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12 May 2014
10th Street Gang Member Sentenced for RICO ConspiracyRead the Press Release
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that 10th Street Gang member Brandon Bobbitt, 25, of Buffalo, N.Y., who was convicted of Racketeering Influenced Corrupt Organizations (RICO), was sentenced to 210 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Joseph M. Tripi, who is handling the case, stated that on September 15, 2008, the defendant stole a car and gave it to 10th Street members who were looking to use it a drive-by shooting against rival 7th Street Gang members. The car was used in the drive-by shooting of Omar Fraticello-Lugo who was killed in the attack. Two other people and rival gang members were also injured during the incident.In addition, between 2008 and 2010, Bobbitt also sold cocaine and crack cocaine as part of his participation in the activities of the 10th Street Gang.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, the New York State Police, under the direction of Major Michael Cerretto, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon.
The defendant is among 44 10th Street Gang members and associates charged in this case. A total of 38 have been convicted. Charges are pending against the six remaining defendants. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
10 May 2014
Williamsburg Man Pleads Guilty to Wire Fraud and Money Laundering ChargesRead the Press Release
NORFOLK, Va. – Stephen Kohout, 56, of Williamsburg, Virginia, pleaded guilty yesterday to wire fraud and concealment money laundering.
Dana J. Boente, United States Attorney for the Eastern District of Virginia made the announcement after the plea was accepted by U. S. District Judge Robert G. Doumar.
Kohout was charged in a criminal indictment returned on March 11, 2014, with thirteen counts of wire fraud and eight counts of concealment money laundering. Kohout faces a maximum penalty of 20 years in prison on the wire fraud charge and a $250,000 fine, and a maximum penalty of 20 years in prison on the money laundering charge and a fine of $500,000 when he is sentenced on July 10, 2014, in Norfolk.
According to a statement of facts filed with his plea agreement, Kohout was given power of attorney by his parents, R. K. and J.K., on July 15, 2003. The power of attorney provided Kohout with full authority to act on behalf of both of his parents with respect to their property, assets and income. In 2006, Kohout began handling the financial affairs of his parents, whose assets were in excess of $1 million and were held in bank and investment accounts to which Kohout had gained full access and control. By 2007, his parents had lost the medical capacity to make financial decisions and Kohout assumed full control over their assets. R. K. died in July, 2011 and his entire estate was left to his wife J.K., who currently resides at a nursing home in Tyrone, Pennsylvania.
In 2007, Kohout, in connection with day trading activities, formed two business entities, ITM Traders, LLC and Nychi, Inc., and opened bank accounts for each of the companies. Thereafter he transferred $55,000 from his parents’ bank account into his account with ITM Traders, LLC. Subsequent to that transfer, he continued to transfer various funds between the ITM Traders, LLC account and the Nychi, Inc. account, all in an effort to support his trading activities.
Kohout did not return any gains made from these trades to his parents’ accounts. Instead, from 2008 through July 2011, Kohout wired approximately $465,000 from his parents’ investment account to his parents’ bank trust accounts. He then misappropriated money from the bank trust accounts in the amount of $386,000 by writing 86 checks, all but one of which were transferred to an account in Kohout’s name.
Kohout spent the misappropriated money on his personal living expenses, repayment of personal loans, credit card bills and dining, entertainment and retail expenditures. In addition to the disbursements Kohout made for his day trading and personal expenses, from 2007 through 2011, Kohout made various disbursements from his parents’ accounts in the form of gifts, loans to his siblings and for the medical care and living expenses of his parents.
Around December 2012, the nursing home caring for J.K. threatened eviction proceedings against her due to her account being in financial arrears. In January 2013, Kohout filed for bankruptcy and despite admitting that he acted contrary to his fiduciary duty and misappropriated his parents’ assets, he did not reveal the full extent of his misappropriation. Kohout’s sister was appointed emergency guardian of their parents’ estate by a Pennsylvania court. J.K. continues to reside at the nursing home where her care is being paid for in whole or in part by the Commonwealth of Pennsylvania Department of Public Welfare. The funds in the parents’ investment accounts had been liquidated and the balance in J.K.’s bank account is approximately $2,000.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service. Assistant U. S. Attorney Brian Samuels is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
9 May 2014
Wellsville Woman Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that April Patterson, of Wellsville, N.Y., who was convicted of conspiracy to manufacture, possess with intent to distribute and distribute, 50 grams or more of methamphetamine, was sentenced to 30 months in prison and ordered to pay $3,143 in restitution to the New York State Department of Environmental Conservation by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the case, stated that during the execution of a search warrant on January 26, 2012 at a residence on South Main St. in Wellsville, law enforcement officers discovered items used to manufacture methamphetamine and a quantity of methamphetamine. A search warrant was later executed at a residence on Madison Ave. in Wellsville. During that search, officers discovered an active methamphetamine laboratory.
The defendant was arrested along with her husband Jason Patterson, Anthony Kidd, John Faber and Justin McPherson. Justin McPherson was convicted and sentenced to 24 months in prison. John Faber was convicted and sentenced to xx months in prison. Jason Patterson and Anthony Kidd have been convicted and are awaiting sentencing.
Today’s sentencing is the result of an investigation on the part of the New York State Police, under the direction of Major Michael Cerretto, the Wellsville Police Department, under the direction of Chief Timothy Walsh, and the Drug Enforcement Administration, under the direction of Jamie J. Hunt, Acting Special Agent in Charge, New York Field Division.Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS (before Magistrate Judge Roger B. Cosbey:)
Charley Gonzalez III, 26, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly conspiring to distribute and possess with the intent to distribute 5 kilograms or more of cocaine and with possessing a firearm in furtherance of a drug trafficking crime. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Damion Alexander, 20, of Fort Wayne, Indiana pled guilty to the felony offense of possession of a firearm after having been convicted of a misdemeanor crime of domestic violence. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
Narciso Soto III, 32, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly maintaining drug-involved premises. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Joseph Luna, 37, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly conspiring to distribute and possess with the intent to distribute 5 kilograms or more of cocaine. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Safe Streets Task Force, Indiana State Police, Fort Wayne Police Department, Allen County Police Department, Allen County Drug Task Force and the New Haven Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
Manuel Herrera, 44, of Fort Wayne, Indiana pled guilty to the felony offense of conspiracy to distribute and possess with intent to distribute controlled a substance. The magistrate is recommending that the district court accept the tendered guilty plea. Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation, FBI Fort Wayne Safe Streets Task Force and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.The Fort Wayne Safe Streets Task Force is comprised of FBI agents and officers from the Indiana State Police, Allen County Police Department, and Fort Wayne Police Department.The New Haven Police Department, Steuben County Sheriff's Department, Elkhart County Interdiction and Covert Enforcement Unit, South Bend Police Department, and IMAGE Drug Task Force assisted with this investigation.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
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.
DISPOSITION (before District Judge Theresa L. Springmann:)
Armando Gonzalez-Gutierrez, 44, of Fort Wayne, Indiana was sentenced to 1 year and 1 day with time served and 3 years supervised release after pleading guilty to the felony offense of conspiracy to distribute a controlled substance.According to documents filed in this case, between July 2011 and February 2013 investigation revealed the existence of a large scale narcotics distribution conspiracy operating in northeastern Indiana and southern lower Michigan.Gonzales – Gutierrez was a part of that network and obtained quantities of cocaine for distribution to his customers.This case was the result of an investigation by the Federal Bureau of Investigation .This case was prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
Week in Review - HammondRead the Press Release
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Jeremy Lloyd, 22, of Gary, Indiana, pled guilty before Senior District Judge James Moody to the felony offense of possession of a firearm by a convicted felon.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force, the Gary Police Department and the Indiana State Police.This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
Tambra Ducker, 25, of Indianapolis, Indiana, pled guilty before Senior District Judge James Moody to the felony offense of possession with the intent to distribute heroin.This charge was filed as a result of an investigation by the Drug Enforcement Administration and the Jasper County Sheriff’s Department.This case is being prosecuted by Assistant United States Attorneys Dean Lanter and Jennifer Chang-Adiga.
Kiontay Pennington, 35, of Gary, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of homicide in the aid of racketeering activity. Sentencing has been set for 9/2/14.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorneys David Nozick and Thomas McGrath.
James Huddleston, 41, of Wheatfield, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of theft concerning programs receiving federal funds.This charge was filed as a result of an investigation by Federal Bureau of Investigation and the Internal Revenue Service.This case is being prosecuted by Assistant United States Attorneys Dean Lanter and Gary Bell.
Jennifer Kurek, 40, of Hobart, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of theft of government property.Sentencing has been set for 7/17/14.This charge was filed as a result of an investigation by the Social Security Administration.This case is being prosecuted by Assistant United States Attorney Gary Bell.
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.
DISPOSITION:
Alejandro Murillo, 27, of Chicago, Illinois, was sentenced by Chief Judge Philip Simon to 57 months imprisonment and 3 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute methamphetamine.According to documents filed in this case, Murillo was arrested on Interstate 65 near Demotte, Indiana, while driving a vehicle containing 1,498 gross grams of methamphetamine, which he had hidden near the motor of the vehicle. Immigration law enforcement officials determined that Murillo is an illegal alien. This case was a result of an investigation by the Drug Enforcement Administration HIDTA Task Force.This case was prosecuted by Assistant United States Attorney Dean Lanter.
Virginia Man Sentenced to 12 1/2 Years for Transporting Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Stewart Thornton Reed, 50, of Virginia, was sentenced today in U.S. District Court by Judge
George Z. Singal to 12½ years in prison, to be followed by 5 years of supervised release, for transporting child pornography. Reed pled guilty to the offense on December 20, 2013.According to court records, in September of last year, Reed sent an email message to an undercover email account of a Special Agent with Homeland Security Investigations. Attached to the email were image files depicting a young girl displaying her genitals. When the agent asked the girl’s age, Reed replied that she was two years old. Reed was arrested near
Fredericksburg, Virginia in October. A cell phone in Reed’s possession when he was arrested was later found to contain a number of images depicting minors engaged in sexually explicit conduct, including the images that he had sent to the agent in September.The investigation was conducted by U.S. Immigration and Customs Enforcement’s
Homeland Security Investigations.Virginia Beach Man Sentenced to 180 Months in Prison for Receipt and Possession of Child PornographyRead the Press Release
NORFOLK, Va. – Marcus Warrick, 29, of Virginia Beach, Va., was sentenced today to 180 months in prison, followed by lifetime supervised release, for receipt of child pornography and possession of child pornography.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Katrina W. Berger, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Washington, made the announcement after sentencing by United States District Judge Mark S. Davis.
Warrick was found guilty by a federal jury on February 4, 2014. According to court records and evidence at trial, HSI executed a search warrant and seized his computer on November 8, 2013. HSI found more than 400 videos and images of child pornography on his computer. The investigation revealed that he installed numerous file-sharing programs on his computer and, using search terms, actively sought out images of child pornography.
This case was investigated by Homeland Security Investigations. Assistant United States Attorneys Randy Stoker and Elizabeth Yusi prosecuted the case on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Two New York Women Admit Trafficking Fraudulent Federal Tax Refund ChecksRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PRICILLA BRITO, 38, of New York, N.Y., and YOWANDY DeLEON, 38, of the Bronx, N.Y., pleaded guilty today before Senior U.S. District Judge Ellen Bree Burns in New Haven to federal offenses related to the trafficking of fraudulent federal tax refund checks.
According to court documents and statements made in court, this matter stems from an investigation into individuals who, through various means, obtained fraudulent U.S. Treasury tax refund checks using stolen identities. After obtaining the checks, individuals typically deposited them into bank accounts that had been opened using fraudulent identifying documents. The funds were then quickly withdrawn. At times, co-conspirators sold the fraudulent checks to others for less than face value of the checks. The government alleges that millions of dollars were lost as result of this scheme.
BRITO and DeLEON obtained several fraudulent tax refund checks, subsequently delivered some of the checks to co-conspirators in Connecticut, and received proceeds from the negotiation or sale of fraudulent checks.
In 2013, BRITO provided at least nine checks, with a total face value of $59,802, to an individual in Waterbury. In an undercover operation, the checks were then purchased by an individual working with law enforcement for $35,590.
In October 2013, DeLEON traveled to Connecticut to provide co-conspirators with one fraudulent check with a face value of $7,580.38. In addition, a law enforcement search of DeLEON’s cell phone revealed images of names, dates of birth, Social Security numbers, and amounts of refunds for 32 individuals whose identities had been used in filing fraudulent federal tax returns. In total, the intended loss to the U.S. Treasury resulting from the checks that DeLEON provided to co-conspirators, as well as the refunds issued to the 32 individuals whose personal information was found on her phone, was $240,450.
BRITO pleaded guilty to one count of conspiracy to defraud the U.S. She is scheduled to be sentenced on August 6, 2014, at which time she faces a maximum term of imprisonment of five years.
DeLEON pleaded guilty to one count of theft of public funds, and aiding and abetting the theft of public funds. She is also scheduled to be sentenced on August 6, 2014, at which time she faces a maximum term of imprisonment of 10 years.
Four other individuals have been charged as a result of this investigation:
On February 12, 2014, Ramon Mena, 25, of Waterbury, pleaded guilty to one count of theft of public money and one count of distribution of heroin. He has been detained since his arrest on November 23, 2013, and is scheduled to be sentenced on November 1, 2014.
On February 20, 2014, Jerry de los Santos Rodriguez, 23, a citizen of the Dominican Republic last residing in Waterbury, pleaded guilty to one count of conspiracy to defraud the U.S. On May 1, 2014, he was sentenced to approximately five months of imprisonment, time already served, and he will be deported.
Julio Lara Trinidad, 27, of Waterbury, and Cesar Penson-Perez, 27, of New York, N.Y., are awaiting trial.
Trinidad is charged with one count of conspiracy to defraud the U.S., six counts of theft of public money and aiding and abetting the same, one count of Social Security fraud and one count of aggravated identity theft. He has been detained since his arrest on November 23, 2013.
Penson-Perez is charged with one count of conspiracy to defraud the U.S., three counts of theft of public money and one count of aggravated identity theft. He has been detained since his arrest by the Darien Police Department on March 17, 2014.
As to Trinidad and Penson-Perez, U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the United States Postal Inspection Service, the Internal Revenue Service – Criminal Investigation Division, the United States Secret Service and Homeland Security Investigations, with the assistance of the Danbury and Darien Police Departments. The case is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala.
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Tom Carson
(203) 821-3722 [email protected]Two Individuals Charged as Part of Securities Kickback SchemeRead the Press Release
BOSTON – Two California men were charged yesterday for their involvement in a microcap stock kickback scheme.
Sandip Shah, 40, was charged in an indictment with nine counts of wire fraud and Shailesh Shah, 47, was charged in an Information with two counts of mail fraud and two counts of wire fraud. Both are from Chino, Calif. And were previously arrested on February 27, 2014.
According to the charging documents, Sandip Shah was in the business of promoting penny stocks and assisting public companies in finding sources of funding. Shailesh Shah was the President and Chief Executive Officer of two publicly-traded companies, SOHM, Inc. and Costas, Inc. Shailesh Shah agreed to pay secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in his two publicly-traded companies. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents.
According to the charging documents, Sandip Shah agreed to introduce the investment fund representative to executives of publicly-traded companies so that those executives could enter into the kickback arrangement. In exchange for the introductions and for facilitating the kickback arrangements as they continued, Sandip Shah accepted a portion of the kickbacks paid by the executives. What the defendants did not know was that the purported investment fund representative was actually an undercover agent.
The charges follow a lengthy investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly-traded companies whose stock often trades at pennies per share.
If convicted, each defendant faces a statutory maximum penalty of 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss on each count.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. U.S. Attorney Ortiz expressed appreciation for the significant assistance her office received from the U.S. Securities and Exchange Commission. These cases are being prosecuted by Trial Attorney Alexander H. Berlin.
The details contained in the indictment and Information are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Two District Men Sentenced to Decades in Prison for Carjacking and Robberies Committed in Same Night-Third Defendant Sentenced to More Than Eight Years in Prison for Joining in Crimes-Read the Press Release
WASHINGTON – Rayshawn Clark, 25, and Dwayne Hilton, 22, both of Washington, D.C., were sentenced today to prison terms of 31 years and 25 years, respectively, for carrying out three separate armed robberies on the same night, as well as a carjacking of one of the victims, U.S. Attorney Ronald C. Machen Jr. announced.
A third man, Pernell Lee, 37, also of Washington, D.C., was sentenced to eight years and eight months in prison for participating in one of the robberies and acting as a getaway driver.
The men were found guilty by a jury in February 2014, following a trial in the Superior Court of the District of Columbia. They were sentenced by the Honorable Anita Josey-Herring. Upon completion of their prison terms, they will be placed on five years of supervised release.
The jury found Clark and Hilton guilty of conspiracy, three counts of armed robbery, armed carjacking, and firearms offenses. The jury found Lee guilty of one count of armed robbery, fleeing a law enforcement officer, reckless driving, and firearms offenses.
According to the government’s evidence, the series of crimes began in the early morning hours of June 17, 2012. Clark and Hilton pistol-whipped, robbed and carjacked the first victim, a man, in the 5600 block of 14th Street NW. An unidentified third co-conspirator got away in the victim’s car. A second man, who was walking by while the robbery was in progress, was pistol-whipped and robbed by Hilton, while Clark continued to hold the first victim at gunpoint. After obtaining property from both victims, Clark and Hilton took off in a dark Ford Explorer.
Minutes later, after the first victim had called 911, Clark and Hilton returned to the scene after realizing that during the robberies they dropped a cell phone – later determined to belong to Hilton. Clark got out of the car, and with a gun drawn, demanded the dropped phone. The victim, who had found and hidden the dropped phone, pretended to know nothing about it. Clark then robbed the victim of his remaining belongings.
Officers with the Metropolitan Police Department (MPD) arrived as this robbery was concluding, and as Clark ran back to the Explorer to flee. Following a chase, the Explorer flipped over. Lee, who had been driving, ran and was caught after a foot chase. Clark was extracted from the flipped vehicle with the first victim’s property in his pocket. Hilton escaped on foot and was arrested later. Two guns were recovered in and around the car. Hilton’s DNA matched DNA found on one of the guns.
In a separate proceeding today, Hilton was sentenced to an additional two years in prison – to run consecutively to his other sentence – on a charge of assault with significant bodily injury. He pled guilty earlier this year to that charge, which stemmed from a stabbing at the District of Columbia Jail on Dec. 20, 2013. Hilton participated in the attack against another inmate.
In announcing the sentences, U.S. Attorney Machen commended the work of those who investigated the robbery and carjacking case from the Metropolitan Police Department. He also expressed appreciation for the assistance provided by the District of Columbia Department of Forensic Sciences. He acknowledged the efforts of those who provided assistance and handled the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Chrisellen Kolb and Suzanne Curt, Deputy Chiefs of the Office’s Appellate Division; Victim/Witness Advocate Jennifer Clark; Criminal Investigators John Marsh and Stephen Cohen; Litigation Technology Specialist Leif Hickling, and Paralegal Specialists Deborah McPherson, Wanda Trice, and Todd McClelland. Finally, he commended the work of Assistant U.S. Attorney Vivien Cockburn, who handled the initial investigation, and Assistant U.S. Attorney Natalia Medina, who prosecuted the robbery and carjacking case at trial.
U.S. Attorney Machen also expressed appreciation to those who handled the case involving the stabbing at the jail, including the District of Columbia Department of Corrections Office of Investigative Services, Paralegal Specialist Todd McClelland, and Assistant U.S. Attorney Jin Park, who prosecuted that matter.
14-110Swiss Asset Management Firm and Related Companies Agree to Resolve Criminal Tax InvestigationRead the Press Release
James M. Cole, the Deputy Attorney General of the Department of Justice, Kathryn Keneally, the Assistant Attorney General for the Tax Division of the Department of Justice, Preet Bharara, the United States Attorney for the Southern District of New York, and Richard Weber, the Chief of the Internal Revenue Service, Criminal Investigation (IRS-CI), announced today that swisspartners Investment Network AG, a Swiss-based asset management firm, and three of its wholly-owned subsidiaries (collectively, the Swisspartners Group), entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Southern District of New York and agreed to pay $4.4 million to the United States. The NPA was entered into based on, among other things, the Swisspartners Group’s remedial measures, voluntary self-reporting and extraordinary cooperation, including its voluntary production of approximately 110 client files for non-compliant U.S.-taxpayer clients, and provides that the Swisspartners Group will not be criminally prosecuted for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from in or about 2001 through in or about 2011. The NPA requires the Swisspartners Group to forfeit $3.5 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $900,000 in restitution to the IRS, representing the approximate amount of unpaid taxes arising from the tax evasion by the Swisspartners Group’s U.S. taxpayer-clients. The NPA applies only to the four specific entities that are party to it and does not apply to any other subsidiaries of swisspartners Investment Network AG or any individuals.
“The extraordinary cooperation of Swisspartners has enabled us to identify U.S. tax cheats who have hidden behind phony offshore trusts and foundations,” said Deputy Attorney General Cole . “In this and other cases around the world, we will continue to provide substantial credit for prompt and full cooperation.”
“As today’s announcement shows, we receive information about U.S. taxpayers with undisclosed accounts from many sources, some of which are not public,” said Assistant Attorney General Keneally. “For many accountholders, the time to come forward voluntarily to avoid criminal prosecution has run out.”
“This office will continue to work aggressively to hold accountable not only those U.S. taxpayers who evade their tax obligations by hiding money overseas, but also those abroad who make such tax evasion possible,” said U.S. Attorney Bharara. “For its wrongdoing in assisting U.S. taxpayers to open and maintain undeclared accounts overseas, the Swisspartners Group is being made to pay $4.4 million in forfeiture and restitution. Swisspartners avoided criminal charges as a direct result of its decision to self-report its misconduct at a time when it was not even under investigation and its extraordinary cooperation, including its decision to turn over voluntarily the files and identities of U.S. taxpayer clients it helped hide money from the IRS. The case serves as a clear example of the benefits that can be obtained from early and complete cooperation with federal law enforcement.”
“I am very pleased that we have successfully concluded negotiations with the Swisspartners Group,” said IRS-CI Chief Weber . “In making amends, the Swisspartners Group has turned over 110 account files relating to U.S. taxpayer-clients who maintained undeclared assets overseas. This agreement marks yet another significant step forward in combating offshore tax evasion. Anyone who is hiding money or assets offshore with the intent of committing tax evasion will be found and prosecuted. It's not a matter of ‘if,’ it's a matter of ‘when."
The NPA was entered into between the U.S. Attorney’s Office, on the one hand, and swisspartners Investment Network AG and the following three wholly-owned subsidiaries on the other: swisspartners Wealth Management AG, a Zurich-based company that establishes and manages entities such as foundations and trusts; swisspartners Insurance Company SPC Ltd., a Cayman Islands-based life insurance carrier that offers life insurance and annuity products; and swisspartners Versicherung AG, a Liechtenstein-based insurance carrier that offers a variety of insurance and annuity products.
The NPA recognizes that, beginning in 2008, the Swisspartners Group voluntarily implemented a series of remedial measures to stop assisting U.S. taxpayers in evading federal income taxes. The NPA further recognizes that in 2012, at a time when it was neither a subject nor target of any investigation by the U.S. Department of Justice, the Swisspartners Group self-reported its conduct concerning U.S. taxpayer-clients to the Department of Justice. Additionally, the NPA recognizes the extraordinary cooperation of the Swisspartners Group, including its voluntary production of client files for 110 non-compliant U.S. taxpayers that included the identities of those U.S. taxpayers.
As part of the NPA, the Swisspartners Group admitted various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct. Specifically, the Swisspartners Group admitted that it knew certain U.S. taxpayers were maintaining undeclared foreign bank accounts with the assistance of the Swisspartners Group in order to evade their U.S. tax obligations, in violation of U.S. law. The Swisspartners Group acknowledged that it helped certain U.S. taxpayer-clients conceal from the IRS their beneficial ownership of undeclared assets maintained in foreign bank accounts by, among other things, creating sham foundations and other sham entities that served as the nominal account holders; placing accounts or insurance policies in the names of non-U.S. nationals; facilitating the transportation of large amounts of cash into the United States on behalf of U.S. taxpayer-clients; and arranging for the bulk deposit of cash at Swiss depository financial institutions on behalf of U.S. taxpayer-clients.
As part of the NPA, the Swisspartners Group has agreed to forfeit $3.5 million to the United States, representing certain fees it obtained in exchange for services that it provided to U.S. taxpayers with undeclared foreign bank accounts from in or about 2001 through in or about 2011. In connection with this forfeiture, the Swisspartners Group has agreed not to contest a civil forfeiture action filed by the United States. That action was filed on May 9, 2014, in the U.S. District Court for the Southern District of New York and assigned to U.S. District Judge Gregory H. Woods.
The department entered into the NPA based on factors including:
· the Swisspartners Group’s voluntary implementation of various remedial measures beginning in or about May 2008; · the Swisspartners Group’s voluntary self-reporting of its criminal conduct at a time when it was neither a subject nor target of any investigation by the U.S. Department of Justice; · the Swisspartners Group’s voluntary and extraordinary cooperation, including its voluntary production of account files that include the identities of U.S. taxpayer-clients; · the Swisspartners Group’s willingness to continue to cooperate to the extent permitted by applicable law; and
· the Swisspartners Group’s representation, based on an investigation by outside counsel, the results of which have been shared with the U.S. Attorney’s Office and the Tax Division, that the misconduct under investigation did not, and does not, extend beyond that described in the Statement of Facts.
The NPA requires the Swisspartners Group to continue to cooperate with the United States for at least three years from the date of the agreement. In the event that the Swisspartners Group violates the NPA, the U.S. Attorney’s Office may prosecute the Swisspartners Group.Sovereign Citizen Convicted on Gun ChargeRead the Press Release
ATLANTA - Jermaine Eric Gibson has been convicted by a federal jury of unlawfully possessing a firearm as a convicted felon, in connection with his illegal occupation of a foreclosed property as a “sovereign citizen.”
“Sovereign citizens do not believe that laws apply to them except when it is to their benefit,” said United States Attorney Sally Quillian Yates. “This conviction demonstrates that our laws do apply to everyone. If you violate the law, you will be prosecuted.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Individuals and even groups who feel that our laws don’t apply to them can pose a more significant risk to law enforcement, particularly when they illegally arm themselves. The conviction in federal court of Mr. Gibson, a self-described sovereign citizen, is a clear reminder that he is not above the law.”
According to United States Attorney Yates, the charges and other information presented in court: In March 2013, Jermaine Gibson, a self-professed sovereign citizen, moved into a foreclosed home located in an upscale, gated community in Lithonia, Ga. The home, however, was under contract to be sold, and the Gibson was not the buyer. Gibson declared ownership of the property after he filed a deed in DeKalb County, Ga., in which he claimed that he had deeded the home to himself. After he moved into the residence, he changed the locks on the doors and posted a warning to real estate agents to stay off the property.
While Gibson was in the home, several people observed long-barreled guns at that residence. Efforts to convince Gibson to vacate the property failed. The real estate agent called the police to the residence, but was told that the matter was a civil matter. The homebuyer went to the residence and spoke to Gibson. When asked to leave because the homebuyer would be closing soon, Gibson refused to leave. Gibson told the homebuyer that someone lied to her because she would not be moving into that home.
The home was sold in April 2013, but the new buyer could not move into her home because Gibson still remained in the home. The bank and the homeowner joined together to file paperwork in DeKalb County to have Gibson evicted. In the meantime, warrants were obtained in DeKalb County for Gibson’s arrest.
On May 2, 2013, Gibson, 36, of Atlanta, Ga., was arrested and a search warrant was executed at the residence. During the search, officers found a .38 Smith and Wesson revolver in Gibson's bed. Because Gibson is a convicted felon, he cannot legally possess a firearm.
During the trial, agents testified that in a post-arrest interview, Gibson declared that the laws of the government do not apply to him. He advised further that he possessed the handgun for protection.
Sentencing is scheduled for July 29, 2014, at 10:30 a.m. before United States District Judge Thomas W. Thrash.This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Tracia King is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
South Portland Man Sentenced to More than Four Years for Heroin Trafficking ConspiracyRead the Press Release
Contact: Daniel J. Perry
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Nicholas Schwarz, 26, of South Portland, Maine was sentenced in United States District Court by Judge George Z. Singal to more than four years (53 months) in prison and four years of supervised release for conspiracy to distribute heroin. Schwarz pleaded guilty to the offense on
May 14, 2013.
According to court records, from 2011 until February 2013, the conspirators, led by
Mitch Merritt, obtained kilogram quantities of heroin in Lawrence, Massachusetts that was distributed to customers in Maine and New Hampshire by Merritt, Schwarz, and others. Numerous home burglaries and shoplifting crimes were committed by customers to pay for that heroin.This case was investigated by the United States Drug Enforcement Administration; the
Bureau of Alcohol, Tobacco, Firearms and Explosives; the Maine Drug Enforcement Agency; the New Hampshire and Maine State Police; the York County Sheriff’s Office; and the
Rochester, New Hampshire Police Department; and results from the ongoing effort of the
Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.Snohomish County Men Indicted for Gun TraffickingRead the Press Release
Four men who trafficked firearms stolen from the Snohomish, Washington Fred Meyer store were indicted this week and will appear in the U.S. District Court in Seattle, announced U.S. Attorney Jenny A. Durkan. MATTHEW ELSHAUG, 35, of Monroe, Washington is currently in the Snohomish County Jail and will come to federal court next week. CASEY YOUNT, 26, also of Monroe; LEVI HERZ, 30, of Everett, Washington; and RAYMOND BARON, 52, of Marysville, Washington all appeared in the U.S. District Court on the indictment today, and are being detained at the Federal Detention Center at SeaTac pending further court hearings.
According to the indictment, in the early morning hours of November 17, 2013, ELSHAUG burglarized the Snohomish Fred Meyer store, using a crowbar to steal 29 firearms from the gun case. ELSHAUG and YOUNT then sold the guns for cash or drugs. HERZ bought nine of the stolen firearms and BARON bought other stolen firearms. ELSHAUG, YOUNT, and HERZ all are prohibited from possessing firearms because of prior convictions. ELSHAUG has prior convictions in Snohomish County for burglary, theft, and illegal firearms possession. YOUNT has prior convictions in Snohomish County for theft and drug crimes. HERZ has prior convictions in Snohomish County for drug crimes.
The thirteen count indictment charges all four men with conspiracy to receive, possess, barter, and sell stolen firearms. ELSHAUG is charged with Possession and Sale of Stolen Firearms, Theft of Firearms from a Federal Firearms Licensee, and being a Felon in Possession of Firearms. YOUNT is charged with Possession and Sale of Stolen Firearms, and being a Felon in Possession of Firearms. HERZ is charged with Possession and Sale of Stolen Firearms, being a Felon in Possession of Firearms, and Distribution of Controlled Substances (methamphetamine and heroin). BARON is charged with Possession and Sale of Stolen Firearms, Distribution of Controlled Substances (methamphetamine and heroin), Possession of a Firearm with Obliterated Serial Number, and Possession of a Firearm Not Registered to Possessor in the National Firearms Registration and Transfer Record.
The conspiracy count is punishable by up to five years in prison. The firearms related charges are punishable by up to ten years in prison, except for the count involving an obliterated serial number, which is punishable by five years in prison. The drug distribution charges are punishable by up to twenty years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the Snohomish Police Department, the Snohomish County Sheriff’s Department, the Marysville Police Department, the Everett Police Department, the Washington State Department of Corrections, the Snohomish Fugitive Task Force, and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The Snohomish County Prosecuting Attorney’s Office worked closely with the U.S. Attorney’s Office and law enforcement on the case.
The case is being prosecuted by Assistant United States Attorney Kate Crisham.Shooter One of Two Defendants Sentenced in Series of Armored Truck Robberies That Left One Person DeadRead the Press Release
ATLANTA – Ashley Henderson has been sentenced to 75 years and Stacey Dooley has been sentenced to 40 years in federal prison for committing a series of armored truck robberies in the Atlanta area between October 2010 and March 2011.
“The sentencing of these two defendants closes one chapter on a disturbingly violent robbery crew that had all Atlanta area law enforcement on high alert back in 2010 and 2011,” said United States Attorney Sally Quillian Yates. “These robberies grew increasingly violent and dangerous not only to armored car couriers, but to the public who had the misfortune to be nearby. The dismantling and sentencing of this robbery crew makes our district a safer place, and the long prison terms provide justice for the truly senseless murder of Mr. Castillo.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The sentencing of both Dooley and Henderson removes two violent career criminals from our streets. While the FBI is pleased with the role it played in bringing these two individuals to justice, our thoughts and prayers remain with those harmed in the wake of this violent crime spree, particularly the family of mortally wounded Garda courier Gary Castillo.”
According to United States Attorney Yates, the charges and other information presented in court: The defendants, Ashley Henderson and Stacey Dooley, were part of a group that robbed armored car couriers between October 7, 2010, and March 30, 2011. During the robberies, one or two gunmen would approach a courier after the courier made a cash pick-up from a location or as the courier was about to restock an ATM machine with cash. Other members of the robbery crew would act as lookouts during the robberies, with one being the designated getaway driver. During a robbery in January 2011, Henderson shot the victim courier multiple times at close range, critically injuring him. In March 2011, Henderson shot the victim courier multiple times, which resulted in the victim’s death. Altogether, members of this crew were responsible for six robberies involving over $470,000.
The evidence established that Henderson, Dooley, and their co-conspirators, were involved in the commission of the following robberies:
- The robbery of a Dunbar Armored courier just after he made a cash pick-up on October 7, 2010, at the Mex America Latino Services located in Marietta, Ga.
- The robbery of a Dunbar Armored courier who was restocking cash in an ATM machine on November 11, 2010, at a Bank of America located in Buford, Ga.
- The robbery of a Loomis Armored courier who was restocking cash in an ATM machine on November 29, 2010, at a Wells Fargo Bank located in Snellville, Ga.
- The robbery of a Dunbar Armored courier who was heading to an ATM machine to restock it with cash inside the Mall of Georgia on December 7, 2010.
- The robbery of a Loomis Armored courier who was restocking cash in an ATM machine on January 21, 2011, at a Wells Fargo Bank located in Stone Mountain, Ga. Ashley Henderson shot and seriously injured the courier during the robbery.
- The robbery of a Garda Cash Logistics courier outside the Kroger Grocery Store located on LaVista Road in DeKalb County, Ga. Ashley Henderson fatally shot the courier, Gary Castillo, after Castillo made a cash pick-up of $11,000 from the store.
Henderson pleaded guilty to five counts of Hobbs Act robbery (armed robbery of the couriers) and three counts of carrying and using a firearm during the commission of a violent crime. Dooley pleaded guilty to six counts of Hobbs Act robbery and two counts of carrying and using a firearm during the commission of a violent crime.
In addition to Henderson and Dooley, the following persons have also entered guilty pleas as a result of their role in the robberies:
- Quentin Booker, 36, of Douglasville, Ga., pleaded guilty to five counts of Hobbs Act robbery and two counts of carrying and using a firearm during the commission of a violent crime.
- Edwin Thornton, 31, of Atlanta, Ga., pleaded guilty to three counts of Hobbs Act robbery and one count of carrying and using a firearm during the commission of a violent crime.
- Derrick Powell, 26, of Atlanta, Ga., pleaded guilty to two counts of Hobbs Act robbery and one count of carrying and using a firearm during the commission of a violent crime.
- Michael Johnson, 31, of Atlanta, Ga., pleaded guilty to two counts of Hobbs Act robbery and one count of carrying and using a firearm during the commission of a violent crime.
- Ronnie Little, 22, of Stone Mountain, Ga., pleaded guilty to one count of Hobbs Act robbery and one count of carrying and using a firearm during the commission of a violent crime.
- Veronica Bullard, 35, of Lithia Springs, Ga., pleaded guilty to one count of Hobbs Act robbery.
Desiree Jones, 29, of Snellville, Ga., pleaded guilty to two counts of unlawfully transferring a firearm knowing it would be used in a crime of violence and received a sentence of five years in federal prison.
Henderson, 30, of Atlanta, Ga., was sentenced by United States District Judge Thomas W. Thrash, Jr., to 75 years in prison to be followed by five years supervised release. He was also ordered to pay an $800 special assessment. Dooley, 37, originally from Charlotte, NC, was sentenced to 40 years in prison on April 16, 2014 to be followed by five years supervised release. He was also ordered to pay an $800 special assessment.
This case is being investigated by the Federal Bureau of Investigation with significant assistance and resources provided by the Gwinnett Police Department. Other departments providing invaluable assistance were the Gwinnett County District Attorney's Office, DeKalb County Police Department, the DeKalb County District Attorney's Office, Marietta Police Department, and the Cobb County District Attorney's Office.
Assistant United States Attorneys Jill E. Steinberg and Tracia M. King are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Serial Armed Robber Sentenced to over 56 Years in PrisonRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Manuel Orosa, Chief, City of Miami Police Department, announce that Lionell Sanders, 19, of Miami, was sentenced by U.S. District Judge K. Michael Moore to fifty-six years and four months in prison, after pleading guilty on December 9, 2013 to conspiracy to commit robbery affecting interstate commerce, and two counts each of robbery affecting interstate commerce and the possession of a firearm in furtherance of a crime of violence.
According to information in the court record, from August through September 2013 Sanders and his associates conducted a string of violent armed robberies targeting food delivery drivers and taxicab operators. On at least five separate occasions, Sanders and his co-conspirators placed orders for food deliveries, or requested taxi service, at residential locations where he and others, brandishing firearms, assaulted the drivers and forcibly took money, other personal belongings, and any items to be delivered. Several of the robberies resulted in injuries to the victims of varying severity.
This case is, in large part, the result of the Violence Reduction Partnership, launched by the U.S. Attorney’s Office. Through this Partnership, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks in various neighborhoods, while simultaneously working with community leaders and concerned citizens to mentor at-risk youths, provide jobs and job training to young families, and help probationers and parolees successfully re-enter society.
Mr. Ferrer commended the investigative efforts of the ATF and the City of Miami Police Department. The case was prosecuted by Assistant U.S. Attorney Vanessa S. Johannes.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Santa Fe Man Arrested on Federal Tax ChargesRead the Press Release
ALBUQUERQUE – Andre Lewis, 33, of Santa Fe, N.M., made his initial appearance in federal court in Albuquerque, N.M., this morning on an indictment charging him with federal tax offenses, announced Acting U.S. Attorney Damon P. Martinez and Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
Lewis was arrested without incident by the IRS yesterday afternoon. He remains in custody pending his arraignment hearing and a detention hearing, both of which are scheduled on May 12, 2014.
Lewis is charged in an eleven-count indictment that was filed on April 23, 2014. Count 1 of the indictment charges Lewis with conspiracy to defraud the IRS. Count 2 charges him with making a materially false statement to a federal officer. Counts 3 through 11 charge Lewis with preparing and aiding and abetting the preparation and filing of false tax returns. Lewis allegedly committed the offenses between Feb. 2009 and Aug. 2009 in Bernalillo, County, N.M.
According to Count 1 of the indictment, from Feb. to July 2009, Lewis conspired with others to defraud the IRS by preparing and filing fraudulent claims for tax refunds. Lewis and his co-conspirators allegedly perpetuated the scheme by obtaining the names, identifiers and W-2 Forms for federal taxpayers, and using that information to electronically file federal income tax returns included either false claims for the First Time Home Buyer Credit or false withholding information. Lewis and his conspirators allegedly obtained tax refunds to which they were not entitled from the IRS.
Counts 3 through 11 of the indictment identify nine separate instances in which Lewis allegedly filed or assisted in the filing of false federal tax returns that sought an aggregate of $97,803.00 in tax refunds. Based on those allegedly fraudulent filings, the IRS deposited an aggregate of $95,058.12 into bank accounts identified in the false tax returns, including five deposits made into Lewis’s bank accounts.
Count 2 of the indictment alleges that on Aug. 13, 2009, Lewis knowingly made a materially false statement to a Special Agent of the IRS. Lewis allegedly told the agent that he did not have an email address bearing his name knowing that his representation was false because he allegedly had used the email address to electronically file false federal income tax returns.
If convicted, Lewis faces a statutory maximum penalty of five years on each of Counts 1 and 2 of the indictment and a statutory maximum penalty of three years on each of Counts 3 through 11 of the indictment. Charges in indictments are merely accusations. Defendants are presumed innocent unless found guilty.
This case was investigated by IRS Criminal Investigation in Albuquerque and is being prosecuted by Assistant U.S. Attorney Cynthia L. Weisman.
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Lewis Indictment
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Sandra Hatfield, Former Chief Operating Officer of DHB Industries, Inc., Sentenced to 7 Years in Prison for Insider Trading, Fraud, and Obstruction of JusticeRead the Press Release
Earlier today, Sandra Hatfield, the former Chief Operating Officer of DHB Industries, Inc., was sentenced to 7 years in prison, to be followed by 3 years of supervised release, and ordered to forfeit some $1.8 million in illicit profits made during her fraudulent operation of a Long Island-based supplier of body armor to the U.S. military and law enforcement agencies. The sentence was imposed by United States District Judge Joanna Seybert in at the U.S. Courthouse in Central Islip, New York.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Shantelle P. Kitchen, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS).
Hatfield and her co-defendant DHB founder David H. Brooks were convicted in September 2010 on nine counts of conspiracy, insider trading, securities fraud, and obstruction of justice arising out of a $200 million fraud. Subsequently, Hatfield pleaded guilty to filing a false income tax return. The district court reserved its decision on how much Hatfield will be required to pay in restitution to the victims of her fraud. A decision is expected within 90 days.
“DHB made millions from supplying body armor to protect those who serve this country in the U.S. military and our law enforcement ranks. But, rather than honor the bravery of those who donned DHB’s products, Hatfield preyed upon investors, lied to them, and looted the company, all the while wrapping herself in the American flag,” stated United States Attorney Lynch. “And her lies did not stop there. She lied on her taxes and, when the SEC investigated, she lied to them too. Today, Hatfield was held accountable. This prosecution demonstrates my Office’s unwavering commitment to exposing and prosecuting corrupt executives.” Ms. Lynch thanked the FBI and IRS for leading the investigation and the Defense Criminal Investigative Service for its assistance in the case.
FBI Assistant Director-in-Charge Venizelos stated “Hatfield took advantage of her position as Chief Operating Officer at DHB to profit at the expense of honest and unsuspecting investors. She placed greed and entitlement above the law. Hatfield’s sentence should be a warning to those who engage in financial crimes that the consequences can be severe. We will continue to work with our law enforcement partners to investigate and present for prosecution those individuals who misuse their positions within the financial market for personal gain.”
IRS Acting Special Agent-in-Charge Kitchen stated, “The real shame is that DHB Industries provided vital products to the men and women of the U.S. military and to law enforcement, but Ms. Hatfield and Mr. Brooks used their positions in the company to satisfy their own voracious greed. Corporate officials hold positions of trust and that trust is broken when they abuse their power by committing crimes of selfishness. IRS-Criminal Investigation is committed to working with our law enforcement in vigorously investigating corporate officers who engage in financial crimes such as conspiracy, insider trading, securities fraud, and obstruction of justice, as well as tax crimes.”
During an eight-month trial, the government’s evidence proved that Hatfield and others conspired to loot DHB for personal gain. Hatfield helped her co-defendant Brooks conceal the related party status of Tactical Armor Products, a company supposedly run independently of DHB by Brooks’ wife, but in fact wholly controlled by Brooks. Through this scheme, Hatfield helped Brooks siphon more than ten million dollars from DHB to support a thoroughbred horse-racing business.
Hatfield also engaged in accounting fraud schemes designed to increase the net income and profits that DHB reported in its press releases and filings with the Securities and Exchange Commission by falsely inflating the value of DHB’s existing inventory, adding non-existent inventory to the company’s books and records, and fraudulently reclassifying expenses. Knowing that DHB’s stock price of $20 per share had been artificially-inflated through her many and varied schemes, Hatfield sold more than $5 million of DHB stock in late 2004. After those insider sales, DHB stock plummeted to pennies per share and the company was de-listed from the American Stock Exchange.
Hatfield resigned from DHB in November 2005 and Brooks was removed as DHB’s CEO in July 2006. In July 2006, DHB relocated its headquarters from Westbury, New York, to Pompano Beach, Florida, and on October 1, 2007, DHB changed its name to Point Blank Solutions, Inc. DHB stock was traded on the American Stock Exchange until trading was suspended on May 26, 2006, as the defendants’ schemes came to light
The government’s case was prosecuted by Assistant United States Attorneys Christopher Ott, Christopher Caffarone, James Knapp, Laura Mantell, Bonni Perlin, and Mary Dickman.
This prosecution was the result of efforts by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
Sacramento Men Indicted in Three Federal Cases for Drug and Firearm OffensesRead the Press Release
SACRAMENTO, Calif. — Thanks to the efforts of federal and local law enforcement working together, over the course of the past week three federal indictments have been brought against Sacramento defendants Jose Manuel Hernandez, Michael Rojas Jr., and Gabriel Reyes Hernandez, charging each of them with illegal possession of firearms. This announcement was made by United States Attorney Benjamin B. Wagner, Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl, and Sacramento Police Chief Sam Somers.
The Project Safe Neighborhoods initiative (PSN) brings together federal, state and local law enforcement to combat gun and gang crime. At the core of PSN is increased federal prosecution to incapacitate chronic violent offenders as well as to communicate a credible deterrent threat to potential gun offenders.
Jose Manuel Hernandez, 30, was charged with possessing a firearm after previously being convicted of a felony, and in addition with possessing with intent to distribute methamphetamine, cultivating marijuana, and possessing with intent to distribute marijuana.(Docket # 2:14-cr-122 JAM) Michael Rojas Jr., 24, was charged with being a felon in possession of a firearm. (Docket # 2:14-cr-134 JAM) Gabriel Reyes Hernandez, 27, was charged with being a felon in possession of a .40 caliber Glock 23 pistol with an obliterated serial number. (Docket # 2:14-cr-129 JAM)
These cases are the product of investigations by the Sacramento Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorneys Michael McCoy and Justin Lee are prosecuting the cases.
If convicted on the firearm offenses, each defendant faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Rochester Woman Pleads Guilty to Tax FraudRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Kenyatta Hubbard, 33, of Rochester, N.Y., pleaded guilty to conspiring to defraud the United States before U.S. District Judge David G. Larimer. The charge carries a maximum sentence 10 years in prison, a fine of $853,766, or both.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that from 2010 to 2012, Hubbard worked at McFarland Tax Company preparing income tax returns. The defendant conspired with the owner of the business to prepare false income tax returns for clients. The scheme involved reporting fictitious employment in order to increase the Earned Income Tax Credit refunds claimed on behalf of the clients. As a result of the scheme, the United States was defrauded into paying tax refunds totaling $426,883.
The plea is the culmination of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.
Sentencing is scheduled for August 12, 2014, at 10:30 a.m. before Judge Larimer.Rochester Man Sentenced for Selling Counterfeit GoodsRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Carmelo Gimeli, 67, of Rochester, N.Y., who was convicted of trafficking in counterfeit goods, was sentenced to 24 months supervised release to include four months of electronic monitoring, by Chief U.S. District Court Judge William M. Skretny.
Assistant U.S. Attorney Carol G. Bridge, who handled the case, stated that the defendant sold large quantities of counterfeit merchandise at the Walden Super Flea. During the execution of a search warrant, law enforcement officers seized more than 650 counterfeit purses, wallets, shoes and boots being sold under such names as Ugg, Michael Kors and Coach.
The sentencing is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.Physical Therapist Facing Additional Health Care Fraud and Tax Fraud ChargesRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that DANIELLE FAUX, 46, of Weston, has been charged in a 54-count superseding indictment with federal health care fraud and income tax fraud offenses. The superseding indictment was returned by a grand jury in Bridgeport on April 16, 2014, and FAUX appeared today before U.S. Magistrate Judge Holly B. Fitzsimmons in Bridgeport and entered a plea of not guilty to the charges.
According to the superseding indictment, FAUX owned and operated Danielle Faux PT, LLC, a physical therapy clinic located at 27 Lois Street in Norwalk, and was a part owner of Achieve Rehab and Fitness, a gym located at the same address in Norwalk. The indictment alleges that FAUX engaged in a scheme to defraud Medicare, Anthem Blue Cross Blue Shield, and Aetna by referring some of her patients for personal training sessions at Achieve Rehab and Fitness and then billing the sessions as if they were physical therapy procedures. The indictment also alleges that FAUX created and altered patient records when Medicare audited her practice in August 2009, and that she made false statements on her 2008, 2009, and 2010 federal income tax returns.
FAUX was arrested on February 24, 2014, based on an indictment charging her with 46 counts of health care fraud and one count of obstruction of a federal audit. The superseding indictment includes four additional counts of health care fraud and three counts of making a false statement on a federal income tax return.
If convicted, FAUX faces a maximum term of imprisonment of 10 years and a fine of up to $250,000 on each of the health care fraud counts, a maximum term of imprisonment of five years and a fine of $250,000 on the obstruction count, and a maximum term of three years and a fine of $100,000 on each of the tax counts.
The case has been assigned to Senior U.S. District Judge Warren W. Eginton in Bridgeport, who has scheduled trial for October.
FAUX is released on a $50,000 bond.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney David J. Sheldon.
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(203) 821-3722 [email protected]Pennsylvania Realtor Charged with Defrauding ClientsRead the Press Release
Joseph N. Reilly, 69 of Philadelphia, Pennsylvania, was charged today by information with mail fraud, announced United States Attorney Zane David Memeger. According to the information, Reilly, who owned Joseph N. Reilly Real Estate, Inc., diverted more than $1 million in client funds to himself, between January 2009 and April 2011, defrauding approximately 50 clients.
Reilly, through his company, acted as a property manager for his clients, collecting rent and utilities payments for owners. He also paid utility and real estate tax bills. Reilly mailed monthly statements to tenants and property owners. According to the information, Reilly sent at least one statement to a property owner indicating that the balance in the owner’s account was $490,565.58 when, in fact, the balance was $86.80.
If convicted the defendant faces a maximum possible sentence of 20 years in prison, a fine of up to $250,000, three years of supervised release, and a $100 special assessment.
The case was investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistant United States Attorney Judy G. Smith.
Click here to view the indictment
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Pair Indicted for Operating Advance Fee Loan SchemeRead the Press Release
BOSTON – A Florida woman and a man who previously resided in Beverly were charged in an indictment unsealed today in connection with an advance fee scheme involving approximately 100 victims throughout the United States, including many in Massachusetts.
Ann Elizabeth Ursiny, a/k/a Ann Stone, 50, and Robert E. O’Connor, 63, were indicted on 19 counts of mail fraud and 17 counts of wire fraud.
The indictment alleges that between early 2010 and 2011, Ursiny recruited agents, including O’Connor, in several states to solicit individuals to apply for loans through her entity Trace Financial Group, Inc. (Trace) and to pay the advance fees. The agents, including O’Connor, were paid a portion of those advance fees. O’Connor and Ursiny told prospective applicants that Trace had successfully processed and disbursed many loans, when in fact none were ever disbursed. Ursiny and O’Connor focused their scheme on prospective applicants who had poor credit or whose homes were underwater, and represented that Trace could replace their mortgage with a new, smaller mortgage with lower mortgage interest payments. The indictment alleges that Trace never funded any of the loans, and failed to pay refunds as promised. Victims’ funds were used primarily for Ursiny’s personal and family expenses, as well as to pay “commissions” to agents.
If convicted, Ursiny and O’Connor each face a statutory maximum sentence of 20 years in prison, three years of supervised release, and a $250,000 fine on each count.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Owners of TelexFree Charged in $1 Billion Pyramid SchemeRead the Press Release
BOSTON – James M. Merrill and Carlos N. Wanzeler, principals of TelexFree, Incorporated and related entities, were charged today in a federal criminal complaint, charging them with conspiracy to commit wire fraud.
Merrill, 53, of Ashland, Mass. and Wanzeler, 45, of Northborough, Mass., were charged in a one count criminal complaint filed in U.S. District Court in Worcester, Mass. If convicted, each face up to 20 years in prison. Merrill was arrested today by federal authorities and made an initial appearance in U.S. District Court in Worcester. A federal arrest warrant was issued for Wanzeler who is a fugitive.
United States Attorney Carmen Ortiz said, “The scope of this alleged fraud is breathtaking. As alleged, these defendants devised a scheme which reaped hundreds of millions of dollars from hard working people around the globe.”
“I am very proud of the tireless efforts of my special agents. Investigating the flow of illicit money across U.S. borders and the criminal enterprises behind that money is one of our top priorities,” said Bruce Foucart, Special Agent in Charge of Homeland Security Investigations. “While pyramid schemes are nothing new, the potential scope of this case will hopefully serve as an educational lesson for all. The main point is clear; if it sounds too good to be true, it probably is.”
According to the complaint affidavit, TelexFree, Inc., and TelexFree LLC (collectively, “TelexFree”) provided “voice-over-internet-protocol” (“VOIP”) telephone services, for which customers can sign up via a web site maintained by TelexFree. It is alleged that TelexFree was actually a pyramid scheme and that between January 2012 and March 2014, TelexFree purported to aggressively market its VOIP service by recruiting thousands of “promoters” to post ads for the product on the Internet. Each promoter was required to “buy in” to TelexFree at a certain price, after which they were compensated by TelexFree, under a complex compensation structure, on a weekly basis so long as they posted ads for TelexFree’s VOIP service on the Internet.
It is alleged that the ad-posting requirements were a meaningless exercise, in which promoters cut and pasted ads into various classified ad sites provided by TelexFree which were already saturated with ads posted by earlier participants. According to the affidavit, TelexFree derived only a fraction of its revenue from sales of VOIP service – less than 1% of TelexFree’s hundreds of millions of dollars in revenue over the last two years. The overwhelming majority of its revenue – the other roughly 99% – came from new people buying into the scheme. TelexFree was allegedly only able to pay the returns it had promised to its existing promoters by bringing in money from newly-recruited promoters.
On or about March 8, 2014, TelexFree announced changes to its compensation system. On April 14, 2014, Telexfree filed for bankruptcy. In its filings with the bankruptcy court, Telexfree stated, among other things, that it changed its compensation plan “because questions were raised” about the prior plan and that, after changing the plan, the “discretionary payments ... quickly became a substantial drain on the Company’s liquidity.”
On April 16, 2014, the Securities and Exchange Commission obtained a restraining order to freeze assets of Telexfree and eight related individuals. Since then, the U.S. Attorney’s Office has executed 37 seizure warrants for assets in the tens of millions of dollars.
It is further alleged that in 2013, TelexFree reported sales of $1.016 billion, while known sales of the TelexFree VOIP product represented less than 0.1% percent of TelexFree’s total revenues.
United States Attorney Ortiz, SAC Foucart and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Cory Flashner and Andrew Lelling of Ortiz’s Worcester Branch Office and Economic Crimes Unit, respectively.
If you believe that you are a victim of the alleged TelexFree, Inc. scheme, please send your contact information to the following address: [email protected]The details contained in the complaint affidavit are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Oelwein Felon Sentenced to More Than Five Years' Imprisonment for Possession of Stolen HandgunsRead the Press Release
A convicted felon who was found in possession of two stolen handguns was sentenced today to more than five years in federal prison. Michael Rohrick, age 28, from Oelwein, Iowa, received the prison term after a February 24, 2014, guilty plea to one count of being a felon in possession of a firearm and ammunition.
In a plea agreement, Rohrick admitted that on November 1, 2013, when law enforcement officers searched his house while trying to arrest him for an outstanding warrant for distributing drugs, the officers found a stolen, loaded 9mm handgun, a scale, empty baggies, baggies containing marijuana, and drug use paraphernalia. Three days later officers surrounded Rohrick in a cornfield. While speaking with him in an attempt to get him to surrender to officers, he reported that he had another handgun hidden in his house. Officers again searched his house and found a stolen .327 caliber revolver hidden in a vent. Rohrick was prohibited from possessing firearms because he was a convicted felon, having been convicted in 2009 in the Iowa District Court for Fayette County of burglary.
Rohrick was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Rohrick was sentenced to 71 months’ imprisonment. The court based the sentence, in part, upon Rohrick’s serious criminal history, which included multiple burglary convictions, and because he possessed the stolen handguns in connection with drug trafficking. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Rohrick is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney C.J. Williams and was investigated by the Oelwein Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-cr-2002.
Norfolk Woman Sentenced for Conspiring to Distribute MethamphetamineRead the Press Release
NORFOLK, Va. – Linda Marie Delarosa, 31, of Norfolk, Va., was sentenced today to 240 months in prison for conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine.
Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Acting Special Agent in Charge Katrina W. Berger, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, made the announcement after sentencing by Chief United States District Judge Rebecca Beach Smith.
Delarosa pleaded guilty to the conspiracy charge on December 17, 2013. According to the statement of facts filed with her plea agreement, beginning in 2012, Delarosa, an Asheville, NC area based methamphetamine supplier, conspired with others to transport methamphetamine to the Eastern District of Virginia. Delarosa later moved to Norfolk, Virginia, but continued to transport methamphetamine from the Asheville, NC area for repackaging and distributing in the Eastern District of Virginia. Delarosa distributed large quantities of methamphetamine to various conspirators until August of 2013.
This case was investigated by Homeland Security Investigations and the Virginia Beach Police Department. Assistant United States Attorney Darryl Mitchell prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Nine Trey Gang Leader Sentenced to 40 Years in Prison, Enforcer Sentenced to 30 Years for Multiple Racketeering OffensesRead the Press Release
Gang members engaged in sex trafficking, robberies, drug distribution and violent crimes
ALEXANDRIA, Va. – Thaddaeus Snow, a/k/a “Storm,” 34, of Manassas, Va., was sentenced today to 40 years in prison, followed by five years of supervised release and registration as a sex offender. William Sykes, a/k/a “Black,” 29, of Bealeton, Va., was sentenced to 30 years in prison, five years of supervised release and registration as a sex offender.
Both men were convicted on Feb. 21, 2014, by a federal jury of charges that included conspiracy to commit racketeering, violence in aid of racketeering, robbery, conspiracy to distribute cocaine base, conspiracy to commit sex trafficking by force and coercion and multiple firearms offenses.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Colonel Edwin C. Roessler, Jr., Fairfax County Chief of Police, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema.
“These defendants and their fellow gang members threatened the safety of our communities by committing acts of violence, dealing drugs, and dehumanizing women through prostitution by force and coercion,” said U.S. Attorney Boente. “I want to commend our federal, state and local law enforcement partners for their commitment to dismantling this dangerous gang and combatting these pernicious crimes.”
“The sentences handed down today send a clear message to members of these violent criminal enterprises: we will not tolerate your illegal activities,” said Assistant Director in Charge Parlave. “The FBI, through the Northern Virginia Gang Task Force and our partners in local law enforcement, will continue to systematically target, investigate and prosecute gang members who use violence to threaten our communities.”
Snow and Sykes were indicted by a federal grand jury on Sept. 26, 2013, along with twenty-two other members and associates of the Nine Trey Gangsters street gang, on charges of conspiracy to commit racketeering, violence in aid of racketeering, conspiracy to commit sex trafficking, conspiracy to commit robbery, conspiracy to distribute 280 grams or more of crack cocaine and multiple counts related to the possession and use of firearms.
According to court records and evidence presented at trial, the Nine Trey Gangsters are a Bloods street gang set of the United Blood Nation, which was founded in New York City in the early 1970’s. Thaddaeus Snow led a “line-up” of the Nine Trey Gangsters that operated as a criminal enterprise in Virginia and committed criminal activity in multiple states. From 2008 until the date of the indictment, Snow’s line-ups of Nine Trey gangsters engaged in racketeering activity involving the sex trafficking of women using force and coercion in Virginia, Maryland, North Carolina, New York and elsewhere; the commission of robberies; and the distribution of cocaine, crack, marijuana, heroin, ecstasy and prescription painkillers. The evidence at trial also showed that Snow, Sykes and other Nine Trey Gangsters dealt in counterfeit U.S. currency and used counterfeit currency to finance wholesale drug purchases.
In addition, the evidence at trial showed that Snow and his subordinate gang members undertook several acts of violence. On or about April 1, 2010, Snow directed Nine Trey Gangsters to give a female victim a “buck-fifty,” consisting of slashing the woman’s face with a knife from mouth to ear with the aim of requiring 150 stiches to close the wound, because the woman had stolen proceeds of Snow’s drug sales and used some of Snow’s drug supply. The slashing was carried out by Sykes. Sykes and other gang members beat a man unconscious who may have stolen drugs from a gang member, and Sykes also committed a shooting on April 12, 2010, after the shooting victims became involved in a dispute with one of the gang members. Additionally, Sykes slapped and choked a prostitute when she concealed money she earned from him.
Snow and Sykes were convicted following a trial that began on Feb. 11, 2014. All twenty-four individuals named in the Sept. 26, 2013 indictment have been convicted, bringing to 37 the total number of Nine Trey Gangsters members and associates who have been convicted in the Eastern District of Virginia since 2013.
This case was investigated by the FBI’s Washington Field Office and the Fairfax County Police Department, with assistance from the Northern Virginia Regional Gang Task Force, Hampton Police Department, Fauquier County Sheriff’s Office, Manassas City Police Department and the U.S. Marshals Service. Assistant U.S. Attorneys Adam B. Schwartz and Dennis M. Fitzpatrick prosecuted the case on behalf of the United States.
This case is part of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation dubbed Operation “Ruby Red,” which has been focusing on the illegal distribution of narcotics by alleged organized crime members.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.New Arrest of TSA Employee and Bklyn Resident: Vernon LythcottRead the Press Release
Lythcott Complaint
Middle Georgia Methamphetamine Distributors SentencedRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that members of a major methamphetamine trafficking organization have been sentenced. On January 16, 2014, Shawn Foster Phillips, age 35, of Houston County, Chad Minter, age 40, of Houston County, Marty Bass, age 51, of Houston County, entered guilty pleas to conspiracy to distribute methamphetamine. Travis Walker McElhenny, age 40, of Houston County, pled guilty to possession with intent to distribute methamphetamine. Jon Rylander, age 28, of Houston County, pled guilty to possession of methamphetamine.As a part of their guilty pleas, the respective defendants admitted that between January 1, 2011 and December 31, 2012, Mr. Phillips traveled from Warner Robins, Georgia, to Atlanta, Georgia, to obtain methamphetamine from a Mexican drug supplier. The drugs were transported by Mr. Phillips from Atlanta to Warner Robins where they were sold to Mr. Minter, Mr. Bass, Mr. McElhenny and others in the Warner Robins area. These men then sold the methamphetamine to street level dealers. Conservative estimates suggest that during its operation, the organization distributed more than 50 kilograms of methamphetamine. Federal and state authorities seized 250 grams of methamphetamine and three firearms.
The case was called for sentencing on May 7, 2014, before U.S. District Judge Marc T. Treadwell. Chad Minter was sentenced to 10 years confinement. Travis McElhenny was sentenced to 7 years confinement. Marty Bass was sentenced to 15 years confinement. Jon Rylander was sentenced to 3 years probation. Sentencing on the remaining defendants has not yet been set.
The case was investigated by the Federal Bureau of Investigation, U.S. Marshals Service, and Houston County Sheriff’s Department. Assistant U.S. Attorney Charles L. Calhoun is prosecuting the case.
US Attorney Michael Moore stated, “My office will continue to target and dismantle these types of drug trafficking organizations. Methamphetamine use and distribution poses a significant threat to the public and must be vigorously prosecuted.”
Inquiries regarding the case should be directed to Pamela Lightsey, United States Attorney's Office at (478) 621-2603.
Massage Parlor Manager Pleads GuiltyIn Federal Sex Trafficking CaseRead the Press Release
WICHITA, KAN. - The former manager of a Wichita massage parlor pleaded guilty Friday to a federal charge of transporting a woman from China to work as prostitute in Wichita, U.S. Attorney Barry Grissom said.
Yan Zhang, 50, Wichita, Kan., pleaded guilty to one count of interstate transportation for the purpose of prostitution. In her plea, she admitted that in 2009 she induced a Chinese woman to move to Wichita to work in a massage parlor and engage in prostitution.
In her plea, Zhang said she was married in 2004 to co-defendant Gary Kidgell. During the marriage, she worked at massage parlors in San Francisco and Phoenix, where she became familiar with the operation of massage parlors as fronts for prostitution. In 2009, she and Kidgell moved to Wichita to establish their own massage parlor. She worked giving massages and served as a manager because she was able to communicate with Chinese women who worked at the massage parlor.
Sentencing is set for Aug. 4. Both parties have agreed to recommend a sentence of time served and five years supervised release.
Co-defendants are: Gary Kidgell, who is set for sentencing Aug. 1.
Xinqing Tian, 44, who was sentenced to time served and two years supervised release.Grissom commended the Wichita Police Department and Assistant U.S. Attorney Jason Hart for their work on the case.
Manhattan U.S. Attorney Announces Return to the Government of Brazil Masterpiece Linked to Bank FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Bruce Foucart, Special Agent-in-Charge of U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”) Boston Office, announced today that a painting by Serge Poliakoff called “Composition abstraite [Abstract composition]” (the “Poliakoff”) was returned to Brazil at a repatriation ceremony at the United States Attorney’s Office in Manhattan, New York. The painting was smuggled into the United States in violation of U.S. customs law and was forfeited to the United States as a result of civil forfeiture action brought by the United States.
Manhattan U.S. Attorney Preet Bharara stated: “Art and antiquities have special value and meaning that cannot readily be quantified. As a result, they have long been the subject of theft and deception, as well as a means to launder illicit proceeds. Art should serve to inspire the mind and nourish the soul, and not be allowed to become a conduit for crime.”
HSI Special Agent-In-Charge Bruce Foucart stated: “During this seven year investigation, HSI along with our international law enforcement partners have located, detained and seized approximately 1,000 works of art in Switzerland, France, the United Kingdom and the United States, all belonging to Edemar Cid Ferreira. We hope this most recent painting being returned by HSI and the Manhattan U.S. Attorney’s Office to the government of Brazil assists in the recovery of financial losses. HSI remains committed to investigating the illicit importation of cultural property into the United States and the laundering of proceeds derived from illicit activities.”
In a related repatriation ceremony held on September 21, 2010, the U.S. Attorney’s Office for the Southern District of New York returned to Brazil two paintings – “Modern Painting with Yellow Interweave” by Roy Lichtenstein (the “Lichtenstein”) and “Figures dans une structure” by Joaquin Torres-Garcia (the “Torres-Garcia”) – that were smuggled into the United States.
The Poliakoff once belonged to Brazilian banker Edemar Cid Ferreira. Ferreira, the founder and former president of Banco Santos, S.A. (“Banco Santos”), was convicted in Brazil of crimes against the national financial system and money laundering. In December 2006, Ferreira was sentenced in Brazil to 21 years in prison.
As part of the case, a Sao Paulo Court Judge also ordered the search, seizure, and confiscation of assets that Ferreira, his associates, and members of his family had acquired with unlawfully obtained funds from Banco Santos. Those assets included the Poliakoff, the Lichtenstein, the Torres-Garcia, and other artwork valued at $20 million to $30 million. The artwork was kept in several locations, including Ferreira’s home in the Morumbi neighborhood of Sao Paulo, the main offices of Banco Santos, and at a holding facility. When Brazilian authorities searched these locations, they found that several of the most valuable works of art were missing, including the Poliakoff.
The Sao Paulo Court sought INTERPOL’s assistance after searching museums and institutions in Brazil for the missing artwork. In October and November 2007, INTERPOL and the Government of Brazil sought the assistance of the United States to locate and seize the missing works on behalf of the Brazilian government. In response, HSI special agents in New Haven, Connecticut located and seized a painting by Jean-Michel Basquiat called “Hannibal,” and the U.S. Attorney’s Office for the Southern District of New York filed a civil forfeiture Complaint alleging that “Hannibal” had been brought into the United States illegally. Since the filing of the original Complaint in February 2008, the United States seized additional works of art and filed two amended Complaints seeking the forfeiture of four additional artworks listed in the INTERPOL request for assistance.
The Southern District of New York and HSI investigation revealed that the Poliakoff, the Lichtenstein, and the Torres-Garcia were shipped on December 1, 2006, from the Netherlands to a secure storage facility in New York. The invoices, however, failed to comply with U.S. customs laws in a number of respects. For example, the shipping invoices did not identify the names of the paintings or their artists. The invoices also falsely claimed that the combined value of the paintings was $230. In fact, the combined appraisal value of the paintings was recently assessed in excess of $4 million, with the Poliakoff appraised at $500,000.
After the shipment containing the paintings was imported into the United States, the Lichtenstein and the Torres-Garcia were subsequently sold, but the purchasers later voluntarily surrendered the works to HSI. The Poliakoff was shipped to Switzerland, where it was seized by Swiss authorities in July 2008 at the request of the U.S. Attorney’s Office and HSI.
On October 15, 2010, the Poliakoff was forfeited to the United States. “Hannibal,” which was recently valued to be worth about $8 million, and a sculpture known as the “Roman Togatus” have also been forfeited to the United States. An appeal of that decision is pending.
Mr. Bharara praised the investigative work of HSI in helping to locate and seize the painting. He was grateful for the assistance of the Department of Justice’s Office of International Affairs. Mr. Bharara thanked Brazilian authorities for their assistance in the case. He also acknowledged the assistance of the U.S. Department of State and the U.S. Embassy in Brazil for its assistance in the investigation.
The case is being handled by the Money Laundering and Asset Forfeiture Unit of the U.S. Attorney’s Office. Assistant U.S. Attorneys Jason P. Hernandez and Alexander Wilson are in charge of the litigation.
Brazilian Paintings 2nd Amended Complaint
Manhattan U.S. Attorney Announces Agreement with Swiss Asset Management Firm and Related Companies to Resolve Criminal Tax InvestigationRead the Press Release
The Swisspartners Group Earned Non-Prosecution Agreement As a Result of its Extraordinary Cooperation and Self-Reporting
James M. Cole, the Deputy Attorney General of the Department of Justice, Preet Bharara, the United States Attorney for the Southern District of New York, Kathryn Keneally, the Assistant Attorney General for the Tax Division of the Department of Justice, and Richard Weber, the Chief of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that swisspartners Investment Network AG, a Swiss-based asset management firm, and three of its wholly-owned subsidiaries (collectively, the “Swisspartners Group”), entered into a non-prosecution agreement (“NPA”) with the U.S. Attorney’s Office for the Southern District of New York and agreed to pay $4.4 million to the United States. The NPA was entered into based on, among other things, the Swisspartners Group’s remedial measures, voluntary self-reporting, and extraordinary cooperation, including its voluntary production of approximately 110 client files for non-compliant U.S.-taxpayer clients, and provides that the Swisspartners Group will not be criminally prosecuted for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from in or about 2001 through in or about 2011. The NPA requires the Swisspartners Group to forfeit $3.5 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $900,000 in restitution to the IRS, representing the approximate amount of unpaid taxes arising from the tax evasion by the Swisspartners Group’s U.S. taxpayer-clients. The NPA applies only to the four specific entities that are party to it and does not apply to any other subsidiaries of swisspartners Investment Network AG or any individuals.
Deputy Attorney General James Cole said: “The extraordinary cooperation of Swisspartners has enabled us to identify U.S. tax cheats who have hidden behind phony offshore trusts and foundations. In this and other cases around the world we will continue to provide substantial credit for prompt and full cooperation.”
Manhattan U.S. Attorney Preet Bharara said: “This Office will continue to work aggressively to hold accountable not only those U.S. taxpayers who evade their tax obligations by hiding money overseas, but also those abroad who make such tax evasion possible. For its wrongdoing in assisting U.S. taxpayers to open and maintain undeclared accounts overseas, the Swisspartners Group is being made to pay $4.4 million in forfeiture and restitution. Swisspartners avoided criminal charges as a direct result of its decision to self-report its misconduct at a time when it was not even under investigation and its extraordinary cooperation, including its decision to turn over voluntarily the files and identities of U.S. taxpayer clients it helped hide money from the IRS. The case serves as a clear example of the benefits that can be obtained from early and complete cooperation with federal law enforcement.”
Assistant Attorney General Kathryn Keneally said: “As today’s announcement shows, we receive information about U.S. taxpayers with undisclosed accounts from many sources, some of which are not public. For many accountholders, the time to come forward voluntarily to avoid criminal prosecution has run out.”
IRS-CI Chief Richard Weber said: “I am very pleased that we have successfully concluded negotiations with the Swisspartners Group. In making amends, the Swisspartners Group has turned over 110 account files relating to U.S. taxpayer-clients who maintained undeclared assets overseas. This agreement marks yet another significant step forward in combating offshore tax evasion. Anyone who is hiding money or assets offshore with the intent of committing tax evasion will be found and prosecuted. It's not a matter of ‘if,’ it's a matter of “when.’”
The NPA was entered into between the U.S. Attorney’s Office, on the one hand, and swisspartners Investment Network AG and the following three wholly-owned subsidiaries, on the other: swisspartners Wealth Management AG, a Zurich-based company that establishes and manages entities such as foundations and trusts; swisspartners Insurance Company SPC Ltd., a Cayman Islands-based life insurance carrier that offers life insurance and annuity products; and swisspartners Versicherung AG, a Liechtenstein-based insurance carrier that offers a variety of insurance and annuity products
The NPA recognizes that, beginning in 2008, the Swisspartners Group voluntarily implemented a series of remedial measures to stop assisting U.S. taxpayers in evading federal income taxes. The NPA further recognizes that in 2012, at a time when it was neither a subject nor target of any investigation by the U.S. Department of Justice, the Swisspartners Group self-reported its conduct concerning U.S. taxpayer-clients to the Department of Justice. Additionally, the NPA recognizes the extraordinary cooperation of the Swisspartners Group, including its voluntary production of client files for 110 non-compliant U.S. taxpayers that included the identities of those U.S. taxpayers.
As part of the NPA, the Swisspartners Group admitted various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct. Specifically, the Swisspartners Group admitted that it knew certain U.S. taxpayers were maintaining undeclared foreign bank accounts with the assistance of the Swisspartners Group in order to evade their U.S. tax obligations, in violation of U.S. law. The Swisspartners Group acknowledged that it helped certain U.S. taxpayer-clients conceal from the IRS their beneficial ownership of undeclared assets maintained in foreign bank accounts by, among other things, creating sham foundations and other sham entities that served as the nominal account holders; placing accounts or insurance policies in the names of non-U.S. nationals; facilitating the transportation of large amounts of cash into the United States on behalf of U.S. taxpayer-clients; and arranging for the bulk deposit of cash at Swiss depository financial institutions on behalf of U.S. taxpayer-clients.
As part of the NPA, the Swisspartners Group has agreed to forfeit $3.5 million to the United States, representing certain fees it obtained in exchange for services that it provided to U.S. taxpayers with undeclared foreign bank accounts from in or about 2001 through in or about 2011. In connection with this forfeiture, the Swisspartners Group has agreed not to contest a civil forfeiture action filed by the United States. That action was filed on May 9, 2014, in the U.S. District Court for the Southern District of New York and assigned to U.S. District Judge Gregory H. Woods.
The U.S. Attorney’s Office entered into the NPA based on factors including:
- the Swisspartners Group’s voluntary implementation of various remedial measures beginning in or about May 2008;
- the Swisspartners Group’s voluntary self-reporting of its criminal conduct at a time when it was neither a subject nor target of any investigation by the U.S. Department of Justice;
- the Swisspartners Group’s voluntary and extraordinary cooperation, including its voluntary production of account files that include the identities of U.S. taxpayer-clients;
- the Swisspartners Group’s willingness to continue to cooperate to the extent permitted by applicable law; and
- the Swisspartners Group’s representation, based on an investigation by outside counsel, the results of which have been shared with the U.S. Attorney’s Office and the Tax Division, that the misconduct under investigation did not, and does not, extend beyond that described in the Statement of Facts.
The NPA requires the Swisspartners Group to continue to cooperate with the United States for at least three years from the date of the agreement. In the event that the Swisspartners Group violates the NPA, the U.S. Attorney’s Office may prosecute the Swisspartners Group.
Mr. Bharara thanked the IRS for its outstanding work in the investigation of this matter and the Tax Division of the Department of Justice for its assistance in the investigation.
This investigation is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Jason H. Cowley, Sarah E. Paul, and Jared P. Lenow are in charge of the matter.
U S v $3500000 (Swisspartners Forfeiture Complaint)
Longtime Pimp Sentenced to 10 Years in Federal Prison for Taking SoCal Woman to Las Vegas to Work as ProstituteRead the Press Release
SANTA ANA, California – A man previously convicted and sentenced to 14 years in federal prison for transporting minors to work as prostitutes today received what is effectively another 14-year sentence for engaging in the same conduct involving a 19-year-old victim almost immediately after he was released from custody in the first case.
William Earl Flavors, aka “Andre,” 40, who most recently resided in Long Beach, was sentenced this morning to 10 years in federal prison. United States District Judge Josephine L. Staton ordered that this sentence run consecutive to a four-year prison term he received last year based on related conduct for violating his supervised release on his prior federal conviction, meaning that Flavors has been ordered to serve 14 years in prison for acting as a pimp for girls in 2012.
At today’s sentencing hearing, Judge Staton discussed a letter that Flavors wrote to the Court in which he blamed the judicial system and the probation department for his current “predicament” and that he “not given a fair chance.” Judge Staton noted “beating women and forcing them into prostitution is not a ‘predicament,’ but a choice – a choice that defendant made.”
Flavors pleaded guilty in December to transportation in interstate commerce for purposes of prostitution. Flavors specifically admitted that he transported his victims between Long Beach to Las Vegas, forced or coerced them to work as prostitutes in Las Vegas, and used physical abuse and threats of additional physical abuse to make one of his victims work for him as a prostitute.
“In order to coerce and force [the victim] into continuing to engage in prostitution, defendant physically abused her, threatened her with additional physical abuse, and did not allow her to leave him,” according to a sentencing memo filed by prosecutors. The sentencing memo also details the physical abuse defendant carried out on his victim, including “beating her with his fists and on one occasion burning her legs with a lit cigarette.”
Today’s sentencing concludes the second case in which Flavors has been convicted in federal court of trafficking women across state lines and forcing them to work as prostitutes. In December 1999, he pleaded guilty to transportation of a
15-year-old girl and a 17-year-old girl in interstate commerce for prostitution. In addition to transporting these minors from Washington to California, Flavors beat, raped and forced these girls into prostitution on his behalf, according to court documents.In the 1999 case, Flavors’ “depravity towards his victims included, among other acts: breaking one victim’s nose from beating her; and beating another victim with clothes hangers, burning her with curling irons, and forcing her to drink cups of urine and cigarette butts,” prosecutors wrote in a sentencing memo.
The case against Flavors was investigated by Federal Bureau of Investigation.Release No. 14-059
Illegal Drug Company Gallant Pharma and Co-Founder SentencedRead the Press Release
ALEXANDRIA, Va. – Gallant Pharma International Inc. (Gallant Pharma), an unlicensed wholesale drug distributor headquartered in Arlington, Va., that distributed more than 17,000 units of non-FDA-approved cancer and cosmetic drugs to doctors across the United States, was sentenced today to pay $3.4 million in forfeiture and restitution. On Dec. 2, 2013, Gallant Pharma pleaded guilty to two counts of illegal importation, five counts of introducing misbranded drugs and five counts of unlicensed prescription drug wholesaling.
Syed “Farhan” Huda, 39, formerly of Arlington, Va., co-founder and co-owner of Gallant Pharma, was sentenced today to 36 months in prison, followed by two years of supervised release. Huda also was ordered to pay $3.4 million in forfeiture and restitution to victims. On Dec. 2, 2013, Huda pleaded guilty to illegal importation, introducing misbranded drugs, unlicensed medical wholesaling and wire fraud.
Also sentenced today was Gallant Pharma office manager Deeba Mallick, 37, the wife of co-owner Huda. Mallick was sentenced to nine months in prison, one year of supervised release and a $75,000 fine. Mallick pleaded guilty on Dec. 19, 2013 to misprision of a felony.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Antoinette V. Henry, Special Agent in Charge of the Food and Drug Administration’s (FDA) Office of Criminal Investigations; Katrina W. Berger, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Washington; Gary Barksdale, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division; and M. Douglas Scott, Arlington County Chief of Police, made the announcement after the sentencings by U.S. District Judge Claude M. Hilton.
According to information made public in court, between August 2009 and August 2013, Gallant Pharma smuggled into the United States and sold more than $12.4 million in non-FDA-approved chemotherapy drugs and injectable cosmetic drugs and devices, generating profits of $3.4 million. Many of these drugs were subject to strict temperature controls to protect drug potency. Gallant Pharma shipped and received such drugs with ice packs, not dry ice as used by legitimate distributors, and on at least one occasion, a shipment containing such drugs took more than two weeks to arrive in Virginia from overseas during a July 2012 heat wave. Many drugs sold by Gallant Pharma were also required to carry a FDA “black box” warning, which indicates that a drug carries a significant risk of serious or life-threatening adverse effects. The versions sold by Gallant Pharma did not meet this or other FDA labeling requirements.
On Tuesday, co-conspirators Anoushirvan Sarraf, 48, and Eva Montejo Pritchard, 48, both of Rockville, Maryland, were convicted by a federal jury for their involvement in the scheme. Sarraf, a licensed doctor and the owner of Aphrodite Skin Care & Esthetic Clinic in McLean, Virginia, and Pritchard, Aphrodite’s office manager, received hundreds of shipments addressed to Aphrodite, containing illegal importations intended for Gallant Pharma, in exchange for a deeply discounted price on non-FDA-approved drugs and devices. While cancer drugs were always handed off to Gallant Pharma, the defendants kept many of the non-FDA-approved cosmetic drugs and devices, which were used on Aphrodite patients without the patients’ knowledge or consent.
To date, twelve defendants associated with Gallant Pharma have been convicted. Two additional defendants named in the indictment, Robert Wachna and Munajj Rochelle, remain fugitives and are believed to be in Canada.
This case was investigated by FDA’s Office of Criminal Investigations, DEA’s Group 33 Diversion Task Force, ICE-HSI and the U.S. Postal Inspection Service, with assistance from INTERPOL and the Arlington County Police Department. Assistant U.S. Attorneys Lindsay Kelly, Maya Song and Jay Prabhu are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Illegal Alien Pleads Guilty to Producing False IDRead the Press Release
BOSTON – An illegal alien pleaded guilty today in U.S. District Court in Worcester in connection with a conspiracy to produce false identification documents.
Leonardo Burgos Espinal, 42, pleaded guilty before U.S. District Judge Timothy S. Hillman to conspiracy to commit fraud in connection with identification documents. In March 2013, Burgos Espinal was charged by information with bribing an employee of the Massachusetts Registry of Motor Vehicles.
From January 2011 through June 2012, Burgos would direct his “clients” to present fraudulently obtained, but valid, Puerto Rican identification documents to his co-conspirator at the RMV, who would then issue a valid Massachusetts driver’s license or ID knowing that the Puerto Rican documents belonged to other real people. This plea is the most recent development in investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.Burgos Espinal faces a statutory maximum penalty of five years in prison, three years of supervised release, restitution, and a $250,000 fine.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; and Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Glen Burnie Drug Dealer Sentenced to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Chad Bennet Brown, age 34, of Glen Burnie, Maryland, on May 8, 2014, to 10 years in prison, followed by three years of supervised release, after pleading guilty to conspiracy to distribute and possess with the intent to distribute heroin and cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Anne Arundel County Police Chief Kevin Davis; Chief James W. Johnson of the Baltimore County Police Department; and Colonel Michael Kundrat, Chief of the Maryland Transportation Authority Police.
According to Brown’s plea agreement, from May 2013, through February 10, 2014, Chad Bennett Brown, conspired with others to acquire quantities of cocaine and heroin from sources of supply in Texas for distribution in Maryland. Arrangements for the acquisition of the drugs were made by Brown, while a co-conspirator drove from Maryland to Texas to secure the drugs, often carrying cash to pay for the drugs. On one occasion, the co-conspirator was en route from Maryland to Texas when he was stopped by police in Dickson County, Tennessee and approximately $132,000 was seized. This money was intended for delivery to a source of supply in Texas as payment for several kilograms of cocaine.This pattern of activity, which involved Brown making arrangements with the sources of supply and the co-conspirator taking money to Texas or picking up drugs in Texas, was repeated on at least ten occasions. On February 10, 2014, the co-conspirator was arrested with 2.5 kilograms of heroin in Jefferson County, Texas, while en route back to Maryland.
Over the course of the conspiracy, Brown was responsible for the distribution of over one kilogram of heroin and five kilograms of cocaine. At the time of his arrest, Brown was on supervised release for a previous federal drug conviction.
United States Attorney Rod J. Rosenstein praised the DEA, Anne Arundel County and Baltimore County Police Departments and the Maryland Transportation Authority Police for their work in the investigation. U.S. Attorney Rosenstein also recognized the Dickson County, Tennessee Sheriff’s Office, Jefferson County, Texas Sheriff’s Office and the U.S. Attorney’s Office for the Eastern District of Texas for their assistance in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys James G. Warwick and Kenneth S. Clark, who prosecuted the case.
Former Restaurant Owner Pleads Guilty to Federal Tax Charge-Admits Under-Reporting Gross Receipts and Overstating Expenses on Tax Returns-Read the Press Release
WASHINGTON – Zewditu Wondemu, 62, who owned Zed’s Restaurant, a business in the Georgetown area of Washington, D.C., pled guilty today to a federal tax charge for under-reporting gross receipts and income and overstating expenses on tax returns.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr. and Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Wondemu pled guilty in the U.S. District Court for the District of Columbia to one count of filing a false tax return. The Honorable Beryl A. Howell scheduled sentencing for Aug. 1, 2014. The charge carries a statutory maximum of three years in prison and financial penalties. Under federal sentencing guidelines, Wondemu faces a likely range of 10 to 16 months in prison and a fine of up to $30,000. As part of her plea, she must pay $50,350 in restitution to the United States government, representing the taxes still owed.
According to the government’s evidence, Wondemu owned and operated Zed’s Restaurant at the time of the offenses. She admitted understating gross receipts on corporate income tax returns for the tax years 2005 through 2008. At the same time, she overstated business expenses. Additionally, she admitted understating her income on individual income tax returns for the tax years 2005 through 2008. As a result of her actions, the tax losses to the government for those years totaled at least $50,350. Wondemu has since sold the restaurant.
In announcing the guilty plea, U.S. Attorney Machen and Special Agent in Charge Kelly commended the work of those who investigated the case for IRS-CI. In addition, they expressed appreciation for the assistance provided by Trial Attorney Erin Pulice of the Department of Justice’s Tax Division and Associate Director Jeffrey Olson of the Department of Justice’s Office of International Affairs. They also acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialist Donna Galindo, Criminal Investigator Stephen Cohen, and Assistant U.S. Attorney Philip A. Selden, of the Fraud and Public Corruption Section, who is prosecuting the matter.
14-109Former Mayor of Martin Convicted of Violating Civil Rights and Buying VotesRead the Press Release
PIKEVILLE – The former Mayor of Martin, Ky., has been convicted of intentionally violating voters’ civil rights, during her reelection campaign in 2012.
On Thursday evening, a federal jury in Pikeville, Ky., convicted former Martin Mayor, Ruth Thomasine Robinson, 69, of conspiracy to violate civil rights and one count of vote buying. The jury also convicted her husband, James “Red” Robinson, 64, of the conspiracy count and one vote buying count. Her stepson, James Steven Robinson, 32, was found guilty of the conspiracy count and two of three vote buying counts and another co-defendant, Johnny T. Moore, 32,was acquitted of all charges. The jury returned the verdicts after approximately two hours of deliberation, following three days of trial.
According to evidence introduced at trial, Thomasine Robinson and her co-conspirators intimated poor and disabled citizens in order to gain their votes during the 2012 general election in Martin. For instance, members of the conspiracy directed residents of public housing to vote by absentee ballot under the supervision of Thomasine Robinson or another member of the conspiracy. The members of the conspiracy also targeted residents of private housing owned and leased by Thomasine Robinson.
The trial testimony established that the members of the conspiracy filled out absentee ballots, marking the conspirators’ choice of candidates, and then had the voters sign the pre-marked ballots. Voters who cooperated with this arrangement and voted for Thomasine Robinson received promises of better living arrangements and other consideration. Voters who did not comply faced consequences such as eviction and the loss of priority for public housing.
In addition, the evidence at trial established that the defendants offered to pay several voters to vote for Thomasine Robinson.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Perrye K. Turner, Special Agent in Charge, FBI; and Jack Conway, Kentucky Attorney General, jointly announced the conviction.
The investigation was conducted by the FBI and the Kentucky Attorney General’s Office. Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone represent the federal government in this case.
Sentencing is scheduled for September 9. The defendants face a maximum of 10 years in prison for the conspiracy offense and a maximum of five years in prison on the vote buying offenses. However, the Court must consider the U.S. Sentencing Guidelines and the federal statutes before imposing a sentence.
Former Maryland Sergeant Sentenced for Obstruction of JusticeRead the Press Release
Josh Hummer, formerly a sergeant at Roxbury Correctional Institution (RCI) in Hagerstown, Maryland, was sentenced today to serve 12 months and a day in prison for obstruction of justice. Previously, on Jan. 31, 2014, a federal jury found Hummer guilty of providing false and misleading information to state investigators tasked with conducting an inquiry into a series of staff assaults against an inmate, Kenneth Davis, at RCI.Evidence presented at trial showed that Hummer, 41, of Chambersburg, Pennsylvania, was on duty as a sergeant at RCI on the morning of March 9, 2008, when officers assaulted Davis inside a cell. On April 3, 2008, Hummer lied to a Maryland State Police detective about that assault.
Sixteen former RCI officers have been convicted in connection with the series of assaults against Davis. Through those guilty pleas, the defendants have admitted that officers from three different shifts, including Hummer’s, assaulted Davis in retaliation for a prior incident in which Davis had hit an officer. As a result of these beatings, Davis suffered broken bones in his face, ribs and back.
“The vast majority of correctional supervisors serve their communities with honor and integrity,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “When a supervisor at a correctional facility tries to cover up a staff assault of an inmate, however, the Department of Justice will do its utmost to hold him accountable.”
This case was investigated by the Frederick Resident Agency of the FBI, and prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorneys Sanjay Patel and Christine Siscaretti, with the support of Assistant U.S. Attorney Michael Cunningham of U.S. Attorney’s Office for the District of Maryland.
Former Ft. Lauderdale Resident Pleads Guilty to Bank Fraud Using MBC Shell Company to Defraud A Financial InstitutionRead the Press Release
Wifredo Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Henry Fecker, III, 60, of Ft. Lauderdale, pled guilty yesterday before U.S. District Judge Robin S. Rosenbaum in Ft. Lauderdale to a superseding information charging him with one count of bank fraud. Sentencing for Fecker is scheduled for July 18, 2014 before Judge Rosenbaum.
According to court documents, Fecker was the listed owner of Camden Consulting, Inc., a shell company used by the principals of Mutual Benefits Corporation (MBC) to receive proceeds from a massive Ponzi scheme, from approximately 1994 through 2004. According to court documents, in 2006, Fecker obtained a $1.5 million bank loan from Washington Mutual Bank in the form of a cash-out refinance of a waterfront vacation house in Camden, Maine. The vacation house had been purchased with funds derived from MBC. Fecker and his accomplice, Steven Steiner a/k/a Steven Steinger, received $487,801.15 as proceeds from the bank loan. According to court documents, Fecker acknowledged that he and Steiner held the funds in the form of ten separate certified bank checks and cashed them periodically between 2008 and 2011. Fecker acknowledged that this was done to conceal the funds from judgment creditors, including the U.S. Securities and Exchange Commission. Fecker used the funds to support a lavish lifestyle and to pay bills for Fecker, Steiner and Steiner’s brother, Joel Steinger, in the years after MBC shut down.
Fecker made material false statements on the loan application under penalty of perjury, including by claiming a monthly salary of $102,083, and that he had been the President of Camden Consulting for 11 years. Fecker also provided a false residence and business address to make the claim of employment appear legitimate. In truth, Camden Consulting was never a real company, had no real business, and Fecker had not had any employment since approximately 1996 when he worked at MBC.
In an earlier case, United States v. Henry Fecker, III and Steven Steiner, No. 11-20578-KMW, in February 2013, Steiner and Fecker were defendants in a four-week trial before U.S. District Judge Kathleen Williams, for money laundering and obstruction of justice. Steiner was convicted of 31 counts and Fecker was acquitted of all counts.
And, in earlier proceedings, Joel Steinger and Steven Steiner pleaded guilty to charges in this case, No. 12-20123-RSR, and a separate case related to the MBC fraud, No. 08-21158-CR-RNS.
Mr. Ferrer commended the investigative efforts of the FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy, Dwayne E. Williams and Alison Lehr.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former EBAY Exec Pleads Guilty to Insider TradingRead the Press Release
PHILADELPHIA - Christopher Saridakis, 45, of Wilmington DE, pleaded guilty today to securities fraud for giving another person confidential information about a company’s stock. Saridakis was a senior executive at GSI Commerce, Inc. (“GSIC”), when he provided material, non-public information regarding eBay’s pending acquisition of GSIC. U.S. District Court Judge Stewart Dalzell scheduled a sentencing hearing for September 19, 2014.
On March 20, 2011, Saridakis, who was privy to discussions of a merger, sent a series of text messages to a Confidential Witness (“CW1”) that began with the defendant asking if CW1 “...own[ed] our [GSIC] shares?” CW1 replied, “no, but it’s cheap.” This response led Saridakis to tell CW1 “you should.” CW1 responded with “ok,” to which Saridakis replied, “soon.” On March 22, 2011, following the receipt of the text messages, while in possession of the inside information, and knowing defendant Saridakis’ position as a senior executive at GSIC, CW1 purchased and caused to be purchased 25,000 shares of GSIC stock on margin for approximately $470,000. On June 20, 2011, CW1 received $737,500 in exchange for the 25,000 shares of GSIC, equating to an illicit profit of $260,304, as a result of the text messages. Saridakis also shared the same material non-public information with other individuals.
Saridakis faces a maximum possible sentence of 20 years in prison, three years of supervised release, a $5 million fine, and a $100 special assessment.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Joel D. Goldstein. Saridakis and others have been charged in a parallel civil matter by the Securities and Exchange Commission.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former EBAY Exec Pleads Guilty to Insider TradingRead the Press Release
PHILADELPHIA - Christopher Saridakis, 45, of Wilmington DE, pleaded guilty today to securities fraud for giving another person confidential information about a company’s stock. Saridakis was a senior executive at GSI Commerce, Inc. (“GSIC”), when he provided material, non-public information regarding eBay’s pending acquisition of GSIC. U.S. District Court Judge Stewart Dalzell scheduled a sentencing hearing for September 19, 2014.
On March 20, 2011, Saridakis, who was privy to discussions of a merger, sent a series of text messages to a Confidential Witness (“CW1”) that began with the defendant asking if CW1 “...own[ed] our [GSIC] shares?” CW1 replied, “no, but it’s cheap.” This response led Saridakis to tell CW1 “you should.” CW1 responded with “ok,” to which Saridakis replied, “soon.” On March 22, 2011, following the receipt of the text messages, while in possession of the inside information, and knowing defendant Saridakis’ position as a senior executive at GSIC, CW1 purchased and caused to be purchased 25,000 shares of GSIC stock on margin for approximately $470,000. On June 20, 2011, CW1 received $737,500 in exchange for the 25,000 shares of GSIC, equating to an illicit profit of $260,304, as a result of the text messages. Saridakis also shared the same material non-public information with other individuals.
Saridakis faces a maximum possible sentence of 20 years in prison, three years of supervised release, a $5 million fine, and a $100 special assessment.
The case was investigated by the FBI. The case is being prosecuted by Assistant United States Attorney Joel D. Goldstein. Saridakis and others have been charged in a parallel civil matter by the Securities and Exchange Commission.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Chief Executive Officer of Oil Services Company <br /> Indicted in New Jersey on Foreign Bribery and Kickback ChargesRead the Press Release
The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey – was indicted today for his role in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA) and to defraud PetroTiger.
Acting Principal Deputy Assistant Attorney General Marshall Miller of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement.
Joseph Sigelman, 43, of Miami and the Philippines, was indicted today by a federal grand jury in the District of New Jersey and charged with conspiracy to violate the FCPA and to commit wire fraud, conspiracy to launder money, and substantive FCPA and money laundering violations. Gregory Weisman, 42, of Moorestown, New Jersey, the former general counsel of PetroTiger, pleaded guilty on Nov. 8, 2013, to conspiracy to violate the FCPA and to commit wire fraud. Sigelman’s co-CEO, Knut Hammarskjold, 42, of Greenville, South Carolina, pleaded guilty to the same charge on Feb. 18, 2014.
According to court records, Sigelman and others allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million. To conceal the bribes, they first attempted to make the payments to a bank account in the name of the foreign official’s wife for purported consulting services she did not perform. Sigelman and Hammarskjold provided Weisman invoices, including her bank account information. The conspirators made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed. Sigelman and his conspirators then took steps to conceal the bribe payments from PetroTiger’s board members.
In addition, court documents allege that Sigelman and others attempted to secure kickback payments while negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition. In exchange for negotiating more favorable terms for the owners of the target company, two of the owners agreed to kick back to the conspirators a portion of the increased purchase price. To conceal the kickback payments, Sigelman and others had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments and used the code name “Manila Split” to refer to the payments amongst themselves.
Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on Nov. 8, 2013. Hammarskjold was arrested Nov. 20, 2013, at Newark Liberty International Airport. Sigelman was arrested on Jan. 3, 2014, in the Philippines. The charges against Sigelman, Hammarskjold and Weisman were unsealed on Jan. 6, 2014.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which cooperated with the department’s investigation. The department has worked closely with and has received significant assistance from its law enforcement counterparts in the Republic of Colombia and greatly appreciates their assistance in this matter. The department also thanks the Republic of the Philippines, including the Bureau of Immigration, and the Republic of Panama for their assistance in this matter. Significant assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the FBI’s Newark Division. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Zach Intrater of the District of New Jersey.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .Former Chief Executive Officer of Oil Services Company Indicted in New Jersey on Foreign Bribery and Kickback ChargesRead the Press Release
NEWARK, N.J. – The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey – was indicted today for his role in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA) and to defraud PetroTiger.
U.S. Attorney Paul J. Fishman of the District of New Jersey, Acting Principal Deputy Assistant Attorney General Marshall Miller of the Justice Department’s Criminal Division and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement.
Joseph Sigelman, 43, of Miami and the Philippines, was indicted today by a federal grand jury in Camden, N.J., with conspiracy to violate the FCPA and to commit wire fraud, conspiracy to launder money, and substantive FCPA and money laundering violations. Gregory Weisman, 42, of Moorestown, N.J., the former general counsel of PetroTiger, pleaded guilty on Nov. 8, 2013, to conspiracy to violate the FCPA and to commit wire fraud. Sigelman’s co-CEO, Knut Hammarskjold, 42, of Greenville, S.C., pleaded guilty to the same charge on Feb. 18, 2014.
According to documents filed in this case and statements made in court: Sigelman and others paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million. To conceal the bribes, they first attempted to make the payments to a bank account in the name of the foreign official’s wife for purported consulting services she did not perform. Sigelman and Hammarskjold provided Weisman invoices, including her bank account information. The conspirators made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed. Sigelman and his conspirators took steps to conceal the bribe payments from PetroTiger’s board members.
In addition, Sigelman and others attempted to secure kickback payments while negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition. In exchange for negotiating more favorable terms for the owners of the target company, two of the owners agreed to kick back to the conspirators a portion of the increased purchase price. To conceal the kickback payments, Sigelman and others had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments and used the code name “Manila Split” to refer to the payments amongst themselves.
Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on Nov. 8, 2013, with conspiracy to commit wire fraud, conspiracy to violate the FCPA, conspiracy to launder money and substantive violations of the FCPA. Hammarskjold was arrested Nov. 20, 2013, at Newark Liberty International Airport. Sigelman was arrested on Jan. 3, 2014, in the Philippines. The charges against Sigelman, Hammarskjold and Weisman were unsealed on Jan. 6, 2014. Today’s indictment consolidates the complaint’s conspiracy to commit wire fraud and to violate the FCPA charges into a single count, and adds one count of transacting in criminal proceeds.
The conspiracy to commit wire fraud and violations of the FCPA count carries a maximum potential penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The three substantive FCPA counts each carry a maximum potential penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum potential penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The transacting in criminal proceeds charge carries a maximum potential penalty of 10 years in prison and $250,000 or twice the gain or loss from the offense.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which cooperated with the department’s investigation. The department has worked closely with and has received significant assistance from its law enforcement counterparts in the Republic of Colombia and greatly appreciates their assistance in this matter. The department also thanks the Republic of the Philippines, including the Bureau of Immigration, and the Republic of Panama for their assistance in this matter. Significant assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the FBI’s Newark Division. The case is being prosecuted by Assistant U.S. Attorney Zach Intrater of the District of New Jersey and Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.14-160
Defense counsel: Andrew C. Lourie, Matthew I. Menschel, William A. Burck, Juan Pablo Morillo Esqs., Washington; Patrick J. Egan Esq., Philadelphia
Sigelman, Joseph Indictment
Former Boy Scouts of America Leader Sentenced to 7 Years in Federal Prison for Receipt of Child PornographyRead the Press Release
TULSA, Okla. — United States Attorney for the Northern District of Oklahoma, Danny C. Williams Sr., announced today that a former Boy Scouts of America Lodge Chief and Scout leader was sentenced in Federal court for receiving child pornography.
Kevin D. Woolsey, 22, of Jenks, was sentenced by United States Court Judge Claire V. Eagan to serve 84 months, to be followed by 10 years of supervised release, after a one-count Information charge for Receipt of Child Pornography. Woolsey was charged by sealed Information on September 19, 2013, and entered a guilty plea on November 5, 2013. The defendant targeted males between 14 to 16 years of age who primarily participated in the Boy Scouts or who were members of a church youth group.
“The defendant used his position of authority to exploit and manipulate children,” said U.S. Attorney Williams. “My office will continue to work with our law enforcement partners to punish those who would prey on the most vulnerable in our communities.”
Specifically, Woolsey admitted that on or about May 19, 2012, he received one or more visual depictions involving the use of minors engaging in sexually explicit conduct. Woolsey created a fictitious Facebook page that falsely purported to belong to a minor female known to the victim. Woolsey established communication with the victim through the Facebook page, then engaged the victim in sexually-oriented conversation and sent the victim pornographic images. Posing as a minor female, Woolsey requested photos from the victim, who sent the photos via the internet to an e-mail address Woolsey provided.
Woolsey received pornographic images from at least 11 minors. He created at least 7 fictitious Facebook accounts posing as different female minors from the church youth group.
The case was investigated by the U.S. Immigration and Customs Enforcement and prosecuted by Assistant United States Attorney Jeffrey Gallant.
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. For more information about Project Safe Childhood and Internet safety education, visit www.usdoj.gov/psc.
Florida Doctor Sentenced for Federal Tax CrimesRead the Press Release
Dr. Patricia Lynn Hough, of Englewood, Florida, was sentenced today to serve two years in prison and three years supervised release by U.S. District Court Judge John Steele in Fort Myers, Florida, for conspiring to defraud the Internal Revenue Service (IRS) by concealing millions of dollars in assets and income in offshore bank accounts at UBS and other foreign banks, and for filing false individual income tax returns which failed to report the existence of those foreign accounts or the income earned in those accounts, the Justice Department and the IRS announced. Hough was also ordered to pay $15,518,382 in restitution and $42,732.27 for the costs of prosecution . Hough was convicted by a jury on Oct. 24, 2013.
According to court documents and court proceedings, Hough owned two Caribbean-based medical schools, Saba University School of Medicine located in Saba, Netherlands Antilles, and Medical University of the Americas located in Nevis, West Indies. Hough conspired to defraud the IRS with her husband, Dr. David Fredrick, who is awaiting trial. They carried out the conspiracy by creating and using nominee entities, including a foundation, and by using undeclared accounts in their names and the names of nominee entities at UBS and other foreign banks to conceal assets and income from the IRS. Both schools and the associated real estate were sold on April 3, 2007, for more than $35 million, all of which was deposited into undeclared accounts in the names of the nominee entities. The majority of the proceeds from the sale were not reported to the IRS on their tax returns and no tax was paid. In total, between 2003 and 2008, Hough and Fredrick failed to pay more than $15 million in taxes.
The evidence at trial further proved that Hough and Fredrick used emails, telephone calls and in-person meetings to instruct Swiss bankers and asset managers to make investments and transfer funds from their undeclared accounts at UBS. The evidence also established that Hough and Fredrick caused funds from the undeclared accounts in the names of the medical schools to be transferred to undeclared accounts in their individual names or in the names of nominee entities. Hough and her husband then used the funds in their undeclared accounts to purchase an airplane, two homes in North Carolina and a condominium in Sarasota, Florida.
Hough was also convicted of three counts of filing false tax returns for 2005, 2007 and 2008. The evidence at trial showed that Hough filed false tax returns that substantially understated her total income because she failed to report substantial interest and investment income and because she failed to report her half of the proceeds from the sale of the medical schools in 2007. In addition, Hough failed to report that she had an interest in, or signature or other authority over, bank, securities or other financial accounts located in foreign countries.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such accounts on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens must file a Report of Foreign Bank and Financial Accounts (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
“The Justice Department is committed to investigating and prosecuting those who continue to evade taxes by hiding income and assets in undisclosed offshore bank accounts,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “As this sentence shows, those who fail to come into compliance risk high penalties and jail.”
“Those who use nominee entities to conceal their assets and income in offshore accounts should realize by now that no bank offering such services will be a safe haven from the IRS,” said Chief of IRS-Criminal Investigation Richard Weber. “Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report. It is more important that the American people feel confident that everyone is playing by the same rules and paying their taxes. Today, Dr. Hough has been held accountable for using an intricate network of financial transactions to evade her tax obligation.”This case was prosecuted by Trial Attorneys Caryn Finley and Leigh Kessler of the Tax Division and was investigated by IRS – Criminal Investigation. Assistant Attorney General Keneally thanks them for their work, and also thanks the U.S. Attorney’s Office for the Middle District of Florida, Fort Myers Division, for their assistance and support in the prosecution.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.Federal Charges Filed Against 22 Alleged Members of Related Camden Drug Trafficking OrganizationsRead the Press Release
NOTE: The press release below was originally issued Wednesday, May 7, 2014. The complaints on which it was based misidentified Bryan Falu of Philadelphia as one of the defendants. Charges against Bryan Falu have been dismissed and he is not being sought by law enforcement. The criminal complaint on which the original press release was based, and this press release, have been amended.
Camden’s C-4 Anti-Violence Team Arrests 16 in Coordinated Takedown
CAMDEN, N.J. – This morning, teams of federal, state and local law enforcement partners led by the FBI arrested 16 members of related drug trafficking organizations – bound by family and narcotics business relationships – that processed and distributed crack, powder cocaine and heroin on the streets of Camden County, U.S. Attorney Paul J. Fishman announced.
Based on criminal charges filed by the U.S. Attorney’s Office and executed through the cooperative work of the Camden County Crime Collaboration, or C-4, the arrests targeted a group of interconnected drug trafficking organizations (DTOs) operating primarily in the Whitman Park section of Camden. The complaints unsealed today charge 21 defendants in two separate DTOs: one allegedly led by Efraim Rivera (the Rivera DTO), and the second involving two groups run by the Roldan and Ramos families – allegedly led by cousins Raymond Roldan and Jerome “Ant” Ramos – operated cooperatively on Sheridan Street as one organization (the Sheridan Street DTO).
In addition to the 16 defendants arrested today, two of the charged individuals, Dewayne Jackson and Mark Washington, were already in custody on state charges. Three more are being sought by law enforcement. Those arrested today are expected to appear this afternoon before U.S. Magistrate Judge Anne Marie Donio in Camden federal court.
“According to the charges, these individuals turned entire city blocks into distribution centers for narcotics,” said U.S. Attorney Fishman. “Relying on the bond of blood ties, they allegedly operated drug trafficking businesses as a family affair, sharing suppliers and street dealers in Camden and throughout South Jersey. Law enforcement is collectively committed to improving the quality of life of the people who live in these neighborhoods, who deserve freedom from drug trafficking and related violence.”
“This is the largest FBI takedown in Camden in a decade,” said Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division, “and we’re not done yet. The FBI’s South Jersey Violent Offender and Gang Task Force, aided by our outstanding law enforcement partners, is committed to dismantling the violent drug gangs poisoning Camden’s streets.”
According to documents filed in this case and statements made in court:
In addition to providing drugs to distributors on Sheridan Street, the DTOs together controlled or supplied numerous drug distribution groups, or “sets,” throughout Camden with powder cocaine, crack and – through the Ramos group – heroin. They also supplied other narcotics distributors, who sold the DTOs’ drugs throughout Camden County, including in Lindenwold, Sicklerville and Gloucester City.
Many of the DTOs’ members are relatives, and the Roldan and Ramos groups live in close proximity to one another on Sheridan Street. While the Roldan and Ramos groups each ran their own open-air drug sets along three blocks of Sheridan Street, they shared territory, set workers and suppliers, and used the same locations to process powder cocaine into crack cocaine.
An investigation led by the FBI used surveillance, confidential informants and cooperating witnesses, controlled drug purchases, record checks and telephone wiretaps to uncover the distribution networks.
Just during the time period of the wiretap – from Dec. 4, 2013 to March 4, 2014 – the Rivera DTO trafficked at least 225 ounces and the Sheridan Street DTO trafficked more than 50 ounces of powder cocaine. During the same period, the Rivera DTO trafficked approximately 24 ounces of crack. The Sheridan Street DTO sold more than 36 ounces of crack during a similar time frame – ending April 16, 2014 – during which the Ramos group also trafficked a minimum 325 grams of heroin, making approximately $1,800 a day on heroin alone.
“It is the continuing cooperative efforts of federal, state and county law enforcement agencies that have had a significant impact on the crime rate in Camden and made the city a safer place for its citizens, “said Camden County Prosecutor Warren Faulk. “Today’s arrests are just a part of these continuing efforts.”
“The Camden County Crime Collaboration is a collaboration of law enforcement agencies leveraging resources and intelligence to remove the most violent drug gang organizations from the streets in our region,” said Camden County Police Chief J. Scott Thomson. “Today’s arrest signals the end to a drug gang that has influenced violence in the Whitman Park neighborhood, one of Camden’s most challenged sections with gun violence. I am extremely grateful to the leadership of the U.S. Attorney’s Office of New Jersey for their stewardship of our C-4 efforts.”The Rivera DTO acquired and distributed powder cocaine to the Sheridan Street DTO, which then processed the powder into crack for sale at open-air drug sets it controlled. The DTOs maintained various stash houses; rented cars to conduct drug-related business; moved around different locations to manufacture crack; and employed coded language when conducting drug business by phone or text messaging.
Efraim Rivera primarily operated the Rivera DTO from his mother’s residence on Liberty Street in Camden, taking telephone orders for both powder and crack cocaine. He regularly travelled to Philadelphia, sometimes as often as three times a week, to purchase multiple-ounce quantities of cocaine from an uncharged conspirator who was Rivera’s source of supply. The Rivera DTO then sold the powder cocaine to the Sheridan Street DTO and to other customers. Some of the Rivera DTO’s customers then supplied powder or crack to Dymiere Demby, Dewayne Jackson and Daniel Alston for sets at 10th and Warsaw Streets, Green and Mechanic Streets, and Lindenwold, respectively.
The Sheridan Street DTO would then convert the powder cocaine to crack, which would be sold on the open-air drug markets respectively controlled by the Roldan and Ramos groups, or to other drug distributors, who supplied other drug traffickers or sets in and beyond the city of Camden. The Rivera DTO would purchase Sheridan Street DTO crack made from the same cocaine it sold to the Roldan group. Rivera’s DTO crack customers included Rivera’s relatives, Angel “Jungo” Garcia and Angel Velez, who would redistribute the crack.
When Raymond Roland was unable to obtain powder cocaine from the Rivera DTO, he turned to other suppliers, such as Luis “Canelo” Diaz, who also supplied the Rivera DTO. Roldan worked closely with his cousin “Ant” Ramos. The two maintained regular contact and reached out to each other when attempting to locate sources of supply. Roldan was assisted in the day-to-day operation of his group by his sister, Daisy Roldan, and her son, Anthony “Boo Boo” Esprit, who facilitated meetings with suppliers and customers, transported narcotics and collected drug proceeds.
“Ant” Ramos was assisted by his brothers Giovanny “Gio” Ramos and Alexsio “Al” Ramos, who, along with Jimmy Mercado, “cooked” the crack and processed the powder cocaine, crack cocaine and heroin for sale. Intercepted telephone conversations captured the coordination among the Ramos group members as they discussed materials including ammonia, sandwich bags, masks and grinders.
The Roldan and Ramos groups shared set workers, such as Christian Setzer and Graciano “Rocky” Diaz, who made walk-up sales on Sheridan Street.
Calls were intercepted between Sheridan Street DTO members referring to being armed with guns and having a “strap” or gun on their person. One DTO member stated, “at the end of the day, I’m shooting.” One DTO member stated in an intercepted conversation that he had just come from the gun range.
The defendants involved with the Rivera DTO each are charged with one count of conspiracy to distribute and to possess with intent to distribute 280 grams or more of crack and 5 kilograms or more of cocaine; the members of the Sheridan Street DTO each are charged with one count of conspiracy to distribute 280 grams or more of crack; 500 grams or more of cocaine; and 100 grams or more of heroin. Raymond Roldan, Luis Diaz and Efraim Rivera each are charged with both counts. Each count carries a minimum potential penalty of 10 years in prison and a maximum potential penalty of life in prison and a $10 million fine.
U.S. Attorney Fishman credited special agents of the FBI’s Philadelphia Division and the South Jersey Violent Offender and Gang Task Force, under the direction of FBI Special Agent in Charge Hanko; the Camden County Prosecutor’s Office, under the direction of Prosecutor Faulk; and the Camden County Police Department – Metro, under the direction of Chief Scott Thomson, with the investigation – as well as the Camden County Sheriff’s Office, under the direction of Sheriff Charles Billingham; the New Jersey State Police, under the direction of Col. Rick Fuentes; and the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean Dalton. He also thanked other members of C-4, the Philadelphia/Camden High Intensity Drug Trafficking Area program and the New Jersey Division of Criminal Justice for their roles in the case.
The government is represented by Special Assistant U.S. Attorney Ira M. Slovin of the
U.S. Attorney’s Office Criminal Division in Camden.The charges and allegations contained in the complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.
This case was developed through the work of C-4. Every federal, state and local law enforcement agency and prosecutor’s office responsible for combating drug trafficking, gang activity and violent crime in Camden has come together in one location to share intelligence, develop strategies and support the investigative and prosecutorial efforts of its partners. C-4 has merged the individual missions of the various law enforcement agencies into a single strategic attack on drug trafficking and drug-related violent crime. Such intense coordination greatly enhances the law enforcement community’s ability to correctly identify and successfully prosecute the most dangerous criminals in one of our nation’s most dangerous cities.
Name
Age
Residence
Alleged Role
33
Camden
Leader, Rivera DTO
Supplier, Sheridan Street DTORaymond Roldan
38
Camden
Leader, Roldan group
Supplier, Rivera DTOJerome Anthony Ramos, aka “Ant”
28
Camden
Leader, Ramos group
Uncharged conspirator
Supplier, Rivera DTO
Luis Diaz, aka “Canelo”
42
Camden
Supplier, Rivera DTO
Supplier, Sheridan Street DTORamon Diaz, aka “Paluco”
44
Camden
Facilitator, Sheridan Street DTO
Daisy Roldan
36
Camden
Facilitator, Roldan group
Anthony Esprit, aka “Boo Boo”
18
Camden
Facilitator, Roldan group
Alexsio Ramos, aka “Al”
25
Camden
Facilitator, Ramos group
Giovanny Ramos, aka “G”
20
Camden
Facilitator, Ramos group
Jimmy Mercado, aka “J.I.”
26
Camden
Facilitator, Ramos group
Christian Setzer. aka “Hitstick”
33
Camden
Set Worker, Roldan and Ramos groups
Graciano Diaz, aka “Rocky”
26
Camden
Set Worker, Roldan and Ramos groups
Angel Garcia, aka “Jungo”
36
Camden
Customer/Redistributor, Rivera DTO
Ali Alexander, aka “Ali Al”
35
Camden
Customer/Redistributor, Rivera DTO
Angel Velez
32
Camden
Customer/Redistributor, Rivera DTO
Daniel Alston, aka “Boo”
33
Camden
Customer/Redistributor, Rivera DTO
Dymiere Demby
23
Camden
Customer/Redistributor, Rivera DTO
Giovanny Carrero
34
Camden
Customer/Redistributor, Rivera DTO
Dewayne Jackson
45
Camden
Customer/Redistributor, Rivera DTO
Mark Washington, aka “Burger”, aka “BG”
27
Camden
Customer/Redistributor, Ramos group
Eric Rivera, aka “E”
27
Camden
Customer/Redistributor, Ramos group
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Rivera, Efraim et al Revised Complaint
Dryden Man Sentenced to Imprisonment for Defrauding Social Security AdministrationRead the Press Release
ABINGDON, VIRGINIA – United States Attorney Timothy J. Heaphy announced today that Phillip Reece, 47, of Dryden, Va., was sentenced to six months imprisonment in the United States District Court for the Western District of Virginia in Abingdon. Phillip Reece previously pled guilty to one count of converting the social security benefits payments of another to his own use.
According to evidence presented at the sentencing and guilty plea hearings by Assistant United States Attorney Zachary T. Lee, between 1999 and 2011, Phillip Reece was the third party payee for his three children’s Social Security Survivor Benefits and was required to use those benefit payments for the care and support of his three children. An investigation by the Social Security Administration’s Department of Inspector General discovered that Phillip Reece falsified multiple Social Security Administration documents claiming his three children resided with him during this timeframe, when in actuality they resided with their grandparents. Additionally, Phillip Reece did not use any of the Social Security Benefits for the support and care of his three children and unlawfully used $91,336 of his children’s Social Security Survivor Benefits for his own personal expenses.
The investigation of this case was conducted by Social Security Administration’s Department of Inspector General. Assistant United States Attorney Zachary T. Lee is prosecuting the case for the United States.
District Man Found Guilty of Robbing Restaurant at Gunpoint and Obstructing Justice After His Arrest-Defendant Was A Manager at the Restaurant He Targeted-Read the Press Release
WASHINGTON – Torrey C. Robinson, 26, of Washington, D.C., has been found guilty by a jury of robbery and other charges in the hold-up of a Northwest Washington restaurant where he was employed as a manager, U.S. Attorney Ronald C. Machen Jr. announced.
Robinson was found guilty on May 8, 2014, following a trial in the Superior Court of the District of Columbia, of robbery, burglary, obstruction of justice, and unlawful possession of ammunition. The Honorable Robert I. Richter scheduled sentencing for July 9, 2014.
According to the government’s evidence, on Nov. 26, 2013, Robinson worked the day shift as a manager at Taylor Gourmet, located in the 600 block of E Street NW. He was replaced that afternoon by the victim, a new female manager set to work her first night shift alone that evening. At about 9:05 p.m., just after the restaurant had closed, Robinson returned to the establishment, wearing black Helly Hansen pants with reflective striping, a black North Face jacket with the hood up, a ski mask, and black-and-gray gloves.
Upon entering the restaurant, Robinson turned off the lights and approached the victim, who was working behind the counter. Robinson opened his jacket, displayed a dark-colored gun in his waistband, and told the victim, “This is a robbery, this is not a game.” He commanded her to open the safe. When the victim did not do so, Robinson consulted a clipboard containing the safe combination – which was hidden in code – and opened the safe himself, taking nearly $2,000 in cash, as well as multiple rolls of quarters wrapped in orange-and-white paper.
Senior staff at Taylor Gourmet later reviewed a surveillance video and immediately believed that the robber was Robinson, a manager at that location. Pursuant to a search warrant, police found the black Helly Hansen pants with reflective striping worn during the robbery in Robinson’s room, along with nearly $950 in various denominations, including 100 in $1 bills, and one roll of quarters wrapped in orange-and-white paper. Also found in the room was a box of 9 mm ammunition. In a search of Robinson’s car, police found the black-and-gray gloves worn during the robbery, along with four more rolls of quarters wrapped in orange-and-white paper. Additionally, police searched Robinson’s iPhone and found photos and a video of him holding a thick wad of cash the night after the robbery. Text messages recovered from Robinson’s cell phone proved that he was in the area of the robbery; he texted a friend that he was arriving at a store just two blocks away, minutes after the crime.
When he picked his friend up at the store, Robinson was wearing the black pants with reflective striping. Finally, in the weeks after his arrest, Robinson made multiple telephone calls from the District of Columbia Jail in which he solicited various friends and family members to move his gun, which he called “Baby Girl.” In one such call, Robinson learned that the gun had been successfully moved.
In announcing the verdict, U.S. Attorney Machen commended the work of the Metropolitan Police Department (MPD), which investigated the case. He also expressed appreciation for the assistance provided by the FBI’s Cellular Analysis Survey Team and the District of Columbia Department of Forensic Sciences. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Criminal Investigators John Marsh and Nelson Rhone, Paralegal Specialist Todd McClelland, and Assistant U.S. Attorney James A. Petkun, who investigated, indicted, and tried the case to verdict.
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