Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Thursday 20 March 2014
Biloxi Attorney Pleads Guilty to Creating A Scheme to Falsify, Conceal, and Cover up Material Facts in Defrauding Two Banks and the Bankruptcy CourtRead the Press Release
Gulfport, Miss - Stephen Richard Colson, 48, of Biloxi, pled guilty in federal court on March 19, 2014, to falsifying, concealing, and covering up material facts in connection with a scheme to defraud two banks and the Bankruptcy Court in violation of Title 18 Section 1001, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen. The government indicated at the guilty plea that it would seek restitution on behalf of the victims in the amount of $7,749,576.65.
Colson, a settlement agent and closing attorney, owned Prestige Title, Inc., and Advanced Title and Escrow, both headquartered in Biloxi, Mississippi, with 18 office locations in Mississippi, Alabama, Florida, Georgia, Louisiana and Texas. These offices handled loan closings for new mortgages and the refinancing of existing mortgages. In addition, Colson served as escrow agent for several condominium developments on the Mississippi Gulf Coast. As settlement agent on loan closings, Colson was required to establish trust accounts from which to disburse funds exclusively for activities related to each individual loan. These trust funds were not to be commingled with other personal or business accounts. However, a federal investigation into Colson’s activities revealed that Colson, through his business entities, willfully diverted funds from trust accounts for his own personal use, and concealed shortfalls in those accounts by co-mingling funds from other accounts when making payments to financial institutions.
The scheme began in the summer of 2004 when Colson obtained a mortgage loan from a federally (FDIC) insured financial institution (the Lender), using property he had titled in his name as collateral. Colson, as an agent for a title insurance company, issued a loan policy on the mortgage. Colson sold the property in September of 2005 for cash and should have paid off the mortgage. However, he concealed the sale of the property by continuing to make payments on the loan until he filed for bankruptcy protection in September of 2009. The Lender then learned that it did not have a valid lien or mortgage on the property. This delay in learning that the FDIC insured institution did not have a valid lien was as a direct consequence of Colson’s scheme to conceal the fact that he had already sold and pocketed the proceeds without paying off the mortgage. The title insurance company ultimately paid $133,600 to the FDIC insured institution to settle the claim.
The count to which he pleaded guilty was part of a larger scheme wherein Colson, through his title businesses, used funds generated in new real estate closings to pay off earlier closings. The larger scheme was discovered following the December 22, 2008, acquisition of a title insurance company for which Colson served as agent, by a successor company. On February 6, 2009, the successor title insurance company initiated an audit of Colson’s business records on and discovered that Colson’s title companies had a shortage in funds for settlement of real estate closings. The successor title insurance company was forced to pay 54 claims from lenders, borrowers, and sellers, and later prevailed in an adversary proceeding against Colson in Bankruptcy Court. Its claim of $4,904,627.37, plus attorneys’ fees and costs of litigation, were not discharged, and must be repaid by Colson. The Bankruptcy Court also found that
Colson’s use of his trust account “was akin to a Ponzi scheme in that Colson depended upon funds generated in new real estate closings to pay off earlier closings.”
In a separate adversary proceeding involving Colson, the Bankruptcy Court denied Colson’s attempt to discharge a private investor’s $2,000,000.00 claim.
In commenting on this case, SAC Daniel McMullen applauded the hard work and dedication of the FBI investigators, the U.S. Bankruptcy Court and Trustees, and the U. S. Attorney’s Office in unraveling this intricately woven scheme of fraud and deception. He also commended the title insurance company for bringing this matter to the attention of the FBI and assisting throughout the investigation.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Jay Golden..If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Our nation-wide commitment to reducing gun crime in America.
Belcourt Man Sentenced for MurderRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on March 20, 2014, Daniel Greatwalker Jr., 24, Belcourt, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of second degree murder and a charge of altering, destroying, or concealing a tangible object in a federal investigation. Greatwalker pleaded guilty to the charges on Nov. 8, 2013.
Judge Hovland sentenced Greatwalker to 40 years in federal prison, to be followed by five years of supervised release. Greatwalker was ordered to pay a $200 special assessment to the Crime Victim’s Fund and $6060 in restitution.
On Nov. 27, 2012, Greatwalker used a knife to stab a victim multiple times over his entire body, causing his death. Greatwalker then disposed of the knife, washed his clothes, and burned his shoes to conceal his involvement in the death.
The case was investigated by the Bureau of Indian Affairs – Turtle Mountain Agency and the Federal Bureau of Investigation.
Assistant U.S. Attorney Brandi Sasse Russell prosecuted the case.
Bakersfield Man Indicted for Counterfeiting U.S. CurrencyRead the Press Release
FRESNO, Calif. — Alfonso Castellon, 40, of Bakersfield, was indicted today on charges of counterfeiting U.S. currency and possessing images for counterfeiting purposes, United States Attorney Benjamin B. Wagner announced.
According to the court documents, from January 2011 to March 2014, Castellon counterfeited Federal Reserve Notes in $100 and other denominations. In March 2014, a search of his residence revealed sample images of $100 bills and computer equipment, printers, and ink associated with counterfeiting, along with a flash drive containing images of $100 bills.
This case is the product of an investigation by the United States Secret Service, the Kern County Sheriff’s Office, and the Bakersfield Police Department. Assistant United States Attorney Michael G. Tierney is prosecuting the case.
If Castellon is convicted, he faces a maximum statutory penalty of 20 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 sentencing 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.
Ava Woman Sentenced for Embezzling $212,000 from Employer in Wire Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Ava, Mo., woman was sentenced in federal court today for embezzling $212,100 from her employer.
Peggy J. Duncan, 63, of Ava, was sentenced by U.S. District Judge Gary A. Fenner to three years and two months in federal prison without parole. The court also ordered Duncan to pay $212,100 in restitution to her victims.
Duncan was the account manager for the law firm of Carmichael & Neal, P.C. In addition to her other duties, Duncan handled the accounts payable and reconciled bank accounts for multiple corporations operated by Lloyd and Rose Carmichael, including Affordable Homes Development, LLC. During her employment, Duncan and her husband jointly owned Twin Oaks Mill, Inc., a sawmill located in Ava.
On Aug. 29, 2013, Duncan pleaded guilty to two counts of wire fraud. Duncan admitted that she prepared 47 checks totaling $212,100 drawn on the Affordable Homes bank account from September 2006 to February 2009. Each of these checks was made payable to herself or to Twin Oaks Mill. Duncan forged her employer’s name to the checks without his knowledge or permission and deposited the checks into her own bank accounts. Duncan converted these funds to her and her husband’s personal use.
Duncan then entered false information into the Affordable Homes Reconciliation Detail Report which she presented to Lloyd Carmichael each month. The false information entered by Duncan made it appear that each check was written to other parties and was written for an otherwise authorized and legitimate purpose.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Secret Service and the Springfield, Mo., Police Department.
Apache Resident Pleads Guilty to Tribal EmbezzlementRead the Press Release
Second to Plead Guilty for Embezzlement Scheme from Apache Tribe Casinos
Oklahoma City, Oklahoma – ANTONIO CARATTINI, 61, of Apache, Oklahoma, pled guilty yesterday to embezzlement from the Apache Tribe of Oklahoma, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In a related case, JOHN PANGBURN, 60, of Tulsa, Oklahoma, pled guilty in September of 2013 to conspiracy to embezzle funds from the Apache Tribe of Oklahoma.
From July 2010 through July 2011, Pangburn was the general manager of the Apache Tribe’s Silver Buffalo Casino in Anadarko. According to the Indictment filed against Carattini, in the fall of 2010, Pangburn "hired" Carattini – without the approval of the tribe – as a tribal consultant to help with building a new casino in Apache. The Indictment alleged that Pangburn signed and directed checks for more than $90,000 in tribal casino funds to Carattini, though Carattini did little if any work for the tribe. The Indictment also alleged that on several occasions, Carattini cashed those tribal checks to him and returned approximately $1,000 in cash to Pangburn.
At yesterday’s plea hearing, Carattini pled guilty to one count of tribal embezzlement. Carattini admitted that in July 2011, he received and benefitted from a $3,500 tribal check to him signed by Pangburn, though Carattini had not done any tribal work in exchange for the check. In September 2013, Pangburn pled guilty to a conspiracy with Carattini to embezzle funds from the Apache Tribe.
At sentencing, Carattini and Pangburn each face up to five years in prison, three years of supervised release, and a fine of $250,000. In separate plea agreements, each defendant agreed to pay restitution to the Apache Tribe for the amount of embezzled funds, which will be determined by the Court at sentencing. A sentencing hearing for Carattini will be set by the Court in approximately 90 days. Sentencing for Pangburn is scheduled for April 28, 2014.
These charges are the result of an investigation conducted by the Federal Bureau of Investigation, and the cases are being prosecuted by Assistant U.S. Attorney Chris M. Stephens.
Albuquerque Man Sentenced to Fifteen Years in Federal Prison for Being an Armed Career Criminal and Trafficking HeroinRead the Press Release
ALBUQUERQUE – Arthur Sanchez, 36, of Albuquerque, N.M., was sentenced this afternoon to 15 years in federal prison followed by three years of supervised release for his heroin trafficking conviction and for being a felon in possession of a firearm and ammunition. Sanchez received an enhanced sentence because of his status as an armed career criminal.
The sentence was announced by Acting U.S. Attorney Steven C. Yarbrough, 2nd Judicial District Attorney Kari E. Brandenburg, Special Agent in Charge Bernard J. Zapor of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives, and Chief Gorden E. Eden, Jr., of the Albuquerque Police Department.
Sanchez was arrested on state charges on March 30, 2011, after officers of the Albuquerque Police Department observed Sanchez throw an object out of his vehicle’s window when they pulled him over for a traffic violation. The object was a package containing approximately 22 grams of heroin. The officers subsequently recovered a pistol with a loaded magazine from Sanchez’s vehicle.
In March 2013, Sanchez was indicted federally and charged with possession of heroin with intent to distribute and being a felon in possession of a firearm and ammunition based on the conduct occurring on March 30, 2011. At the time, Sanchez was prohibited from possessing firearms or ammunition because he previously had been convicted of the following felony offenses: aggravated assault and auto burglary; robbery; and aggravated robbery with a firearm. The related state charges were dismissed after Sanchez was transferred to federal custody in April 2013.
On Dec. 17, 2013, Sanchez entered a guilty plea to both counts of the indictment. Sanchez admitted intentionally possessing heroin on March 30, 2011, with the intention of distributing it. He also admitted possessing a loaded pistol on that day.
Sanchez was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office, and was prosecuted by Assistant U.S. Attorney Paul Mysliwiec.
Wednesday 19 March 2014
Webb County Commissioner Charged with Accepting Bribes in Exchange for Official ActsRead the Press Release
Kristopher Michael Montemayor, a county commissioner for Precinct 1 of the Webb County Commissioners Court in Texas, was arrested today on charges of bribery, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
A federal grand jury in the Southern District of Texas returned an indictment on March 18, 2014, that charges Montemayor, 36, of Laredo, Texas, with two counts of federal programs bribery. The indictment was unsealed following today’s arrest.
According to allegations in the indictment, while serving as a county commissioner, Montemayor solicited and accepted bribes in exchange for promising to perform various official acts. Montemayor allegedly accepted the use of a 2012 Ford truck, which cost approximately $37,015, in exchange for promising to provide government jobs to both the vehicle’s owner and his spouse.
The indictment further alleges that Montemayor, while serving as a county commissioner, solicited and accepted approximately $11,000 in cash as well as electronics equipment worth approximately $2,700 from a businessman who, unbeknownst to Montemayor, was an undercover law enforcement agent. The indictment alleges that Montemayor promised to take official action to promote the business interests of the undercover agent in exchange for cash and electronics.
If convicted, Montemayor faces a maximum potential penalty of 10 years in prison for each bribery charge. Each charge also carries a maximum $250,000 fine.
The case is being investigated by the FBI’s Laredo Resident Agency. The case is being prosecuted by Trial Attorneys Emily Rae Woods and Mark Cipolletti of the Criminal Division’s Public Integrity Section.
The charges and allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until he is proven guilty.Two KC Men Indicted for Armed Bank RobberyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that two Kansas City, Mo., men were indicted by a federal grand jury today for the armed robbery of Commerce Bank.
Kortlin D. Hughes, 21, and Samuel A. Washington, 22, both of Kansas City, were charged in a two-count indictment returned by a federal grand jury in Kansas City, Mo.
Today’s indictment alleges that Hughes and Washington used firearms to rob Commerce Bank, 8901 State Line Rd., Kansas City, Mo., on Nov. 15, 2012. The indictment also charges Hughes and Washington with one count of brandishing firearms during a crime of violence.
According to an affidavit filed in support of the original criminal complaint, Hughes and Washington both carried handguns when they entered the bank at approximately 9:30 a.m. One of the men jumped over the teller counter and took money from one of the teller drawers. At one point, the affidavit says, he pointed a gun at a customer and in the face of a bank employee. He also allegedly put a gun up to a teller’s neck and said, “Do you want to die? Where’s the money?” He jumped back over the counter, met the second robber who had stayed in the lobby, and both robbers left the bank. The bank reported a loss of $6,922.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Christina Y. Tabor. It was investigated by the FBI and the Kansas City, Mo., Police Department.Two Individuals Charged in Manhattan Federal Court with Murder During Home Invasion Robbery of Pizza Shop OwnerRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of charges against ANTOINE BURROUGHS and LEON WHITFIELD. WHITFIELD was arrested and presented yesterday in Manhattan federal court before U.S. Magistrate Judge Frank Maas, and ordered detained. BURROUGHS is still at large.
Manhattan U.S. Attorney Preet Bharara said: “Antoine Burroughs and Leon Whitfield allegedly targeted and robbed a Queens pizza owner, and then brutally murdered his son as he tried to protect his father. This Office and our law enforcement partners stand fully committed to eradicating this type of violence from our neighborhoods.”
FBI Assistant Director-in-Charge George Venizelos said: “As alleged, Burroughs and Whitfield had no regard for life, especially the life of Gerardo Antoniello. They illegally entered Antoniello’s father’s home with the intention of robbing him of any cash on hand from Antoniello’s pizza shop. The FBI stands with our law enforcement partners to announce these charges and to reiterate that this case will not be done until all those involved face justice.”
According to the allegations in the Superseding Indictment unsealed yesterday in Manhattan federal court and on other documents in the public record:
On September 9, 2009, BURROUGHS and WHITFIELD attempted to rob an individual named Bartolomeo Antoniello at his home in Queens, New York. BURROUGHS and WHITFIELD were targeting the cash proceeds of Antoniello’s pizza shop. Antoniello’s son, Gerardo Antoniello, was home at the time, and attempted to protect his father. During the struggle, Gerardo Antoniello was shot in the head and died later of his injuries. He was 29 years old.
BURROUGHS, 25, and WHITFIELD, 23, both of New York, New York, are each charged with one count of robbery conspiracy and one count of attempted robbery, which each carry a maximum sentence of 20 years in prison; one count of discharging a firearm, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison; and one count of murder, which carries a maximum sentence of life in prison or death. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. This case has been assigned to U.S. District Judge Gregory H. Woods.
Mr. Bharara praised the investigative work of the FBI, the New York City Police Department, and the Queens District Attorney’s Office, and stated that the investigation is ongoing.
The case is being prosecuted by the Organized Crime Unit. Assistant United States Attorneys Peter Skinner and Rachel Maimin are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Antione Burroughs and Leon Whitfield S1 Indictment
Tonawanda Coke and Manager Sentenced for Violating the Clean Air Act and Resource Conservation and Recovery ActRead the Press Release
Tonawanda Coke Corporation was sentenced in federal court in Buffalo, N.Y., Wednesday to pay a $12.5 million penalty and $12.2 million in community service payments for criminal violations of the Clean Air Act (CAA) and the Resource Conservation and Recovery Act (RCRA), the Justice Department and the U.S. Environmental Protection Agency announced. Tonawanda was convicted by a federal jury in March 2013 on 11 counts of violating the CAA and three counts of violating the RCRA.
The fine is one of the largest fines ever levied in an air pollution case involving a federal criminal trial. The community service payment will go to fund an epidemiological study and an air and soil study to help determine the extent of health and environmental impacts of the coke facility on the Tonawanda community.
In addition, Tonawanda Coke Environmental Control Manager, Mark L. Kamholz, 66, of West Seneca, N.Y., who was convicted of 11 counts of violating the CAA, one count of obstruction of justice and three counts of violating the RCRA, was sentenced to one year in prison, 100 hours of community service, and a $20,000 fine.
“This sentence holds Tonawanda Coke Corporation and its environmental manager accountable for attempting to deceive federal and state environmental regulators while exposing the local community to toxic emissions,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The environmental regulations designed to protect our citizens also place trust in industry not to choose pollution over profit. Tonawanda Coke Corporation betrayed that trust. We hope the federal and state investigation, prosecution and sentencing of Tonawanda begins to bring justice to a community that has born too high a burden for having simply been the neighbor of Tonawanda Coke. They deserved a better neighbor.”
“Today’s sentencing holds Tonawanda Coke and its Environmental Control Manager accountable for one of the most egregious environmental pollution crimes in this area’s history,” said William J. Hochul Jr., U.S. Attorney for the Western District of New York. “As found by the jury, these defendants released hundreds of tons of poisonous, benzene-laden gas containing into the atmosphere, while also dumping additional hazardous waste out in the open. Such conduct is the equivalent to releasing known killers into the community. As expressed in citizen letters, this criminal conduct at a minimum caused substantial emotional and psychological harm, to say nothing of possible physical harm. The fact that remedial measures would have cost a small fraction of the company's multimillion dollar profits only adds to the seriousness of these crimes.”
“Today’s sentence is some measure of justice for the communities of Tonawanda that for too long have been overburdened by toxic air pollution,” said Cynthia Giles, Assistant Administrator of U.S. EPA’s Office of Enforcement and Compliance Assurance. “Environmental crimes have real victims, as the residents of these communities know well. When local companies break the law, EPA and its partners will step in to reduce dangerous air toxics and fight for those vulnerable to pollution.”
“The NYS Department of Environmental Conservation (DEC) has worked closely with the Department of Justice and Environmental Protection Agency to address serious environmental violations at Tonawanda Coke,” said DEC Commissioner Joe Martens. “This sentencing is an important step in redressing the environmental insults borne by the Tonawanda community based on Tonawanda Coke Corporation's gross disregard for federal and state environmental laws. DEC will continue to work on the civil enforcement action with our federal partners to further protect public health and the environment.”
According to evidence presented at trial, Tonawanda Coke released coke oven gas containing benzene into the air through an unreported pressure relief valve. In addition, a coke-quenching tower was operated without baffles, a pollution control device required by TCC’s Title V Clean Air Act permit designed to reduce the particulate matter that is released into the air during coke quenches.
In addition, prior to an inspection conducted by the U.S. Environmental Protection Agency in April of 2009, defendant Kamholz told another TCC employee to conceal the fact that the unreported pressure relief valve, during normal operations, emitted coke oven gas directly into the air, in violation of the TCC’s operating permit.
The defendants also stored, treated and disposed of hazardous waste without a permit to do so, in violation of the Resource Conservation and Recovery Act. These offenses related to TCC’s practice of mixing its coal tar sludge, a listed hazardous waste that is toxic for benzene, on the ground in violation of hazardous waste regulations.
The sentences are the culmination of an investigation on the part of the U.S. Environmental Protection Agency, Criminal Investigation Division, under the direction of Director Doug Parker, and Assistant Special Agent-In-Charge, Vernesa Jones-Allen and investigators of the New York State Department of Environmental Conservation Police, Bureau of Environmental Crimes Investigation, under the direction of Captain Frank Lauricella.
Assistant U.S. Attorney Aaron J. Mango of the Western District of New York and Senior Trial Attorney Rocky Piaggione of the Environmental Crimes Section in the Justice Department’s Environment and Natural Resources Division handled the prosecution.Tonawanda Coke and Manager Sentenced for Violating the Clean Air Act and Resource Conservation and Recovery ActRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul Jr. and Acting Assistant Attorney General Robert G. Dreher, of the Environment and Natural Resources Division of the U.S. Department of Justice, announced today that the Tonawanda Coke Corporation, which was convicted of 11 counts of violating the Clean Air Act and three counts of violating the Resource Conservation and Recovery Act by a federal jury in March 2013, was sentenced to pay a $12.5 million fine and five years probation by Chief U.S. District Judge William M. Skretny. Judge Skretny also ordered Tonawanda Coke to pay $12.2 million to fund two environmental studies to help determine the extent of health and environmental impacts Tonawanda Coke has had in the community.
The fine is one of the largest fines ever levied in an air pollution case involving a federal criminal trial.In addition, Tonawanda Coke Environmental Control Manager, Mark L. Kamholz, 66, of West Seneca, N.Y., who was convicted of 11 counts of violating the Clean Air Act, one count of obstruction of justice and three counts of violating the Resource Conservation and Recovery Act, was sentenced to 12 months in prison and a $20,000 fine.
“Today’s sentencing holds Tonawanda Coke and its Environmental Control Manager accountable for one of the most egregious environmental pollution crimes in this area's history,” said U.S. Attorney Hochul. “As found by the jury, these defendants released hundreds of tons of poisonous, benzene-laden gas containing into the atmosphere, while also dumping additional hazardous waste out in the open. Such conduct is the equivalent to releasing known killers into the community. As expressed in citizen letters, this criminal conduct at a minimum caused substantial emotional and psychological harm, to say nothing of possible physical harm. The fact that remedial measures would have cost a small fraction of the company's multi-million dollar profits only adds to the seriousness of these crimes.”“This sentence holds Tonawanda Coke Corporation and its environmental manager accountable for attempting to deceive federal and state environmental regulators while exposing the local community to toxic emissions,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The environmental regulations designed to protect our citizens also place trust in industry not to choose pollution over profit. Tonawanda Coke Corporation betrayed that trust. We hope the federal and state investigation, prosecution and sentencing of Tonawanda begins to bring justice to a community that has born too high a burden for having simply been the neighbor of Tonawanda Coke. They deserved a better neighbor.”
“People living and working in the Tonawanda community were exposed to toxic coke oven emissions that may have serious effects on their health and I commend the hard-working residents who have stood up to a major local polluter,” said Judith A. Enck, U.S. Environmental Protection Agency Regional Administrator. “This sentence is the culmination of years of investigative and legal work on the part of EPA and others to bring the Tonawanda community some environmental justice.”
"The NYS Department of Environmental Conservation (DEC) has worked closely with the Department of Justice and Environmental Protection Agency to address serious environmental violations at Tonawanda Coke," said DEC Commissioner Joe Martens. "This sentencing is an important step in redressing the environmental insults borne by the Tonawanda community based on Tonawanda Coke Corporation's gross disregard for federal and state environmental laws. DEC will continue to work on the civil enforcement action with our federal partners to further protect public health and the environment."
According to Assistant U.S. Attorney Aaron J. Mango and Senior Trial Attorney Rocky Piaggione, who handled the prosecution of the case, Tonawanda Coke released coke oven gas containing benzene into the air through an unreported pressure relief valve. In addition, a coke-quenching tower was operated without baffles, a pollution control device required by TCC’s Title V Clean Air Act permit designed to reduce the particulate matter that is released into the air during coke quenches.
The sentences are the culmination of an investigation on the part of the U.S. Environmental Protection Agency, Criminal Investigation Division, under the direction of director Doug Parker, and Assistant Special Agent-In-Charge, Vernesa Jones-Allen and investigators of the New York State Department of Environmental Conservation Police, Bureau of Environmental Crimes Investigation, under the direction of Captain Frank Lauricella.
As for further criminal conduct, prior to an inspection conducted by the U.S. Environmental Protection Agency in April of 2009, defendant Kamholz told another TCC employee to conceal the fact that the unreported pressure relief valve, during normal operations, emitted coke oven gas directly into the air, in violation of the TCC’s operating permit.
The defendants also stored, treated and disposed of hazardous waste without a permit to do so, in violation of the Resource Conservation and Recovery Act. AUSA Mango and Senior Trial Attorney Piaggione stated that these offenses related to TCC’s practice of mixing its coal tar sludge, a listed hazardous waste that is toxic for benzene, on the ground in violation of hazardous waste regulations.Teacher's Aide Sentenced to 50 Years’ Imprisonment for Producing and Distributing Child PornographyRead the Press Release
Earlier today, in federal court in Brooklyn, Taleek Brooks, a former teacher's aide at a public elementary school in Brooklyn, was sentenced to 50 years’ imprisonment following his conviction for the production and distribution of child pornography.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
“Today’s sentence stands as a strong warning to child predators, especially those who take advantage of the trust that the public and parents place in them to educate and protect our children, that we will not tolerate the victimization of our children,” stated United States Attorney Lynch. "The prevention of sexual exploitation remains a priority of this office and child predators are on notice that we will prosecute them to the fullest extent of the law." Ms. Lynch expressed her grateful appreciation to the Federal Bureau of Investigation.
Brooks, a former teacher’s aide at Public School 243, The Weeksville School, in Brooklyn, regularly downloaded and traded videos and images depicting child pornography over the Internet through GigaTribe, a peer-to-peer file sharing program. In December 2011, Brooks accepted a "friend" request from an undercover FBI special agent with the FBI’s Crimes Against Children Unit, which permitted the agent to observe and download several videos and images depicting child pornography that Brooks had designated for sharing with his GigaTribe "friends." During a subsequent search of the defendant’s Brooklyn residence, agents recovered computer equipment that contained nearly 2,000 videos and images depicting child pornography.
A FBI forensic examination of the equipment revealed that Brooks had produced child pornography. In a folder that Brooks had labeled "Special," investigators recovered videos of a young boy performing sexually explicit acts at Brooks' direction. Brooks can be seen and heard on the videos directing the child to masturbate, and on one of the videos the defendant himself is seen molesting the victim child. Investigators later confirmed that the young boy was a former student at Public School 243 and that Brooks produced the videos on at least seven different occasions between 2010 and 2011. All of the videos were produced in school classrooms.
The sentencing proceeding was held before United States District Judge Roslynn R. Mauskopf.
The government’s case was prosecuted by Assistant United States Attorney Robert T. Polemeni.
The Defendant:
TALEEK BROOKS
Brooklyn, New York
Age: 43
Task Force Puts Drug Trafficking Ring Out of BusinessRead the Press Release
TALLAHASSEE, FLORIDA – United States Attorney Pamela C. Marsh announced the culmination of Organized Crime Drug Enforcement Task Force Operation “King of the Trap.”
The operation targeted a drug trafficking organization that was responsible for distributing in excess of 100 kilograms of cocaine and 500 pounds of marijuana in the north central panhandle of Florida between 2008 and 2013. The investigation led to the arrest and prosecution of 43 federal defendants, whose sentences ranged from three years of probation to life imprisonment.
As a result of the operation, law enforcement personnel seized nine kilograms of cocaine, one kilogram of crack cocaine, three pounds of marijuana, and 220 grams of methamphetamine. In addition, the investigation resulted in the seizure of 14 firearms and assets valued in excess of $120,000.
U.S. Attorney Marsh praised the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the office of Homeland Security Investigations, the Florida Department of Law Enforcement, the Florida Highway Patrol, the Leon County Sheriff’s Office, the Taylor County Sheriff’s Office, the Tallahassee Police Department, and the Perry Police Department for their hard work, dedication, and expertise in the investigation that led to the successful prosecution of this case.
The case was prosecuted by Assistant United States Attorney Jason R. Coody.Sunnyvale Gang Leader and Career Offender Sentenced to Twelve Years in Prison for Methamphetamine Trafficking in Gang ChannelsRead the Press Release
SAN JOSE – Jose Miguel Aguilar (a/k/a “Lil Joe”) was sentenced today to twelve years in prison for methamphetamine trafficking, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
Aguilar was indicted on October 17, 2013, and pleaded guilty two months later, on December 18, 2013. He pleaded to one count of Possession with Intent to Distribute, and Distribution of, Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A)(viii).
Aguilar, one of the highest-ranking members of the Sunnyvale-based Norteño gang, “Varrio Via Sol,” or “VVS,” routinely sold ounce and greater quantities of methamphetamine. On a single day in 2013, while on probation for two separate state convictions, Aguilar convened five different methamphetamine buyers in a Sunnyvale residence to sell them methamphetamine. That day, Aguilar distributed a total of not less than 126 grams (approximately one quarter of a pound) of methamphetamine to the five buyers in exchange for more than $2,000. In his plea agreement, Aguilar conceded that under the United States Sentencing Guidelines, he is considered a “career offender” because of three violent felonies on his record, among many other prior convictions during the last two decades.
“Today’s sentence ends this defendant’s harmful activities and takes a notorious drug dealer and gang leader off the street for more than ten years,” said United States Attorney Melinda Haag. “This case demonstrates that the federal government will swiftly and aggressively prosecute gang members responsible for drug trafficking and other illegal activity in the Bay Area.”
The sentence was handed down by the Honorable Lucy H. Koh, United States District Court Judge. Judge Koh also sentenced Aguilar to a five-year period of supervised release to follow his term of imprisonment. Aguilar has been in federal custody since his arrest and will begin serving his sentence immediately.
Special Assistant United States Attorney Casey O’Neill and Assistant United States Attorney Stephen Meyer prosecuted the case with support from Susan Kreider, Tracey Andersen, and Nina Burney. The prosecution is the result of an investigation by the FBI’s Santa Clara County Violent Gang Task Force, which includes Task Force Officers from the Sunnyvale Police Department. Following the sentencing, United States Attorney Haag expressed her appreciation for the excellent work done by the FBI and Sunnyvale Police on this case and related matters.
(Aguilar indictment )
Stockton Woman Charged with ID Theft and Fraud OffensesRead the Press Release
SACRAMENTO, Calif. — Frances Marie Charles, 35, of Stockton, was arraigned today on seven counts of aggravated identity theft, mail fraud, access device fraud, and possession of 15 or more identification documents, United States Attorney Benjamin B. Wagner announced.
According to court documents, between June 2012 and December 2013, Charles participated in a scheme to obtain replacement American Express credit cards in the names and account numbers of others, and to use the credit cards to obtain cash, goods, and services at the expense of American Express, banks, and merchants. Charles placed calls to American Express and used identification and financial information of victims to cause the replacement cards to be sent to Stockton, after which the cards would be used to make fraudulent charges and purchases.
This case is the product of an investigation by the United States Secret Service. Assistant United States Attorney Christopher S. Hales is prosecuting the case. Charles is scheduled to appear before United States District Judge Troy L. Nunley on April 3, 2014, for a status conference.
If convicted, Charles faces maximum statutory penalties of 30 years in prison and a $1 million fine on each mail fraud count, 10 years in prison and a $250,000 fine for access device fraud, 15 years in prison and a $250,000 fine for possession of 15 or more identification documents, and not less than two years imprisonment for each aggravated identity theft count, consecutive to time on conviction for the underlying mail fraud counts. 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.
Steuben County Woman Pleads Guilty to Kidnapping Woman and 6-Month Old ChildRead the Press Release
Rochester, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Billie Jo Ribble, 36, of Bath, N.Y., pleaded guilty before U.S. District Judge David G. Larimer to kidnapping a mother and her six-month old child and transporting them from Pennsylvania to New York. The charges carry a mandatory minimum penalty of 20 years in prison, a maximum of life, a fine of $250,000 or both.
Assistant U.S. Attorney Brett A. Harvey, who is handling the case, stated that the defendant abducted a mother and her six month-old child in Pennsylvania on March 1, 2013. At that time, Ribble was wanted by the Steuben County Sheriff's Office on charges of Burglary in the First Degree and Grand Larceny in the Third Degree, in relation to a residential burglary that occurred in October 2012. On March 1, investigators from the Steuben County Sheriff's Office and Pennsylvania State Police located and arrested the defendant in Mansfield, Pennsylvania. After being remanded to the Tioga County Jail in Pennsylvania, Ribble, who is pregnant, was taken to the hospital in Wellsboro, Pennsylvania, for treatment in the maternity ward. While there, the defendant became violent, assaulted a Tioga County Corrections Officer who was assigned to guard her, and escaped the hospital by climbing out a window.
Later on March 1, a woman and her six month-old daughter were asleep in the basement bedroom of a residence in Wellsboro, Pennsylvania. At 11:30 p.m., the woman was awakened by Ribble, who was standing over her daughter's crib holding a large butcher's knife. While still holding the knife, the defendant picked up the child and threatened to kill the woman and her child, and herself, if the woman did not take Ribble where she wanted to go. Thereafter, the woman got into the driver's seat of her car and Ribble got into the front passenger seat, still holding the woman's daughter and the butcher's knife. At the direction of the defendant, the woman drove from Pennsylvania to an exit off Route 15 in Lindley, N.Y., where Ribble was dropped off. The woman then drove to a gas station in Pennsylvania and called the police.
After urgent investigation by the Steuben County Sheriff's Office and the New York State Police, Ribble was located at her boyfriend's residence in Corning, N.Y. Ribble initially barricaded herself in the attic, but eventually surrendered to authorities without incident.
Sentencing is scheduled for June 25, 2014, at 11:00 a.m. before Judge Larimer.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, the Steuben County Sheriff's Office, under the direction of Sheriff David Cole, the New York State Police, under the direction of Major Mark Koss, the Pennsylvania State Police, under the direction of Commissioner Frank Noonan, and the Wellsboro (Pennsylvania) Police Department, under the direction of Chief Jim Bodine.Stamford Man Sentenced to 50 Months in Prison for Stealing and Selling FirearmsRead the Press Release
Follow @USAO_CT
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MICHAEL LOTZ, 45, of Stamford, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 50 months of imprisonment, followed by three years of supervised release, for stealing and selling firearms.
According to court documents and statements made in court, on August 28, 2012, LOTZ and other individuals stole six firearms from a residence in Stamford. LOTZ was arrested the following day after he sold three of the stolen firearms to an individual working with law enforcement, and a fourth stolen firearm to an undercover officer.
LOTZ has been detained since his federal arrest on April 1, 2013. On October 3, 2013, he pleaded guilty to one count of possession of stolen firearms.
LOTZ’s criminal history includes multiple felony convictions for burglary and other offenses.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Stamford Police Department, with the assistance of the Darien Police Department. The case was prosecuted by Assistant U.S. Attorneys Rahul Kale and Vanessa Richards.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Spa Owner Indicted on Federal ChargesRead the Press Release
McALLEN, Texas - A McAllen federal grand jury has arrested Elva Navarro, 37, of Hidalgo, for Food and Drug Administration (FDA) violations in relation to the injection of unapproved substances, announced United States Attorney Kenneth Magidson.
The indictment was returned under seal yesterday and unsealed just moments ago following her arrest. She is expected to appear before U.S. Magistrate Judge Dorina Ramos tomorrow morning.
Specifically, Navarro is charged with receiving an adulterated device and misbranding a device.
The indictment alleges Navarro would administer injections of liquid silicone into individuals who would frequent her facility, Bella Face and Body Spa in McAllen. These injections were not approved by the FDA. According to the allegations, Navarro also falsely represented to her customers to whom she administered the liquid silicone injections that they were safe when in fact they were not.
If convicted of the federal charges, she faces up to three years in prison and a possible $10,000 fine.
The FBI, FDA-Office of Criminal Investigations, FDA-Forensic Chemistry Center and the Hidalgo County Sheriff's Office investigated the case. Assistant United States Attorney Kimberly Ann Leo is prosecuting.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.San Jose Street Gang Members Federally Indicted for Racketeering and MurderRead the Press Release
SAN FRANCISCO/SAN JOSE – A 41-count second superseding indictment against 27 members and associates of Sur Santos Pride, a San Jose-based criminal street gang, alleging a variety of charges, including a RICO conspiracy, violent crimes in aid of racketeering, including murder, several drug trafficking counts, and firearms related counts was unsealed today, announced United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson.
The defendants named in the Second Superseding Indictment are as follows:
- MIGUEL MIRANDA, a/k/a “Payaso,” 27
- GILBERTO VILLELA, a/k/a “Snowman,” 32
- JESSE AGUILAR, a/k/a “Munchies,” 31
- FRANCISCO FONSECA, a/k/a “Griffo,” 28
- JORGE CISNEROS, a/k/a “Sleepy,” 28
- DANIEL CORTEZ, a/k/a “Little Temper,” 21
- JOSE DAVID SANCHEZ, a/k/a “Joker,” 32
- MIGUEL VASQUEZ, a/k/a “Tweety,” 29
- JUAN CHAVEZ, a/k/a/ “Dukester,” 29
- MARCOS SALVADOR LOMELI, a/k/a “Cookie,” 27
- JESSE PARRA, a/k/a “Little Looney,” 31
- ANDY LAMB LOPEZ, a/k/a “Solo,” 36
- JOSE ANGEL MORENO, a/k/a “Lil Chocolate,” 30
- FERNANDO CRUZ, a/k/a “Nano,” 23
- ALFREDO MOLDONADO, a/k/a “Junior,” 35
- JESUS MANUEL ARMENDARIZ, a/k/a “Chumel,” 22
- FELIX HERNADEZ CRISTOBAL, a/k/a “Pato,” 22
- JORGE LUIS OLIVERA, a/k/a “Chivo,” 20
- MARIO GUERRERO, a/k/a “Lil Junior,” 22
- BENITO CANALES, a/k/a “Dopey,” 32
- RAFAEL MARISCAL CAMBEROS, a/k/a “Bad Boy,” 23
- ROBERTO MARTINEZ, a/k/a “Espantos,” 32
- JORGE RODRIGUEZ, a/k/a “Brownie,” 24
- OSCAR MARTINEZ DE LA CRUZ, a/k/a “Cuete,” 27
- RICARDO MONTOYA, a/k/a “Necio,” 23
- MARIO CARDENAS, a/k/a “Trusty,” 20
- DENIS SANDOVAL, a/k/a “Criminal,” 26
The RICO conspiracy count and the violent crimes in aid of racketeering counts arise from the defendants’ participation as members and associates in the racketeering enterprise known as Sur Santos Pride (“SSP”). According to the Second Superseding Indictment, SSP constitutes a racketeering enterprise and its members and associates agreed to conduct the affairs of the enterprise through, among other crimes, murder, attempted murder, assault, robbery, narcotics trafficking, obstruction of justice, and tampering with witnesses.
Two defendants, including Roberto Martinez, are also charged with one count of murder in aid of racketeering committed on October 23, 2011. The defendants charged in the RICO Conspiracy face up to life in prison. Roberto Martinez is subject to a sentence of life imprisonment or possibly the death penalty.
The Second Superseding Indictment also includes a number of drug trafficking and firearms offenses committed between August 2010 and January 30, 2014. Many of these defendants on the drug trafficking charges face a maximum of life imprisonment and a mandatory minimum of 10 years in prison.
Any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, in accordance with 18 U.S.C. § 3553(a). In addition, although Roberto Martinez is eligible for the death penalty, the decision whether to seek the death penalty against him is pending. Please note, an indictment contains only allegations against a person and, as with all defendants, those charged in this case must be presumed innocent unless and until proven guilty.
This Indictment is the result of a long term investigation the by the Federal Bureau of Investigation Santa Clara County Violent Crime Task Force, with the assistance of the following agencies: San Jose Police Department, Milpitas Police Department, Morgan Hill Police Department, Mountain View Police Department, Sunnyvale Public Safety Service, Santa Clara Police Department, Santa Clara County Sheriff’s Office, Santa Clara County Probation, California Department of Corrections and Rehabilitation, and the Department of Homeland Security.
Cynthia Frey, Stephen Meyer, and Amie Rooney are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Kurt Kosek, Ponly Tu, and Tracey Andersen.
(Sur Santos Pride second superseding indictment )
Rochester Woman is Sentenced in Case Involving False Tax ReturnsRead the Press Release
ROCHESTER, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Michelle Torres, 38, of Rochester, N.Y., who was convicted of conspiracy to defraud the United States, was sentenced to five years probation and ordered to pay restitution in the amount of $1,644,202.96 to the Internal Revenue Service by U.S. District Judge David G. Larimer.
Assistant U.S. Attorney Tiffany H. Lee, who handled the case, stated that Torres engaged in a scheme with others that involved the filing of federal tax refund claims. Claims were filed using stolen identities and refund checks were issued to various addresses in Rochester. The defendant retrieved the checks and then sent them to co-conspirators in New York City in exchange for a fee. The conspiracy resulted in over $1.6 million in fraudulent tax refunds being issued by the Internal Revenue Service.
“This case shows the public the wide harm that identity fraud can bring,” said U.S. Attorney Hochul. “Here, not only were people’s identities stolen, taxpayers were victimized to the extent of over 1.6 million dollars. For information on protecting your identity, please visit www.stopfraud.gov.”
The plea was the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation and Special Agents of the Internal Revenue Service, Criminal Investigations, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.Rochester Man Pleads Guilty in Sex Trafficking CaseRead the Press Release
ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr., announced today that Daniel Tanck, 32, of Rochester, N.Y., pleaded guilty before U.S. District Judge Frank P. Geraci, Jr., to sex trafficking of a minor. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life, and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that Tanck placed an ad on Backpage.com for a minor female victim to engage in prostitution activities. The defendant took pictures of the victim for the Backpage.com ad at his residence on Emerson Street in Rochester. Tanck also transported the victim for outcalls to service customers.
Tanck was arrested along with Robert Palermo. Charges are pending against Palermo. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the culmination of an investigation on the part of the FBI's Cyber Crimes Task Force, which includes the Monroe County Sheriff's Office, under the direction of Sheriff Patrick O'Flynn, the Rochester Police Department under the direction of Chief Michael Ciminelli, and Special Agents of the Federal Bureau of Investigation, and the Monroe County District Attorney's Office, under the direction of Sandra Doorley.
Sentencing is scheduled for June 18, 2014 at 3:00 p.m. before Judge Geraci.Rochester Attorney Sentenced for Filing False Tax ReturnsRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Salvatore J. Marcera, Jr., 53, of Rochester, N.Y., who was convicted of filing a false income tax return, was sentenced to five years probation, including one year of home confinement, by U.S. District Judge Frank P. Geraci, Jr. The defendant was also ordered to pay restitution to the Internal Revenue Service in the amount of $104,074.
Assistant U.S. Attorney Frank H. Sherman, who handled the case, stated that for tax years 2004 through 2007, the defendant, a sole practitioner attorney in Rochester, understated the gross receipts of his law practice on the Schedule C of each return. The total of the unreported gross receipts for the four tax years as shown by the government's proffered evidence was approximately $356,353. The government offered evidence that, if the true gross receipts had been reported by defendant for each of the years in question, the total for the four years of additional tax due and owing would be $104,074.
The sentence is the culmination of an investigation on the part of 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.Pawtucket Accountant Pleads Guilty to Conspiracy to Traffic Contraband Cigarettes and Conspiracy to Commit Food Stamp FraudRead the Press Release
PROVIDENCE, R.I. – Bassam Kiriaki, 46, an accountant with offices located in Pawtucket, R.I., pleaded guilty in U.S. District Court in Providence on Monday to participating in a conspiracy which trafficked $1.2 million dollars in contraband cigarettes into Rhode Island from Virginia and to participating in a conspiracy to defraud the food stamp program, announced United States Attorney Peter F. Neronha.
Kiriaki and six other individuals were indicted by a federal grand jury in May 2013, charged with allegedly participating in a complex conspiracy to import cigarettes from Virginia into Rhode Island that were sold in convenience stores and other locations allegedly owned or operated by members of the conspiracy and others. The conspiracy allegedly resulted in the loss of more than $1 million dollars in Rhode Island state tax revenue.
The indictment also alleges that Kiriaki and others participated in various schemes and conspiracies to defraud other types of programs, including Social Security and the food stamp program.
At the time of his guilty plea, Bassam Kiriaki admitted to the court that he made false representations to law enforcement and created a false tax document in order to conceal the conspiracy. According to court records, on March 30, 2013, the Virginia State Police stopped an alleged co-conspirator and seized $30,000 in cash from his vehicle. After the stop and seizure, the FBI intercepted calls made by Kiriaki during which he agreed to call Virginia State Police and to tell them that the money was to buy merchandise for a “new” store in Virginia, Bad Boys Tobacco Stop, Inc. In other phone calls Kiriaki discussed how he would create or backdate documents, including an IRS form, to substantiate the false claim to the Virginia State Police. The tax form was then faxed to Virginia State Police.
In addition, at the time of his guilty plea, Kiriaki admitted to the court that he participated in a conspiracy and that he filed fraudulent documents with the United States Department of Agriculture Food and Nutrition Service so that a convenience store owned by a co-conspirator could maintain participation in the Supplemental Nutrition Assistance Program (SNAP) as an approved vendor, even though the store had been previously disqualified. The documents intentionally misrepresented the true owners of the business.
Bassam, who pleaded guilty to one count each of conspiracy to traffic contraband cigarettes and conspiracy to commit food stamp fraud, is scheduled to be sentenced on June 6, 2014, by U.S. District Court Chief Judge William E. Smith. Each charge is punishable by statutory penalties of up to 5 years in federal prison followed by up to 3 years supervised release and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorneys William J. Ferland and Ly T. Chin.
The investigation was conducted by the United States Attorney’s Office, Rhode Island State Police, FBI, Internal Revenue Service Criminal Investigation, Homeland Security Investigations, Social Security Administration - Office of the Inspector General/Office of Investigations and the U.S. Department of Agriculture Office of Inspector General.
###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Owner of Fort Myers Grocery Store Indicted for Conspiring to Steal Government FundsRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces the return by a grand jury of an indictment charging Ramon Almengo (47, Fort Myers) with conspiracy to commit theft of government funds. If convicted, he faces a maximum penalty of 5 years in federal prison. The Indictment also notifies Almengo that the United States is seeking a money judgment in the amount of $2,053,328.28, the proceeds of offense. An arraignment is scheduled for March 27, 2014 at 1:30 p.m., before U.S. Magistrate Judge Douglas N. Frazier.
Almengo was previously charged by a criminal complaint on March 11, 2014.
According to court documents, Almengo owned and operated Mi Bodegon Latino y Mas, Inc, in Fort Myers, Florida. Almengo allegedly cashed approximately $2,053,328.28 worth of United States Treasury tax refund checks that were generated as a result of fraudulently filed tax returns with the Internal Revenue Service, utilizing stolen personal identification information. Almengo retained 20% of each check that he cashed on behalf of the conspirators.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service - Criminal Investigation, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It will be prosecuted by Assistant United States Attorney David G. Lazarus.
North America’s Largest Acid Manufacturer and Its Subsidiaries Agree to Slash Emissions and Reduce Air PollutionRead the Press Release
LSB Industries Inc. (LSB), the largest merchant manufacturer of concentrated nitric acid in North America, and four of its subsidiaries have agreed to reduce harmful emissions of nitrogen oxides (NOx) by meeting emission limits that are among the lowest for the industry in the nation at plants in Alabama, Arkansas, Oklahoma and Texas, the U.S. Environmental Protection Agency (EPA) and Department of Justice announced today.
EPA estimates that the measures required by today’s settlement will reduce NOx emissions by more than 800 tons per year, directly benefitting surrounding communities, which include low-income and minority populations living near the Arkansas and Texas plants. The companies estimate that it will cost between $6.3 and $11.7 million to implement the measures required by the settlement.
“With today’s settlement, LSB and its subsidiaries are further improving the nitric acid manufacturing process and reducing harmful air pollution across four states,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “In response to the Clean Air Act and state law claims, the companies have taken a constructive and cooperative approach by agreeing to implement global operational changes and mitigate past emissions. These actions raise the bar for compliance in this industry sector.”
“This case is about cleaner air for people living in communities near manufacturing plants,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. “LSB Industries has committed to dramatic cuts in air pollution and ensuring they are in compliance with the law. We expect others in the industry to recognize the imperative to adopt reforms and reduce pollution in communities where they operate.”
LSB and its four nitric acid producing subsidiaries will also pay a total penalty of $725,000 to resolve alleged violations of the Clean Air Act and applicable Oklahoma state law. In addition to paying the penalty, the companies must continuously monitor emissions and make any necessary operational improvements such as installing new pollution controls or upgrading current controls to meet the new NOx limits.
The settlement applies to the 10 nitric acid manufacturing plants owned or operated by the following Oklahoma City-based LSB subsidiaries: El Dorado Chemical Co., in El Dorado, Ark. (four plants); Cherokee Nitrogen Co. in Cherokee, Ala. (two plants); El Dorado Nitrogen Co. in Pryor, Okla. (three plants); and El Dorado Nitrogen Co. in Baytown, Texas (one plant). The complaint, filed concurrently with the settlement, alleges that the Cherokee, El Dorado and Pryor subsidiaries constructed or made modifications to their plants that resulted in increased emissions of NOx without first obtaining pre-construction permits and installing pollution controls. The complaint does not allege any violations regarding the Texas facility.
Today’s action is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including acid manufacturing facilities. High concentrations of NOx in the air can irritate the lungs and lower resistance to respiratory infections such as influenza. Continued or frequent exposure may cause increased incidence of acute respiratory illness in children. Further, airborne NOx can significantly contribute to acid rain and lead to the formation of smog.
The companies have also agreed to spend $150,000 to remediate and reforest ten acres of land with acidified soils located near El Dorado, Ark. NOx emissions, such as those from nitric acid plants, can contribute to soil acidification. The project will help to minimize erosion, reduce stormwater runoff, improve habitat for wildlife and capture carbon dioxide, a greenhouse gas.
The states of Oklahoma and Alabama are co-plaintiffs in today’s settlement and will receive a portion of the total penalty as follows: $206,250 will be paid to the Oklahoma Department of Environmental Quality and $156,250 will be paid to the Alabama Department of Environmental Management.
LSB, headquartered in Oklahoma City, Okla., is a major producer of nitrogen-based fertilizers, including anhydrous ammonia, urea and ammonium nitrate. The company owns and operates the largest fleet of concentrated nitric acid rail cars in the United States. LSB and its subsidiaries produce nitric acid for use in products that include herbicides, metal treatment, explosives and pharmaceuticals.
The consent decree, lodged in U.D. District Court for the Western District of Oklahoma, is subject to a 30-day public comment period and court approval. The consent decree is available for viewing at www.justice.gov/enrd/Consent_Decrees.html .
# # #
Newark, N.J., Man Sentenced to 114 Months in Prison for His Role in Armed Robbery and Shooting of Retired Police OfficerRead the Press Release
TRENTON, N.J. — A Newark, N.J., man was sentenced today to 114 months in prison for his role in an armed robbery and shooting of a retired police officer working as an armed money courier, U.S. Attorney Paul J. Fishman announced.
Theodore Lada, 40, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to commit Hobbs Act robbery and Hobbs Act robbery. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
On May 19, 2011, Lada and James Sodano, 70, of West Orange, N.J., confronted a retired police officer working as an armed money courier for a check cashing service as he was delivering a bag containing $400,000 to a Newark bar. As he exited his car, Lada approached him and the two men exchanged gunfire. The courier fell to his knees and Lada fled.
Sodano approached the courier from behind, shooting him in the jaw. As the victim fell, he fired a shot, hitting Sodano in the leg. Sodano shot him again, hitting the victim in the arm. Sodano then pulled the bag of money from beneath the victim as he was lying face down on the ground. Sodano drove off in his car, but crashed three and a half blocks away. When police arrived, they found Sodano, wearing a bulletproof vest and a pair of gloves, slipping in and out of consciousness, still holding on to the steering wheel. Police found a pool of blood, several weapons, ammunition and the bag containing the $400,000 inside the car. Lada was apprehended nine months later after DNA evidence connected him to the crime scene.
In addition to the prison term, Judge Sheridan sentenced Lada to three years of supervised release and ordered him to pay $375,551.56 in restitution to the victim.
Following a two-and-a-half week trial, a jury convicted Sodano on April 2, 2013, on all three counts charged in the indictment: conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and possessing, carrying and using a firearm, which was discharged in connection with the robbery. Sodano was sentenced to a total of 468 months in prison and five years of supervised release. He was also ordered to pay $375,551.56 in restitution to the victim.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s sentence. He also thanked the Essex County Prosecutor’s Office and the Newark Police Department, for their roles in the case.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
14-096
Defense counsel: Olubukola O. Adetula Esq., Irvington, N.J.
New York Based Alien Smuggler and Associate Sentenced for Operating an Illegal Alien Smuggling Business in ArizonaRead the Press Release
PHOENIX– On March 17, 2014, Joel Mazariegos-Soto, 29, and Walfre David Perez-Jovel, 34, both from Guatemala, were sentenced by U.S. District Judge Susan R. Bolton after they pleaded guilty on Dec. 17, 2013, to conspiracy to commit money laundering and conspiracy to transport and harbor illegal aliens. Mazariegos-Soto was sentenced to 60 months in federal custody and Perez-Jovel was sentenced to 46 months in federal custody for their roles in laundering the proceeds of alien smuggling and harboring and transporting illegal aliens.
Joel Mazariegos-Soto, a leader of this alien smuggling organization, operated the illegal business from the assumed anonymity of Fonda, N.Y., where he also worked on a dairy farm. During just four months of this investigation, Mazariegos-Soto laundered more than $70,000. Mazariegos-Soto laundered the money by moving it through an illegal “funnel” account, requiring families of illegal aliens here in the United States to make deposits into a bank account, which would be accessed by his alien smugglers working in the Phoenix area. Mazariegos-Soto and his associates utilized multiple stash houses in the Phoenix area, including one discovered by agents with Homeland Security Investigations (HSI) in October 2012 containing over 27 illegal aliens and another found in January 2013 with over 40 illegal aliens.
On April 18, 2013, HSI Albany, N.Y. agents arrested Mazariegos-Soto near his residence in Fonda, N.Y.
Walfre David Perez-Jovel operated a stash house here in Phoenix of behalf of this illegal alien smuggling organization. Under surveillance from HSI, agents witnessed Perez-Jovel launder more than $16,000 in alien smuggling proceeds. Perez-Jovel not only harbored illegal aliens but also coordinated the illegal transportation of undocumented persons throughout the United States in a manner that was reckless and dangerous, by overloading vehicles and loading people into the luggage compartments of vans, to be moved across the United States.
On June 11, 2013, HSI West Palm Beach, Fla. agents arrested Perez-Jovel near Lake Worth, Fla. after he fled from Mesa, Ariz. in January 2013 following an HSI interdiction of over 40 illegal aliens from the stash house he operated in Mesa.
The investigation in this case was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Phoenix, West Palm Beach, and HSI Albany. The prosecution was handled by Kristen Brook, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR13-898-PHX-SRB and CR13-955-PHX-SRB
RELEASE NUMBER: 2014-017_Mazaregios-Soto&Perez-JovelFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
New Orleans Man, Christopher M. Schwab, Pleads Guilty to Producing and Distributing Child PornographyRead the Press Release
CHRISTOPHER M. SCHWAB, age 24, a resident of New Orleans, Louisiana, pled guilty today to four counts of producing child pornography involving four different minor victims, one count of distributing child pornography and one count of receiving child pornography, announced U. S. Attorney Kenneth Allen Polite, Jr.
According to court documents, in August 2013, SCHWAB was arrested by special agents with the United States Department of Homeland Security, Homeland Security Investigations (“HSI”) after they determined that SCHWAB was responsible for sending images depicting the sexual exploitation of children. SCHWAB has been in custody since his arrest.
Production of child pornography carries a mandatory minimum sentence of fifteen years and a maximum sentence of thirty years. Distribution and receipt of child pornography carry a mandatory minimum sentence of five years and a maximum sentence of twenty years. Upon his release from incarceration, SCHWAB will have to register has a sex offender. Sentencing is scheduled for June 11, 2014 before United States District Judge Sarah Vance.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by Homeland Security Investigations. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.
(Download Factual Basis )
Needham Tax Assessor Sentenced for Felony Tax EvasionRead the Press Release
BOSTON – The elected Chairman of the Needham Tax Assessors Office was sentenced yesterday for felony tax evasion.
U.S. District Court Judge Richard G. Stearns sentenced Kevin Foley, 56, of Needham, to 18 months in prison, two years of supervised release and $115,500 in restitution to the IRS. In July 2013, Foley pleaded guilty to three counts of felony tax evasion.
Foley misappropriated approximately$492,000 in funds belonging to an elderly Needham resident and failed to file taxes reflecting not only the misappropriated funds, but also the income he legally earned from the Town of Needham for tax years 2007, 2008, and 2009.
United States Attorney Carmen M. Ortiz, William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, and Needham Police Chief Philip Droney, made the announcement. The case was prosecuted by Assistant U.S. Attorney Robert A. Fisher of Ortiz's Public Corruption and Special Prosecutions Unit.
Milwaukee Man Pleads guilty to Filing False Income Tax ClaimsRead the Press Release
United States Attorney James L. Santelle announced that Prince Rashada, age: 45, (a.k.a. Romello Sinclair), pled guilty today to filing a false claim for a federal income tax refund, in violation of Title 18, United States Code, Sections 287 and 2. At sentencing, Rashada faces a maximum of five years in prison and a fine up to $250,000.
In 2008, Rashada and another individual were charged by a federal grand jury in the Eastern District of Wisconsin with defrauding the United States by filing fraudulent returns. Rashada remained a fugitive after the indictment was returned. However, in late 2013, he was apprehended by the United States Marshals Service.
According to a written plea agreement in the case, between March 2005 and January 2007, Rashada and his co-defendant caused more than 100 false federal income tax returns to be filed with the Internal Revenue Service. Rashada defrauded the United States by recruiting others to file fraudulent federal income tax returns, claiming wages that were never earned. The fraudulent wages reported on the federal tax returns ranged from $11,000 to $16,000, with an average refund totaling $3,800. The defendant kept approximately $1,000 from each fraudulent income tax return he prepared and filed.
This matter was investigated by the Internal Revenue Service Criminal Investigation and is being prosecuted by Assistant United States Attorney Lisa Wesley.Memphis Truck Driver Pleads Guilty to Stealing Cargo in West PlainsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Memphis, Tenn., truck driver pleaded guilty in federal court today to his role in a cargo theft scheme that included a theft in West Plains, Mo.
Michael Lee Sherley, 49, of Memphis, pleaded guilty before U.S. Magistrate Judge David P. Rush to theft of an interstate shipment.
According to today’s plea agreement, Sherley was employed by Nu World Trucking, LLC, a Memphis company in the business of transporting goods in interstate commerce, from July 2012 until his arrest on May 12, 2013.
Sherley was part of a cargo theft ring that used the resources of Nu World Trucking to steal cargo in various states. They did so by “bob-tailing” (meaning they traveled in a road tractor truck, without a semi-trailer attached) through truck stops and service stations located on or near interstate highways, looking for semi-trailers that had been left parked and unattended, and were not coupled to road tractors. When they located a semi-trailer that appeared to be unattended, they would steal the semi-trailer and the goods it contained by coupling their road tractor truck to it and driving off. After having stolen a semi-trailer and its contents, they usually transported the stolen goods to the Chicago, Ill., and Detroit, Mich., areas to be “fenced” or sold.
The specific charge to which Sherley pleaded guilty today involves a theft that occurred on May 11, 2013, at the Snappy Mart Truck Stop in West Plains. Sherley and another person stole a 2000 Wabash trailer (valued at $7,500), which contained a load of Green Giant canned corn (valued at $73,008). The trailer, owned by Bryant Freight, LLC, was in transit from Minnesota to a food bank in Arkansas. Sherley admitted that they traveled through Missouri and Indiana with the stolen cargo before being apprehended in Michigan.
Under federal statutes, Sherley is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FBI’s Memphis Cargo Theft Task Force, the U.S. Marshal’s Service, the West Plains, Mo., Police Department and the Michigan State Highway Patrol.Massachusetts Man Sentenced to Almost 4 Years on Federal Firearm ChargeRead the Press Release
Contact: Jonathan R. Chapman
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Jamie
Figueroa, 22, of Lawrence, Massachusetts, was sentenced today in U.S. District Court by Judge
D. Brock Hornby to 46 months of imprisonment to be followed by three years of supervised
release for possession of a firearm by a felon. Figueroa pled guilty to the charge on November
26, 2013.According to court records, on September 2, 2013, Figueroa, a convicted felon since
2012, was arrested by Windham, Maine police officers. The police officers had responded to a
call regarding a residential disturbance and had obtained a description of the vehicle used by the
suspects. Officers located the vehicle, which had been reported stolen in New Hampshire,
stopped in the driveway of another residence in Windham. At gunpoint, officers ordered
Figueroa, who was the driver, out of the vehicle and removed a loaded revolver from his coat
pocket.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and
Explosives and the Windham, Maine Police Department.Marubeni Corporation Agrees to Plead Guilty <br /> to Foreign Bribery Charges and to Pay an $88 Million FineRead the Press Release
Marubeni Corporation, a Japanese trading company involved in the handling of products and provision of services in a broad range of sectors around the world, including power generation, entered a plea of guilty today for its participation in a scheme to pay bribes to high-ranking government officials in Indonesia to secure a lucrative power project.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney Michael J. Gustafson of the District of Connecticut and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
“Marubeni pleaded guilty to engaging in a seven-year scheme to pay – and conceal – bribes to a high-ranking member of Parliament and other foreign officials in Indonesia,” said Acting Assistant Attorney General Raman. “The company refused to play by the rules, then refused to cooperate with the government’s investigation. Now Marubeni faces the consequences for its crooked business practices in Indonesia .”
“For several years, the Marubeni Corporation worked in concert with a Connecticut company, among others, to bribe Indonesian officials in order to secure a contract to provide power-related services in Indonesia,” said Acting U.S. Attorney Michael J. Gustafson. “Today’s guilty plea by Marubeni Corporation is an important reminder to the business community of the significant consequences of participating in schemes to bribe government officials, whether at home or abroad.”
“Companies that wish to do business in the United States or with U.S. companies must adhere to U.S. law, and that means bribery is unacceptable,” said Assistant Director in Charge Parlave. “The FBI continues to work with our international law enforcement partners as demonstrated in this case to ensure that companies are held accountable for their criminal conduct. I want to thank the agents, analysts and prosecutors who brought this case to today’s conclusion.”
Marubeni entered a plea of guilty to an eight-count criminal information filed today in the U.S. District Court for the District of Connecticut, charging Marubeni with one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and seven counts of violating the FCPA. Marubeni admitted its criminal conduct and has agreed to pay a criminal fine of $88 million, subject to the district court’s approval. Sentencing has been scheduled for May 15, 2014.
As part of the plea agreement, Marubeni has agreed to maintain and implement an enhanced global anti-corruption compliance program and to cooperate with the department’s ongoing investigation. The plea agreement cites Marubeni’s decision not to cooperate with the department’s investigation when given the opportunity to do so, its lack of an effective compliance and ethics program at the time of the offense, its failure to properly remediate and the lack of its voluntary disclosure of the conduct as some of the factors considered by the department in reaching an appropriate resolution.
Frederic Pierucci, who was the vice president of global boiler sales at Marubeni’s consortium partner, pleaded guilty on July 29, 2013, to one count of conspiring to violate the FCPA and one count of violating the FCPA. David Rothschild, a former vice president of regional sales at the consortium partner, pleaded guilty on Nov. 2, 2012, to one count of conspiracy to violate the FCPA. Lawrence Hoskins, a former senior vice president for the Asia region for the consortium partner, and William Pomponi, a former vice president of regional sales at the consortium partner, were charged in a second superseding indictment on July 30, 2013. The charges against Hoskins and Pomponi are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
According to court filings, Marubeni and its employees, together with others, paid bribes to officials in Indonesia – including a high-ranking member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia – in exchange for assistance in securing a $118 million contract, known as the Tarahan project, for Marubeni and its consortium partner to provide power-related services for the citizens of Indonesia. To conceal the bribes, Marubeni and its consortium partner retained two consultants purportedly to provide legitimate consulting services on behalf of the power company and its subsidiaries in connection with the Tarahan project. The primary purpose for hiring the consultants, however, was to use the consultants to pay bribes to Indonesian officials.
As admitted in court documents, Marubeni and its co-conspirators retained the first consultant in the fall of 2002. However, in the fall of 2003, before the Tarahan contract had been awarded, Marubeni and its co-conspirators determined that the first consultant was not bribing key officials at PLN effectively. One e-mail between employees of the power company’s subsidiary in Indonesia described a meeting between Marubeni employees, employees of its consortium partner, and PLN officials during which the PLN officials expressed “concern” that if Marubeni and its consortium partner win the project, whether the agent would give the officials “rewards” that they would consider “satisfactory,” or “only give them pocket money and disappear. Nothing has been shown by the agent that the agent is willing to spend money.” Shortly thereafter, a Marubeni employee sent an e-mail to other employees at Marubeni and its consortium partner stating that “unfortunately our agent almost did not execute his function at all, so far. In case we don’t take immediate action now now [sic], we don’t have any chance to get this project forever.”
As a result, Marubeni and its consortium partner decided to reduce the first consultant’s commission from three percent of the total contract value to one percent, and pay the remaining two percent to a second consultant who could more effectively bribe officials at PLN. In an e-mail between two employees of Marubeni’s consortium partner, they discussed a meeting between Marubeni, an executive from the consortium partner, and the first consultant, stating that the first consultant “committed to convince [the member of Parliament] that ‘one’ [percent] is enough.”
Marubeni and its co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials. Marubeni and its co-conspirators paid hundreds of thousands of dollars into the first consultant’s bank account in Maryland to be used to bribe the member of Parliament. The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official.
This case is being investigated by FBI agents from the Washington Field Office, with assistance from the Resident Agency of the FBI in Meriden, Conn. Significant assistance was provided by the Criminal Division’s Office of International Affairs. In addition, the department greatly appreciates the significant cooperation provided by its law enforcement colleagues in Indonesia at the Komisi Pemberantasan Korupsi (Corruption Eradication Commission), the Office of the Attorney General in Switzerland and the Serious Fraud Office in the United Kingdom.
The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .Manhattan U.S. Attorney Announces Criminal Charge Against Toyota Motor Corporation and Deferred Prosecution Agreement with $1.2 Billion Financial PenaltyRead the Press Release
Independent Monitor to Be Appointed to Oversee Toyota’s Public Statements and Reporting of Safety Issues
Eric Holder, the Attorney General of the United States, Anthony Foxx, the United States Secretary of Transportation, Preet Bharara, the United States Attorney for the Southern District of New York, Calvin L. Scovel, III, Inspector General of the United States Department of Transportation (“DOT”), and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced a criminal wire fraud charge against Toyota Motor Corporation (“TOYOTA” or the “Company”), an automotive company headquartered in Toyota City, Japan, that designs, manufactures, assembles, and sells Toyota and Lexus brand vehicles. The charge is that TOYOTA defrauded consumers in the fall of 2009 and early 2010 by issuing misleading statements about safety issues in Toyota and Lexus vehicles.
Also today, Mr. Bharara announced a deferred prosecution agreement with TOYOTA (the “Agreement”) under which the Company admits that it misled U.S. consumers by concealing and making deceptive statements about two safety issues affecting its vehicles, each of which caused a type of unintended acceleration. The admissions are contained in a detailed Statement of Facts attached to the Agreement. The Agreement, which is subject to judicial review, requires TOYOTA to pay a $1.2 billion financial penalty – the largest penalty of its kind ever imposed on an automotive company, and imposes on TOYOTA an independent monitor to review and assess policies, practices and procedures relating to TOYOTA’s safety-related public statements and reporting obligations. TOYOTA agrees to pay the penalty under a Final Order of Forfeiture in a parallel civil action also filed today in the Southern District of New York.
The criminal charge is contained in an Information (the “Information”) alleging one
count of wire fraud. If TOYOTA abides by all of the terms of the Agreement, the Government will defer prosecution on the Information for three years and then seek to dismiss the charge.
Attorney General Eric Holder said: “Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to Members of Congress. When car owners get behind the wheel, they have a right to expect that their vehicle is safe. If any part of the automobile turns out to have safety issues, the car company has a duty to be upfront about them, to fix them quickly, and to immediately tell the truth about the problem and its scope. Toyota violated that basic compact. Other car companies should not repeat Toyota’s mistake: a recall may damage a company’s reputation, but deceiving your customers makes that damage far more lasting.”
Transportation Secretary Anthony Foxx said: “Safety is our top priority. Throughout this recall process, NHTSA investigators worked tirelessly to make sure that Toyota recalled vehicles with defects causing unintended acceleration, and to determine when they learned of it, and as we learned today, they succeeded in this effort in spite of extraordinary challenges. Today’s penalties follow NHTSA’s own record civil penalties of more than $66 million – together, they send a powerful message to all manufacturers to follow our recall requirements or they will face serious consequences.”
Manhattan U.S. Attorney Preet Bharara said: “Toyota stands charged with a criminal offense because it cared more about savings than safety and more about its own brand and bottom line than the truth. In its zeal to stanch bad publicity in 2009 and 2010, Toyota misled regulators, misled customers, and even misstated the facts to Congress. The tens of millions of drivers in America have an absolute right to expect that the companies manufacturing their cars are not lying about serious safety issues; are not slow-walking safety fixes; and are not playing games with their lives. Companies that make inherently dangerous products must be maximally transparent, not two-faced. That is why we have undertaken this landmark enforcement action. And the entire auto industry should take notice.”
DOT Inspector General Calvin L. Scovel, III, said: “To the families and friends of those who died or were injured as a result of these incidents, I offer my deepest sympathies for your loss and my highest admiration for the strength you demonstrate every day. As is true for Secretary Foxx and DOT, safety is and will remain the highest priority of my office. The OIG is committed to working with our law enforcement and prosecutorial partners in pursuing those who commit criminal violations of the Department of Transportation’s or related laws. The efforts of this dedicated multi-agency team and the agreement reached with Toyota must serve as a clarion call to all auto manufacturers of the need to always be as vigilant and forthcoming as possible to keep the public safe.”
FBI Assistant Director-in-Charge George Venizelos said: “Toyota put sales over safety and profit over principle. The disregard Toyota had for the safety of the public was outrageous. Not only did Toyota fail to recall cars with problem parts, they continued to manufacture new cars with the same parts they knew were deadly. When media reports arose of Toyota hiding defects, they emphatically denied what they knew was true, assuring consumers that their cars were safe and reliable. Today's announcement could have been prevented if Toyota had done the right thing, told the truth, and disclosed the rampant safety problems. Instead, they denied and doubled-down. More than speeding cars or a major fine, the ultimate tragedy has been the unwitting consumers who died behind the wheel of Toyota vehicles.”
According to the allegations in the Information, as well as other documents filed today in Manhattan federal court, including the Statement of Facts:
In the fall of 2009, TOYOTA deceived consumers and its U.S. regulator, the National Highway Traffic Safety Administration (“NHTSA”), by claiming that it had “addressed” the “root cause” of unintended acceleration in its vehicles through a limited safety recall of eight models for floor-mat entrapment, a dangerous condition in which an improperly secured or incompatible all-weather floor mat can “trap” a depressed gas pedal causing the car to accelerate to a high speed. Such public assurances deceived customers and NHTSA in two ways: First, at the time the statements were made, TOYOTA knew that it had not recalled some cars with design features that made them just as susceptible to floor-mat entrapment as some of the recalled cars. Second, only weeks before these statements were made, TOYOTA had taken steps to hide from NHTSA another type of unintended acceleration in its vehicles, separate and apart from floor-mat entrapment: a problem with accelerators getting stuck at partially depressed levels, known as “sticky pedal.”
Floor-Mat Entrapment: A Fatal Problem
TOYOTA issued its misleading statements, and undertook its acts of concealment, against the backdrop of intense public concern and scrutiny over the safety of its vehicles following a widely publicized August 28, 2009 accident in San Diego, California that killed a family of four. A Lexus dealer had improperly installed an incompatible all-weather floor mat into the Lexus ES350 in which the family was traveling, and that mat entrapped the accelerator at full throttle. A 911 emergency call made from the out-of-control vehicle, which was speeding at over 100 miles per hour, reported, “We’re in a Lexus . . . and we’re going north on 125 and our accelerator is stuck . . . there’s no brakes . . . we’re approaching the intersection . . . Hold on . . . hold on and pray . . . pray.” The call ended with the sound of the crash that killed everyone in the vehicle.
The San Diego accident was not the first time that TOYOTA had faced a problem with floor-mat entrapment. In 2007, following a series of reports alleging unintended acceleration in Toyota and Lexus vehicles, NHTSA opened a defect investigation into the Lexus ES350 model (the vehicle involved in the 2009 San Diego accident), and identified several other Toyota and Lexus models it believed might likewise be defective. TOYOTA, while denying to NHTSA the need to recall any of its vehicles, conducted an internal investigation in 2007 which revealed that certain Toyota and Lexus models, including most of the ones that NHTSA had identified as potentially problematic, had design features rendering entrapment of the gas pedal by an all-weather floor mat more likely. TOYOTA did not share these results with NHTSA. In the end, the Company negotiated a limited recall of 55,000 mats (no vehicles) – a result that TOYOTA employees touted internally as a major victory: “had the agency . . . pushed for recall of the throttle pedal assembly (for instance), we would be looking at upwards of $100 million + in unnecessary costs.”
Shortly after TOYOTA announced its 2007 mat recall, Company engineers revised internal design guidelines to provide for, among other things, a minimum clearance of 10 millimeters between a fully depressed gas pedal and the floor. But TOYOTA decided those revised guidelines would only apply where a model was receiving a “full model redesign” – something each Toyota and Lexus model underwent only about once every three to five years. As a result, even after the revised guidelines had been adopted internally, many new vehicles produced and sold by TOYOTA – including the Lexus ES350 involved in the 2009 San Diego accident – did not comply with TOYOTA’s 2007 guidelines.
After the fatal and highly publicized San Diego accident, TOYOTA agreed to recall eight of its models, including the ES350, for floor-mat entrapment susceptibility. Thereafter, as part of an effort to defend its brand image, TOYOTA began issuing public statements assuring customers that this limited recall had “addressed the root cause of unintended acceleration” in its U.S.-sold vehicles.
As TOYOTA knew from internal testing it had completed by the time these statements were made, the eight-model recall had not in fact “addressed the root cause” of even the floor-mat entrapment problem. Models not recalled – and therefore still on the road – bore design features rendering them just as susceptible to floor-mat entrapment as those within the recall population. One engineer working at a TOYOTA facility in California had concluded that the Corolla, a top-selling car that had not been recalled, was among the three “worse” vehicles for floor-mat entrapment. In October 2009, TOYOTA engineers in Japan circulated a chart showing that the Corolla had the lowest rating for floor-mat entrapment under their analysis. None of these findings or this data were shared with NHTSA at the time.
The Sticky Pedal Problem
What is more, at the same time it was assuring the public that the “root cause” of unintended acceleration had been “addressed” by the 2009 eight-model floor-mat entrapment recall, TOYOTA was hiding from NHTSA a second cause of unintended acceleration in its vehicles: the sticky pedal. Sticky pedal, a phenomenon affecting pedals manufactured by a U.S. company (“A-Pedal Company”) and installed in many Toyota brand vehicles in North America as well as Europe, resulted from the use of a plastic material inside the pedals that could cause the accelerator pedal to become mechanically stuck in a partially depressed position. The pedals incorporating this plastic were installed in, among other models, the Camry, the Matrix, the Corolla, and the Avalon sold in the United States.
The sticky pedal problem surfaced in Europe in 2008. There, reports reflected instances of “uncontrolled acceleration” and unintended acceleration to “maximum RPM,” and customer concern that the condition was “extremely dangerous.”
In early 2009, TOYOTA circulated to European Toyota distributors information about the sticky pedal problem and instructions for addressing the problem if it presented itself in a customer’s vehicle. These instructions identified the issue as “Sudden RPM increase/vehicle acceleration due to accelerator pedal sticking,” and stated that should a customer complain of pedal sticking, the pedal should be replaced with pedals manufactured by a company other than A-Pedal Company. Contemporaneous internal TOYOTA documents described the sticky pedal problem as a “defect” that was “[i]mportant in terms of safety because of the possibility of accidents.”
TOYOTA did not then inform its U.S. regulators of the sticky pedal problem or conduct a recall. Instead, beginning in the spring of 2009, TOYOTA quietly directed A-Pedal Company to change the pedals in new productions of affected models in Europe, and to plan for the same design changes to be rolled out in the United States (where the same problematic pedals were being used) beginning in the fall of 2009. The design change was to substitute the plastic used in the affected pedal models with another material and to change the length of the friction lever in the pedal.
Meanwhile, the sticky pedal problem was manifesting itself in U.S. vehicles. On or about the same day the San Diego floor-mat entrapment accident occurred, staff at a U.S. TOYOTA subsidiary in California sent a memorandum to staff at TOYOTA in Japan identifying as “critical” an “unintended acceleration” issue separate and apart from floor-mat entrapment that had been identified in an accelerator pedal of a Toyota Matrix vehicle in Arizona. The problem identified, and then reproduced during testing of the pedal on September 17, 2009, was the sticky pedal problem. Also in August, the sticky pedal problem cropped up in a U.S. Camry.
On September 9, 2009, an employee of a U.S. TOYOTA subsidiary who was concerned about the sticky pedal problem in the United States and believed that TOYOTA should address the problem prepared a “Market Impact Summary” listing (in addition to the August 2009 Matrix and Camry) 39 warranty cases that he believed involved potential manifestations of the sticky pedal problem. This document, which was circulated to TOYOTA engineers and, later, to staff in charge of recall decisions in Japan, designated the sticky pedal problem as priority level “A,” the highest level.
By no later than September 2009, TOYOTA recognized internally that the sticky pedal problem posed a risk of a type of unintended acceleration – or “overrun,” as Toyota sometimes called it – in many of its U.S. vehicles. A September 2009 presentation made by a manager at a U.S. TOYOTA subsidiary to TOYOTA executives gave a “current summary of O/R [overrun] types in NA [North American] market” that listed the three confirmed types as: “mat interference” (i.e., floor-mat entrapment), “material issue” (described as “pedal stuck and . . . pedal slow return/deformed”), and “simultaneous pedal press” by the consumer. The presentation further listed the models affected by the “material issue” as including “Camry, Corolla, Matrix, Avalon.”
Hiding Sticky Pedal from NHTSA and the Public
As noted, TOYOTA had by this time developed internal plans to implement design changes for all A-Pedal-Company-manufactured pedals in U.S. Toyota models to address, on a going-forward basis, the still-undisclosed sticky pedal problem that had already been resolved for new vehicles in Europe. On October 5, 2009, TOYOTA engineers issued to A-Pedal Company the first of the design change instructions intended to prevent sticky pedal in the U.S. market. This was described internally as an “urgent” measure to be implemented on an “express” basis, as a “major” change – meaning that the part number of the subject pedal was to change, and that all inventory units with the old pedal number should be scrapped.
On October 21, 2009, however, in the wake of the San Diego floor-mat entrapment accident, and in the midst of TOYOTA’s discussions with NHTSA about its eight-model entrapment recall, engineers at TOYOTA and the leadership of TOYOTA’s recall decision group decided to cancel the design change instruction that had already been issued and to suspend all remaining design changes planned for A-Pedal Company pedals in U.S. models. U.S. TOYOTA subsidiary employees who had been preparing for implementation of the changes were instructed, orally, to alert the manufacturing plants of the cancellation. They were also instructed not to put anything about the cancellation in writing. A-Pedal Company itself would receive no written cancellation at this time; instead, contrary to TOYOTA’s own standard procedures, the cancellation was to be effected without a paper trail.
TOYOTA decided to suspend the pedal design changes in the United States, and to avoid memorializing that suspension, in order to prevent NHTSA from learning about the sticky pedal problem.
In early November 2009, TOYOTA and the leadership of a U.S. TOYOTA subsidiary became aware of three instances of sticky pedal in U.S. Corollas. Shortly thereafter, the leadership of the recall decision group within TOYOTA discussed a plan to finally disclose the sticky pedal problem to NHTSA. The recall decision group was aware at this time not only of the problems in the three Corollas in the United States but also of the problems that had surfaced in a Matrix and a Camry in August 2009 and been reproduced through testing in September 2009. The group was also familiar with the sticky pedal problem in Europe, the design changes that had been implemented there, and the cancellation and suspension of similar planned design changes in the United States. Knowing all of this, the group’s leadership decided that (a) it would not disclose the September 2009 Market Impact Summary to NHTSA; (b) if any disclosure were to be made to NHTSA, it would be limited to a disclosure that there were some reports of unintended acceleration apparently unrelated to floor-mat entrapment; and (c) NHTSA should be told that TOYOTA had made no findings with respect to the sticky pedal problem reflected in the reports concerning the three U.S. Corollas, and that the investigation of the problem had just begun.
On November 17, 2009, before TOYOTA had negotiated with NHTSA a final set of remedies for the eight models encompassed by the floor-mat entrapment recall, TOYOTA informed NHTSA of the three Corolla reports and several other reports of unintended acceleration in Toyota model vehicles equipped with pedals manufactured by A Pedal Company. In TOYOTA’s disclosure to NHTSA, TOYOTA did not reveal its understanding of the sticky pedal problem as a type of unintended acceleration, nor did it reveal the problem’s manifestation and the subsequent design changes in Europe, the planned, cancelled, and suspended design changes in the United States, the August 2009 Camry and Matrix vehicles that had suffered sticky pedal, or the September 2009 Market Impact Summary.
TOYOTA’s Misleading Statements
After the August 2009 fatal floor-mat entrapment accident in San Diego, several articles critical of TOYOTA appeared in U.S. newspapers. The articles reported instances of TOYOTA customers allegedly experiencing unintended acceleration and the authors accused TOYOTA of, among other things, hiding defects related to unintended acceleration.
On November 25, 2009, TOYOTA, through a U.S. subsidiary, announced its floor-mat entrapment resolution with NHTSA. In a press release that had been approved by TOYOTA, the U.S. subsidiary assured customers: “The safety of our owners and the public is our utmost concern and Toyota has and will continue to thoroughly investigate and take appropriate measures to address any defect trends that are identified.” A spokesperson for the subsidiary stated during a press conference the same day, “We’re very, very confident that we have addressed this issue.”
In truth, the issue of unintended acceleration had not been “addressed” by the remedies announced. A-Pedal Company pedals which could experience stickiness were still on the road and still, in fact, being installed in newly-produced vehicles. And the best-selling Corolla, the Highlander, and the Venza – which had design features similar to models that had been included in the earlier floor-mat entrapment recall – were not being “addressed” at all.
Again, on December 23, 2009, TOYOTA responded to media accusations that it was continuing to hide defects in its vehicles by authorizing a U.S. TOYOTA subsidiary to publish the following misleading statements on the subsidiary’s website: “Toyota has absolutely not minimized public awareness of any defect or issue with respect to its vehicles. Any suggestion to the contrary is wrong and borders on irresponsibility. We are confident that the measures we are taking address the root cause and will reduce the risk of pedal entrapment.” In fact, TOYOTA had “minimized public awareness of” both sticky pedal and floor-mat entrapment. Further, the measures TOYOTA had taken did not “address the root cause” of unintended acceleration, because TOYOTA had not yet issued a sticky pedal recall and had not yet recalled the Corolla, the Venza, or the Highlander for floor-mat entrapment.
TOYOTA’s False Timeline
When, in early 2010, TOYOTA finally conducted safety recalls to address the unintended acceleration issues it had concealed throughout the fall of 2009, TOYOTA provided to the American public, NHTSA, and the United States Congress an inaccurate timeline of events that made it appear as if TOYOTA had learned of the sticky pedal in the United States in “October 2009,” and then acted promptly to remedy the problem within 90 days of discovering it. In fact, TOYOTA had begun its investigation of sticky pedal in the United States no later than August 2009, had already reproduced the problem in a U.S. pedal by no later than September 2009, and had taken active steps in the months following that testing to hide the problem from NHTSA and the public.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Bonnie Jonas, Deputy Chief of the Criminal Division, and Assistant U.S. Attorney Sarah E. McCallum are in charge of the prosecution, and Assistant U.S. Attorney Sharon Cohen Levin, Chief of the Money Laundering and Asset Forfeiture Unit, is responsible for the forfeiture aspects of the case.
U.S. v. Toyota Corportation DPA, Statement of Facts, and Information
U.S. v. $1200000000 Civil CompliantLeader of Million Dollar “Felony Lane Gang” Sentenced to over Fifteen Years in PrisonRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that the leader of the “Felony Lane Gang” conspiracy was sentenced to 188 months in prison.
According to the United States Attorney, on March 18, 2014, U.S. District Senior Judge William Caldwell sentenced Travis J. Russ for his leadership role in a car break-in and bank fraud crew that stole over a million dollars in the five years it was in operation. Testimony presented at Russ’s sentencing showed that the crew stole millions of dollars from banks using stolen checks and identification. At the sentencing, Russ was identified as the leader of the group of thieves. Although they were only caught in the fall of 2012, Russ was implicated in committing this scheme over five years and victimizing over 250 people in the course of his fraud scheme, dubbed the “Felony Lane Gang.”
The “Felony Lane Gang” is a group of thieves based in Fort Lauderdale, Florida, that travels across the United States stealing identities and checkbooks from unattended cars (“smash and grabs”). With the stolen checkbooks and driver’s licenses, the gang cashes checks using the drive through lane of banks. The lane farthest from video cameras and tellers has been dubbed the “felony lane” because of the ease with which false identities can be used to cash checks.
In December 2012, a grand jury returned a four-count indictment charging 10 people with conspiracy to commit fraud, bank fraud, wire fraud, and aggravated identity theft. All of those who were charged entered guilty pleas, and the majority of them have been sentenced:
- Travis J. Russ, age 32, of Fort Lauderdale, Florida – identified as the leader and sentenced to 188 months in prison;
- Sylvester Joseph, age 26, of Derrfield, Florida – identified as a leader and pending sentencing;
- Jarrett Hobbs, age 31, of Fort Lauderdale, Florida – identified as a leader and pending sentencing;
- Khiante Thompson, age 20, Florida – sentenced to 14 months in prison;
- Phillip Etienne, age 31, of Margate, Florida – 46 months in prison;
- Willie L. Ogiste, age 35, of Fort Lauderdale, Florida – pending sentencing;
- Teresa L. Brimhall, age 45, of Oakland Park, Florida – 18 months in prison;
- April Ainsworth, age 26, of Richmond, Texas – 36 months in prison;
- Colleen Shelly, age 49, of Lauderdale Lakes, Florida – 11 months in prison; and
- Wendy Snyder-Lucas, age 31, of Fort Lauderdale, Florida – 11 months in prison.
The 10 persons charged in this indictment struck Pennsylvania from August to October 2012. During that time, they broke into and/or stole the identities of over 100 people. In addition, the group targeted state parks where victims left purses, wallets, and checkbooks in their cars while using the recreation facilities. The “smash and grabs” occurred at approximately 25 different state parks and recreation centers in and around Central Pennsylvania.
This group used stolen checks and identification to obtain funds from banks and credit unions. According to the indictment, a conspirator, disguised as the account holder, used the drive-through lane at the account holder’s bank, submitted to the teller a forged check with the stolen identification of the victim, and received the funds. Through this process, these conspirators successfully compromised numerous accounts and stole tens of thousands of dollars in funds from the victims.
This investigation was conducted by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), HSI’s Bulk Cash Smuggling Center, the United States Secret Service, the Pennsylvania State Police, the Federal Bureau of Investigation, the Pennsylvania Department of Conservation and Natural Resources and other state and local investigative agencies. The prosecutor assigned to the case is Assistant United States Attorney Michael A. Consiglio.
****Law Clerk, Stock Broker Charged in New Jersey with Trading on Inside Information Stolen from Prominent New York Law FirmRead the Press Release
More than $33 Million in Alleged Illegal Trades Netted $5.6 Million Over Four-Year Scheme
NEWARK, N.J. - The managing clerk of the New York office of Simpson Thacher & Bartlett LLP – a prominent, international law firm – and a professional stock broker who worked at Oppenheimer & Co. and Morgan Stanley were arrested today and charged with participating in a multi-year insider trading scheme that allegedly netted more than $5.6 million in illicit profits, New Jersey U.S. Attorney Paul J. Fishman announced.
Steven Metro, 40, of Katonah, N.Y., and Vladimir Eydelman, 42, of Colts Neck, N.J., are both charged by complaint with one count of conspiracy to commit securities fraud and tender offer fraud, as well as multiple counts of securities fraud and tender offer fraud: Metro is charged with nine counts of securities fraud; Eydelman is charged with eight counts of securities fraud; and each defendant is charged with four counts of tender offer fraud. FBI agents arrested Metro in Katonah and Eydelman in Colts Neck this morning. Both men are scheduled to appear this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.
“These defendants are charged with using confidential information that Metro stole from his employer to reap huge illegal profits,” U.S. Attorney Fishman said. “They allegedly rigged the system by exploiting sensitive information that was not available to other investors. This kind of activity undermines the integrity of our financial markets and weakens investor confidence.”
“As alleged in the complaint, Metro, Eydelman and another engaged in a lengthy insider trading scheme that reaped more than five million in illicit profits,” said FBI Special Agent in Charge Aaron T. Ford. “The FBI is committed to investigating allegations of insider trading and will hold violators accountable to ensure the integrity of the financial markets. We will continue to work with our partners to identify securities fraud so investors maintain a high level of confidence in the markets.”
According to the complaint unsealed today:
Metro, Eydelman, and a third person who subsequently became a cooperating witness – referred to in court documents as “the CW” – engaged in an insider trading scheme that began in 2009. The conspirators invested more than $33 million and reaped more than $5.6 million in illicit profits over the life of the scheme.
Starting in November 1999, Metro worked at the New York office of Simpson Thacher & Bartlett LLP, one of the nation’s premier mergers and acquisitions law firms. During the period of the trading scheme, he was the firm’s managing clerk, responsible for, among other things, filing pleadings on behalf of attorneys. Eydelman was a broker-dealer employed first at Oppenheimer & Co. and most recently by Morgan Stanley, both renowned investment firms.
While at the law firm, Metro repeatedly obtained inside information regarding anticipated corporate mergers and acquisitions on which his firm was working. He disclosed the material, nonpublic information to his friend, the CW. Metro would arrange to meet the CW in person and would disclose inside information, including the stock exchange ticker symbol of the company in which to invest, and the pricing and/or timing of the planned transaction. The CW would write the information on a small piece of paper or napkin.
The CW would then meet with Eydelman, usually the same day, to divulge the stolen information. These meetings usually occurred at an agreed-upon location near the large clock in New York City’s Grand Central Terminal. The CW would show Eydelman the paper or napkin on which the CW had written the ticker symbol of the company whose securities should be purchased. After Eydelman memorized the ticker symbol, the CW then would place the paper or napkin into his mouth and chew it until it was destroyed.
Eydelman purchased securities for himself, family members, friends and clients, including the CW. Eydelman quickly sold the shares and covered any options positions once the relevant deal was publicly announced and the stock price rose.
Over the four-year period, the CW reinvested approximately $7,000 in profits that Metro made on the first deal, and updated Metro on the running balance of his profits from the insider trading scheme. As of October 2013, by which time the conspirators had traded ahead of at least 13 planned corporate transactions, Metro’s share of the profits had reached approximately $168,000.
The complaint specifically identifies the 12 transactions and one uncompleted transaction ahead of which Eydelman, Metro, and the CW traded between February 2009 and February 2013 – as outlined in an appended chart.
The complaint also details a number of recorded meetings among the conspirators. During the course of one meeting with the CW on Jan. 28, 2014, Metro expressed his desire to cash out his share of the illicit profits. Metro stated to the CW, “You gotta try to liberate some cash, somewhere, or I’m going to be freakin’ flat out.” Metro also promised to let the CW know of any planned M&A deals that he came across in the future, stating that although “Right now it’s all been private equity, private equity...I think this year, it’s going to be a good year[.]”
In a meeting on Feb. 6, 2014, Eydelman indicated he would be willing to pay a portion of the cash proceeds owed to Metro. Eydelman stated, “I got seven [thousand]….That’s all I can do, without [my wife] knowing.”
Eydelman came through with the $7,000 in cash for the CW to use to compensate Metro for tipping them inside information. During a recorded meeting with the CW on Feb. 20, 2014, Eydelman handed the CW a small plastic shopping bag with a cigar manufacturer’s logo on it, stating, “Take these cigars, put it to good use.” Eydelman enclosed $7,000 in cash in the cigar bag he handed to the CW.
The conspirators attempted to hide their illegal conduct. In addition to the CW destroying pieces of paper on which he wrote the ticker symbols provided by Metro, Eydelman sent the CW “covering” emails that contained false justifications designed to suggest that their trades in the subject securities were based on research, not inside information.
While Metro relied on the CW to reinvest his illicit profits on his behalf, Eydelman realized substantial personal profits on an ongoing basis from the insider trading scheme and used these unlawful proceeds to purchase a new 2011 Maserati Grand Turismo for $117,700 and to spend tens of thousands of dollars on expensive jewelry. Eydelman also used illicit proceeds to purchase his residence and to pay the mortgage on the property.
The conspiracy count with which Metro and Eydelman are each charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the aggregate loss to victims or gain to the defendants. On the substantive securities fraud and tender offer fraud charges, they each face a maximum of 20 years in prison and a $5 million fine. The complaint also seeks the forfeiture of Eydelman’s residence.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s arrests and complaint. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel Hawke. He also thanked the New York FBI, under the direction of Assistant Director in Charge George C. Venizelos, for assistance with the investigation.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu of the Economic Crimes Unit of the U.S. Attorney’s Office in Newark, and Joseph R. Gribko of the U.S. Attorney’s Office in Trenton, as well as Marion Percell, Chief of the of the Office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
These charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.14-093
Defense counsel:
Metro: TBA
Vladimir Eydelman: William Silverman Esq., New York
Alleged Insider TradesAPPROX. DATE(S) OF PURCHASES
ANNOUNCEMENT DATE
SECURITY
APPROX. ILLICIT PROFIT
2/17/2009
Sirius XM Radio
$212,814
12/29/2009-1/15/2010
1/18/2010
Brinks Home Security
$773,154
7/8/2010-7/15/2010
7/15/2010
Smithtown Bancorp
$29,010
10/20/2010-10/29/2010
11/1/2010
CNA Surety Corporation
$241,141
4/11/2011-4/12/2011
4/13/2011
Graham Packing Company Inc.
$105,964
1/31/2011-4/19/2011
4/26/2011
SMART Modular Technologies
$1,575,382
4/4/2011-4/21/2011
4/27/2011
Vital Images, Inc.
$39,233
4/29/2011
5/2/2011
International Coal Group, Inc.
$231,276
6/21/2011-8/22/2011
8/23/2011
PharMerica Corp.
$1,517,092
4/16/2012-4/20/2012
5/1/2012
Collective Brands, Inc.
$360,775
5/14/2012-10/1/2012
N/A
“Company A”
N/A
9/20/2012-9/25/2012
9/27/2012
Sealy Corporation
$14,509
1/31/2013-2/15/2013
2/20/2013
Officemax Inc.
$573,332
APPROX. TOTAL ILLICIT PROFITS
$5,673,682
Metro, Steven, and Eydelman, Vladimir Complaint
Lapwai Man Indicted for First Degree MurderRead the Press Release
COEUR D’ALENE – Raymond Antoine Scott, Jr., 37, of Lapwai, Idaho, was indicted by a federal grand jury in Coeur d’Alene yesterday for first degree murder, U.S. Attorney Wendy J. Olson announced. Scott is currently being held at the Yakama Tribal Jail in Toppenish, Washington. An initial appearance in federal court has not been set.
The indictment alleges that on or about July 9, 2013, within the boundaries of the Nez Perce Indian Reservation, Scott, an enrolled tribal member, killed William Reich, also an enrolled tribal member.
The charge of first degree murder is punishable by life in prison and a maximum fine of $250,000.
The case is being investigated by the Federal Bureau of Investigation, Nez Perce Tribal Police, and the Lewiston City Police Department.
An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Lake St. Louis Man Indicted on Tax ChargesRead the Press Release
St. Louis, MO – Kenneth Kreisch was indicted for allegedly failing to pay employment taxes that had been deducted from employee payrolls.
According to the indictment, Kreisch controlled and was part owner of Marble and Granite Worldwide LLC (MGW). The indictment alleges that after withholding employment taxes from his employees’ paychecks, other than two quarters in 2008, Kreisch made no payments to the IRS, which were due. During the seven calendar quarters beginning in 2006 through the fourth quarter of 2008, Kreisch failed to account for and pay over approximately $462,501 in employee taxes.
"Business owners who fail to remit withheld employment taxes to the IRS are not only enriching themselves, they are creating financial problems for their employees," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation.
KENNETH KREISCH, Lake St. Louis, MO, was indicted by a federal grand jury on seven felony counts of failure to pay over taxes.
If convicted, each count of the indictment carries a maximum penalty of five years in prison and/or fines up to $10,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by IRS-Criminal Investigation. Assistant United States Attorney Jennifer Roy is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Justice Department Announces Criminal Charge Against Toyota Motor Corporation and Deferred Prosecution Agreement with $1.2 Billion Financial PenaltyRead the Press Release
U.S. Attorney General Eric Holder, U.S. Secretary of Transportation Anthony Foxx, U.S. Attorney for the Southern District of New York Preet Bharara, Inspector General of the U.S. Department of Transportation (DOT) Calvin L. Scovel III, National Highway Traffic Safety Administration (NHTSA) Acting Administrator David Friedman and Federal Bureau of Investigation (FBI) Deputy Assistant Director Joe Campbell announced a criminal wire fraud charge against Toyota Motor Corporation (“TOYOTA” or “the company”), an automotive company headquartered in Toyota City, Japan, that designs, manufactures, assembles, and sells Toyota and Lexus brand vehicles. The charge is that TOYOTA defrauded consumers in the fall of 2009 and early 2010 by issuing misleading statements about safety issues in Toyota and Lexus vehicles.
Also today, the Department of Justice announced a deferred prosecution agreement with TOYOTA (“the agreement”) under which the company admits that it misled U.S. consumers by concealing and making deceptive statements about two safety issues affecting its vehicles, each of which caused a type of unintended acceleration. The admissions are contained in a detailed statement of facts attached to the agreement. The agreement, which is subject to judicial review, requires TOYOTA to pay a $1.2 billion financial penalty – the largest penalty of its kind ever imposed on an automotive company, and imposes on TOYOTA an independent monitor to review and assess policies, practices and procedures relating to TOYOTA’s safety-related public statements and reporting obligations. TOYOTA agrees to pay the penalty under a Final Order of Forfeiture in a parallel civil action also filed today in the Southern District of New York.
The criminal charge is contained in an Information (“the information”) alleging one count of wire fraud. If TOYOTA abides by all of the terms of the agreement, the Government will defer prosecution on the information for three years and then seek to dismiss the charge.
“Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to Members of Congress,” said Attorney General Eric Holder. “When car owners get behind the wheel, they have a right to expect that their vehicle is safe. If any part of the automobile turns out to have safety issues, the car company has a duty to be upfront about them, to fix them quickly, and to immediately tell the truth about the problem and its scope. Toyota violated that basic compact. Other car companies should not repeat Toyota’s mistake: a recall may damage a company’s reputation, but deceiving your customers makes that damage far more lasting.”
“Safety is our top priority,” said Transportation Secretary Anthony Foxx. “Throughout this recall process, NHTSA investigators worked tirelessly to make sure that Toyota recalled vehicles with defects causing unintended acceleration, and to determine when they learned of it, and as we learned today, they succeeded in this effort in spite of extraordinary challenges. Today’s penalties follow NHTSA’s own record civil penalties of more than $66 million – together, they send a powerful message to all manufacturers to follow our recall requirements or they will face serious consequences.”
“Toyota stands charged with a criminal offense because it cared more about savings than safety and more about its own brand and bottom line than the truth,” said U.S. Attorney Preet Bharara for the Southern District of New York. “In its zeal to stanch bad publicity in 2009 and 2010, Toyota misled regulators, misled customers, and even misstated the facts to Congress. The tens of millions of drivers in America have an absolute right to expect that the companies manufacturing their cars are not lying about serious safety issues; are not slow-walking safety fixes; and are not playing games with their lives. Companies that make inherently dangerous products must be maximally transparent, not two-faced. That is why we have undertaken this landmark enforcement action. And the entire auto industry should take notice.”
“To the families and friends of those who died or were injured as a result of these incidents, I offer my deepest sympathies for your loss and my highest admiration for the strength you demonstrate every day,” said DOT Inspector General Calvin L. Scovel III. “As is true for Secretary Foxx and DOT, safety is and will remain the highest priority of my office. The OIG is committed to working with our law enforcement and prosecutorial partners in pursuing those who commit criminal violations of the Department of Transportation’s or related laws. The efforts of this dedicated multi-agency team and the agreement reached with Toyota must serve as a clarion call to all auto manufacturers of the need to always be as vigilant and forthcoming as possible to keep the public safe.”
According to the allegations in the information, as well as other documents filed today in Manhattan federal court, including the Statement of Facts:
In the fall of 2009, TOYOTA deceived consumers and its U.S. regulator, the National Highway Traffic Safety Administration (“NHTSA”), by claiming that it had “addressed” the “root cause” of unintended acceleration in its vehicles through a limited safety recall of eight models for floor-mat entrapment, a dangerous condition in which an improperly secured or incompatible all-weather floor mat can “trap” a depressed gas pedal causing the car to accelerate to a high speed. Such public assurances deceived customers and NHTSA in two ways: First, at the time the statements were made, TOYOTA knew that it had not recalled some cars with design features that made them just as susceptible to floor-mat entrapment as some of the recalled cars. Second, only weeks before these statements were made, TOYOTA had taken steps to hide from NHTSA another type of unintended acceleration in its vehicles, separate and apart from floor-mat entrapment: a problem with accelerators getting stuck at partially depressed levels, known as “sticky pedal.”
Floor-Mat Entrapment: A Fatal Problem
TOYOTA issued its misleading statements, and undertook its acts of concealment, against the backdrop of intense public concern and scrutiny over the safety of its vehicles following a widely publicized Aug. 28, 2009 accident in San Diego, Calif., that killed a family of four. A Lexus dealer had improperly installed an incompatible all-weather floor mat into the Lexus ES350 in which the family was traveling, and that mat entrapped the accelerator at full throttle. A 911 emergency call made from the out-of-control vehicle, which was speeding at over 100 miles per hour, reported, “We’re in a Lexus . . . and we’re going north on 125 and our accelerator is stuck . . . there’s no brakes . . . we’re approaching the intersection . . . Hold on . . . hold on and pray . . . pray.” The call ended with the sound of the crash that killed everyone in the vehicle.
The San Diego accident was not the first time that TOYOTA had faced a problem with floor-mat entrapment. In 2007, following a series of reports alleging unintended acceleration in Toyota and Lexus vehicles, NHTSA opened a defect investigation into the Lexus ES350 model (the vehicle involved in the 2009 San Diego accident), and identified several other Toyota and Lexus models it believed might likewise be defective. TOYOTA, while denying to NHTSA the need to recall any of its vehicles, conducted an internal investigation in 2007 which revealed that certain Toyota and Lexus models, including most of the ones that NHTSA had identified as potentially problematic, had design features rendering entrapment of the gas pedal by an all-weather floor mat more likely. TOYOTA did not share these results with NHTSA. In the end, the Company negotiated a limited recall of 55,000 mats (no vehicles) – a result that TOYOTA employees touted internally as a major victory: “had the agency . . . pushed for recall of the throttle pedal assembly (for instance), we would be looking at upwards of $100 million + in unnecessary costs.”
Shortly after TOYOTA announced its 2007 mat recall, company engineers revised internal design guidelines to provide for, among other things, a minimum clearance of 10 millimeters between a fully depressed gas pedal and the floor. But TOYOTA decided those revised guidelines would only apply where a model was receiving a “full model redesign” – something each Toyota and Lexus model underwent only about once every three to five years. As a result, even after the revised guidelines had been adopted internally, many new vehicles produced and sold by TOYOTA – including the Lexus ES350 involved in the 2009 San Diego accident – did not comply with TOYOTA’s 2007 guidelines.
After the fatal and highly publicized San Diego accident, TOYOTA agreed to recall eight of its models, including the ES350, for floor-mat entrapment susceptibility. Thereafter, as part of an effort to defend its brand image, TOYOTA began issuing public statements assuring customers that this limited recall had “addressed the root cause of unintended acceleration” in its U.S.-sold vehicles.
As TOYOTA knew from internal testing it had completed by the time these statements were made, the eight-model recall had not in fact “addressed the root cause” of even the floor-mat entrapment problem. Models not recalled – and therefore still on the road – bore design features rendering them just as susceptible to floor-mat entrapment as those within the recall population. One engineer working at a TOYOTA facility in California had concluded that the Corolla, a top-selling car that had not been recalled, was among the three “worse” vehicles for floor-mat entrapment. In October 2009, TOYOTA engineers in Japan circulated a chart showing that the Corolla had the lowest rating for floor-mat entrapment under their analysis. None of these findings or this data were shared with NHTSA at the time.
The Sticky Pedal Problem
What is more misleading, at the same time it was assuring the public that the “root cause” of unintended acceleration had been “addressed” by the 2009 eight-model floor-mat entrapment recall, TOYOTA was hiding from NHTSA a second cause of unintended acceleration in its vehicles: the sticky pedal. Sticky pedal, a phenomenon affecting pedals manufactured by a U.S. company (“A-Pedal Company”) and installed in many Toyota brand vehicles in North America as well as Europe, resulted from the use of a plastic material inside the pedals that could cause the accelerator pedal to become mechanically stuck in a partially depressed position. The pedals incorporating this plastic were installed in, among other models, the Camry, the Matrix, the Corolla, and the Avalon sold in the United States.
The sticky pedal problem surfaced in Europe in 2008. There, reports reflected instances of “uncontrolled acceleration” and unintended acceleration to “maximum RPM,” and customer concern that the condition was “extremely dangerous.”
In early 2009, TOYOTA circulated to European Toyota distributors information about the sticky pedal problem and instructions for addressing the problem if it presented itself in a customer’s vehicle. These instructions identified the issue as “Sudden RPM increase/vehicle acceleration due to accelerator pedal sticking,” and stated that should a customer complain of pedal sticking, the pedal should be replaced with pedals manufactured by a company other than A-Pedal Company. Contemporaneous internal TOYOTA documents described the sticky pedal problem as a “defect” that was “[i]mportant in terms of safety because of the possibility of accidents.”
TOYOTA did not then inform its U.S. regulators of the sticky pedal problem or conduct a recall. Instead, beginning in the spring of 2009, TOYOTA quietly directed A-Pedal Company to change the pedals in new productions of affected models in Europe, and to plan for the same design changes to be rolled out in the United States (where the same problematic pedals were being used) beginning in the fall of 2009. The design change was to substitute the plastic used in the affected pedal models with another material and to change the length of the friction lever in the pedal.
Meanwhile, the sticky pedal problem was manifesting itself in U.S. vehicles. On or about the same day the San Diego floor-mat entrapment accident occurred, staff at a U.S. TOYOTA subsidiary in California sent a memorandum to staff at TOYOTA in Japan identifying as “critical” an “unintended acceleration” issue separate and apart from floor-mat entrapment that had been identified in an accelerator pedal of a Toyota Matrix vehicle in Arizona. The problem identified, and then reproduced during testing of the pedal on Sept. 17, 2009, was the sticky pedal problem. Also in August, the sticky pedal problem cropped up in a U.S. Camry.
On Sept. 9, 2009, an employee of a U.S. TOYOTA subsidiary who was concerned about the sticky pedal problem in the United States and believed that TOYOTA should address the problem prepared a “Market Impact Summary” listing (in addition to the August 2009 Matrix and Camry) 39 warranty cases that he believed involved potential manifestations of the sticky pedal problem. This document, which was circulated to TOYOTA engineers and, later, to staff in charge of recall decisions in Japan, designated the sticky pedal problem as priority level “A,” the highest level.
By no later than September 2009, TOYOTA recognized internally that the sticky pedal problem posed a risk of a type of unintended acceleration – or “overrun,” as Toyota sometimes called it – in many of its U.S. vehicles. A September 2009 presentation made by a manager at a U.S. TOYOTA subsidiary to TOYOTA executives gave a “current summary of O/R [overrun] types in NA [North American] market” that listed the three confirmed types as: “mat interference” (i.e., floor-mat entrapment), “material issue” (described as “pedal stuck and . . . pedal slow return/deformed”) and “simultaneous pedal press” by the consumer. The presentation further listed the models affected by the “material issue” as including “Camry, Corolla, Matrix, Avalon.”
Hiding Sticky Pedal from NHTSA and the Public
As noted, TOYOTA had by this time developed internal plans to implement design changes for all A-Pedal-Company-manufactured pedals in U.S. Toyota models to address, on a going-forward basis, the still-undisclosed sticky pedal problem that had already been resolved for new vehicles in Europe. On Oct. 5, 2009, TOYOTA engineers issued to A-Pedal Company the first of the design change instructions intended to prevent sticky pedal in the U.S. market. This was described internally as an “urgent” measure to be implemented on an “express” basis, as a “major” change – meaning that the part number of the subject pedal was to change, and that all inventory units with the old pedal number should be scrapped.
On Oct. 21, 2009, however, in the wake of the San Diego floor-mat entrapment accident, and in the midst of TOYOTA’s discussions with NHTSA about its eight-model entrapment recall, engineers at TOYOTA and the leadership of TOYOTA’s recall decision group decided to cancel the design change instruction that had already been issued and to suspend all remaining design changes planned for A-Pedal Company pedals in U.S. models. U.S. TOYOTA subsidiary employees who had been preparing for implementation of the changes were instructed, orally, to alert the manufacturing plants of the cancellation. They were also instructed not to put anything about the cancellation in writing. A-Pedal Company itself would receive no written cancellation at this time; instead, contrary to TOYOTA’s own standard procedures, the cancellation was to be effected without a paper trail.
TOYOTA decided to suspend the pedal design changes in the United States, and to avoid memorializing that suspension, in order to prevent NHTSA from learning about the sticky pedal problem.
In early November 2009, TOYOTA and the leadership of a U.S. TOYOTA subsidiary became aware of three instances of sticky pedal in U.S. Corollas. Shortly thereafter, the leadership of the recall decision group within TOYOTA discussed a plan to finally disclose the sticky pedal problem to NHTSA. The recall decision group was aware at this time not only of the problems in the three Corollas in the United States but also of the problems that had surfaced in a Matrix and a Camry in August 2009 and been reproduced through testing in September 2009. The group was also familiar with the sticky pedal problem in Europe, the design changes that had been implemented there, and the cancellation and suspension of similar planned design changes in the United States. Knowing all of this, the group’s leadership decided that (a) it would not disclose the September 2009 Market Impact Summary to NHTSA; (b) if any disclosure were to be made to NHTSA, it would be limited to a disclosure that there were some reports of unintended acceleration apparently unrelated to floor-mat entrapment; and (c) NHTSA should be told that TOYOTA had made no findings with respect to the sticky pedal problem reflected in the reports concerning the three U.S. Corollas, and that the investigation of the problem had just begun.
On Nov. 17, 2009, before TOYOTA had negotiated with NHTSA a final set of remedies for the eight models encompassed by the floor-mat entrapment recall, TOYOTA informed NHTSA of the three Corolla reports and several other reports of unintended acceleration in Toyota model vehicles equipped with pedals manufactured by A‑Pedal Company. In TOYOTA’s disclosure to NHTSA, TOYOTA did not reveal its understanding of the sticky pedal problem as a type of unintended acceleration, nor did it reveal the problem’s manifestation and the subsequent design changes in Europe, the planned, cancelled, and suspended design changes in the United States, the August 2009 Camry and Matrix vehicles that had suffered sticky pedal, or the September 2009 Market Impact Summary.
TOYOTA’s Misleading Statements
After the August 2009 fatal floor-mat entrapment accident in San Diego, several articles critical of TOYOTA appeared in U.S. newspapers. The articles reported instances of TOYOTA customers allegedly experiencing unintended acceleration and the authors accused TOYOTA of, among other things, hiding defects related to unintended acceleration.
On Nov. 25, 2009, TOYOTA, through a U.S. subsidiary, announced its floor- mat entrapment resolution with NHTSA. In a press release that had been approved by TOYOTA, the U.S. subsidiary assured customers: “The safety of our owners and the public is our utmost concern and Toyota has and will continue to thoroughly investigate and take appropriate measures to address any defect trends that are identified.” A spokesperson for the subsidiary stated during a press conference the same day, “We’re very, very confident that we have addressed this issue.”
In truth, the issue of unintended acceleration had not been “addressed” by the remedies announced. A-Pedal Company pedals which could experience stickiness were still on the road and still, in fact, being installed in newly-produced vehicles. And the best-selling Corolla, the Highlander, and the Venza – which had design features similar to models that had been included in the earlier floor-mat entrapment recall – were not being “addressed” at all.
Again, on Dec. 23, 2009, TOYOTA responded to media accusations that it was continuing to hide defects in its vehicles by authorizing a U.S. TOYOTA subsidiary to publish the following misleading statements on the subsidiary’s website: “Toyota has absolutely not minimized public awareness of any defect or issue with respect to its vehicles. Any suggestion to the contrary is wrong and borders on irresponsibility. We are confident that the measures we are taking address the root cause and will reduce the risk of pedal entrapment.” In fact, TOYOTA had “minimized public awareness of” both sticky pedal and floor-mat entrapment. Further, the measures TOYOTA had taken did not “address the root cause” of unintended acceleration, because TOYOTA had not yet issued a sticky pedal recall and had not yet recalled the Corolla, the Venza, or the Highlander for floor-mat entrapment.
TOYOTA’s False Timeline
When, in early 2010, TOYOTA finally conducted safety recalls to address the unintended acceleration issues it had concealed throughout the fall of 2009, TOYOTA provided to the American public, NHTSA and the United States Congress an inaccurate timeline of events that made it appear as if TOYOTA had learned of the sticky pedal in the United States in “October 2009,” and then acted promptly to remedy the problem within 90 days of discovering it. In fact, TOYOTA had begun its investigation of sticky pedal in the United States no later than August 2009, had already reproduced the problem in a U.S. pedal by no later than September 2009, and had taken active steps in the months following that testing to hide the problem from NHTSA and the public.
* * *
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Bonnie Jonas, Deputy Chief of the Criminal Division and Assistant U.S. Attorney Sarah E. McCallum are in charge of the prosecution, and Assistant U.S. Attorney Sharon Cohen Levin, Chief of the Money Laundering and Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
Related Materials:
Deferred Prosecution Agreement
Toyota Information
Toyota Statement of FactsJoint Law Enforcement Operation Leads to Return of Accused Argentine War Criminal Hiding in United StatesRead the Press Release
USDOJ: INTERPOL Washington: Updates
Department of Justice
INTERPOL Washington FOR IMMEDIATE RELEASE Wednesday, March 19, 2014Joint Law Enforcement Operation Leads to Return of Accused Argentine War Criminal Hiding in United States
WASHINGTON - An exhaustive investigation spearheaded by INTERPOL Washington and the U.S. Marshals Service International Investigations Branch ended with one of Argentina's most sought-after war criminals being located in Miami.
In December 2013, INTERPOL Buenos Aires requested assistance from U.S. law enforcement officials in establishing the whereabouts of Rodolfo Adolfo Gimenez. A former Argentine military officer, Gimenez, is accused of committing atrocities against civilians during Argentina's “dirty war” in the 1970s.
Knowing that an international arrest warrant would be forthcoming, Gimenez fled Argentina in October 2013, traveling through Chile and ultimately seeking safe haven in Florida. INTERPOL Washington and investigators from the U.S. Marshals Service subsequently determined Gimenez had taken refuge in a safe house situated well within the Spanish speaking community in Miami, where he believed that he could easily acclimatize and blend in.
On Friday, at the request of INTERPOL Washington, U.S. Marshals Service personnel from the Southern District of Florida and agents from the Miami office of U.S. Immigration and Customs Enforcement - Homeland Security Investigations positively located and identified Gimenez and facilitated his removal from the United States back to Argentina. There, he was taken into custody by Argentine National Police representatives from INTERPOL Buenos Aires.
“This is an excellent example of U.S. law enforcement and the Argentina government working together to apprehend a wanted fugitive,” said Amos Rojas, U.S. Marshal for the Southern District of Florida. “The Marshals Service is dedicated to pursuing all those who choose to flee rather than face justice.”
According to the INTERPOL Red Notice and warrants of arrest issued by Federal Courts in Argentina, Gimenez is specifically implicated “in the unlawful imprisonment of 22 year old Juan Marcos Herman, a political activist in student circles and a member of the anti-military Peronist Youth Movement. In July 1977, Herman was kidnapped at gunpoint by a group of military personnel.” He was subsequently taken to a clandestine detention center in Buenos Aires where he was “subjected to repeated mental and physical torture, and relentless interrogation.” Herman was never again seen alive, and his remains have never been recovered. If convicted as charged, Gimenez faces life in prison.
“I commend the work of all the law enforcement authorities involved in this investigation,” said INTERPOL Washington Director Shawn Bray. “This is a great example of U.S. law enforcement agencies and their international partners sharing information to locate and bring criminals to justice. No matter how far and hard this fugitive ran he could not escape the coordinated international effort to locate him.”
INTERPOL Washington credits the combined efforts of INTERPOL, INTERPOL Buenos Aires, the U.S. Marshals Service, U.S. Immigration and Customs Enforcement – Homeland Security Investigations and Enforcement Removal Operations, U.S. Customs and Border Protection, U.S. Citizenship and Immigration Services, the Transportations Security Administration, the U.S. Department of State Bureau of Diplomatic Security, and the U.S. Department of Justice Office of International Affairs.
Jacksonville Man Pleads Guilty to Conspiring and Attempting to Support TerroristsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Shelton Thomas Bell (20, Jacksonville) today pleaded guilty to conspiracy to provide material support to terrorists and attempting to provide material support to terrorists. Bell faces a maximum penalty of 30 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, between May 2012 and continuing through at least July 18, 2012, Bell agreed and conspired with a juvenile, and one other individual, to train and prepare themselves as combatants for overseas violent jihad, then travel from Jacksonville to the Middle East for the ultimate purpose of providing themselves to terrorists, including members of Ansar al-Sharia in Yemen. Once overseas, their plan included receiving further training and deadly weapons from Ansar al-Sharia, and then engage in violent jihad against, and to kill, others in the country of Yemen and elsewhere.
In May 2012, Bell introduced the juvenile to the concept of traveling overseas for the purpose of engaging in violent jihad and inspired the juvenile and another person with the teachings of an Al Qaida spokesperson, Anwar al-Awlaki ("al-Awlaki"). Bell suggested traveling to Yemen to fight because of al-Awlaki's teachings - that all young people should travel to Yemen to “take up the fight.” Bell and the juvenile subsequently agreed to a plan in which they would travel to Israel and then make Hajj. As part of the deception, the conspirators told others, including their parents, that they were traveling overseas to attend Hajj, to study, and to get an education. By July 2012, Bell, the juvenile, and another individual began taking actions to train for their unlawful activities by conducting mental training that included watching al-Awlaki videos and looking at images of dead Muslims.
Another part of the training took place on July 4, 2012, when Bell and another individual conducted a late-night “jihadi training mission” that involved the destruction of religious statues in a multi-denominational cemetery located in Jacksonville, Florida. In preparation for the mission, the two dressed in all black clothing, wore tactical gloves, masks, and wrapped their shoes in black duct tape to avoid leaving footprints. Bell brought a loaded 9 mm pistol with him on the mission, to use “in case any kuffar want to cause any trouble.” Other training sessions conducted by Bell included a homemade firing range and impromptu battlefield lessons intended for recording and uploading to the Internet, to be used in the recruitment of others as to “the actions of Jihad.” At the conclusion of one training session, Bell placed the American flag on a machete, burned it, and commented that the flag was “burning to the ground by the mujahidin’s hands.” To recruit other youth to travel and join in armed conflict, Bell and the juvenile also planned to take footage of each other actually participating in armed conflict in the Middle East, once they made it there and began fighting.
On September 25, 2012, Bell and the juvenile left Jacksonville and flew to New York, Poland, and Tel Aviv, Israel, where they were detained by Israeli officials and deported to Poland. From there, Bell and the juvenile traveled to Jordan to stay with the juvenile's relatives. While in Jordan, Bell and the juvenile contacted another person to assist in their plan of joining up with Ansar al-Sharia. Bell and the juvenile also bought airline tickets to the country of Oman, believing they would fly to Oman and walk across the border to Yemen to join the armed conflict there. As part of the conspiracy, Bell and the juvenile intended to travel to Yemen, where they intended to carry out their plan. During their overseas travel, Bell and the juvenile took steps to avoid detection by law enforcement.
Ultimately, Bell and the juvenile were deported from Jordan to the United States on November 21, 2012. At that time, Bell spoke with agents and stated, among other things, that he and the juvenile had purchased plane tickets to Oman, with the intention of entering Yemen. Bell stated, “If you ask me if [I] was going for jihad in Yemen, I say yes.” Bell confirmed that Ansar al-Sharia was the group that they sought to join, but explained that several groups were affiliated with Ansar al-Sharia, including al Qa’ida and the Taliban.
In commenting on this case, United States Attorney A. Lee Bentley, III stated, “Working with our law enforcement partners to prevent terrorism and promote national security is a top priority. We are thankful that this investigation was resolved without harm or injury to any citizens, at home or abroad.”
“Stopping these threats from within is the grim reality we deal with today,” said Special Agent in Charge Michelle S. Klimt, FBI - Jacksonville. “This case serves as a reminder that terrorist-related activities can occur anywhere. It also shows that we will use all the resources at our disposal to root out the individuals posing these threats to keep America safe.”
This case was investigated by the FBI's Jacksonville Joint Terrorism Task Force (JTTF). The JTTF is a multi-agency task force comprised of full-time personnel from the FBI, U.S. Coast Guard Investigative Service, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, the Jacksonville Sheriff's Office, Florida Highway Patrol, the Florida Department of Law Enforcement, and the Naval Criminal Investigative Service. It is being prosecuted by Assistant United States Attorney Mac D. Heavener, III and Department of Justice Trial Attorney Mara M. Kohn from the Department's Counter Terrorism Section, National Security Division.
Jacksonville Man Pleads Guilty in Scheme to Defraud over $904,000Read the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that David Allen Dinsbeer (37) today pleaded guilty to 16 counts of conspiracy to commit wire fraud and wire fraud. Each count carries a maximum penalty of up to 20 years in prison. Dinsbeer is currently released on bond, pending a sentencing hearing.
Dinsbeer was indicted on October 3, 2013.
According to court records, between January 2011 and May 2012, Dinsbeer defrauded the Hickory Foods group of companies out of approximately $904,000. The Hickory Foods companies are best known for Bubba Burgers. The investigation revealed that Dinsbeer used phony supplier companies to bill for supplies that were never delivered. He then deposited checks, which were issued on false invoices, into bank accounts for the phony companies, which he controlled. An FBI forensic accountant determined that the companies had no legitimate business expenses and that Dinsbeer withdrew money from the accounts, using them to pay his personal expenses. To facilitate the scheme, Dinsbeer conspired with an employee of Hickory Foods companies.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Dale Campion.
###Indictment: Kansas City, Kan., Tax PreparerPrepared False Income Tax ReturnsRead the Press Release
KANSAS CITY KAN. - A tax preparer in Kansas City, Kan., was indicted today by a federal grand jury on charges of preparing false tax returns, U.S. Attorney Barry Grissom said.
Ahferom Goitom, 34, Kansas City, Kan., is charged with fourteen counts of preparing false tax returns. The indictment alleges that Goitom was a professional tax return preparer who worked in Kansas City, Kan., and was the manager of a franchise business that prepares tax returns. He used commercial tax preparation software at the business to file returns electronically with the Internal Revenue Service.
He prepared at least 34 Form 1040s containing false and fraudulent education credits, charitable deductions, medical and dental expenses, home mortgage interest deductions, gross receipts for a sole proprietorship business, expenses for a sole proprietorship business and deductions for rental real estate.
For example, count one of the indictment alleges Goitom filed a return for a taxpayer in calendar year 2009 claiming medical and dental expenses of $5,050; gifts to charity of $8,200; and job expenses and miscellaneous deductions of $5,821. He knew that in fact the taxpayer was entitled to claim medical and dental expenses of only $226, gifts to charity of approximately $2,000 and no job expenses or other miscellaneous deductions.
If convicted, he faces a maximum penalty of three years in federal prison and a fine up to $250,000 on each count. The Internal Revenue Service investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
OTHER INDICTMENTS
Lamar Lynch, 41, Kansas City, Kan., is charged with 13 counts of stealing government funds by filing false and fraudulent federal income tax returns and nine counts of aggravated identity theft. The crimes are alleged to have occurred in 2011 and 2012 in the state of Kansas.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000 on each count of filing a false tax return, and a penalty of not less than two years and a fine up to $250,000 on each count of aggravated identity theft. The Internal Revenue Service – Criminal Investigation Division, U.S. Secret Service and Housing and Urban Development – Office of Inspector General investigated. Assistant U.S. Attorney Tris Hunt is prosecuting.
Randy A. Cornelius, 21, Kansas City, Mo., Allen J. Williams, 23, Kansas City, Mo., and Alvin J. Williams, 23, Kansas City, Mo., have been indicted on bank robbery and federal firearms charges.
A federal criminal complaint filed Feb. 28 in U.S. District Court in Kansas City, Kan., charged each of the defendants with one count of bank robbery in the Feb. 27, 2014, robbery of Inter-State Federal Savings at 8620 Metcalf in Overland Park, Kan. Today’s indictment adds a charge against each defendant of using a firearm during the robbery. In addition, Allen J. Williams is charged with one count of unlawful possession of a firearm after a felony conviction.
If convicted, the defendants face a maximum penalty of 25 years in federal prison and a fine up to $250,000 on the bank robbery charge, and a penalty of not less than seven years and a fine up to $250,000 on the charge of using a firearm in the robbery. In addition, the charge of unlawful possession of a firearm after a felony conviction carries a maximum penalty of 10 years and a fine up to $250,000. The Overland Park Police Department, the Kansas City, Mo., Police Department and the FBI investigated. Assistant U.S. Attorney Tris Hunt is prosecuting.
Jose Angel Aquilera-Franco, 20, Bonner Springs, Kan., and Darin Glassburn, 44, are charged in a second superseding indictment with one count of attempted possession with intent to distribute methamphetamine. The crime is alleged to have occurred Dec. 5, 2013, in Kansas City, Kan.
In addition, Aguilera-Franco is charged with one count of distributing methamphetamine within 1,000 feet of St. Peter’s Catholic School in Kansas City, Kan., one count of distributing methamphetamine and one count of dealing in firearms without a federal license.
Upon conviction, the crimes carry the following penalties:
Distributing methamphetamine within 1,000 feet of a school: A maximum penalty of 40 years in federal prison and a fine up to $2 million.
Distributing methamphetamine: A maximum penalty of 20 years and a fine up to $1 million.
Dealing in firearms without a license: A maximum penalty of five years and a fine up to $250,000.
Attempted possession with intent to distribute methamphetamine: Not less than 10 years and a fine up to $10 million.The U.S. Postal Inspection Service and the Kansas City, Kan., Police Department investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Illegal Alien Pleads Guilty to Firearms and Drug Trafficking ChargesRead the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announced today that Jose Luis Ariciaga-Banda, 28, of Mexico, pleaded guilty Tuesday before U.S. District Judge Donald E. Walter to possession of a firearm and ammunition by a felon, possession of a firearm and ammunition by an illegal alien, possession with the intent to distribute marijuana, and illegal reentry into the United States after deportation.
According to evidence presented at the guilty plea, Louisiana State Troopers stopped the truck Ariciaga-Banda was driving on August 7, 2013 on Mansfield Road in Shreveport for a traffic violation. He was found to be a Mexican citizen and illegally in the United States. An Immigration and Customs Enforcement Special Agent who arrived at the scene placed the defendant under arrest. A search warrant was also obtained and executed at Ariciaga-Banda’s residence. A 9 mm pistol, ammunition, money and approximately 18 pounds of marijuana were found at Ariciaga-Banda’s residence. The defendant was previously convicted in September of 2008 for possession of cocaine in Caddo Parish District Court. In November of 2010, he was convicted in federal court of two counts of possession of a firearm by an alien illegally in the United States and a count of illegal reentry after his deportation from the United States.
Ariciaga-Banda faces 10 years in prison for being a felon in possession of a firearm; 10 years in prison for being an illegal alien in possession of a firearm; 20 years in prison for illegal reentry after deportation; and five years in prison for possession with intent to distribute marijuana. Each count also carries up to a $250,000 fine. Sentencing is set for June 26, 2014.The U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Louisiana State Police, the Caddo Parish Sheriff-Shreveport Police Drug Task Force, and the Caddo Parish Sheriff’s Department investigated the case. Assistant U.S. Attorney Robert W. Gillespie Jr. prosecuted this case as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide program started in 2001 designed to reduce violence by aggressively enforcing existing federal firearms laws.
Heroin Dealer from Ohio Pleads Guilty to Federal Drug ChargeRead the Press Release
Charleston, W.Va. – An Ohio man has pleaded guilty to conspiring to distribute heroin, U.S. Attorney Booth Goodwin announced today. Christopher Swann, 23, admitted at today’s plea hearing that he and others traveled back and forth from Charleston, West Virginia, to Ohio to purchase heroin for resale in Charleston. Swann was previously indicted on one count of conspiracy to distribute heroin in October of 2013. He is scheduled to be sentenced on June 18, 2014. He faces up to 20 years imprisonment, a $1,000,000 fine and at least three years of supervised release.
This case was investigated by Charleston Police Department’s Special Enforcement Unit.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Five Defendants Sentenced in Identity Theft Tax Refund Fraud and Access Device Fraud SchemesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Paula Reid, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, and Scott Israel, Sheriff, Broward Sheriff’s Office (BSO), announce that Alex Dontfred, 29, David Tilus, 27, Sherika Rowe, 20, Fritznel Etienne, 24, and Latonya Ware, 27, all of Lauderhill, were sentenced for their participation in a stolen identity tax refund scheme and an access device fraud scheme that resulted in the submission of over $137,000 in fraudulent tax refund claims and over $49,000 in unauthorized access device purchases.
Dontfred was sentenced yesterday to 46 months in prison, followed by three years of supervised release, and was ordered to pay forfeiture of $49,561.88 and restitution in the amount of $45,711.10. Tilus was sentenced on March 10, 2014 to 70 months in prison, followed by three years of supervised release, and was ordered to pay $188,322 in restitution. Rowe was sentenced on March 13, 2014 to 45 months in prison, followed by three years of supervised release, and was ordered to pay a money judgment of $136,538 and restitution in the amount of $136,535. Etienne was sentenced on March 14, 2014 to 34 months in prison, followed by two years of supervised release, and was ordered to pay a money judgment of $11,204 and restitution in the amount of $3,844.81. Latonya Ware was sentenced on March 10, 2014 to 34 months in prison, followed by three years of supervised release, and was ordered to pay a money judgment of $136,535 and restitution in the amount of $136,535.
Dontfred previously pled guilty to one count each of conspiracy to commit access device fraud and access device fraud, in violation of Title 18, United States Code, Sections 1029(b)(2) and 1029(a)(2), respectively. Tilus previously pled guilty to one count each of conspiracy to commit wire fraud, wire fraud, conspiracy to commit access device fraud, and aggravated identity theft, in violation of Title 18, United States Code, Sections 1349, 1343, 1029(b)(2) and 1028A(a)(1), respectively. Rowe previously pled guilty to one count each of conspiracy to commit wire fraud, wire fraud and aggravated identity theft, in violation of Title 18, United States Code, Section 1349, 1343 and 1029A(a)(1), respectively. Etienne previously pled guilty to one count each of access device fraud and aggravated identity theft, in violation of Title 18, United States Code, Sections 1029(a)(2) and 1028A(a)(1), respectively. Latonya Ware previously pled guilty to one count each of conspiracy to commit wire fraud and aggravated identity theft, in violation of Title 18, United States Code, Section 1349 and 1029A(a)(1), respectively.
According to court documents, Andrew Ware, David Tilus, Latonya Ware and Sherika Rowe obtained the personal identifying information (PII) of numerous identity theft victims, including their names, dates of birth, and social security numbers. Latonya Ware stole patients' names and social security numbers from a medical office where she worked, and gave the PII to Tilus and her cousin, Andrew Ware. Rowe electronically filed fraudulent tax returns utilizing the victims’ names and social security numbers, and the fraudulent refunds from these returns were loaded onto prepaid debit cards that Tilus and Andrew Ware used to purchase gift cards and other merchandise from retail stores. Fraudulent refunds claimed by Andrew Ware, Tilus, Latonya Ware and Rowe from the stolen identities totaled approximately $137,132.
Court documents state that Andrew Ware, David Tilus, Jaqwayn Henry, Alex Dontfred and Fritznel Etienne utilized victims’ access devices, without their authorization, to purchase merchandise totaling at least $1,000 in a single year. These defendants obtained credit card numbers from various victims and used these stolen access devices to purchase merchandise, gift cards and prepaid debit cards for later use. The total amount of fraudulent charges made or attempted to be made by Andrew Ware, Tilus, Henry, and Dontfred utilizing the stolen credit cards is $49,561.88. From approximately January 20, 2012 through January 22, 2012, the total amount of fraudulent charges made or attempted to be made by Etienne utilizing a stolen credit card number is $11,942.23.
Co-defendant Andrew Ware, 27, of Lauderhill, previously pled guilty to one count each of conspiracy to commit wire fraud, wire fraud, conspiracy to commit access device fraud, and aggravated identity theft, in violation of Title 18, United States Code, Sections 1349, 1343, 1029(b)(2) and 1028A(a)(1), respectively. The defendant is scheduled to be sentenced on April 18, 2014.
Co-defendant Jaqwayn Henry, 23, of Lauderhill, is a fugitive. The indictment was dismissed against Latanya Ware.
Mr. Ferrer commended the investigative efforts of IRS-CI, the USSS, and BSO. The case is being prosecuted by Assistant U.S. Attorneys Alicia Shick and Harry Wallace.
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.
Federal Judge Sentences Manager of Heroin Conspiracy that distributed heroin resulting in death to twenty years in prisonRead the Press Release
PORTLAND, Ore. - On March 18, 2014, U.S. District Court Judge Marco Hernandez sentenced Samuel Navarrette-Aguilar, 41, a citizen of Mexico, to 240 months for his managerial role in a heroin trafficking conspiracy involving a kilogram or more of heroin. A federal jury found the defendant guilty of the conspiracy in June of 2013. Judge Hernandez further found by a preponderance of evidence that heroin distributed by the defendant resulted in the death of Erin Freeman, 22, who overdosed on heroin in her Portland residence in June of 2012. Judge Hernandez cited this and other factors to support his sentence including the fact that the defendant committed this crime after escaping from a Washington state prison sentence for drug trafficking and having remained at large since 1999. Although the quantity of heroin subjected the defendant to a statutorily mandated minimum sentence of twenty years, Judge Hernandez indicated he would have pronounced the same sentence independent of the mandatory minimum requirement.
Reaching into the upper echelon of a trafficking conspiracy from the tragic scene of a young woman’s last failure against heroin addiction, required a fast moving investigation led by the Portland Police Bureau Drugs and Vice Division with support from the Federal Bureau of Investigation and the Drug Enforcement Administration.
“This sentence serves justice. In 2012 we lost 147 Oregonians to heroin, many of those, like Erin Freeman, were far too young”, said U.S. Attorney Amanda Marshall. “This defendant and other purveyors of this deadly drug face heavy penalties as Oregon and communities across the nation address the clear and present danger of this heroin epidemic.”This case was prosecuted by Assistant U.S. Attorney Kathleen Bickers.
Federal Grand Jury Indicts Ohio Men for Heroin DistributionRead the Press Release
CHARLESTON, W.Va. – A federal grand jury in Charleston, West Virginia, returned two indictments yesterday related to the illegal distribution of heroin.
The grand jury returned a three-count indictment charging Marion Alonvo Felder of Upper Sandusky, Ohio, with the distribution of heroin on September 2, September 14 and October 1, 2013, in Parkersburg, West Virginia. The grand jury also charged Keith Irons, 25, of Marion County, Ohio, with heroin distribution. According to the two-count indictment of Irons, he distributed heroin on October 3 and October 6, 2013, in Parkersburg, West Virginia.
Marion and Irons each face up to 20 years in prison on each count if convicted.
The investigation was conducted by the Parkersburg Police Department and the Parkersburg Violent Crime and Narcotics Task Force. Assistant United States Attorney Joshua Hanks is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Note: The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Federal Appellate Court Reverses U.S. District Court Order Granting New Trial for Reese DefendantsRead the Press Release
ALBUQUERQUE – The Tenth Circuit Court of Appeals today issued a ruling reversing the Feb. 1, 2013 Order of the U.S. District Court for the District of New Mexico which granted a new trial for the owner of a gun shop in Deming, N.M., his wife and their son who were found guilty on federal firearms charges by a jury on Aug. 1, 2012.
Today’s ruling upholds the convictions of Rick Reese, 58, Terri Reese, 52, and Ryin Reese, 26, on charges that they aided and abetted straw purchases of firearms at their place of business, New Deal Shooting Sports. In reaching this decision, the appellate court rejected the defendants’ arguments that the United States failed to disclose material information that could have been used to impeach a government witness at trial.
In announcing the appellate court’s decision, Acting U.S. Attorney Steven C. Yarbrough said, “The United States takes its obligation to disclose material information favorable to a criminal defendant very seriously. The Tenth Circuit’s conclusion that my office did not violate its disclosure obligations during its prosecution of this case is, therefore, a very important one. We affirm our commitment to vigorously prosecute those who commit federal crimes and to do so in a manner that ensures that criminal defendants receive the fair trials to which they are entitled.”
The defendants have a period of time to seek en banc review from the Tenth Circuit Court of Appeals or a writ of certiorari from the U.S. Supreme Court. Absent further appeal, the case returns to the district court for sentencing. Rick, Terri and Ryin Reese each face a maximum penalty of five years in prison. Their sentencing hearings have yet to be scheduled.
This case was investigated by Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorneys Maria Y. Armijo and Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office are prosecuting the case in the district court. Assistant U.S. Attorney Laura Fashing, Chief of the U.S. Attorney’s Appellate Division, represented the United States on the appeal.
- Reese Appellate Decision
Fayetteville Man Sentenced in Child Pornography CaseRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today United States District Judge Terrence W. Boyle sentenced FRANKLIN WADE MEARES, 46to 96 months imprisonment followed by 10 years supervised release.
A Federal Grand Jury returned a Criminal Indictment on June 18, 2013.On December 18, 2013, MEARES pled guilty to receipt of child pornography.
According to the investigation, on September 14, 2012, the Cumberland County Sheriff’s Office initiated an undercover investigation related to the distribution of child pornography through the use of peer-to-peer (P2P) software. P2P software allows users to search for images, videos, and digital files by entering search terms. During the course of the investigation, a computer was identified by its IP address as using the Gnutella P2P network and offering to share child pornography. The IP addressed led law enforcement to MEARES and a search warrant was executed. Forensic examination of the computer uncovered over 12,000 images depicting children under the age of 12 engaged in sexual activity.
Investigation of this case was conducted by the Cumberland County Sheriff’s Office. Assistant United States Attorney Ethan A. Ontjes prosecuted the case.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.