Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
17 April 2014
Corporate-Wide Settlement with Lowe’s Protects Public from Lead Pollution During Home RenovationsRead the Press Release
Lowe’s Home Centers, one of the nation’s largest home improvement retailers, has agreed to implement a comprehensive, corporate-wide compliance program at its more than 1,700 stores nationwide to ensure its contractors minimize lead dust from home renovation activities, as required by the federal Lead Renovation, Repair and Painting (RRP) Rule, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. The company will also pay a $500,000 civil penalty, which is the largest ever for violations of the RRP Rule.
The settlement stems from violations, discovered by EPA inspectors, of the RRP Rule’s recordkeeping and work practice standards at private homes that had been renovated by Lowe’s contractors. EPA enforces the RRP and other lead rules to protect children and others who are vulnerable to exposure to lead dust that can cause lead poisoning.
“Today’s settlement requires Lowe’s to institute a robust, nationwide program at its more than 1,700 stores nationwide to ensure that the contractors it hires to perform renovation projects, like window and carpet installation, are properly certified and adhere to practices that help prevent lead contamination in customers’ homes,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This action, the first of its kind to address lead safe work practices on a system-wide basis, will help prevent children’s exposure to lead in communities across the nation by raising home improvement contractors’ awareness of EPA’s lead safety regulations and contributing to a culture of compliance.”
“Today’s settlement sends a clear message to all contractors and the firms they hire: Get lead certified and comply with the law to protect children from exposure to dangerous lead dust,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Lowe’s is taking responsibility for the actions of the firms it hires, and EPA expects other contractors to do the same.”
“Protecting our most valuable assets, our children, is something that I will always do,” said Stephen R. Wigginton, U.S. Attorney for the Southern District of Illinois. “This settlement will ensure that not only children in southern Illinois, but children throughout the United States will be better protected from the known hazards associated with lead exposure. I commend Lowe’s for taking responsibility and entering into this agreement.”
EPA discovered the violations through a review of records from completed renovations performed by contractors hired by the following Lowe’s stores: Alton, Ill.; Kent and Trotwood, Ohio; Bedford, N.H.; Southington, Conn.; South Burlington, Vt.; Rochester, N.Y.; Savannah and Lebanon, Tenn.; Boise, Idaho Falls and Nampa, Idaho; and Muldoon, Alaska.
The government complaint alleged that Lowe’s failed to provide documentation showing that its contractors had been certified by EPA, had been properly trained, had used lead-safe work practices, or had correctly used EPA-approved lead test kits at renovation sites. Additionally, EPA’s investigation found that Lowe’s contractors had failed to ensure that work areas had been properly contained and cleaned during renovations at three homes. EPA’s investigation was prompted by tips and complaints submitted by the public.
In addition to the civil penalty, Lowe’s must implement a comprehensive compliance program to ensure that the contractors it hires to perform work for its customers comply with the RRP Rule during renovations of any child-occupied facilities, such as day-care centers and schools, and any housing that was built before 1978. For these projects, Lowe’s must contract with only EPA-certified renovators, ensure they maintain certification, and ensure they use lead safe work practices checklists during renovations. In addition, Lowe’s must suspend anyone that is not operating in compliance with the rule, investigate all reports of potential noncompliance and ensure that any violations are corrected.
The RRP Rule, which implements the federal Toxic Substances Control Act, is intended to ensure that owners and occupants of housing built before 1978, as well as any child-occupied facilities, receive information on lead-based paint hazards before renovations begin, and that individuals performing such renovations are properly trained and certified by EPA and follow specific work practices to reduce the potential for lead-based paint exposure. Home improvement companies such as Lowe’s that contract with renovators to perform renovation work must ensure that those contractors comply with all of the requirements of the RRP Rule.
Lead-based paint was banned in 1978 but still remains in many homes and apartments across the country. Lead dust hazards can occur when lead paint deteriorates or is disrupted during home renovation and remodeling activities. Lead exposure can cause a range of health problems, from behavioral disorders and learning disabilities to seizures and death, putting young children at the greatest risk because their nervous systems are still developing.
In February 2014, EPA announced enforcement actions that require 35 home renovation contractors and training providers to take additional steps to protect communities by minimizing harmful lead dust from home renovation activities, as required by the RRP Rule. Those settlements generated a total of $274,000 in civil penalties.
Renovators that are certified under EPA’s RRP Rule are encouraged to display EPA’s “Lead-Safe” logo on worker’s uniforms, signs, websites and other material, as appropriate. Consumers can protect themselves by looking for the logo before hiring a home renovator.
Lowe’s operates over 1,700 stores throughout the U.S., with over 120 additional stores located in Canada and Mexico. Lowe’s Home Centers, LLC, formerly known as Lowe’s Home Centers Inc. and Lowe’s HIW Inc., is headquartered in Mooresville, N.C.
The consent decree was lodged in the U.S. District Court for the Southern District of Illinois. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment. The consent decree will available for viewing at www.justice.gov/enrd/Consent_Decrees.html .
More information about today’s settlement: http://www2.epa.gov/enforcement/lowes-home-centers-llc-settlement
More information about related settlements: http://yosemite.epa.gov/opa/admpress.nsf/2467feca60368729852573590040443d/383445d9a21d283f85257c83005a24ce!OpenDocument&Highlight=2,lead
More information about the RRP Rule and how contractors can get certified: www.epa.gov/leadRelated Materials:
Lowes Complaint
Lowes Consent DecreeConvicted Ponzi-Schemer Indicted on New Fraud and Other ChargesRead the Press Release
NEWARK, N.J. - An Ocean County, N.J., man who was sentenced less than two months ago to 22 years in prison for running a Ponzi-style real estate scheme was indicted by a federal grand jury today on new charges of conspiracy, wire fraud and transacting criminal proceeds while on pretrial release, U.S. Attorney Paul J. Fishman announced.
Eliyahu Weinstein, 38, of Lakewood, N.J., was indicted on one count of conspiracy to commit wire fraud, five counts of wire fraud committed while on pretrial release, and seven counts of transacting in criminal proceeds. The government is seeking the seizure and forfeiture of all funds fraudulently obtained by Weinstein as a result of the scheme.
According the indictment and documents filed in this and other cases: Weinstein allegedly defrauded victims through three investment schemes: (1) pre-IPO shares of Facebook stock; (2) the purchase of an apartment complex in Florida; (3) the purchase of the mortgage notes on seven Florida condominiums. Weinstein and co-defendants Alex Schleider and Aaron Muschel, were originally charged by criminal complaint with the Facebook fraud in May 2013.
In February of 2012, Weinstein and his fellow conspirators allegedly offered a pair of investors (referred to in the indictment as the “Facebook victims”) the opportunity to purchase large blocks of Facebook shares prior to the company’s initial public offering, or IPO, in May 2012. The offer was particularly attractive because large blocks of the shares were extremely difficult to get, and they were expected to increase in value at the time of the IPO. Weinstein and his conspirators did not actually have access to the shares.Based on alleged misrepresentations by Weinstein and his conspirators, the Facebook victims wired millions of dollars between February and March of 2012 to an account Weinstein and a conspirator controlled. Weinstein and another conspirator convinced the Facebook victims to send the money by, among other things, providing them with false documents showing companies owned by various conspirators held assets which would secure the Facebook victims’ investment.
The conspirators did not use any of the Facebook victims’ money to purchase Facebook shares, instead misappropriating it for their own use and benefit by moving it through various accounts. Weinstein used some of the money to pay lawyers and experts representing him in his earlier – and at that time, still pending – criminal case and in related civil matters. Weinstein and his conspirators also used the Facebook victims’ money to make investments in a number of different businesses unrelated to Facebook, and to make loans for their own benefit.
Around the same time, Weinstein and his conspirators also persuaded the Facebook victims to invest in the purported purchase of an apartment complex, “Belle Glade Gardens,” in Florida. They falsely told the Facebook victims that Weinstein had the opportunity to purchase Belle Glade Gardens at a discounted price and immediately flip it at a substantial profit. Weinstein and his conspirators further told the Facebook victims that Weinstein had already placed $2.5 million in the trust account of a Miami law firm for the transaction; that if the Facebook victims contributed another $2.5 million toward the transaction, those funds would remain in escrow at the Miami law firm until the deal closed; and that the Facebook victims would be repaid within 60 days. In reliance on these representations, the Facebook victims wired approximately $2.83 million to the Miami law firm in order to complete the Belle Glades Gardens transaction. Weinstein and his conspirators, however, did not use the money to purchase Belle Glades Gardens. Instead, they allegedly redirected the money from the law firm to accounts that they controlled, returned $1.8 million to the Facebook victims as a purported return on their Facebook investment, and used the remaining money for their own purposes.
In July 2012, Weinstein allegedly approached another group of investor victims (referred to in the indictment as the “Florida condominium victims”) and told them that he had the opportunity to purchase the notes on seven condominiums in Florida at a discounted price of $3 million. Weinstein and his conspirators falsely represented that they had already paid $1.5 million toward the deal, and that they needed only $1.5 million to complete the transaction. They claimed that the properties had an annual rental income of approximately $780,000, and provided to the Florida condominium victims fraudulent documentation purporting to verify this fact. The Florida condominium victims transferred approximately $1.5 million to Weinstein and his conspirators between August 2012 and December 2012. Weinstein did not use this money to purchase the notes on the Florida condominiums – many of which he himself had previously owned and lost to foreclosure. Instead, Weinstein and his conspirators converted the money to their own use and benefit.
Throughout the scheme, Weinstein was already under indictment and on pretrial release, and was prohibited from engaging in any monetary transaction for more than $1,000 without the approval of court-appointed special counsel. Weinstein pleaded guilty on Jan. 3, 2013, before U.S. District Judge Joel A. Pisano in Trenton, N.J., to two counts of that indictment, admitting he ran a Ponzi-style real estate investment fraud scheme that caused $200 million in losses and then laundered the proceeds of the scheme. Judge Pisano sentenced Weinstein on Feb. 25, 2014, to 264 months in prison and ordered him to pay more than $200 million in restitution and forfeiture to the victims of his scheme.The conspiracy count with which Weinstein is charged carries a maximum potential penalty of 20 years in prison; the wire fraud counts carry a maximum potential penalty of 30 years in prison (20 years on the wire fraud plus 10 years for commission while on pretrial release); and the transacting in criminal proceeds counts carry a maximum potential penalty of 10 years in prison. All the counts are also punishable by a $250,000 fine.
Charges against Muschel and Schleider, who were charged in the criminal complaint filed against Weinstein in May 2013, remain pending.
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 indictment. He also credited special agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for role in the case.
The government is represented by Counsel to the U.S. Attorney Rachael A. Honig; Gurbir S. Grewal, Chief of the U.S. Attorney’s Office Economic Crimes Unit, and Assistant U.S. Attorneys Zach Intrater of the Economic Crimes Unit and Evan S. Weitz of the Asset Forfeiture and Money Laundering Unit.
The charges and allegations against the defendants are merely accusations, and they are considered innocent unless and until proven guilty.
Today’s indictment 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.
14-134Defense counsel: Eric Creizman Esq., New York
Weinstein, Eliyahu Indictment II
Connecticut Man Charged with Coercing A MinorRead the Press Release
BOSTON – A Connecticut man was charged today with attempting to engage a 14-year-old in sexual activity.
Paul R. Hinkel, 56, of Chester, Conn., was indicted on charges that he induced and coerced, and attempted to induce and coerce, a minor to engage in sexual activity.
In February 2014, federal undercover agents in Boston placed an advertisement on Craigslist purportedly as a mother seeking an adult interested in a “taboo relationship” with her daughter. Hinkel responded that he was interested, even after the purported mother disclosed that the daughter was only 14-years-old. Hinkel proceeded to engage in email communications with the purported mother, detailing the sexual activities in which he would engage with the minor “daughter”. On March 19, Hinkel traveled from his home in Chester to Watertown, Mass., for the purpose of having sex with a minor. Upon his arrival at the designated meeting place, he was arrested by federal agents. At the time of his arrest, Hinkel was carrying a bag which contained sexual paraphernalia, men’s cologne, and a stuffed animal for the minor.
If convicted, Hinkel faces a statutory mandatory minimum term of 10 years in prison, a minimum of five years and a maximum of a lifetime of supervised released, and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs enforcement’s Homeland Security Investigations in Boston, made the announcement today. Assistance was also provided by the U.S. Attorney’s Office in Connecticut, HSI Connecticut, the Massachusetts State Police, and the Watertown Police Department. The case is being prosecuted by Assistant U.S. Attorney Eve A. Piemonte Stacey of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Clarion Man Sentenced to 18 Years on Child Pornography ChargesRead the Press Release
A repeat sex offender who possessed child pornography was sentenced April 16, 2014, to 18 years in federal prison.
Kevin Ammerman, age 49, of Clarion, Iowa, received the sentence after a January 16, 2014, guilty plea to two counts of possession of child pornography. Ammerman previously had been convicted of lascivious acts with a child in Wright County in 1985. Ammerman also had been convicted of indecent contact with a child in Wright County in 2000.
Ammerman was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Ammerman was sentenced to 216 months’ imprisonment. A special assessment of $200 was imposed, and Ammerman must also serve a 15-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by Homeland Security Investigations and the Wright County Sheriff’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-3048.
Chamico President and Employees Charged with Mail Fraud and ConspiracyRead the Press Release
CHARLES “CHUCK” MIZELL, JR., age 44, a resident of Bogalusa, Louisiana, JAMES CREEL, age 48, a resident of Bogalusa, Louisiana, WILLIAM DARRYL KING, age 47, a resident of Angie, Louisiana, TENILLE NIELSON, age 34, a resident of Franklinton, Louisiana, JACQUELINE MYERS, age 27, a resident of Franklinton, Louisiana, JERRY ATHEY, age 56, a resident of Bogalusa, Louisiana, DAVID LOWE, age 48, a resident of Bogalusa, Louisiana, TERRY CASTILOW, age 48, a resident of Bogalusa, Louisiana, and ROGER NADEAU, age 51, a resident of Linn, Missouri, were charged today by a grand jury sitting in the Eastern District of Louisiana with mail fraud and conspiracy to commit mail fraud for an alleged scheme to defraud the Louisiana Workforce Commission of unemployment benefits, announced United States Attorney Kenneth Allen Polite, Jr.
According to the indictment, CHARLES “Chuck” MIZELL, JR., the President of Chamico, Inc., a Bogalusa construction company, and TERRY CASTILOW, WILLIAM DARRYL KING, DAVID LOWE, JAMES CREEL, JERRY ATHEY, TENILLE NIELSON, JACQUELINE MYERS, and ROGER NADEAU who were Chamico employees, conspired to defraud the Louisiana Workforce Commission (“LWC”) of money and property by means of false and fraudulent pretenses, representations, and promises, and by mailing and causing to be mailed through the United States Postal Service fraudulent unemployment benefit claim forms for the purpose of obtaining unemployment benefits to which they were not entitled. Specifically, at the time CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU applied for unemployment benefits and made weekly representations to LWC that they were unemployed and not getting paid, MIZELL, JR., employed them at Chamico. MIZELL, JR. had Chamico checks cashed and used the cash to pay CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU the difference in their salaries after LWC paid them fraudulent unemployment benefits. MIZELL, JR., confirmed the misrepresentations his employees made to the LWC on the Notice of Claim Filed and Notice of Base Period Employer forms mailed to Chamico by the LWC stating that CASTILOW, KING, LOWE, CREEL, ATHEY, NIELSON, MYERS, and NADEAU, were not employed by Chamico because of lack of work. As a result, MIZELL, JR. did not have to pay the employees their full salaries thereby saving Chamico and himself money. In addition to being charged with conspiracy, MIZELL, JR., CASTILOW, ATHEY, CREEL, LOWE, NIELSON, and NADEAU, are charged with substantive mail fraud counts based on the mailing of the employer notice forms that fraudulently confirmed to LWC that ATHEY, CREEL, LOWE, NIELSON, and NADEAU, were unemployed due to lack of work.
United States Attorney Polite reiterated that the charges in the indictment are allegations and the defendants are innocent until proven guilty.
The defendants face a maximum sentence of five (5) years in prison on the conspiracy count, and 20 years in prison on each of the mail fraud counts. The defendants also face a $250,000 fine and three (3) years of supervised release as to each count.
The case was investigated by the Department of Labor-Office of Inspector General and the Federal Bureau of Investigation with assistance from the Louisiana Workforce Commission. The case is being prosecuted by Assistant United States Attorney Emily K. Greenfield.
Cambridge Teacher Charged with Transportation of Child PornographyRead the Press Release
BOSTON – A Cambridge elementary school teacher was charged today with transporting child pornography.
Josh Wairi, 27, of Somerville, was arrested and charged in a criminal complaint with transportation of child pornography. Wairi is being held without bail pending a detention and probable cause hearing which is scheduled for April 23, 2014 at 2:30 pm.
The complaint alleges, among other things, that Wairi, a fifth grade teacher, used his email account to trade and receive images of child pornography and also uploaded images and videos of children being sexually exploited. The complaint further alleges that Wairi transferred the images and videos of child pornography to other users.
If convicted, Wairi faces a mandatory minimum sentence of five years and a maximum of 20 years of in prison, a mandatory minimum of five years and a maximum of a lifetime of supervised release, and a $250,000 fine.United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Acting Somerville Chief of Police Charles Femino, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
The details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Borger, Texas, Man Pleads Guilty to Federal Child Pornography OffenseRead the Press Release
AMARILLO, Texas — Aaron Robert Wells, 23, of Borger, Texas, appeared today in federal court, before U.S. District Judge Mary Lou Robinson, and pleaded guilty to one count of transportation of child pornography. Wells, who is on bond, faces a maximum statutory penalty of not less than five years and up to 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. Sentencing will be set at a later date. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.
According to documents filed in the case, in March 2012, Wells was contacted online by an undercover law enforcement officer through file sharing software. Wells provided the undercover officer passwords necessary to download images of child pornography that Wells had saved his computer and had made available for online sharing. Among other images, the undercover officer downloaded two images of minor males engaged in sexually explicit conduct.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI is investigating the case. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.
Billings Woman Gets Two Years for Role in Meth Conspiracy Karrie Marie StoltenbergRead the Press Release
The United States Attorney's Office announced that on April 3, 2014, before U.S. District Judge Susan P. Watters, Karrie Marie Stoltenberg, a 40 year-old resident of Billings, Montana, was sentenced to a term of 24 months imprisonment, three years supervised release, and a $100 special assessment. Stoltenberg was sentenced in connection with her guilty plea to conspiracy to possess with intent to distribute methamphetamine.
Assistant U.S. Attorney Brendan McCarthy, during the course of an investigation into the sales of methamphetamine by J.S. and H.R. in the Billings, Montana area, agents learned that J.S. had kept a safe containing methamphetamine at the Billings Heights residence of Karrie Marie Stoltenberg. Agents confirmed through multiple sources that Stoltenberg allowed J.S. to keep the safe at her house from October to November of 2012. Agents also confirmed that Stoltenberg knew that the safe contained methamphetamine. A cooperating witness admitted that she stole the safe from Stoltenberg's residence in November of 2012, and the safe contained less than a pound of methamphetamine.
Beckley Woman Sentenced to 14 Months for Obtaining Oxycodone by FraudRead the Press Release
BECKLEY, W.Va. – Tina Marie Richmond, age 41, of Beckley, West Virginia was sentenced to 14 months in federal prison for obtaining oxycodone by fraud, announced U.S. Attorney Booth Goodwin.
While employed as a receptionist at a Beckley area doctor’s office, Richmond stole a prescription pad that contained the doctor’s DEA registration number. Richmond used the pad to write prescriptions for oxycodone on which she forged the doctor’s signature. Richmond plead guilty in December of 2013
This case was 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 United States 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.Beckley Man Sentenced to Two Years in Federal Prison for Defrauding Walker MachineryRead the Press Release
Beckley, W.Va. – United States Attorney Booth Goodwin announced that Mark Randall Trump, 44, of Beckley, West Virginia was sentenced to serve two years in federal prison for defrauding Walker Machinery. Trump was also ordered to pay $367,000 in restitution.
Trump was a branch manager of the Walker Express Store in Crab Orchard, West Virginia. From 2009 until April of 2012, Trump gave select customers discounts on equipment rentals if payment was made with cash or personal check. These payments were then deposited into Trump’s personal bank account. Trump concealed the fraud by creating rental agreements for the customers and then later deleting them from Walker Machinery’s computer system. Trump also failed to process paperwork which would have prompted the creation of invoices.
Through this scheme, Trump converted $90,000 to his own use and caused over $350,000 in loss to Walker Machinery. Trump pleaded guilty in December of 2013 to the wire fraud charge.
The West Virginia State Police and the Federal Bureau of Investigation conducted the investigation. Assistant United States Attorney Blaire L. Malkin handled the prosecution. United States District Judge Irene C. Berger imposed the sentence.
Augusta Business Woman Sentenced to over 23 Years in Prison for Investor Fraud SchemeRead the Press Release
AUGUSTA, GA: REGINA M. PREETORIUS, 47, of Augusta, Georgia was sentenced yesterday to 280 months in prison by U. S. District Court Judge J. Randal Hall for her role in a multi-million dollar investor fraud scheme. After a lengthy jury trial in September 2013, Preetorius was convicted of eight counts of mail fraud, two counts of wire fraud, and three counts of money laundering.
Evidence presented at trial and during sentencing showed that between 2004 and 2009, Preetorius defrauded dozens of investors out of homes and over $1 million. The victims included private investors and distressed homeowners facing imminent foreclosure. Preetorius promised certain investors that that they would make enormous returns off of their investments in real estate; instead, Preetorius used the homes and money to support her lavish lifestyle.
United States Attorney Edward J. Tarver said, “This defendant stole millions of dollars in money and property from dozens of victims. Preetorius’s promises of realizing the American Dream quickly turned to nightmares for her victims. She now has over two decades in a federal prison cell to sleep on the harm she has caused others.”
In addition to the ordered term of imprisonment, Preetorius was ordered to pay $1,457,374.67 in restitution. After Preetorius is released from prison, she will serve three years of supervised release. Regarding the length of the prison sentence, Mr. Tarver noted that parole was abolished in the federal system in 1984.
FBI Special Agent Paul Kubala and IRS-CI Special Agent Roger Garland conducted the investigation which led to the indictment. Assistant United States Attorney C. Troy Clark and former Assistant United States Attorney David M. Stewart prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Assault on A Federal Officer Draws Prison Time for Crow Agency ManRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings on March 27, 2014, before U.S. District Judge Susan Watters, CHARLES JOSEPH WALKS was sentenced to a term of 51 months imprisonment, 3 years of supervised release and $100 special assessment.
Walks was sentenced in connection with his December 2013 guilty plea to assault on a federal officer. In an Offer of Proof filed by Assistant U.S. Attorney Lori Suek, the government stated that on August 25, 2012, the defendant had been drinking alcohol and drove to a home in Lodge Grass to see an individual that had filed a complaint with the local police department against the defendant four days earlier.
When the defendant arrived at the residence, the defendant was told to leave and the police were called. The victim, a Bureau of Indian Affairs police officer, responded with lights and sirens activated. Almost immediately upon arriving at the scene, the victim was attacked by the defendant and, during the assault, the victim's knee was twisted under his body. The victim suffered a torn meniscus, a torn anterior cruciate ligament, and the victim had to undergo surgery to repair the damage. He was put on seven months of light duty.
On April 4, 2013, the defendant was interviewed. He admitted that something happened with the officer but that he could not provide any specific details because of his alcohol consumption and claimed that he blacked out and woke up in jail.
Army Reserve Soldier Agrees to pay $20,000 to Settle Civil Claims of Obtaining Fraudulent Housing BenefitsRead the Press Release
Oklahoma City, Oklahoma -- Monique J. Ritz, a reserve soldier with the United States Army from Edmond, Oklahoma, has agreed to pay $20,000 to the United States to settle civil claims related to obtaining fraudulent housing benefits, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The United States filed a civil action against Ritz and her former spouse Edward Donahue, a former reserve soldier with the United States Army, alleging that from June of 2007 through January of 2010, Donahue submitted travel vouchers for lodging reimbursement which included lease agreements created and signed by Ritz. It was alleged that the lease agreements falsely represented that Donahue was the only occupant of the residence and that Donahue was paying rent to Ritz when in fact they were living together in the residence as husband and wife. As a result, Donahue and Ritz received lodging reimbursement benefits from the United States Army to which they were not entitled. Ritz did not admit liability but agreed to pay $20,000 to the government in order to resolve the claims against her. In addition, Ritz executed a Consent Judgment of her indebtedness in favor of the United States in the amount of $20,000. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the United States Army Criminal Investigation Command and was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
Armenian Power Gang Leaders Convicted in Federal RICO CaseRead the Press Release
LOS ANGELES – Two leaders of the Armenian Power gang were convicted today of participating in a racketeering conspiracy that included extortion, firearms offenses, bank fraud and identity theft targeting elderly bank customers, as well as a sophisticated credit and debit card skimming scheme that stole account numbers and personal identification numbers (PINs) from thousands of people who used their cards at 99 Cents Only Stores across Southern California.
Concluding a four-week trial, a federal jury returned guilty verdicts against Armenian Power leaders Mher “Capone” Darbinyan and Arman “Horse” Sharopetrosian. Rafael Parsadanyan, an associate of the gang, was also convicted for his role in the 99 Cents Only Stores skimming scheme.
The convictions today in United States District Court in Los Angeles were announced by United States Attorney André Birotte Jr., Acting Assistant Attorney General David O’Neil of the Justice Department’s Criminal Division, and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office.
Darbinyan, 38, of Valencia, was found guilty of 57 criminal counts, including racketeering conspiracy, extortion conspiracy, extortion, bank fraud, access device fraud conspiracy, aggravated identity theft, and possession of a firearm by a convicted felon. According to the evidence presented at trial, Darbinyan was a leader of Armenian Power who participated in extortions, firearms offenses, frauds, and identity theft, and repeatedly engaged in criminal activities with members of the Mexican Mafia prison gang. Among other things, Darbinyan operated a sophisticated bank fraud scheme that used middlemen and runners to deposit and cash hundreds of thousands of dollars in fraudulent checks drawn on the accounts of elderly bank customers and businesses. Separately, Darbinyan also organized and operated a sophisticated debit card skimming operation targeting customers of the discount chain 99 Cents Only Stores. This expansive scheme involved installation of skimmers in stores that were used to steal customers’ debit card numbers and PIN codes. The scheme targeted stores across Southern California, and involved the bank accounts of thousands of customers of the discount store. Darbinyan also conspired to extort and extorted funds from a member of the Armenian community using threats of violence against the victim and his family members. Darbinyan, on two separate occasions, possessed firearms and ammunition after having previously been convicted of felony grand theft for his role in a 2004 debit card fraud scheme. At sentencing, Darbinyan will face a statutory maximum penalty of 973½ years in federal prison.
Sharopetrosian, 35, was convicted of three counts – racketeering conspiracy, extortion conspiracy, and extortion. The evidence at trial showed that while Sharopetrosian was incarcerated in Avenal State Prison in 2009, he used smuggled cell phones to direct the extortion of a member of the Armenian community. Sharopetrosian worked together with Darbinyan and others to carry out the extortion over a period of six months, at one point even arranging the kidnapping at gunpoint of the victim in order to hasten the extortion payments. Sharopetrosian, at different times, threatened to kill and kidnap the victim in order to coerce the victim into paying him more than $100,000. As a result of today’s guilty verdicts, Sharopetrosian faces a statutory maximum sentence of 60 years in federal prison.
Parsadanyan, 29, of Los Angeles, was convicted of 14 counts of bank fraud for his role in the 99 Cents Only Store scheme. The evidence at trial showed that Parsadanyan assisted Darbinyan by, among other things, collecting and storing proceeds of the fraud scheme, including delivering approximately $34,000 in criminal proceeds to a co-schemer. Each count of bank fraud carries a statutory maximum sentence of 30 years in federal prison.
Darbinyan, Sharopetrosian, and Parsadanyan were convicted after a jury trial before United States District Judge R. Gary Klausner. Darbinyan is scheduled to be sentenced on July 21. Sharopetrosian is scheduled to be sentenced on September 15. Parsadanyan is scheduled to be sentenced on July 14.
Darbinyan, Sharopetrosian, and Parsadanyan were among 90 individuals charged in 2011 in two indictments targeting Armenian Power. One indictment accused 29 defendants, including Darbinyan and Sharopetrosian, of participating in the Armenian Power racketeering conspiracy that involved a host of illegal activities such as sophisticated bank fraud schemes, identity theft, debit card skimming, manufacturing counterfeit checks. Some defendants in the case were charged with participating in a variety of violent crimes, such as kidnapping, extortion and firearms offenses.
According to court documents, the Armenian Power street gang formed in the East Hollywood area of Los Angeles in the 1980s. The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc. Armenian Power has more than 250 documented members, as well as hundreds of associates. According to court documents, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions, and witness intimidation to enrich its members and associates and preserve and enhance the power of the criminal enterprise.
The evidence also showed that Armenian Power leaders worked closely with powerful organized crime figures in Russia and Armenia, known as “thieves-in-law,” to commit criminal activities in the Los Angeles area and elsewhere.
Out of the 90 defendants charged in the two indictments, 85 have now been been convicted. Two of the defendants are still pending trial, two defendants are fugitives, and prosecutors dismissed charges against one defendant. The charges contained in the indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by the Eurasian Organized Crime Task Force, which is comprised of the FBI, the Glendale Police Department, the Los Angeles Police Department, the Burbank Police Department, the Los Angeles Sheriff’s Department, IRS – Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the U.S. Secret Service. The Huntington Beach Police Department and the Beverly Hills Police Department provided assistance.
The case is being prosecuted by Assistant United States Attorneys E. Martin Estrada and Elizabeth Yang of the Central District of California and Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section.Release No. 14-047
Armenian Power Gang Leaders Convicted <br /> for Their Role in Racketeering ConspiracyRead the Press Release
Two leaders of the Armenian Power gang were found guilty today by a federal jury in Los Angeles for their participation in a racketeering conspiracy that included extortion, bank fraud targeting elderly bank customers and a sophisticated credit and debit card skimming scheme that stole account numbers and personal identification numbers (PINs) from thousands of people who used their cards at 99 Cents Only Stores throughout Southern California.
Armenian Power leaders Mher “Capone” Darbinyan and Arman “Horse” Sharopetrosian were each found guilty for their roles in a racketeering conspiracy, and an associate of the gang, Rafael Parsadanyan, was found guilty for his role in the 99 Cents Only Stores skimming scheme.
Acting Assistant Attorney General David O’Neil of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement following a four-week jury trial before United States District Judge R. Gary Klausner of the Central District of California.
Darbinyan, 38, of Valencia, was found guilty of 57 criminal counts, including racketeering conspiracy, extortion conspiracy, extortion, bank fraud, access device fraud conspiracy, aggravated identity theft and possession of a firearm by a convicted felon. According to the evidence presented at trial, Darbinyan was a powerful leader of Armenian Power who operated a sophisticated bank fraud scheme that used middlemen and runners to deposit and cash hundreds of thousands of dollars in fraudulent checks drawn on the accounts of elderly customers and jewelry businesses. Darbinyan also organized and operated a sophisticated debit card skimming operation targeting customers of 99 Cents Only Stores. This expansive scheme involved installation of skimmers in stores that were used to steal customers’ debit card numbers and PINs. The scheme targeted stores throughout Southern California and involved the bank accounts of thousands of customers of the discount store. Separately, Darbinyan conspired to extort and extorted funds from a member of the Armenian community using threats of violence. He also possessed, on two separate occasions, firearms and ammunition after having previously been convicted of felony grand theft for his role in a 2004 debit card fraud scheme.
Sharopetrosian, 35, was convicted of three counts: racketeering conspiracy, extortion conspiracy and extortion. The evidence at trial showed that while Sharopetrosian was incarcerated in Avenal State Prison in 2009, he directed the extortion of a member of the Armenian community. Sharopetrosian worked together with Darbinyan and others to carry out the extortion over a period of six months, at one point even arranging the kidnapping of the victim in order to hasten the extortion payments. Sharopetrosian, at different times, threatened to kill and kidnap the victim to coerce the victim into paying him over $100,000.
Parsadanyan, 29, of Los Angeles, was convicted of 14 counts of bank fraud for his role in the 99 Cents Only Store scheme. The evidence at trial showed that Parsadanyan assisted Darbinyan by, among other things, collecting and storing proceeds of the fraud scheme, including delivering approximately $34,000 in criminal proceeds to a co-schemer.
Darbinyan is scheduled to be sentenced on July 21, 2014. Sharopetrosian is scheduled to be sentenced on Sept.15, 2014. Parsadanyan is scheduled to be sentenced on July 14, 2014.
Darbinyan, Sharopetrosian and Parsadanyan were among 90 individuals charged in 2011 in two indictments targeting Armenian Power. One indictment accused 29 defendants, including Darbinyan and Sharopetrosian, of participating in the Armenian Power racketeering conspiracy that involved a host of illegal activities such as sophisticated bank fraud schemes, identity theft, debit card skimming and manufacturing counterfeit checks. Some defendants in the case were charged with participating in a variety of violent crimes, such as kidnapping, extortion and firearms offenses.
According to court documents, the Armenian Power street gang formed in the East Hollywood area of Los Angeles in the 1980s. The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc. Armenian Power has more than 250 documented members, as well as hundreds of associates. According to court documents, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions and witness intimidation to enrich its members and associates and preserve and enhance the power of the criminal enterprise.
Out of the 90 defendants charged in the two indictments, 85 have now been convicted. Two of the defendants are still pending trial, two defendants are fugitives and prosecutors dismissed charges against one defendant. The charges contained in the indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by the Eurasian Organized Crime Task Force, which is composed of the FBI, the Glendale Police Department, the Los Angeles Police Department, the Burbank Police Department, the Los Angeles Sheriff’s Department, IRS – Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Secret Service. The Huntington Beach Police Department and the Beverly Hills Police Department provided assistance.
The case is being prosecuted by Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys E. Martin Estrada and Elizabeth Yang of the Central District of California.Angelo Hill Sentenced to 21 Months in Prison for Conspiracy to Possess with Intent to Distribute CocaineRead the Press Release
St. Thomas, USVI - District Court Judge Curtis V. Gomez today sentenced Angelo Hill, 51, a former Virgin Islands Police Department sergeant, to 21 months in prison for conspiracy to possess with intent to distribute cocaine, United States Attorney Ronald W. Sharpe announced.
On December 18, 2013, Hill pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine after he was arrested on May 24, 2013, and charged with conspiracy to possess with intent to distribute cocaine, and possession of a firearm in furtherance of drug trafficking. Hill was arrested as part of the investigation of Roberto Tapia, Director of the Virgin Islands Department of Planning and Natural Resources (DPNR) Division of Environmental Enforcement. On September 12, 2013, he was charged in a 34-count second superseding indictment, along with six other defendants, including Tapia, Raymond Brown, Hector Alcenio, Edwin Monsanto, Stephen Torres, and Eddie Lopez-Lopez.
The case was investigated by the Public Corruption Task Force, which comprises the Federal Bureau of Investigation (FBI); U.S. Drug Enforcement Administration (DEA; Virgin Islands Police Department; U.S. Marshals Service; Internal Revenue Service Criminal Investigation Division (IRS-CI); U.S. Department of Homeland Security, Homeland Security Investigations (HSI); U.S. Customs and Border Protection (CBP); United States Coast Guard; Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Office of the Virgin Islands Inspector General. It was prosecuted by Assistant U.S. Attorney Kelly B. Lake.
Alabama Man Sentenced to 24 Months in Prison for Copyright ViolationRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that Johnson Augustus Powell, 54, of Huntsville, Ala., was sentenced by U.S. District Judge Richard T. Haik to 24 months in prison and three years of supervised release for copyright infringement. He was also ordered to pay $7,500 restitution to the Motion Picture Association of America.
According to evidence presented at the guilty plea on November 12, 2013, Louisiana State Police stopped Powell’s vehicle August 10, 2011, on Interstate 10. During a search of the vehicle, State Police found 1,463 counterfeit DVD movies and 1,225 counterfeit music CDs. Powell surrendered the illegal materials and admitted that he was selling them for profit.
On November 30, 2011, a Calcasieu Parish Anti-Drug Team officer stopped Powell’s vehicle on Interstate 10 for a routine traffic violation. After a vehicle search, officers found 1,085 counterfeit DVD movies and 836 counterfeit music CDs. Powell again admitted to making the illegal materials for profit. In January 2012, Powell turned over computer programs and equipment he used to counterfeit the media. On April 4, 2012, a Calcasieu Parish Anti-Drug Team officer again stopped Powell on Interstate 10, and after a search of the vehicle, found 511 counterfeit DVD movies and 423 counterfeit music CDs.
The Louisiana State Police, Calcasieu Parish Anti-Drug Team, and Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Brett L. Grayson prosecuted the case.
Akron Man Arrested for Importing Bath Salts from ChinaRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Rodney Howard, 45, of Akron, N.Y., was arrested and charged by criminal complaint with importing, conspiracy to import, and smuggling into the United States, alpha-PVP, a synthetic drug also commonly known as “bath salts.” The charges carry a maximum sentence of 20 years in prison and a $1,000,000 fine.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that according to the complaint, a quantity of bath salts were ordered over the Internet from China and addressed to a third party at the defendant’s residence in Akron. On April 15, 2014, Howard arrived at the United States Post Office in Akron and picked up the package, which contained 14 ounces of alpha-PVP. Special Agents from Homeland Security Investigations then arrested the defendant.
The defendant made an initial appearance on April 16, 2014 before U.S. Magistrate Judge Hugh B. Scott. Howard was released on bond and is due back in court for a preliminary hearing on May 7, 2014 at 2:00 p.m.
The criminal complaint is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, and Special Agents of the U.S. Postal Inspection Service, Boston Division, under the direction of Acting Inspector in Charge, Shelly A. Binkowski.Activity for April 15, 2014Read the Press Release
Wyoming Woman Charged with First Degree
U.S. Attorney for the District of Wyoming Christopher A. Crofts announced today that on April 15, 2014, Ardis Sierra Enos, 20, an Eastern Shoshone tribal member, appeared in federal court on a Complaint charging her with one count of First Degree Murder in violation of 18 U.S.C. '' 1111 and 1153. The charge against Enos stems from her actions in the death of her newborn infant on March 26, 2014 at her home on the Wind River Reservation. Enos is facing a potential sentence of life imprisonment, and could be ordered to pay restitution, a fine and special assessment. A complaint is only an accusation. In every criminal case, the accused is presumed to be innocent until proven guilty, and the government always has the burden of proving guilt beyond a reasonable doubt.
16 April 2014
Wood County Man Sentenced for Firearms ViolationRead the Press Release
Department of Justice
Office of Public AffairsProject Safe Neighborhoods sends Convicted Felon to Federal Prison For Possessing a Stolen Firearm
TYLER, Texas - A 29-year-old Dike, Texas man has been sentenced to federal prison for firearms violations in the Eastern District of Texas announced U.S. Attorney John M. Bales today.
Kerry Lynn Sanders pleaded guilty on December 4, 2013, to possessing a stolen firearm and was sentenced to 120 months in federal prison today by U.S. District Judge Leonard Davis.
According to information presented in court, on March 19, 2013, Sanders was stopped by Wood County Sheriff’s Deputies due to an outstanding arrest warrant. The deputies arrested Sanders and performed an inventory of Sanders’ vehicle. During the inventory, the deputies discovered a 20gauge, pump-action shotgun behind the driver’s seat. Sanders admitted that he knowingly possessed the shotgun without the consent of the owner, and with the intent to deprive the owner of the shotgun.
Sanders was indicted by a federal grand jury on September 25, 2013, for possessing the shotgun after having been previously convicted of multiple felony crimes including Theft, Attempted Evading Arrest with a Vehicle, Possession of a Controlled Substance, and Aggravated Robbery. Federal law prohibits the possession of stolen firearms and further prohibits convicted felons from owning or possessing firearms or ammunition.
This conviction is yet another important outcome from Project Safe Neighborhoods (PSN), a national priority of the United States Department of Justice. PSN is designed as a partnership between federal and local law enforcement to reduce violent crime and gun-related crime through the vigorous enforcement of the criminal provisions of the federal firearms laws.
This case was investigated by ATF and the Wood County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney Jim Noble.
####West and Hardy Plea Guilty to ForgeryRead the Press Release
OXFORD, Miss - Felicia C. Adams, United States Attorney for the Northern District of Mississippi, Craig Caldwell, Special Agent in Charge of the United States Secret Service, and Special Agent in Charge Gabriel L. Grchan, Internal Revenue Service, Criminal Investigation announced that:
Sadie West, 35, of Greenwood, Mississippi, and Mary Ann Hardy, 38, of Greenville, Mississippi, pled guilty on April 15, 2014 before United States District Judge Sharion Aycock, in Aberdeen, Mississippi. Both West and Hardy pled guilty to count one of an indictment, charging each with conspiracy to pass United States Treasury checks bearing a forged endorsement or signature as well as conspiracy to pass forged commercial checks.
West remains out on a pre-existing bond while Hardy is being detained pending sentencing, which will take place following the completion of a presentence report. At sentencing, West and Hardy face a maximum possible penalty of five years imprisonment, a $250,000 fine, and three years supervised release.
Malcolm Alexander, 39, and Jacarda Lawrence, 39, both of Greenville, recently pled guilty to similar charges in this matter. Alexander pled guilty to one count of conspiracy and one count of passing a forged commercial check while Lawrence pled guilty to one count of passing a forged commercial check. Alexander faces a maximum possible penalty of five years imprisonment on the conspiracy charge and ten years imprisonment on the forged commercial check charge, a $250,000.00 fine on each charge, and three years supervised release on each charge. Lawrence faces a maximum possible penalty of ten years imprisonment, a $250,000 fine, and three years supervised release. Lawrence remains out on a pre-existing bond while Alexander is being detained pending sentencing.
Gabriel L. Grchan, Special Agent in Charge for the Internal Revenue Service, Criminal Investigation stated:
"We are pleased with the guilty pleas entered by Sadie West, Mary Hardy, Malcolm Alexander, and Jacarda Lawrence. Conspiracies to steal from the U.S. Treasury cause great detriment to our nation's economy and discourage honest taxpayers who pay their fair share. I would like to thank our law enforcement partners and the Office of the United States Attorney for their roles in the investigation and prosecution of this case."
This case was investigated by the United States Secret Service and the Internal Revenue Service, Office of Inspector General and is being prosecuted by Assistant United States Attorney Robert Mims.
Victor Man Charged with Failing to File Income Tax ReturnsRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Christopher Wheeler, 46, of Victor, N.Y., was charged in a three-count information with willfully failing to file tax returns for 2007, 2008 and 2009. The charges carry a maximum sentence of three years in prison and a $75,000 fine.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Wheeler had gross income of approximately $4,600,000 in 2007, $5,600,000 in 2008, and $1,600,000 in 2009, but failed to file timely tax returns with the Internal Revenue Service to report this income.
The charges are the culmination of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Utah Man Pleads Guilty to Religious-Motivated Attack on Synagogue and Gun ChargesRead the Press Release
Macon Openshaw, 21, pleaded guilty in the U.S. District Court for the District of Utah today to a federal civil rights crime relating to a bias-motivated weapons discharge aimed at a local synagogue and to two unlawful gun possession charges.
During the plea proceedings, Openshaw admitted that late at night on a date in 2012, he fired three rounds from a Walther .22 caliber handgun at the Congregation Kol Ami synagogue in Salt Lake City because of its religious character, hitting the unoccupied structure’s second floor window casing and the exterior wall of the synagogue. Openshaw also admitted to possessing a handgun with a destroyed serial number, which was the same handgun he used to shoot the synagogue. He also admitted to possessing several firearms and ammunition while he was subject to a protective order.
“Religiously-motivated violence tears at the fabric of our diverse society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Today, and in the future, the department stands vigilant to confront and eradicate violence based on a person’s religion, and we will continue to vigorously prosecute those who commit crimes born of hate.”
“Every citizen living in Utah has a right to be free from intimidation and threatening conduct,” said U.S. Attorney David B. Barlow. “The U.S. Attorney’s Office in Utah has a strong history of prosecuting those who violate the civil rights of others.”
Openshaw entered into a plea agreement whereby he would be sentenced to 60 months incarceration. As part of his plea agreement, Openshaw agreed to pay restitution to the synagogue to repair the damage caused by his actions.
Openshaw is scheduled to be sentenced on July 15, 2014, by U.S. District Judge Tena Campbell.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Carlos Esqueda of the U.S. Attorney’s Office for the District of Utah and Trial Attorney Nicholas Durham of the Civil Rights Division’s Criminal Section.
Utah Man Pleads Guilty to Religious-Motivated Attack on Synagogue and Gun ChargesRead the Press Release
SALT LAKE CITY - Macon Openshaw, 21, pleaded guilty in the U.S. District Court for the District of Utah Wednesday to a federal civil rights crime relating to a bias-motivated weapons discharge aimed at a local synagogue and to two unlawful gun possession charges.
During the plea proceedings, Openshaw admitted that late at night on a date in 2012, he fired three rounds from a Walther .22 caliber handgun at the Congregation Kol Ami synagogue in Salt Lake City because of its religious character, hitting the unoccupied structure’s second floor window casing and the exterior wall of the synagogue. Openshaw also admitted to possessing a handgun with a destroyed serial number, which was the same handgun he used to shoot the synagogue. He also admitted to possessing several firearms and ammunition while he was subject to a protective order.
“Religiously-motivated violence tears at the fabric of our diverse society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Today, and in the future, the department stands vigilant to confront and eradicate violence based on a person’s religion, and we will continue to vigorously prosecute those who commit crimes born of hate.”
“Every citizen living in Utah has a right to be free from intimidation and threatening conduct,” said U.S. Attorney David B. Barlow. “The U.S. Attorney’s Office in Utah has a strong history of prosecuting those who violate the civil rights of others.”
Openshaw entered into a plea agreement whereby he would be sentenced to 60 months incarceration. As part of his plea agreement, Openshaw agreed to pay restitution to the synagogue to repair the damage caused by his actions. Openshaw is scheduled to be sentenced on July 15, 2014, by U.S. District Judge Tena Campbell.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Carlos Esqueda of the U.S. Attorney’s Office for the District of Utah and Trial Attorney Nicholas Durham of the Civil Rights Division’s Criminal Section.
Union Official Cashed Dues Checks and Used the Money for HimselfRead the Press Release
PITTSBURGH – A resident of Venango County pleaded guilty in federal court to a charge of union embezzlement, United States Attorney David J. Hickton announced today.
David L. Barr, 50, of Emlenton, PA, pleaded guilty to one count before United States District Court Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Barr, the Financial Secretary-Treasurer of the Local No. 99 of the Glass, Molders, Pottery, Plastics & Allied Workers International Union, AFL CIO, CLC, stole approximately $5,688.40 from the union by cashing 19 employer dues remittance checks belonging to the labor organization and converting the monies to his own personal use during the period from April 9, 2010 through Sept. 22, 2011.
Judge Cercone scheduled sentencing for Sept. 2, 2014, at 11:30 A.M. The law provides for a maximum total sentence of not more than 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentence, the court released Barr on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The Department of Labor, Office of Labor Management Standards, conducted the investigation that lead to the prosecution of Barr.
U.S. Attorney's Office, PharMerica Enter into Settlement AgreementRead the Press Release
ROANOKE, VIRGINIA – United States Attorney Timothy J. Heaphy announced today that the United States Attorney’s Office for the Western District of Virginia has entered into a civil settlement agreement with PharMerica Corporation regarding the unlawful dispensation of schedule II controlled substances.
PharMerica, a non-public pharmacy in Vinton, Va., fills prescriptions for patients in long term care facilities and operates pursuant to a certificate of registration issued by the Drug Enforcement Administration [DEA].
In accordance with the DEA’s regulatory authority over registered pharmacies, a DEA Diversion Task Force investigator examined the schedule II prescriptions filled by PharMerica’s Vinton pharmacy between May 8, 2008 and July 22, 2009. This investigation revealed 228 occasions whereas PharMerica’s Vinton pharmacy violated the Controlled Substance Act [CSA].
“The problem of prescription drug abuse and addiction continues to plague communities across Virginia,” United States Attorney Timothy J. Heaphy said today. “To minimize the risk of abuse, we must do all we can to ensure that everyone in the chain of distribution of prescription drugs follows proper procedures. Our newly-formed DEA Diversion Task Force is doing this important work and will continue to enforce the laws governing prescription drugs in the Western District of Virginia.”
The United States Attorney’s Office for the Western District of Virginia and PharMerica agreed that PharMerica would pay the United States $213,283 or $935.45 for each violation of the CSA. PharMerica also agreed to maintain a program to ensure future compliance with the CSA, including that schedule II controlled substances only be dispensed pursuant to valid prescriptions. In investigating this matter, the United States Attorney’s Office found that PharMerica’s 228 CSA violations represented only three percent of its total schedule II prescriptions filled between May 8, 2008 and July 22, 2009.
Had this matter not been settled through a civil settlement, the United States was prepared to prove in a civil suit that PharMerica’s Vinton pharmacy violated the CSA on 228 occasions when it:
- 25 times dispensed Schedule II controlled substances where the practitioners’ signatures were never obtained on prescriptions.
- 38 times dispensed schedule II controlled substances from emergency boxes in long-term care facilities with no valid prescription within seven days.
- 20 times emergency dispensed schedule II controlled substances with no valid prescription within seven days.
- 14 times dispensed schedule II controlled substances without practitioners’ signatures when dispensed or in non-emergency situations dispensed schedule II drugs after the prescription had expired.
- 27 times dispensed schedule II controlled substances without the patients’ correct addresses on the prescription.
- 104 dispensed schedule II controlled substances without the practitioners’ correct names, correct DEA registration numbers and correct prescribing dates on the prescriptions.
This matter was investigated by the Drug Enforcement Administration and prosecution by Assistant United States Attorney Thomas Eckert.
Two More Charged in Gang-related Kidnapping of Father of State Prosecutor in North CarolinaRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that two more defendants were charged with Conspiracy to Kidnap in violation of Title 18, United States Code, Section 1201(c), in connection with the kidnapping of Frank Arthur Janssen of Wake Forest, North Carolina. These two new charges are in addition to the six already charged with engaging in a conspiracy to seize, kidnap, and abduct Frank Janssen from Wake Forest, North Carolina and transport him to Atlanta, Georgia. Janssen is the father of a Raleigh, North Carolina prosecutor who prosecuted a Blood member in state court.
Mr. Walker stated, “My office will continue to pursue everyone involved with this crime. This deliberate attack on our judicial system cannot be tolerated.”
According to the investigation, Blood member Kelvin Melton, a/k/a Dizzy, a/k/a Old Man, 49, used a cell phone that he illegally possessed while serving a life sentence in North Carolina’s Polk Correctional Institution in Butner, to transmit instructions and threats to Mr. Janssen’s wife and to co-conspirators in the plot. Specifically, Melton gave instructions on how to kill Mr. Janssen and dispose of his body. Mr. Janssen was taken from his home against his will on April 5, 2014. Through a coordinated effort involving many federal, state, and local law enforcement agencies, the FBI’s Hostage Rescue Team rescued Mr. Janssen at 11:55 pm on April 9, 2014 at a residence in Southeast Atlanta. The two new charges are against JAKYM TIBBS and JOHN DOE, a/k/a “Quan”, a/k/a “Kirkwood Quan”. The others already charged with kidnapping in this case are Jenna Paulin Martin, 21, Tiana Maynard, a/k/a Tiana Brooks, 30, Jevante Price, a/k/a Flame, 20, Michael Montreal Gooden, a/k/a Hot, 21, and Clifton James Roberts, 29. These five had their detention hearings in Atlanta yesterday and all were ordered held without bond. Jenna Paulin Martin and Tiana Maynard waived their probable cause hearings and will be extradited to North Carolina. It is of note that Mr. Janssen’s daughter is a state prosecutor who prosecuted Melton in Raleigh, North Carolina. This investigation is ongoing.
If convicted of this charge, each defendant faces a maximum sentence of life imprisonment and a fine of up to $250,000.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
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 with assistance from the United States Attorney’s Office for the Northern District of Georgia.
Two Mexican Citizens Charged with Illegal ReentryRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania and the U.S. Department of Homeland Security, Immigrations and Customs Enforcement, Enforcement and Removal Operations (ERO) announced today that a 29-year-old native and citizen of Mexico has been charged with illegal reentry into the United States.
According to United States Attorney Peter Smith, Santos Aguilar-De Leon, age 29, a native and citizen of Mexico, in the United States illegally was charged in a one-count indictment by a federal grand jury in Harrisburg today.
The indictment alleges that Aguilar-De Leon, an alien who has previously been arrested and deported from the United States in February 2010, did knowingly and unlawfully reenter the United States and was apprehended in Dauphin County, Pennsylvania.
If convicted, Aguilar-De Leon faces a maximum sentence of up to two years’ imprisonment and a $250,000 fine.
In a separate case a 30- year-old native and citizen of Mexico was charged with Improper Entry by Alien into the United States.
Jose Hernandez-Barrientos, a native and citizen of Mexico, in the United States illegally was charged in a one-count information filed with the Court in Harrisburg on April 14, 2014.
The information alleges that Hernandez-Barrientos, an illegal alien, did enter the United States at any time or place other than as designated by immigration officers and was found in the United States in York County, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, Hernandez-Barrientos faces a maximum sentence of up to 6 months imprisonment and a $5,000 fine.
In both cases, investigation was conducted by the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO). The cases are being prosecuted by Special Assistant United States Attorney Brian G. McDonnell.
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 two years imprisonment, a term of supervised release following imprisonment, and a fine. 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.
Two from Northeast Ohio Sentenced to Prison for Persuading Minor to Engage in Sexually Explicit ConductRead the Press Release
Two men from Northeast Ohio were both sentenced to more than eight years in prison after pleading guilty to two counts of inducing a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of that conduct, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Randall S. Allman, 38, of Strongsville, and Shawn M. Kadras, 34, of Cleveland, on two occasions in February 2013, did persuade, induce, entice and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of the conduct, according to the indictment.
Kadras was sentenced to 110 months in prison while Allman was sentenced to 97 months in prison.
The case was prosecuted by Assistant United States Attorney Michael A. Sulivan following an investigation by the Federal Bureau of Investigation’s Safe Streets Task for and the Summit County Sheriff’s Office.
Two Former Pharmaceutical/Medical Technology Executives Sentenced for Their Roles in Insider Trading SchemeRead the Press Release
Pair Netted More Than $1.4 Million in Illicit Profits over Five Years
NEWARK, N.J. - Two former pharmaceutical and medical technology firm executives were sentenced today for their involvement in an extensive insider trading network that repeatedly exploited non-public material information for financial gain, U.S. Attorney Paul J. Fishman announced.
Mark Cupo, 53, of Morris Plains, N.J. was sentenced to 16 months in prison and Mark Foldy, 44, also of Morris Plains, N.J. was sentenced to two years of probation, including six months of home confinement with electronic monitoring. Cupo previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a seven-count information charging him with two counts of conspiracy to commit securities fraud and five counts of securities fraud. Foldy previously pleaded guilty before Judge Hayden to a four-count information charging him with one count of conspiracy to commit securities fraud and three counts of securities fraud. Judge Hayden imposed both sentences today in Newark federal court.
According to documents filed in this case and statements made in court: From 2007 to 2012, Cupo, who was an executive at Sanofi-Aventis, a global pharmaceutical company based in New Jersey, repeatedly obtained non-public material information from his friend and former employee, John Lazorchak, 43, of Long Valley, N.J., who was director of financial reporting at Celgene Corp., another global pharmaceutical company based in New Jersey. The inside information included non-public merger and acquisition plans, quarterly earnings results, and a regulatory application decision. Cupo would pass the information to his friends, Lawrence Grum, 50, of Livingston, N.J., and Michael Castelli, 50, of Morris Plains, N.J., who would then execute numerous profitable trades based on that information and share the profits with Cupo and Lazorchak.
During the course of the multi-year insider trading operation, Cupo divulged inside information to Grum and Castelli regarding then-confidential plans by his own employer, Sanofi-Aventis, to acquire Chattem Inc. Grum and Castelli traded on the Chattem-related inside information prior to its public announcement, reaping substantial profits.
Foldy, 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. Through the course of his employment at Stryker, Foldy learned of Stryker’s then-confidential plans to acquire Orthovita Inc. Foldy leaked news of the planned acquisition to Lazorchak prior to public announcement, and Lazorchak, in turn, passed the inside information to Cupo. Cupo informed Grum and Castelli of the impending deal so that they could trade ahead of the public announcement of the Orthovita acquisition for substantial profits.
Foldy also received inside information from Lazorchak regarding Celgene’s planned acquisition of Pharmion Corp. and profitably traded on the Pharmion-related inside information. Foldy passed inside information on to a family member and friend.
In addition to the prison terms, Judge Hayden sentenced Cupo to two years of supervised release.
Cupo and Foldy are the third and fourth defendants 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. Lazorchak is scheduled to be sentenced by Judge Hayden on April 22, 2014, and another conspirator and high school friend of Lazorchak, 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.
14-133
Defense counsel: Cupo: Joseph J. Bell Esq. and Joseph J. Bell IV Esq., Rockaway, N.J.
Mark Foldy: Jonathan Marks Esq., New York
John Lazorchak: Lawrence S. Lustberg Esq., Newark
Lawrence Grum: Scott A. Resnik Esq., New York
Michael Castelli: Daniel Zinman Esq. and Daniel Stein Esq., New York
Michael Pendolino: James S. Friedman Esq., NewarkTwo Former Officers at Roxbury Correctional Institution Sentenced in Connection with Assault of an InmateRead the Press Release
Two former correctional officers at Roxbury Correctional Institution (RCI) in Hagerstown, Md., were sentenced today in connection with the March 9, 2008, assault of Kenneth Davis, an inmate. U.S. District Judge James K. Bredar sentenced Jeremy McCusker to serve 21 months in prison. Walter Scott Steele was ordered to serve four months in prison and to complete 40 hours of community service.
Jeremy McCusker previously pleaded guilty to deprivation of rights under color of law and conspiring to obstruct justice. Walter Scott Steele also pleaded guilty to conspiring to obstruct justice as well as making false statements to federal authorities.
Both McCusker and Steele testified for the prosecution at the federal trial of former RCI officer James Kalbflesh, who was convicted for his role in the assault of Davis that took place during a midnight shift and in the subsequent cover up.
During their testimony at Kalbflesh’s trial and in court documents filed in connection with their respective guilty pleas, McCusker and Steele each admitted that they were present when other officers at RCI met during the midnight shift and agreed to assault Davis in retaliation for a prior incident involving Davis and another officer. McCusker and other correctional officers then entered Davis’ cell and assaulted the inmate while Steele and another officer watched the assault.
Later, Steele, McCusker and other officers met at a restaurant and agreed on a story to cover up their involvement in, or knowledge of, the midnight shift’s assault on Davis. On Feb. 12, 2013, Steele met with federal authorities and provided false information regarding the incident.
“The overwhelming majority of correctional officers serve their communities with honor and professionalism,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Justice Department will aggressively prosecute those who engage in criminal misconduct.”
To date, 16 current or former officers at RCI have been convicted in connection with a series of assaults that Davis suffered on March 8-9, 2008. Four former RCI officers still await sentencing before Judge Bredar.
The case was investigated by the Frederick Resident Agency of the FBI, and prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division of the Department of Justice, with the assistance of Assistant U.S. Attorney Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.
Two Former Cook County Board of Review Analysts Sentenced to Prison for Accepting A Bribe to Arrange Property Tax ReductionsRead the Press Release
CHICAGO ― Two former analysts for the Cook County Board of Review were sentenced today for accepting $1,500 to facilitate reducing by more than $10,000 the property taxes on three residential properties. THOMAS HAWKINS was sentenced to 24 months in prison and JOHN RACASI was sentenced to 18 months in prison after they were convicted of federal conspiracy, bribery, and fraud charges. They were captured scheming with others to facilitate reducing property tax assessments in exchange for bribes in undercover recordings that were played at their week-long trial last October in U.S. District Court.
Hawkins, 50, and Racasi, 53, half-brothers and both of Chicago, were analysts on the staff of one of the three Board of Review commissioners in September 2008, when they accepted the $1,500 bribe payment. Each of the three commissioners has analysts who handle residential property tax appeals and at least two of the three commissioners’ analysts must agree in order to reduce the Cook County Assessor’s property tax assessments.
“Offenses like [these], betray the citizens who pay property taxes in Cook County and who expect the process in place for assessing property values and appealing those property tax assessments to operate fairly and legitimately,” Assistant U.S. Attorneys Margaret J. Schneider and Michael T. Donovan, argued at sentencing.
According to the evidence at trial, Ali Haleem, a former Chicago police officer who began cooperating with the FBI in July 2008 and is awaiting sentencing on other federal charges, was introduced to Hawkins, who, in turn, introduced him to Racasi. Haleem recorded numerous meetings and telephone conversations with both defendants in which they discussed facilitating property tax assessment reductions in exchange for bribes.
In September 2008, Haleem, Hawkins and Racasi discussed the specifics of the bribe Haleem would pay for reducing tax assessments on properties in Chicago, Burbank, and Tinley Park. On Sept. 11, 2008, Hawkins and Racasi agreed to reduce the assessed values on properties Haleem owned in Chicago and Burbank, as well as a property in Tinley Park owned by another individual, for three years beginning with the 2008 tax year. Hawkins and Racasi provided Haleem with analysis sheets for these properties, which could be used to calculate the tax savings that a property owner would realize over the three-year period. In return for the $1,500 bribe, Hawkins and Racasi promised Haleem a total tax savings for the three properties over the threeyear period of at least approximately $10,000. The payment was made on Sept. 17, 2008, when Haleem met with Hawkins and Racasi and handed the money to Racasi. Hawkins assured Haleem that Racasi would later provide Hawkins with his share of the money.
Hawkins and Racasi also facilitated a reduction in property tax assessments on 11 condominium units in Chicago, expecting to receive bribe payments that Haleem would collect from the property owners once the reductions were verified.
The sentences were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The FBI=s Chicago City Public Corruption Task Force led the investigation with assistance from the Chicago Police Department’s Internal Affairs Division, which is a task force member.
Two Defendants Sentenced for $100 Million Nationwide Tax Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Alabama man and a California woman were sentenced in federal court today, in separate but related cases, for their roles in a tax fraud conspiracy that attempted to receive nearly $100 million in fraudulent refunds from the IRS. Co-conspirators from eight states were involved in filing fraudulent tax returns in the largest federal false claims case that has ever been prosecuted in Missouri.
Billy Ray Hall, 75, of Newton, Ala., was sentenced by U.S. District Judge Brian C. Wimes to three years and one month in federal prison without parole. The court also ordered Hall to pay $1,141,062 in restitution.
Maria Haro Campos, 43, of Vista, Calif., was sentenced by U.S. District Judge Howard F. Sachs to 20 months in federal prison without parole.
Conspirators prepared and filed a total of 284 fraudulent tax returns from July 1, 2008, to Sept. 21, 2011. Each of the returns contained false claims that the taxpayer listed was due a refund due to over-withholding of taxes, based on fictitious forms 1099-OID. In actuality, the clients had not received interest income from the banks and lenders listed on their Forms 1099, nor had any money been over-withheld. Conspirators claimed that a total of $96 million dollars in fraudulent tax refunds were due. The IRS mistakenly paid out $3.5 million on these fraudulent claims.
On Dec. 18, 2013, Hall pleaded guilty to participating in a conspiracy to defraud the United States by filing fraudulent tax returns. Hall admitted that he was a regional manager for a fraudulent Form 1099-OID scheme led by co-defendant Gerald A. Poynter, also known as “Brother Jerry Love,” 48, of Kansas City, Mo.
Hall introduced people to Poynter and encouraged them to participate in the OID process, either as a tax filer or as a branch manager. He also gathered information from some filers and provided it to Poynter. As Poynter’s regional manager, Hall had at least four branch managers beneath him. Hall had at least 20 clients of his own, resulting in at least 51 individual income tax returns claiming $14.28 million in fraudulent refunds. Of those, the IRS paid out $1,141,062 in fraudulent refunds.
Poynter and Hall conducted a training seminar in December 2008 at the Doubletree Hotel in Atlanta, Ga.. At the seminar, Poynter gave a presentation outlining his “OID process,” during which he pointed out that the IRS would issue refunds even if the name listed on the OID form was Spongebob Squarepants or Spiderman. Poynter told attendees they would use a rented office rather than process the OID returns at home to avoid their homes being raided by the FBI. He talked about attracting attention from IRS criminal investigators, and he provided pointers on how to avoid that outcome. Poynter also joked that his going to prison was a possibility. Despite hearing these statements, Hall continued to be involved. Hall sponsored other meetings where Poynter provided information to third parties concerning the OID process. Hall spoke about OIDs at another seminar with Poynter in Monroe, La. Hall admits that he ignored the many red flags that Poynter’s process was too good to be true and was in fact illegal.
On April 7, 2011, Campos pleaded guilty to her role in the conspiracy. Campos acted as the southern California branch manager for Poynter. She recruited new clients and facilitated their 1099-OID processes. She collected tax information and up-front fees, which she forwarded to Poynter for processing.
Campos furthered the conspiracy by aiding two of her clients in obtaining a total of $1,207,349 in fraudulent refunds. Campos unsuccessfully attempted to obtain refunds in the amount of at least $21 million for other clients. In total, Campos introduced at least 10 individuals or married couples to the conspiracy, including one couple who received a fraudulent refund of $805,749.
Campos traveled to Kansas City, Mo., from California on several occasions to meet with Poynter for training and to deliver records. Campos knew that Poynter’s scheme was fraudulent, and was intended to defraud the U.S. Treasury of millions of dollars. When interviewed by law enforcement, Campos admitted that she was aware of problems caused by Poynter’s 1099-OID scheme and that she continued to participate in the conspiracy even after she knew it was illegal.
Poynter was sentenced on March 13, 2014, to 13 years in federal prison without parole after pleading guilty to his role in the conspiracy and to filing a fraudulent tax return. The court also ordered Poynter to pay $951,930 in restitution to the government.
Hall and Campos are among 12 defendants who have pleaded guilty, including Kristi Jones, 41, of Riverside, Mo.; Shirley Oyer, 72, of Overland Park, Kan.; Jennifer Wilson, 37, of Cumming, Ga.; Mark J. Murray, 52, of Newton, Ala.; John V. Perdido, 58, of Temecula, Calif.; Earl Lee Davis, 55, of Monroe, La.; Robert E. Morris, 68, of Rocklin, Calif.; and Karen A. Olson, 42, of Wood Dale, Ill. Marian Fine-Kennedy, 36, of Eugene, Ore., pleaded guilty in a separate but related case.
In addition, Nkosi Gray, 40, of New Fairfield, Conn., and Kimberly Johnson, 43, of Chickamauga, Ga., were each convicted at trial of filing false claims for a tax refund. Gray and Johnson each filed fraudulent tax returns that falsely claimed refunds due to over-withholding of taxes. Gray received a $278,874 refund and Johnson filed a claim for a $61,959 refund on behalf of another person.
1099-OID Tax Fraud Scheme
Conspirators utilized 1099-Original Issue Discount forms as part of their scheme.
These forms are legitimately used by tax filers who must pay taxes on income they receive from the interest on their bond investments. Tax on certain bonds must be paid as income accrues. Bond holders receive annual forms, called 1099-Original Issue Discount (OID), from the debt issuers. Bond holders then file these OID forms with the IRS, along with their income tax forms.
However, the scheme described in the indictments utilized the 1099-OID forms in a nonsensical manner. Clients of the conspirators, working with their branch managers, assembled financial documents such as mortgage and loan statements, car payments, foreclosure records, bank statements, credit card statements, and other records of debt and spending. Poynter and his staff used this debt information – rather than any actual bond income – to prepare and/or finalize false tax returns and improperly calculated Forms 1099-OID.
These tax returns falsely claimed that the filers had received income from bond proceeds and that federal income tax had been withheld. The fraudulent returns claimed the government had over-withheld taxes from the clients’ OID bond income, making the clients appear entitled to more than $96 million in tax refunds.
In reality, Poynter’s clients had not earned – or paid tax on – any bond income. No bond payer had issued any 1099-OID forms. Instead, the bond income that was listed was calculated by what the indictment describes as an “arbitrary and capricious formula.” Conspirators simply added up the taxpayers’ debts and spending and listed those creditors as “payers” of bond interest.
OID Fraud Web Site
A Web site has been established to provide information about the status of this investigation. Updates about this investigation and related cases will be posted at www.justice.gov/usao/mow/divisions/OIDfraud.html
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by IRS-Criminal Investigation.
Twinsburg Man Sentenced to Nearly Five Years in Prison for Tax FraudRead the Press Release
A Twinsburg man was sentenced to nearly five years in prison and ordered to pay approximately $1.2 million in restitution for his role in a tax-fraud conspiracy, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, IRS-Criminal Investigation Special Agent in Charge.
Brian D. Krantz, 47, previously pleaded guilty to one count of conspiracy to make false claims for income tax refunds and five counts of making such false claims. U.S. District Judge Sara Lioi sentenced him to 57 months in custody.
“Those individuals who engage in this type of financial fraud should know they will not go undetected and will be brought to justice,” Dettelbach said.“This sentence sends an important message to America’s taxpayers who play by the rules that we have no tolerance for those who make up their own rules,” Enstrom said.
The conspiracy included filing false income tax returns claiming false refunds totaling more than $8.8 million. Based on those false claims, the U.S. Treasury issued 17 refund checks totaling approximately $3,615,586 payable to Krantz and various corporations controlled by Krantz and his co-conspirator, Bryan D. McCallum, according to the court documents.
Krantz owned and controlled two corporations that engaged in financial services and/or real estate investment business activities. McCallum, of Parma Heights, worked as an accountant/ bookkeeper at the companies, according to court documents.
From approximately April 2009 through June 8, 2010, Krantz and McCallum conspired to make false claims for tax refunds using income tax returns filed with the IRS in the names of Krantz, companies formed by Krantz and McCallum, and several “shelf” companies purchased by Krantz. A “shelf” company is a corporate or other formal non-operating business entity established for the purpose of being held for sale to another person, according to court documents.
The scheme involved the use of fake IRS Forms 2439, titled “Notice to Shareholder of Undistributed Long-Term Capital,” purportedly issued by some of the shelf companies to the persons and companies in whose names the false returns were filed. A Form 2439 is to be issued by a regulated investment company (RIC) or real estate investment trust (REIT) to report undistributed capital gains and taxes withheld from those gains on behalf of RICs or REITs shareholders. Under federal tax law, RICs and REITs are entities that are not taxed on their earnings but instead pass those earnings to their shareholders who, in turn, have the obligation to report those earnings and any resulting tax liabilities on the shareholders’ income tax returns. The returns filed pursuant to the conspiracy claimed substantial amounts of Form 2439 withholding credits, when, in fact, none of the companies listed as RICs or REITs on the forms were actually RICs or REITs or had any undistributed capital gains or withheld taxes, according to court documents.
Krantz used more than $1 million of the refund proceeds to finance a real estate venture he established with other partners, known as Phoenix Ventures Partners LLC. Krantz and McCallum misled Krantz’s real estate partners to believe that a group of Colorado-based hard money lenders had provided the funds.
McCallum previously pleaded guilty to a two-count information charging him with the same false claims conspiracy and with making 30 false claims. He was sentenced to three years in prison and ordered to pay approximately $1.2 million in restitution.
The government’s case was prosecuted by Assistant United States Attorneys John M. Siegel and Justin J. Roberts, following an investigation by the Internal Revenue Service, Criminal Investigation.
Twenty-Seven Defendants Indicted in Drug, Homicide and Money Laundering Case in Federal Court in MilwaukeeRead the Press Release
United States Attorney James L. Santelle announced today that an indictment was unsealed in federal court charging 27 defendants in a poly-drug conspiracy case which also includes homicide, money laundering, and firearms offenses.
The following defendants are charged with conspiracy to distribute controlled substances, including heroin, crack cocaine, marijuana, and five kilograms or more of cocaine: Kevin R. Arms (40), John Bailey (37), Trevan Brown (29), Cecil Arms (70), Timothy Cunningham (44), Maurice Handy (42), Roosevelt Lee (40), Phillip Moffett (32), Brandon Owens (30), Joe Parker (73), Sam Spears (37), Roger Walker (33), and Carl Wilson (41). In addition, John Cleveland (38), Demerius Sholar (28), Ronnie Reid (45), Kyle Carrington (22), and Brandon Trotter (27) are charged with possession with intent to distribute or distribution of controlled substances.
Kevin R. Arms, John Bailey, and Phillip Moffett are charged with causing death by discharge of a firearm. John Cleveland, Roosevelt Lee, Brandon Owens, Roger Walker, Carl Wilson, Kyle Carrington, Brandon Trotter are charged with possession of firearms in furtherance of drug-trafficking offenses.
Kevin R. Arms, Cecil Arms, Kevin C. Arms (21), Shenese Arms (33), Shenita Arms-Nicholas (33), and Tremell Nicholas (34) are charged with money laundering offenses.
Malik Danun (28) is charged with obstruction of justice. Ricky Shaw (38) and Patricia Arms (65) are both charged with misprision of a felony. Katilia Jackson (26) and Brenda Arms (55) are both charged with maintaining a drug-involved premises. All of the defendants currently reside in Milwaukee, except for Kevin R. Arms (Pewaukee), Ricky Shaw (Atlanta, GA) and Malik Danun (Atlanta, GA).
Today, law enforcement officers arrested 18 of these defendants. Three were already in custody. Six are still at large, including: Trevan Brown, John Cleveland, Ronnie Reid, Demerius Scholar, Sam Spears, and Roger Walker. In addition, law enforcement executed eight search warrants and recovered 31 firearms and approximately $143,000.
The defendants were charged based on a multi-year investigation by law enforcement officers from the U.S. Department of Justice, Drug Enforcement Administration, the Milwaukee Police Department, the Wisconsin Department of Revenue, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, assisted by the Wisconsin Department of Justice- Division of Criminal Investigations, and the Milwaukee High Intensity Drug Trafficking Area (HIDTA) Heroin Task Force.
Law enforcement agencies assisting with today’s arrests include the U.S. Marshals Service, Waukesha Metro Drug Unit, and the Milwaukee County Sheriff’s Department.
The drug conspiracy and firearms offenses are all punishable by up to life in prison. The other offenses have lower maximum penalties, including: money laundering (20 years); maintaining a drug involved premises (20 years); possession with intent to distribute or distribution of controlled substances (20 years); obstruction of justice (20 years); and misprision of a felony (3 years).
This case is being prosecuted by Assistant U.S. Attorneys Erica O’Neil and Brian Resler.An indictment is merely the formal method of charging an individual and does not constitute inference of his or her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.
Three Indicted on Federal ChargeOf Bank Robbery in Pomona, KSRead the Press Release
KANSAS CITY, KAN. – A federal grand jury returned indictments here today against three people who are charged with robbing a bank in Pomona, Kan., U.S. Attorney Barry Grissom said.
Caleb Jeffcoat, 26, Quenemo, Kan.; Christel Collins, 37, Quenemo, Kan.; and Robert Martin, 39, Quenemo, Kan., were charged with one count of bank robbery. The indictment alleged that on March 19, 2014, they robbed the Goppert State Service Bank at 118 East Franklin Street in Pomona.
If convicted, they face a maximum penalty of 20 years in federal prison and a fine up to $250,000. The Franklin County Sheriff’s Office, the Ottawa Police Department, the KBI, the Franklin County Attorney’s Office and the FBI investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
OTHER INDICTMENTS
Luis Angel Sanchez-Cruz, 32, Baldwin Park, Calif.; Daniel Flores, 34, Perris, Calif.; and Evelyn Rose Cardenas, 23, Perris, Calif., are charged with one count of conspiracy to distribute heroin and methamphetamine, one count of possession of heroin with intent to distribute and one count of possession of cocaine with intent to distribute. The crimes are alleged to have occurred from April 1 to April 5, 2014, in Kansas City, Kan.
If convicted, they face a penalty of not less than 10 years in federal prison and a fine up to $10 million. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Sheri McCracken is prosecuting.
Chester Bragg, 36, is charged with failure to register as required by the federal Sex Offender Registration and Notification Act. The crime is alleged to have occurred starting in December 2013 in Wyandotte County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The U.S. Marshal Service investigated. Assistant U.S. Attorney Kim Martin is prosecuting.
Scott Meinert, 49, Tonganoxie, Kan., is charged with one count of possession of child pornography. The crime is alleged to have occurred March 25, 2013, in Tonganoxie, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Kim Martin is prosecuting.
Javier Zambrano-Sanchez, 39, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and cocaine, nine counts of distributing various amounts of methamphetamine and five counts of distributing various amounts of cocaine. The crimes are alleged to have occurred in 2012 and 2013 in Johnson and Wyandotte counties.
If convicted, he faces a penalty of not less than 10 years in federal prison and a fine up to $10 million on the conspiracy charge. Sentences on the other counts vary: Not more than 20 years, not less than five years, not less than 10 years, depending on the count. The FBI investigated. Assistant U.S. Attorney Sheri McCracken is prosecuting.
Miguel Lozoya-Serrano, 40, a citizen of Mexico who has been living in Wichita, Kan., is charged with one count of unlawfully re-entering the United States after being deported. He was found March 18, 2014, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Roberto Martinez-Bahena, 43, a citizen of Mexico who has been living in Liberal, Kan., is charged with unlawfully re-entering the United States after being deported. He was found March 27, 2014, in Seward County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Vincente Diaz-Gomez, 21, a citizen of Mexico, is charged with one count of unlawfully transporting aliens who were in the United States illegally, and one count of unlawfully re-entering the United States after being deported. The indictment alleges that on April 5, 204, he transported six such aliens in Seward County, Kan.If convicted, he faces a maximum penalty of five years and a fine up to $250,000 on the transportation charge, and a maximum penalty of two years and a fine up to $250,000 on the other count. Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Oscar Sanchez-Valencia, 27, a citizen of Mexico, is charged with one count of making a false statement to the government, three counts of misusing a Social Security number, seven counts of aggravated identity theft, two counts of making a false claim of U.S. citizenship, and one count of using false documents. The crimes are alleged to have occurred in 2012, 2013 and 2014 in Barton County, Kan.
Upon conviction, the crimes carry the following penalties: Making a false statement, misusing a Social Security number: A maximum penalty of five years in federal prison and a fine up to $250,000.
Aggravated identity theft: A mandatory consecutive two years and a fine up to $250,000 on each count.
Making a false claim of citizenship: A maximum penalty of three years and a fine up to $250,000.
Using false documents: A maximum penalty of 15 years and a fine up to $250,000.Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Howard D. Franks, 59, Osage City, Kan., is charged with one count of theft of Social Security benefits. The crime is alleged to have occurred from 2010 to 2013 in Osage County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Social Security Administration – Office of Inspector General investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Ladonna I. Hensley, 44, Americus, Kan., is charged with one count of Social Security benefits fraud. The crime is alleged to have occurred from 2007 to 2011 in Lyon County, Kan.
If convicted, she faces a maximum penalty of five years in federal prison and a fine up to $250,000. The Social Security Administration – Office of Inspector General investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Three California Residents Arrested, Charged with Sex Trafficking of an Orlando MinorRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment against Vincent Hudson, a/k/a “Goldie,” (44, Stockton, CA), Patricia Poulson, a/k/a “Moët Diamonds,” (22, Stockton, CA), and Jessica McCrary, a/k/a “Amber Snow” (20, Stockton, CA). Hudson is charged with conspiracy to commit sex trafficking of a minor, sex trafficking of a minor, transporting a minor to engage in prostitution, and two counts of commission of a felony offense involving a minor when required to register as a sex offender. Poulson and McCrary are charged with conspiracy to commit sex trafficking of a minor. If convicted, each faces a maximum penalty of life in federal prison.
All three individuals were arrested in the Eastern District of California and will make their initial appearances at the federal courthouse in Sacramento, California.
According to the indictment, between on or about November 8, 2013 and December 18, 2013, the above named individuals recruited, enticed, and transported “Minor A” from Orlando, Florida to Louisiana and, ultimately, California for the purpose of engaging in prostitution. The indictment further alleges that Hudson committed the offenses after being required to register as a sex offender.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the Metropolitan Bureau of Investigation. It will be prosecuted by Assistant United States Attorney David Haas.
(Download Factual Basis )
The Office of the United States Attorney Reaches Settlement with Miron Construction Company, Inc. and Corporate OfficersRead the Press Release
United States Attorney James L. Santelle today publicly released a Non-Prosecution Agreement between the Office of the United States Attorney for the Eastern District of Wisconsin and Miron Construction Company, Inc., David G. Voss, Jr., and Dean J. Basten. Voss is half owner of Miron Construction and serves as its President and Chief Executive Officer. Basten serves as Miron’s Secretary, Treasurer, and Chief Financial Officer. Miron Construction Company, Inc. is headquartered in Menasha, Wisconsin, with regional offices throughout Wisconsin and in Iowa, Michigan, and Minnesota. Miron employs more than 1,200 individuals at its various offices and in 2013 reported sales in excess of $680 million.
The Non-Prosecution Agreement brings to a conclusion a multi-year investigation by the Federal Bureau of Investigation (FBI) of Miron’s billing practices in Wisconsin public school construction projects, Miron’s financial reporting practices in these and other construction projects, and Voss’s and Basten’s role in these billing and financial reporting practices.
United States Attorney Santelle stated that, among other things, the three-year Non-Prosecution Agreement: (1) calls for the appointment of a Monitor to oversee Miron’s operations during the period of the Agreement; (2) requires Miron to pay $4 million to the federal government, which the United States Attorney’s Office will use to compensate five separate school districts; (3) requires Miron, in all future construction contracts, to disclose to its customers the actual labor rates it is charging the customer; (4) ends a practice known within Miron as “cost smoothing” so as to accurately report its costs, revenues, and income on individual construction projects; (5) replace its current accounting and auditing firm; and (6) adopt a document retention policy that is consistent with industry practices and in compliance with its construction contracts.
In releasing the agreement, Santelle stated: “In addition to obtaining restitution for the named school districts and appointing a Monitor to review Miron’s business operations, the other important consideration in reaching this agreement is the potential impact on more than 1,200 Miron employees—who were uninvolved in and unaware of the allegations that prompted the FBI investigation and resulted in this resolution. If this matter had proceeded into a litigation posture, the jobs of all of those employees and those of many other individuals with jobs dependent on the business that Miron generates would be in peril.”
Santelle further stated that this was the first time that the U.S. Attorney’s Office had ever required an entity to agree to Monitor oversight. “I am confident that the business monitoring, financial compensation, contract disclosure, accounting modification, and other critical terms and conditions of this agreement accomplish justice for the parties involved and collectively address well the interests of the people we serve,” Santelle noted.
This matter was investigated by special agents of the Green Bay and Milwaukee Offices of the Federal Bureau of Investigation. Assistant United States Attorneys Carol L. Kraft and Joseph R. Wall oversaw the investigation and led the negotiations that resulted in the Non-Prosecution Agreement.
For additional information, contact Public Information Officer Elizabeth Makowski at (414) 297-1774.
# # #(Miron Non-Prosecution Agreement )
The Executive Office for Immigration Review Releases FY 2013 Statistics Yearbook with Revised Reporting MethodologyRead the Press Release
FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced that it has released its Fiscal Year (FY) 2013 Statistics Yearbook. As announced on its website on October 1, 2013, EOIR has been working to enhance its external data reporting by changing the way it analyzes and reports its data. The new statistical methodology is featured in the FY 2013 Statistics Yearbook, an annual compilation of data that examines respondents' cases by nationality, language, and disposition, and provides detailed information surrounding asylum cases.
In September 2011, EOIR convened an internal data working group to evaluate the collection and analysis of data and to assist in EOIR's annual effort to improve the agency's most significant data report. The conclusions of that working group were consistent with recommendations from the Department of Justice's Office of Inspector General in October 2012.
"Our new methodology will allow us to be more responsive to external statistics requests and to provide more transparency into EOIR's daily operations," said EOIR Director Juan P. Osuna. "These changes will make the FY 2013 Statistics Yearbook an even more useful tool than in years past."
The new statistical methodology revises the manner in which matters received and completed at EOIR are counted so that that the number of new receipts and initial case completions will provide as close an approximation as possible to the number of new individuals coming into EOIR immigration courts, and the number of motions and bonds will show additional work in existing cases.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Tennessee Substance Abuse Treatment Facility Agrees to <br /> Resolve False Claims Act Allegations for $9.25 MillionRead the Press Release
The Department of Justice announced today that CRC Health Corp. (CRC) has agreed to pay $9.25 million to the federal government and the State of Tennessee to settle allegations that CRC knowingly submitted false claims by providing substandard treatment to adult and adolescent Medicaid patients suffering from alcohol and drug addiction at its facility in Burns, Tenn. CRC, based in Cupertino, Calif., is a nationwide provider of substance abuse and mental health treatment services.
“Medicaid patients who enter residential treatment programs for alcohol and drug addiction deserve to have treatment provided by qualified personnel according to the appropriate standard of care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will not tolerate health care providers who prioritize profit margins over the needs of their patients.”
CRC owns and operates a residential substance abuse treatment facility in Burns, Tenn., called New Life Lodge. The government alleged that, between 2006 and 2012, New Life Lodge billed the Tennessee Medicaid program (TennCare) for substance abuse therapy services that were not provided or were provided by therapists who were not properly licensed by the state of Tennessee. The government also alleged that New Life Lodge failed to make a licensed psychiatrist available to patients at the facility, as required by the state’s regulations; failed to maintain patient-staffing ratios required by Tennessee Department of Mental Health regulations and billed for Medicaid patients in excess of the state-licensed bed capacity at the facility. In addition, the government alleged that New Life Lodge double-billed Medicaid for prescription substance abuse medications given to residents at the facility. New Life Lodge currently is not treating Medicaid patients at its facility.
“Substance abuse of varying levels is rampant here and across the country,” said U.S. Attorney for the Middle District of Tennessee David Rivera. “Fortunately, when needed, Medicaid or TennCare covers substance abuse treatment and certain mental health assistance. When those services are required, the government will ensure that the treatment is provided with the highest possible quality of care to those patients. Anything less is unacceptable.”
“Safeguarding TennCare’s mental and behavioral health support system is a particular focus of this office,” said Tennessee Attorney General Bob Cooper.
The allegations covered by the settlement were raised in a lawsuit filed by Angie Cederoth, who was previously employed in New Life Lodge’s billing department, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and to receive a share of any recovery. Cederoth will receive $1.5 million as her share of the settlement proceeds.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
“Providers of health care services must not place profits above patients,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “This was a vulnerable population of individuals who were seeking treatment for their substance abuse problems. We will pursue these cases in order to ensure proper treatment is afforded to those seeking treatment.”
The investigation of this matter reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, the Federal Bureau of Investigation, the Tennessee Attorney General’s Office, the Tennessee Bureau of Investigation and the Department of Health and Human Services Office of Inspector General.
“The FBI is committed to investigating allegations of wrongdoing and false claims related to federally funded health care programs,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the FBI. “The resolution of this matter is the result of the hard work by the individual investigators and the coordinated effort of all the agencies involved.”
“This resolution is indicative of a great collaborative effort to combat egregious and fraudulent activity against health care, which ultimately impacts everyone in Tennessee,” said Director of the Tennessee Bureau of Investigation Mark Gwyn.
The lawsuit is captioned U.S. ex rel. Cederoth v. CRC Health Corporation Inc. , CV-3-11-00897 (M.D. Tenn.). The claims asserted against the defendants are allegations only, and there has been no determination of liability.
Tennessee Substance Abuse Treatment Facility Agrees to Resolve False Claims Act Allegations for $9.25 MillionRead the Press Release
New Life Lodge in Burns, Tennessee at Center of Allegations
U.S. Attorney David Rivera announced today that CRC Health Corporation (CRC) has agreed to pay $9.25 million to the United States and the State of Tennessee to settle allegations that CRC knowingly submitted false claims by providing substandard treatment to adult and adolescent Medicaid patients suffering from alcohol and drug addiction at its facility in Burns, Tennessee. CRC, based in Cupertino, California, is a nationwide provider of substance abuse and mental health treatment services.
“Substance abuse of varying levels is rampant here and across the country,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “Fortunately, when needed, Medicaid or TennCare covers substance abuse treatment and certain mental health assistance. “When those services are required, that treatment must be provided with the highest possible quality of care to those patients. Anything less is unacceptable.”
CRC owns and operates a residential substance abuse treatment facility in Burns, Tennessee, called New Life Lodge. The United States alleged that, between 2006 and 2012, New Life Lodge billed the Tennessee Medicaid program for substance abuse therapy services that were not actually provided or were provided by therapists who were not properly licensed by the State of Tennessee. The United States also alleged that New Life Lodge failed to make a licensed psychiatrist available to patients at the facility, as required by the state’s regulations, failed to maintain patient-staffing ratios required by the Tennessee Department of Mental Health regulations, and billed for Medicaid patients in excess of the state-licensed bed capacity at the facility. In addition, the United States alleged that New Life Lodge caused Medicaid to be double-billed for prescription substance abuse medications given to residents at the facility. New Life Lodge is not currently treating Medicaid patients at its facility.
“Medicaid patients who enter residential treatment programs for alcohol and drug addiction deserve to have treatment provided by appropriately qualified personnel according to the appropriate standard of care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will not tolerate health care providers who prioritize profit margins over the needs of their patients.”
“The FBI is committed to investigating allegations of wrong doing and false claims related to federally- funded health care programs,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The resolution of this matter is the result of the hard work by the individual investigators and the coordinated effort of all the agencies involved.”
“Providers of health care services must not place profits above patients,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services- Office of Inspector General in Atlanta. “This was a vulnerable population of individuals who were seeking treatment for their substance abuse problems. We will pursue these cases in order to ensure proper treatment is afforded to those seeking treatment.”
Director Mark Gwyn of the Tennessee Bureau of Investigation said, “This resolution is indicative of a great collaborative effort to combat egregious and fraudulent activity against health care, which ultimately impacts everyone in Tennessee.”
The allegations covered by the settlement were originally raised in a lawsuit filed by Angie Cederoth, who was previously employed in New Life Lodge’s billing department, under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for the submission of false claims and to receive a share of any recovery. Ms. Cederoth will receive a payment of $1,526,260.01 as her share of the settlement proceeds.
The investigation of this matter reflects a coordinated effort among the, the U.S. Attorney’s Office for the Middle District of Tennessee; the Commercial Litigation Branch of the Justice Department’s Civil Division; the Tennessee Attorney General’s Office; the FBI; the Tennessee Bureau of Investigation; and the Department of Health and Human Services’- Office of Inspector General.
The lawsuit is captioned U.S. ex rel. Cederoth v. CRC Health Corporation, Inc.3-11-CV-00897 (M.D. Tenn.).
The claims asserted against the defendants are allegations only, and there has been no determination of liability.
Sioux Falls Man Appears in Federal Court on Attempted Commercial Sex Trafficking ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for Attempted Commercial Sex Trafficking.
James Anthony Murphy, age 21, was indicted on April 8, 2014. He appeared before U.S. Magistrate Judge John E. Simko on April 9, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory minimum of 15 years in custody and a maximum of life imprisonment, a $250,000 fine, a mandatory minimum of 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Murphy attempted to recruit, entice and obtain a person who had not attained the age of 14 years, and knowing that the person would be caused to engage in a commercial sex act.
The charge is merely an accusation and Murphy is presumed innocent until and unless proven guilty.
The investigation is being conducted by the South Dakota Internet Crimes Against Children Task Force, the South Dakota Division of Criminal Investigation, Sioux Falls Police Department, Minnehaha County Sheriff’s Office, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, and the Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Murphy was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for June 17, 2014.
Sioux Falls Man Appears in Federal Court on Attempted Commercial Sex Trafficking ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for Attempted Commercial Sex Trafficking.
Elijah Wilson, age 24, was indicted on April 8, 2014. He appeared before U.S. Magistrate Judge John E. Simko on April 10, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory minimum of 15 years in custody and a maximum of life imprisonment, a $250,000 fine, a mandatory minimum of 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Wilson attempted to recruit, entice and obtain a person who had not attained the age of 14 years, and knowing that the person would be caused to engage in a commercial sex act.
The charge is merely an accusation and Wilson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the South Dakota Internet Crimes Against Children Task Force, the South Dakota Division of Criminal Investigation, Sioux Falls Police Department, Minnehaha County Sheriff’s Office, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, and the Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Wilson was released on bond pending trial. A trial date has been set for June 17, 2014.
Seven Individuals from Wagner Indicted for Distribution of MethamphetamineRead the Press Release
United States Attorney Brendan V. Johnson announced that a second group of individuals from Wagner, South Dakota, have been indicted by a federal grand jury for Conspiracy to Distribute Methamphetamine and Maintaining a Drug-Involved Premises. The first group was indicted in December 2013 and included five people.
Helen Ann Archambeau, age 55; Desmond Basil Heth, age 35; Cindy Lynn Schunk, age 37; Natasha Ann Archambeau, age 32; Mona Fay Winckler, age 58; Leslie Lee French, 31; and Brenda Evette Alonzi, age 53, were indicted on March 5, 2014, for Conspiracy to Distribute Methamphetamine. Additionally, Helen Archambeau and Winckler were also indicted for Maintaining a Drug-Involved Premises.
All defendants appeared before U.S. Magistrate Judge John E. Simko on various dates in March and April and pled not guilty to the Indictment.
The maximum penalty upon conviction of Conspiracy to Distribute Methamphetamine is up to 20 years in custody and/or a $1 million fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered. The maximum penalty upon conviction of Maintaining a Drug-Involved Premises is up to 20 years in custody and/or a $500,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely an accusation and all defendants are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, the South Dakota Division of Criminal Investigation, Bureau of Indian Affairs, and the Charles Mix County Sheriff’s Office. Special Assistant U.S. Attorney Jennifer D. Mammenga is prosecuting the case.
All parties except for French have been released on bond. French is currently in the custody of the U.S. Marshals Service. The trial has been set to commence on Tuesday, July 1, 2014.
Rochester Men Charged with Robberies of Tops MarketsRead the Press Release
ROCHESTER, N.Y. – U.S. Attorney William J. Hochul, Jr., announced today that Tyrelis Austin, 22, of Rochester, N.Y., was charged by criminal complaint with the robbery of three Tops Marketplace stores in 2012, 2013 and 2014. The charge carries a maximum penalty of 20 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Douglas E. Gregory, who is handling the case, stated that Austin is charged with the November 25, 2012 robbery of the Tops store located at 1100 Jefferson Road in Henrietta; the July 29, 2013 robbery of the Tops store located at 3507 Mt. Read Boulevard in Greece; and, the March 28, 2014 robbery of the Tops store located at 270 East Main Street in Avon, New York. According to the complaint, on each occasion, the defendant threatened to shoot store employees if they did not comply with his request to empty the cash registers located at the service desks of each store.After robbing the Tops store in Avon, Austin led deputies with the Monroe County Sheriff’s Department on a high speed chase on Route 390 northbound. Ultimately, the defendant’s vehicle crashed into a ditch on Route 390 near the Chili Avenue exit. Deputies arrested Austin at the scene and discovered a large amount of cash, as well as the black hooded sweatshirt, wig and baseball cap that he wore into the store. Deputies also discovered two handwritten notes which stated “put all the money in the bag or I will shoot you.” In a post-arrest statement to police, Austin admitted his involvement in all three robberies.
Austin’s arrest follows the January 4, 2014 apprehension of the defendant’s cousin, Derek Stanin, 21, also of Rochester. Stanin is accused of robbing the Tops Marketplace store located at 3507 Mt. Read Boulevard in Greece. In that case, store clerks were able to introduce marked bills and a GPS tracker into the monies turned over to Stanin. The GPS tracker allowed law enforcement to quickly locate Stanin hiding in a parked vehicle. Police located a large sum of case as well as clothes that Stanin wore during the robbery. The defendant was also found to be in possession of a replica .357 pellet gun in his right pant leg. Similar to Austin, Stanin was also charged with robbery.
The criminal complaint is the culmination of an investigation by Special Agents of the Federal Bureau of Investigation, the Monroe County Sheriff’s Department, under the direction of Patrick O’Flynn, the Avon Police Department, under the direction of Chief Gary Benedict, and the Greece Police Department, under the direction of Chief Patrick Phelan.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Puerto Rico Man Detained in Illegal Shipment of Firearms CaseRead the Press Release
St. Thomas, USVI – United States Magistrate Judge Ruth Miller today ordered the detention of Emmanuel Benel Cuadrado, 24, of Puerto Rico, who was arrested Sunday at the Cyril E. King Airport on St. Thomas and charged with illegally shipping firearms into the Virgin Islands, United States Attorney Ronald W. Sharpe announced.
Benel Cuadrado made his initial appearance in District Court before U.S. Magistrate Judge Ruth Miller on Monday, and was ordered held without bail pending today’s detention and preliminary hearing. According to documents filed in District Court, Customs and Border Protection officers and agents of Homeland Security Investigations intercepted a brown box that Benel Cuadrado placed on a Jet Blue flight traveling from Puerto Rico to St. Thomas on April 13th. The package contained three firearms, one Glock and two Smith and Wesson firearms. The three firearms were removed from the box and replaced with two fake firearms, and the box was allowed to continue on to St. Thomas. Upon Jet Blue’s arrival in St. Thomas, Benel Cuadrado retrieved the brown box from the airport’s baggage claim area.
If convicted, Benel Cuadrado faces a statutory maximum sentence of five years in prison. This case was investigated by Homeland Security Investigations. It is being prosecuted by Assistant U.S. Attorney Everard E. Potter.
The public is reminded that a criminal complaint is merely a charging document and is not evidence of guilt. A defendant is presumed innocent until proven guilty.
Public Corruption Indictments Returned in Hammond Federal CourtRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana- United States Attorney David Capp announced today two indictments naming Keith Soderquist, the Mayor of Lake Station.
The first indictment charges Soderquist, age 44, and his wife, Deborah Soderquist, age 55, who was employed as the administrative assistant to Mayor Soderquist.
The indictment alleges a conspiracy between Keith and Deborah Soderquist to commit wire fraud in connection with financial transactions involving the Mayor’s campaign finance account and the Lake Station Food Pantry account. These accounts were allegedly utilized by the Soderquists to obtain cash for personal expenses, including gambling activities at casinos in Indiana and Michigan.
The indictment also charges both Keith and Deborah Soderquist with filing false tax returns for the years 2010, 2011 and 2012. The basis for the tax charges is their failure to disclose the money they took from the campaign and food pantry account that they converted to their own personal uses.
The second indictment names Keith Soderquist, Deborah Soderquist, and Miranda Brakley, age 33, a former employee of Lake Station. Brakley is charged in Count 1 of the second indictment with theft of funds from Lake Station from August 1, 2011 through July 31, 2012. Brakley is also charged in Count 2 with bankruptcy fraud for failing to disclose certain payments received from Lake Station on her bankruptcy schedules.
Keith and Deborah Soderquist are charged in Count 3 of the second indictment for being accessories after the fact. That Count alleges that, after knowing that Brakley had committed the theft alleged in Count 1, they assisted Brakley in order to hinder and prevent Brakley’s apprehension, trial and punishment.
The last count alleges that Keith and Deborah Soderquist structured a series of financial transactions in order to avoid the reporting requirements under federal law. The indictment alleges that in December 2012, the Soderquists obtained $15,000 from an individual. They instructed that individual to write three checks in amounts less than $10,000 (the reporting requirement under federal law) and to back date two of those checks. From December 8-12, 2012, those checks were cashed at different branches of JP Morgan Chase bank.
The investigation which led to the second indictment was initiated after a State Board of Accounts audit disclosed missing funds that had been posted as bond money with the Lake Station City Court.
United States Attorney David Capp stated, “These indictments are part of this office’s ongoing public corruption investigation. Today’s indictments were the result of an extensive investigative effort by the FBI, IRS and ISP. This investigative team will continue to investigate allegations of abuse of the public trust.”
The Soderquists and Brakley are expected to surrender to authorities at the Hammond federal courthouse Thursday morning.
This case is a result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service and the Indiana State Police.This case will be prosecuted by Assistant United States Attorneys Joshua Kolar and Philip Benson.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.Ponzi Schemer Charged with Criminal Contempt for Lavish Spending and Other Violations of Court OrdersRead the Press Release
BOSTON - A West Roxbury man was charged on April 10, 2014, with criminal contempt for violating an asset freeze and other court orders entered in a civil case brought by the United States Securities and Exchange Commission.
Steven Palladino, 57, was charged in an Information with twenty-five counts of criminal contempt.
The Information alleges that from May 2013 through November 2013, Palladino willfully violated court orders in the United States Securities and Exchange Commission’s civil case when he incurred thousands of dollars in credit card charges and cash advances – including charges at high-end restaurants – and did not deposit the proceeds of cash advances into an escrow account established by the Court. In addition, Palladino is alleged to have violated the same court orders in June 2013 when he sold a truck he owned and did not deposit the proceeds into the escrow account established by the Court. The Information also alleges that Palladino violated another court order that commanded Palladino to undo his transfers of luxury vehicles to his wife and the subsequent encumbrance of those luxury vehicles with approximately $137,000 in new loans by November 22, 2013.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. United States Attorney Ortiz also expressed appreciation for the significant assistance of the United States Securities and Exchange Commission. The case is being prosecuted by Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.
The details contained in the Information are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Today’s announcement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s Securities and Commodities Fraud Working Group. The interagency FFETF was created to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.
Pasadena Man Sentenced to 300-month Prison Term in Multimillion Dollar Investment Fraud SchemeRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – Gary Lynn McDuff, 59, was sentenced to 300 months in prison today for his role in conspiring to defraud investors of almost $11 million in an investment fraud scheme and laundering the proceeds in the Eastern District of Texas, announced U.S. Attorney John M. Bales. United States District Judge Richard A. Schell also ordered the payment of over $6.5 million in restitution to the victims of the fraudulent scheme. McDuff’s fellow conspirators, Gary Lancaster, 62, of Oregon, and Robert Reese, deceased, of Carmel, California, previously pleaded guilty and were sentenced to terms of imprisonment for their roles in the scheme.
According to evidence presented during the federal trial, McDuff and Lancaster agreed to create the Lancrorp Investment Fund, to draft a prospectus for the Fund, and to solicit investments from individuals across the United States. While McDuff controlled the operation, Lancaster agreed to serve as the “front” since McDuff could not possess a securities license or sell securities because of a past felony conviction. McDuff recruited Reese to help sell the investment despite the fact that Reese had been barred by the State of California from selling securities. McDuff, Lancaster, and Reese made numerous false representations to their investors in order to induce payments, including representations that the Fund would only invest in A+ or A1 rated bonds, that the principal of each investment would be insured and never at risk, and that Lancaster had experience operating this type of investment. McDuff, Lancaster, and Reese never disclosed McDuff’s felony conviction or Reese’s securities ban. McDuff then laundered the criminal proceeds in order to promote the operation of the fraudulent scheme. After hearing the evidence, the jury needed just six minutes to convict McDuff on the conspiracy and laundering charges.
“This significant sentence reflects how seriously we take investment fraud. We will not tolerate false representations being made to investors in order to take their money,” said U.S. Attorney Bales.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service and prosecuted by Assistant United States Attorneys Shamoil T. Shipchandler and Camelia Lopez.
####Ozark Man Sentenced to 15 Years for Meth ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that three south Missouri residents were sentenced in federal court today for their roles in a conspiracy to distribute methamphetamine.
Noe Moreno-Malagon, 36, a citizen of Mexico residing in Ozark, Mo., Rita J. Vera, 35, of Monett, Mo., and Paul E. Allen, 58, of Purdy, Mo., were sentenced in separate appearances before U.S. Chief District Judge Greg Kays. Moreno-Malagon was sentenced to 15 years in federal prison without parole, which must be served consecutively to his prison sentence in an unrelated state case. Moreno-Malagon must also forfeit to the government $32,000 and four firearms (with miscellaneous ammunition) that were seized by law enforcement officers.
Vera was sentenced to five years in federal prison without parole. Allen was sentenced to seven years in federal prison without parole.
On Nov. 15, 2013, Moreno-Malagon pleaded guilty to leading a multi-pound methamphetamine conspiracy operating in the Springfield area but also covering Polk, Christian and Taney Counties. The case began when couriers were intercepted in New Mexico and Texas with 4-kilogram loads of methamphetamine. The couriers indicated that the methamphetamine was going to Springfield. The federal investigation included controlled buys and additional seizures of methamphetamine, firearms and cash.
On Dec. 3, 2012, a search warrant was executed in Morrisville, Mo. During the search, DEA agents located 338.1 grams of pure methamphetamine, as well as a handgun and a rifle. The DEA also conducted a search at a Springfield residence believed to be a stash house for the organization. At that location, agents found 123.6 grams of pure methamphetamine.
Moreno-Malagon supplied Vera and Allen with methamphetamine. On Feb. 13, 2012, federal law enforcement agents seized 362 grams of pure methamphetamine from Allen in Ozark, Mo. Additionally, on June 22, 2012, 224.4 grams of pure methamphetamine was seized from another co-defendant. In addition to the seizures, two controlled buys were made on March 27, 2012 and April 12, 2012. In March, 125.1 grams of pure methamphetamine was purchased, and in April, 117.5 grams of pure methamphetamine was purchased.
On Sept. 3, 2013, Allen pleaded guilty to his role in the drug-trafficking conspiracy. Vera pleaded guilty to her role in the conspiracy on June 20, 2013.
This case is being prosecuted by Assistant U.S. Attorney Gary Milligan. It was investigated by the Drug Enforcement Administration, IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Missouri State Highway Patrol, and task force officers from the Greene County, Mo., Sheriff’s Department, the Christian County, Mo., Sheriff’s Department, the Ozark, Mo., Police Department, the Springfield, Mo., Police Department, the South Central Drug Task Force and COMET (the Combined Ozarks Multijurisdictional Enforcement Team).