Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
14 April 2014
Local Tax Preparer Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – EDWARD JONES (an individual not connected with the company Edward Jones) was indicted on multiple fraud charges involving his alleged scheme to use stolen identities to obtain federal tax refunds.
According to the indictment, between February 2009 and April 2012, Jones devised a scheme to defraud the Internal Revenue Service and financial institutions by enticing them to issue electronic tax refunds and prepaid debit cards in the identities of others. Jones represented himself as a federal income tax preparer and state property tax credit preparer. In that role, Jones obtained the names, birth dates, and social security numbers of individuals who desired him to prepare and electronically file federal income tax returns or state property tax credit forms. In order to maximize the refunds, Jones fraudulently claimed that the tax filers were self-employed individuals with unsubstantiated business deductions and entitled to earned income credit as a result of the misrepresentation that the tax filers had dependents. As a result of the misrepresentations, the tax returns prepared by defendant resulted in the fraudulent payment of substantial tax refunds. Furthermore, Jones misdirected some of the fraudulently obtained tax returns from the tax filers to himself by instructing the Internal Revenue Service to electronically deposit the tax refunds into prepaid debit card accounts he controlled.
"The IRS has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation.
Jones, St. Louis, Missouri, was indicted by a federal grand jury on two felony counts of mail fraud, two felony counts of making false claims and two felony counts of aggravated identity theft. The indictment was returned April 9. He appeared in federal court earlier today.
If convicted, each count of mail fraud carries a maximum penalty of 20 years in prison; each false claims count carries five years in prison; aggravated identity theft carries a mandatory two-year prison term; all with fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Internal Revenue Service Criminal Investigation. Assistant United States Attorney Tracy Berry is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Jury Convicts DBSI Principals of FraudRead the Press Release
U.S. Attorney Commends Work and Career of FBI SA Morse
BOISE - A federal jury in Boise today returned guilty verdicts against four DBSI principals, Douglas L. Swenson, Mark Ellison, David D. Swenson, and Jeremy S. Swenson on multiple fraud charges, announced U.S. Attorney Wendy J. Olson. The jury convicted Douglas Swenson, 65, of Eagle, Idaho, on thirty-four counts of wire fraud and forty-four counts of securities fraud. The jury convicted Ellison, 65, of Boise, David Swenson, 36, of Boise, and Jeremy Swenson, 41, of Meridian, on forty-four counts of securities fraud. The jury returned not guilty verdicts on the thirty-four wire fraud counts against Ellison, David Swenson and Jeremy Swenson and on two conspiracy counts. During the forty-two day trial, the United States presented evidence that the defendants publicly represented that DBSI was a profitable company and had a net worth in excess of $105 million when they knew that DBSI's real estate and non-real estate business activities were universally unprofitable.
No sentencing date has been set.
Olson issued the following statement after the verdict was returned:
“The jury’s verdicts finding Douglas Swenson, Mark Ellison, David Swenson and Jeremy Swenson guilty of fraud send a strong message that those who seek to induce investors to trust them, often with hundreds of thousands of dollars, have a clear obligation to be open and transparent and to make full disclosure about the financial condition of their business. Our financial system, indeed our markets, relies on such full disclosure. The U.S. Department of Justice is pleased that these defendants have been found responsible for the frauds they perpetrated and the losses they caused. They will have a firm restitution obligation to their defrauded victims, DBSI investors.
The jury’s verdicts show that the jurors listened carefully and thoughtfully to the evidence that was presented, the attorneys’ arguments and the Court’s instructions. They are to be commended for their long and deliberate service to our criminal justice system. They have performed an important duty in our democracy. I thank them.
I also commend the outstanding work of the trial team, AUSAs Ray Patricco, George Breitsameter, and Justin Whatcott, Tax Division trial attorney Mark Williams, paralegal Denise Price from my office and numerous others who provided support for the longest federal criminal trial in this district for at least two decades. Finally, I commend the work of the investigative agencies, and particularly the strong work of agents from IRS, criminal investigations and of FBI Special Agent Rebekah Morse. All of these outstanding federal government employees spent countless hours, sacrificing time with their families and loved ones, during challenging work conditions.
Having said that, let me be clear, the human price of this case was too high. FBI Special Agent Rebekah Morse was an outstanding agent and person. In her less than four years as an agent, all stationed in Boise, she played a critical role in almost every significant white collar prosecution, including three successful trials in the last twelve months. She displayed enormous integrity, intelligence, and honesty. She worked harder and better than any young, new agent I have seen in my more than 20 years as a federal prosecutor. Her vast ability was exceeded only by her great humor and joy. She was a tremendously warm and caring human being who held herself to the highest of standards, gave much to all around her and expected and asked for little in return.
As the United States has maintained in argument to the court and in its pleadings, we believe that Rebekah Morse was truthful in her responses to the Court and that a full examination of the facts warrants that conclusion. We understand and respect that the Court saw this differently. Rebekah Morse was greatly respected. She will be greatly missed.
We will not take any questions, and the United States will make no further statements in this case prior to the sentencing.”
Jury Convicts Amherst Man of Drug ChargesRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Jack Reid, III, 46, of Amherst, N.Y., was convicted following a jury trial before U.S. District Judge Richard J. Arcara, of conspiracy to possess with intent to distribute five kilograms or more of cocaine and possession with intent to distribute cocaine. The charges carry a mandatory minimum sentence of 20 years in prison, a maximum of life, and a fine of $20,000,000.
Assistant U.S. Attorneys Thomas S. Duszkiewicz and John M. Alsup, who handled the prosecution of the case, stated that beginning in 1990 through April 2012, the defendant utilized family members and others as drug couriers and distributors of multiple kilograms of cocaine. The cocaine was obtained from sources in Rochester, N.Y., New York City and Atlanta, Georgia. The cocaine was distributed in various areas throughout Erie and Niagara Counties. Throughout the course of the conspiracy, the defendant acquired and distributed in excess of 70 kilograms of cocaine.
In a forfeiture proceeding, the Government will be seeking $1,000,000 in United States currency including two residences owned by the defendant in Williamsville N.Y. and Amherst N.Y. as well as three properties in the City of Buffalo.
The verdict is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge James J. Hunt, New York Field Division, the Lackawanna Police Department, under the direction of Chief James Michel, and the Lockport Police Department, under the direction of Chief Lawrence Eggert.
Sentencing is scheduled for August 6, 2014, at 1:00 p.m. before Judge Arcara.Junction City Man Pleads Guilty to Child Porn ChargeRead the Press Release
TOPEKA, KAN. A Junction City man pleaded guilty Monday to a federal child pornography charge, U.S. Attorney Barry Grissom said.
Scott Deppish, 43, Junction City, Kan., pleaded guilty to one count of accessing child pornography with intent to view. In his plea, he admitted that that on Feb. 12, 2013, investigators served a search warrant and seized his desktop computer and two lose hard drives. They found images depicting prepubescent children engaged in sexual conduct. They also found images of a known victim in what is referred to as the “Abby” series, which were taken in the state of Idaho. They depict a very young prepubescent female engaged in sexual conduct with an adult male.
Sentencing is set for July 7. He faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Grissom commended the Junction City Police Department, Homeland Security Investigation and Assistant U.S. Attorney Christine Kenney for their work on the case.Jacksonville Child Sex Offender Faces Federal Charges for Producing and Possessing Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that a federal grand jury last week returned an indictment charging Christopher Richard Cloonan (44, Jacksonville) with three counts of using a minor to produce images depicting child pornography, one count of possessing child pornography, and three counts of committing a felony offense involving a minor while being required to register as a sex offender. As a result of his prior child sex convictions, Cloonan faces a mandatory sentence of life in federal prison on each of the four production counts, a mandatory minimum sentence of 10 years, up to 20 years’ imprisonment for the possession count, and additional terms of 10 years in prison for each of the sex offense counts.
Cloonan was arrested for his current offenses on March 12, 2014, at his residence in Jacksonville, and has been in custody on related state charges since that time.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent until, and unless, proven guilty.
This case was investigated by the Federal Bureau of Investigation in Jacksonville and Washington, D.C., the Jacksonville Sheriff’s Office, and the District of Columbia Metropolitan Police Department. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another 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.
(Download Factual Basis )
Indictment: Dangerous Synthetic Drugs Were Key to $16 Million in SalesRead the Press Release
KANSAS CITY, KAN. – An indictment unsealed here today alleges the owners of an Olathe-based business produced and sold dangerous controlled substances, and controlled substance analogues of THC (the active ingredient in marijuana) and methcathinones (stimulants) to rack up at least $16 million in sales in less than two years, U.S. Attorney Barry Grissom said.
The indictment alleges the conspirators sold products under exotic names including Pump It, Head Trip, Black Arts, Grave Digger, Voodoo Doll and Lights Out. Some of the drugs were manufactured in buckets with drill-powered immersion mixers and tried out on “testers” who helped tweak the recipes by reporting on the drugs’ effects.
The indictment alleges the conspiracy stretched from Kansas to Missouri, California, Texas, Georgia and Colorado, involving more than 15 companies with more than 40 financial accounts at more than 10 financial institutions.
“The indictment alleges the defendants were aware of – and even discussed – the potential harmful effects of the illegal substances they manufactured and distributed, including extreme physical reactions, overdoses and deaths,” said U.S. Attorney Barry Grissom.
Charged in the indictment are: Tracy Picanso, 58, Olathe, Kan. and Roy Ehrett, 55, Olathe, Kan., who lived together in Olathe and were owners and operators of businesses including Retailing Specialists, Innovative Products 4U, The Outer Edge, Lakeridge Holdings, Monster Warehouse, Monster Distribution, Monster, 3P Distribution and Life Source.
Michelle Reulet, 34, and Michael Myers, 34, Montgomery, Texas, who owned Bully Wholesale, which was a large-scale independent wholesaler for The Outer Edge.
Michael Meyers, 34, Montgomery, Texas, who lived with Reulet in Houston.
Terrie Adams, 63, Denver, Colo., who packaged, marketed and distributed substances for Picanso and Ehrett.
Craig Broombaugh, 29, formerly of Huntington Beach, Calif., who worked as a “cook,” manufacturing synthetic cannabinoids.
Cindy McRoberts, 48, Lees Summit, Mo., who worked as an office manager in Olathe and Kansas City Mo., warehouses.
Christopher Freemyer, 46, Adrian, Mo., who worked as a delivery driver, accounts manager and warehouseman. He kept retail stores stocked.Charges in the indictment include: Conspiracy to possess with intent to distribute controlled substances and controlled substance analogues; distribution of Buphedrone, a controlled substance; distribution of synthetic cannabinoids, which are controlled substance analogues; distribution of Pentedrone, a controlled substance analogue; selling mislabeled drugs; selling misbranded drugs; and conspiracy to commit money laundering.
The indictment alleges conspirators marketed their products at trade shows held throughout the country that cater to the smoke shop industry. In addition, conspirators are alleged to have sold misbranded and counterfeit drugs including substances called “Swing Her,” and “Swing Him,” which they claimed had effects similar to Viagra. They are alleged to also have sold counterfeit Viagra and Cialis.
“Selling illegal prescription drugs, such as counterfeit Viagra and Cialis, to an unsuspecting public that believes them to be part of the legitimate drug supply chain, overseen by the FDA, places at risk the public’s health,” said Catherine A. Hermsen, Acting Special Agent in Charge, FDA’s Office of Criminal Investigation. “We commend our colleagues at the Drug Enforcement Administration and the United States Attorney’s Office for their contributions in unraveling the multiple components of this complex case.”
Investigating agencies include the Drug Enforcement Administration, the Food and Drug Administration – Office of Criminal Investigations, the Department of Homeland Security, Homeland Security Investigations, Customs and Border Protection, the FBI, the Overland Park Police Department, the Johnson County Sheriff’s Office, the Olathe Police Department, the St. Joseph Police Department and the Buchanan County Drug Strike Force.Idaho Aquarium Sentenced for Illegal Trafficking of Marine LifeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Tracy Dunn, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and Edward Grace, Deputy Assistant Director, U.S. Fish & Wildlife Service, Office of Law Enforcement, announce that Idaho Aquarium, Inc. (IAI), located in Boise, Idaho, was sentenced today in Key West for conspiring to harvest, transport, and sell spotted eagle rays and lemon sharks, knowing the marine life were taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, contrary to the federal Lacey Act, Title 16, United States Code, Sections 3372(a)(2)(A), and 3373(d)(1) and (2), all in violation of Title 18, United States Code, Section 371.
IAI, was sentenced by U.S. District Judge Jose E. Martinez, who had previously accepted the guilty plea from IAI, to pay a criminal fine of $10,000 and serve a term of probation of three years. The court added special conditions requiring IAI to submit a comprehensive Compliance Plan and to conduct annual audits of the corporate records by an independent auditor. Additionally, the Court ordered IAI to make alternative community service payments in the amount of $50,000 to the National Fish & Wildlife Foundation, a Congresionally-chartered charitable and non-profit organization. The payment is to be used by NFWF to promote research, management, education, conservation, and restoration of marine life and corals throughout the waters of the Florida Keys National Marine Sanctuary and the Florida Keys. IAI’s co-defendants, Ammon Covino, 40, formerly of Meridian, Idaho, and Christopher Conk, 40, formerly of Middleton, were sentenced on December 2, 2013 on the same offense. Covino was sentenced to one year and a day in prison, followed by two years of supervised release and was barred by the Court from any employment during that period that involves the possession, display, transportation, exhibition, purchase, or sale of wildlife. Conk, who cooperated with investigators, received a reduced sentence of four months in prison, followed by two years of supervised release and forfeiture of the vehicle used in the commission of the violation. As part of his sentence, 180 days of the supervised release is to be served in home detention under electronic monitoring. Conk also received the specific employment prohibition during his period of supervision. In imposing the prison sentences, Judge Martinez stated that the defendants conduct “strikes to the very heart of this area and the economy of this area.”
According to the indictment, joint factual statements submitted to the Court, and arguments at the sentencing hearings, during the period extending from March 2012 through approximately November 2012, IAI, Covino and Conk engaged in a conspiracy to purchase and transport wildlife from the Florida Keys to Idaho for exhibit at IAI in Boise. The wildlife included spotted eagle rays and lemon sharks, which required Florida licenses and permits never acquired by the participants in the deals. According to the Factual Statements, Covino and Conk were both at the time officers of the Aquarium, were individually advised of the requirements of the law, and nevertheless directed their Florida-based suppliers to ignore the law and make the shipments. Unknown to them the Florida business owner was cooperating with federal authorities and the phone conversations and text messages were recorded. Payment for the various specimens was made by credit cards held in IAI?s name. The defendants acknowledged that Covino and Conk’s illegal conduct was within the scope of their employment, and intended to benefit, at least in part, IAI.
Mr. Ferrer commended the investigative efforts of NOAA Office of Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement. Mr. Ferrer also thanked the Idaho Department of Fish & Game. This case was prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Antonia Barnes, with assistance from the U.S. Attorney?s Office for the District of Idaho.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Huntington Man Robs Drug Dealer at Gun PointRead the Press Release
Robbery occurred at drug dealer’s 10th Street apartment in Huntington
Huntington, W.Va. – United States Attorney Booth Goodwin announced that Kamel Auntae Burris, 31, of Huntington plead guilty today in federal court in Huntington to using a firearm in furtherance of a crime of violence. In November of 2013, Burris, who was wearing a mask, robbed a known drug dealer at gun point. The robbery occurred at the drug dealer’s apartment on 10th Street in Huntington.
This case arose out of a joint law enforcement investigation of Kenneth Dewitt Newman and his organization for the distribution of illegal drugs in the Huntington area. The Newman organization was responsible for the distribution of cocaine, crack cocaine, heroin, prescription pills, MDMA (a street drug akin to Ecstasy) and marijuana. The investigation led to the indictment of 15 defendants, including Burris, for their various roles in the conspiracy. Burris has been described as an enforcer for the Newman organization. Burris faces up to life imprisonment and a $250,000 fine when he is sentenced on July 28, 2014.
The investigation was conducted by the Drug Enforcement Administration, Huntington Police Department, Metropolitan Drug Enforcement Network Team and Bureau of Alcohol, Tobacco, Firearms and Explosive. The case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Houston, Lafayette Men Sentenced for Roles in Drug Conspiracy Distribution RingRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced that German Caballero Rodriguez, 42, of Houston, and Tyrone James Thibeaux, 38, of Lafayette, were sentenced Friday by U.S. District Judge Elizabeth Foote for conspiracy with intent to distribute and distribution of cocaine. Rodriguez was sentenced to 100 months in prison and Thibeaux was sentenced to 135 months in prison. They will both serve five years of supervised release.
Rodriguez and Thibeaux, along with co-defendants John Dauphin, Glenn Charles and Fernellis Woods, were indicted in April of 2012 for conspiracy to possess with intent to distribute cocaine between August 2008 and April 2011. According to evidence presented at his guilty plea on June 13, 2013, Rodriguez supplied multi-kilogram quantities of cocaine from Houston to a large scale Lafayette drug trafficking/distribution organization that included Dauphin, Charles, Woods and Thibeaux. On December 9, 2013, Thibeaux pleaded guilty.
Woods was sentenced on October 18, 2013, to 135 months in prison; Charles was sentenced on December 12, 2013, to 71 months in prison; and Dauphin was sentenced on February 14, 2014, to 120 months in prison. All three are to serve five years of supervised release.
The Drug Enforcement Administration, the Carencro Police Department, the Houston Police Department and the Waller County Texas Sheriff’s Office participated in this investigation. Assistant U.S. Attorney Howard C. Parker prosecuted the case.
The defendants were arrested as part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Government Settles False Claims Act Allegations Against <br /> Kansas Cancer Treatment Facility and Its OwnerRead the Press Release
Hope Cancer Institute, a cancer treatment facility in Kansas, and Dr. Raj Sadasivan, the owner of Hope Cancer Institute, have agreed to pay $2.9 million to resolve allegations that they violated the False Claims Act by submitting claims to Medicare, Medicaid and the Federal Employee Health Benefits Program for drugs and services that were not provided to beneficiaries, the Department of Justice announced today.
“Billing Medicare and Medicaid for drugs that are not provided to beneficiaries contributes to the soaring costs of health care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Providers will be investigated aggressively and held accountable for falsely billing federal health care programs.”
The settlement resolves allegations that, between 2007 and 2011, Sadasivan and Hope Cancer Institute submitted claims to federal health benefit programs for the chemotherapy drugs Rituxan, Avastin and Taxotere that were not provided to federal health care beneficiaries. Sadasivan allegedly instructed the employees of Hope Cancer Institute to bill for a predetermined amount of cancer drugs at certain dosage levels, when lower dosages of these drugs were actually provided to beneficiaries. As a result of these instructions, Hope Cancer Institute submitted inflated claims to federal health care programs for drugs that were not actually provided to patients.
“Health care providers that try to make a quick buck by billing taxpayers for services never provided will instead pay a high price for their greed-fueled fraud," said Gerald T. Roy, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General. “We are dedicated to investigating and prosecuting these types of deceptive schemes.”The settlement resolves a lawsuit filed by Krisha Turner, Crystal Dercher and Amanda Reynolds, former employees of Hope Cancer Institute, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to file suit on behalf of the government and to share in any recovery.
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 $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with Sadasivan and Hope Cancer Institute was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Kansas and the U.S. Department of Health and Human Services Office of Inspector General. The False Claims Act suit was filed in the U.S. District Court for the District of Kansas and is captioned United States ex rel. Turner et al. v. Hope Cancer Institute, et al.
The claims settled by this agreement are allegations only; there has been no determination of liability.
Government Intervenes in Lawsuit Against Medical <br /> Equipment Supplier Orbit Medical Inc. and Former <br /> Vice President Jake KilgoreRead the Press Release
The government has intervened in a False Claims Act lawsuit against Orbit Medical Inc. and Jake Kilgore alleging that Orbit Medical’s sales representatives boosted power wheelchair and accessory sales by altering and forging physician prescriptions and supporting documentation, the Justice Department announced today. Orbit Medical is a durable medical equipment supplier based in Salt Lake City, Utah. Jake Kilgore is the former vice president and sales manager at Orbit Medical for the Western region of the United States.
“Medical equipment suppliers must bill federal health care programs accurately and honestly to ensure that federal dollars are used for individuals who truly need mobility devices,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department is committed to pursuing those who seek to abuse taxpayer-funded programs.”
Medicare pays for power wheelchairs for beneficiaries who cannot perform mobility- related activities of daily living in their home using other mobility assistance equipment, such as a cane, walker or power scooter. To qualify for reimbursement, a physician must conduct a face-to-face examination of the beneficiary and provide the supplier with a written prescription for a power wheelchair within 45 days of such an encounter, along with documentation that supports the medical necessity of the device. The prescription must be completed by the physician who performed the exam and must include the beneficiary’s name, the exam date, the diagnoses and conditions the wheelchair is expected to accommodate, the length of need and the physician’s signature.
The lawsuit alleges that Orbit Medical sales representatives, at Kilgore’s direction and encouragement, knowingly altered physician prescriptions and supporting documentation to get Orbit Medical’s power wheelchair and accessory claims paid by Medicare, the Federal Employees Health Benefits Plan and the Defense Health Agency. In particular, the lawsuit alleges that Orbit Medical sales representatives created documents to falsely establish that physicians examined beneficiaries in person; changed physicians’ prescriptions to falsely establish medical necessity for the power wheelchair or accessory; created or altered chart notes and other documents to falsely establish the medical necessity of the power wheelchair or accessory; forged physicians’ signatures on prescriptions and chart notes and added facsimile stamps to supporting documentation to make it appear as though physicians’ offices had sent the documents to Orbit Medical.
On Oct. 23, 2013, a federal grand jury in Utah indicted Jake Kilgore on three counts of health care fraud, three counts of false statements related to health care and three counts of wire fraud, all arising from his tenure with Orbit Medical.
“The government is intervening in this matter seeking to restore Medicare trust funds taken through the alleged use of falsified records and fraudulent billings, among other things,” said U.S. Attorney for the District of Utah David B. Barlow. “Health care fraud is aggressively pursued in Utah. Every effort is made to restore taxpayers' dollars taken through fraudulent conduct.”
“Our agency is dedicated to investigating health care fraud schemes such as this, which divert scarce taxpayer funds meant to provide for legitimate patient care,” said Gerald T. Roy, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General.
The allegations against Orbit Medical and Kilgore in this lawsuit were filed under the False Claims Act by two former Orbit employees, Dustin Clyde and Tyler Jackson. Under the act, private parties can sue for false claims on behalf of the government and share in any recovery. The act also permits the government to intervene in the whistleblowers’ suit, as the government did here.
The government’s intervention illustrates its 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 $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was a coordinated effort among the U.S. Attorney’s Office for the District of Utah, the Civil Division of the Department of Justice, the Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, the Office of Personnel Management and the Defense Health Agency. The lawsuit is captioned United States ex rel. Clyde; Jackson v. Orbit Medical; Kilgore, No. 2:10-CV-00297 (D. Utah).
The claims pursued by the government are allegations only; there has been no determination of liability.
Former Treasurer of Mayetta Fire DistrictSentenced for EmbezzlementRead the Press Release
TOPEKA, KAN. - The former treasurer of the Mayetta Rural Fire District #1 was sentenced Monday to 30 months in federal prison for embezzling from the district, U.S. Attorney Barry Grissom said. The defendant also was ordered to pay more than $427,000 in restitution.
At sentencing, U.S. District Judge Julie A. Robinson noted that the defendant created a dangerous situation by depleting fire department funds that should have been used to purchase fire equipment.
Richard P. Bontrager, 68, Holton, Kan., pleaded guilty to one count of embezzlement. In his plea, he admitted that in 2008 he began embezzling from the fire district by issuing checks with the forged signatures of members of the board of the fire district. The checks were made payable to R & S Services, a fictitious entity Bontrager created so he could deposit the fraudulent checks into his own account at Denison State Bank. From 2008 to 2012 he made approximately $427,042 in unauthorized transfers from the fire district’s accounts.
In addition, without the knowledge of the board of the fire district he falsified loan documents to obligate the fire district to monthly lease payments on a Polaris Ranger UTV and a 1988 Chevrolet 1-ton brush truck. He created false board minutes to make it appear the board had approved the lease payments.
Grissom commended the Jackson County Sheriff’s Office, the FBI and Assistant U.S. Attorney Richard Hathaway for their work on the case.Former Treasurer for Communications Workers of America Local 88329 Charged with Falsifying RecordsRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a criminal Information was filed today in U.S. District Court in Scranton charging Robert Vargeson, age 46 of Galeton, Pennsylvania with falsification of financial records.
According to United States Attorney Peter Smith, Vargeson was responsible for the financial records of Communications Workers of America, Local Union 88329, and during 2012 – 2013, he falsified those records to conceal the fact that he had embezzled approximately $6,373 from the funds of the union.
If convicted, Vargeson faces a maximum penalty of one year incarceration and a $100,000 fine.
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 one year 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.
The investigation was conducted by U.S. Department of Labor and prosecution is assigned to Assistant United States Attorney Lorna Graham.
****Former Hidalgo County Sheriff Pleads GuiltyRead the Press Release
McALLEN, Texas - Guadalupe Trevino, aka Lupe Trevino, 64, of McAllen, has entered a guilty plea a criminal information charging him with conspiracy to commit money laundering, announced United States Attorney Kenneth Magidson. Trevino was the former sheriff of Hidalgo County.
The investigation revealed that during 2011 and 2012, Trevino received cash contributions for his election campaign from alleged drug trafficker, Tomas “El Gallo” Gonzalez. Today, Trevino admitted he accepted the money, knowing it was from illegal activities. He admitted he accepted the monies directly and through others as donations to assist with his 2012 election campaign. Some of the monies received were subsequently deposited into bank accounts Trevino controlled and were comingled with other funds.During and after the transactions, Trevino and others acted to disguise and conceal the nature, location, source, ownership and control of the currency by filing false Candidate/Officeholder Campaign Finance Reports and producing other documents.
U.S. District Judge Micaela Alvarez, accepted the plea today and has set sentencing for July 17, 2014. At that time, Trevino faces up to 20 years in federal prison and $500,000 or twice the value of the property involved in the transaction.
On Friday, April 14, 2014, Trevino’s former chief of staff and campaign treasurer, Maria Patricia Medina, pleaded guilty to misprision of a felony, admitting she assisted Trevino in the concealment of the donations by falsifying election records. She faces up to three years in federal prison and a potential fine of $250,000.
The investigation leading to the charges was conducted by Homeland Security Investigations, Drug Enforcement Administration, Texas Department of Public Safety, Rangers Division and Internal Revenue Service – Criminal Investigation. Assistant United States Attorneys James Sturgis and Anibal Alaniz prosecuted the case.
Former Employee at Medistat Group, Associates, Inc., in Desoto, Texas, Sentenced to 33 Months in Federal Prison for Role in Health Care Fraud ConspiracyRead the Press Release
Jerry C. Bullard and Okey Nwagbara Submitted Nearly $600,000 in False and Fraudulent Claims to Medicare
DALLAS — Jerry C. Bullard, 57, of Mesquite, Texas, was sentenced this afternoon, by U.S. District Judge Sam A. Lindsay, to 33 months in federal prison and ordered to pay $317,779 in restitution, following his guilty plea in February 2012 to one count of conspiracy to commit health care fraud. Bullard worked in the durable medical equipment department of Medistat Group Associates, Inc., an association of health care providers in Desoto, Texas. Judge Lindsay ordered that Bullard surrender to the Bureau of Prisons on July 15, 2014. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
A co-defendant in the case, Okey Nwagbara, formerly of Plano, Texas, pleaded guilty in January 2012 to three felony offenses related to his involvement in the health care fraud conspiracy as well as providing false information to obtain citizenship. Nwagbara was the owner and operator of Advanced Medequip and Supplies, Ltd., (Advanced) a durable medical equipment company that was located in Richardson, Texas. He is currently serving a 36-month federal prison sentence; after the completion of that sentence, he will be referred to U.S. Citizenship and Immigration Services (CIS) for deportation.
Bullard admitted that he entered into an agreement with Nwagbara to submit false and fraudulent claims to Medicare. Bullard accepted kickbacks from Nwagbara to direct business to Advanced and to sign durable medical equipment orders for Advanced. Upon receiving cash payments from Nwagbara, Bullard would sign “JRoy MD” on Medistat prescription pads, durable medical equipment information forms and certificates of medical necessity for enteral nutrition products falsely indicating, among other things, that the beneficiary required tube feeding, when in fact the beneficiary did not. Bullard and Nwagbara admitted that they submitted and caused to be submitted $583,688 in these types of false and fraudulent claims.
The case was investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. To learn more about the HEAT Strike Force, please visit: http://stopmedicarefraud.gov.
Assistant U.S. Attorneys Michael Elliott and Mindy Sauter were in charge of the prosecution.
Former Chief Administrative Officer for City of Bell Sentenced to Federal Prison for Cheating IRS to Avoid Taxes on Corrupt ActivitiesRead the Press Release
LOS ANGELES – Robert A. Rizzo, the former top administrator in the City of Bell who has admitted his role in a widespread municipal corruption scandal, was sentenced today to 33 months in federal prison in a tax fraud scheme designed to hide part of the massive income he was bilking from the small Los Angeles County city.
Rizzo was sentenced today by United States District Judge George H. King, who said Rizzo’s activities demonstrated “greed in cheating the taxpayers of the United States after cheating the citizens of Bell.” In issuing the 33-month prison term, Judge King ordered that it run consecutive to a prison term Rizzo is expected to receive Wednesday when he is sentenced in Los Angeles Superior Court in his corruption case.
Rizzo, 60, of Torrance, pleaded guilty in January to federal charges – conspiracy and filing a false federal income tax return with the Internal Revenue Service – in a scheme that resulted in hundreds of thousands of dollars in unpaid federal income tax. At today’s sentencing hearing, Judge King ordered Rizzo to pay $255,984 in restitution, a figure that equals the amount of unpaid taxes directly attributable to the defendant.
In his plea agreement, Rizzo admitted that he created a corporation to fraudulently claim losses on his income tax return, which served to illegally reduce his tax liability on the significant income he was receiving from the City of Bell. Rizzo also admitted claiming personal expenses as business deductions.
Rizzo’s “conduct can only be described as corrupt,” prosecutors wrote in a sentencing memo filed with the court. Not only did Rizzo fleece the City of Bell and its residents, he also bilked the Internal Revenue Service “in an extraordinary display of greed.”
According to court documents, Rizzo, sometime in 2002, created an S Corporation that he called R.A. Rizzo Incorporated (RARI). Rizzo was assisted in the scheme by co-conspirators that included his tax preparer, Robert J. Melcher, who has pleaded guilty to aiding and abetting the filing of a false tax return.
Rizzo used RARI to claim bogus losses in relation to a purported rental property in Auburn, Washington. RARI’s corporate tax return fraudulently deducted more than $571,530 in losses for the years 2006 through 2009.
Rizzo also admitted in his plea agreement that he used a RARI account to pay for more than $80,000 in personal expenses in 2009 and $120,000 in construction work on his residence in Huntington Beach in 2010. RARI’s tax returns falsely claimed that these expenses were related to rental property.
Rizzo “abused his position to fleece the City of Bell of hundreds of thousands of dollars that he paid to himself in excessive salary – monies that could have been spent for the benefit of the people he served,” according to the government’s sentencing memorandum. “But not satisfied with betraying the trust place in him by the city and its residents, in an extraordinary display of greed, [Rizzo] also found it necessary to cheat the IRS.”
Melcher, who as a result of his guilty plea faces a sentence of up to three years in prison, is scheduled to be sentenced on May 12 by Judge King.
The cases against Rizzo and Melcher are part of an ongoing investigation being conducted by special agents with IRS - Criminal Investigation and the Federal Bureau of Investigation.
Release No. 14-042a
Former Bryan Chiropractor and Clinic Owner Sentenced in $3 Million Automobile Insurance ScamRead the Press Release
HOUSTON – Chase Lindsey, 36, and Brittany Jessie, 25, have been sentenced to federal prison for engaging in a conspiracy to defraud various automobile insurance companies of more than $3 million, announced United States Attorney Kenneth Magidson. Lindsay and Jessie previously entered guilty pleas to conspiracy to defraud the insurance companies.
Jessie and Lindsey admitted they participated in a conspiracy along with Earlie Dickerson, 41, Marion Young, 43, and Edward Graham, 37, to defraud numerous auto insurance companies. The scheme involved the creation of fraudulent chiropractic bills for treatments which were never performed and used as support for fraudulent settlement demand letters sent to auto insurance companies.
Today, U.S. District Judge Kenneth Hoyt handed Lindsey and Jessie respective terms of 24 and 30 months in federal prison. Judge Hoyt further ordered Lindsey and Jessie to pay restitution to the insurance companies totaling $1.1 million and $1 million, respectively. Both will also serve two-year-terms of supervised release following completion of their prison terms.
Sanjoh & Associates represented clients allegedly injured in auto accidents. Lindsey agreed to provide medical evaluations of, and recommend treatment for, those patients in exchange for $2,000 in cash per month, which totaled approximately $58,000 during the course of the conspiracy. Jessie sometimes cashed checks and took the cash to Lindsey for payment.
For the clients he actually evaluated, Lindsey routinely recommended medically unnecessary therapeutic treatments. In some instances, Lindsey either never evaluated the patient or did so after the patient had already begun receiving treatments. The treatments, if done, were done by unlicensed, untrained and unqualified individuals whom Lindsey never supervised. Lindsey always prescribed the same six treatments but the patients usually received only two: ice/heat packs and electric stimulation. He prescribed the treatments be done 3-4 times per week for 5-6 weeks, but patients usually went once a week for 3-4 weeks. Lindsey also provided no follow-up treatments.
Jessie was instructed on which treatments to mark down in order for the billing to be approved and to alternate treatments on the billing so it did not look suspicious. At one point, Jessie provided a set of treatment guidelines to an employee at Private Chiropractic Care to follow which were needed for the billing of patients. Jessie instructed that employee to mark down patient treatments, even if the treatments were not done, because it was necessary for billing. Jessie further instructed the employee to have the patients initial off next to the fraudulent treatments as if they received them. Jessie also fraudulently marked down treatments and the patient's pain levels on treatment forms at the Sanjoh & Associates office when the patient had not received the treatment and prepared the false chiropractic billing statements at law firm.
The co-conspirators used four chiropractic clinics in the scheme. Lindsey started working at the first clinic, Texas Avenue Chiropractic Clinic, in February 2007 and continued until it closed on or about Sept. 1, 2007. After that, Lindsey was listed as the only chiropractor at H & E Chiropractic and Private Chiropractic Care, two businesses also involved in the conspiracy. After Private Chiropractic Care shut down in September 2009, Lindsey and others agreed to continue the fraud scheme by sending the law firm clients to Lindsey Chiropractic Care - Lindsey's chiropractic clinic. Clients were sent there until search warrants were executed in November 2009. Dickerson was the office manager of Sanjoh & Associates Law Firm. Jessie worked both at Sanjoh and Associates, as a tech at the chiropractic clinics and was the owner of Private Chiropractic Care. All the defendants reside in Bryan where all the businesses are also located.
Despite changing the name and location of the chiropractic clinic four times, the fraud scheme remained the same. Co-conspirators recruited individuals allegedly involved in auto accidents to be represented by the law firm who were then sent to Lindsey to be evaluated. Lindsey routinely prescribed medically unnecessary treatment which was provided, if at all, by unlicensed, untrained and unqualified individuals. Lindsey knew that most of the treatments were not being performed. Nonetheless, Lindsey allowed false and fraudulent chiropractic bills to be created under his name from each of the four clinics for treatments which were never performed.
The fraudulent bills were used as support for settlement demand letters sent to auto insurance companies which caused the insurance companies to issue settlement checks. Lindsey and Jessie acknowledged the scheme to defraud the automobile insurance companies resulted in the submission of more than $3 million in false billing claims. The insurance companies paid at least $1.2 million in false claims during 2007-2009.
Lindsey and Jessie were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
Young entered a guilty plea to one count of conspiracy and one count of wire fraud, while Graham and Dickerson were convicted following an eight-day trial of the conspiracy and 30 counts of mail fraud. Those three defendants are scheduled for sentencing on July 28, 2014.
The criminal charges are the result of a joint investigation by agents of the FBI and the National Insurance Crime Bureau. Assistant United States Attorney (AUSA) Al Balboni and Special AUSA Adrienne Frazior are prosecuting the case.Former Beaumont ISD Employees Guilty of Stealing over $4 MillionRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – The former Director of Finance and Comptroller of the Beaumont Independent School District (BISD) have pleaded guilty to federal charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Devin Wayne McCraney, 35, of Beaumont, pleaded guilty to the charge of fraud upon programs receiving federal funds today before U.S. District Judge Ron Clark.
Sharika Baksh Allison, 43, of Beaumont, pleaded guilty to the charge of conspiracy to commit fraud upon programs receiving federal funds today before Judge Clark.
According to information presented in court, McCraney, Director of Finance for BISD, and Allison, Comptroller for BISD, devised schemes in which they embezzled over $4 million from BISD. McCraney and Allison were indicted by a federal grand jury on Jan. 8, 2014.
“The guilty pleas are an important milestone, not just for the Government and the Defendants, but for citizens of Beaumont, said U.S. Attorney Bales. “Lately, much of the news coming from BISD has been disappointing but its mission to educate Beaumont’s children remains critically important. The joint task force will continue to diligently work to insure that individuals who are ripping off BISD and impugning both the mission, and the many good public servants who are committed to that mission, are held accountable.”
“These defendants knowingly and willfully abused their position of trust to steal education funds that were supposed to be used to provide services for the most innocent of victims – school children. That is unacceptable,” said Neil Sanchez, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s South Central Regional Office. “I’m proud of the work of OIG Special Agents and our law enforcement colleagues for holding these individuals accountable for their criminal actions.”
“The admission of guilt today by these defendants is one more step in the process of restoring the public’s faith and belief in law and order in our community,” said Jefferson County District Attorney Cory Crenshaw. “I sincerely hope the mission of our task force is made evident by these guilty pleas which allow our entire community to see clearly that we have people who allow their own greed to put the future of our children at great risk. We will continue in our goal to do what is required to bring all of those responsible to justice and I continue to ask that those with knowledge of wrongdoing within our school district to promptly come forward.”
McCraney faces up to 10 years in federal prison and restitution of $4,041,705.27. Allison faces up to 5 years in federal prison and restitution of up to $1,351,983.11. Sentencing dates have not been set.
This case is being prosecuted as part of the Joint Task Force established in March 2014 between the U.S. Attorney’s Office for the Eastern District of Texas and the Jefferson County District Attorney’s Office to investigate and prosecute major crimes – more specifically, violent crime and crimes related to the abuse of public trust in Jefferson County, Texas.
If you have any information related to this matter, please call the Federal Bureau of Investigation at 409-832-8571.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Education Office of Inspector General. This case is being prosecuted by Assistant U.S. Attorneys Christopher T. Tortorice and Joseph R. Batte.
####Federal Tax Prosecutions Serve as Reminder to Taxpayers to Comply with Tax Obligations on Eve of April 15 DeadlineRead the Press Release
CHICAGO ― Seven Chicago and suburban residents, among others, are facing federal prosecution for alleged federal income tax crimes in various separate cases filed recently. Two defendants were arrested by IRS agents today after they were indicted in an alleged scheme to use stolen identities to fraudulently claim and obtain tax refunds based on fictitious returns. Other defendants include Dolton and Lockport businessmen and a retired Chicago police officer and his wife.
“The IRS Criminal Investigation Division is focused on ensuring that taxpayers pay their fair share,” said James C. Lee, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. “Tax fraud does not know a season ― IRS special agents pursue criminals year round, not only at filing deadlines. Taxpayers who might be thinking about cheating should think twice or they will risk the consequences,” he said.
“Federal tax prosecutions occur throughout the year but at this time of year it is especially prudent to remind taxpayers of the importance of voluntary compliance with their tax obligations,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
In addition to criminal penalties, including incarceration, fines, and the costs of prosecution, convicted defendants remain responsible for any taxes and interest due, as well as civil penalties of up to 75 percent of the tax owed, Mr. Fardon noted. And those making false claims against the government may be required to pay restitution or may be sued civilly for an amount greater than the fraudulent claims, he added.
In the case involving today’s arrests, three defendants were indicted in an alleged scheme to fraudulently claim tax refunds in excess of $350,000, and fraudulently obtaining approximately $180,000, after filing 173 fictitious returns. WILLIS PATTON, 43, of Woodridge, and STEVIE SHELTON, 54, of Chicago, were arrested today, while KENYA BOND, 35, of Chicago, will be arraigned on a date to be determined in U.S. District Court. Each of them was charged with six counts of wire fraud, while Patton and Bond were also charged with two counts each of making false claims, and Shelton was charged with two counts of theft of government funds in a 10-count indictment that was returned by a federal grand jury on April 2 and unsealed today.
According to the indictment, Bond misappropriated the names, social security numbers, and dates of birth of 29 patients of the suburban Woodridge dentist’s office where she worked, and provided the identity information to Patton for a fee. Patton used that information, as well as identifying information obtained from other unspecified sources, to file 173 fictitious tax returns for 2011 that contained false information about income, tax withholdings, and supporting documents. Patton directed the IRS to send electronic tax refunds to bank accounts controlled by Shelton and other individuals, the indictment alleges. In fact, Patton allegedly controlled these bank accounts and recruited Shelton and others to open and maintain them in their names for Patton to obtain tax refunds.
For the 2011 tax year, Patton allegedly received approximately $180,000 in false tax refunds, including $67,000 that was electronically transferred into accounts maintained by Shelton. Patton and Shelton were both ordered to remain in federal custody pending a detention hearing at 2 p.m. Thursday before Magistrate Judge Geraldine Soat Brown in U.S. District Court.
Each count of wire fraud carries a maximum sentence of 20 years in prison, each count of making a false claim carries a maximum of five years, and each count of theft of government funds carries a maximum of 10 years, and all counts carry a maximum fine of $250,000. The government is being represented by Assistant U.S. Attorney Jessica Romero.
In other recent cases:
- VICTOR SHAW, 53, of Dolton, was charged in a criminal information filed Friday with six misdemeanor counts of failing to file federal income tax returns for each year between 2007 and 2012. He will be arraigned on a date to be determined in U.S. District Court. Each count of failing to file an income tax return, a misdemeanor, carries a maximum sentence of a year in prison and $100,000 fine. (AUSA Maureen Merin.)
- RONALD MUHAMMAD, 63, who retired as a Chicago police officer in 2007, and his, wife, WILHELMENIA MUHAMMAD, 64, a retired Social Security Administration employee, both of Chicago, were each indicted on four counts of tax evasion and four counts of failing to file a federal income tax return in a 12-count indictment that was returned by a federal grand jury last Thursday. Between 2007 and 2010, the couple allegedly failed to file tax returns and evaded paying taxes on hundreds of thousands of dollars in income from pension payments and wages, including Ronald’s earnings at the Chicago Park District after he retired from the police department. Among the couple’s other wages and retirement earnings, Ronald allegedly withdrew the following amounts in police pension and annuity payments: $537,514 in 2008, $514,043 in 2009, and $149,490 in 2010.
According to the indictment, either or both of the Muhammads responded to various letters from the IRS by saying they viewed a letter as a “fraudulent document that had no legal basis,” or the IRS “has no jurisdiction over our personal affairs,” as well as claiming at times that they were exempt from federal withholding.
The Muhammads are scheduled to be arraigned at 9 a.m. Wednesday in U.S. District Court. Each count of tax evasion carries a maximum sentence of five years in prison and a $250,000 fine, and each count of failing to file an income tax return, a misdemeanor, carries a maximum sentence of a year in prison and $100,000 fine. (AUSA Bethany Biesenthal.) - PAUL WEST, 61, of Lockport and formerly of Frankfort, also known as “Thomas Wilson,” and “Tom Wilson,” was indicted last Thursday on two counts of filing a false federal income tax return and three counts of failing to file a federal income tax return. West, who was in the business of selling materials for recycling, including scrap cardboard, had gross income in excess of $450,000 in 2007, and more than $200,000 in 2011, and allegedly under-reported his income for both years, reporting that he owed little or no taxes, according to the indictment. It further alleges that he had gross income in excess of $250,000 in 2008, $150,000 in 2009, and 200,000 in 2010, and failed to file federal income tax returns for those years.
West will be arraigned on a date to be determined in U.S. District Court. Each count of filing a false income tax return carries a maximum sentence of three years in prison and a $250,000 fine, and each count of failing to file an income tax return, a misdemeanor, carries a maximum sentence of a year in prison and $100,000 fine. (AUSA Kaarina Salovaara.)
In each case, if convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that criminal charges are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Federal Judge Sentences Talladega County Man to Six Years in Prison for Attempting to Hire KKK to Kill NeighborRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Talladega County man to six years in prison for attempting to hire a member of the Ku Klux Klan to murder an African-American neighbor he suspected of raping his wife, announced Acting Assistant Attorney General for the Civil Rights Division of the Department of Justice Jocelyn Samuels, U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge Karon O. Bowdre sentenced ALLEN WAYNE DENSEN MORGAN, 30, of Munford, on one count of using and causing someone else to use interstate facilities and travel -- a telephone and a motor vehicle -- with the intent to commit a murder-for hire. He must serve three years of supervised release following completion of his prison term. Morgan pleaded guilty to the charge in October. Federal officials arrested him in August after he told FBI agents posing as members of the KKK that he would pay them to murder his neighbor. Morgan admitted he offered a watch, a necklace and a gun as payment for the murder and gave explicit details for the man's torture and murder.
“The defendant attempted to have his neighbor tortured and murdered by the KKK,” Samuels said. “Today’s sentence demonstrates that the Justice Department will continue to aggressively prosecute those who act on their racial hatred by seeking to inflict such acts of violence on others.”"Mr. Morgan detailed his calculated desire to end his neighbor's life through the most brutal and heinous means," Vance said. "Today's sentence reinforces that vigilantism is not acceptable in our society and we will prosecute that crime."
“The gruesome crime Morgan envisioned and plotted was designed to terrify and intimidate," Schwein said. "Thanks to outstanding investigative and undercover work he was not able to carry out his plan, and today pays the price for that crime.”
The government's sentencing memorandum refers to the detailed recorded instructions Morgan gave to undercover agents on how he wanted the murder carried out. Morgan's plot to have his neighbor killed "was no idle threat," according to the memorandum. "He fully intended to seek revenge against his neighbor by hanging, mutilation, and evisceration."
The government recommended Morgan receive the maximum statutory penalty of 10 years in prison. He has had numerous encounters with law enforcement, including convictions for possession of cocaine and opiates, disorderly conduct, false reporting to law enforcement, purchase of more than six grams of Ephedrine and possessing marijuana, according to the sentencing memorandum. The minimum sentence calculated according to federal sentencing guidelines for the murder-for-hire conviction and Morgan's criminal history was above the 10-year statutory maximum. Morgan's case calls for the maximum statutory penalty, the government argued, "There can be no allowance for vigilantism provoked either by real or imagined injuries."
Morgan's efforts to arrange the paid murder of his neighbor unfolded as follows, according to his plea:
Morgan talked to an undercover FBI agent by telephone on Aug. 22, who identified himself as a KKK member. The men arranged to meet three days later at an Oxford motel to discuss payment for the murder. In that phone conversation, Morgan used a racial slur to describe the man he wanted killed and bragged that he had just fired several shots toward the man to intimidate him. Morgan also detailed how he wanted the man "hung from a tree like a deer and gutted," to have body parts cut off, and to "die a slow, painful death."
The FBI investigated the case. Assistant U.S. Attorneys Pat Meadows and John B. Felton of the Northern District of Alabama and Civil Rights Division Trial Attorney David Reese prosecuted the case.
Edgewood Man Charged with Violating Federal Wildlife Laws Prohibiting Sale of Eagle FeathersRead the Press Release
ALBUQUERQUE – Dale N. Smith, 60, of Edgewood, N.M., has been charged with violating federal wildlife laws that prohibit the selling of, and offering to sell, eagle feathers in a criminal complaint filed in federal court.
Smith was arrested on April 10, 2014, and made his initial appearance in federal court in Albuquerque on April 11, 2014. During a court appearance this morning, Smith was ordered detained pending release to a half-way house under pretrial supervision when space becomes available.
The criminal complaint alleges that Smith violated the Migratory Bird Treaty Act, the Lacey Act and the Bald and Golden Eagle Protection Act in March 2014, in Santa Fe County, N.M. According to the criminal complaint, Smith, a member of the Lakota/Sioux Tribe of the Hunkpapa Band of Lakota, was charged as the result of an undercover investigation by the U.S. Fish and Wildlife Service that began on March 7, 2014, and concluded with Smith’s arrest on April 10, 2014. The investigation was initiated on March 7, 2014, after the U.S. Fish and Wildlife Service received information that Smith had posted on an Internet website photographs of Indian arts and crafts which appeared to include federally protected feathers.
The criminal complaint alleges that on March 7, 2014, an undercover agent contacted Smith and inquired about the feathers on one particular piece of art. Smith allegedly responded by telling the agent that the feathers were bald eagle feathers and offering to sell the artwork for $1,000. On March 20, 2014, Smith allegedly sold a feather fan containing 21 bald eagle feathers and a medicine wheel containing eight bald eagle feathers to the undercover agent for $1,000. On March 20, 2014 and again on March 24, 2014, Smith allegedly offered to sell a headdress with bald eagle feathers to the undercover agent for $2,000.
If convicted of the offenses charged in the criminal complaint, Smith faces a maximum statutory penalty of five years in prison, three years of supervised release, and a $250,000 fine. Charges in criminal complaints are merely accusations and all criminal defendants are presumed innocent unless proven guilty in a court of law.
Bald eagles are amongst more than 1000 wild birds protected under the federal wildlife laws, including the Migratory Bird Treaty Act, the Bald and Golden Eagle Protection Act, and the Lacey Act. Among other things, these laws prohibit the possession, use, and sale of the feathers or other parts of federally protected birds, as well as the unauthorized killing of these birds, to help ensure that the Eagle and other bird populations remain healthy and sustainable.
This case was prosecuted by Assistant U.S. Attorney Paul H. Spiers and was investigated by the Office of Law Enforcement of the U.S. Fish and Wildlife Service. Service with assistance from the New Mexico Game and Fish Department, Homeland Security Investigations, the U. S. Marshals Service, and Santa Fe County Sheriff's Office.The mission of the U.S. Fish and Wildlife Service is working with others to conserve, protect, and enhance fish, wildlife, plants, and their habitats for the continuing benefit of the American people. It is both a leader and trusted partner in fish and wildlife conservation, known for its scientific excellence, stewardship of lands and natural resources, dedicated professionals, and commitment to public service. For more information on its work and the people who make it happen, visit www.fws.gov. Connect with its Facebook page at www.facebook.com/usfws, follow its tweets at www.twitter.com/usfwshq, watch its YouTube Channel at http://www.youtube.com/usfws and download photos from its Flickr page at http://www.flickr.com/photos/usfwshq.
- Smith Complaint
Eastern Idaho Man Sentenced for Selling Methamphetamine and GunsRead the Press Release
POCATELLO - Harold Thomas Barker, 59, of Rexburg, Idaho, was sentenced today in United States District Court to 24 months in prison followed by three years of supervised release for unlawfully transferring firearms and distributing methamphetamine, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Barker to pay a $500 fine. Barker was indicted by a federal grand jury in Pocatello on May 29, 2013, and entered his guilty plea on January 22, 2014.
According to the plea agreement, between May and July 2011, Barker sold eight firearms, assorted ammunition, and methamphetamine to an individual Barker knew was prohibited from possessing firearms. One of the firearms was a sawed-off shotgun. Barker agreed to forfeit $3,040, which constitute proceeds of his offenses.
The case was investigated by Bureau of Alcohol, Tobacco, Firearms and Explosives and the Madison County Sheriff’s Office, with the assistance of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Defendants Sentenced in Massive Stolen Identity Refund Fraud SchemeRead the Press Release
DALLAS — Two defendants, who were convicted on felony offenses related to their roles in a scheme to use stolen identity information to fraudulently obtain millions of dollars in tax refunds, were sentenced this afternoon in federal court in Dallas.
George Ojonugwa, 32, of Garland, Texas, was sentenced to 174 months in federal prison and ordered to pay $15,979,187 in restitution.
Eseos Igiebor, 43, of Richardson, Texas, was sentenced to 96 months in federal prison and ordered to pay $9,660,658 in restitution.
Defendant Ogiesoba City Osula, 38, of Dallas, will be sentenced next month. He was convicted, following a nearly one week-long trial in October 2013, on one count of conspiracy to commit wire fraud, mail fraud and bank fraud; seven counts of presenting fraudulent claims upon the U.S.; two counts of fraud in connection with access devices and aiding and abetting; and six counts of aggravated identity theft and aiding and abetting.
Late last year, Ebenezer Legbedion, 42, of Lagos, Nigeria, was sentenced to 40 months in federal prison and ordered to pay more than $1 million in restitution, and Evelyn Nyaboke Haley, 34, of Dallas, was sentenced to 60 months in federal prison and ordered to pay approximately $5.7 million in restitution.
Ojonugwa, Igiebor and Legbedion each pleaded guilty to one count of conspiracy to commit wire fraud. Igiebor also pleaded guilty to one count of aggravated identity theft. Haley pleaded guilty to one count of conspiracy to defraud the government with respect to claims.
The defendants conspired to defraud the U.S. by using stolen identity information and false information to create and electronically file false tax returns to claim refunds. The defendants had the refunds credited to stored value cards or bank accounts opened with stolen taxpayer identity information. Even while the defendants fraudulently obtained millions of dollars in tax refunds, they filed additional fraudulent returns, attempting to obtain millions more in tax refunds for their own use and benefit.
During Osula’s trial, the government presented evidence that Osula and his coconspirators sent information to and traded information with, a group running a similar scheme in Cincinnati, Ohio. On Nov. 8, 2011, police in a Cincinnati suburb questioned Osula and Ojonugwa, who were in a parked car after midnight with the leader of the Cincinnati ring. A drug detection dog alerted on the vehicle, and when it was searched, police found more than $300,000 in cash and money orders and numerous debit cards. During that incident, while Osula was in a police car and waiting to be questioned, he ate a debit card.
According to documents filed in this case and statements made in court:
SIRF is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the United States Treasury. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals.
- SIRF perpetrators complete Individual Income Tax Return Form using the fraudulently-obtained information and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 forms are entitled to tax refunds – when in fact, the various tax withholdings indicated on the fraudulent 1040s have not been paid by the listed “taxpayers,” and no refunds are due.
- Perpetrators direct the U.S. Treasury Department to issue the refunds through checks (Tax Refund Treasury Checks) generated by the fraudulent 1040 forms to locations they control or can access, in various ways.
- With Tax Refund Treasury Checks now in hand, SIRF perpetrators generate cash proceeds. Certain SIRF perpetrators sell Tax Refund Treasury Checks at a discount to face value. In turn, the buyers then cash the Tax Refund Treasury Checks, either themselves or using straw account holders, by cashing checks at banks or check cashing businesses, or by depositing checks into bank accounts. When cashing or depositing Tax Refund Treasury Checks, SIRF perpetrators often present false or fraudulent identification documents in the names of the “taxpayers” to whom the checks are payable.
While this investigation was conducted by IRS Criminal Investigation and the FBI, the U.S. Secret Service Office in Cincinnati, Ohio, and the U.S. Attorney’s Office for the Southern District of Ohio, provided substantial assistance.
Assistant U.S. Attorneys Mark Penley, Christopher Stokes and P.J. Meitl prosecuted.
Dayton Man Indicted on More Than Three Dozen Additional Charges for Buying Stolen Identities Online and Filing False Income Tax ReturnsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – A federal grand jury has returned a 42-count superseding indictment against Lance Ealy, 28, of Dayton, alleging that he bought hundreds of stolen identities online and used the identities to file more than 150 fraudulent federal income tax returns seeking refunds to which he was not entitled.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Mark Porter, Special Agent in Charge, U.S. Secret Service announced the superseding indictment today following Ealy’s appearance before U.S. District Judge Michael Barrett, who released Ealy on electronic monitoring and set a trial date for August 18, 2014.
Ealy was initially charged in a federal complaint filed on October 28, 2013 following in investigation by Secret Service agents that revealed that Ealy had purchased hundreds of stolen identities from an online source. A federal grand jury initially indicted Ealy in November 2013, charging him with one count of knowingly possessing 5 or more access devices with intent to defraud.
The superseding indictment charges him with 41 additional charges, including 11 counts of filing false claims for income tax refunds with the IRS, 14 counts of wire fraud, 14 counts of aggravated identity theft, one count of mail fraud, and one count of using unauthorized access devices to obtain items of $1,000 or more in value in a one-year period. An access device includes things such as payment cards and bank account numbers used to access financial accounts.
The superseding indictment alleges that between approximately January 2013 and October 2013, Ealy electronically filed at least 150 fraudulent federal income tax returns, which include filing at least 50 fraudulent returns using the personal information of others that he had unlawfully acquired or purchased from an online broker. The superseding indictment further alleges that Ealy opened dozens of bank accounts at multiple financial institutions using the names and social security numbers of other individuals – without their knowledge or permission – in order to electronically deposit the fraudulent tax refunds.
Illegally possessing fifteen or more unauthorized access devices with intent to defraud and using unauthorized access devices to obtain items of $1,000 or more in value carries a maximum sentence of ten years in prison and a fine of up to $250,000; filing false claims for income tax refunds with the IRS carries a maximum of five years in prison and a $250,000 fine; wire fraud and mail fraud each carry a maximum penalty 20 years in prison and a fine of up to $250,000; and aggravated identity theft carries a mandatory two-year sentence that must run consecutive to whatever sentence may ultimately be handed down.
IRS Special Agent in Charge Enstrom said, “Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law. IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney's Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes.”
U.S. Attorney Stewart commended the investigation of this case by the Secret Service and IRS-Criminal Investigation and Assistant U.S. Attorneys Alex R. Sistla and Andrew J. Hunt, who are prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Contractor Admits Fraud and Aggravated AssaultRead the Press Release
CAMDEN, N.J. – The principal of a Pennsylvania construction company today admitted his role in an employee kickback scheme that occurred during a reconstruction project at the Ft. Dix military base in Burlington County, N.J., U.S. Attorney Paul J. Fishman announced today.
Leonard Santos, 67, of Yardley, Pa., owner of Sands Mechanical Inc. of Bristol, Pa., pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count One of an indictment charging him with conspiracy to obtain kickbacks from public works employees and Count Three, charging him with causing persons to travel in interstate commerce to commit a crime of violence.
According documents filed in this case and statements made in court:
Between November 2009 and September 2010, Santos operated Sands Mechanical Inc. as a subcontractor on the restoration and rehabilitation of the Marine Corps Reserve Training Center at Joint Base-McGuire-Dix-Lakehurst in Burlington County, N.J. Sands provided HVAC and plumbing services. The general contractor was a company headquartered in Marriotsville, Md. During the project Santos demanded that certain employees kickback a percentage of their weekly paychecks or face termination.
In February 2010, the U.S. Department of Labor’s Wage and Hour Division (WHD) was tipped off that the Sands employees were being forced to kickback portions of their salary and were not being paid the prevailing wage for Burlington County. Santos conceded that Sands failed to pay the proper prevailing wage to its employees and agreed to repay $80,000 to those deprived employees. Santos cut settlement checks to those employees who were owed back wages. However, Cottone and Featherston warned those employees not to cash their settlement checks. Instead, Cottone and Featherston took the employees to a nearby check cashing business, where they endorsed their checks over to Cottone, who cashed them and returned the funds to Santos. Since these kickbacks were removed from employees’ checks, Santos routinely submitted inaccurate weekly payroll forms that are required whenever the federal government subsidizes a construction project.
The general contractor’s site manager was routinely critical of the work performance of Sands’ employees, which, at times, necessitated that work be done over. The site manager was targeted by Santos, Cottone and others by having his truck torched in front of his residence at 4 a.m. on May 17, 2010. This tactic failed to warn off the site manager. On June 09, 2010, at 5 AM, while riding his bike, the site manager was intentionally run down by a car driven by Cottone’s nephew and two friends. The victim sustained multiple serious injuries.
The count of conspiracy to demand kickbacks from employees on a federally subsidized project carries a maximum potential penalty of five years in prison and a $250,000 fine. The count of causing others to travel in interstate commerce to commit a crime of violence carries a maximum potential penalty of 20 years in prison. Sentencing is scheduled for July 28, 2014.
Two Sands’ supervisors have already pleaded guilty to these charges: Richard Cottone, 39, of Windsor, Pa., (Santos’ son-in-law) pleaded guilty Dec. 11, 2012, and Michael Featherston, 44, of Cumberland County, N.J., pleaded guilty Jan. 10, 2012. Both are awaiting sentencing. A third Sands supervisor, Alex Rabinovich, 58, of Richboro, Pa., pleaded guilty on Sept. 18, 2013, to Count Four, conspiracy to bribe a representative of a prime contractor of federally subsidized construction projects and is awaiting sentencing.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia; the Department of Labor-Wage and Hour Division, under the direction of Acting Regional Administrator Mark Watson Jr.; Naval Criminal Investigative Service, under the direction of Special Agent in Charge Jeremy Gauthier, Northeast field office; and the Air Force Office of Special Investigations, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst.The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Andrew Bruck of the U.S. Attorney’s Office Organized Crime-Gangs Unit in Newark.
14-129
Defense counsel: Guillermo R. Arango Jr. Esq., New Brunswick, N.J.
Santos, Leonard and Rabinovich, Alex Indictment
Company Owner Pleads Guilty to Not Reporting Opelousas Housing Authority Bid ConspiracyRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that Kendall Anderson, 41, of Scott, La., pleaded guilty before U.S. District Judge Richard T. Haik to charges that he failed to report a conspiracy to award Opelousas Housing Authority construction bids to his company.
According to evidence presented at the guilty plea, from 2007 through 2009, the Opelousas Housing Authority awarded construction contracts primarily to Anderson Iron Works, owned by the defendant, without following the bid rules. Anderson admitted to assisting Garnett L. Thomas, who was the grant and capital funds coordinator for the OHA and who previously pleaded guilty to wire fraud, in creating false bid documents, so that it would appear that the OHA was following the bid rules and laws. Thomas and Anderson used the names and letterheads of other contractors to make it appear that several companies were placing bids on construction projects, but in fact, Anderson’s company was the only one being considered. After creating these false documents, they were placed in the OHA files to give the appearance that the bid laws were being followed, when in fact, the procurement policies were not followed on virtually every construction project from 2007 through mid-2009.
The defendant then failed to report to law enforcement in June of 2009 that he had knowledge of Opelousas Housing Authority Director Walter Guillory’s and Thomas’ plans to commit wire fraud by creating, sending and receiving fake bids by email in order to circumvent state and federal bid laws.Co-Leader of Moorhead Drug Conspiracy Receives 16 YearsRead the Press Release
FARGO – U.S. Attorney Timothy Q. Purdon announced that on April 14, 2014, David Ramiro Cerna Jr., 37, of Moorhead, Minn., was sentenced before U.S. District Judge Ralph R. Erickson to serve 16 years in prison for aiding and abetting the conspiracy to distribute methamphetamines and marijuana. Judge Erickson also ordered that Cerna Jr. pay a $100 special assessment to the Crime Victims Fund as well as 48 months supervised release.
The conspiracy involved the transportation of kilogram quantities of methamphetamine from Texas that was distributed in the Fargo-Moorhead area.
Co-conspirators also obtained large quantities of marijuana from the Minneapolis area and distributed it throughout the local area.In addition to today’s sentencing, Judge Erickson previously sentenced several other co-conspirators. Sean Ingebretson, of Fargo, N.D., was sentenced on Thursday April 10, 2014, to serve 12 years three months in prison for conspiracy to distribute methamphetamines.
Juan Cerna, David Cerna Jr.’s brother and co-leader of the conspiracy was sentenced on February 12, 2014 to 18 ½ years in prison.Other members previously sentenced from the Cerna organization include; Al Owen Johnson, Cassandra Anne Kasowski, Allison Schrelle Hunter, Jonathan Scott Lewis, Brandon Scott Elsenpeter and Steve Frederick Schmidt. Three other members are awaiting sentencing.
The case was investigated by Homeland Security Investigations, Drug Enforcement Administration, North Dakota Bureau of Criminal Investigations, Fargo and Moorhead Police Departments, and Cass County Drug Task Force.
First Assistant U.S. Attorney Chris Myers and Assistant U.S. Attorney Brett Shasky prosecuted the cases.
CEO and Managing Partner of Wall Street Broker-Dealer<br /> Charged with Massive International Bribery SchemeRead the Press Release
The chief executive officer and a managing partner of a New York-based U.S. broker-dealer were arrested today on felony charges arising from a conspiracy to pay bribes to a senior official in Venezuela’s state economic development bank.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge George Venizelos of the New York Office of the FBI made the announcement.
According to the indictment unsealed today, Benito Chinea and Joseph DeMeneses, who were the Chief Executive Officer and a managing partner, respectively, of a New York-based broker-dealer (Broker-Dealer), are accused of conspiring with others to pay and launder bribes to Maria de los Angeles Gonzalez de Hernandez, a senior official in Venezuela’s state-owned economic development bank, Banco de Desarollo Económico y Social de Venezuela (BANDES), in exchange for her directing BANDES’s financial trading business to the Broker-Dealer. DeMeneses was also charged with conspiring to obstruct an examination of the Broker-Dealer by the U.S. Securities and Exchange Commission (SEC) to conceal the true facts of the Broker-Dealer’s relationship with BANDES.
Chinea, 47, was arrested today in Manalapan, N.J., where he resides, and DeMeneses, 44, was arrested today in Fairfield, Conn., where he resides. In a separate action, the SEC announced civil charges against Chinea, DeMeneses and others involved in the bribery scheme.
“These senior Wall Street executives are accused of paying six-figure bribes to an official in Venezuela to secure foreign business for their firm,” said Acting Assistant Attorney General O’Neil. “Today’s charges show once again that we will aggressively pursue individual executives, all the way up the corporate ladder, when they try to bribe their way ahead of the competition.”
“These two defendants, senior executives at a U.S. brokerage firm, are the fifth and sixth people to be charged in an alleged conspiracy to corrupt the trading business of a state-run economic development bank of Venezuela,” said U.S. Attorney Bharara. “They are alleged to have bribed a willing officer at the bank to steer its overseas trading business to the defendants’ brokerage firm, reaping millions for these defendants and their partners in crime. This Office will not tolerate the kind of outright bribery and concealment that characterized this scheme.”
“As alleged in the indictment, Chinea and DeMeneses bribed Gonzalez to secure BANDES's financial trading business,” said FBI ADIC Venizelos. “DeMeneses compounded the Broker-Dealer’s illegal activities by conspiring to obstruct an investigation by regulators. The arrests today of Chinea and DeMeneses should be a reminder to all those in the business community that engaging in bribery schemes to secure business and make a profit is illegal. Together with our law enforcement partners, the FBI will continue to investigate bribery and fraud at all levels.”
According to the allegations in the indictment unsealed today, as well as other documents previously filed in Manhattan federal court, Chinea and DeMeneses worked at the headquarters of the Broker-Dealer in New York City. In 2008, the Broker-Dealer established a group called the Global Markets Group (GMG), which offered fixed income trading services for institutional clients in the purchase and sale of foreign sovereign debt. One of the Broker-Dealer’s GMG clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance. Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a commission.
As alleged in court documents, from late 2008 through 2012, Chinea and DeMeneses, together with three Miami-based Broker-Dealer employees, Ernesto Lujan, Tomas Alberto Clarke Bethancourt and Jose Alejandro Hurtado, participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer split the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in commissions from trades with BANDES. In order to conceal their conduct, Chinea, DeMeneses and their co-conspirators routed the payments to Gonzalez, frequently in six-figure amounts, through third-parties posing as “foreign finders” and into offshore bank accounts. In several instances, Chinea personally signed checks worth millions of dollars that were made payable to one of these purported “foreign finders” and later deposited in a Swiss bank account.
As further alleged in court documents, as a result of the bribery scheme, BANDES quickly became the Broker-Dealer’s most profitable customer. As the relationship continued, however, Gonzalez became increasingly unhappy about the untimeliness of the payments due her from the Broker-Dealer, and she threatened to suspend BANDES’s business. In response, DeMeneses and Clarke agreed to pay Gonzalez approximately $1.5 million from their personal funds. Chinea and DeMeneses agreed to use Broker-Dealer funds to reimburse DeMeneses and Clarke for these bribe payments. To conceal their true nature, Chinea and DeMeneses agreed to hide these reimbursements in the Broker-Dealer’s books as sham loans from the Broker-Dealer to corporate entities associated with DeMeneses and Clarke.
Court documents also allege that beginning in or around November 2010, the SEC commenced a periodic examination of the Broker-Dealer, and from November 2010 through March 2011, the SEC’s exam staff made several visits to the Broker-Dealer’s offices in Manhattan. In or about early 2011, DeMeneses and others involved in the scheme discussed that the SEC was examining the Broker-Dealer’s relationship with BANDES. DeMeneses and others agreed they would take steps to conceal the true facts of the Broker-Dealer’s relationship with BANDES, including by deleting emails, in order to hide the actual relationship from the SEC.
Chinea and DeMeneses were each charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and the Travel Act, five counts of violating the FCPA, and five counts of violating of the Travel Act. Chinea and DeMeneses were also charged with one count of conspiracy to commit money laundering and three counts of money laundering. DeMeneses was further charged with one count of conspiracy to obstruct justice.
Previously, on Aug. 29 and Aug. 30, 2013, Lujan, Hurtado and Clarke each pleaded guilty in Manhattan federal court to conspiring to violate the FCPA, to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses, relating, among other things, to the scheme involving bribe payments to Gonzalez. On Nov. 18, 2013, Gonzalez pleaded guilty in Manhattan federal court to conspiring to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses, for her role in the corrupt scheme.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This ongoing investigation is being conducted by the FBI, with assistance from the Criminal Division’s Office of International Affairs. The department appreciates the substantial assistance provided by the SEC.
Senior Deputy Chief James Koukios and Trial Attorney Maria Gonzalez Calvet of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution. Assistant U.S. Attorney Carolina Fornos is responsible for the forfeiture aspects of the case.
Additional information about the Justice Department’s FCPA enforcement efforts can befound at www.justice.gov/criminal/fraud/fcpa .
Burlington County Man Sentenced to 30 Years in Prison for Producing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A Burlington County, N.J., man was sentenced today to 30 years in prison for his role in producing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
David Clark, 49, of Southampton, N.J., previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez in to an information charging him with three counts of producing child pornography. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From 2004 through March 9, 2011, Clark employed, used, persuaded, induced, enticed or coerced three separate minor victims to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.
In addition to the prison term, Judge Rodriguez sentenced Clark to a lifetime term of supervised release.
U.S. Attorney Fishman credited special agents of the FBI=s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; investigators with the Burlington County Prosecutor=s Office, under the direction of Prosecutor Robert D. Bernardi; and detectives with the N.J. State Police, under the direction of Col. Rick Fuentes, and the N.J. Regional Computer Forensic Laboratory, with the investigation leading to today=s sentencing.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the Criminal Division in Camden.
14-131
Defense counsel: Lori M. Koch Esq., Assistant Federal Public Defender, Camden
Broward County Resident Sentenced in Identity Theft Tax Refund Fraud Scheme Involving Theft of Hundreds of TIAA-CREF Clients’ Personal Identifying InformationRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that defendant Jeffrey Alexander Martin, 27, of Broward County, was sentenced by U.S. District Judge Robin S. Rosenbaum to 99 months in prison, followed by three years of supervised release. Martin was also ordered to pay $197,088 in restitution.
Martin and co-defendant Tobin Lamar Lyon, II, a/k/a/ Tobe Kasa, 27, of Charlotte, North Carolina, previously pled guilty to one count of wire fraud conspiracy, in violation of Title 18, United States Code, Section 1349, and one count of aggravated identity theft, in violation of Title l8, United States Code, Section 1028A(a)(1). Judge Rosenbaum’s sentencing decision as to Martin was largely influenced by the fact that Martin committed the exact same crime, after pleading guilty in this case, when he was arrested with new access devices including gift cards that he had converted into credit and debit cards by encoding the credit card numbers and bank account information of victims on those cards. Lyon was sentenced on January 6, 2014 to 72 months in prison, followed by three years of supervised release. Lyon was also ordered to pay $118,602.52 in restitution.
According to court documents, Lyon worked as a service representative for Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), a financial services company specializing in providing retirement services to those in the academic, research, medical and cultural fields. As an employee of TIAA-CREF, Lyon had access to the names, addresses, social security numbers, and dates of birth of TIAA-CREF's clients.
Court documents state that Lyon, in anticipation of a share of the proceeds, provided Martin with personal identifying information (PII) belonging to individual clients of TIAA-CREF for the purpose of filing fraudulent tax returns claiming tax refunds in those clients' names. Lyon sent over 500 different identities to Martin. For the tax years 2011 and 2012, the total amount of fraudulent refunds claimed by Martin as a result of the stolen PII he received from Lyon is approximately $304,611. From those fraudulent returns, Martin received approximately $5,776 in fraudulent refunds. Lyon knowingly possessed and transferred the victims' means of identification without authority and permitted Martin to use the stolen PII to file these fraudulent returns. During the time that Lyon was providing stolen PII of TIAA-CREF clients to Martin, he was also providing stolen PII to others in New York for the purpose of raiding the TIAA-CREF clients' bank accounts.
Mr. Ferrer commended the investigative efforts of IRS-CI, and thanked the Sunrise Police Department for its assistance in this case. The case is being prosecuted by Assistant U.S. Attorney Alicia E. Shick.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Bismarck Man Sentenced for Killing His Brother on the Spirit Lake Indian ReservationRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on April 14, 2014, Orlen Francis Smith, Jr., 26, of Bismarck, N.D., was sentenced before U.S. District Judge Ralph R. Erickson to serve 14 years in prison for voluntary manslaughter, assault resulting in serious bodily injury and assault with a dangerous weapon.
On Feb. 25, 2013, Smith Jr., an enrolled member of the Fort Berthold Indian Reservation, went to the home of his brother, Daniel Smith, located in St. Michael, N.D., on the Spirit Lake Indian Reservation where an altercation occurred between Smith Jr. and his brother, Daniel Smith. Smith Jr. armed with a switchblade knife, swung at his brother striking Daniel in the side of his chest, piercing his heart. Daniel died at the scene. Smith Jr. then attacked two others in the residence, puncturing one person in the forearm with the knife and another individual suffered a laceration on the forehead.
Judge Erickson also ordered Smith to pay restitution in the amount of $11,436.50 and a $300 special assessment to the Crime Victims Fund.
The case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Janice M. Morley is prosecuting the case.
Beford Man Sentenced for Conducting Bank RobberyRead the Press Release
CONCORD, NEW HAMPSHIRE –Jonathan Talbot, 27, of Bedford, was sentenced in United States District Court for the District of New Hampshire 41 months in prison, for engaging in a bank robbery, announced United States Attorney John P. Kacavas.
On May 30, 2013, the Manchester Police Department responded to Citizens Bank at 2035 Brown Avenue for a report of a robbery. Upon arrival, a bank teller indicated that she was working at her station when a caucasian male, who appeared to be in his mid-30s and approximately 5’5”, 140 pounds, wearing a short-sleeved white button-down shirt, gray beret and eyeglasses, entered the bank and walked over to a table, which contained blank deposit slips while speaking on a cellular telephone. He wrote on a slip, walked to her station and handed her a deposit slip which stated, “All unmarked bills. I have a gun give back note! Be calm!” The teller gave Talbot all of the currency from her register.
Talbot left the bank in a grey Audi. Following the robbery, law enforcement determined that the 2003 silver Audi A4, was registered to Jonathan Talbot of Bedford, New Hampshire. At 3:50 p.m. on May 30, 2013, approximately one hour after the robbery, law enforcement traveled to Talbot’s residence
A search warrant was obtained for the 2003 Gray Audi A4, and law enforcement recovered a black plastic framed pair of eyeglasses. A search warrant was also obtained for the residence and seized from Jonathan Talbot’s bedroom closet was a backpack which was found to contain the white shirt, hat, shorts and shoes worn during the robbery. Also recovered from within the backpack was $4,268.00 in $50.00, $20.00, $10.00, $5.00 and $1.00 denominations.
The case was investigated by the Manchester, New Hampshire, Police Department, the Bedford, New Hampshire, Police Department, and the Federal Bureau of Investigation, and prosecuted by Assistant United States Attorney Terry L. Ollila.
Attorney Charged with Filing False Immigration Documents on Behalf of Alien/ClientRead the Press Release
ATLANTA - Bonnie Monique Youn has been arraigned on federal charges that she submitted false documentation to the United States on behalf of a client who was an alien seeking lawful permanent resident status in the United States, inducing the alien to reside unlawfully in the United States, and witness tampering.
“We expect lawyers to uphold and defend the rule of law, not assist clients in breaking the law, as Ms. Youn is charged in this indictment,” said United States Attorney Sally Quillian Yates. “Specifically, Ms. Youn is charged with obtaining legal status for a client in this country by filing false documents with the United States Government, and encouraging them to lie to federal agents.”
“The defendant stands accused of illegally attempting to manipulate our immigration system for her own personal gain,” said HSI Atlanta Special Agent in Charge Brock Nicholson. “Homeland Security Investigations and the partner agencies on our Document and Benefit Fraud Task Force work diligently to preserve the integrity of our immigration system by aggressively investigating these types of fraud.”
According to United States Attorney Yates, the charges and other information presented in court: From February 9, 2009, to the present, Bonnie Monique Youn, an immigration attorney, encouraged and induced an alien, identified by her initials in the indictment, to reside in the United States in violation of the law, and for Youn’s financial benefit. Youn also filed documents with immigration that were false with respect to material facts, thereby engaging in visa fraud. Then, once the investigation was underway, Youn engaged in witness tampering by contacting the alien and encouraging her to provide false information to federal agents when they questioned her.
Bonnie Monique Youn, 44, of Atlanta, Ga., was arraigned today before United States Magistrate Judge Gerrilyn G. Brill. Youn, who was indicted by a federal grand jury on April 1, 2014, was released on a $25,000 unsecured bond, and ordered to surrender her United States passport.Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Homeland Security Investigations (HSI) Document Benefit Fraud Task Force comprised of Special Agents with HSI, the United States Department of Labor-Office of the Inspector General, the United States Department of State, Diplomatic Security Service, as well as Fraud Detection/National Security Officers of the United States Citizenship and Immigration Services.
Assistant United States Attorneys Susan Coppedge and William L. McKinnon, Jr. are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Attleboro Man Charged with Possession of Child PornographyRead the Press Release
BOSTON – The office manager of a sober house in Attleboro was charged today with possessing child pornography.
Michael Paterson, 53, was charged via a criminal complaint with possession of child pornography. Paterson remains in custody and is scheduled for a probable cause detention hearing on April 18, 2014 in the U.S. District Court in Worcester.
The criminal complaint alleges that Paterson was observed viewing child pornography by a resident of the sober house on two occasions. A search warrant was executed at the residence and uncovered multiple computers, CPU units, hard drives, thumb drives, CDs, DVDs, and printers containing pictures of children being sexually exploited. Additionally, a lock-box containing a black stun gun and $71,502 was seized. A second search warrant was executed on Paterson’s car and multiple computer storage devices, printed images of children being sexually exploited, and $1500 was recovered.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Special Agent in Charge of the U.S. Postal Inspection Service; and Attleboro Police Chief Kyle P. Heagney, made the announcement today. The case is being prosecuted by Kenneth G. Shine of Ortiz’s Major Crimes Unit.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.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Alabama Man Sentenced for Attempting to Hire Ku Klux Klan to Kill NeighborRead the Press Release
Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division, U.S. Attorney Joyce White Vance for the Northern District of Alabama and FBI Special Agent in Charge Richard D. Shwein Jr. announced that a Talladega County, Ala., man was sentenced in federal court today for attempting to hire members of the Ku Klux Klan (KKK) to murder an African-American neighbor
Allen Wayne Densen Morgan, 29, of Munford, Ala., pleaded guilty before U.S. District Judge Karon O. Bowdre on Oct. 24, 2013, to one count of using and causing someone else to use interstate facilities and travel with the intent to commit a murder-for-hire. At today’s sentencing hearing, Judge Bowdre sentenced Morgan to serve 72 months in prison to be followed by three years of supervised release.
Morgan previously admitted that in August 2013, he attempted to hire members of the KKK to murder his neighbor. According to Morgan’s plea agreement, on Aug. 22, 2013, Morgan spoke on the phone with an undercover FBI agent, who identified himself as a KKK member. The men arranged to meet three days later at an Oxford, Ala., motel to discuss payment for the murder. In that phone conversation, Morgan used a racial slur to describe the man he wanted killed and bragged that he had just fired several shots toward the man to intimidate him. Morgan also described, in detail, how he wanted the man to be “hung from a tree like a deer and gutted,” to have body parts cut off and to “die a slow, painful death.” On August 25, Morgan met with FBI agents posing as members of the KKK. Morgan offered a watch, a necklace and a gun as payment for the murder and gave explicit directions for the man’s torture and murder.
“The defendant attempted to have his neighbor tortured and murdered by the KKK,” said Acting Assistant Attorney General Samuels. “Today’s sentence demonstrates that the Justice Department will continue to aggressively prosecute those who act on their racial hatred by seeking to inflict such acts of violence on others.”
“Mr. Morgan detailed his calculated desire to end his neighbor's life through the most brutal and heinous means,” said U.S. Attorney Vance. “Today's sentence reinforces that vigilantism is not acceptable in our society and we will prosecute that crime.”
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Pat Meadows and Brad Felton of the Northern District of Alabama and Civil Rights Division Trial Attorney David Reese.
2 Haitian Men Arrested in Alien Smuggling Conspiracy That Killed 8Read the Press Release
St. Thomas, USVI – Dieuseul Mompremier, 44, and Lamorthe Delva, 45, both Haitian nationals, were arrested Friday on St. Thomas after a federal grand jury returned a 10-count indictment charging them with conspiracy to smuggle illegal aliens into the United States, United States Attorney Ronald W. Sharpe announced today. After their arrest, Mompremier and Delva made their initial appearance before U.S. Magistrate Judge Ruth Miller, who ordered Delva held without bail pending trial, and continued Mompremier’s detention hearing to Thursday, April 17.
According to the indictment, in December 2010, Mompremier, Delva and Roro Edourre, 46, conspired with each other and additional co-conspirators to smuggle illegal aliens into St. John, U.S. Virgin Islands. On December 5, 2010, Edourre was the captain on the vessel “Jesus La,” with approximately 33 passengers, most of them Haitian nationals, including men, women and children, when the vessel traveled from St. Maarten, Netherlands Antilles, to the U.S. Virgin Islands. While Edourre was transporting the illegal aliens on the vessel, Mompremier and Delva waited in the U.S. Virgin Islands and communicated with their co-conspirators by telephone. The U.S. Coast Guard spotted the vessel carrying Edourre and his passengers, and Edourre attempted to evade the Coast Guard. While attempting to evade the Coast Guard, the “Jesus La” ran aground and sank, resulting in the death of at least eight individuals, including four children.
In addition to conspiracy to smuggle aliens, Mompremier, Delva and Edourre are charged with unlawfully attempting to bring aliens into the United States. Mompremier also is charged with transportation of an alien within the United States on or about December 28, 2011. Edourre also was prosecuted for manslaughter in the British Virgin Islands, where he is currently serving his sentence.
The 10-count indictment is the result of months of investigative work by U.S. Immigration and Customs Enforcement, Homeland Security Investigations.
USA Sharpe reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
"Enforcer" for Atlantic City "Dirty Block" Gang Admits Participating in Heroin Trafficking ConspiracyRead the Press Release
CAMDEN, N.J. - An Atlantic City, N.J., man admitted today to engaging in a conspiracy to distribute heroin with the “Dirty Block” criminal street gang that allegedly used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City.
Shaamel Spencer, a/k/a “Buck,” 30, pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin, and one count of being a previously convicted felon in possession of a firearm.
According to documents filed in this case and statements made in court: During the period of the conspiracy Spencer acted as an “enforcer” on behalf of Mykal Derry, 33, of Atlantic City, helping Dirty Block to control the heroin trafficking trade in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court in Atlantic City. Spencer assisted in the distribution of heroin to Dirty Block customers.
Spencer was arrested on October 30, 2012, and found to be in possession of a firearm at the time of the arrest. On February 12, 2013, Spencer was charged federally with being a previously convicted felon in possession of a firearm and ammunition. A search warrant executed at Spencer’s residence at the time of his arrest revealed approximately $4,500 in suspected drug proceeds, as well as a 9mm semi-automatic handgun and approximately 44 rounds of 9mm ammunition.
Spencer and other members of the Dirty Block gang – a number of them previously convicted felons – travelled to a shooting range in Lakewood, N.J., where they were photographed firing handguns.
As part of his guilty plea, Spencer admitted to distributing heroin. He also admitted to being a previously convicted felon who possessed firearms and ammunition, and that specifically, he took a handgun to an Atlantic City casino where he believed Derry was involved in a violent fight with his rivals. Spencer also agreed to forfeit the proceeds of his drug trafficking as well as his firearms and ammunition.
The drug conspiracy charge carries a minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and maximum $5 million fine. The felon-in-possession charge carries a maximum potential penalty of 10 years in prison and a maximum $250,000 fine. Sentencing is scheduled for July 22, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Police Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang Task Force, with the investigation.
The charges and allegations in the indictment charging Derry are merely accusations and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorneys Patrick C. Askin and Justin C. Danilewitz.14-130
Defense counsel: Assistant Federal Public Defender Maggie Moy Esq., Camden
Spencer, Shaamel Information
11 April 2014
Wilson Man Sentenced for Federal Firearm ViolationRead the Press Release
NEW BERN – United States Attorney Thomas G. Walker announced that yesterday in federal court, United States District Judge Louise W. Flanagan sentenced KENNETH RAY CANADY , 49, of Wilson to 94 months imprisonment, followed by 3 years of supervised release.
CANADY was named in an Indictment filed on April 24, 2012 charging him with one count of Possession with the Intent to Distribute a Quanitity of Cocaine Base in violation of Title 21, United States Code, Section 841(a)(1) and one count of Felon in Possession of a Firearm, in violation of Title 18, United States Code 922(g)(1) and 924. On November 16, 2012, CANADY pled guilty to the Felon in Possession of a Firearm charge.
According to the investigation, an officer from the Wilson Police Department conducted a traffic stop on January 19, 2011 of a vehicle being driven by CANADY. A subsequent search of the vehicle resulted in the seizure of 6.7 grams of cocaine base, a .38 caliber revolver, and $5,298 in U.S. currency. CANADY was previously convicted of a felony and he is prohibited from possessing a firearm.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Wilson Police Department and the Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF). Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Williston Man Pays $100,000 to Settle Spa Forfeiture ClaimRead the Press Release
The Office of the United States Attorney for the District of Vermont announces that it has reached a settlement in the civil forfeiture matter involving the previous home of the Harmony Spa at 5649 Williston Road, in Williston, Vermont. In a complaint filed on June 28, 2013, the United States alleged that the Williston property owned by Thomas Booska, age 68, of Burlington, Vermont, was forfeitable to the government because it was used to house individuals who were induced or encouraged to come to Vermont from out of state for purposes of engaging in prostitution or other commercial sex acts. While admitting that he is the owner of the Williston property and that Harmony Spa had been located at the Williston property, Booska generally denied the allegations of the complaint.
The complaint alleged that in May 2011, Booska was advised by law enforcement that it had received reports of commercial sex acts taking place at the Harmony Spa located at the Williston property. At that time, Booska was further advised that if such activity continued, the property would be subject to forfeiture by the United States Attorney’s Office. The complaint further alleged that despite this warning, in the Fall of 2012 and thereafter, Booska was providing housing and transportation to Asian females, who he knew had traveled from out of state to Vermont with the intent of engaging in sexual acts for pay as part of their services at Harmony Spa. According to information filed with the complaint, several sources of information reported that they had been offered sexual services at the Harmony Spa, including a service referred to as a “happy ending.” The complaint alleged that the property was subject to forfeiture because its use in facilitating the activities of the Harmony Spa was a violation of the Mann Act, which governs crimes related to travel in interstate commerce for the purpose of prostitution or other commercial sex activity.The forfeiture action was initially stayed by the parties pending the outcome of a related criminal case against Booska in Vermont Superior Court. On April 9, 2014, the Honorable William K. Sessions III, United States District Judge, lifted the stay and approved a settlement agreement between Booska and the United States. Pursuant to the terms of the settlement agreement, Booska agreed to forfeit to the United States $100,000 in place of the Williston property no later than ninety days from the entry of the Court’s Order. Failure to pay within that time frame will result in forfeiture of the Williston property to the government. The settlement agreement also contemplates the sale of the property to individuals who have previously run a hair and nail salon in Colchester, Vermont.
The United States was represented in this matter by Assistant United States Attorney Heather E. Ross. Thomas Booska was represented by Kurt Hughes, Esq. of the Burlington law firm Murdoch, Hughes, and Twarog. The matter was investigated by the United States Immigration and Customs Enforcement (ICE), Homeland Security Investigations, and the Williston Police Department.Whiteville Farmer Sentenced for Mail Fraud and Grain Theft SchemeRead the Press Release
NEW BERN – United States Attorney Thomas G. Walker announced that yesterday in federal court, United States District Judge Louise W. Flanagan sentenced JOHN PAUL SMITH , aged 48, of Whiteville, North Carolina to 24 months imprisonment, followed by 3 years of supervised release.
SMITH was sentenced after pleading guilty to committing mail fraud, in connection with a scheme to defraud Murphy Brown, LLC, which is the Warsaw, North Carolina, based pork production subsidiary of Smithfield Foods.
In 2008, SMITH, who was a farmer and grain broker operating in Whiteville, North Carolina, entered into a business relationship with Murphy Brown, LLC, whereby he served as a grain broker, purchasing corn and soybeans from local farmers for Murphy Brown’s hogs. Under the terms of their agreement, local farmers from whom SMITH purchased corn and soybeans were to make deliveries to SMITH’s grain elevator in Whiteville. In turn, Murphy Brown would take delivery of corn and soybeans from SMITH’s Whiteville grain elevator.
Over the course of their business relationship, Murphy Brown discovered unexplained shrinkage in their supplies of corn and soybeans that SMITH had allegedly purchased on their behalf.
Evidence presented to the Court established that SMITH began “shorting” Murphy Brown with respect to the corn and soybeans that he had been purchasing for the company. Essentially what SMITH did was charge Murphy Brown for corn and soybeans which he never delivered to them. The Court found that, from 2010 and 2011, SMITH purloined 38,645 bushels of soybeans worth approximately $387,000.00 and corn worth approximately $735,000.00 that was paid for by Murphy Brown, but never delivered to them. This amounts to over 200 truckloads of grain. The Court also found that Murphy Brown suffered a “hedging loss” in the amount of approximately $375,000.00. By the time Murphy Brown realized that a substantial amount of its corn was missing, the price of corn had increased, and the company was forced to replace it at a higher market value.
SMITH has been ordered to report to prison no later than July 15, 2014.
The case was investigated by the Federal Bureau of Investigation (FBI) and the North Carolina State Bureau of Investigation (SBI). Assistant U.S. Attorney Evan Rikhye handled the prosecution of this case on behalf of the Eastern District of North Carolina.
Whiteriver Man Sentenced to 14 Years in Prison for Domestic Violence AssaultRead the Press Release
PHOENIX– On April 8, 2014, Ronald Josh Lupe, 27, of Whiteriver, Ariz. was sentenced by U.S. District Judge Paul G. Rosenblatt to 14 years imprisonment. Lupe pleaded guilty on Dec. 9, 2013 to two counts of assault resulting in serious bodily injury
During Lupe’s approximately two year relationship with his girlfriend, he physically abused her on multiple occasions. The victim was hospitalized a number of times as a result of Lupe’s abuse, resulting in her sustaining serious bodily injury.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Bureau of Indian Affairs. The prosecution was handled by Dimitra H. Sampson, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-2013-08026-PCT-PGR
RELEASE NUMBER: 2013-023_LupeFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
West Palm Beach Police Officer Charged with Selling Controlled Substances While in Uniform and on DutyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, David W. Bourne, Special Agent in Charge, Food and Drug Administration, Office of Criminal Investigations, Miami Field Office, and Vincent Demsi, Chief, West Palm Beach Police Department, announce the filing of charges against Dewitt McDonald, 45, of Wellington. Initial appearance for McDonald is scheduled for Tuesday, April 15, 2014, in Fort Lauderdale before U.S. Magistrate Judge Alicia O. Valle.
According to the information filed with the Court, the defendant was a police officer with the West Palm Beach Police Department. Dewitt McDonald was charged with one count of knowingly carrying a firearm during and in relation to a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A). If convicted, the defendant faces a minimum sentence of five years in prison and a maximum statutory sentence of up to life in prison.
The information against McDonald charges that, while employed as a police officer, the defendant operated two businesses: Prime Performance Wellness Centers, Inc., located in Lake Worth, and Prime Health and Rejuvenation Clinic, located in Wellington, through which he unlawfully distributed anabolic steroids and other prescription drugs. The information further alleges that on March 5, 2013, while on duty and carrying his Smith & Wesson MP40 pistol, the defendant made a delivery of these drugs to someone in Palm Beach County, Florida.
Mr. Ferrer commended the investigative efforts of the FBI, FDA Office of Criminal Investigations. Mr. Ferrer also thanked the West Palm Beach Police Department for their cooperation and assistance in this matter. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan.
An information is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Week in Review – South BendRead the Press Release
South Bend, Indiana — The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS before Magistrate Judge Christopher A. Nuechterlein:
Shan Skinner, 44, of Portage, Indiana pled guilty to the felony offense of being a felon in possession of a firearm . The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.Sentencing has been set for 7/17/2014.This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
Willie Long, 23, of Elkhart, Indiana pled guilty to the felony offense of being a felon in possession of a firearm . The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.Sentencing has been set for 7/15/2014.This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS before District Judge Jon E. DeGuilio:
Angela White, 28, of South Bend, Indiana was sentenced to 2 years supervised probation and to pay $36,705 in restitution after pleading guilty to the felony offense of conspiracy to defraud the United States Department of the Treasury.According to documents filed in this case, White participated with others in a false tax return preparation and filing scheme in South Bend, Indiana. Individuals prepared and submitted Forms 1040, U.S. Individual Income Tax Returns, with false or inflated Forms W-2 to obtain false tax refunds. Within the scheme approximately 1,189 tax returns were submitted for tax years 2008, 2009, and 2010 requesting a total of approximately $3,543,794.00 in tax refunds. White opened and controlled bank accounts that received tax refunds from these false tax returns. This case was the result of an investigation by the Internal Revenue Service.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Brian Lindsey, 27, of La Porte, Indiana was sentenced to 1 year supervised probation, 94 hours community service, and to pay $680, $100 in restitution after pleading guilty to the felony offense of passing counterfeit Federal Reserve notes.According to documents filed in this case, in December 2012, Lindsey purchased two Nook Notebook tablet computers using counterfeit Federal Reserve Notes in the denomination of twenty dollars in the total amount of $240 at a local department store.Lindsey was aware the bills were falsely made, forged and counterfeited at the time that he gave them to the cashier.This case was the result of an investigation by the United States Secret Service.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS before District Roger B. Cosbey:
Stefanie Redfern, 31, of Fort Wayne, Indiana pled guilty to the felony offense of maintaining a drug involved premises. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the U.S. Department of Homeland Security, U.S. Drug Enforcement Administration, United States Postal Service, and the Indiana State Police.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Tina Nommay.
Hayley VanDurmen, 23, of Fort Wayne, Indiana pled guilty to the felony offense of knowingly selling a firearm to a convicted felon and aiding and abetting. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Lovita Morris-King.
Christopher Smith, 31, of Fort Wayne, Indiana pled guilty to the felony offense of being a felon in possession of a firearm. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Tina Nommay.
Eddie Carlisle, 26, of Fort Wayne, Indiana pled guilty to the felony offense of being a felon in possession of a firearm. The magistrate is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.Sentencing has not been set.This case is being prosecuted by Assistant United States Attorney Anthony Geller.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITION before District Judge Theresa L. Springmann:
Contrel Johnson, 23, of Fort Wayne, Indiana was sentenced to 57 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of being a convicted felon in possession of a firearm.According to documents filed in this case, on February 3, 2013, Fort Wayne Police Department stopped Johnson while driving due to potential intoxication while operating the vehicle.Officers searched Johnson’s vehicle and found a loaded firearm in the glove box.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.This case was prosecuted by Assistant United States Attorney Lovita Morris-King.
U. S. Attorney Barry Grissom to SpeakAt Civil Rights Symposium Wednesday at WSURead the Press Release
WICHITA, KAN. U.S. Attorney Barry Grissom will speak to open the U.S. Attorney’s Fourth Annual Statewide Civil Rights Symposium Wednesday, Aug. 13, 2014, at Wichita State University.
“Law enforcement has a key role to play in building a society that allows all people to fully realize their potential,” Grissom said.
A report on racial profiling produced by Wichita State University will be one of the highlights of the day-long conference, which is expected to draw civil rights advocates and law enforcement officers from across the state. Michael Birzer, Director of WSU’s School of Community Affairs, will speak on racial profiling and the results of a study for the City of Wichita showing that during a six-month period African-Americans accounted for 22 percent of the people receiving traffic violations in Wichita. African-Americans make up about 11 percent of the city’s population.
The conference will be held from 9 a.m. to 4 p.m. in Room 132 at WSU’s Metropolitan Complex at 5015 E. 29th North. It is free and open to the public, but enrollment is required. Registration forms are available online at the U.S. Attorney’s Web site: http://www.justice.gov/usao/ks/
The symposium also will include:
- A look at the federal Community Relations Service, which provides mediation, facilitation and training on federal civil rights issues.
- A presentation on hate crimes by the FBI.
- A civil rights panel discussion moderated by U.S. Attorney Barry Grissom. Panel members will include Hussam Madi, spokesperson for the Islamic Society of Wichita; Holly Weatherford, advocacy director for the American Civil Liberties Union of Kansas; Wade Moore, president of the Greater Wichita Ministerial League; and Thomas Witt, executive director of Equality Kansas.
The U.S. Department of Justice is responsible for upholding the civil and constitutional rights of all Americans. It enforces federal statutes prohibiting discrimination on the basis of race, color, sex, disability, religion, familial status and national origin.
Sponsors for the symposium include the U.S. Attorney’s Office, the Midwest Criminal Justice Institute at WSU, the Kansas Law Enforcement Training Center, the School of Community Affairs at WSU and the Regional Policing Training Institute at WSU.
For more information, call Jim Cross, public information officer, at 316-269-6552.Two Tax Preparers Sentenced in Stolen Identity Tax Refund Fraud Scheme and Other Types of Tax FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Geto Dorlizier, 35, of Boynton Beach, and Jourmel Thomas, 48, of Lake Worth, were sentenced for their participation in a scheme to commit stolen identity tax refund fraud and other types of tax fraud. Dorlizier was sentenced to 111 months in prison, to be followed by three years of supervised release. Thomas was sentenced to 61 months in prison, to be followed by three years of supervised release.
Each defendant previously pled guilty to one count of conspiracy to steal, receive, and retain money and things of value of the United States and to forge endorsements on and cash U.S. Treasury checks, in violation of Title 18, United States Code, Sections 371, 641, 510(a)(1) and 510(a)(2); count three, which charges the defendant with receipt and retention of things of value of the United States, in violation of Title 18, United States Code, Section 641; and count eight, which charges the defendant with aggravated identity theft, in violation of Title 18, United States Code, Section 1028(a)(1).
According to the facts agreed to in the plea agreements and at sentencing, Dorlizier and Thomas, who are brothers, each operated tax preparation businesses. Dorlizier was operating Atlantic Multi-Services, LLC (Atlantic Multi-Services) in Delray Beach by at least 2011. Thomas operated JTS Paperworks and Tax Services in Lake Worth in 2013. Between them, the two businesses submitted 706 Federal income tax returns that were fraudulent either in that the taxpayer did not know about or authorize the return to be filed or in that the return contained significant material falsehoods, or both. Based on these fraudulent returns, the Treasury Department paid more than $1.6 million in tax refunds.
Mr. Ferrer commended the investigative efforts of the FBI and IRS-CI. The case was prosecuted by Assistant U.S. Attorney Marc Osborne.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Indicted on Conspiracy, Hobbs Act Robbery and Firearm Charges in Alleged Robbery and Shootout in Woonsocket ResidenceRead the Press Release
PROVIDENCE, R.I. – A federal grand jury in Providence has returned a three-count indictment charging Tyronne Seams, 28, of Woonsocket, R.I., and David Bunnell, 21, of Franklin, Mass. with allegedly participating in a conspiracy and Hobbs Act Robbery and with discharging firearms during a crime of violence during an alleged robbery and shootout inside a Woonsocket residence in September 2013. If convicted, the defendants face a mandatory minimum of 10 years and up to life in federal prison.
The indictment, which charges Seams and Bunnell with one count each of conspiracy to commit Hobbs Act robbery, Hobbs Act robbery and use and discharge of a firearm in furtherance of crimes of violence, was announced by United States Attorney Peter F. Neronha and Woonsocket Police Chief Thomas S. Carey.
According to documents filed with the court, in the early morning hours of September 12, 2013, Woonsocket Police responded to reports of gunfire at a multi-family residence. Upon arrival, Woonsocket officers encountered Seams and Bunnell allegedly attempting to leave the building. As police arrived, Seams and Bunnell allegedly fled back inside the building.
According to court documents, officers located Bunnell in the basement where they also seized a sawed-off shotgun and a 9mm semi-automatic pistol. Seams was located on the floor of a second floor landing suffering from an apparent gun shot. Police seized a packet containing approximately 80 grams of cocaine from Seams’ pocket and a .41 caliber revolver was located nearby.
According to court documents, inside a second floor apartment officers discovered a substantial amount of blood; numerous spent shell casings from at least two firearms; bullet holes in the kitchen counter, bathroom door and bathroom wall; an individual with a head wound from blunt force trauma; and materials allegedly associated with the preparation and sale of drugs. Another individual who allegedly suffered a gunshot wound while at the residence made his way out of the building before police arrived and drove himself to a nearby hospital.
According to information presented to the court, the investigation revealed that Seams and Bunnell allegedly forcibly stole cocaine from inside the apartment and allegedly inflicted physical violence on persons inside the apartment in the course of the robbery.
Seams and Bunnell have been detained since their arrest. They are scheduled to be arraigned in U.S. District Court on April 16, 2014.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.
Woonsocket Police were assisted in the investigation of this matter by agents and officers from ATF, the DEA Drug Task Force, Rhode Island State Police, North Smithfield Police Department and the Franklin and Blackstone, Mass., Police Departments.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Three Men Sentenced to Federal Prison for Credit Card Fraud ConspiracyRead the Press Release
Orlando, Florida – Chief U.S. District Judge Anne C. Conway yesterday sentenced Andre Aldain Flemming (23, Brooklyn, NY), Jim Lee Jean (21, Margate), and Harry Cancel-Velez (24, Kissimmee) for their roles in an access device fraud conspiracy. Flemming was sentenced to 4 years’ imprisonment, Jean was sentenced to a term of 2 years in prison and Cancel-Velez was sentenced to 1 year in prison. All three individuals pleaded guilty between December 2013 and January 2014.
According to court documents and evidence presented at the sentencing hearing, Flemming, Jean, and Cancel-Velez participated in a conspiracy that involved the production of counterfeit credit or debit cards using account numbers belonging to other individuals, which were obtained online. Flemming acted as the leader of the conspiracy and produced the counterfeit cards using compromised account numbers. Once Flemming produced the counterfeit cards, he provided them to Jean, Cancel-Velez, and other co-conspirators. The individuals then used the cards to make fraudulent purchases at retail stores. The co-conspirators provided the fraudulently purchased merchandise to Flemming. Flemming then paid them a fee and then sold the merchandise on the street for a profit.
On April 3, 2014, three other indicted co-conspirators, Nicholas Aaron Brown, Donald Napoleon, and Renington Javier Noa were also sentenced to federal prison as part of this investigation. Brown and Napoleon were both sentenced to 2 years in federal prison. Noa was sentenced to 4 years in federal prison.
This case was investigated by the United States Secret Service, with assistance from the Osceola County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Andrew C. Searle.
Tennessee Sex Offender Sentenced to 27 Years for Enticing a Minor for Sex via the InternetRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Tennessee man, who is a registered sex offender, has been sentenced in federal court for using the Internet and a cell phone to attempt to entice a minor to engage in sexual activity.
John Richard Fortenberry, Jr., 38, of Murfreesboro, Tenn., was sentenced by U.S. District Judge Greg Kays on Wednesday, April 9, 2014, to 27 years in federal prison without parole.
Fortenberry, who pleaded guilty on Nov. 26, 2013, was a registered sex offender in Tennessee at the time of the offense. He was previously convicted of indecent liberties with a child.
In January 2013, an acquaintance of Fortenberry contacted the FBI to report that he was in contact via Facebook with a 12-year-old girl in the Kansas City, Mo., area. Their Facebook messages indicated that Fortenberry was planning to travel to Kansas City to meet the victim in person and engage in sexual activity.
According to court documents, the federal investigation established that Fortenberry had been in constant and continual contact with the minor victim via Skype, Facebook, e-mail and phone since she was 11 years old. Fortenberry and the minor victim would mutually masturbate and watch pornography together while talking on Skype.
FBI agents found approximately 1,200 text messages between Fortenberry and the minor victim, dating back to November of 2012, on the victim’s cell phone. Agents also discovered a video of Fortenberry masturbating and nude photographs of the victim on the cell phone.
Fortenberry was controlling, threatening, and coerced the minor victim, according to court documents. The minor victim stated that Fortenberry, who had access to her Facebook account, deleted any of her friends whom he thought were a “threat.” The minor victim also reported that Fortenberry controlled her activity on Facebook and threatened her to the point that she was scared. He threatened to commit suicide if the minor victim did not follow his orders to reformat her computer in order to hide evidence from law enforcement.
After Fortenberry became aware of the investigation, he not only coerced the victim into reformatting her computer, but he reformatted his own hard drive to hide evidence of the crime.
After Fortenberry was arrested and incarcerated he made numerous attempts to contact the victim. According to court documents, law enforcement officers obtained letters from Fortenberry’s mother that were written and sent to her by Fortenberry. In these letters he instructed his mother to communicate with the minor victim on his behalf, and asked his mother to send him photographs of the victim.
This case was prosecuted by Assistant U.S. Attorney Teresa Moore. It was investigated by the FBI and the Lee County, N.C., Sheriff’s Department.
Seven Charlotte Men Sentenced for Conspiracy to Traffic in NarcoticsRead the Press Release
CHARLOTTE, N.C. – Seven Charlotte men were sentenced on Thursday, April 10, 2014, on federal drug conspiracy charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The sentencings stem from a joint six-month investigation conducted by the Drug Enforcement Administration and the Charlotte Mecklenburg Police Department, targeting drug trafficking and violent crime in Mecklenburg County, with special emphasis placed on Enderly Park neighborhood in northwest Charlotte.
Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD), join U.S. Attorney Tompkins in making today’s announcement.
According to the January 2013 criminal indictment, from 2006 through 2013, the 10 defendants engaged in a drug trafficking conspiracy. According to court documents and yesterday’s sentencing hearings, between July 2012 and January 2013, law enforcement made approximately 30 undercover drug buys from the defendants at or near a residence located on Karendale Avenue, in Enderly Park. In addition to charging the defendants, court documents show that the government has sought forfeiture of the residence that was used to facilitate the drug sales and that action is still pending.
Chief U.S. District Judge Frank D. Whitney sentenced the following seven of the 10 defendants:
• Maurice Crawford, 32, was sentenced to 49 months in prison and three years of supervised release. • Theodore Falls, 39, was sentenced to 40 months in prison and three years of supervised release. • Aaron Ligon, 49, was sentenced to 40 months in prison and three years of supervised release. • Mario Wilson, 24, was sentenced to 40 months in prison, followed by three years of supervised release. • Lavar Rodgers, 32, was sentenced to 30 months in prison, followed by three years of supervised release. • Curtis Smith, 37, was sentenced to 30 months in prison, followed by three years of supervised release. • Nathaniel Washington, 31, was sentenced to 24 months in prison and three years of supervised release.
The three remaining three defendants, Derrick Lowery, Derrick Owens and Cadaryl Drayton are awaiting sentencing.
In issuing the sentences, Judge Whitney noted the devastating effect that drug trafficking has had in communities. Judge Whitney called the repeated drug sales by these individuals a “poison” to the other residents of Enderly Park, who have a right to live in a safe and crime-free neighborhood.
The seven defendants have been in federal custody since January 2013. They will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation is being handled by the DEA and CMPD. The prosecution for the government is being handled by Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte.