could illegally sell it, rather than manufacture the intended product. Those who want to abuse federal programs should understand that such conduct will not be tolerated by this Office.”
According to the allegations contained in the Complaint filed Monday, March 24, 2014, in Manhattan federal court:
PRESTIGE, which is owned and operated by HENLEY, brokers the importation and distribution of dairy products in the United States. AGRI-DAIRY distributes dairy products in the United States. In 2009, the USDA invited qualified dairy product companies to submit bids for the purchase of discounted nonfat dry milk (“NDM”) through a federal program, the Dairy Product Price Support Program. The bidders were required to certify that they could and would domestically manufacture the product into casein, a common protein product. In particular, each bidder was required to certify that it had the facilities to manufacture casein domestically and that the bidder would use the NDM solely for domestic conversion into casein within 90 days. The purpose of the certification was to ensure that the federally subsidized NDM would be used to benefit the domestic manufacturing industry.
The defendants conspired to exploit this federal program by obtaining the federally discounted NDM and re-selling it on the open market, contrary to the program requirements and certifications. Specifically, defendants agreed that HENLEY, in the name of PRESTIGE, would submit two bids to the USDA falsely certifying that he had the facilities to manufacture the NDM into casein and would do so within 90 days. They did so knowing that PRESTIGE lacked the ability to manufacture the NDM into casein domestically. HENLEY and AGRI-DAIRY further agreed that AGRI-DAIRY would advance PRESTIGE the funds to pay the USDA for the dairy products, that AGRI-DAIRY would then sell the NDM at market prices, and that PRESTIGE and AGRI-DAIRY would split the net profits from the resale.
HENLEY, in the name of PRESTIGE, then submitted two false bids to the USDA and won the contracts each time. AGRI-DAIRY wired HENLEY the funds to allow PRESTIGE to pay the USDA, as an advance against profits from the resale of the NDM. Then, instead of converting the NDM into casein, defendants resold the NDM to AGRI-DAIRY’S customers at market prices after each purchase. Further, because the USDA required a certification of conversion to casein within 15 days of conversion as a condition of the sales, HENLEY twice falsely certified that PRESTIGE had, in fact, converted the NDM to casein, when it had not.
As a result of their conspiracy to submit false bids to the USDA, defendants collectively made a total of more than $630,000 from their resale of the discounted NDM they unlawfully acquired from the USDA.
In connection with the settlement, HENLEY and PRESTIGE will pay the United States $632,527 in damages, and AGRI-DAIRY also will pay $632,527 in damages, for a total settlement amount of $1,265,055.
As part of the settlement, HENLEY, PRESTIGE, and AGRI-DAIRY admitted, acknowledged, and accepted responsibility for the following facts:
- On or about June 1, 2009, and November 25, 2009, Henley presented two bids to the USDA to purchase discounted NDM;
- In those bids to purchase NDM, Henley falsely certified that the NDM would be used solely for domestic conversion into casein or caseinate, one of USDA’s requirements for purchasing the NDM;
- The two false bids were made pursuant to an agreement between Agri-Dairy and Henley, by which the NDM would not be used for the purpose of domestic conversion into casein or caseinate, but instead would be sold by Agri-Dairy to third parties, with the net profits from the sales split between Henley and the Prestige entities, on the one hand, and Agri-Dairy, on the other;
- Pursuant to that agreement, the NDM that Henley acquired from the USDA in connection with the June and November 2009 bids was not converted to casein, but was resold by Agri-Dairy; the net profits from those sales were split between Henley and the Prestige entities, on the one hand, and Agri-Dairy, on the other; and
- On or about October 5, 2009, and March 9, 2010, Henley falsely certified that the NDM purchased from the USDA in connection with the June and November 2009 bids had been converted to casein or caseinate, when in fact that had not occurred.
Mr. Bharara thanked the USDA, Office of the Inspector General, for its assistance in this case.
The case is being handled by the Office’s Civil Frauds Unit.
U.S. v. Henley Prestige AgriDairy Complaint
U.S. v. Henley Stipulation and Order of Settlement
U.S. v. Agridairy Stipulation and Order of SettlementLos Angeles-Area Gang Member Who Trafficked Teens as Prostitutes Sentenced to 30 Years in Federal PrisonRead the Press Release
RIVERSIDE, California – A Lynwood gang member who pleaded guilty to federal sex trafficking charges – admitting that he used force, fraud and coercion to cause teen-age girls to work as prostitutes across Southern California – was sentenced this morning to 360 months in federal prison.
Paul Edward Bell, 30, a member of the Rolling 60s Crips street gang, was sentenced by United States District Judge Virginia A. Phillips.
Bell “not only used his fists, a cane, a shoe, and other objects against the females, he also pepper sprayed one of the victims in her face,” prosecutors wrote in a sentencing brief filed with the court. “He also threatened the victims with physical abuse, put a gun to the head of one of the victims, and locked at least two of the victims in his apartment. The physical and mental abuse and anguish suffered by the victims at the hands of defendant has and will continue to deeply affect the victims and their families.”
The sentencing brief notes that Bell was previously convicted in two prior state court cases with crimes related to sex trafficking.
Bell is among eight defendants convicted in the case stemming from a federal grand jury indictment filed in August 2012.
Bell and his co-defendants used minors as prostitutes for their own financial gain. Bell was the leader of the organization that preyed on vulnerable victims, convinced them to become prostitutes, and verbally and physically abused them when they did not perform as required. Bell specifically admitted that in 2011 he forced at least four minor victims – aged 15 to 17 – to work as prostitutes in Lynwood and Compton.The other seven defendants in this case who previously pleaded guilty are:
Samuel Rogers, also known as Bone, 24, of Moreno Valley, another alleged member of the Rolling 60s, who pleaded guilty to sex trafficking of a minor and is currently scheduled to be sentenced on April 14;
Gary Rogers, who used monikers such as G Man, 25, of Moreno Valley, another alleged member of the street gang and Samuel Rogers’ brother, who pleaded guilty to conspiracy to engage in sex trafficking and is scheduled to be sentenced on April 11;
Christopher Weldon, Bell’s half-brother, who is also known by several names, including Chris Roc, of Compton, who pleaded guilty to one count of conspiracy to engage in sex trafficking and received a six-year prison sentence;
Javiya Brooks, who is also known by several permutations of Shady Blue, 21, of Lynwood, who was the lead prostitute for Bell, who pleaded guilty to one count of conspiracy to engage in sex trafficking and is scheduled to be sentenced on April 21;
Kimberly Alberti, 21, of Riverside, who was the lead prostitute for Samuel Rogers, who pleaded guilty to one count of conspiracy to engage in sex trafficking and received a two-year sentence;
Kristy Harrell, 22, of Riverside, who was Gary Rogers’ lead prostitute, who pleaded guilty to interstate transportation in the aid of racketeering and is scheduled to be sentenced on April 28; and
Su Yan, 32, of Rosemead, a Chinese national who allegedly assisted Bell with his prostitution business, who pleaded guilty to interstate transportation in the aid of racketeering and was sentenced to 18 months in prison.
This case resulted from an investigation by the Inland Child Exploitation/Prostitution Task Force, which is comprised of agents, deputies and officers with the Federal Bureau of Investigation, the Riverside County Sheriff’s Department, the Riverside Police Department, the San Bernardino Police Department, the Pomona Police Department, and the Ontario Police Department.
The investigation in this case began in January of 2011, when the Riverside County Sheriff’s Department learned that teen-age girls attending schools in the Inland Empire were being recruited to work as prostitutes. The investigation later revealed that Alberti attended one of the schools and recruited underage females by “grooming them” – or gaining their trust and telling them that they could make large sums of money by working as prostitutes for Alberti's pimp. The girls who were successfully recruited to work as prostitutes were brought to the Los Angeles area, where they were housed at hotels or at the pimps’ apartments. Some of the victims were housed at Bell's apartment. The Rogers brothers and Bell also often housed the victim prostitutes at motels located in the Los Angeles area.
The United States Attorney’s Office is working with the Justice Department’s Child Exploitation and Obscenity Section to prosecute this case.
Release No. 14-036
Los Angeles Physician Assistant Pleads Guilty <br /> in Two Medicare Fraud CasesRead the Press Release
A Los Angeles physician assistant pleaded guilty today to defrauding Medicare by signing fraudulent prescriptions for durable medical equipment while working at two separate medical clinics in California.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office and Special Agent in Charge Erick Martinez of Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.
Erasmus Kotey, 77, of Montebello, Calif., pleaded guilty before U.S. District Judge Margaret M. Morrow in the Central District of California to one count of health care fraud and one count of conspiracy to commit health care fraud. Sentencing is scheduled for Sept. 8, 2014.
According to court documents, Kotey was a physician assistant who worked at medical clinics in and around Los Angeles County. From approximately November 2007 through February 2008, Kotey engaged in a scheme to commit health care fraud through his work at a clinic located at 866 North Vermont Avenue in Los Angeles. In addition, from approximately April 2008 through December 2008, Kotey engaged in a conspiracy to commit health care fraud through his work at a clinic located at 943 South Atlantic Boulevard, Suite 218, in Monterey Park, Calif.
At both clinics, Kotey signed prescriptions and other medical documents for medically unnecessary power wheelchairs and other durable medical equipment (DME). Kotey and his co-conspirators then sold the prescriptions to DME supply companies, knowing that the prescriptions were fraudulent. Based on these fraudulent prescriptions, the DME supply companies then submitted false and fraudulent claims to Medicare.
Combined, the two indictments allege that fraudulent prescriptions from Kotey were responsible for approximately $7 million in false and fraudulent claims to Medicare, and Medicare paid approximately $3 million on those claims.
The cases were investigated by the FBI, HHS-OIG and the IRS and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The cases are being prosecuted by Trial Attorney Fred Medick of the Fraud Section and Assistant U.S. Attorneys Kristen Williams and Cathy Ostiller of the Central District of California.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Lincoln Man Sentenced for Selling Firearm to a Prohibited PersonRead the Press Release
United States Attorney Deborah R. Gilg announced that Ashley F. Gerbig was sentenced on Monday, March 31, 2014, by U.S. District Judge Laurie Smith Camp to a term of forty-six month in prison. Mr. Gerbig pled guilty on October 28, 2013, to selling a firearm and ammunition to a prohibited person. On March 7, 2013, Mr. Gerbig sold a firearm and ammunition to a law enforcement cooperating witness. The cooperating witness was a convicted felon who had previously informed Mr. Gerbig of his or her status as a convicted felon.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms.
Leader of $30 Million Bakersfield Mortgage Fraud Scheme and Wife SentencedRead the Press Release
FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced San Diego residents David Crisp, 34, to 17 years and 7 months in prison, and Jennifer Crisp, 31, to five years on probation for charges stemming from their involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007, United States Attorney Benjamin B. Wagner announced. David Crisp was ordered to pay more than $28 million in restitution to lenders. He was taken into custody after today’s hearing. Jennifer Crisp was ordered to pay $1,689,952 in restitution.
U.S. Attorney Wagner stated, “David Crisp lived in the fast lane, steering a real estate company that was all image and no substance. Today he crashed hard, and the prison sentence he began this afternoon is the final bit of devastation caused by his mortgage fraud scheme.”
“David Crisp rose to real estate millionaire by participating in a massive mortgage fraud scheme that contributed to the real estate bubble that devastated the savings of so many Californians,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento division. “He flaunted his ill-gotten wealth with an extravagant lifestyle that included exotic cars, Armani suits, bodyguards and private jets. His sentencing reflects the gravity of his crimes.”
According to court documents, David Crisp and Carl Cole, who was sentenced last month to 17 years and seven months in prison, owned and operated Crisp & Cole Real Estate (CCRE), a real estate brokerage, and Tower Lending, an affiliated mortgage brokerage. Between January 2004 and September 2007, these defendants and others at CCRE and Tower Lending carried out a conspiracy to defraud mortgage companies and federally insured financial institutions. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. David Crisp admitted in his plea agreement that he and the co-conspirators caused losses of close to $30 million to the defrauded lenders due to the conspiracy.
According to her plea agreement, Jennifer Crisp acted as a straw buyer for CCRE and purchased several properties by submitting loan applications to lenders containing material misstatements and omissions of material information.
Last week, co-defendant Jayson Peter Costa was sentenced to 78 months in prison due to his participation in the scheme. Sentencing dates for the remaining defendants are as follows: Michael Angelo Munoz on May 5, 2014; Jeriel Salinas on May 12, 2014; and Sneha Mohammadi on June 9, 2014. Robinson Nguyen has completed his 27-month sentence. The trial of the remaining co-defendant is set for April 8, 2014. The charges as to that defendant are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Before David Crisp and the other defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to this scheme. Three are scheduled to be sentenced on June 2, 2014: Jerald Allen Teixeira
(1:09-cr-375 – one count of wire fraud for false statements on loan documents), Megan Balod (1:10-cr-016 – four counts of wire fraud for acting as a straw buyer), and Christopher Lance Stovall (1:10-cr-271 – four counts of mail fraud for making false statements on loan documents). Two are scheduled to be sentenced on May 27, 2014: Kevin Patrick Sluga (1:10-cr-001 – four counts of wire fraud for false verification of employment letters), and Leslie Sluga (1:10-cr-002 – two counts of wire fraud for acting as a straw buyer).This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.
This case was done in coordination with the President’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.
L.A.-Area Physician Assistant Pleads Guilty in Medicare Fraud CasesRead the Press Release
LOS ANGELES – A physician assistant pleaded guilty today to defrauding Medicare by signing fraudulent prescriptions for durable medical equipment while working at two Los Angeles-area medical clinics.
Erasmus Kotey, 77, of Montebello, pleaded guilty before United States District Judge Margaret M. Morrow to one count of health care fraud and one count of conspiracy to commit health care fraud.
Judge Morrow is scheduled to sentence Kotey on September 8, at which time he faces a statutory maximum sentence of 20 years in federal prison.
According to court documents, Kotey was a physician assistant who worked at Los Angeles County medical clinics. From approximately November 2007 through February 2008, Kotey engaged in a scheme to commit health care fraud through his work at a clinic located at 866 North Vermont Avenue in Los Angeles.
(The scheme involving the clinic on North Vermont Avenue also involved Susanna Artsruni, a North Hollywood woman who has pleaded guilty and admitted she caused $25 million in fraudulent claims to be submitted to Medicare, see: http://www.justice.gov/usao/cac/Pressroom/2014/002.html.)
In addition, Kotey engaged in a conspiracy to commit health care fraud from approximately April 2008 through December 2008, through his work at a clinic at 943 South Atlantic Boulevard in Monterey Park.
At both clinics, Kotey signed prescriptions and other medical documents for medically unnecessary diagnostic tests, power wheelchairs and other durable medical equipment (DME). Co-conspirators then sold the prescriptions, knowing that the prescriptions were fraudulent. Based on these fraudulent prescriptions, the testing facilities and DME supply companies then submitted false and fraudulent claims to Medicare.
In the two cases combined, fraudulent prescriptions from Kotey were responsible for approximately $7 million in false and fraudulent claims to Medicare, and Medicare paid approximately $3.5 million on those claims.
The cases against Kotey are the product of an investigation by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; and IRS - Criminal Investigation.
The cases were brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to Health Care Fraud Unit.
Release No. 14-038
Kirkland Plastic Surgeon Agrees to Pay $125,000 to Settle DEA Drug Diversion ClaimsRead the Press Release
A plastic surgeon who practices in Kirkland, Washington has agreed to settle federal civil penalty claims brought by the U.S. Attorney’s Office on behalf of the Federal Drug Enforcement Administration (DEA). Based on evidence and information obtained through its investigation, DEA contends that from 2007 through 2011, Dr. Gavin Dry forged at least 265 prescriptions under another physician’s name – and with Dr. Dry’s minor son falsely listed as the patient – so that Dr. Dry could obtain controlled substances (primarily Adderall and other amphetamines) for his own personal use. DEA also contends that Dr. Dry committed multiple recordkeeping violations.
In 2011, Dr. Dry voluntarily entered into an in-patient chemical dependency treatment program, which he successfully completed. Since January 2012, Dr. Dry has practiced under the terms of, and in compliance with, a monitoring contract with the Washington Physicians Health Program. In May 2012, after DEA initiated its investigation, Dr. Dry voluntarily surrendered his DEA registration, which meant that he could no longer prescribe certain medications, including amphetamines.
Under the terms of the parties’ settlement, Dr. Dry has agreed to pay the government $125,000 in order to resolve its claims prior to the commencement of litigation. The settlement is not an admission of legal fault or responsibility by Dr. Dry.
DEA and the United States Attorney’s Office were assisted in their investigation of this matter by the Department of Health and Human Services and the Bellevue Police Department.
Justice Department Files Lawsuit to Stop Las Vegas Man from Preparing Tax ReturnsRead the Press Release
The Department of Justice filed a civil lawsuit today in the U.S. District Court for the District of Nevada to stop Bill Sunga Modina, who allegedly does business as 5M Financial and 6M Financial, from preparing federal tax returns. According to the complaint, Modina has prepared over 2,200 tax returns since 1992.
The complaint alleges that Modina understates his customers' federal tax liabilities by reporting false or inflated employee business expenses and inflated or fabricated charitable contributions. In addition, the complaint alleges that Modina has failed to provide his preparer identifying number on tax returns he prepared, thereby obscuring his identity as the tax return preparer. According to the complaint, Modina’s activities have resulted in an estimated average tax loss of over $4,400 per return, and the total tax loss could allegedly be as high as $9,680,000 due to Modina’s false and fraudulent return preparation.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 . The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website . An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Bill Sunga Modina, etc.
Complaint for Permanent Injunction and Other Equitable ReliefJoplin Attorney Pleads Guilty to Stealing $586,000 from ClientsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., attorney pleaded guilty in federal court today to stealing more than $586,000 from his clients.
Daniel D. Whitworth, 58, of Joplin, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a three-count federal information that charges him with wire fraud, money laundering and false statements on tax returns.
Whitworth was the owner of a law practice in Joplin. By pleading guilty today, Whitworth admitted that he embezzled approximately $586,739 from 22 of his legal clients between 2004 and Oct. 18, 2013. Whitworth spent these embezzled funds on personal loans and items unrelated to the legal matters of his clients.
Law enforcement officers investigated complaints made to the Office of Chief Disciplinary Counsel of the Missouri Supreme Court about Whitworth’s theft of client money. Investigators determined from bank records and speaking with former clients that Whitworth repeatedly took money from and for clients. He claimed that money would be used to resolve the matter that the client had pending before the court. In many instances, Whitworth deposited the client’s money either into his attorney trust account or into his personal bank accounts. After depositing his client’s money, Whitworth would then withdraw money and pay for personal expenses and items that were entirely unrelated to his client’s legal case.
Whitworth also admitted that he failed to report the embezzled funds on his personal income tax returns for the years 2009-2011, which the plea agreement says totaled $448,835. Whitworth did not file an income tax return for 2012, according to the plea agreement, and therefore did not report the embezzled funds during this year as well.
Under the terms of today’s plea agreement, Whitworth must surrender his license to practice law in any and all jurisdictions and forfeit to the government a $586,739 money judgment.
Under federal statutes, Whitworth is subject to a sentence of up to 33 years in federal prison without parole, plus a fine up to $750,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Missouri Highway Patrol and IRS-Criminal Investigation.Johnny Wayne Neeley Sentenced to Serve 96 Months in Prison for Conspiring to Distribute OxycodoneRead the Press Release
GREENEVILLE, Tenn. – Johnny Wayne Neeley, 39, of Sneedville, Tenn., was sentenced on Mar. 31, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 96 months in federal prison for conspiring to distribute oxycodone and possessing with intent to distribute oxycodone. Upon his release from prison, Neeley will be subject to three years of supervised release. There is no parole in the federal system.
In October 2012, Neeley and 11 other individuals were named in an 18-count indictment charging them with drug trafficking of oxycodone, oxymorphone, and methamphetamine, firearms violations, and money laundering. The charges were the result of a lengthy investigation of individuals who traveled to Florida, Tennessee, and Georgia to obtain oxycodone and other drugs to distribute throughout eastern Tennessee. The total conspiracy involved over 778,000 milligrams of oxycodone, which is the equivalent of nearly 26,000 dose units of 30 milligram oxycodone.
Neeley was the only individual charged in the indictment who elected to proceed to trial. According to the evidence presented at trial, Neeley paid for, or “sponsored, individuals to travel on commercial airlines to pill mills in Tampa, Fla., to obtain oxycodone for distribution in the Eastern District of Tennessee. He also paid for, or “sponsored,” individuals to travel to pill mills in the Eastern District of Tennessee to obtain oxycodone for distribution. Evidence at trial also showed that Neeley himself distributed controlled substances, including oxycodone, Xanax, and Suboxone, in the Eastern District of Tennessee on numerous occasions. Several officers testified about the October 2012 arrest of Neeley and Greg Rhea, at Rhea’s Morristown residence, where the two were found barricaded inside a room in the house, which was found to contain controlled substances, including oxycodone and oxymorphone, and three firearms.
All 12 individuals charged in the indictment have now been convicted and Neeley was the next to last to be sentenced. A sentencing hearing for Gregory Allen Rhea is scheduled for April 14, 2014, in U.S. District Court, Greeneville, Tenn.
U.S. Attorney William C. Killian commended the law enforcement agencies involved in this investigation and stated, “The U.S. Attorney’s office will continue to work closely with all law enforcement agencies to cut off the illegal supply lines of oxycodone and other prescription narcotics. This sentence is an example of the punishment that awaits those who traffic prescription drugs and the ‘pill mills’ that supply criminal organizations.”
Agencies involved in this investigation included the Tennessee Bureau of Investigation, Morristown Police Department, and Hawkins County Sheriff’s Department. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
John Acosta-bermudez Charged with Reentry After DeportationRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that John Acosta-Bermudez, a Columbian citizen who has landed immigrant status in Canada, appeared today in United States District Court in Burlington on a charge that he reentered the United States after having been deported. U.S. Magistrate Judge John M. Conroy ordered that the defendant be detained pending his next hearing.
According to the criminal complaint, immigration officials at the Route 5 Port-of-Entry in Derby Line observed a black vehicle enter the United States in mid-morning on March 29, 2014. The car did not stop at the Port for inspection, but instead headed south on Interstate 91. A Border Patrol agent followed and stopped the car on the highway. Acosta-Bermudez was driving and an undocumented alien was the passenger. Acosta-Bermudez has twice been deported from the United States following a New York robbery conviction and a federal passport fraud conviction. As a deportee, Acosta-Bermudez cannot return to the United States without the advance permission of the Attorney General.
The United States Attorney emphasizes that the charge against Acosta-Bermudez is merely an accusation and that the defendant is presumed innocent unless and until he is proven guilty.
If convicted, the defendant faces up to 20 years of imprisonment and a fine of up to $250,000. The actual sentence would be determined with reference to federal sentencing guidelines.
Acosta-Bermudez is represented by Assistant Federal Public Defender David McColgin. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Iowa Man Pleads Guilty to <br /> Sexually Exploiting 10-year-old GirlRead the Press Release
An Iowa man pleaded guilty today in the District of Massachusetts to federal child exploitation charges moments before his jury trial was scheduled to begin this morning.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Acting Inspector in Charge Shelly Binkowski of the U.S. Postal Inspection Service (USPIS) made the announcement.
Joshua Dunfee , 32, of Oxford Junction, Iowa, pleaded guilty before U.S. District Court Chief Judge Patti B. Saris to the coercion and enticement of a child to engage in illicit sexual activity and the sexual exploitation of a child to produce child pornography. Sentencing is scheduled for June 27, 2014.
Dunfee posed as “John” from “Hunt Photography” on Facebook and communicated with a Massachusetts mother who was seeking employment as a model and believed Hunt Photography to be a legitimate business. In October 2011, Dunfee contacted the mother and told her that Hunt Photography had a client willing to pay $20,000 for a mother-daughter bikini modeling contract. Dunfee told the mother that in order to apply she would need to audition her daughter for him immediately and persuaded the mother to take her minor daughter out of school.
At Dunfee’s further direction, the mother placed her daughter on webcam for him to view for a 48-minute video call. During this time, Dunfee was able to see and hear the mother and her minor daughter, but they were unable to see or hear him. During the “audition,” Dunfee directed via instant messenger that the minor be posed for him—first in a bra and underwear and then completely naked. Dunfee knew that the girl was a minor.
On Nov. 3, 2011, federal agents executed a search warrant at Dunfee’s residence, where law enforcement had traced the illicit conduct via IP address records. A forensic examination of Dunfee’s computers (obtained during the execution of the search warrant) revealed various activities consistent with the use of certain platforms to communicate while posing as Hunt Photography, including Facebook, Skype and Windows Live Messenger Chat.
The case was investigated by law enforcement in Massachusetts, the USPIS, the Jones County, Iowa, Sheriff’s Office, the Massachusetts State Police, the Attleboro Police Department and the Department of Justice High Technology Investigative Unit. Substantial assistance was provided by the U.S. Attorney’s Office for the District of Iowa.
The case is being prosecuted by Trial Attorney Herbrina Sanders of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Stacy Dawson Belf of the District of Massachusetts’s Major Crimes Unit.
This case is brought as part of Project Safe Childhood, which is a nationwide initiative created by the Department of Justice in 2006 that is designed to protect children from online exploitation and abuse. Led by the U.S. Attorney’s Offices, 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.
# # #Iowa Man Pleads Guilty to Child Pornography Charges Moments Before Trial BeginsRead the Press Release
BOSTON - An Iowa man pleaded guilty to federal child exploitation charges moments before his jury trial began this morning.
Joshua Dunfee, 32, of Oxford Junction, Iowa, pleaded guilty before U.S. District Court Chief Judge Patti B. Saris to the coercion and enticement of a child to engage in illicit sexual activity and the sexual exploitation of a child to produce child pornography. Sentencing is scheduled for June 27, 2014. Dunfee faces a mandatory minimum sentence of 15 years and a maximum of 40 years in prison, a maximum of a lifetime of supervised release and a $250,000 fine. Dunfee has been in custody since his arrest in November 2011.
Dunfee posed as “John” from “Hunt Photography” on Facebook and communicated with a Massachusetts mother who was seeking employment as a model and believed Hunt Photography to be a legitimate business. In October 2011, Dunfee contacted the mother and told her that Hunt Photography had a client willing to pay $20,000 for a mother-daughter bikini modeling contract. Dunfee told the mother that in order to apply she would need to audition her daughter for him immediately and persuaded the mother to take her minor daughter out of school.
At Dunfee’s further direction, the mother placed her daughter on webcam for him to view for a 48-minute video call. During this time, Dunfee was able to see and hear the mother and her minor daughter, but they were unable to see or hear him. During the “audition,” Dunfee directed via instant messenger that the minor be posed for him—first in a bra and underwear and then completely naked. Dunfee knew that the girl was a minor.On Nov. 3, 2011, federal agents executed a federal search warrant at Dunfee’s residence, where law enforcement had traced the illicit conduct via IP address records. A forensic examination of Dunfee’s computers (obtained during the execution of the search warrant) revealed various activities consistent with the use of certain platforms to communicate while posing as Hunt Photography, including Facebook, Skype, and Windows Live Messenger Chat.
United States Attorney Carmen M. Ortiz, Assistant Attorney General David A. O’Neil of the Department of Justice’s Criminal Division, and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service made the announcement today. The case was investigated by the U.S. Postal Inspection Service, the Jones County (IA) Sheriff's Office, the Massachusetts State Police, the Attleboro Police Department, and the Department of Justice’s High Technology Investigative Unit. Substantial assistance was provided by the U.S. Attorney's Office for the District of Iowa. The case is being prosecuted by Assistant U.S. Attorneys Stacy Dawson Belf and David Tobin of Ortiz's Major Crimes Unit and Trial Attorney Herbrina Sanders of the Department of Justice Child Exploitation & Obscenity Section.
This case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys= Offices, 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/.
Idaho Man Sentenced to 25 Years in Prison for November 2011 Shooting at the White House-Defendant Fired at Least Eight Shots in Attack-Read the Press Release
WASHINGTON - Oscar Ramiro Ortega-Hernandez, 23, of Idaho Falls, Idaho, who used a semi-automatic assault rifle to fire at least eight rounds at the White House in November 2011, was sentenced today to 25 years in prison for terrorism and weapons offenses.
The sentencing was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Kathy A. Michalko, Special Agent in Charge of the Washington Field Office of the U.S. Secret Service.
Ortega-Hernandez pled guilty Sept. 18, 2013, in the U.S. District Court for the District of Columbia to one count of injury to a dwelling and placing lives in jeopardy within the territorial jurisdiction of the United States, as well as one count of discharging a firearm during a crime of violence. Additionally, he admitted that the attack was a terrorist act, and therefore, a sentencing enhancement under the United States Sentencing Guidelines is applicable.
The Honorable Rosemary M. Collyer sentenced Ortega-Hernandez this afternoon. In addition to the prison term, she ordered that he pay approximately $94,000 in restitution for damage caused to the White House. Upon completion of his prison term, Ortega-Hernandez will be placed on five years of supervised release.
“This man drove cross-country to launch an assault rifle attack on the White House from Constitution Avenue,” said U.S. Attorney Machen. “He was motivated by hatred for the President and the desire to start a revolution against the federal government. We are very fortunate that his bullets narrowly missed the U.S. Secret Service officers guarding the White House that night. This 25-year prison sentence demonstrates that anyone who comes to the nation’s capital planning to use violence should expect to spend decades behind bars.”
“Acts of terrorism, like the one that Mr. Ortega-Hernandez was sentenced for today, instill a sense of fear in our community,” said Assistant Director in Charge Parlave. “Along with our law enforcement partners, the FBI’s Violent Crimes Task Force and Evidence Response Team diligently worked to collect evidence of Ortega-Hernandez’s actions on the night of Nov. 11, 2011, ultimately leading to the justice he received today for committing this crime of violence.”
“Today’s sentencing is the result of the efforts of the U.S Secret Service and many of our law enforcement partners to provide the highest level of protection to our Nation’s leaders,” said Special Agent in Charge Michalko.
**
According to the government’s evidence, the events unfolded like this:
Beginning in 2010, Ortega-Hernandez made repeated statements to many friends and associates in Idaho about his contempt for the federal government, and he espoused numerous theories regarding how the federal government was seeking to control Americans through Global Positioning System chips, fluoride, and aspartame. He also criticized the federal government for the wars in Afghanistan and Iraq, claiming that the United States was “bullying” other countries to obtain oil. He made numerous statements vilifying the President of the United States, calling him “the devil” and “the anti-Christ,” among other things. On numerous occasions, he told friends and associates that “he was on a mission from God to take out Obama.”
On March 19, 2011, Ortega-Hernandez purchased a Romanian Cugir SA semi-automatic (AK-47-style) assault rifle from an individual in Idaho for $550. He also purchased more than 1,200 rounds of ammunition to use with the weapon. In August 2011, Ortega-Hernandez purchased a scope kit on the Internet and asked a friend to install it on the weapon for him. Over the course of six months, Ortega-Hernandez repeatedly practiced firing the weapon at a desolate crater located on land owned by the Bureau of Land Management outside of Idaho Falls, Idaho.
On Oct. 23, 2011, Ortega-Hernandez made two short videos at the home of one of his friends. In the videos, he praised Osama bin Laden for having the courage to stand up to the United States, and called for a revolution against the federal government. Ortega-Hernandez described himself as a “cold-hearted warrior of God” and declared, “it’s time for Armageddon.”
After making the two videos, Ortega-Hernandez departed Idaho Falls and drove more than 2,000 miles, armed with his Romanian Cugir SA semi-automatic assault rifle with the attached scope, and more than 180 rounds of ammunition.
On Nov. 11, 2011, at approximately 8:50 p.m., Ortega-Hernandez drove southbound on 15th Street NW and made a right turn onto Constitution Avenue NW. Shortly after passing the entrance to the Ellipse, he stopped his vehicle in the middle of the road. With the passenger-side window of his car lowered, he pointed his assault rifle out the passenger-side window of the car and aimed directly at the White House. He fired at least eight rounds at the White House.
Following the shooting, Ortega-Hernandez fled the scene, driving erratically and at a high rate of speed westbound on Constitution Avenue. Moments later, he lost control of the vehicle and crashed near the ramp from Constitution Avenue to the Theodore Roosevelt Bridge in front of the United States Institute of Peace. After efforts to restart the vehicle failed, Ortega-Hernandez fled from the vehicle on foot. Law enforcement subsequently launched a multi-jurisdictional search for Ortega-Hernandez. He was arrested on Nov. 16, 2011, in Indiana, Pa.
The FBI examined the area around the White House and located approximately eight bullet impact points on the south side of the building on or above the second story. Two bullets were recovered from the White House: one from a window frame on the Truman Balcony and one found on the ground east of the South entrance. The FBI determined that both of those bullets were fired from Ortega-Hernandez’s assault rifle. The FBI also recovered a bullet jacket that was found in the window sill of the Truman Balcony, which was also fired from Ortega-Hernandez’s assault rifle.
At the time of the shooting, two U.S. Secret Service officers were stationed on the northeast section of the roof of the White House. One of the bullets fired by Ortega-Hernandez struck the roof of the White House within approximately 20 feet of where the officers were stationed. In addition, another U.S. Secret Service Officer was stationed at the South Portico underneath the Truman balcony at the time of the shooting. Several of the bullets fired by Ortega-Hernandez struck the Truman balcony directly above where this officer was stationed. This officer took cover behind the stairwell, drew a firearm, and readied a shotgun.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave and Special Agent in Charge Michalko expressed their appreciation to those who diligently investigated this case from the FBI’s Washington Field Office, the U.S. Secret Service, and the U.S. Park Police. They also acknowledged the assistance provided by the Pennsylvania State Police; the Arlington County, Va. Police Department; the U.S. Attorney’s Office for the Western District of Pennsylvania; the FBI Laboratory at Quantico, Va.; FBI field offices in Pittsburgh and Salt Lake City, including the Idaho Falls Resident Agency, and Secret Service field offices in Pittsburgh, Salt Lake City, and Boise, Idaho. Additionally they thanked those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including former Assistant U.S. Attorney John Borchert, who assisted in securing the defendant’s indictment; Paralegal Specialists Jenifer Rowe and Devron Elliott, Victim/Witness Coordinator Dawn Tolson-Hightower, and Litigation Technology Specialist Leif Hickling.
Finally, they commended the efforts of Special Assistant U.S. Attorney George P. Varghese and Assistant U.S. Attorney Alessio D. Evangelista of the National Security Section of the U.S. Attorney’s Office for the District of Columbia, who prosecuted the case.
14-075Huntington Woman Sentenced to Four Years for Role in Heroin Trafficking ConspiracyRead the Press Release
Huntington, W.Va. – United States Attorney Booth Goodwin announced today that Kimberly Gayle Hamlett, 35, of Huntington, West Virginia was sentenced in federal court in Huntington by Chief Judge Robert C. Chambers to four years of imprisonment for distribution of heroin. Hamlett, who pled guilty in November of 2013, admitted that she sold heroin to a confidential informant on May 27, 2013. The sale took place near the Speedway located at 16th Street and 6th Avenue in Huntington. As part of her plea, Hamlett also admitted that she was involved in a conspiracy to sell oxycodone pills and heroin for other individuals. That conspiracy lasted from at least 2011 through August 8, 2013. Ms. Hamlett made deliveries of drugs and provided places for others to store and sell drugs. Firearms were also kept at those locations.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Huntington Man Pleads Guilty to Heroin and Gun ChargesRead the Press Release
Huntington, W.Va. – A Huntington, West Virginia, man pleaded guilty today in federal court to charges of being a convicted felon in possession of firearms and of selling heroin, announced U.S. Attorney, Booth Goodwin. Antonio Michael Smith, 31, pleaded guilty before United States District Judge Robert C. Chambers in Huntington.
On September 24, 2013, Smith used two firearms to shoot six people in the Northcott Court neighborhood of Huntington. Smith was a convicted felon and could not legally possess any firearms, having been previously convicted in 2001 of robbery in Ohio. He was also convicted in 2010 in Cabell County, West Virginia, of unlawful wounding and attempt to commit a felony. Additionally, Smith pleaded guilty today to selling heroin in Huntington on February 6, 2013.
Smith fled the state after the September 2013 shooting and was eventually located and arrested in New York by the FBI.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District. The investigation was conducted by the Huntington Violent Crime/Drug Task Force, Huntington Police Department, DEA and the FBI. SAUSA Sharon M. Frazier is handling the prosecution.
Hugo Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that SAMMY WAYNE DAVIS, age 46, of Hugo, Oklahoma, pled guilty to Possession with Intent to Distribute Methamphetamine, in violation of Title 18, United States Code, Sections 922(g)(I) and 924(e).
The charge arose from an investigation by the Hugo Police Department, the Choctaw County Sheriff’s Office and District 17 District Attorney’s Drug Task Force. The defendant was indicted in February, 2013.
The Indictment alleged that on or about June 5, 2011, within the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over today’s hearing and ordered the completion of a presentence investigation report. The defendant remains in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment is not less than 10 years up to Life imprisonment and/or up to a $8,000,000.00 fine and up to 8 years of supervised release.
Assistant United States Attorney Dean Burris represented the United States.
Frederick Man Sentenced to 15 Years in Prison for Three Armed Store RobberiesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Steven Ray Williams, age 43, of Frederick, Maryland, today to 15 years in prison, followed by five years of supervised release, for three armed robberies and for brandishing a gun during a crime of violence.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief J. Thomas Manger of the Montgomery County Police Department; and Chief Alan Goldberg of the Takoma Park Police Department.
According to Williams’ plea agreement, on December 10, 2011 Williams and a co-conspirator robbed a store in the 15000 block of Frederick Road in Gaithersburg, Maryland. Williams and the co-conspirator accosted a store employee as he was opening the store, pointing a handgun at the employee and ordering the employee to open the safe. After the employee opened the safe, Williams and the co-conspirator wrapped the employee’s arms and ankles with duct tape and fled the store, stealing $6,000 in store proceeds, as well as the employee’s cell phone and wallet. On March 7, 2012, Williams and another co-conspirator robbed the same store, accosting two store employees as they were opening the store. Williams and the co-conspirator duct taped one of the employee’s legs and wrists and forced the other store employee at gunpoint to open the safe. They then duct taped that employee’s wrists, and fled the store, stealing $2,700 in store proceeds, as well as the cell phone of one of the employees.On September 16, 2012, Williams and the two co-conspirators robbed a store located in the 6300 block of New Hampshire Avenue in Takoma Park, Maryland. One of the co-conspirators waited outside the store while Williams and the other co-conspirator entered the store. After the last customer had left the store, the co-conspirator locked the front door and Williams took out a gun, pointed it at a store employee and ordered the employee to take him to the store office, where the manager was counting money. After entering the office, Williams threw the employee to the floor and the co-conspirator tied his hands and feet using flex cuffs. They were unable to tie up the manager, so Williams held the gun to the manager’s neck, while Williams and the co-conspirator collected the money the manager had been counting. While the robbery was taking place, an 81 year old customer managed to open the front door and entered the store. Williams and the co-conspirator tied the customer’s hands with flex cuffs and dragged the customer to the back of the store. Williams and the co-conspirator ran out the back door with a bag filled with approximately $800 in store proceeds, but as they attempted to flee, they left the money outside the store.
United States Attorney Rod J. Rosenstein praised the ATF, Montgomery County Police Department and Takoma Park Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Leah J. Bressack, Mara Zusman Greenberg and Kelly O. Hayes, who prosecuted the case.
Former Raleigh Mortgage Broker Sentenced to 42 Months in Prison for His Role in Mortgage Fraud SchemeRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today before Chief United States District Judge James C. Dever, III, MARK THOMAS BOWE, JR., 56, of Jonesboro, Georgia, was sentenced to a 42 month term of imprisonment, followed by 5 years of supervised release, on Count One of an Indictment charging BOWE with Conspiracy to Commit Bank and Wire Fraud, in violation of Title 18, United States Code, Section 1349. BOWE was also ordered to pay $604,550.69 in restitution.
Count One of the Indictment charged that between 2003 and 2008, BOWE was a licensed mortgage broker operating through mortgage companies operating on Rock Quarry Road in Raleigh. BOWE participated with others, including developer David Lewis Johnson, developer Arthur Lee Barnes, real estate broker Mark Henry Tkac, and attorney James Scott Taggart in a real estate flipping scheme which defrauded various banks and lenders. Johnson, Barnes, and Taggart were previously sentenced to prison for their role in the scheme. Tkac has not yet been sentenced.
BOWE participated in the scheme by, among other things, falsifying various aspects of loan applications that were submitted to banks and lenders to qualify buyers for mortgages related to properties sold by Johnson’s real estate company. BOWE falsified, among other things, the amount and source of the borrower’s income and assets, the existing debts of the borrower, and the borrower’s intent to occupy the property as a primary residence. In some instances, BOWE completed loan applications which falsely represented that the information contained within the application had been obtained from a telephonic interview when, in truth and fact, the borrower never spoke to BOWE in a telephonic interview or provided the information in the loan application.
BOWE and Johnson also promoted the scheme by deceiving and attempting to deceive lenders into believing that some borrowers held assets at an investment company, known as Mutual Southern Investments. Bowe and another conspirator supplied false verifications of deposit and false account statements purporting to show that borrowers held, in some instances, millions of dollars in assets, when in truth and fact, Mutual Southern Investments did not exist and the assets and asset statements were entirely fictitious.
BOWE and other participants in the scheme benefitted by receiving kickbacks or payments out of the loan proceeds at the time of the loan closing. In some instances, BOWE received payments in excess of the amounts identified on the HUD-1 settlement statements that were supplied to the banks and lenders to compensate BOWE for his role in the scheme.
Ultimately, the borrowers defaulted on the loans brokered by BOWE, resulting in substantial losses to various banks and lenders. At sentencing, stipulated losses from various loans brokered by BOWE were found to total $604,550.69.
On April 4, 2013, BOWE was named in a four-count Indictment filed by the Grand Jury in the Eastern District of North Carolina. On August 26, 2013, BOWE pleaded guilty to Count One which charged him with Conspiracy to Commit Bank and Wire Fraud.
Investigation of this case was conducted by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney William M. Gilmore represented the United States.
Former Fugitive Admits Selling Bogus Insurance PoliciesRead the Press Release
CAMDEN, N.J. – A former insurance broker admitted today to conspiring to defraud purchasers of commercial liability insurance by overcharging for policies as well as issuing some customers bogus policies, U.S. Attorney Paul J. Fishman announced.
Thomas M. Grubb Jr., 58, of Voorhees, N.J., pleaded guilty before Chief U.S. District Judge Jerome B. Simandle in Camden federal court to an indictment charging him with one count of conspiracy to commit mail fraud and wire fraud.
Grubb was originally arrested on April 14, 2008, and charged by complaint with one count of obstruction of justice. On Nov. 5, 2008, Grubb failed to appear in court and a warrant was issued for his arrest.
Special agents of IRS-Criminal Investigation apprehended Grubb in Port Charlotte, Fla., on Dec. 6, 2011.
According to documents filed in this case and statements made in court:
Grubb was employed at Aconorate Insurance Agency in Hammonton, N.J., when Aconorate engaged in a scheme to defraud its clients by overcharging them for commercial liability insurance and selling them policies that were not issued by a legitimate insurance carrier. Grubb – along with the individuals identified in court documents as “CC-1,” the owner of Aconorate, and “CC-2,” an information technology employee at Aconorate – procured insurance for Aconorate commercial liability insurance clients through an insurance broker in Texas, identified as “GM.” Many of the clients were bars, restaurants, and nightclubs.
Grubb and the owner of Aconorate substantially inflated the premiums that they charged these customers, sometimes increasing the quote that GM provided by as much as 700 to 800 percent. Between June 2004 and July 2006, Grubb and the owner of Aconorate collected more than $1 million dollars in premiums for commercial liability insurance procured through GM and kept over $597,000 of the premiums for themselves.
Grubb and others also took steps to create the appearance that the insurance companies purportedly issuing the policies were legitimate, including creating websites, mailing addresses, and telephone numbers for the insurance companies, and setting up their own mechanism to pay claims.
The mail fraud and wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for July 30, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, Newark field office, with the investigation leading to today’s guilty plea.
The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.14-111
Defense counsel: Anne Singer Esq., Haddonfield
Grubb, Thomas Indictment
Former Bank Executive Sentenced for Mortgage FraudRead the Press Release
Orlando, FL – U.S. District Judge Roy B. Dalton, Jr. today sentenced Braden Koegel (35, Apopka) to three years and six months in federal prison for bank fraud. Koegel pleaded guilty on November 21, 2013.
According to court documents, Koegel, a former home lending executive at a local bank, fraudulently obtained more than $2 million worth of fraudulent home mortgages on two properties in North Carolina. He did so by utilizing "straw purchasers" (individuals who would act as buyers) to purchase the properties, and by lying about the income and assets of these straw purchasers on loan applications. Both of these properties ultimately went into foreclosure, resulting in a loss of more than $1 million to the lenders.
This case was investigated by the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the Florida Division of Financial Services. It was prosecuted by Assistant United States Attorney Vincent S. Chiu.
Former Alabama Real Estate Investor Indicted forConspiracy to Commit Mail FraudRead the Press Release
A federal grand jury in Mobile, Ala., returned a one-count indictment against a former real estate investor, charging him with conspiracy to commit mail fraud as part of a scheme related to public real estate foreclosure auctions held in southern Alabama, the Department of Justice announced today.
The indictment, returned on March 27, 2014, and entered today in the U.S. District Court for the Southern District of Alabama, charges former real estate investor Chad E. Foster, of Theodore, Ala., with conspiracy to commit mail fraud affecting a financial institution. The department alleged that the scheme defrauded financial institutions, homeowners and others with a legal interest in selected foreclosure properties, for the unlawful purpose of obtaining money and property through fraudulent pretenses, representations or promises.
The indictment charges Foster with conspiring with others to, among other things, conduct secret, second auctions open only to members of the conspiracy, to make payoffs to and receive payoffs from co-conspirators and to divert money away from financial institutions, homeowners and others with a legal interest in selected properties. Several financial institutions suffered actual monetary losses as a result of the conspiracy. According to the charge, Foster participated in the mail fraud conspiracy beginning at least as early as February 2005 and continuing until at least January 2007.
“Conspiring to defraud financial institutions and distressed homeowners is a crime the Antitrust Division takes seriously,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will vigorously prosecute those who subvert the competitive process for their own gains.”
“The public demands that the integrity of our nation’s financial institutions and processes be free from fraud and deceit,” said Stephen E. Richardson, FBI Special Agent in Charge of the Mobile Field Office. “These indictments in this investigation reflect the FBI’s unwavering commitment to protecting the citizen’s reliance on those processes.”
To date, nine individuals and two companies have pleaded guilty in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes in the Alabama real estate foreclosure auction industry.
The charge of conspiracy to commit mail fraud affecting a financial institution carries a maximum penalty of 30 years in prison, five years of supervised release, and a $1 million fine.
Today’s charge stems from an ongoing investigation being conducted by the Antitrust Division’s new Washington Criminal II Section and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Alabama should call the Antitrust Division at 404-331-7116, or visit www.justice.gov/atr/contact/newcase.htm.
Today’s charges were brought in connection with the President’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.Final Defendant Pleads Guilty in Scheme to Use Fresno Trucking Front to Smuggle Cocaine into CanadaRead the Press Release
FRESNO, Calif. —Armitdeep Mann, 33, a Toronto resident and a Canadian citizen, pled guilty today to conspiracy to distribute and possess with the intent to distribute five or more kilograms of cocaine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Mann helped set up a Fresno trucking company intending that cocaine would be concealed in legitimate cargo to be shipped to Canada. As part of the conspiracy, on September 21, 2012, another person was sent to Los Angeles and obtained eight kilograms of cocaine. Law enforcement seized that cocaine and arrested Mann and additional defendants. A follow-up search warrant on September 21, 2012, at the Los Angeles residence where authorities believed the eight kilograms of cocaine had been stored resulted in the seizure of an additional forty kilograms of cocaine.
Mann has been held in custody without bail since his September 21, 2012 arrest. According to court documents, Mann’s father Harjeet Mann, was arrested in the Bakersfield area during 2008 and subsequently convicted of federal cocaine trafficking charges.
This case was the product of an investigation by the Organized Crime Drug Enforcement Task Force. The Drug Enforcement Administration, Fresno Police Department, and the Fontana and Vernon Police Departments actively worked on the case. Assistant United States Attorney Kevin Rooney is prosecuting the case.Armitdeep Mann is scheduled to be sentenced by Judge Anthony W. Ishii on June 9, 2014, at 1:30 p.m. Mann faces a maximum statutory penalty of life in prison and a $10,000,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF Program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Federal Grand Jury in Fort Wayne Returns IndictmentRead the Press Release
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Fort Wayne, Indiana - The United States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictment on March 26, 2014:
Kelvin B. Walker, 49, of Fort Wayne, Indiana, is charged in a six count Indictment with making a false claim on IRS tax returns on or about April 18, 2011, February 16, 2011, January
19, 2012, March 30, 2011, January 7, 2012 and April 17, 2012. These charges were filed as a result of an investigation by the Internal Revenue Service, Treasury Inspector General for Tax Administration, and the Fort Wayne Police Department. This case has been assigned to and will be prosecuted by Assistant United States Attorney Lovita Morris King.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.Father and Son Sentenced to Lengthy Federal Prison Sentences on Conspiracy and Health Care Fraud ConvictionsRead the Press Release
Defendants Owned a Physician House Call Company and Billed for Services Not Rendered
DALLAS — Two Grand Prairie, Texas, men, convicted at trial in October 2013 on conspiracy and health care fraud charges related to their operation of A Medical House Calls, a physician house-call company in North Texas, were sentenced this morning by U.S. District Judge David C. Godbey, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Lawrence Dale St. John, 67, was sentenced to serve a total of 262 months in federal prison, and his son, Jeffrey Dale St. John, 42, was sentenced to serve a total of 135 months in federal prison. Both St. John’s were ordered to pay restitution to the Centers for Medicare and Medicaid Services (CMS).
Each defendant was convicted at trial on one count of conspiracy to commit health care fraud and 13 substantive counts of health care fraud. Co-defendant Dr. Nicolas Alfonso Padron, 54, of Garland, Texas, pleaded guilty in September 2013 to one count of conspiracy to commit health care fraud. Dr. Padron, who joined A Medical as its medical director in December 2009, testified, as did a number of nurse practitioners, physician assistants and company staff, services billed were never performed. Earlier this month, Judge Godbey sentenced Dr. Padron to 57 months in federal prison and ordered that he also pay restitution to CMS.
A Medical provided physician visits to Medicare beneficiaries in their homes rather than at a doctor’s office. A Medical, aka A+ Medical House Calls and ANM Physician House Calls, was owned by Lawrence St. John; Jeffrey St. John ran its daily operations. A Medical had locations in Mesquite, Texas; Dallas; and Carrollton, Texas. Its primary purpose was to certify and re-certify Medicare beneficiaries for home health services, regardless of the true condition of the patient.
Once A Medical established a Medicare beneficiary for physician home-visit services, it would submit billing for fraudulent care plan oversight claims. The company did not provide primary care physician services to Medicare beneficiaries.
According to documents filed in the case and evidence presented at trial, from May 2010 to January 2012, the defendants conspired together and with others to defraud the Medicare program. A Medical, at the direction of Lawrence and Jeffrey St. John, submitted claims to Medicare using Dr. Padron’s unique Medicare number, with Dr. Padron’s permission, regardless of the claim’s merit.
The defendants conspired together to bill Medicare for care plan oversight by Dr. Padron for numerous beneficiaries when Dr. Padron was out of town, including dates when he was out of the country and on a cruise.
In total, the defendants billed taxpayers for $1.4 million of services that were either not medically necessary or not rendered at all. Through the fraudulent certifications, Medicare was billed an additional $9.7 million by home health agencies.
The U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Medicaid Fraud Control Unit of the Office of the Attorney General of Texas investigated. Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch prosecuted.
District Man Pleads Guilty to Prostituting and Sexually Abusing 15 Year-Old Victim-Defendant Lured Teenager from Seattle to Work as Prostitute-Read the Press Release
WASHINGTON – Jason Whren, 33, of Washington, D.C., pled guilty today to charges of first-degree sexual abuse of a child and pandering of a minor for sexually abusing and prostituting a 15-year-old girl, U.S. Attorney Ronald C. Machen Jr. announced.
Whren pled guilty in the Superior Court of the District of Columbia. The Honorable Lynn Leibovitz scheduled sentencing for June 11, 2014. Whren faces a potential sentence of life in prison without the possibility of release, as well as a fine of up to $250,000. In addition to prison time, he will be required to register as a sex offender for ten years.
According to the government’s evidence, Whren contacted the victim on Facebook and began to develop a relationship with her over the telephone and internet. After sending the victim numerous text messages that contained sexually explicit pictures of himself, Whren was able to entice the victim to travel from Seattle to Washington, D.C. in December 2012.
Upon her arrival in Washington, D.C., the defendant immediately engaged in intercourse and other sexual activities with the victim. He then began prostituting the teenager, forcing her to walk the streets to find clients, as well as compelling her to respond to illicit Internet advertisements that he posted. The activities took place between Dec. 1, 2012 and Dec. 5, 2012 in Northeast Washington. Whren’s crimes were ultimately discovered by undercover officers conducting an operation to locate child prostitutes in the District of Columbia.
In announcing the guilty plea, U.S. Attorney Machen commended the work performed by those who investigated the case from the Metropolitan Police Department’s Narcotics and Special Investigation Division, Human Trafficking Unit. He also praised those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialist D’Yvonne Key, and Assistant U.S. Attorneys Danny Nguyen and Mervin A. Bourne, Jr., who investigated and prosecuted the matter.
14-076Detroit Resident Convicted for Assaulting A Federal Law Enforcement OfficerRead the Press Release
Larry O’Neill Walker, II, 31, of Detroit, was convicted today in federal district court of assaulting a federal law enforcement officer, announced United States Attorney Barbara McQuade.
McQuade was joined in the announcement by Special Agent in Charge Paul Abbate, Federal Bureau of Investigation, Detroit Field Office.
The three day trial was conducted before United States District Judge Marianne O. Battani. The jury deliberated for approximately 20 minutes before reaching their verdict.
"This defendant endangered a law enforcement officer and members of the public by using his vehicle as a weapon," McQuade said.
“The use or attempted use of violence against law enforcement officers carrying out their sworn duties is an offense against every brave individual who has ever worn the badge,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “When violent perpetrators direct their actions toward those whose duty is to protect and serve, they will be brought to justice.”
Evidence presented during the trial established that FBI Federal Task Force Officer Scott Herzog was assisting the Detroit Police Department with an investigation in the early morning hours of November 7, 2013. Officer Herzog was conducting surveillance in an undercover car in a parking lot in Rochester Hills, Michigan, when Walker sped into the lot and attempted to hit Officer Herzog’s car with his vehicle.
Officer Herzog left the lot and traveled away from Walker on Rochester Road. Walker chased Officer Herzog north on Rochester Road, at times reaching speeds in excess of 70 miles per hour, attempting to strike the rear bumper and rear quarter panels of the officer’s car. The assault ended just before the two cars entered the City of Rochester when Officer Herzog activated his emergency lights and maneuvered his car to halt Walker’s pursuit.Sentencing is set before Judge Marianne O. Battani on July 8, 2014, at 2:00 p.m.
McQuade praised the work of the Detroit office of the FBI and the Violent Crime Task Force. Assistant U.S. Attorneys John O’Brien and Eaton Brown are handling the prosecution of this case.
Delaware County Man Sentenced for Mortgage and Bank FraudRead the Press Release
PHILADELPHIA - Simon H. Aouad, 35, of Garnet Valley, PA, was sentenced today to 70 months in prison and restitution of $5,462,682 for a mortgage fraud scheme involving fraudulently obtained mortgages to purchase properties in North Wildwood, NJ, and Dorchester, MA, and a bank fraud scheme involving fraudulently obtained lines of credit at Wachovia Bank, now Wells Fargo Bank. Aouad pleaded guilty to conspiracy, mail fraud, and bank fraud. He was involved in three schemes. In the first, properties primarily located in North Wildwood, NJ, were purchased for inflated sale prices, and using false borrower income and asset information so that the buyers could obtain kickbacks totaling tens of thousands of dollars, which were not disclosed to the lenders. In the second, lines of credit at Wachovia Bank were obtained using false borrower income and employment information. In the third, the conspirators arranged for sham real estate transactions involving properties located in Dorchester, MA, in which a straw buyer would purchase properties from one of the conspirators for inflated prices. The sham sales were financed with fraudulently obtained mortgages. The conspirators split the proceeds of the sham sales.
Aouad=s co-conspirators in the North Wildwood scheme included John C. Lucidi, Jr., Daniel Mumbower (who was, at the time, an employee of Wachovia Bank), Timothy Cook, Eric Maratea, and Eric Itzi, all of whom have pleaded guilty to charges stemming from the mortgage fraud scheme. Aouad brought willing buyers, such as Cook, Maratea, and Itzi, to Lucidi, in exchange for fees and kickbacks for each successful buyer. In the Massachusetts mortgage fraud scheme, Aouad identified straw buyers for his co-conspirators, which included a former mortgage broker, and Aouad shared in the proceeds of the sham sales. The mortgages Aouad facilitated in both schemes went into default and caused losses to the lenders of a little more than $5 million.
Aouad=s co-conspirators in the bank fraud scheme included a loan broker by the name of Gerald Cathie, who is charged elsewhere, as well as Daniel Mumbower, a corrupt Wachovia Bank loan officer. Similar to his role in the mortgage fraud schemes, Aouad facilitated the fraudulently obtained Wachovia Bank lines of credit by bringing borrowers to Cathie and Mumbower to apply for the lines of credit using false income and other information. When the loans were funded, the borrowers paid Cathie a fee of 5-7% of the amount of loan proceeds, Cathie kicked money back to the loan officer, and the loan officer paid Aouad several thousand dollars from the loan proceeds for his role in identifying the borrower. The Wachovia Bank loans that Aouad facilitated went into default and caused losses to Wachovia Bank of approximately $400,000.In addition to the prison term and restitution, U.S. District Court Judge C. Darnell Jones, II, ordered forfeiture of $3,675,468, a $400 special assessment, and five years of supervised release.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the United States Secret Service. It was prosecuted by Assistant United States Attorneys Nancy E. Potts.
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PATTY HARTMAN, Media Contact, 215-861-8525Court of Appeals Upholds Former County Commissioner’s Bribery ConvictionsRead the Press Release
Tampa, FL - United States Attorney A. Lee Bentley III announces that the United States Court of Appeals for the Eleventh Circuit today affirmed the convictions and sentence of former Hillsborough County Commissioner Kevin White for his role in a bribery scheme. White had been convicted after a jury trial of bribery, mail fraud, wire fraud, and conspiracy to commit both fraud and bribery. In March 2012, he was sentenced to a total of three years’ imprisonment.
In 2009 and 2010, while White was a Hillsborough County Commissioner, he also served as Chairman of the County’s Public Transportation Commission, which was responsible for certifying towing companies to work for county law-enforcement agencies. The evidence at trial showed that White had received cash bribes from persons who wanted the commission to certify their towing companies and help them get hired by local law-enforcement agencies. White’s father, Gerald White, also participated in the scheme; he urged the towing companies to pay bribes, insisting that White could help them out if they helped out the Whites. Unbeknownst to the Whites, the men they met with were an FBI informant and an undercover FBI special agent. In a series of meetings, many of which were recorded, both White and Gerald White received thousands of dollars in cash bribes from the informant and from the agent. In addition to the cash bribes, Gerald White demanded and received from the informant a Lincoln Navigator SUV.
At Kevin White’s trial, the jury found White guilty of seven counts. White’s father (Gerald) did not go to trial, as he had died in the meantime. White appealed his convictions and his sentence to the Court of Appeals in Atlanta. He argued that the evidence at trial had been insufficient to support his convictions because the Public Transportation Commission receives no federal funds, and the federal bribery statute applies only to agents of agencies that receive at least $10,000 in federal funds annually. The Court of Appeals rejected White’s argument, pointing out that White also was acting as an agent of the Hillsborough County Commission when he solicited and took the bribes, and Hillsborough County receives millions of dollars in federal funds each year. As the Court explained, “Ample evidence supports White’s convictions for bribery and conspiracy to bribe.”
White also challenged his three-year sentence, arguing that the sentencing court should not have taken into account the SUV that his father had received and should not have increased his sentence based on his status as an elected public official. The Court of Appeals rejected those arguments as well and upheld White’s three-year sentence.
This appeal was handled by Assistant United States Attorney David Rhodes, Chief of the Office’s Appellate Division.
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Congressional Candidate, Husband, Admit Violating Federal Campaign Finance LawsRead the Press Release
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The United States Attorney for the District of Connecticut and the United States Postal Inspection Service announced that LISA WILSON-FOLEY, a former candidate for the U.S. House of Representatives, and her husband, BRIAN FOLEY, of Simsbury, pleaded guilty today before U.S Magistrate Judge Donna F. Martinez in Hartford to conspiring to make illegal campaign contributions.
According to court documents and statements made in court, in 2011 and 2012, WILSON-FOLEY, 54, was a candidate for election to the U.S. House of Representatives from Connecticut’s Fifth Congressional District, and competing in a primary campaign for the nomination of the Republican Party. As a candidate for federal office, WILSON-FOLEY and her associates formed and registered with the Federal Election Commission (“FEC”) the “Lisa Wilson-Foley for Congress” committee in order to receive contributions and make expenditures on behalf of her campaign.
WILSON-FOLEY knew that federal law imposed restrictions on contributions to federal campaigns, and that her campaign committee was required by law to file periodic reports with the FEC detailing, among other things, contributions made to her campaign and expenditures made on the campaign’s behalf. Under the federal campaign finance laws, convention, primary and general election campaign contributions were limited to $2,500 each, for a total of $7,500, from any individual to any one candidate. WILSON-FOLEY knew that one of the purposes of the FEC reporting requirements was to make available to the voting public information concerning the source of contributions to the campaign and the nature of the campaign’s expenditures.
In September 2011, WILSON-FOLEY, FOLEY and a co-conspirator, who is a former elected official in the State of Connecticut, entered into an unlawful conspiracy to make and cause to be made illegal contributions to WILSON-FOLEY’s campaign. As part of the scheme, the co-conspirator proposed to WILSON-FOLEY and FOLEY that he, the co-conspirator, be hired to work on the campaign. The co-conspirator advised that he could replace the private political consultant that the campaign had retained. WILSON-FOLEY wanted the co-conspirator to work on the campaign, but believed that if the co-conspirator was hired in a significant role by her campaign and paid through her campaign committee for that work, the media and the voting public would become aware of the co-conspirator’s official association with her campaign. WILSON-FOLEY believed that, because the co-conspirator had previously been convicted of a felony offense, disclosure of his paid role in the campaign would result in substantial negative publicity for WILSON-FOLEY’s candidacy. In order to retain the co-conspirator’s services for the campaign while reducing the risk that his paid campaign role would be disclosed to the public, WILSON-FOLEY, FOLEY and the co-conspirator agreed that the co-conspirator would be paid by FOLEY to work on the Campaign.
FOLEY, 62, owns a Connecticut nursing home company and a number of other related companies, including a real estate company. As part of the scheme, the co-conspirator, FOLEY and others created and executed a fictitious contract outlining an agreement purportedly for consulting services between the co-conspirator and the law offices of an attorney who worked for FOLEY’s nursing home company. FOLEY made regular payments to the co-conspirator for his work on behalf of WILSON-FOLEY’s campaign and routed those payments from his real estate company through the law offices of the attorney and on to the co-conspirator.
The co-conspirator provided nominal services to FOLEY’s nursing home company in order to create a “cover” that he was being paid for those nominal services when, in fact, he was being paid in exchange for his work on behalf of WILSON-FOLEY’s campaign.
Between September 2011 and April 2012, the co-conspirator was paid approximately $35,000 for services rendered to WILSON-FOLEY’s campaign. The payments originated with FOLEY and constituted campaign contributions, but were not reported to the FEC in violation of federal campaign finance laws.
WILSON-FOLEY and FOLEY are scheduled to be sentenced by Senior U.S. District Judge Warren W. Eginton in Bridgeport on June 23, 2014, at which time they face a maximum term of imprisonment of one year and a fine of up to $100,000.
This ongoing investigation is being conducted by the U.S. Postal Investigation Service. The case is being prosecuted by Assistant U.S. Attorneys Liam Brennan and Christopher Mattei.
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