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22 April 2014
Two Conspirators Plead Guilty in Mortgage Fraud SchemeRead the Press Release
Provided False Information About the Buyer and Property Renovations
Greenbelt, Maryland – Real estate agent Nsane Phanuel Ligate, age 42, of Ashburn, Virginia, pleaded guilty today to conspiring to commit wire fraud in connection with a mortgage scheme involving the purchase of two properties located on North Patterson Park Avenue in Baltimore. Co-defendant Cane Mwihava, age 43, of Bowie, Maryland pleaded guilty to the same offense yesterday.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG); Special Agent in Charge Cary A. Rubenstein of the Housing and Urban Development Office of Inspector General (HUD); Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
According to their pleas, in 2008, Ligate and his co-conspirators identified two properties for sale located at 424 and 444 North Patterson Park Avenue in Baltimore. Also at that time, Mwihava established a shell company called Xavier Engineering and Construction Company (XECC) to receive settlement disbursements for purported home renovations. With assistance from Ligate, co-conspirator Gladyness Silaa acted as the real estate agent; and co-conspirator Larry Johnson acted as the buyer. Ligate, Silaa and Johnson included false statements in the loan applications for both properties regarding Johnson’s employment, income, credit and assets. Mwihava and Ligate falsely inflated the purchase price of the properties by representing to lenders that repairs and renovations had been completed on each property by XECC, including installation of premium kitchen cabinets, granite countertops, stainless steel appliances and marble flooring. None of the purported renovations or repairs were in fact performed.
After the settlement of the properties, the settlement agent disbursed a total of $108,860 to XECC, the amount shown on false invoices submitted for the purported renovations. Mwihava then divided these funds between himself, Ligate, Silaa and Johnson.
On June 5 and 9, 2008, Ligate and Mwihava caused banks to wire transfer $181,159.65, and $179,866.93, respectively, to the title agent to complete the settlement transactions. These amounts were needed to fund the original loan amounts plus additional costs and fees associated with the closings.
As a result of the conspiracy, HUD, which insured the loan for 424 North Patterson Park Avenue suffered a loss of $164,090, and a bank which was the lender for the other property suffered a loss of $188,001.58.
The defendants face a maximum sentence of 30 years in prison and a $1 million fine. Chief U.S. District Judge Deborah K. Chasanow scheduled sentencing for Mwihava on October 14, 2014, at 1:00 p.m. and for Ligate on October 16, 2014 at 10:00 a.m.
Gladyness Silaa, age 35, of Bowie, previously pleaded guilty to conspiracy to commit wire fraud and her sentencing is scheduled for June 16, 2014 at 10:00 a.m. Larry Johnson, age 57, previously pleaded guilty to making false statements in a loan application and was sentenced on February 24, 2014 to eight months in prison consecutive to the current sentence he is serving on an unrelated case.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage Fraud/index.html.
Today=s announcement is 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. attorneys= offices and state and local partners, it=s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.United States Attorney Rod J. Rosenstein commended the FHFA- OIG, HUD-OIG, Secret Service and HSI Baltimore for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Kevin DiGregory, from the Federal Housing Finance Agency, Office of Inspector General, who are prosecuting the case.
Three More Florida Men Charged in $80 Million Drug Theft from Eli Lilly Warehouse in EnfieldRead the Press Release
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The United States Attorney for the District of Connecticut today announced that three more Florida men have been arrested for their alleged participation in the March 2010 theft of approximately $80 million in pharmaceuticals from an Eli Lilly Company warehouse and storage facility in Enfield, Conn.
On April 10, 2014, a federal grand jury in New Haven returned a second superseding indictment charging AMAURY VILLA, 39, of Miami, YOSMANY NUNEZ, also known as “El Gato,” 41, of Southwest Ranches, Fla., ALEXANDER MARQUEZ, 40, of Hialeah, Fla.,and RAFAEL LOPEZ, 49, of Miami, on federal conspiracy and theft charges. The indictment was unsealed yesterday.
NUNEZ, MARQUEZ and LOPEZ, who are citizens of Cuba, were arrested last week in Florida. VILLA was originally charged by indictment in March 2012 and has been in federal custody since May 2012.
The second superseding indictment alleges that, between January and March 2010, VILLA, NUNEZ, MARQUEZ, LOPEZ and another individual conspired to steal pharmaceuticals from the Eli Lilly Company warehouse and storage facility in Enfield. The investigation revealed that, in early 2010, VILLA, NUNEZ and others traveled from the Miami area to Connecticut to gather information about the warehouse facility and the surrounding area. Shortly before the theft, LOPEZ and another individual traveled to Flushing, N.Y., where they purchased tools needed to break into the warehouse facility, and then traveled to Connecticut.
The indictment alleges that, in the evening of March 13, 2010, MARQUEZ drove a tractor trailer to the parking lot of the Eli Lilly warehouse facility. Later that evening, VILLA and a co-conspirator carried a ladder to the warehouse, checked for security in the front area, climbed onto the roof, used the tools to cut a hole in the facility roof, dropped down into the facility and disabled the alarm system. Thereafter, VILLA and others loaded approximately 49 pallets of pharmaceuticals into the tractor trailer, which they had backed up to the loading dock of the warehouse.
The indictment alleges that LOPEZ was in the vicinity of the Enfield warehouse at the time of the theft and communicated by cell phone with a co-conspirator who was inside the warehouse.
The pallets of pharmaceuticals included thousands of boxes Zyprexa, Cymbalta, Prozac, Gemzar and other medicines, valued at approximately $80 million.
It is alleged that MARQUEZ drove the tractor trailer containing the stolen pharmaceuticals from Connecticut to Florida. VILLA, NUNEZ, MARQUEZ and a co-conspirator then met in Florida, unloaded the stolen pharmaceuticals from the tractor trailer and stored them in public storage facility in Miami area.
As part of an investigation in the Southern District of Florida, on October 14, 2011, a search of a storage facility in Florida recovered pharmaceuticals that had been stolen from the Enfield warehouse.
The defendants are charged with one count of conspiracy, which carries a maximum term of imprisonment of five years, four counts of theft from an interstate shipment, each of which carries a maximum term of imprisonment of 10 years, and one count of interstate transportation of stolen property, which carries a maximum term of imprisonment of 10 years.
NUNEZ and MARQUEZ were arrested on April 17 in Florida. Both are detained pending hearings that are scheduled for April 24 in Fort Lauderdale. LOPEZ surrendered to authorities yesterday. He was released on bond and is scheduled to be arraigned in the District of Connecticut on May 1.
This matter is being investigated by the Federal Bureau of Investigation and the Enfield Police Department, with the assistance of several other U.S. Attorney’s Offices and federal, state and local law enforcement agencies that have been investigating large-scale thefts of pharmaceuticals and other products.
The case is being prosecuted by Assistant U.S. Attorneys Anastasia E. King and Douglas P. Morabito, with the assistance of the U.S. Attorney’s Office for the Southern District of Florida.
An indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
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(203) 821-3722 [email protected]Sweetwater Police Detective Convicted on Credit Card Fraud and Aggravated Identity TheftRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce the conviction of William Garcia, 39, a detective with the Sweetwater Police Department.
On April 21, 2014, a jury in U.S. District Court found Garcia guilty of twelve counts. Specifically, the defendant was found guilty of one count conspiring to produce, use, or traffic in one or more counterfeit access devices, in violation of Title 18, United States Code, Section 371; one count of use of a counterfeit access device, in violation of Title 18, United States Code, Section 1029(a)(1); and ten counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1). Garcia faces a mandatory minimum sentence of two years imprisonment and a maximum sentence of thirty-five years in prison.
At trial, the United States presented evidence documenting Garcia’s improper friendship with a former confidential source. The confidential source, a convicted felon, provided Garcia and another former South Miami Detective Richard Munoz with counterfeit credit cards. During the trial, the source, Munoz and others testified about Garcia’s possession and use of those cards during shopping trips to Miami-Dade County shopping malls in 2010 and early 2011. During a meeting in late December 2010, Garcia was recorded providing his own personal credit card for use in stealing account numbers and manufacturing counterfeit cards.
Additional evidence at trial showed that Garcia was caught on videotape bringing eight counterfeit credit cards to the residence of the confidential source. During that and other recorded meetings, Garcia explained that he had taken the counterfeit cards from work and that he would share them with the confidential source. During the next two weeks, Garcia was recorded discussing his use of the cards at restaurants, movies, and a mall. Garcia’s presence during the transactions was further documented through use of phone records, placing Garcia’s cellular telephone in the area of each transaction at the time it occurred.
After the verdict, U.S. District Court Judge Federico Moreno remanded Garcia pending sentencing on June 26, 2014 at 9:30 a.m. in Miami. Munoz, who himself pleaded guilty on March 13, 2014 to related fraud charges last month, is presently set for sentencing in front of Judge Moreno on May 9, 2014.
Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force, the FBI Miami Cyber Task Force, and the Sweetwater Police Department. This case is being prosecuted by Assistant U.S. Attorneys Anthony Lacosta and Sarah Schall.
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.
Shreveport Attorney Guilty of Federal ViolationsRead the Press Release
Department of Justice
Office of Public AffairsSHREVEPORT, LA – A 52-year-old Shreveport, Louisiana attorney has pleaded guilty to federal violations in the Western District of Texas, announced U.S. Attorney John M. Bales of the Eastern District of Texas.
James Ward Davis pleaded guilty to an Information charging him with making a false statement in a bankruptcy proceeding today.
According to information presented in court, Davis is a lawyer and former member of the Shreveport law firm Jones, Odom, Davis & Politz. He also operated and controlled Tower Hill Energy Company, LLC, which purported to be in the business of acquiring oil, gas, and mineral leases, interests, and royalties in north Louisiana. In February 2009, Tower Hill entered into an agreement with a Texas company known as Furie Petroleum. By way of the agreement, Tower Hill was obligated to acquire mineral rights on Furie’s behalf. Furie agreed to deposit $1 million to be used by Tower Hill “solely for the acquisition of Mineral Leases or purchase contracts/options to acquire Mineral Leases.” A client trust account for Davis’s law firm was used for escrow. After Furie made the deposit, Davis transferred the $1 million out of the firm’s trust account into a Tower Hill escrow account and then used the funds to address personal and business expenditures. In June 2010,Davis and his wife filed for Chapter 7 bankruptcy in the Western District of Louisiana. They subsequently sought to convert the bankruptcy case from Chapter 7 to Chapter 11. A hearing was held on that motion in August 2010. During the proceeding, Davis falsely stated under oath that Furie was aware of the disposition of the $1million deposit after he removed the funds from the client trust account. In truth, at no time prior to litigation, did Davis advise Furie or its representatives that he had transferred the money out of the Tower Hill escrow account and used the funds for personal and unrelated business purposes.
Davis faces up to 5 years in federal prison and a fine of $250,000, at sentencing. A sentencing date has not been set.
This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Frank Coan.
####Sevierville Residents Charged with Oxycodone Distribution Conspiracy and Firearms OffensesRead the Press Release
KNOXVILLE, Tenn. - A federal grand jury in Knoxville returned a six-count indictment on Apr.15, 2014, against Esther Franklin, 53, Nicole Hughes, 26, and Christopher Matthew Hughes, 31, all of Sevierville, Tenn., charging them with a conspiracy to distribute oxycodone and firearms offenses.
Franklin and Nicole Hughes appeared in court on Apr. 22, 2014, before U.S. Magistrate Judge C. Clifford Shirley, Jr., and pleaded not guilty to the charges in the indictment. Nichole Hughes was placed on pretrial release and Franklin was held pending trial, which has been set for July 1, 2014, in U.S. District Court in Knoxville. Christopher Hughes will be scheduled for an initial appearance in the near future.
The indictment alleges that from May 2011 to July 2013, Franklin, Nicole Hughes and Christopher Matthew Hughes were involved in a conspiracy to distribute oxycodone. Franklin was also charged with possession with intent to distribute oxycodone, possession of firearms in furtherance of a drug trafficking crime, and possession of firearms and ammunition by a convicted felon. Christopher Matthew Hughes was also charged with distribution of oxycodone and possession of ammunition by a convicted felon.
If convicted, all three face up to 20 years in prison, a fine of up to $1,000,000, and a term of supervised release of at least three years and up to life. In addition, if Franklin is convicted of possessing firearms in furtherance of a drug trafficking offense, she will face a minimum mandatory term of imprisonment of at least five years and up to life, to be served consecutively to any other term of imprisonment which may be imposed.
This indictment is the result of an investigation by the Tennessee Bureau of Investigation and Sevier County Sheriff’s Office. Assistant U.S. Attorney Cynthia F. Davidson will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
Seven Individuals Indicted for Trafficking in Counterfeit GoodsRead the Press Release
SAN JUAN, PR – On April 14, a federal grand jury returned six separate indictments charging seven individuals for trafficking in counterfeit goods, specifically “Freshlook” mark contact lenses, announced United States Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez. The investigations were conducted by Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), with the collaboration of U.S. Customs and Border Protection (CBP), Federal Drug Administration (FDA), Puerto Rico Police Department (PRPD) and the San Juan Municipal Police.
Beginning no later than July 19, 2012, and continuing to on or about August 21, 2012, José Estevez-Cabrera did conspire with other persons, known and unknown to the Grand Jury, to traffic in goods, specifically contact lenses, knowingly using on and in connection with such goods a counterfeit mark, namely the “Freshlook” logo. According to the indictment, Estevez-Cabrera did intentionally traffic in goods, aiding and abetting others, with intent to defraud and mislead, received a misbranded device, that is counterfeit Freshlook Colorblends contact lenses, in interstate commerce, and delivered and proffered delivery to another, for pay and otherwise. Said device was misbranded in that its labeling was false and misleading in any particular. The defendant is facing a forfeiture allegation of 3,942 boxes of counterfeit Freshlook Colorblends contact lenses.Wilma Soto-Díaz and Karla Rodríguez-Soto, mother and daughter, are charged with Conspiracy to traffic in counterfeit goods and trafficking in counterfeit goods. They are both facing a forfeiture allegation of 101 boxes of counterfeit Freshlook Colorblends contact lenses.
On four separate indictments, Ezequiel Bayon-Santos, Katherine Agostini-Ruiz, Rafael Torres-Vicente and Eileen Martinez-Estevez are charged with trafficking counterfeit Freshlook Colorblends contact lenses. These defendants are facing the following forfeiture allegations:
- Bayon-Santos- 93 boxes of counterfeit Freshlook Colorblends contact lenses
- Agostini-Ruiz- 93 boxes of counterfeit Freshlook Colorblends contact lenses
- Torres-Vicente- 25 boxes of counterfeit Freshlook Colorblends contact lenses
- Martinez-Estevez- 15 boxes of counterfeit Freshlook Colorblends contact lenses
“These defendants recklessly put in danger the health of many patients who need contact lenses by trafficking the counterfeit lenses. Specifically, lab tests revealed that many of the counterfeit contact lenses were contaminated with bacteria, and some also had physical defects including sharp edges,” said Rosa Emilia Rodríguez-Vélez.
“To people who think designer knockoffs are a harmless way to beat the system and get a great deal - buyer beware,” said Angel M. Melendez, special agent in charge of HSI San Juan. “Part of what you're paying for when you buy established brands, regardless of the product, are quality control. As this case shows, when you purchase counterfeit decorative contact lenses, you can easily get something you hadn't bargained for, something that could put you at risk by damaging your eyes or even blind you.”
These cases are being prosecuted by Assistant U.S. Attorney Justin R. Martin. The maximum penalties are 10 years of imprisonment for conspiracy to counterfeit goods and for trafficking in counterfeit goods; and 3 years for misbranding devices. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.
Sentences Entered for Final Two Defendants in Marshalltown Methamphetamine CaseRead the Press Release
MARSHALLTOWN, IOWA - On Friday, April 18, 2014, the last of ten defendants from Marshalltown, Iowa and elsewhere were sentenced on federal drug trafficking and money laundering charges announced United States Attorney Nicholas A. Klinefeldt. District Judge Stephanie M. Rose sentenced Jose Sanchez Adame, age 40, of Marshalltown, Iowa, to 216 months imprisonment for conspiracy to distribute methamphetamine and distribution of methamphetamine. Sanchez Adame was also ordered to serve a term of five years supervised release following the period of imprisonment, and to pay $200 to the Crime Victim Fund. Julian Marin Gutierrez, age 53, of San Jose, California, was sentenced to 204 months imprisonment for conspiracy to distribute methamphetamine, conspiracy to launder monetary instruments and two counts of money laundering. Gutierrez was sentenced to a concurrent five years imprisonment for three counts of structuring financial transactions, and was ordered to serve concurrent terms of supervised release of five and three years, following imprisonment, as well as to pay $700 to the Crime Victim Fund.
This case arose from a two-year investigation into the distribution of methamphetamine in the Marshalltown area. This organization was responsible for the distribution of large quantities of methamphetamine in and around Marshalltown from at least 2010 through 2012. Proceeds from the sale of the methamphetamine were transported in bulk cash shipments, including $134,960 seized during a traffic stop in March 2012, in Cass County, Iowa. Other drug proceeds were funneled through bank deposits made in Iowa and withdrawn in California.
The investigation culminated in the arrests of ten individuals in Marshalltown and Ankeny, Iowa on November 20, 2012. The individuals, charged in December 2012 with conspiracy to distribute methamphetamine, included: Jose Luis Sanchez Adame, Jose Sanchez Adame, Julian Marin Gutierrez, Antonio Cebrero Mendiola, Raymundo Sotel Calderon, Fidel Sanchez, Kyla Forbes, Shannon Fogle, James Buffington and Fernando Camacho.
After seven defendants plead guilty, Jose Sanchez Adame, Julian Marin Gutierrez and Fidel Sanchez were convicted following a jury trial in November 2013. Fidel Sanchez, age 42, of Marshalltown, was sentenced to 108 months imprisonment for conspiracy to distribute and distribution of methamphetamine and ordered to serve five years supervised release, following the period of imprisonment, and to pay $600 to the Crime Victim Fund.
The following defendants were sentenced on prior dates:
-- Kyla Forbes, age 39, of Marshalltown, was sentenced to 75 months imprisonment and ordered to serve five years and three years concurrent supervised release, after being released from prison, for conspiracy to distribute methamphetamine and conspiracy to launder monetary instruments.
-- Fernando Camacho was sentenced to 48 months imprisonment and ordered to serve a one-year term of supervised release for use of a communication facility in the commission of a drug felony.
-- Jose Luis Sanchez Adame, age 37, of Marshalltown, and Antonio Cebrero Mendiola, age 27, of Ankeny, were each sentenced to 120 months imprisonment and ordered to serve five years supervised release, after being released from prison, for conspiracy to distribute methamphetamine.
-- Raymundo Sotel Calderon, age 40, of Marshalltown, was sentenced to 70 months imprisonment, and ordered to serve three years of supervised release, following the term of imprisonment for conspiracy to distribute methamphetamine.
-- James Buffington, age 44, of Marshalltown, was sentenced to 92 months imprisonment followed by five years supervised release, following his term of imprisonment for conspiracy to distribute methamphetamine.
-- Shannon Fogle, age 32, of Marshalltown, was sentenced to 60 months in prison, and ordered to serve a five-year term of supervised release, following the term of imprisonment for conspiracy to distribute methamphetamine.
In a related case, Rogelio Guevara, Jr., age 32, of Marshalltown, was sentenced to 144 months and ordered to serve five years supervised release after pleading guilty to possession with intent to distribute methamphetamine.
This investigation was conducted by a multi-agency task force through the Organized Crime Drug Enforcement Task Force (OCDETF) program. The principal mission of the OCDETF Program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation's illegal drug supply. Agencies participating in this investigation included the Drug Enforcement Administration, Mid Iowa Drug Task Force (MIDTF), Internal Revenue Service Criminal Investigations, Iowa Division of Narcotics Enforcement, Marshall County Sheriff’s Office, Marshalltown, Iowa, Police Department, Homeland Security Investigations, Cass County Sheriff’s Office and the Mid-Iowa Narcotics Enforcement (MINE) Task Force. This case was prosecuted by the U. S. Attorney’s Office for the Southern District of Iowa.
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Riverview Woman Sentenced to 7 Years in Federal Prison for Stolen Identity Refund FraudRead the Press Release
Tampa, FL – U.S. District Judge James D. Whittemore yesterday sentenced Ashley C. Guy (30) to 7 years in federal prison for committing wire fraud and aggravated identity theft. The court also entered a money judgment against Guy in the amount of $309,895, the proceeds of the wire fraud and identity theft scheme. Guy pleaded guilty to the offenses on January 27, 2014.
According to court documents, Ashley C. Guy, a/k/a “Ashley C. Gay,” devised and participated in a scheme to defraud the United States out of tax refunds by using stolen identities to electronically file false federal income tax returns. During the execution of a search warrant at Guy’s residence, federal agents uncovered lists containing more than 200 names, dates of birth, and Social Security numbers, as well as at least 15 prepaid debit cards in the names of others. The search also revealed documents containing information on the filing of false tax returns, $1,500 in U.S. currency in a small safe located in the living room, and $642 in U.S. currency seized from a purse in Guy’s master bedroom. In addition, agents found a trash can on the back porch of the residence that had been used for burning documents related to the fraud. From the trash can, agents were able to recover a list of personal identifying information that had not been completely burned.
Between January 2012 and April 2013, approximately 100 false federal income tax returns were filed from Guy’s house, claiming $560,713 in tax refunds. Another 112 false returns, claiming $801,011 in refunds, were filed from different locations, but were linked to Guy based upon the stolen identities and prepaid debit cards found in her house. The Internal Revenue Service (IRS) was able to stop many of these fraudulent refund claims. Out of the total 212 returns claiming roughly $1,361,724 in refunds, the IRS was ultimately defrauded into paying $309,895.
This case was investigated by the Internal Revenue Service – Criminal Investigation and the Tampa Police Department, with assistance from the Hillsborough County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Matthew J. Mueller and Trial Attorney Jason H. Poole of the Department of Justice, Tax Division.
Registered Child Sex Offender Sentenced to 15 Years for Receipt of Child PornographyRead the Press Release
WILMINGTON, Del. – William Zimmerman, age 64, of Georgetown, Delaware, was sentenced today to 15 years in federal prison for Receipt of Child Pornography, in violation of federal law. Zimmerman also was sentenced to 10 years of supervised release following his prison sentence. He also will be required to continue to register as a sex offender in any jurisdiction in which he lives, works, or attends school.
Zimmerman was previously convicted in Delaware of Unlawful Sexual Contact Second Degree in 1988 and Possession of Child Pornography in 1993. He served 4 years in prison for the child pornography offense, and was released from custody in 1997. At the time of the instant offense, he was registered as a sex offender as required by Delaware and federal law.
According to statements made and documents filed in court, Zimmerman came to the attention of the Delaware Child Predator Task Force (the “Task Force”) during its investigation of Roger Cordero and David Pennington, two other registered child sex offenders living in Delaware, who had met while incarcerated at the Smyrna Correctional Institution for other child sexual offenses. In December 2012, the Task Force conducted residential searches at Cordero and Pennington’s residences. They recovered computers containing thousands of images of child pornography and handwritten stories relating to child sexual abuse from Cordero’s residence, and found a cell phone referencing child pornography images at Pennington’s residence.
Pennington, who was then wearing an electronic monitoring device due to a state probation violation, provided the Task Force officers with information about Zimmerman, whom Pennington met in sex offender therapy. In particular, Pennington admitted that he and Zimmerman viewed child pornography together on a computer located at Zimmerman’s residence. They did this at Zimmerman’s residence because Pennington was on active probation and was prohibited from possessing a computer in his residence. Pennington also admitted that Zimmerman had sent him cell phone text messages attaching images of child pornography.
On January 8, 2013, Task Force officers executed a state search warrant at Zimmerman’s Georgetown residence. They recovered several pieces of computer equipment found to contain over 2,300 images of child pornography. The images featured children, mostly boys, ranging in age from infancy to mid-teen, who were posed or engaged in sexual acts with adult males.
In the spring of 2013, the Delaware Attorney General’s Office referred the Cordero and Zimmerman cases to the United States Attorney’s Office for federal prosecution. The Delaware Attorney General’s Office proceeded with a state prosecution of David Pennington, which resulted in Pennington being sentenced to 28 years in prison in October 2013.
Following today’s sentencing hearing, United States Attorney Charles M. Oberly, III stated: “With the active cooperation of State and Federal authorities, three serious child predators have been taken into custody. Zimmerman and Pennington have pled guilty and received sentences of 15 and 28 years. Cordero is scheduled for trial in June 2014 and faces a mandatory minimum term of 35-60 years of incarceration if convicted. These cases serve as an example of what can be achieved through the mutual cooperation of state and federal law enforcement.”
Delaware Attorney General Beau Biden credited the Delaware Child Predator Task Force with identifying all three defendants after receiving a CyberTip in late 2012 from the National Center for Missing and Exploited Children.
“These individuals will never again be a threat to children. After receiving a CyberTip the Child Predator Task Force worked quickly to uncover a child pornography network operating locally in our State and took three dangerous predators off the streets. Thanks to its excellent investigation and to our strong partnership with state and federal law enforcement agencies we’re using the full force of the law to protect children.”
“Homeland Security Investigations (HSI) special agents in Wilmington will continue to work tirelessly with our partners of the Delaware Child Predator Task Force and the U.S. Attorney’s Office in bringing child sexual predators to face justice and to ensure that those victims who are identified are rescued from this plight,” said HSI Special Agent in Charge in Philadelphia John P. Kelleghan. “This sentencing is a reminder to those who exploit our most innocent citizens, children: We will identify, investigate and arrest you for committing these horrendous crimes.”
All three cases were brought as part of the United States Department of Justice’s Project Safe Childhood Program, which was launched in May 2006 to combat the growing epidemic of online child sexual exploitation and abuse. Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue child victims. Under this program, the Delaware Attorney General’s Office, the United States Attorney’s Office, the Delaware State Police and the United States Department of Homeland Security have worked together to investigate and prosecute Zimmerman, Cordero and Pennington.For more information about the Project Safe Childhood Program, please visit http://www.justice.gov/psc/. For more information about reporting online child exploitation to the national CyberTipline, visit the National Center for Missing and Exploited Children’s website at: www.missingkids.com.
Ordained Minister Sentenced to 5 Years in Prison for Receiving Pornographic Videos of ChildrenRead the Press Release
PITTSBURGH, Pa. - A resident of Allegheny County, Pennsylvania, has been sentenced in federal court to five years imprisonment, to be followed by 10 years of supervised release, on his conviction of receipt of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on Charles Appel, 72, of Pittsburgh, Pa.
According to information presented to the court during the earlier guilty plea proceeding, Appel, an ordained minister and retired St. Edmund’s Academy teacher, received by United States mail, on Feb. 21, 2011, a video which depicted the sexual exploitation of minor boys from a Canadian video production company known as “Azov”, which previously operated a website offering DVD’s and streaming videos depicting children being sexually exploited. Appel ordered and received the video, titled “Boy Fights XIX: Triple Threat (2009)”, in both electronic and DVD format for $29.95 on Feb. 21, 2011, which he paid for with a credit card. During the period May 15, 2009 through March 13, 2011, Appel ordered child pornography videos from Azov on 29 occasions for a total cost of $1,864.54.
Assistant United States Attorney Carolyn J. Bloch prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Postal Inspection Service and members of the Pittsburgh Crimes Against Children Task Force, for the investigation leading to the successful prosecution of Appel.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
One Correctional Officer Sentenced and Another Pleads Guilty in Baltimore Jail Racketeering ConspiracyRead the Press Release
One Defendant Sentenced to 30 Months for Smuggling Drugs; Thirteenth Officer Pleads Guilty and Admits to Having Sex With BGF Inmates
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced correctional officer Katrina Laprade, a/k/a Katrina Lyons, age 32, today to 30 months in prison followed by one year of supervised release for participating in a racketeering conspiracy arising from the smuggling of drugs and contraband inside the Baltimore City Detention Center (BCDC). Another correctional officer, Tanierdra Finch, age 26, of Baltimore, and Frederick Morrison, a/k/a Fry, an inmate, age 29, pleaded guilty yesterday to the conspiracy.
The sentence and guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Secretary Gregg Hershberger of the Maryland Department of Public Safety and Correctional Services; Baltimore Police Commissioner Anthony W. Batts; and Baltimore City State’s Attorney Gregg L. Bernstein.This case was developed as a result of the efforts of the Maryland Prison Task Force, formed in 2011 with the Maryland Department of Public Safety and Correctional Services, local, state and federal law enforcement agencies, and prosecutors. The Task Force has met regularly for over three years, generating recommendations to reform prison procedures and producing leads that have been pursued by state, local and federal criminal investigators. The investigation is continuing.
According to court documents, the Black Guerilla Family (BGF) has been the dominant gang at the BCDC, and in several connected facilities, including the Baltimore Central Booking Intake Center BCBIC, the Women’s Detention Center, which houses many men, and in the Jail Industries Building.
Laprade and Finch, correctional officers at BCDC, admitted that in 2012 and 2013, they helped smuggle contraband into the jail. Laprade smuggled in marijuana and tobacco on behalf of Stephen Loney, a leader of the BGF. Finch admitted that she smuggled drugs such as Percocet into BCDC for distribution by BGF inmates such as Tavon White and Jamar Anderson. Finch also had sexual relations with some BGF members, including Anderson.
Morrison was a BGF member and in pretrial custody at BCDC from 2012 to 2013. He was involved with and often directed the smuggling of cell phones, tobacco, marijuana and drugs into BCDC through other correctional officers who received payments, gifts or a share of the profits. Morrison had sexual relations with at least one of the correctional officers involved with contraband trafficking. He also helped conceal from prison officials contraband smuggled into the jail.As part of his plea agreement, Morrison and the government have agreed that if the Court accepts the plea agreement, Morrison will be sentenced to five years in prison consecutive to any state prison sentence he is serving. Finch faces a maximum sentence of 20 years in prison for the racketeering conspiracy. Judge Hollander scheduled sentencing for Morrison on August 27, 2014 and for Finch on August 8, 2014.
Thirteen correctional officers have pleaded guilty to their roles in the conspiracy. Two of these correctional officers, Taryn Kirkland, age 23, and Adrena Rice, age 26, both of Baltimore, were sentenced in January 2014, each to 42 months in prison and officer Jasmine Thornton, a/k/a J.T., age 27, of Glen Burnie, Maryland, was sentenced to 32 months in prison on February 5, 2014.
BGF leader Tavon White, age 37; BGF commander Steven Loney, age 25; BGF members Jamar Anderson a/k/a “Hammer” and “Hamma Head,” and Kenneth Parham, both age 24; and Jermaine McFadden, age 25, an associate of BGF; also pleaded guilty to the racketeering enterprise. Parham was sentenced on February 24, 2014 to151 months in prison, McFadden was sentenced on March 12, 2014 to 140 months and Loney was sentenced on January 14, 2014 to nine years in prison. Tavon White and Jamar Anderson are awaiting sentencing.
U.S. Attorney Rosenstein recognized the efforts of the other members of the Maryland Prison Task Force, including: Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Chief Mark A. Magaw of the Prince George’s County Police Department; United States Marshal Johnny Hughes; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Tom Carr, Director of the Washington-Baltimore High Intensity Drug Trafficking Area; and Dave Engel, Executive Director of the Maryland Coordination and Analysis Center.
United States Attorney Rod J. Rosenstein praised the FBI, Maryland Department of Public Safety and Correctional Services, Baltimore Police Department, and Maryland Prison Task Force, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.Ocean County, N.J., Man Admits Forging IRS Documents to Evade Federal Tax LienRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., man today admitted forging and transmitting documents to evade a federal tax lien, U.S. Attorney Paul J. Fishman announced.
Charles W. Jarvis, 59, of Toms River, N.J., pleaded guilty today before U.S. District Judge Mary L. Cooper in Trenton federal court to an information charging him with one count of corruptly endeavoring to impede and impair the administration of the Internal Revenue Code.
According the documents filed in this case and statements made in court:
In 2012, Jarvis and his wife incurred a federal tax liability of $76,676 due to insufficient tax withholdings in 2009 and 2010. The IRS filed a tax lien against a piece of property that Jarvis’ wife had inherited from her deceased mother’s estate. Jarvis’ wife then contracted to sell the property to a third party, but could not transfer title due to the tax lien. Jarvis forged a “Notice of Tax Lien Release” and a letter purportedly from the IRS falsely claiming that the tax liability had been paid and the lien discharged. Jarvis sent the forged documents to the real estate attorney handling the sale of the property, who provided the documents to the title agent. The sale of the property closed even though the tax lien had not been satisfied.
The count to which Jarvis pleaded guilty carries a maximum potential penalty of three years in prison and a $5,000 fine. Sentencing is scheduled for August 7, 2014.
U.S. Attorney Fishman credited special agents of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge Robert M. Geary of the Philadelphia office, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.14-139
Defense counsel: Robert J. Bowman Esq., Voorhees, N.J.
Jarvis, Charles Information
North Port Couple Pleads Guilty to Filing A False Tax Refund ClaimRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that North Port residents James Dee Jaeger (62) and Lora Anne Jaeger (50) each pleaded guilty yesterday to one count of filing a false claim for tax refund. Each faces a maximum penalty of 5 years in federal prison.
According to the plea agreement, on March 31, 2009, James Dee Jaeger and Lora Anne Jaeger electronically filed a joint federal income tax return with the IRS falsely claiming a refund in the amount of $344,672. The false refund amount was based on a bogus theory that the U.S. banking system maintains “Remic Trust” accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS. Under this theory, the taxpayer first files a false Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. In this case, the IRS did not issue the fraudulent tax refund claimed by the Jaegers.
This case was investigated by the Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorney Matthew J. Mueller and Trial Attorney Kevin C. Lombardi of the Department of Justice, Tax Division.
North Canton Man Faces Gambling-Related ChargesRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced the filing of a two-count Information charging Joseph Udeck, age 70, of North Canton, Ohio, with conspiracy to launder monetary instruments and the transmission of wagering information.
Count 1 of the information alleges that from at least as early as January 1, 2000, and continuing up to and including May 1, 2011, Joseph Udeck conspired to launder money generated from an illegal sports bookmaking operation.
Count 2 of the information alleges that Joseph Udeck engaged in the business of betting and wagering and with using one or more wire communication facilities for the transmission and interstate commerce of bets and wagers and information assisting in the placing of bets and wagers on one or more sporting events and contests.
If convicted, a defendant’s sentence will be determined by the Court after review of factors unique to this case, including a defendant’s prior criminal record, if any, a defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigation preceding the information was conducted by the United States Secret Service and its Money Laundering Task Force. The case is being prosecuted by Assistant United States Attorneys Robert E. Bulford and Robert J. Patton.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Nine Indicted in Kidnaping Case of Wake Forest ManRead the Press Release
WILMINGTON – United States Attorney Thomas G. Walker announced that today, a federal grand jury in Wilmington, North Carolina returned a multi-count indictment charging KELVIN MELTON, a/k/a Dizzy, Old Man, 49, QUANTAVIOUS THOMPSON, a/k/a QUAN, KIRKWOOD QUAN, 18 or 19, JAKYM CAMEL TIBBS, a/k/a JOK, JAK, 20, TIANNA DANEY MAYNARD, a/k/a TIANNA DANET MAYNARD, TIANNA DANET SOLOMON, TIANNA BROOKS, AXT UP, ACT UP, 30, JENNA MARTIN, a/k/a JENNA PAULIN MARTIN, 21, CLIFTON JAMES ROBERTS, a/k/a YEELO, CJ, YEE, KING YEE, ELO, 29, PATRICIA ANN KRAMER, a/k/a TRISH, TRISHA, 28, JEVANTE PRICE, a/k/a JEVANTE TRAVELL PRICE, FLAME, 20, and MICHAEL MARTRELL GOODEN, a/k/a Hot, MICHAEL MONTREAL GOODEN, MICHAEL MARTREE GOODEN, 21, with Conspiracy to Commit Violations of the Kidnaping Statute. Count Two charges MELTON, KRAMER, PRICE, and GOODEN with Attempted Kidnaping and Aiding and Abetting the Same. Count Three charges MELTON, PRICE, and GOODEN with Using and Carrying a Firearm During and in Relation to Attempted Kidnaping and Aiding and Abetting the Same. Count Four charges MELTON, THOMPSON, TIBBS, MAYNARD, MARTIN, ROBERTS, PRICE, and GOODEN with Kidnaping and Aiding and Abetting the Same. Count Five charges MELTON, THOMPSON, TIBBS, and MAYNARD with the Use, Carrying, and Brandishing a Firearm During and in Relation to, and Possessing a Firearm in Furtherance of, a Kidnaping and Aiding and Abetting the Same.
If convicted on the Conspiracy to Commit Kidnaping charge, all the defendantsface a maximum penalty of life imprisonment and a $250,000 fine.
The case is being investigated by the FBI Charlotte, FBI Atlanta, the Wake Forest Police Department, the North Carolina State Bureau of Investigation with assistance by the Durham County Sheriff’s Office, Raleigh Police Department, Durham Police Department, North Carolina Alcohol Law Enforcement, Garner Police Department, North Carolina Highway Patrol, RDU Police, City County Bureau of Investigation, the Cobb County Police Department, Alpharetta Police Department, Atlanta Police Department, and the Georgia Bureau of Investigation. The United States Attorney’s Office for the Eastern District of North Carolina is handling the prosecution of these cases.
The charges contained in this indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Click on link for attached indictment.
Newman Lake Man Sentenced to 10 Years in Federal Prison for Distributing MethamphetamineRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Henry Patrick Bevans, III, age 30, of Newman Lake, Washington, was sentenced today for distributing 50 grams or more of pure methamphetamine. Senior United States District Court Judge Fred Van Sickle sentenced Bevans to a 10-year term of imprisonment and a 10-year term of court supervision following release from Federal prison. The Court also ordered Bevans to pay $8,000 in restitution to the United States.
According to information disclosed during court proceedings, on July 16, 2013 and July 18, 2013, Bevans distributed 109 and 119 grams of pure methamphetamine to another individual in a hotel room in Spokane, Washington. Bevans was charged with two counts of distributing 50 grams or more of pure methamphetamine and he pled guilty to those crimes on December 18, 2013.
Michael C. Ormsby said, "I commend the officers of the Spokane Police Department, Spokane County Sheriff's Office, Spokane Regional Drug Task Force, Spokane Violent Crimes and Gang Enforcement Team, and United States Drug Enforcement Administration for their efforts in investigating this methamphetamine case. Their strong working partnership is reflected by the successful prosecution of this case. Federal and local law enforcement officers in the Eastern District of Washington continue to work together to root out the scourge of drug trafficking in this District. With their assistance, the United States Attorney's Office for the Eastern District of Washington is committed to prosecuting aggressively and seeking appropriate punishment for traffickers distributing controlled substances in our communities."
This case was investigated by the Spokane Police Department, Spokane County Sheriff's Office, Spokane Regional Drug Task Force, Spokane Violent Crimes and Gang Enforcement Team, and United States Drug Enforcement Administration. This case was prosecuted by George J.C. Jacobs, III, an Assistant United States Attorney for the Eastern District of Washington.
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Nashville Woman Sentenced to Prison for Stealing VA Funds Intended for Needy VeteransRead the Press Release
Squandered More Than $364,000 Intended to Assist Homeless Veterans
Birdie Anderson, 56, of Nashville, Tenn., was sentenced on April 18, 2014, by U.S. District Judge Todd Campbell to serve 2 years in prison for making false statements to the Department of Veterans Affairs (VA), and stealing public money, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Anderson pleaded guilty in April 2013 to stealing the money obtained in three VA grants, totaling more than $364,000 during 2006 and 2007, which was intended to assist indigent and homeless veterans.
“This is a truly egregious violation,” said U.S. Attorney David Rivera. “There is no group as worthy of government assistance as those who have served their country in the military, and have since fallen on hard times. This defendant’s greed and deception deprived that group of assistance they needed, and as a result they will not receive the benefit of the money she stole and squandered. Hopefully others like defendant who may be tempted to take advantage of government programs that are intended to help others, will take heed of this case.”
According to testimony at the hearing, in April 2007 Anderson obtained the first VA grant of $80,000 for the purchase of a dwelling. The grant agreement specified that she would not be required to repay the grant on condition that she would maintain the property as a residence for homeless veterans for a period of seven years. She represented that the property was worth $124,000 and that she had the rest of the money on hand in cash for the purchase. In truth she did not have the balance of the purchase price in cash, but instead obtained a mortgage loan of $75,000 to purchase the property. She then used only about $55,000 of the $80,000 cash grant provided by VA to close on the property, and simply kept the rest. She made only one payment on the mortgage, and defaulted on the loan. Though the property was used to house veterans for a period of time, it has been repossessed and is no longer available to veterans as a residence.In December 2007 Anderson obtained a second grant of $25,000, which she represented she would combine with matching funds to purchase a $40,000 specialty van for use in transporting veterans to medical appointments and job interviews. Anderson submitted a sales contract and a vehicle identification number for the van she represented she was going to purchase, in support of her grant application. She received and kept the cash VA deposited into her bank account, but simply never purchased the van.
In March 2009 Anderson applied for and obtained a third VA grant of more than $250,000 for the purchase of a large apartment building worth $398,000. Anderson again represented that she would maintain this building as a residential dwelling for homeless veterans, and that the City of Nashville had agreed to provide the matching funds for the purchase. In support of this representation, Anderson submitted a letter which purported to have been sent by the director of the Nashville Commission on Homelessness, and which represented that Nashville had committed the balance of funds needed for this purchase. The letter was later determined to be a forgery. Anderson received the VA grant funds but never closed on the property, since she did not in fact have any matching funds. When VA officials inquired of Anderson regarding the fact that no purchase had occurred, she falsely represented that she was undergoing cancer treatments.
The matter was referred to the VA Office of Inspector General for investigation. Agents executed a search warrant on Anderson’s Nashville residence in February 2012. No money was located, but agents discovered hundreds of receipts demonstrating gambling activity at regional casinos and horse tracks. A review of her bank records likewise revealed numerous checks written to and debit card use at such establishments, during 2007 through 2009. Anderson told agents that the $250,000 cash from the third grant was in a safe located in New Hampshire. Further investigation, however, disclosed no such safe or cash being maintained on Anderson’s behalf and none of the grant money was ever recovered.
Monty Stokes, Special Agent in Charge, VA Office of Inspector General, said, “The VA Grant and Per Diem Program’s goal is to promote the development of supportive housing and services to assist homeless veterans achieve residential stability, increased skills and obtain greater independence. Because of the successful investigative and prosecutive efforts of the VA OIG and the U.S. Attorney’s office, Birdie Anderson’s greed and deception will not go unchecked. She will have the next two years to contemplate if it was really worth it.”
The case was investigated by the Nashville VA Office of Inspector General, and was prosecuted by Assistant U.S. Attorney Hilliard Hester.
Middlesex County, N.J., Man Sentenced to 18 Years in Prison for Production, Distribution of Child Sex Abuse ImagesRead the Press Release
TRENTON, N.J. – A Middlesex County, N.J., man who once worked as a school crossing guard was sentenced today to 216 months in prison for taking compromising photographs of a naked child and distributing them and hundreds of other photographs of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Kenneth Christensen, 45, of Edison, N.J., previously pleaded guilty before U.S. District Judge Peter G. Sheridan to information charging him with one count of production of child pornography and one count of distribution of child pornography. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:Christensen – who worked as a school crossing guard in Metuchen, N.J., prior to his arrest – admitted that in 2012, he sent four individuals emails containing several hundred images of child pornography, including sadistic and masochistic conduct. Christensen acknowledged he distributed more than 600 such images.
Christensen also admitted that some of the files he distributed were photographs he took himself, including in his own bedroom, of a naked, prepubescent child who was bound in some of the images.
In addition to the prison term, Judge Sheridan sentenced Christensen to lifetime supervised release and required him to register as a sex offender.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney David M. Eskew of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense counsel: K. Anthony Thomas Esq., Assistant Federal Public Defender, NewarkMercer County, N.J., Man Sentenced to More Than 17 Years in Prison for Producing Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Mercer County, N.J., man was sentenced today to 210 months in prison for producing images of child sexual abuse by coercing a minor victim to stream explicit content to him over the Internet, U.S. Attorney Paul J. Fishman announced.
Fredy Arbito, 31, of Hightstown, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of production of child pornography. Judge Shipp also imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
During his guilty plea proceeding, Arbito admitted that between July 2011 and January 2013, he made contact with a young girl over a video chat messaging system and coerced her to engage in sexually explicit conduct for the purpose of transmitting it live over the Internet. Arbito also admitted keeping copies of the video on his own computer.
Arbito was initially charged with possession of child pornography, apprehended by local authorities in Panama and returned to the United States where he was arrested by special agents of Department of Homeland Security’s Immigration and Customs Enforcement, Homeland Security Investigations (HSI) in April of 2013.
In addition to the prison term, Judge Shipp also sentenced Arbito to serve a lifetime of supervised release. Arbito is also required to register as a sex offender.
U.S. Attorney Fishman praised special agents of the HSI, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation.
Defense counsel: James R. Lisa Esq., Jersey City, N.J.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
14-141Memphis Women Plead Guilty to Tax Fraud Scheme Using Identities of Deceased PersonsRead the Press Release
Memphis, TN – A tax fraud scheme that featured returns filed on behalf of deceased individuals resulted in a pair of guilty pleas, announced U.S. Attorney Edward L. Stanton III.
Nakita Brooks, 31, and Cheryl Wright, 30, both of Memphis, each pleaded guilty to one count of conspiracy to defraud the government through the filing of false income tax returns.
According to the facts presented in the indictment and revealed during sentencing hearings, beginning as early as February 2010 through at least November 2011, Brooks and Wright filed hundreds of false returns using the personal identifying information of deceased individuals, including social security numbers.
In addition to filing false returns, Wright and Brooks also set up tax return services using stolen identities as the preparers of the returns. In 2010, the name of the company used to prepare the returns was Rattler’s Tax Pals. In 2011, the name of the company used to prepare the returns was Taxes Express. Three individuals, including a nine-year old girl from Indiana, had their tax information fraudulently listed as the preparers for these companies.
At least $462,619.31 was deposited into accounts under the control of Brooks and Wright. The total loss is estimated to be $1 million to $2.5 million. The conspiracy count carries a penalty of up to 10 years in prison and a fine of up to $250,000.
Brooks will be sentenced on July 11, 2014, and Wright will be sentenced on July 24, 2014. Both will appear before U.S. District Judge John T. Fowlkes, Jr.
This case was investigated by IRS-Criminal Investigations. Assistant U.S. Attorney David Pritchard represented the government.Memphis Pair Indicted for Half-Million Dollar Mortgage and I.D. Fraud SchemeRead the Press Release
Memphis, TN – Marcus Payne, 44, of Memphis, TN, and Booker Smith, 30, of Memphis, TN, were indicted by a federal grand jury on April 16, 2014 on seven counts related to a mortgage fraud and identity theft scheme, announced U.S. Attorney Edward L. Stanton III.
Payne and Smith were each charged with one count of conspiracy to commit mail, wire and bank fraud; two counts of wire fraud; two counts of bank fraud; one count of mail fraud; and one count of aggravated identity theft.
According to the facts alleged in the indictment, between December 2008 and May 2009, Payne and Smith committed multiple acts of bank, wire and mail fraud as part of a scheme to fraudulently enrich themselves, by applying for mortgage loans to purchase residential properties using someone else’s personal identifying information, including social security numbers. As a result of the conspiracy and scheme, more than $500,000 was fraudulently obtained from Fifth Third Bank and CitiBank.
The aggravated identity theft charge carries a penalty of two years in prison consecutive to any other sentence. Each of the other charges carries a penalty of up to 30 years in federal prison. There is no parole in the federal prison system.
This case was investigated by IRS-Criminal Investigations and the FBI. Assistant U.S Attorney Brian Coleman is representing the government.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.Last Defendant Found Guilty in $30 Million Bakersfield Mortgage Fraud SchemeRead the Press Release
FRESNO, Calif. — A federal jury in Fresno, returned a verdict today in the trial of Julie Dianne Farmer, 45, of Bakersfield, finding her guilty of conspiracy to commit mail fraud, wire fraud and bank fraud, and two counts each of mail fraud and wire fraud, United States Attorney Benjamin B. Wagner announced. The charges stem from her involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007.
“The jury’s verdict marks the end of a long and thorough investigation that resulted in the conviction of 14 defendants before this trial even began,” said U.S. Attorney Wagner. “The fraud perpetrated at the Crisp, Cole & Associates real estate firm harmed neighborhoods, local builders, consumers, and lenders. This office has earned a national reputation for mortgage fraud prosecutions, and we will continue to bring to justice anyone who commits these crimes.”
“Today’s verdict is a bittersweet end to our extensive investigation into the large-scale conspiracy of Crisp, Cole & Associates, also known as Crisp & Cole Real Estate (CCRE), and Tower Lending in the Bakersfield area. While millions in restitution have been ordered to be paid and a total of 14 individuals will spend time in prison for the crimes they committed, the damage that was done to the real estate industry and community in Bakersfield area will continue to have a negative impact for years to come,” said Supervisory Special Agent Jose Moreno of the Sacramento FBI’s Bakersfield resident agency.
According to evidence brought at trial, between January 2004 and September 2007, Farmer conspired with David Crisp, Carl Cole, and other co-defendants to commit mail fraud, wire fraud, and bank fraud, and to defraud mortgage loan companies and federally insured financial institutions of money and property, by means of materially false and fraudulent pretenses, representations, and promises. Farmer was Crisp & Cole Real Estate’s (CCRE) chief operations officer and managed CCRE’s business operations and business accounts. She and co-defendants David Crisp and Carl Cole oversaw and managed the conspiracy to defraud the lenders, and directed co-defendants and others in furtherance of the conspiracy. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due.Farmer is scheduled to be sentenced on July 14, 2014. She faces a maximum penalty of 30 years in prison and a $1 million fine for conspiracy to commit mail fraud, wire fraud and bank fraud; 20 years in prison and a $250,000 for mail and wire fraud. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.
Each of Farmer’s co-defendants has previously entered pleas of guilty for their roles in the scheme and several have been sentenced. Carl Cole and David Crisp, were each sentenced to 17 years and seven months in prison. Caleb Cole was sentenced to five months in prison, and Jennifer Crisp was sentenced to five years’ probation. Jayson Peter Costa was sentenced to six and a half years in prison. Sentencing dates for the remaining defendants are as follows: Michael Angelo Munoz on May 5, 2014; Jeriel Salinas on May 12, 2014; and Sneha Mohammadi on June 9, 2014. Robinson Nguyen has completed his 27-month sentence.
Before David Crisp, Carl Cole, and the other defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to this scheme. Three are scheduled to be sentenced on June 2, 2014: Jerald Allen Teixeira, Megan Balod, and Christopher Lance Stovall. Kevin Patrick Sluga and Leslie Sluga are scheduled to be sentenced on May 27, 2014.
This case was done in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.Jury Convicts Three Chiropractors and One Recruiter in Staged Automobile Accident SchemeRead the Press Release
93 defendants have been charged to date in Operation Sledgehammer I-VIWifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, and Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, announced that after a six-week trial before U.S. District Judge Kenneth A. Marra, a federal jury in West Palm Beach convicted defendants Kenneth Karow, 54, chiropractor, of West Palm Beach, Hermann J. Diehl, 44, chiropractor, of Miami, Hal Mark Kreitman, 50, former chiropractor, of Miami Beach, and Joel Antonio Simon Ramirez, 29, staged automobile accident recruiter, of West Palm Beach, for their participation in a massive staged automobile accident scheme based in Palm Beach and Miami-Dade Counties.
All of the defendants were convicted of one count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1341, all in violation of Title 18, United States Code, Section 1349; and one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1), all in violation of Title 18, United States Code, Section 1956(h). Defendant Karow was convicted of 48 substantive counts of mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2, and 11 substantive counts of money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii) and 2. Defendant Diehl was convicted of two substantive counts of mail fraud and three substantive counts of money laundering. Defendant Kreitman was convicted of 21 substantive counts of mail fraud and two substantive counts of money laundering. Defendant Simon-Ramirez was convicted of eight substantive counts of mail fraud and one substantive count of money laundering.
According to the superseding indictment, these four defendants were charged with defrauding insurance companies out of Personal Injury Protection (“PIP”) insurance payments through the use of the United States Mails. This indictment alleges that the fraud was committed in a number of ways, including: (1) by soliciting licensed chiropractors, including defendants Karow and Diehl, who would serve as the “named owners” of chiropractic clinics although others would maintain financial control over the businesses in order to avoid Florida’s licensing restrictions; (2) by recruiting individuals to participate in staged automobile accidents or persons who had been in real automobile accidents but who had not suffered any injuries to attend chiropractic clinics and make claims for reimbursement for treatments that were neither needed nor received; (3) submitting fraudulent claims to insurance companies stating that the bills were for treatments that were medically necessary and were actually received when neither was true; (4) submitting claims to insurance companies without attempting to collect co-pays and deductibles from the insureds and without disclosing that fact to the insurance companies; and (5) converting the money collected from the insurance companies to cash which would be used to pay recruiters, patients, and other participants, and to enrich the members of the conspiracy.
This Superseding Indictment was the latest in a series of federal and state charges that have been part of a four-year investigation into a massive staged automobile accident/fraudulent chiropractic clinic scheme based in Palm Beach and Miami-Dade Counties. The joint federal and state law enforcement investigation, dubbed Operation Sledgehammer, has resulted in charges filed against 93 defendants for their participation in this automobile insurance fraud scheme. Of those 93 defendants, 57 have been charged federally by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $11 million to the defrauded insurance companies. With today’s verdicts, 51 of those 57 defendants have been convicted by jury or by guilty plea. The remaining six defendants are fugitives. Another thirty-six defendants have been charged by the Palm Beach County State Attorney’s Office.
According to the evidence presented at trial, between October 2006 and December 2012, the defendants and their co-conspirators staged automobile accidents and thereafter caused the submission of false insurance claims through chiropractic clinics they controlled. To execute the scheme, the true owners of the chiropractic clinics allegedly recruited individuals, who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics. The defendants, including Simon Ramirez, also recruited individuals, whom they referred to as “Macho” and the “Hembra” or the “Perro” and “Perra,” to participate in the accidents, and others to help the clinics launder the insurance proceeds. The defendants also hired complicit chiropractors, including Diehl, Karow and Kreitman, and therapists who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Thereafter, complicit clinic employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services. Twenty-one clinics participated in this scheme.
The defendants face a maximum sentence of 20 years in prison each count of conspiracy to commit mail fraud, substantive mail fraud, conspiracy to commit money laundering, and substantive money laundering. Restitution to the victims of these offenses is mandatory. Sentencing for all four defendants is set for July 3, 2014 before Judge Marra in West Palm Beach.
Mr. Ferrer commended the efforts of the FBI, IRS-CI, the Florida Division of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force for their outstanding work in this case. Mr. Ferrer also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance in this investigation. This case was handled by Assistant U.S. Attorneys A. Marie Villafaña and E.J. Yera.
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.
Jackson County Man Pleads Guilty to Trafficking Oxycodone and Stolen Firearm ChargesRead the Press Release
Defendant Caught with Hydrocodone, Cash and Stolen Firearms
CHARLESTON, W.Va. – A Jackson County man who possessed hydrocodone and stolen firearms pleaded guilty today to federal charges, announced U.S. Attorney Booth Goodwin. Hubert Dwayne Messer, 43, pleaded guilty to conspiracy to distribute oxycodone and possession of stolen firearms in federal court in Charleston.
In February of 2013, the Jackson County Sheriff’s Department executed a search warrant at Messer’s Stonelick Road residence in Gay, West Virginia and seized hydrocodone, more than $35,000, and five stolen firearms. Messer admitted distributing oxycodone in and around Jackson County from at least 2004 until February 2013.
Messer faces up to 30 years in federal prison when he is sentenced on August 6, 2014.
The Jackson County Sheriff’s Department conducted the investigation. 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. The case is also brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Hudson County, N.J., Woman Federally Charged with Robbing Three Banks in Three WeeksRead the Press Release
NEWARK, N.J. – A woman who allegedly robbed three banks in three-week span has been charged federally in connection with the spree, U.S. Attorney Paul J. Fishman announced.
Valeria Parziale, 34, of Harrison, N.J., is charged by complaint with three counts of bank robbery in connection with two robberies in Newark and one in Harrison in January and February of 2014. She was arrested by the Newark Police Department and charged on Feb. 24, 2014, by the Essex County Prosecutor’s Office with related crimes. The U.S. Attorney’s Office is adopting the case for federal prosecution.
Parziale is expected to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint filed in this case:
Parziale robbed a Valley National Bank in Harrison on Jan. 30, 2014; a Wells Fargo bank in Newark on Feb. 14, 2014; and a Popular Community Bank in Newark on Feb. 20, 2014. During each robbery, Parziale handed the teller a note demanding cash and threatening to use a gun.
Parziale’s notes contained threatening language including, “I Have A Gun! Don’t Be Stupid!” She wore sunglasses and a wig to commit the Newark Wells Fargo robbery and a dark, hooded jacket and gloves to the bank in Harrison.
Each of the bank robbery charges carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to the arrest and charges. He also thanked the Newark, Kearny and Harrison Police Departments for their excellent work in this case.
The government is represented by Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and the allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
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Defense counsel: Assistant Federal Public Defender John Yauch Esq., Newark
Parziale, Valeria Complaint
Hogsett Announces Maximum Sentence Imposed on Illegal Firearm Manufacturing OperationRead the Press Release
Hendricks County man charged with illegal possession of 175 firearms, 59,000 rounds of ammunition and 35 fully automatic machineguns
INDIANAPOLIS- Joseph H. Hogsett, the United States Attorney, announced today the sentencing of a Hendricks County man on federal firearms charges. Jackie Richardson, 49, was sentenced to ten years imprisonment on one count of being a felon in possession of a firearm and one count of unlawfully possessing a machinegun.
“Never in the three and one half years that I have served as the United States Attorney have we prosecuted a felony possession case more egregious and dangerous as this,” said Hogsett. “The danger posed by the presence of an illegal gun manufacturing operation to the citizens of Hendricks County is unacceptably disconcerting.”
Richardson was arrested on December 17, 2011, by Hendricks County Sheriff’s Department (HCSD) deputies following a 9-1-1 call reporting a domestic violence incident at Richardson’s residence in Coatesville, Indiana. When deputies responded to the residence, they uncovered evidence of an illegal firearms manufacturing operation and contacted the ATF. During a joint search of Richardson’s property, ATF agents and HCSD deputies recovered approximately 175 firearms along with various firearms parts and over 59,000 rounds of ammunition. ATF experts at the Firearms Technology Branch in Martinsburg, WV, later determined that 35 of the recovered firearms were fully automatic machineguns.
At the time of his arrest, Richardson was prohibited by federal law from possessing any firearms or ammunition by virtue of his multiple prior felony convictions, including convictions in Indiana state court for felony battery and theft in January and April of 1998, respectively and a prior felony conviction for possession of a firearm by a convicted felon (SDIN) in March of 1999. Prior to being prosecuted for the most recent federal violations, Richardson was convicted in Hendricks County Superior Court of felony intimidation stemming from a domestic violence incident in December of 2011.
This prosecution comes as part of the U.S. Attorney’s Violent Crime Initiative (VCI), and is the result of a collaborative investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hendricks County Sheriff’s Department.
Announced in March of 2011, the Violent Crime Initiative represents a district-wide strategy to work with local law enforcement and county prosecutors to combat drug traffickers and criminals that use and carry firearms in their illegal activities. The VCI has produced a dramatic increase in the number of gun-related charges brought federally. In the year preceding the initiative, there were just 14 defendants charged with federal gun crimes by the U.S. Attorney’s Office. In the nearly three years since, more than 314 defendants have been charged.
“Through our Violent Crime Initiative, and in working with our law enforcement partners here in Central Indiana, we’re sending a united message that illegally-armed felons will face the full force of federal law,” Hogsett added. “Prior to the initiative, this office prosecuted one gun crime a month, now we are aggressively prosecuting more than two per week.
According to Assistant U.S. Attorney Matt Rinka, who prosecuted this case for the government, Richardson faces three years of supervised release following his sentence.
Harrisburg Man Sentenced to Prison on Firearms Charges as Part of On-Going Partnership to Prosecute Violent CrimeRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Harrisburg man was sentenced today, in federal court in Scranton by Senior United States District Judge Sylvia H. Rambo, to serve 235 months in prison on the charge of possession of a firearm by a convicted felon and possession of a stolen firearm.
According to United States Attorney Peter Smith, a jury found Carlos C. Hill, age 42, of Harrisburg, guilty of possession of a firearm by a convicted felon in March 2013.
The charges were the result of an on-going partnership between the Dauphin County District Attorney’s Office and the U.S. Attorney’s Office announced in August 2012 to respond to a surge of violent crime within the city. The charges against Hill arose from an incident in which, after Hill brandished a stolen firearm at a female victim in the 1600 Block of Park Street in Harrisburg, the firearm was subsequently recovered by the Harrisburg Police Bureau.
In addition to the prison term, Senior Judge Rambo also ordered that Hill supervised by a probation officer for five years following his release from prison.
Hill was indicted by a federal grand jury on September 26, 2012, after an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and Harrisburg Police Bureau.
The case was prosecuted by Assistant United States Attorney Meredith A. Taylor.
****Harrisburg Businessman Arrested and Charged with Federal Tax FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Paul Biko, age 61 and Maura Mia Whetsel, age 31, both of Harrisburg, Pennsylvania were arrested today on federal tax fraud charges involving failure to pay to the IRS or account for approximately $200,000 withheld from wages of employees.
According to United States Attorney Peter Smith, beginning in or about April 2006 through in or about January 2010, Biko and Whetsel, Biko’s daughter, allegedly conspired to impede and obstruct the IRS in the assessment, computation and collection of federal employment taxes. The alleged objectives of the tax conspiracy were to not fully pay over to the IRS the employment taxes Biko withheld from employees and then convert these funds for other business and personal uses. Biko was the Chief Officer of Clearview of Harrisburg, Clearview Landscaping and Clearview Builders. Whetsel was the firms’ Director of Finance and bookkeeper.
The Superceding Indictment also charges Biko and Whetsel with 8 counts of failing to truthfully account for and pay over to the IRS the employment taxes Biko withheld from his employees.
Biko and Whetsel were charged earlier this month in initial and superceding indictments that were sealed until the defendants were taken into custody today. Their initial appearance was held today before Magistrate Judge Susan E. Schwab. The case has been assigned to Chief District Judge Christopher C. Conner. Both defendants were released under pretrial supervision.
The investigation was conducted by the Internal Revenue Service Criminal Investigations. Prosecution is assigned to Assistant United States Attorney Joseph J. Terz.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 5 years imprisonment, a term of supervised release following imprisonment, and a $250,000 fine for Count 1 and 5 years imprisonment, a term of supervised release following imprisonment, and a $10,000 fine for each count of Count 2 through 8. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Fraudster Homebuilder Pleads Guilty to Defrauding Investors of More Than $22 Million and to Evading More Than $1.4 Million in Tax PaymentsRead the Press Release
Baltimore, Maryland - Patrick J. Belzner, a/k/a “Patrick McCloskey,” age 45, of Glen Arm, Maryland, pleaded guilty late yesterday to a wire fraud conspiracy, wire fraud and tax evasion.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“For over a decade, through a combination of lies and deceit, Patrick Belzner and his coconspirators caused serious financial harm to their victims. These individuals were focused on their own personal gratification with no regard for the consequences of their actions,” said Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office. “Holding cheats such as Belzner accountable for their misdeeds, is critically important to maintaining the integrity of our economy.”
According to Belzner’s plea agreement, from 2009 through August 2011, Belzner, a home builder, worked for a real estate development business known as the McCloskey Group, LLC, owned by Brian McCloskey, who was also a home builder. During that time, Belzner conspired with McCloskey, Maryland attorney Kevin Sniffen and others to defraud investors through a fraudulent investment scheme.
Specifically, Belzner and the conspirators advised wealthy individuals and investment advisers that in order for the McCloskey Group to obtain loans for commercial real estate projects, the loan broker required that large sums of money be deposited in an escrow bank account to show “liquidity.” They further falsely represented that the funds would be maintained under the control of Sniffen, a licensed attorney and escrow agent; would not be used for any other purpose; and that the money would be returned to the investor, either upon the funding of the loan or after a specified period of time. In return for this temporary use of the investor's funds, Belzner and McCloskey promised to pay substantial fees or interest.
Instead, Belzner admitted that he directed McCloskey to remove the investors’ funds soon after they had been deposited into the escrow account. Belzner and McCloskey then used the stolen funds to pay for their personal and business expenses, as well as to make partial repayments to earlier lenders, to pay fees to some of the victim investors to keep them from demanding the return of their money, and to pay the loan broker for its supposed work and expenses in attempting to locate financing sources.
Belzner and his co-conspirators attempted to conceal the fraud by: issuing false bank statements regarding the amount of escrowed funds; falsely representing in emails and by phone the balance of escrow funds and the date when the investors’ money would be returned; and returning part of the victim’s investment using funds fraudulently obtained from other investors. Belzner also wrote scripts for the conspirators to use in telephone conversations or in written communications to lull the victims and their representatives into believing that their escrow monies were safe and would be returned to them as promised in the escrow agreements, as well as to persuade victims not to pursue demands or legal action for the immediate return of their funds.
The government contends that Belzner and his conspirators' fraudulent scheme caused losses in excess of $22 million to more than 10 victim investors.
Belzner also pleaded guilty to evasion of assessed tax payments. In 1995, 1996 and 1998, Belzner stole $1,111,304.78 from his employer at the time, and in 1998, he stole $186,146.71 from another employer, none of which he reported as income on his tax returns for those years. A subsequent IRS audit of those tax years resulted in the assessment of additional taxes, interest and penalties against Belzner of $1,150,935.25 for the 1995 and 1996 tax years and $246,424.50 for the 1998 and 1999 tax years.
To avoid paying those taxes, Belzner admitted that between January 2006 and June 2011, he intentionally concealed income and assets from the IRS and made no payments on his tax debt. For example, Belzner placed his residences, other real estate and automobiles, in the names of corporations that he formed. Belzner paid his personal expenses from bank accounts he opened in the names of the corporations, including his mortgage, ground rent for a vacation home, construction costs on a house that he built, car payments, Ravens season tickets, and private school tuition. Belzner used individuals to act as “straw purchasers” for property that he acquired and to conduct financial and other transactions on his behalf. At Belzner’s direction, McCloskey Group employees and others also cashed more than $175,870 in company checks made payable to them, returning the cash to Belzner or using the cash to pay Belzner's creditors. Belzner also arranged for the McCloskey Group to pay many of his personal living expenses, rather than issuing him salary checks. For example, between January 2009 and June 2011, the McCloskey Group paid more than $1.5 million of Belzner’s personal expenses, including health and life insurance premiums, car, personal loan and mortgage payments, and utility and cable bills. In February 2006 and again in January 2009, Belzner submitted forms to the IRS falsely claiming that he did not have sufficient income to make any payments on the assessed back taxes, penalties and interest. The total amount of assessed tax, interest and penalties owed by Belzner as of August 2013 was $2,619,870.
Belzner faces a maximum sentence of 20 years in prison each for wire fraud and for conspiracy; and a maximum of five years in prison for evasion of assessed tax payments. U.S. District Judge James K. Bredar has scheduled sentencing for September 3, 2014 at 10:00 a.m.
Brian McCloskey, age 42, of Baltimore and Kevin Sniffen, age 52, of Phoenix, Maryland have each pleaded guilty to their roles in the conspiracy and are awaiting sentencing.
Today’s announcement is 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. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the FBI and IRS – Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Jefferson M. Gray and Kathleen O. Gavin, who are prosecuting the case.
Former Pharmaceutical Executive Sentenced to 16 Months in Prison for Central Role in Insider Trading SchemeRead the Press Release
Defendant and Conspirators Netted $1.4 Million in Illicit Profits over Five Years
NEWARK, N.J. - A former executive of a pharmaceutical technology firm was sentenced today to 16 months in prison for playing a central role in an insider trading scheme that repeatedly exploited non-public material information for financial gain, U.S. Attorney Paul J. Fishman announced.
John Lazorchak, 43, of Long Valley, N.J., previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a six-count information charging him with one count of conspiracy to commit securities fraud and five counts of securities fraud. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court: Lazorchak was director of financial reporting at Celgene Corp., a global pharmaceutical company based in New Jersey. Mark Cupo, 53, of Morris Plains, N.J., a friend and former boss of Lazorchak, held a similar position at Sanofi-Aventis, another New Jersey-based global pharmaceutical company. Another conspirator, Mark Foldy, 44, of Morris Plains, a friend and high school classmate of Lazorchak, was a marketing executive at Stryker Corp., a leading medical technology business with a major division located in New Jersey.
In their respective positions, Lazorchak, Cupo, and Foldy became privy to certain material information, including merger and acquisition plans, and – with respect to Lazorchak – quarterly earnings results and decisions on regulatory applications, before such information was made public.
From 2007 to 2012, Lazorchak regularly disclosed non-public information about Celgene’s anticipated corporate acquisitions, numerous quarterly earnings results, and regulatory news to Cupo with the expectation that Cupo would pass the information to a “friend” who would trade in the securities of Celgene or its target acquisition companies and then share the profits with Lazorchak and Cupo.There were, in fact, two “friends” to whom Cupo passed non-public material information: Lawrence Grum, 50, of Livingston, N.J., and Michael Castelli, 50, of Morris Plains, N.J. Both Grum and Castelli traded on the inside information and made more than half a million dollars in profits apiece. Grum and Castelli also passed certain Celgene inside information to friends and family members.
Lazorchak funneled information about Celgene’s anticipated acquisition of Pharmion Corp. in 2007 to his high-school friends, Foldy and Michael Pendolino, 44, a New Hampshire-based chiropractor. In the months leading up to the deal, Foldy and Pendolino traded on the inside information for a profit and broadened the insider trading network by tipping family members and other friends.
In May 2010, Lazorchak informed Cupo of Celgene’s then-confidential plans to acquire Abraxis BioScience Inc. After receiving the information from Cupo, Grum and Castelli purchased Abraxis stock and sold it immediately after the June 30, 2010, acquisition announcement. Grum and Castelli collectively made more than $150,000 in profits and paid thousands of dollars in cash to Cupo, to be shared with Lazorchak.
Between February and March 2011, Foldy informed Lazorchak of Stryker’s then-confidential plans to acquire Orthovita Inc. as payback for the Pharmion deal back in 2007. Foldy also tipped other friends and family members about the Orthovita deal.
Lazorchak passed the Orthovita tip to Pendolino and Cupo. Pendolino not only traded on the Pharmion-related inside information himself, but also passed it on to another high school friend. Cupo gave the information to Grum and Castelli, who traded for substantial profits and gave a cash portion back to Cupo, for distribution amongst Cupo, Lazorchak, and Foldy.
Over the course of the five-year scheme, the conspirators collectively reaped more than $1.4 million in illicit profits by trading ahead of at least 11 corporate news events that Lazorchak or Cupo revealed to them prior to public announcement.
In addition to the prison term, Judge Hayden sentenced Lazorchak to two years of supervised release and ordered him to forfeit $3,000.
Lazorchak is the fifth defendant charged with participating in this insider trading network to be sentenced. On April 9, 2014, Grum was sentenced to one year and one day in prison and Castelli was sentenced to nine months in prison. On April 16, 2014, Cupo was sentenced to 16 months in prison and Foldy was sentenced to two years of supervised release with six months of home confinement and electronic monitoring. The sixth and final charged defendant, Michael Pendolino, is scheduled to be sentenced by Judge Hayden on May 5, 2014.
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 sentences. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit, under the direction of Daniel M. Hawke.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Today’s sentencing is 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.
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Defense counsel: John Lazorchak: Lawrence S. Lustberg Esq. and Amanda B. Protess, Esq., Newark
Mark Cupo: Joseph J. Bell Esq. and Joseph J. Bell, IV Esq., Rockaway, NJ
Lawrence Grum: Scott A. Resnik Esq., New York
Michael Castelli: Daniel Zinman Esq. and Daniel Stein Esq., New York
Mark Foldy: Jonathan Marks Esq., New York
Michael Pendolino: James S. Friedman Esq., NewarkFormer Northern Kentucky School Superintendent Sentenced for Embezzling MoneyRead the Press Release
COVINGTON, KY - The former superintendent for the Dayton Independent School District has been sentenced to two years in federal prison for embezzling school funds during his tenure.
U.S. District Judge David L. Bunning sentenced William Rye, 66, of Wilder, Ky., for embezzlement. Under federal law, Rye will have to serve at least 85 percent of his prison sentence and following his release he will be under the supervision of the U.S. Probation Office for three years. Following the sentencing, Rye was released on his own recognizance and ordered to report on June 2 to a prison facility designated by the Bureau of Prisons. Rye has already paid full restitution in the amount of $193,149.22.
Rye pled guilty in December 2013 and admitted that, between 2004 and 2012, he embezzled approximately $193,149.22 from the Dayton Independent School District, while serving as school superintendent. The Dayton School District annually receives in excess of $10,000 in federal funds.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Laura K. Voorhees represents the federal government in this case.
Former Loan Officer Admits Role in Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. – A Middlesex County, N.J., man today admitted his role in a large-scale mortgage fraud scheme that caused millions of dollars in losses, U.S. Attorney Paul J. Fishman announced.
Delio Coutinho, 71, of Colonia, N.J., pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
From March 2008 through June 2012, Coutinho and his co-defendants conspired with each other and others to release liens on encumbered properties via fraudulently arranged short sale transactions. This allowed Coutinho and his co-defendants to profit from new fraudulent mortgage loans obtained on the properties from other mortgage lenders. To complete the short sale transactions, Coutinho and his co-defendants submitted materially false closing and other documents to mortgage lenders. They submitted fraudulent mortgage loan applications to lenders to obtain new loans on properties in and around Elizabeth, N.J., including a property on Fulton Street.
Coutinho was a loan officer at a northern New Jersey mortgage brokerage company, and he submitted false documents in support of the schemes. Co-defendants included Jose Luis Salguero Bedoya, 37, of Elizabeth, a real estate investor who, along with his girlfriend, Yazmin Soto-Cruz, 33, of Elizabeth, provided much of the funds used by the defendants to perpetuate their fraudulent schemes. Christopher Ju, 28, of Edison, N.J., negotiated the fraudulent short sale real estate transactions. In all, Coutinho and the others obtained approximately $2 million in illegal mortgage proceeds.
The conspiracy count to which Coutinho pleaded guilty carries a maximum potential penalty of 30 years in prison and a $100,000 fine.
U.S. Attorney Fishman credited the FBI Newark Mortgage Fraud Task Force, which includes special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Housing and Urban Development, Office of Inspector General, Northeast Region of Investigations, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Inspector General Michael P. Stephens; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy L. Romero; special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Acting Prosecutor Gaetano Gregory, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark, and Charlton A. Rugg of the Narcotics/OCDETF Unit.
Today’s guilty plea is part of efforts 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.
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Defense counsel: Michael A. Robbins Esq., West Orange, N.J.
Coutinho, Delio Information
Former Federal Correctional Officer Please Guilty to Sexual Relations with InmateRead the Press Release
TALLAHASSEE, FLORIDA -- Angel Santiago, 43, of Ambrose, Georgia, pleaded guilty today to knowingly engaging in a sexual act with a federal prisoner. The plea was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida, and Teresa M. Gulotta-Powers, Special Agent in Charge, United States Department of Justice Office of the Inspector General, Miami Field Office.
Plea documents reflect that, while working as a correctional officer at the Federal Correctional Institution in Tallahassee, Santiago developed a romantic relationship with a female inmate. Several times a month between 2010 and 2012, Santiago would enter the inmate’s cell in the early morning hours and have sexual intercourse with her.
Santiago faces a maximum sentence of 15 years in federal prison. He is also subject to a term of supervised release of five years to life. Sentencing will be held July 10, 2014, in federal district court in Tallahassee.
The case was investigated by the United States Department of Justice Office of the Inspector General. It is being prosecuted by Assistant U.S. Attorney Karen Rhew-Miller.
Former Dawson Springs Letter Carrier Sentenced to Prison Term for Destroying and Delaying the Delivery of at Least 44,900 Pieces of MailRead the Press Release
OWENSBORO, Ky. – A former United States Postal Service Employee from Dawson Springs, Kentucky was sentenced on April 17, 2014 to six months in prison followed by six months of home incarceration for destroying, hiding and delaying the delivery of at least 44,900 pieces of mail announced David J. Hale, United States Attorney for the Western District of Kentucky.
William “Brent” Morse, age 34, also was ordered to pay $14,808.01 by Chief Judge Joseph H. McKinley Jr., for losses suffered by individual residents and a local bank and for losses to two businesses which attempted to mail commercial circulars during the time period when defendant Morse did not deliver the United States Postal Service (USPS) mail.
In court, Morse admitted that for a two year period, beginning around March 2011, until March 30, 2013, when he resigned from the USPS, he destroyed at least 1,000 pieces of undelivered USPS mail and stored at least 44,900 pieces of undelivered mail at his deceased mother’s home and at rented storage facilities located in Dawson Springs. The majority of the undelivered mail was meant for delivery in the Dawson Springs community. The USPS has since delivered the recovered mail. Morse was charged in a single count, grand jury indictment, on August 14, 2013. He was not charged with stealing the contents of the undelivered mail.
This case was prosecuted by Special Assistant United States Attorney Sungtae Kang and the case was investigated by the United States Postal Inspection Service with assistance from the Dawson Springs Police Department.
Former Accounting Assistant Pleads Guilty to Federal Charge in $144,000 Theft from Non-Profit-Defendant Created and Processed False Expense Reports-Read the Press Release
WASHINGTON - Tabitha Harley-Williams, 34, pled guilty today to a federal charge stemming from the theft of more than $144,000 from a non-profit organization where she worked as an accounting assistant, announced U.S. Attorney Ronald C. Machen Jr. and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
Harley-Williams, of Upper Marlboro, Md., pled guilty in the U.S. District Court for the District of Columbia to one count of interstate transportation of stolen property. The Honorable Senior Judge Gladys Kessler scheduled sentencing for July 15, 2014. The charge carries a statutory maximum of 10 years in prison and financial penalties. Under federal sentencing guidelines, Harley-Williams faces a likely range of 12 to 18 months of incarceration, as well as a fine of up to $30,000. Under the plea agreement, Harley-Williams also must pay restitution to the non-profit. Finally, she is subject to an additional forfeiture money judgment.
According to the government’s evidence, the non-profit, identified in court documents as “Company A,” is an organization recognized by the U.S. Department of Education and the Council for Higher Education Accreditation for the accreditation of professional, technical and occupational career education programs. Harley-Williams began working there in 2008 as an accounting assistant. Part of her responsibilities included processing reimbursement requests from employees for travel and entertainment expenses.
In or around October 2012, Harley-Williams began creating false expense reports on behalf of other employees that appeared to be legitimate expenses. After Harley-Williams received supervisory approval to process these false expense reports, she changed the wire payment request information sent to “Company A’s” bank to reflect her own bank account information, rather than the account information of the employee for whom Harley-Williams had submitted the false expense reports. Between October 2012 and April 2013, Harley-Williams processed approximately 38 transactions in this manner, directing a total of $144,113 to her personal bank account. Harley-Williams had no legitimate rights to any of the funds. She left the non-profit in May 2013, and the transactions were later discovered in a budget review.
In announcing the plea, U.S. Attorney Machen and Assistant Director in Charge Parlave commended those who investigated the case from the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Donna Galindo, Corinne Kleinman, and Angela Lawrence, and Assistant U.S. Attorneys Catherine K. Connelly and Anthony Saler, who handled forfeiture issues. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Richard DiZinno, who investigated and prosecuted the matter.
14-092Five Convicted on Federal Drug ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistELKINS, WEST VIRGINIA – Five individuals entered pleas of guilty before U.S. Magistrate Judge John S. Kaull on drug-related charges.
United States Attorney William J. Ihlenfeld, II, announced that Chad Edward CUTRIGHT, age 28, and Natusha Jewell BIGGINS, age 25, of Montrose, West Virginia, entered pleas of guilty to “Possession of Pseudoephedrine to be used in the Manufacture of Methamphetamine.” CUTRIGHT and BIGGINS each face up to 20 years in prison. This case was prosecuted by Assistant U.S. Attorney Stephen D. Warner and investigated by the Barbour County Sheriff’s Department and the West Virginia State Police.
Ihlenfeld also announced that Lennox BUCKLEY, age 39, of Morgantown, West Virginia, entered a plea of guilty to “Distribution of more than 50 kilograms of Marijuana” As part of the plea, BUCKLEY will forfeit a 2002 Lexus ES 300 and $7,011 which constitutes proceeds from the illegal activity. The United States also intends to seek a $70,000 money judgment. BUCKLEY faces up to 20 years in prison.
Melvin SANDERS, age 56, formerly of New York, entered a plea of guilty to “Possession with Intent to Distribute Cocaine.” SANDERS faces up to 20 years in prison.
The BUCKLEY and SANDERS cases were investigated by the Greater Harrison County Drug & Violent Crime Task Force, the West Virginia State Police-Bureau of Criminal Investigations, the United States Postal Inspection Service, the Drug Enforcement Administration and the United States Marshals Service.
Beth Ann BROWN, age 36, of French Creek, West Virginia, entered a plea of guilty to “Possession with Intent to Distribute Marijuana.” BROWN faces up to five years in prison. This case was investigated by the West Virginia State Police-Bureau of Criminal Investigations and the United States Postal Inspection Service.
The BUCKLEY, SANDERS and BROWN cases were prosecuted by Assistant U.S. Attorney Andrew R. Cogar.
Federal Court Bars New York Man from Promoting Alleged Tax SchemeRead the Press Release
A federal court has permanently barred Ramesh Sarva, a certified public accountant in Little Neck, N.Y., from promoting and selling an alleged nationwide tax scheme, the Justice Department announced today. Judge Josephine L. Staton of the U.S. District Court for the Central District of California entered the permanent injunction order yesterday, to which Sarva consented.
According to the complaint, welfare benefit plans permit companies to pool together and make monetary contributions toward the purchase of life insurance for the benefit of each company’s employees or principals. Participants in legitimate welfare benefit plans may be able to deduct the full amount of their plan contributions as a business expense. The complaint alleged that Sarva falsely informed his customers that the welfare benefit plans he promoted were legal, but in fact, Sarva has been promoting plans that illegally permitted his customers to both claim substantial tax deductions for their plan contributions and later access the full cash value of their plan contributions by taking out loans against the life insurance policies purchased. The complaint alleged that Sarva’s promotion of these unlawful welfare benefit plans deprived the U.S. Treasury of significant amounts of tax and subjected his customers to audits and IRS scrutiny.
The injunction order bars Sarva from promoting and selling any purported welfare benefit plans. The court also ordered Sarva to provide the United States with a list of his customers and to send copies of the injunction order to his customers.
In the past decade, the Justice Department’s Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Kenneth Elliott, et al.
Complaint for Permanent Injunction and Other Relief
Stipulated Order of Permanent InjunctionEnvironment and Natural Resources Division Releases FY 2013 Accomplishments ReportRead the Press Release
The Justice Department’s Environment and Natural Resources Division (ENRD) today released its Fiscal Year (FY) 2013 Accomplishments Report, detailing its work alongside other federal agencies, U.S. Attorneys’ Offices, and state, local and tribal governments to enforce environmental and wildlife laws, protect our nation’s natural resources and ensure that all Americans enjoy clean air, water and land.
In the last fiscal year, the Justice Department continued carrying out its commitment to environmental justice to ensure the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental and natural resources laws and policies. The division’s work advancing the goals of environmental justice is illustrated in a separate chapter of the report.
“The Environment Division’s work to protect our air, land and water from pollution is as critical to our nation’s health, security, and sustainability as it has ever been,” said Deputy Attorney General James M. Cole. “As we face significant challenges from climate change, in developing alternative and sustainable sources of energy and addressing pollution to protect public health and the environment, we are grateful to the division and its attorneys for the work they do each day on behalf of the American people and future generations of Americans.”
“As this report shows, every day, the division works with client agencies, U.S. Attorneys’ offices, and state, local and tribal governments to enforce federal environmental, natural resources, and wildlife laws,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “It also defends federal agency actions and rules when they are challenged in the courts, keeping the nation’s air, water, and land free of pollution, promoting military preparedness and national security, and supporting responsible stewardship of America’s forests, wildlife and other natural resources. The division also handles a broad array of important matters affecting Indian tribes and their members. Across all this work, we strive to ensure that all Americans enjoy clean air, water and land, implementing the department’s deep commitment to environmental justice.”
In FY 2013, the division secured over $1.78 billion in civil and stipulated penalties, cost recoveries, natural resource damages and other civil monetary relief, including almost $637 million recovered for the Superfund. The division obtained almost $6.5 billion in corrective measures, through court orders and settlements, to protect the nation’s air, water and other natural resources. It concluded 53 criminal cases against 87 defendants, obtaining nearly 65 years in confinement and over $79 million in criminal fines, restitution, community service funds and special assessments. Finally, the handling of defensive and condemnation cases closed in fiscal year 2013 saved the United States an estimated $6.8 billion.
Among other highlights included in the FY 2013 Accomplishments report: Accountability for the Deepwater Horizon Oil Spill
The division’s top civil enforcement priority remains the ongoing civil litigation and trial stemming from the April 20, 2010 explosion and fire that destroyed the Deepwater Horizon offshore drilling rig in the Gulf of Mexico and triggered a massive oil spill. In December 2010, the United States brought a civil suit against BP, Anadarko, MOEX, and Transocean for civil penalties under the Clean Water Act and a declaration of liability under the Oil Pollution Act, as part of multidistrict litigation in the U.S. District Court for the Eastern District of Louisiana.
Thus far, the department has secured over $1 billion in civil penalties through Deepwater Horizon settlements (with MOEX and Transocean), as well as far-reaching injunctive relief that should make Transocean’s deepwater drilling safer in the Gulf of Mexico.
The department tried the first phase of the U.S. case against the remaining defendants (addressing the cause of the disaster and liability) for nine weeks from February through April 2013, as part of a mass trial in which thousands of private plaintiffs also tried parts of their cases relating to liability and fault. The second phase of the U.S. case (principally addressing how much oil was discharged into the Gulf) took place over three weeks in September and October 2013. Both phases have been submitted to the district court for decision. The district court in New Orleans has scheduled the third phase of trial in this matter, addressing assessment of civil penalties, to begin in January 2015.
Addressing Climate Change
Over the past year, the division made important contributions to combating the effects of climate change. In January 2011, the Environmental Protection Agency’s (EPA’s) regulations governing motor vehicle emissions of greenhouse gases took effect, triggering not only mobile source regulation, but also regulation of the largest stationary sources in accordance with EPA’s greenhouse gas tailoring rule. As of September 2012, the D.C. Circuit in Coalition for Responsible Regulation v. EPA upheld the agency’s greenhouse gas-related regulatory actions in their entirety. Challengers filed nine separate petitions for writs of certiorari with the U.S. Supreme Court. In July 2013, the Department’s Office of the Solicitor General, working closely with Division and client agency attorneys, filed an opposition to the petitions for certiorari. On Oct. 15, 2013, the Supreme Court granted certiorari on six of the petitions, which were consolidated and limited to a single issue: “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” The court denied the remaining three petitions, and rejected consideration of numerous additional issues raised by the petitions that were partially granted. In February 2014, the Supreme Court heard oral argument in the case.
In March 2013, the D.C. Circuit affirmed the district court’s decision in In re Polar Bear Endangered Species Act Listing, thereby upholding the U.S. Fish and Wildlife Service’s 2008 listing of the polar bear under the Endangered Species Act as a threatened species throughout its range. The listing decision was based primarily on the polar bears’ dependence on arctic sea ice for their survival, existing and projected reductions in the extent and quality of sea ice habitat due to global climate change, and the inadequacy of existing regulatory measures to preserve the species.
In a settlement reached with the United States in September 2013, Safeway, the nation’s second largest grocery store chain, agreed to pay a $600,000 civil penalty and to implement a corporate-wide plan to significantly reduce its emissions of ozone-depleting substances from refrigeration equipment at over 650 of its stores nationwide, at an estimated cost of $4.1 million. The settlement resolves allegations that Safeway violated the Clean Air Act by failing to promptly repair leaks of HCFC-22, a hydrochlorofluorocarbon that has a global warming potential that is 1,800 times more potent than carbon dioxide. This first-of-its-kind settlement should also serve as a model for comprehensive solutions across a company.
Combatting Wildlife Trafficking
The department has long been a leader in the fight against wildlife trafficking. Over the last year, the department engaged fully in the administration’s effort to combat wildlife trafficking through its role as one of the three agency co-chairs of the Presidential Task Force on Wildlife Trafficking, established by President Obama’s July 2013 Executive Order—Combating Wildlife Trafficking. In the past decade, wildlife trafficking has escalated into an international crisis, making it both a critical conservation concern and a threat to global security. Beyond decimating the world’s iconic species, this illegal trade threatens international security. Transnational criminal organizations, including some terrorist networks, armed insurgent groups and narcotics trafficking organizations, are increasingly drawn to wildlife trafficking due to the exorbitant proceeds from this illicit trade.
The task force emphasizes the need for a “whole of government” approach to combating this problem and identifies three key priority areas: (1) strengthening domestic and global enforcement; (2) reducing demand for illegally traded wildlife at home and abroad; and (3) strengthening partnerships with foreign governments, international organizations, nongovernmental organizations, local communities, private industry, and others to combat illegal wildlife poaching and trade.
The division works with U.S. Attorneys’ offices around the country and federal agency partners (such as the U.S. Fish and Wildlife Service and the National Oceanic and Atmospheric Administration) to combat wildlife trafficking under the Endangered Species Act and the Lacey Act, as well as statutes prohibiting smuggling, criminal conspiracy and related crimes. In fiscal year 2013, a prominent example of the division’s robust prosecution of illegal wildlife trafficking was “Operation Crash,” an ongoing multi-agency effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the illegal trafficking of endangered rhinoceros horns. This initiative has resulted in multiple convictions, significant jail time, penalties and asset forfeiture.
Read more about the Justice Department’s involvement in the fight to end wildlife trafficking: www.justice.gov/enrd/6329.htmEast St. Louis Post Office Supersivor Pleads Guilty to Stealing PackagesRead the Press Release
Follow @SDILNewsThe United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Jane Johanna Emily, a/k/a Jane Moeller, 41, of St. Louis, Missouri, pled guilty in federal district court on April 22, 2014, to charges that she opened and stole packages from the U.S. Mail.
The federal grand jury charged Emily with Obstruction of Mail, Theft of U.S. Mail by a Postal Employee, and Opening of Mail. Each charge carries a maximum penalty of 5 years in prison, a $250,000 fine, and up to 3 years of supervised release. The sentencing hearing is set for August 8, 2014.
The case was investigated by agents of the U.S. Postal Service, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Liam Coonan.
Driver in Car Crash Sentenced to over 3 Years in Prison for Involuntary ManslaughterRead the Press Release
Driver was Drunk When Passenger was Ejected from the Vehicle During a Crash
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Josue Balbino Ruiz Reyes, age 20, of Hyattsville, Maryland today to 37 months in prison, followed by three years of supervised release, for involuntary manslaughter in connection with the death of a passenger in Reyes’ vehicle resulting from a car collision.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Acting Chief of Police Robert D. Maclean of the U.S. Park Police.
According to his plea agreement, on August 22, 2013 at about 5:30 a.m., Ruiz Reyes drove with a female passenger in his SUV from the Glen Burnie area southbound on the Baltimore-Washington Parkway. He had been drinking alcohol earlier that morning and the previous night. Near the route 197 exit, he lost control of his SUV and drove onto the shoulder of the highway. His SUV rolled over completely and landed upright, breaking all the windows and ejecting the passenger. Ruiz Reyes drove away.Numerous motorists called 911 to report the accident. The U.S. Park Police found Ruiz Reyes driving his badly damaged vehicle on the ramp from the Parkway to Powder Mill Road, about four miles south of the location of the crash. Four police cruisers forced the vehicle to a stop. The right side of the SUV was completely smashed. The passenger side door would not open. Ruiz Reyes told the police he had two beers earlier. He was shirtless, and had minor bruises and cuts on his body. Ruiz Reyes was taken to the hospital where a blood test was given. His blood-alcohol level was .10 grams of alcohol per 100 mL of blood.
Meanwhile, U.S. Park Police officers at the scene of the roll-over found the passenger’s body lying in the grass, where she had been ejected from the SUV. She was pronounced dead. Ruiz Reyes told police that the passenger had gotten out of the car on the side of the road voluntarily. His Maryland driving privileges were suspended.
United States Attorney Rod J. Rosenstein praised the U.S. Park Police for its work in the investigation and thanked Assistant U.S. Attorney Hollis R. Weisman, who prosecuted the case.Defendant Pleads Guilty to Hurricane Ike FraudRead the Press Release
ATLANTA – Angela Pratt Avery pleaded guilty in federal court to fraudulently obtaining FEMA assistance funds intended for the victims of Hurricane Ike.
“These defendants lied by claiming they were victims of Hurricane Ike in 2008 and, based on those lies, stole over $50,000 in disaster relief funds that were intended for the true victims,” said United States Attorney Sally Quillian Yates. “The Disaster Fraud Task Force was created in 2005 to target those fraudsters who would seek to turn the tragedy of a natural disaster into an opportunity to enrich themselves at the expense of the American people.”
“I am pleased by today’s guilty plea. DHS-OIG will continue its commitment towards working with this U.S. Attorney's Office and our law enforcement partners to identify and aggressively investigate these egregious violations,” said James Ward, Special Agent in Charge, Office of Investigations, Atlanta, Department of Homeland Security, Office of the Inspector General. “In the future, DHS-OIG will remain vigilant in seeking prosecutions in such cases to uphold the integrity of our Federal Emergency Programs, which are intended for law abiding citizens."
According to United States Attorney Yates, the charges and other information presented in court: Avery, 45, of Lawrenceville, Ga., and two co-defendants, John A. Wheeler, 57, and Melody Lockett Carter, 49, both of Wilmerding, Pa., worked together to file three fraudulent FEMA claims for Hurricane Ike disaster relief funds. The defendants filed the claims in September 2008 and January 2009, falsely claiming that Avery and Carter lived at a West Ventura Drive address in Galveston, Texas, at the time of Hurricane Ike and that their personal property had been damaged by the storm. In fact, all three defendants lived in Norcross, Ga., at the time of Hurricane Ike and were not victims of the storm. The defendants received over $50,000 in disaster assistance from FEMA based on their fraud.
On September 13, 2008, Hurricane Ike made landfall near Galveston, causing widespread damage along the Texas, Louisiana, Mississippi, and Florida coastlines and the surrounding areas. After Hurricane Ike struck the Texas coastline, FEMA provided financial disaster assistance to displaced individuals who resided in various counties in Texas. Those individuals could make an application for disaster assistance funds by filing a claim with FEMA that included the Texas address where they were living at the time of the hurricane.
Avery pleaded guilty to one count of theft of government money. On January 10, 2014, Wheeler and Carter each pleaded guilty to one count of theft of government money. Sentencing for the defendants has not yet been scheduled.
This case is being investigated by Special Agents of the U.S. Department of Homeland Security, Office of Inspector General.
Assistant United States Attorney Stephen H. McClain is prosecuting the case.
In September 2005, the Attorney General established the Disaster Fraud Task Force to deter, detect, and prosecute disaster-related federal crimes such as charity fraud, identity theft, procurement fraud, and insurance fraud related to the Hurricane Katrina disaster. As multiple disasters occurred in subsequent years, the Task Force expanded its mandate to all types of disaster fraud. The Task Force, chaired by Acting Assistant Attorney General David O’Neil of the Criminal Division, includes the FBI, the Postal Inspection Service, the U.S. Secret Service, the Federal Trade Commission, the Securities and Exchange Commission, federal Inspectors General, and various representatives of state and local law enforcement.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Corrections Officer Arrested on Federal Bribery ChargeDefendant Accused of Accepting Money in Return for Smuggling Contraband to InmateRead the Press Release
WASHINGTON – Darren Malry, 51, a corrections officer, has been arrested and charged with bribery following an undercover FBI investigation in which he allegedly accepted money for smuggling contraband into the District of Columbia’s Correctional Treatment Facility.
The charge was announced by U.S. Attorney Ronald C. Machen Jr.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas N. Faust, Director of the District of Columbia Department of Corrections.
Malry was arrested by the FBI on April 21, 2014 and appeared today in the U.S. District Court for the District of Columbia. He pled not guilty and was released on personal recognizance pending a hearing on May 6, 2014.
At the time of his arrest, Malry worked for the Corrections Corporation of America (CCA) as a corrections officer at the Correctional Treatment Facility. CCA, a private company, has a contract to provide services to the D.C. Jail
According to the charging documents, on March 11, 2014, Malry met with an undercover FBI agent in the parking lot of a shopping center in Greenbelt, Md. The undercover agent gave Malry a cellphone, cigarettes, and rolling papers for Malry to deliver to an inmate housed at the Correctional Treatment Facility. The undercover agent also provided Malry with $750 in cash at that meeting, which was given in exchange for Malry smuggling the contraband into the facility and delivering it to the inmate. The FBI recovered the contraband from the inmate shortly after Malry gave the items to the inmate in the inmate’s jail cell.
Malry met again with the undercover FBI agent on April 21, 2014 at a restaurant in the same shopping center in Greenbelt. At that meeting, the undercover agent gave Malry cigarettes and several packages of a substance resembling marijuana. The undercover agent also provided Malry with $600 in cash, which was in exchange for Malry smuggling the contraband into facility for the same inmate. Malry subsequently was arrested.
A criminal complaint is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until, and unless, proven guilty.
The case is being investigated by the FBI’s Washington Field Office, with assistance from the District of Columbia Department of Corrections Office of Investigative Services. It is being prosecuted by Assistant U.S. Attorney Richard DiZinno, of the Fraud and Public Corruption Section of the U.S. Attorney’s Office, with assistance from Assistant U.S. Attorneys Catherine K. Connelly and Allessandra Stewart, of the Asset Forfeiture and Money Laundering Section.
14-093Columbiana Man Faces Federal Firearms ChargesRead the Press Release
A federal grand jury returned a four-count indictment charging Brent See, age 37, of Columbiana, Ohio, with possession of unregistered firearms and being in the business of manufacturing firearms, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Count 1 of the indictment charges that on or about July, 2013 through January, 2014, See was engaged in the business of manufacturing and dealing in silencer firearms, without a license.
Counts 2 through 4 of the indictment charge that See was in possession of a silencer, not registered to him, on or about September 3 and December 13, 2013, and January 10, 2014.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Postal Inspection Service. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Clarksburg Man Plead Guilty to Federal Firearms ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – A West Virginia pawn shop owner has pleaded guilty to a federal gun charge and for lying to ATF agents.
United States Attorney William J. Ihlenfeld, II, announced that MARTIN L. QUEEN, age 51, of Clarksburg, entered pleas of guilty to “Possession of Stolen Firearms” and two counts of “Making Materially False Statements and Representations.” U.S. District Judge Irene M. Keeley took the plea. QUEEN, who is free on bond pending sentencing, faces up to twenty years in prison. The case was prosecuted by Assistant U.S. Attorney Shawn A. Morgan and was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
In other court matters, a 28-year old Clarksburg resident was sentenced to prison by Judge Keeley. Dominic SUTHERLIN was sentenced to 37 months in prison and three years of supervised release due to his conviction for “Possession of a Firearm by an Unlawful Drug User/Addict.” SUTHERLIN will self-report to prison in May. The case was prosecuted by Morgan and investigated by the Greater Harrison County Drug and Violent Crime Task Force and the Harrison County Sheriff’s Department.
Tony HAWK, age 30, and Marquis Anton BROOKS, age 32, inmates at FCI Morgantown entered pleas of guilty and were each sentenced to 3 months in prison, to run concurrently to HAWK’s current 100-month sentence and BROOKS’ current 60-month sentence for “Possession of a Prohibited Object,” when staff at the correctional institution recovered cell phones from both inmates.
Keegan Chance VANTUYL, age 31, an inmate at USP Hazelton, entered a plea of guilty to “Assault with a Dangerous Weapon with Intent to do Bodily Harm.” VANTUYL aided and abetted another inmate in the assault of an inmate by striking and cutting the victim with a sharp object. VANTUYL faces up to twenty years in prison.
The HAWK, BROOKS, and VANTUYL cases were prosecuted by Assistant United States Attorney Brandon S. Flower and investigated by the Special Investigative Services Unit at FCI Morgantown and USP Hazelton.
Finally, Timothy PETITTO, age 37, of Fairmont, West Virginia, entered a plea of guilty to “Possession of Child Pornography.” PETITTO, who is in custody pending sentencing, faces up to 20 years in prison. This case was prosecuted by Assistant U.S. Attorney Stephen L. Vogrin and investigated by Homeland Security Investigations.
City of New Orleans Agrees to Settlement to Resolve Housing Discrimination LawsuitRead the Press Release
The Justice Department announced today that the U.S. District Court for the Eastern District of Louisiana approved its settlement with the city of New Orleans regarding a housing discrimination lawsuit late yesterday.
Under the settlement, the city agrees to permit the conversion of the former Bethany Nursing Home, located at 2535 Esplanade Avenue, into 40 units of affordable housing. Half of the units in the new Esplanade complex will be designated as permanent supportive housing and will be reserved for formerly homeless persons with disabilities. In addition, the settlement commits New Orleans to developing additional supportive housing for 350 persons with disabilities over the next three years.
“We are very pleased to have worked constructively with New Orleans to reach an agreement that will not only enable the Esplanade to be built, but that will also provide additional permanent supportive housing for 350 persons with disabilities in New Orleans,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.
“Nondiscriminatory housing is a fundamental right of the citizens of New Orleans, and this settlement agreement continues the efforts to rebuild and improve a housing inventory ravaged by Hurricane Katrina,” said U.S. Attorney Kenneth Allen Polite Jr. for the Eastern District of Louisiana. “I applaud the cooperative efforts of the city and the department to reach a resolution that is in the best interests of persons with disabilities, who are amongst the most vulnerable members of our community.”
In addition to the development of 350 additional permanent supportive housing units, the settlement requires that the city agree to provide all appropriate permits for the Esplanade, amend its Comprehensive Zoning Ordinance to allow permanent supportive housing, continue its work to prepare and implement a reasonable accommodation policy approved by the United States, conduct fair housing training for key city officials and be subject to reporting requirements.
The State Bond Commission, which was also named as a defendant, is not a party to the settlement. On March 20, 2014, the Bond Commission voted not to approve a settlement. As a result, the Justice Department has moved to reopen the litigation against the Bond Commission and the court has scheduled a status conference for June 26, 2014.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Title II of the Americans with Disabilities Act prohibits governments from discriminating on the basis of disability in administering their zoning laws. More information about the Civil Rights Division and the laws it enforces is available at the division website
City of New Orleans Agrees to Settlement to Resolve Housing Discrimination LawsuitRead the Press Release
The Justice Department announced today that the U.S. District Court for the Eastern District of Louisiana approved its settlement with the city of New Orleans regarding a housing discrimination lawsuit late yesterday.
Under the settlement, the city agrees to permit the conversion of the former Bethany Nursing Home, located at 2535 Esplanade Avenue, into 40 units of affordable housing. Half of the units in the new Esplanade complex will be designated as permanent supportive housing and will be reserved for formerly homeless persons with disabilities. In addition, the settlement commits New Orleans to developing additional supportive housing for 350 persons with disabilities over the next three years.
“We are very pleased to have worked constructively with New Orleans to reach an agreement that will not only enable the Esplanade to be built, but that will also provide additional permanent supportive housing for 350 persons with disabilities in New Orleans,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.
“Nondiscriminatory housing is a fundamental right of the citizens of New Orleans, and this settlement agreement continues the efforts to rebuild and improve a housing inventory ravaged by Hurricane Katrina,” said U.S. Attorney Kenneth Allen Polite Jr. for the Eastern District of Louisiana. “I applaud the cooperative efforts of the city and the department to reach a resolution that is in the best interests of persons with disabilities, who are amongst the most vulnerable members of our community.”
In addition to the development of 350 additional permanent supportive housing units, the settlement requires that the city agree to provide all appropriate permits for the Esplanade, amend its Comprehensive Zoning Ordinance to allow permanent supportive housing, continue its work to prepare and implement a reasonable accommodation policy approved by the United States, conduct fair housing training for key city officials and be subject to reporting requirements.
The State Bond Commission, which was also named as a defendant, is not a party to the settlement. On March 20, 2014, the Bond Commission voted not to approve a settlement. As a result, the Justice Department has moved to reopen the litigation against the Bond Commission and the court has scheduled a status conference for June 26, 2014.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Title II of the Americans with Disabilities Act prohibits governments from discriminating on the basis of disability in administering their zoning laws. More information about the Civil Rights Division and the laws it enforces is available at the division website <http://www.justice.gov/crt>.
(Download Agreement )
Career Criminal Gets 140 Month SentenceRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WV – A Wheeling man with a lengthy criminal history was sentenced to serve the next decade in federal prison for selling crack cocaine.
United States Attorney William J. Ihlenfeld, II, announced that Emanuel “Sammy” BANKS, age 40, was sentenced to 140 months in prison and three years of supervised release for “Distribution of Crack Cocaine.” BANKS’ sentence was enhanced due to his significant criminal history, which includes prior felonies for “Bringing Stolen Property into the State, “Aggravated Robbery”, “Receiving Stolen Property”, “Unlawful Assault”, and “Distribution of Cocaine Base within 1000 Feet of a Playground.”
BANKS was sentenced by U.S. District Judge Frederick P. Stamp, Jr., who also ordered the forfeiture of $4,990 in U.S. currency seized from BANKS. BANKS was remanded to the custody of the U.S. Marshal pending designation to a Federal prison. This case was prosecuted by U.S. Attorney Ihlenfeld.
In other court proceedings, Ihlenfeld announced that Jerome Melvin ROSS, age 23, of Wheeling, was sentenced to 31 months in prison and six years of supervised release for “Distribution of Crack Cocaine within 1,000 Feet of Riverview Towers.” ROSS, who is free on bond, will self-report to prison. This case was also prosecuted by Ihlenfeld.
Nicole GUST, age 20, of Bellaire, Ohio, was sentenced to 12 months and 1 day in prison and three years of supervised release for “Distribution of Crack Cocaine.” GUST was remanded to the custody of the U.S. Marshal pending designation to a Federal prison.John M. WAKIM, age 57, of Wheeling, entered a plea of guilty before Judge Stamp to “Mantaining a Drug-Involved Premise.” WAKIM owned a garage in Wheeling and allowed others to use the location to store drugs and conduct drug-related activities. WAKIM, who is free on bond pending sentencing, faces up to 20 years in prison.
Ronald Gene VANCE a/k/a “Sammy,” age 63, of Columbus, Ohio, entered a plea of guilty before U.S. Magistrate James E. Seibert to “Conspiracy to Distribute Oxycodone.” VANCE, who is free on bond, faces up to 20 years in prison.
The BANKS, ROSS, GUST, WAKIM, and VANCE cases were investigated by the Ohio Valley Drug & Violent Crime Task Force (OVDTF), consisting of officers and agents from the Wheeling Police Department, the Ohio County Sheriff’s Department, West Virginia State Police-BCI, and the Drug Enforcement Administration. The cases were prosecuted by Assistant U.S. Attorney Randolph J. Bernard. The OVDTF is an Appalachia HIDTA funded unit.Rocci WADE, age 59, of Moundsville, West Virginia, was sentenced to 97 months in prison and three years of supervised release for “Conspiracy to Possess with Intent to Distribute and to Distribute Oxycodone” and “Distribution of Oxycodone.” WADE, who was sentenced by U.S. District Judge John P. Bailey, was part of a five person conspiracy that distributed painkillers in the Moundsville area between 2010 and 2013. WADE is in custody pending designation to a Federal prison. The case was prosecuted by Bernard and was investigated by the Marshall County Drug Task Force which includes officers and agents from the Moundsville Police Department, the Marshall County Sheriff’s Department, and the Drug Enforcement Administration. The Marshall County Drug Task Force is an Appalachia HIDTA funded unit.
Finally, Dallas ACOFF, age 25, of Wheeling, entered a plea of guilty before Judge Stamp to “Escape.” On January 17, 2014, ACOFF escaped from the custody of the Bannum Place halfway house where he was serving the remainder of his 41-month sentence for the distribution of crack cocaine. ACOFF, who is in custody pending sentencing, faces five years in prison. This case was investigated by the U.S. Marshals Service.
Butte County Man Sentenced for Mortgage Fraud SchemeRead the Press Release
SACRAMENTO, Calif., — United States District Court Judge John A. Mendez sentenced Johnny Eugene Grivette Jr., 39, of Magalia, today to four and a half years in prison for his participation in a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.
On July 10, 2012, Grivette pleaded guilty to conspiracy to commit mail fraud and money laundering. According to the plea agreement, Grivette was manager of Advantage Financial Partners of California (AFP), a company that bought residential properties at market prices and then sold them to straw buyers who were investors in a purported investment program. Once AFP bought the properties, it paid commissions to an appraiser who would appraise them for significantly higher than the true market value. This allowed the homes to be financed for the straw buyers at loan-to-value ratios significantly higher than the limits lenders authorized. If the straw buyers had to make down payments on the properties sold by AFP, the money was quickly reimbursed to them by AFP without the lenders' knowledge.
This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Paul A. Hemesath prosecuted the case.
"Victims of mortgage fraud may include the banks which loan the money, but also include all homeowners and would-be homeowners who end up paying for this type of fraud," said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. "IRS-CI is committed to pursuing those who line their pockets with profits from these schemes."
Grivette's sentencing marks another event in a series of prosecutions related to Loomis Wealth Solutions, a "wealth-building" program offered to the public in California, Illinois, Washington, and elsewhere, from 2006 through 2008. According to indictments, persons connected to Loomis Wealth Solutions are alleged to have committed various acts of fraud and money laundering.
In related cases, Dawn Powers, 43, of Lincoln, and John Hagener, 77, of Granite Bay, pleaded guilty to conspiracy charges on March 4, 2014. Powers was a manager at Loomis Wealth Solutions, and Hagener was a manager of entity known as the Naras Funds, which was an investment fund related to Loomis Wealth Solutions. They are scheduled for sentencing on June 10, 2014. On September 11, 2012, Christopher Warren, 31, formerly of Sacramento, was sentenced to 14 and a half years in prison for his role in the scheme. Warren was a manager of a lending company related to Loomis Wealth Solutions. On April 15, 2014, Scott Cavell, a partner of Warren's, pleaded guilty to wire fraud, which was unrelated to his employment at Loomis Wealth Solutions. He is scheduled for sentencing on July 22, 2014.
There are five defendants remaining in the criminal case related to Loomis Wealth Solutions: Lee Loomis, 56, of Granite Bay; Darren Fehst, 45, of Halifax, Nova Scotia; Peter Woodard, 45, of Ventura; Joseph Gekko, 45, of Yorba Linda; and Michael Llamas, 29, of Tracy. A trial is scheduled for October 6, 2014, before the Honorable John A. Mendez. The charges against them are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Buffalo Man Pleads Guilty to Gun ChargeRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul announced today that Damone Holcombe, 28, of Buffalo, N.Y., pleaded guilty today before United States Magistrate Judge Leslie G. Foschio to possession of a firearm by an unlawful user of a controlled substance. The charge carries a maximum penalty of up to 10 years in prison and a $250,000 fine.
Assistant U. S. Attorney Frank T. Pimentel, who is handling the case, stated that on September 21, 2011, Erie County Sheriff’s deputies executed a search warrant at the defendant’s residence on Grant Street in Buffalo and found, among other items, a 7.62mm semi-automatic rifle, a digital scale with cocaine and marijuana residue on it, and a bag of marijuana in Holcombe’s pants pocket.
This is the last of five convictions stemming from an investigation into the activities of the Almighty Latin King and Queen Nation street gang on the West Side of Buffalo in 2011.
The guilty plea is the result of an investigation by Special Agents of the Federal Bureau of Investigation’s Safe Streets Task Force under the direction of Special Agent in Charge Brian P. Boetig, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, and the Erie County Sheriff’s Office, under the direction of Sheriff Timothy B. Howard.
Sentencing will be in front of United States District Judge William M. Skretny on a date to be determined.Bristol Man Pleads Guilty to Bath Salts ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On Apr. 22, 2014, Harry Joseph Cannon, 50, of Bristol, Tenn., pleaded guilty before the Honorable R. Leon Jordan, U.S. District Judge, to conspiring to distribute, and possess with the intent to distribute, assorted Schedule I controlled substances, and Schedule I controlled substance analogues, commonly known as “bath salts” or “spice”.
Sentencing is set for 10:30 a.m., Aug. 19, 2014, in U.S. District Court, Greeneville. He faces up to 20 years in prison. Federal sentences are not parolable.
From March 2011 to October 2013, Cannon conspired with various other persons to distribute, and possess with the intent to distribute “bath salts” and “spice”. Canon sold these substances from his store, 420 Emporium, in Bristol, Tenn. During the investigation, law enforcement conducted a series of undercover drug purchases from Cannon and 420 Emporium. Those purchases led to federal search warrants being executed on two separate occasions in March 2012 and October 2012. In both instances, agents recovered extensive amounts of Schedule I controlled substances, and Schedule I controlled substance analogues. Most of these drugs were already prepackaged for resale. Numerous firearms were also recovered.
This long term investigation was the product of a partnership between the Bristol Tennessee Police Department, Second Judicial District Drug Task Force, Sullivan County Sherriff’s Office, and the Drug Enforcement Administration. Special Assistant U.S. Attorney Nick Regalia represented the United States.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.