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10 April 2014
Summary of Department of Justice's Findings - Albuquerque Police Department InvestigationRead the Press Release
INTRODUCTION
Following a comprehensive investigation, the Justice Department today announced its findings that the Albuquerque Police Department has engaged in a pattern or practice of excessive force, including deadly force. The pattern and practice is the result of serious systemic deficiencies in policy, training, supervision and accountability. The police department’s failure to ensure that officers respect the Constitution undermines public trust. Constitutional policing increases the public’s trust, ensures safety, and respects the rights of the city’s residents.
DEPARTMENT OF JUSTICE INVESTIGATION
The Findings Letter marks the culmination of the Justice Department’s comprehensive investigation of Albuquerque Police Department, which began on November 27, 2012, and was conducted jointly by the Civil Rights Division and the United States Attorney’s Office for the District of New Mexico. The Justice Department investigation involved an in-depth review of police department documents, interviews with command staff and rank and file police officers. The Department reviewed thousands of pages of documents, including written policies and procedures, internal reports, data, video footage, and investigative files. The investigative team interviewed hundreds of community members and held four community meetings in which diverse members of the Albuquerque provided their accounts of encounters with officers.
FINDINGS
The Justice Department found reasonable cause to believe that the Albuquerque Police Department engages in a pattern or practice of excessive force in violation of the Fourth Amendment of the United States Constitution. The Justice Department specifically found three patterns of excessive force:
- Officers too frequently use deadly force against people who pose a minimal threat in situations where the conduct of the officers heightens the danger and contributes to the need to use force;
- Officers use less lethal force, including Tasers, on people who are passively resisting, non-threatening, observably unable to comply with orders, or pose only a minimal threat to the officers; and
- Encounters between Albuquerque Police officers and persons with mental illness and in crisis too frequently result in a use of force or a higher level of force than necessary.
The Justice Department also found systemic deficiencies of the police department, which contribute to these three patterns. The causes include deficient policies, failed accountability systems, inadequate training, inadequate supervision, ineffective systems of investigation and adjudication, the absence of a culture of community policing, and a lack of sufficient civilian oversight.
REMEDIAL MEASURES
The Justice Department seeks critical remedial measures to address these deficiencies. These measures are in eight areas:- Use of Force Policies
- Interacting with Individuals with Mental Illness and other Disabilities
- Tactical Units
- Training
- Internal Investigations and Civilian Complaints
- Management and Supervision
- Recruitment and Selection
- Community Policing and Oversight
NEXT STEPS
The Justice Department looks forward to working with the city and Albuquerque Police Department and the community to timely resolve these findings. Change will not occur over night, and effective reform of the Albuquerque Police Department requires a durable and sustainable blueprint for reform which will provide the structure, transparency, and accountability necessary to achieve success.Statement of U.S. Attorney David B. BarlowRead the Press Release
“I have just informed Attorney General Holder and Senators Hatch and Lee that I have decided to conclude my service as United States Attorney this summer and return to private practice at Sidley Austin LLP. I am making this announcement in advance of my departure so that President Obama and Senators Hatch and Lee will be able to begin the process of selecting and vetting our next U.S. Attorney.
“U.S. Attorneys are not permanent fixtures in their offices. Serving as U.S. Attorney for the better part of three years has been and continues to be the most humbling honor and privilege of my career. However, for family reasons, my wife and I have decided to make the change this summer.
“I look forward to the remaining time I have to serve with the truly outstanding attorneys and other legal professionals in the U.S. Attorney’s Office, as well as our counterpart defense counsel; judges and court personnel; and federal, state, local, and tribal law enforcement who serve the people of Utah with such distinction.”
Statement by Attorney General Holder on Sentencing Commission’s Vote <br /> to Approve Reductions in Sentencing Guidelines for Nonviolent Drug OffendersRead the Press Release
WASHINGTON—U.S. Attorney General Eric Holder—who testified before the U.S. Sentencing Commission last month in support of a proposal to reduce the federal sentencing guidelines for low-level, nonviolent drug offenders—released the following statement Thursday in response to the Commission voting to formally adopt those changes:
“This action by the U.S. Sentencing Commission represents a milestone in our effort to reshape the criminal justice system’s approach to dealing with drug offenders. This reduction in the federal sentencing guidelines, while modest, sends a strong message about the need to reserve the harshest penalties for the most serious criminals. At a time when prison and detention costs consume nearly a third of the Justice Department’s budget, it simply makes sense to explore alternatives to incarceration and renew our emphasis on treatment and prevention.
“It is now time for Congress to pick up the baton and advance legislation that would take further steps to reduce our overburdened prison system. Proposals like the bipartisan Smarter Sentencing Act would enhance the fairness of our criminal justice system while empowering law enforcement to focus limited resources on the most serious threats to public safety. I look forward to continuing to work with lawmakers on both sides of the aisle on these types of common-sense reforms.”
Statement of Manhattan U.S. Attorney Preet Bharara on the Sentencing of SAC Capital Management Companies for Insider TradingRead the Press Release
“After due consideration, the Court has accepted the guilty plea and imposed sentence on SAC, including the payment of $1.184 billion in financial penalties. Today marks the day of reckoning for a fund that was riddled with criminal conduct. SAC fostered pervasive insider trading and failed, as a company, to question or prevent it. So far, this Office has successfully convicted eight SAC employees of insider trading, and when so much criminal conduct takes place within one institution, it is appropriate to impose criminal liability on the institution itself. Today’s sentence affirms that when institutions flout the law in such a colossal way, they will pay a heavy price.”
Spencer Man Sentenced to 262 Months for Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that MAURICE ELON EDWARDS, age 28, of Spencer, Oklahoma, was sentenced to 262 months imprisonment, followed by 4 years of supervised release for Possession of Controlled Substances with Intent to Distribute, in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(B)(viii) and 841(b)(1)(C) and Title 18, United States Code, Section 2.
The charge arose from an investigation by the McAlester Police Department, the Pittsburg County Sheriff’s Department and the Drug Enforcement Administration - Drug Task Force. The defendant was indicted in January, 2013 and was found guilty in September, 2013 by a federal jury along with co-defendant, ANTHONY DEXTER WASHINGTON, II, a.k.a. Tony Washington, age 27, of Oklahoma City, Oklahoma.
The evidence presented at trial proved that on or about January 14, 2012, in McAlester, Oklahoma, the defendants, did aid and abet one another to unlawfully, knowingly and intentionally possess with the intent to distribute five (5) grams or more of actual Methamphetamine, a Schedule II controlled substance, a Schedule II controlled Substance and a mixture or substance containing a detectable amount of Marijuana, a Schedule I controlled substance.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Kyle Waters represented the United States.
Spearfish Man Sentenced for Transporting Stolen PropertyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Spearfish, South Dakota, man convicted of Interstate Transportation of Stolen Property was sentenced on April 7, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Brent Hall, 38, was sentenced to 12 months of imprisonment, 2 years of supervised release, and was ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Between January 2009 and September 2012, while working in a management capacity for Husker Properties, LLC, and Rimrock Properties, LLC, Hall stole funds from the firms and took such money from an office in Wyoming to Spearfish. He took the money from Sundance Travel Center, a business owned by Husker Properties. As part of his job responsibilities, Hall was to deposit money in a Spearfish bank. Before Hall would leave the business with the money, another employee would complete deposit slips showing the amount to be deposited. Hall would, in turn, create a new deposit slip for a lesser amount, and then keep the money not deposited for his own use.
Hall also stole money in a variety of other ways. He stole cash from vendors during the Sturgis Motorcycle Rally meant for the business, used company cash cards to pay for personal expenses, and provided complimentary rooms at the Spearfish Quality Inn, a hotel he was managing, to certain individuals when he was unauthorized to do so. In total, Brent Hall stole over $153,000 from the two companies.
The investigation was conducted by the Federal Bureau of Investigation. The sentencing was handled by Supervisory Assistant U.S. Attorney Gregg S. Peterman. Hall was immediately placed into the custody of the U.S. Marshals Service.
SoCal Doctor Charged with Illegally Writing Prescriptions for Addictive Narcotics and Laundering Proceeds of His Drug DealingRead the Press Release
LOS ANGELES – A Los Angeles-area doctor surrendered this morning to federal authorities after being indicted on federal drug trafficking charges for allegedly illegally distributing drugs, including powerful and addictive painkillers.
Dr. Andrew Sun, 78, of La Mirada, surrendered this morning at the United States Courthouse, where he is expected to be arraigned this afternoon.
Sun, who operated medical clinics in San Gabriel and East Los Angeles, is named in an indictment that was returned by a federal grand jury on March 18. The indictment specifically charges Sun with 24 counts of illegally prescribing controlled substances including hydrocodone (a powerful narcotic painkiller commonly known by the brand names Vicodin and Norco), alprazolam (commonly known by the brand name Xanax), carisoprodol (best known as Soma), diazepam (the generic form of the brand name product Valium), and promethazine with codeine (a Schedule V cough syrup). The indictment also charges Sun with four counts of laundering the proceeds generated by his illegal prescriptions.
Sun issued nearly 5,000 prescriptions for controlled substances in a one-year period that ended in July 2010, according to an affidavit in support of a search warrant executed at Sun’s residence and two medical offices on July 11, 2012. During the investigation detailed in the affidavit, Sun prescribed drugs, including hydrocodone, to undercover agents on 13 separate occasions, each time in exchange for $150 cash.
The affidavit quotes Sun telling one undercover agent: “So if you want to insist on getting such a strong medicine, I’ll give it to you. I’m just a doctor, I’m not God, okay, so I cannot say no to something that you want to do… I only advise you not to, but, if you want to do it I can’t do, I can’t say no.”
The affidavit details another instance in which Sun encouraged an undercover agent to provide a fraudulent justification for the “maximum” allowable number of extra-strength Vicodin pills.
Based on review of the undercover recordings and other materials from the investigation, Dr. Rick Chavez, an expert in pain treatment, concluded that Sun’s interactions with each of the undercover agents “was insufficient, inappropriate, and inadequate,” according to the affidavit. Chavez concluded: “there is not only strong, but irrefutable evidence for inappropriate prescribing of controlled medications” by Sun.
An investigation by IRS - Criminal Investigation showed that Sun and his wife controlled 44 bank accounts, and that Sun deposited more than $1.1 million in cash into his accounts between 2008 and July 2012. The indictment charges Sun with laundering cash on four specific occasions when he deposited thousands of dollars in cash on dates that undercover agents met with him and received prescriptions.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
If convicted of the 28 counts in the indictment, Sun would face a statutory maximum sentence of 248 years in federal prison.
The investigation into Sun was conducted by the Drug Enforcement Administration, IRS - Criminal Investigation, the California Medical Board, the California Department of Health Care Services and the Monterey Park Police Department.
Release No. 14-042
Six Arrested in Drug Raid Involving Correctional FacilitiesRead the Press Release
Montgomery, Alabama - A drug distribution operation that involved inmates and a correction officer has been dismantled and six people have been arrested due to the joint efforts of the Drug Enforcement Administration and the Alabama Department of Corrections, announced George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama, and Joyce White Vance, U.S. Attorney for the Northern District of Alabama. This investigation included multiple State of Alabama correctional facilities and would not have been possible without the extraordinary assistance of Commissioner Kim Thomas and his staff at the Department of Corrections.
A federal grand jury in Montgomery, Alabama returned an indictment against Stephanie Auban, 41 years old, of Cullman; Phillip Burgin, 23 years old, of Montgomery; William Thomas Crane II, 36 years old, of Crossville; and Alberto Trejo who is presently incarcerated in Bullock County Correctional Facility in Union Springs, Alabama for conspiracy to distribute methamphetamine. Phillip Burgin was a correction officer at Kilby State Prison in Montgomery.
A federal grand jury in Birmingham, Alabama returned an indictment against Miguel Calles-Gutierrez, 42 years old, of Birmingham, and Gumaro Calles, 24 years old, presently in Staton Correctional Facility in Elmore, Alabama for distribution of methamphetamine. Along with the arrests, law enforcement searched the two prisoner’s personal areas, one in Bullock County Correctional Facility and one in Staton Correctional Facility.
“Drug dealers spread poison for profit,” stated U.S. Attorney Beck. “They addict children for profit, they destroy families for profit, and they infect communities for profit. There are countless victims of drug dealing. We need to remember and attempt to help these victims and need to continue to do all that is possible under the law to punish these poison pushers. I want to thank Kim Thomas and his staff for their unwavering commitment to stopping these criminals from dealing drugs from inside our state prisons.”
“Some of these defendants worked from prison to distribute a harmful and illegal substance in the Northern District of Alabama," stated U.S. Attorney Vance. "Methamphetamine dealers need to know they will be tracked — wherever they are — and prosecuted. The state Department of Corrections and the DEA are to be commended for working collaboratively to bring about these arrests."
“Drug trafficking and dealing are dangerous to society, and that type of behavior will not be tolerated by the Department of Corrections,” Corrections Commissioner Kim Thomas said. “We have joined forces with our federal law enforcement community to make our streets and our prisons safer. The illegal activity of one correction officer is not a representation of the hard work of the almost 3,000 correctional staff working in our facilities. We will not allow these illegal acts to tarnish the professional reputation of the hard working correctional professionals at the Department of Corrections. It is our responsibility to act, and these arrests are proof of our action with our federal partners to stop illegal activity in prison and protect the public safety. The Department of Corrections will continue to partner with law enforcement across this state to aggressively target criminal activity and stop the network of drug distribution activity from inside our prisons and that harm our communities.”
“Due to the combined efforts of the Drug Enforcement Administration (DEA) and the Alabama Department of Corrections (DOC), a large-scale drug trafficking organization was identified, investigated and ultimately dismantled,” stated Clay Morris, Assistant Special Agent in Charge of the Drug Enforcement Administration. “Without the invaluable assistance from the Alabama Department of Corrections, the success of this investigation would not have been possible. The partnership between DEA and AL DOC was critical in keeping substantial amounts of methamphetamine from being distributed in our communities. I can’t thank Commissioner Thomas and Alabama DOC enough for their assistance.”
An indictment is merely an accusation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted Ausban, Burgin, Crane, Miller and Trejo face a sentence of at least 10 years in prison and a maximum prison term of life. Miguel Calles-Gutierrez and Gumaro Calles face a sentence of no more than 20 years in prison. In the federal system, there is no parole.
This case was investigated by the Drug Enforcement Administration and the State of Alabama Department of Corrections. This case is being prosecuted by Curtis Ivy, Assistant U.S. Attorney in the Middle District of Alabama and an Assistant U.S. Attorney in the Northern District of Alabama.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Six Arrested in Drug Raid Involving Correctional FacilitiesRead the Press Release
MONTGOMERY / BIRMINGHAM, Alabama – A drug distribution operation that involved inmates and a correction officer has been dismantled and six people have been arrested due to the joint efforts of the Drug Enforcement Administration and the Alabama Department of Corrections, announced George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama, and Joyce White Vance, U.S. Attorney for the Northern District of Alabama. This investigation included multiple State of Alabama correctional facilities and would not have been possible without the extraordinary assistance of Commissioner Kim Thomas and his staff at the Department of Corrections.
A federal grand jury in Montgomery, Alabama returned an indictment against Stephanie Auban, 41 years old, of Cullman; Phillip Burgin, 23 years old, of Montgomery; William Thomas Crane II, 36 years old, of Crossville; and Alberto Trejo who is presently incarcerated in Bullock County Correctional Facility in Union Springs, Alabama for conspiracy to distribute methamphetamine. Phillip Burgin was a correction officer at Kilby State Prison in Montgomery.
A federal grand jury in Birmingham, Alabama returned an indictment against Miguel Calles-Gutierrez, 42 years old, of Birmingham, and Gumaro Calles, 24 years old, presently in Staton Correctional Facility in Elmore, Alabama for distribution of methamphetamine. Along with the arrests, law enforcement searched the two prisoner's personal areas, one in Bullock County Correctional Facility and one in Staton Correctional Facility.
"Drug dealers spread poison for profit," stated U.S. Attorney Beck. "They addict children for profit, they destroy families for profit, and they infect communities for profit. There are countless victims of drug dealing. We need to remember and attempt to help these victims and need to continue to do all that is possible under the law to punish these poison pushers. I want to thank Kim Thomas and his staff for their unwavering commitment to stopping these criminals from dealing drugs from inside our state prisons."
"Some of these defendants worked from prison to distribute a harmful and illegal substance in the Northern District of Alabama," stated U.S. Attorney Vance. "Methamphetamine dealers need to know they will be tracked — wherever they are — and prosecuted. The state Department of Corrections and the DEA are to be commended for working collaboratively to bring about these arrests."
"Drug trafficking and dealing are dangerous to society, and that type of behavior will not be tolerated by the Department of Corrections," Corrections Commissioner Kim Thomas said. "We have joined forces with our federal law enforcement community to make our streets and our prisons safer. The illegal activity of one correction officer is not a representation of the hard work of the almost 3,000 correctional staff working in our facilities. We will not allow these illegal acts to tarnish the professional reputation of the hard working correctional professionals at the Department of Corrections. It is our responsibility to act, and these arrests are proof of our action with our federal partners to stop illegal activity in prison and protect the public safety. The Department of Corrections will continue to partner with law enforcement across this state to aggressively target criminal activity and stop the network of drug distribution activity from inside our prisons and that harm our communities."
"Due to the combined efforts of the Drug Enforcement Administration (DEA) and the Alabama Department of Corrections (DOC), a large-scale drug trafficking organization was identified, investigated and ultimately dismantled," stated Clay Morris, Assistant Special Agent in Charge of the Drug Enforcement Administration. "Without the invaluable assistance from the Alabama Department of Corrections, the success of this investigation would not have been possible. The partnership between DEA and AL DOC was critical in keeping substantial amounts of methamphetamine from being distributed in our communities. I can't thank Commissioner Thomas and Alabama DOC enough for their assistance."An indictment is merely an accusation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted Ausban, Burgin, Crane, Miller and Trejo face a sentence of at least 10 years in prison and a maximum prison term of life. Patricia Calles, Miguel Calles-Gutierrez and Gumaro Calles face a sentence of no more than 20 years in prison. In the federal system, there is no parole.
This case was investigated by the Drug Enforcement Administration and the State of Alabama Department of Corrections. This case is being prosecuted by Curtis Ivy, Assistant U.S. Attorney in the Middle District of Alabama and an Assistant U.S. Attorney in the Northern District of Alabama.Sentencing for April 3 - 9, 2014Read the Press Release
Saul Castaneda, 51, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on April 9, 2014, for conspiracy to possess with intent to distribute, and to distribute 50 grams or more of methamphetamine. Castaneda was arrested in Cheyenne, Wyoming. He received 120 months imprisonment, to be followed by five years of supervised release and was ordered to pay a $500.00 fine and a $100.00 special assessment. This case was investigated by the U.S. Drug Enforcement Administration.
Jose Mejilla-Pena, aka Bryan Najera-Barraza, 29, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on April 8, 2014, for possession with intent to distribute, and to distribute less than 50 grams of methamphetamine, and for possession of a firearm in furtherance of a drug trafficking crime. Mejilla-Pena was arrested in Albany County, Wyoming. He received 80 months imprisonment, to be followed by three years of supervised release, and is subject to deportation upon release from custody. This case was investigated by the Wyoming Highway Patrol, the Wyoming Division of Criminal Investigation and the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Jamie Sanchez-Marquez, 40, of Rock Springs, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on April 3, 2014, on one count of conspiracy to possess with intent to distribute, and to distribute 50 grams or more of methamphetamine; two counts of distribution of methamphetamine and aiding and abetting; and one count of use of a telephone facility to facilitate a felony drug offense. Sanchez-Marquez was arrested in Rock Springs. He received 57 months imprisonment, to be followed by five years of supervised release and was ordered to pay a $500.00 fine and a $400.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration.
Seth Michael Pearce, 24, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on April 3, 2014, for conspiracy to possess stolen firearms. Pearce was arrested in Gillette, Wyoming. He received 27 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
SAC Capital Management Companies Sentenced in Manhattan Federal Court for Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that S.A.C. CAPITAL ADVISORS, L.P. (“SAC Capital LP”), S.A.C. CAPITAL ADVISORS, LLC (“SAC Capital LLC”), CR INTRINSIC INVESTORS, LLC (“CR Intrinsic”), and SIGMA CAPITAL MANAGEMENT, LLC (“Sigma Capital”) (collectively, the “SAC Companies”), which are responsible for the management of a group of affiliated hedge funds, (collectively the “SAC Hedge Fund” or “SAC”), were sentenced today by U.S. District Judge Laura T. Swain. The District Court accepted the guilty plea entered by the defendants on November 8, 2013, and approved the parties’ Plea Agreement. The Court imposed a sentence that included a criminal fine of $900 million (which is not tax-deductible), a statutory maximum five-year term of probation for each of the SAC Companies, the condition that the SAC Hedge Fund terminate its investment advisory business, effectively closing the hedge fund to outside investors, and a requirement that the defendants, and any successor entities, employ the compliance procedures necessary to identify and prevent insider trading, and that the defendants retain an independent compliance consultant, who will review, revise, and report to the Government on those compliance procedures. Together with the settlement of the civil forfeiture action, which was approved by U.S. District Judge Richard J. Sullivan on November 6, 2013, the SAC Hedge Fund is required to pay an additional $1.184 billion financial penalty on top of the $616 million the SAC Companies have already agreed to pay to the U.S. Securities & Exchange Commission (“SEC”).
Manhattan U.S. Attorney Preet Bharara said: “After due consideration, the Court has accepted the guilty plea and imposed sentence on SAC, including the payment of $1.184 billion in financial penalties. Today marks the day of reckoning for a fund that was riddled with criminal conduct. SAC fostered pervasive insider trading and failed, as a company, to question or prevent it. So far, this Office has successfully convicted eight SAC employees of insider trading, and when so much criminal conduct takes place within one institution, it is appropriate to impose criminal liability on the institution itself. Today’s sentence affirms that when institutions flout the law in such a colossal way, they will pay a heavy price.”
As alleged in the Indictment, the forfeiture Complaint filed against the funds, other court documents filed in the case, and statements made during the guilty plea and sentencing proceedings:
From 1999 through at least 2010, numerous employees of the SAC Companies obtained and traded on material, non-public information that they were not permitted to have (“Inside Information”), or recommended trades based on such information to SAC Portfolio Managers (“SAC PMs”) or the SAC Owner. Specifically, the Indictment charges the SAC Companies with insider trading offenses committed by numerous employees, occurring over the span of more than a decade, and involving the securities of more than 20 publicly-traded companies across multiple sectors of the economy. As charged in the Indictment, the systematic insider trading engaged in by SAC PMs and Research Analysts was the predictable and foreseeable result of multiple institutional failures. The failures alleged included hiring practices heavily focused on recruiting employees with networks of public company insiders, the failure of SAC management to question employees about trades that appeared to be based on Inside Information, and ineffective compliance measures that failed to prevent or detect such trading, particularly prior to late 2009.
At the guilty plea hearing on November 8, 2013, the SAC Companies pled guilty to all five Counts in the Indictment, and admitted that the six employees who had previously pled guilty to insider trading engaged in that criminal conduct while acting within the scope of their employment of the SAC Companies and for the benefit of the firm. The Plea Agreement does not provide immunity from prosecution for any individual and does not restrict the Government from charging any individual for any criminal offense and seeking the maximum term of imprisonment applicable to any such violation of criminal law. In fact, since the time of the guilty plea and prior to today’s sentencing, two additional SAC portfolio managers, Michael Steinberg and Matthew Martoma, were convicted of insider trading after separate jury trials.
Indeed, the total criminal fine imposed by the Court exceeded a Sentencing Guidelines range that was, in turn, based on all of the illicit profits gained and losses avoided resulting from all of the insider trading alleged in the Indictment. Neither the criminal fine nor the forfeiture amount to be paid in the civil forfeiture case can be claimed as a tax deduction or credit by the SAC Companies or their owner.
The Court further imposed a series of non-financial penalties on the SAC Companies that include the following:
- The SAC Companies will no longer accept third party investor funds and will terminate operations as an investment adviser.
- The SAC Companies were each sentenced to a five-year term of probation – the maximum allowed by law – with a provision to end probation earlier if the SAC Companies cease operating entirely. The terms of probation require, among other conditions, that the SAC Companies employ appropriate compliance measures to identify and prevent insider trading. Additionally, the insider trading compliance measures of the SAC Companies and any related entities trading securities will be reviewed by an independent compliance expert who will direct the SAC Companies to correct identified deficiencies, and who will report to the United States Attorney’s Office as to the progress of the corrective measures undertaken.
Mr. Bharara praised the efforts of the Federal Bureau of Investigation and also thanked the SEC for its assistance in the investigation.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Antonia M. Apps, Arlo Devlin-Brown, and John T. Zach are in charge of the prosecution, and Assistant U.S. Attorneys Sharon Cohen Levin, Chief of the Asset Forfeiture Unit, Micah Smith, and Christine Magdo are responsible for the forfeiture aspects of the case.
U.S. v. SAC Capital Advisors, LP et al. Stipulation and Order of Settlement
U.S. v. SAC Capital Advisors LLP, et al. Cover Ltr, Plea Agt, and StipRobertsdale Meth Cook Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Tony Rodger Foley, 33, of Robertsdale, was sentenced in federal court on Wednesday, April 9, to a seven-year prison term for his involvement in conspiracy to manufacture and attempt to manufacture methamphetamine. Foley pled guilty to the two charges, conspiracy to manufacture methamphetamine and an attempt to manufacture methamphetamine, in 2012. Court documents reflect that Foley was arrested after attempting to flee from Mobile County sheriff’s deputies in a black Hummer when they attempted to arrest him in connection with a sting operation involving the controlled delivery of pseudoephedrine. After making bond on those state charges, he continued to purchase pseudoephedrine and was arrested within months at a trailer near Robertsdale, caught in the act of manufacturing methamphetamine. The federal drug charges were brought against him shortly thereafter, and he has been in custody since that time.
The judge ordered that the sentences in each case would run concurrently. He also ordered that Foley undergo drug treatment while in custody, and as a condition of his supervised release term of five years, which will follow his incarceration. The judge did not impose a fine but ordered that Foley pay $200 in special assessments
The case was investigated by the Baldwin County Drug Task Force, the Baldwin County Sheriff’s Office, the Mobile County Sheriff’s Office and the Loxley Police Department. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
Remarks as Prepared for Delivery ByRead the Press Release
Acting U.S. Attorney Damon P. Martinez, District of New Mexico, on the Albuquerque Police Department Investigation
Good morning and thank you for being here. I am pleased to welcome Acting Assistant Attorney General Jocelyn Samuels and members of her staff from the Justice Department’s Civil Rights Division to Albuquerque. It has been a privilege for the U.S. Attorney’s Office for the District of New Mexico to work closely with Jocelyn and her staff over the past 16 months on the Justice Department’s civil investigation into whether the Albuquerque Police Department engages in a pattern or practice of violating the Fourth Amendment by using excessive force. We are here today to announce our findings and conclusions, and the next steps for the Department of Justice, the City, and the people of Albuquerque.
Jocelyn and Jonathan Smith, who is the Chief of the Special Litigation Section of the Civil Rights Division, will address the scope and conclusions of the investigation, and discuss our next steps. Before they do, I would like to make a few important points.
Today marks a critical milestone in our community and for the Albuquerque Police Department. Understanding how we arrived here is very important, but how we move forward is even more important. The coming days and months will determine what the next generation of policing will look like in our City. We are at a unique time and place where the City can decisively determine the culture of the Albuquerque Police Department and its relationship with the community it serves. We are in a place where the City and the community can collaborate and develop a productive working partnership to rebuild and to maintain the foundation of trust that is essential for effective, productive law enforcement. Although there are difficult and systemic issues to resolve, we embrace these challenges and are very optimistic for the future of the Albuquerque Police Department.
Our optimism is based on three important factors: First, although our investigation has found serious constitutional problems that Acting Assistant Attorney General Samuels will discuss in detail, it also has confirmed that the great majority of APD officers are honorable law enforcement professionals who risk their physical safety and well-being for the public good on a daily basis. Their work is not easy and their duties often are performed under difficult and dangerous circumstances. For most officers, policing is not a job; it is an honor and a profession. It is about promoting public safety and service to their neighbors and the community. The dangers they face on the job are real, and they must have the tools needed to protect the public and themselves. We are optimistic for the future of the Albuquerque Police Department because so many of its officers are committed to making our neighborhoods safer places to live, to work and to play, and do so with integrity and in compliance with the Constitution and the law.
Second, we also are optimistic because the City and the Albuquerque Police Department gave the investigative team access to every document and person requested during the investigation. Additionally, the Mayor and other City officials have expressed a strong desire to address the deficiencies uncovered; and have assured us that they are committed to working with us to remedy the problems. We have every reason to believe that we will move forward in a way that honors both the men and women working in APD and the residents of this great City they serve.
Finally, we are optimistic because the people of Albuquerque want and rightfully demand the highest standards for their police force. The residents of Albuquerque also want safe neighborhoods and want the police to succeed. Clearly, the residents of Albuquerque support the changes needed to fix the problems present in the Albuquerque Police Department. During our investigation we have heard from many people, coming from all walks of life in our city. They came forward because they care about this City, and because they care about the police department that serves them. The people of Albuquerque are committed to being part of the critical dialogue necessary to ensure that reforms are in place to promote constitutional policing while giving the men and women of the Albuquerque Police Department the support they need to fight crime effectively.
These three critical factors give us great optimism that the City, the Albuquerque Police Department, and the community will come together to ensure that the deficiencies identified by the investigation are corrected.
I now turn the podium over to Acting Assistant Attorney General Jocelyn Samuels who will discuss the results of the investigation.
# # #Registered Sex Offender Pleads Guilty to Trafficking A MinorRead the Press Release
Caused a 15 Year Old Runaway to Engage in Prostitution
Baltimore, Maryland – Thomas Sean Tinsley, age 29, of Glen Burnie, Maryland pleaded guilty today to sex trafficking of a minor. Tinsley is a registered sex offender, having previously been convicted of having sex with a minor female.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.
According to Tinsley’s plea agreement, in May 2013, Tinsley met a 15 year old runaway near the Galleria Mall in downtown Baltimore, and invited her to live with him at his residence - a motel on Caton Avenue in Baltimore. Soon thereafter, Tinsley began having sex with the victim.
Tinsley encouraged the victim to engage in prostitution to pay for the motel room and to provide him with additional money. The victim routinely met with prostitution clients and communicated with Tinsley regarding her client interactions, including the location of the commercial sex and the identity of her patrons. Tinsley monitored the victim’s commercial sex activities and gave her instructions regarding her client interactions, including telling her to collect cash before the commercial sex. Sometimes, Tinsley negotiated directly with prospective clients for commercial sex on behalf of the victim.
When they searched the motel room, federal agents found Tinsley’s sex offender registry paperwork from a prior conviction, which listed the motel address as his ‘place of residence.”
Tinsley and the government have agreed that if the Court accepts the plea agreement Tinsley will be sentenced to between 121 and 210 months in prison followed by a lifetime of supervised release. U.S. District Judge Ellen L. Hollander has scheduled sentencing for July 2, 2014 at 11:00 a.m.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Mark W. Crooks, who is prosecuting the case.
Queens, N.Y., Tax Preparer Indicted for Filing False Tax ReturnsRead the Press Release
The Justice Department and Internal Revenue Service (IRS) announced that Celamour Berus, of Springfield Gardens, N.Y., was arrested for multiple tax crimes today following his indictment on April 3, 2014. The indictment was unsealed today in the District Court for the Eastern District of New York following his arrest.
According to the indictment, Berus owned and operated a tax preparation business called Celamour Enterprises, which was located at his home in Springfield Gardens, N.Y. The indictment alleges that Berus prepared false individual income tax returns for clients of Celamour Enterprises for tax years 2007 through 2011. Berus included false itemized deductions for charitable contributions, unreimbursed employee expenses and other expenses on the returns he prepared. The indictment charges that Berus aided and assisted in the preparation of 38 false tax returns for his clients.
The indictment also alleges that Berus falsified his own federal income tax returns for tax years 2007 through 2010 by failing to report all of the gross receipts generated by his tax preparation business. Berus also included false itemized deductions for unreimbursed employee expenses on his tax returns.
A trial date has not been scheduled. An indictment merely alleges that a crime has been committed and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Berus faces a statutory maximum sentence of three years in prison for each count and a fine of up to $250,000.
The case was investigated by special agents of IRS – Criminal Investigation. Trial Attorneys Jeffrey Bender and Kevin Lombardi of the Justice Department’s Tax Division are prosecuting the case.
Pair Charged with Robbing Grocery StoreRead the Press Release
Dylan Capone, 21, and Michael Young, 24, both of Philadelphia, charged today by Indictment with committing the January 28, 2014, armed robbery of the Chuen Hing Grocery, located at 1414 South 6th Street, Philadelphia, Pennsylvania, announced United States Attorney Zane David Memeger. Capone and Young were also charged with brandishing a firearm in connection with that robbery.
If convicted Capone and Young face a mandatory minimum term of seven years in prison with a maximum possible sentence of life.
The case was investigated by the Federal Bureau of Investigation and Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Paul G. Shapiro.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Owner of Tax Return Preparation Franchise and Health Provider Business Pleads Guilty to Tax Fraud, Healthcare Fraud and Money LaunderingRead the Press Release
Claude Arthur Verbal II, formerly of Raleigh, N.C., and now of Miami, pleaded guilty to tax fraud, healthcare fraud and money laundering in two separate cases in federal court, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney Ripley Rand for the Middle District of North Carolina. Verbal pleaded guilty to one count of conspiracy to defraud the United States, one count of aiding and assisting the preparation of false tax returns, one count of healthcare fraud and one count of money laundering. The plea was accepted late yesterday by U.S. District Judge Catherine Eagles in Greensboro, N.C., and sentencing was set for Aug. 11, 2014. Verbal faces up to 28 years in federal prison and $850,000 in fines, and has agreed to pay restitution to the Internal Revenue Service (IRS) and Medicaid.
The Tax Case
According to court documents, Verbal was the owner of Nothing But Taxes (NBT), a tax return preparation franchise with 10 branches throughout the state of North Carolina that operated from 2005 to at least 2012. Verbal personally prepared false tax returns for clients of NBT and taught and encouraged his employees to do so as well. Verbal and NBT employees frequently offered clients a dramatically larger tax refund if the clients agreed to make a cash payment to the person who prepared their return. These cash payments were over and above the flat return preparation fee that NBT charged every client, whether or not their return was falsified.
According to court documents, from 2005 to 2007, Verbal personally prepared dozens of false tax returns on a computer at NBT’s location on Fayetteville Street in Durham, N.C. One such return was a 2006 tax return for an NBT client that falsely reported the client had a Schedule C business and a dependent, which Verbal knowingly prepared and electronically filed with the IRS.
According to court documents, the most common types of falsifications at NBT were false dependents, false Schedule C businesses, false tip income, false Earned Income Tax Credits (EITC) and false education credits. Verbal himself falsified returns using these items and taught his managers and line employees how to do so as well. Verbal and many of his employees facilitated the purchase and sale of false dependents at NBT by purchasing the names, dates of birth and social security numbers of individuals from the community for use as false dependents on other NBT clients’ tax returns.
According to court documents, in November 2010, one of Verbal’s employees informed a U.S. Probation Officer of the fraudulent practices at NBT’s location on Fayetteville Street. The probation officer informed Verbal of this fraud and he falsely denied knowledge of it. Afterward, Verbal took steps to keep the profitable Fayetteville Street location open and to continue operating as usual, but to also further distance himself from the fraudulent practices. In order to do this, Verbal transferred the electronic filing privileges for that NBT branch to a nominee. Verbal and others jointly persuaded, a relative of Verbal who allowed Verbal to use their name to apply for new electronic filing privileges for the Fayetteville Street location. In exchange, Verbal and his wife paid the relative $10,000, and the relative had no role in operating NBT, no professional tax experience and no knowledge of the fraud that was occurring at NBT.
Later, in 2012, the IRS shut down electronic filing privileges at all 10 NBT branches due to persistent fraud. Verbal re-applied for electronic filing privileges twice for all NBT locations, first in the name of the relative and, when that attempt failed, in the name of another relative who had no knowledge of NBT’s business.
Related Tax Cases
According to court documents, in a series of related cases in the Middle District of North Carolina, multiple other individuals employed by NBT – including branch managers, return preparers and client recruiters – have also pleaded guilty to charges involving federal tax fraud, fraud, and identity theft crimes. In particular, each of the individuals listed below pled guilty to one count each of wire fraud, aggravated identity theft and aiding and assisting the preparation of false tax returns:
Defendant Role Sentence
Leslie Brewster Branch manager 70 months
Nikki Brewster Branch manager 61 months
Tiffany Rogers Return preparer 48 months
Dawn Williams Return preparer 36 months and one day
Saichelle McNeill Return preparer 27 months
Ronald Hairston Client recruiter 24 months
Jennifer Bullock Return preparer 15 months
According to court documents, in a related case, Rakecia Brame pleaded guilty to wire fraud, aggravated identity theft and aiding and assisting the preparation of false tax returns. Brame, a former social worker with the Alamance County Department Social Services (DSS), admitted to selling the identities of DSS clients to NBT return preparers for use as false dependents on tax returns.
According to court documents, in another related case, Tasha Smith, a former NBT employee who later left and opened her own fraudulent tax return preparation businesses, pleaded guilty on April 8, 2014, to conspiracy to defraud the United States.
“The tax fraud committed by Claude Verbal and the other Nothing But Taxes defendants is an affront to honest, hard-working taxpayers,” said Assistant Attorney General Kathryn Keneally of the department’s Tax Division. “The Justice Department will prosecute and seek just punishment against those who prepare fraudulent tax returns.”
“Today, Mr. Verbal admitted to owning a tax preparation business that blatantly ignored the tax laws by preparing false tax returns and misusing his electronic filing privileges,” said Chief of IRS-Criminal Investigation Richard Weber. “Dishonest return preparers use a variety of methods to cheat the government, including falsifying information on the tax returns to generate larger refunds for their clients. Criminal Investigation will continue to ensure that all tax practitioners, tax preparers and others who practice in the tax law profession adhere to professional standards and follow the law.”
The Healthcare Fraud Case
According to court documents, Verbal was the owner and operator of Infinite Wellness Concepts (IWC), a Medicaid behavioral health provider with locations in Burlington, Durham and Greensboro, N.C. IWC was contracted to provide group therapy, intensive in-home services, enhanced mental health and substance abuse services. Court documents state that Verbal acquired at least one million dollars in fraudulently obtained funds from the Medicaid program. The fraudulent activities included:
· Changing diagnosis codes so that codes with higher reimbursement rates could be billed;
· Falsely inflating the number of clients treated during group therapy;
· Billing for services not rendered and submitting false treatment notes in support of the services not rendered using forged signatures from counselors and therapists,
· Unqualified personnel conducting therapy; and
· Creating fraudulent clinical assessments and creating clinical assessments prepared and signed by unqualified preparers.
According to court documents, Verbal used the proceeds of the tax and healthcare fraud schemes to make extensive purchases of luxury cars, homes and jewelry. The money laundering charge to which Verbal pleaded guilty relates to the purchase of a $52,000 diamond ring with the proceeds of healthcare fraud.
In the course of the health care fraud investigation, law enforcement authorities seized $765, 917 from bank accounts controlled by Verbal, a 2011 Toyota Camry and four pieces of diamond jewelry, including a 7-carat diamond ring. The United States initiated a civil forfeiture action alleging the properties constituted proceeds traceable to the health care fraud and on Sept. 19, 2013, Judge Eagles entered an order forfeiting the property to the government.
“Mr. Verbal’s fraudulent schemes victimized taxpayers in multiple ways, damaging Medicaid, the patients who rely on it, and the taxpayers who support it,” said U.S. Attorney Rand. “Stopping these fraudulent activities is a priority of the Department of Justice, and we are committed both to bringing the fraudsters to justice and returning the ill-gotten gains to the victimized agencies.”
“The improper billing of the N.C. state community mental health program by unscrupulous providers will not be tolerated,” said Derrick Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “This costs taxpayers millions of dollars each year and drains the Medicaid program of much needed resources.”
The tax case against Verbal was investigated by agents of IRS - Criminal Investigation, and was prosecuted by Assistant U.S. Attorney Frank Chut and Trial Attorney Jonathan Marx of the Tax Division. The healthcare fraud case against Verbal was investigated by agents of the Department of Health and Human Services, Office of Inspector General, the North Carolina State Bureau of Investigations, the North Carolina Department of Justice’s Medicaid Investigations Division and IRS – Criminal Investigation, and was prosecuted by Assistant U.S. Attorney Robert Hamilton.
Owner of Tax Return Preparation Franchise and Health Provider Business Pleads Guilty to Tax Fraud, Healthcare Fraud and Money LaunderingRead the Press Release
WASHINGTON – Claude Arthur Verbal II, formerly of Raleigh, N.C., and now of Miami, pleaded guilty to tax fraud, healthcare fraud and money laundering in two separate cases in federal court, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney Ripley Rand for the Middle District of North Carolina. Verbal pleaded guilty to one count of conspiracy to defraud the United States, one count of aiding and assisting the preparation of false tax returns, one count of healthcare fraud and one count of money laundering. The plea was accepted late yesterday by U.S. District Judge Catherine Eagles in Greensboro, N.C., and sentencing was set for Aug. 11, 2014. Verbal faces up to 28 years in federal prison and $850,000 in fines, and has agreed to pay restitution to the Internal Revenue Service (IRS) and Medicaid.
The Tax Case
According to court documents, Verbal was the owner of Nothing But Taxes (NBT), a tax return preparation franchise with 10 branches throughout the state of North Carolina that operated from 2005 to at least 2012. Verbal personally prepared false tax returns for clients of NBT and taught and encouraged his employees to do so as well. Verbal and NBT employees frequently offered clients a dramatically larger tax refund if the clients agreed to make a cash payment to the person who prepared their return. These cash payments were over and above the flat return preparation fee that NBT charged every client, whether or not their return was falsified.
According to court documents, from 2005 to 2007, Verbal personally prepared dozens of false tax returns on a computer at NBT’s location on Fayetteville Street in Durham, N.C. One such return was a 2006 tax return for an NBT client that falsely reported the client had a Schedule C business and a dependent, which Verbal knowingly prepared and electronically filed with the IRS.
According to court documents, the most common types of falsifications at NBT were false dependents, false Schedule C businesses, false tip income, false Earned Income Tax Credits (EITC) and false education credits. Verbal himself falsified returns using these items and taught his managers and line employees how to do so as well. Verbal and many of his employees facilitated the purchase and sale of false dependents at NBT by purchasing the names, dates of birth and social security numbers of individuals from the community for use as false dependents on other NBT clients’ tax returns.
According to court documents, in November 2010, one of Verbal’s employees informed a U.S. Probation Officer of the fraudulent practices at NBT’s location on Fayetteville Street. The probation officer informed Verbal of this fraud and he falsely denied knowledge of it. Afterward, Verbal took steps to keep the profitable Fayetteville Street location open and to continue operating as usual, but to also further distance himself from the fraudulent practices. In order to do this, Verbal transferred the electronic filing privileges for that NBT branch to a nominee. Verbal and others jointly persuaded, a relative of Verbal who allowed Verbal to use their name to apply for new electronic filing privileges for the Fayetteville Street location. In exchange, Verbal and his wife paid the relative $10,000, and the relative had no role in operating NBT, no professional tax experience and no knowledge of the fraud that was occurring at NBT.
Later, in 2012, the IRS shut down electronic filing privileges at all 10 NBT branches due to persistent fraud. Verbal re-applied for electronic filing privileges twice for all NBT locations, first in the name of the relative and, when that attempt failed, in the name of another relative who had no knowledge of NBT’s business.
Related Tax Cases
According to court documents, in a series of related cases in the Middle District of North Carolina, multiple other individuals employed by NBT – including branch managers, return preparers and client recruiters – have also pleaded guilty to charges involving federal tax fraud, fraud, and identity theft crimes. In particular, each of the individuals listed below pled guilty to one count each of wire fraud, aggravated identity theft and aiding and assisting the preparation of false tax returns:
Leslie Brewster, Branch manager, 70 months
Nikki Brewster, Branch manager, 61 months
Tiffany Rogers, Return preparer, 48 months
Dawn Williams, Return preparer, 36 months and one day
Saichelle McNeill, Return preparer, 27 months
Ronald Hairston, Client recruiter, 24 months
Jennifer Bullock, Return preparer, 15 months
According to court documents, in a related case, Rakecia Brame pleaded guilty to wire fraud, aggravated identity theft and aiding and assisting the preparation of false tax returns. Brame, a former social worker with the Alamance County Department Social Services (DSS), admitted to selling the identities of DSS clients to NBT return preparers for use as false dependents on tax returns.
According to court documents, in another related case, Tasha Smith, a former NBT employee who later left and opened her own fraudulent tax return preparation businesses, pleaded guilty on April 8, 2014, to conspiracy to defraud the United States.
“The tax fraud committed by Claude Verbal and the other Nothing But Taxes defendants is an affront to honest, hard-working taxpayers,” said Assistant Attorney General Kathryn Keneally of the department’s Tax Division. “The Justice Department will prosecute and seek just punishment against those who prepare fraudulent tax returns.”
“Today, Mr. Verbal admitted to owning a tax preparation business that blatantly ignored the tax laws by preparing false tax returns and misusing his electronic filing privileges,” said Chief of IRS-Criminal Investigation Richard Weber. “Dishonest return preparers use a variety of methods to cheat the government, including falsifying information on the tax returns to generate larger refunds for their clients. Criminal Investigation will continue to ensure that all tax practitioners, tax preparers and others who practice in the tax law profession adhere to professional standards and follow the law.”
The Healthcare Fraud Case
According to court documents, Verbal was the owner and operator of Infinite Wellness Concepts (IWC), a Medicaid behavioral health provider with locations in Burlington, Durham and Greensboro, N.C. IWC was contracted to provide group therapy, intensive in-home services, enhanced mental health and substance abuse services. Court documents state that Verbal acquired at least one million dollars in fraudulently obtained funds from the Medicaid program. The fraudulent activities included:
• Changing diagnosis codes so that codes with higher reimbursement rates could be billed;
• Falsely inflating the number of clients treated during group therapy;
• Billing for services not rendered and submitting false treatment notes in support of the services not rendered using forged signatures from counselors and therapists,
• Unqualified personnel conducting therapy; and
• Creating fraudulent clinical assessments and creating clinical assessments prepared and signed by unqualified preparers.
According to court documents, Verbal used the proceeds of the tax and healthcare fraud schemes to make extensive purchases of luxury cars, homes and jewelry. The money laundering charge to which Verbal pleaded guilty relates to the purchase of a $52,000 diamond ring with the proceeds of healthcare fraud.
In the course of the health care fraud investigation, law enforcement authorities seized $765, 917 from bank accounts controlled by Verbal, a 2011 Toyota Camry and four pieces of diamond jewelry, including a 7-carat diamond ring. The United States initiated a civil forfeiture action alleging the properties constituted proceeds traceable to the health care fraud and on Sept. 19, 2013, Judge Eagles entered an order forfeiting the property to the government.
“Mr. Verbal’s fraudulent schemes victimized taxpayers in multiple ways, damaging Medicaid, the patients who rely on it, and the taxpayers who support it,” said U.S. Attorney Rand. “Stopping these fraudulent activities is a priority of the Department of Justice, and we are committed both to bringing the fraudsters to justice and returning the ill-gotten gains to the victimized agencies.”
“The improper billing of the N.C. state community mental health program by unscrupulous providers will not be tolerated,” said Derrick Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “This costs taxpayers millions of dollars each year and drains the Medicaid program of much needed resources.”
The tax case against Verbal was investigated by agents of IRS - Criminal Investigation, and was prosecuted by Assistant U.S. Attorney Frank Chut and Trial Attorney Jonathan Marx of the Tax Division. The healthcare fraud case against Verbal was investigated by agents of the Department of Health and Human Services, Office of Inspector General, the North Carolina State Bureau of Investigations, the North Carolina Department of Justice’s Medicaid Investigations Division and IRS – Criminal Investigation, and was prosecuted by Assistant U.S. Attorney Robert Hamilton.
Norfolk Man Faces More Prison TimeRead the Press Release
NORFOLK, Va. – Lawrence Leo Hawkins, Jr., 35, of Norfolk, Va., was convicted today by a federal jury of possession with intent to distribute cocaine; possession of heroin; possession of a firearm in furtherance of drug trafficking; and felon in possession of a firearm.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Charles E. Smith, Special Agent in Charge of the Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the verdict was accepted by United States District Judge Arenda Wright Allen.
Hawkins faces a maximum penalty of life in prison when he is sentenced on July 17, 2014.
Hawkins was previously indicted on December 19, 2012. According to court records and evidence at trial, the police executed a search warrant at a residence in Norfolk based on the robbery of a cellphone. GPS indicated that the cellphone was located in or near that residence. While conducting a search regarding the robbery, the police found significant quantities of cocaine, quantities of heroin, three guns, packaging material, grinders, sieves, scales and other drug related materials. Several forms of the defendant’s identification were found with these items. The defendant, who was present at the location, was placed under arrest. A key found in the defendant’s pocket opened a safe that contained cocaine, heroin, and two firearms. The robbery of the cellphone was conducted by the son of the defendant’s girlfriend who lived at the residence.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney William D. Muhr is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
New London Man Sentenced to 10 Years in Prison for Distributing Heroin, Possessing FirearmsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSE MORALES, 53, of New London, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 120 months of imprisonment, followed by three years of supervised release, for distributing heroin and illegally possessing firearms.
In early 2012, Homeland Security Investigations (“HSI”), the U.S. Secret Service and the New London Police Department initiated an investigation to combat the large-scale trafficking of heroin and cocaine from the Dominican Republic and Puerto Rico into and around southeastern Connecticut. The investigation revealed that Luis Ariel Capellan Maldonado, also known as “Ariel,” and his associates were receiving heroin from sources in the Dominican Republic and distributing it throughout New London County. MORALES purchased raw heroin from Maldonado’s associate and sold it to his own customers, typically in quantities of five to ten grams at a time.
MORALES was arrested on April 3, 2013. A search of his Willets Avenue residence on that date revealed a shotgun, a .22 caliber semi-automatic pistol, several rounds of ammunition, heroin packaging material and $940 in cash.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
MORALES has been detained since his arrest. On January 6, 2014, he pleaded guilty to one count of conspiracy to possess with the intent to distribute heroin.
MORALES has multiple prior felony convictions, including convictions for sexual assault, violating a protective order, threatening, robbery and larceny.
More than 100 individuals have been charged with federal and state offenses as a result of this investigation. Maldonado has pleaded guilty and awaits sentencing.
This matter is being investigated by Homeland Security Investigations; U.S. Secret Service; U.S. Postal Inspection Service; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection, Office of Air and Marine; Connecticut State Police; New London Police Department, Norwich Police Department, Waterford Police Department, Groton Town Police Department, East Lyme Police Department and Putnam Police Department. The United States Marshals Service; ICE Enforcement and Removal Operations; Drug Enforcement Administration; HSI Assistant Attaché, Santo Domingo, Dominican Republic; HSI Arecibo, Puerto Rico Resident Office; Internal Revenue Service – Criminal Investigation; Connecticut Department of Correction, Parole and Community Services; and the Groton City, Willimantic, New Haven and Bristol Police Departments have provided valuable assistance to the investigation.
The federal cases are being prosecuted by Assistant U.S. Attorneys Alina P. Reynolds, Sarah P. Karwan and Henry K. Kopel. The state cases are being prosecuted by the State’s Attorney for the New London Judicial District and Senior Assistant State’s Attorneys Paul Narducci and Stephen Carney.
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(203) 821-3722 [email protected]NYC Contractor Pleads Guilty in Manhattan Federal Court to Tax Evasion SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Kathryn Keneally, the Assistant Attorney General for the Tax Division of the Department of Justice, and Richard Weber, Chief, Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that NICK A. JODHA, a/k/a “Nick Persaud,” the owner of a contracting business that provided heating, ventilation, and air conditioning (“HVAC”) services throughout the New York City metropolitan area, pled guilty today for his role in a tax evasion scheme. JODHA pled guilty before U.S. District Court Judge Richard J. Sullivan.
Manhattan U.S. Attorney Preet Bharara said: “Nick Jodha has admitted to hiding income and to filing false corporate and personal tax returns, not once but for four consecutive years. His dishonesty cost the government more than $200,000 in tax revenue, and it now will likely cost him his liberty.”
Assistant Attorney General Kathy Keneally said: “Taxpayers who own businesses and seek to evade paying their fair share of taxes, whether through failing to report all of their business’s proceeds or falsely treating personal expenses as business deductions, will be held accountable. The Department of Justice remains committed to investigating and prosecuting those who choose to violate the tax laws.”
IRS-CI Chief Richard Weber said: "Jodha's attempt to evade tax by hiding income and filing false returns was a theft from the American public. It is a felony offense that carries severe consequences. The overarching principle of IRS's enforcement strategy is simply this: We protect the integrity of the tax system by ensuring everyone pays the right amount of tax."
According to the allegations contained in the Information and statements made at the plea proceeding:
JODHA operated and was a 50% owner of United HVAC Services, Inc. (“United HVAC”), an HVAC contracting firm based in South Ozone Park, New York, with operations throughout New York City. From 2007 through 2010, JODHA cashed more than $2.3 million in checks made payable to United HVAC at a check cashing service in Manhattan, rather than depositing the business checks into the business’s corporate bank account. JODHA used the proceeds from the cashed checks for business and personal purposes.
During the same time period, in order to prepare both personal and corporate income tax returns, JODHA provided his accountant with the statements from the business bank account of United HVAC. However, JODHA failed to inform his accountant of the checks he cashed at the check cashing service, which were not reflected in the statements of United HVAC’s business bank account. Moreover, JODHA failed to advise his accountant that he used a portion of the cashed checks for business and personal expenses.
JODHA admitted to filing false S-Corporation income tax returns on behalf United HVAC for the tax years 2007 through 2010, which omitted any business activity and flow-through income concerning the cashed business checks, and to filing false individual income tax returns for the tax years 2007 through 2010, which understated his true taxable income and the taxes due on that income. As a result of his conduct, JODHA admitted to causing the government a tax loss of approximately $214,529.
JODHA, 43, of South Ozone Park, New York, and Kissimmee, Florida, pled guilty to one count of tax evasion and faces a maximum sentence of 5 years in prison. As part of the plea agreement, JODHA has agreed to pay the IRS restitution in the amount of $214,529. JODHA is scheduled to be sentenced by Judge Richard J. Sullivan on July 24, 2014, at 10:00 a.m. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the efforts of IRS-CI in the investigation. He also thanked the U.S. Department of Justice’s Tax Division for their significant assistance in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Special Assistant U.S. Attorney Jorge Almonte of the Department of Justice’s Tax Division is in charge of the prosecution.
U.S. v. Nick A. Jodha Information
Multi-Convicted Felon Sentenced to 20 Years for Firearm OffensesRead the Press Release
Orlando, Florida – Chief U.S. District Judge Anne C. Conway today sentenced Curtis Lee Dallas (32, Orlando) to 20 years in federal prison for being a felon in possession of a firearm, and possessing that firearm in furtherance of a drug trafficking crime. The court also ordered Dallas to forfeit the Taurus pistol and 9mm ammunition he possessed at the time of his arrest. A federal jury found Dallas guilty on April 30, 2013.
According to testimony and evidence presented at trial, on the evening of February 16, 2012, officers with the Orlando Police Department pulled Dallas over for a suspected window tint violation. When one of the officers approached Dallas’ vehicle, the officer smelled marijuana and saw that Dallas, seated in the driver’s seat, had marijuana sprinkled across his lap. The officer also realized that Dallas was hiding something in his mouth. Dallas refused to get out of the car and struggled with the officer. After removing Dallas from the car, the officer located a loaded 9mm pistol tucked into a holster, clipped to his pants. During a subsequent search of Dallas and the vehicle, officers found several plastic bags filled with marijuana, a plastic bag filled with crack cocaine, almost $1,000 in cash, and a 50-count box of 9mm bullets. After Dallas was arrested, he also spit out a plastic bag filled with powder cocaine that he had hidden in his mouth.
At the time of his arrest, Dallas had multiple prior felony convictions and therefore was prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms. It was prosecuted by Assistant United States Attorney Joseph M. Schuster.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Julie Leon, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline strategy to reduce violent crime and improve the quality of life in communities where law enforcement efforts are focused.
Mountain City and Boone Residents Sentenced for Conspiring to Manufacture MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – Two individuals involved in a methamphetamine conspiracy were sentenced on Apr. 9, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge. Amber R. Coffey, 31, of Boone, N.C., was sentenced to serve 148 months in federal prison, to be followed by four years of supervised release. Crystal E. Potter, 30, of Mountain City, Tenn., was sentenced to serve 46 months in federal prison, to be followed by four years of supervised release. There is no parole in the federal system.
A total of 20 individuals, including Coffey and Potter, were indicted in May 2013 for conspiring to manufacture methamphetamine and possessing equipment, chemicals, materials, and products to be used in the manufacture of methamphetamine. All individuals charged in this case have been adjudicated guilty and have either been sentenced or will be sentenced later this year.
The charges against these individuals stemmed from a lengthy investigation spanning from August 2006 to May 2013. The investigation revealed that they conspired to obtain pseudoephedrine and other products needed to manufacture methamphetamine from various sources in the Eastern District of Tennessee, Western District of North Carolina, and Western District of Virginia. The pseudoephedrine and other products were then used to manufacture methamphetamine utilizing the “shake and bake” method. The methamphetamine was used and distributed in the Eastern District of Tennessee.
This investigation was a result of the collaborative efforts of the Johnson County Sheriff’s Office, First Judicial District Drug Task Force, Tennessee Methamphetamine and Pharmaceutical Task Force, and Drug Enforcement Administration. Assistant U.S. Attorneys Suzanne Kerney-Quillen and Caryn Hebets represent the United States.
Mobile County Meth Cook Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. –Clarence Ray Lee, 31, of Irvington, was sentenced today in federal court to 72 months imprisonment. Lee pled guilty to one count of conspiracy to manufacture methamphetamine and one count of using, carrying, and possessing a firearm in connection with and in furtherance of a drug trafficking felony in 2013. Court documents reflect that Lee was arrested after DHR workers responded to a welfare check at a trailer on Judge Irwin Drive and discovered what appeared to be a methamphetamine lab. Mobile Count Sheriff’s deputies were called to the scene, and Lee and his co-defendants Miles Alexander and Cecily Colvin, approached the residence in a vehicle while the deputies were investigating. When they were detained, sheriff’s deputies discovered additional components of a meth lab, gasoline cans, propane tanks and a gun in the car. The gun was discovered under Lee’s seat in the vehicle. Also present in the vehicle was one of Colvin’s two minor children. The other child was at the trailer when DHR workers arrived for the welfare check.
United States District Court Judge William H. Steele imposed the sentence, consisting of a mandatory consecutive 60-month sentence on the gun charge, and a 12-month sentence on the methamphetamine manufacturing conspiracy. Judge Steele did not impose a fine, but ordered that Lee pay a special mandatory assessment of $200.
The case was investigated by the Mobile County Sheriff’s Office. It was prosecuted in the United States Attorney's Office by Assistant United States Attorney Gloria Bedwell.
Mobile County Meth Cook Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Thomas McThaniel Turner, 31, of Wilmer, was sentenced today in federal court to a term of 59 months imprisonment for his role in a methamphetamine distribution conspiracy. Turner pled guilty to the charge in 2013 and has been held in federal custody pending the imposition of sentence. United States District Court Judge Callie V. S. Granade imposed the sentence this morning and ordered that Turner undergo drug treatment while in prison and after his release on a four-year term of supervision, which will follow his imprisonment. She did not impose a fine, but ordered that Turner pay the $100 special mandatory assessment.
The case was investigated by the Mobile County Sheriff’s Office. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
Meth Cook Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Joseph Thomas Plamann, 28, of Robertsdale, was sentenced today in federal court to a term of 48 months imprisonment for his participation in a conspiracy to manufacture methamphetamine. United States District Court Judge William H. Steele imposed the sentence, and ordered that Plamann undergo drug treatment both during his term of imprisonment and after his release on a five-year term of supervision. The judge did not impose a fine, but ordered that Plamann pay $100 in mandatory special assessments. The sentence was imposed pursuant to a guilty plea entered earlier.
The case was investigated by the Baldwin County Sheriff’s Office, the Baldwin County Drug Task Force, and the Loxley Police Department. It was prosecuted in the United States Attorney's Office by Assistant United States Attorney Gloria Bedwell.
Melvin Taylor Indicted for Crack Cocaine DistributionRead the Press Release
KNOXVILLE, Tenn. - A federal grand jury in Knoxville returned a one-count indictment on Mar. 4, 2014, against Melvin Taylor, 41, of Jefferson City, Tenn., for distribution of crack cocaine. Taylor appeared in court on Apr. 9, 2014, before U.S. Magistrate Judge C. Clifford Shirley, Jr., and pleaded not guilty. He was detained pending trial, which has been set for Jun. 17, 2014, in U.S. District Court in Knoxville.
The indictment alleges that in December 2013 Taylor distributed a quantity of crack cocaine to another individual. If convicted, Taylor faces up to 20 years in prison, a fine of up to $1,000,000, and a term of supervised release of at least three years and up to life.
This indictment is the result of an investigation by the Fourth Judicial District Drug Task Force and Jefferson County Sheriff’s Office. Assistant U.S. Attorney Kelly A. Norris will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every defendant is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
Massachusetts Man Convicted of Federal Firearm ChargeRead the Press Release
Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that
Jermaine Whindleton, 28, formerly of Worcester, Massachusetts, was found guilty yesterday in
U.S. District Court in Portland, following a two-day jury trial, of being a felon in possession of a firearm.According to trial evidence and court documents, in 2009, Whindleton was convicted in
Massachusetts of felony drug and assault charges. Several years earlier, he had also been convicted in New York of felony drug and assault charges. On June 12, 2012, Whindleton used a
Mossberg 16 gauge pump-action shotgun in Porter, Maine to assault a drug associate by striking him on the back of his head with the butt end of the firearm during an argument over a drug debt owed to Whindleton.Whindleton is subject to an enhanced sentence as an Armed Career Criminal. He faces a mandatory minimum of 15 years and up to life in prison, a $250,000 fine, or both. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Maine State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Martin Woman Sentenced for Involuntary ManslaughterRead the Press Release
United States Attorney Brendan V. Johnson announced that a Martin, South Dakota, woman convicted of Involuntary Manslaughter was sentenced on April 4, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Stephanie Red Willow, age 26, was sentenced to custody until April 11, 2014, for a total of over 6 months' custody, 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Red Willow was indicted for Felony Child Abuse and Neglect and Involuntary Manslaughter by a federal grand jury on September 24, 2013. She pled guilty to the Involuntary Manslaughter charge on November 27, 2013.
The charge related to Red Willow consuming alcohol and then falling asleep while holding her infant child on a couch on July 23, 2013, in Martin. She awoke to find the child face down and unresponsive. The child was later pronounced dead at the Martin hospital.
This case was investigated by the Federal Bureau of Investigation, Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Red Willow was immediately turned over to the custody of the U.S. Marshals Service.
Loxahatchee Pair Sentenced in Government Benefit Fraud CaseRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Lester Fernandez, Special Agent in Charge, U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office, Thomas Caul, Special Agent in Charge, Social Security Administration (SSA), Office of Inspector General, Atlanta Field Division, Karen Citizen-Wilcox, Special Agent in Charge, U.S. Department of Agriculture (USDA), Office of Inspector General, and Brian P. Martens, Acting Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announce that Gloria Nereida Valle-Clas, 49, and Alexander Gonzalez, 41, of Loxahatchee, were sentenced today in West Palm Beach before United States Senior District Judge Kenneth L. Ryskamp.
Valle-Clas was sentenced to 51 months in prison, three years supervised release, and restitution of $283,359.43. Gonzalez, her husband, was sentenced to 364 days in prison, three years supervised release, and $9,999 in restitution.
Valle-Clas previously pled guilty to one count of conspiracy, in violation of Title 18, United States Code, Section 371, and one count of making a false statement to HUD, in violation of Title 18, United States Code, Section 1001. Gonzalez pled guilty to one count of aiding and abetting Valle-Clas in making a false statement to HUD, in violation of Title 18, United States Code, Section 1001.
According to the indictment, and as made public at the plea and sentencing hearings, Valle-Clas obtained two social security numbers (SSN), one which was originally associated with her birth name, “Nereida Valle,” and one which was originally associated with the name “Gloria Lopes Clas.” From at least December 2003 to January 2013, she used the SSN for “Nereida Valle” to obtain almost $500,000 in federal housing, social security, food, cash, and medical benefits from HUD, SSA, USDA and HHS. At the same time, she used the SSN for “Gloria Lopes Clas” to obtain mortgage loans and buy real estate in both Broward and Palm Beach Counties. As “Gloria Clas,” she sold two Broward properties for a profit of over $200,000. She also purchased over an acre of property in Loxahatchee on which she built an approximately 2,700 square foot residence. After the residence was built, she received a $200,000 HELOC collateralized by the property, but defaulted on it owing over $150,000. At various times, her husband, Gonzalez, assisted her in obtaining housing benefits.
Valle-Clas, who formally changed her name from “Nereida Valle” to “Gloria Nereida Valle-Clas” in 2003, used approximately 12 aliases in perpetrating the scheme, most of which were variations on “Nereida Valle” and “Gloria Lopes Clas.”
Mr. Ferrer commended the investigative efforts of HUD-Office of Inspector General, the Palm Beach County Sheriff’s Office, SSA-Office of Inspector General, USDA-Office of Inspector General, and the HHS-OIG. This case is being handled by Assistant U.S. Attorney Carolyn Bell.
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.
Local Tax Preparer Pleads Guilty to Failure to File Tax ReturnsRead the Press Release
St. Louis, MO – JAMES T. MAHONEY pled guilty to failing to file tax returns.
According to court documents, Mahoney was an accountant and had been preparing tax returns since 1987. He became self-employed in 1997 and originally ran his business from his residence in Kirkwood, Missouri. Mahoney provided professional tax preparation services and prepared tax returns for individual and business entities.
Mahoney earned a substantial income for the tax years of 2007, 2008 and 2009. As a result of that income he owed a total tax of more than $180,000. Mahoney admitted with his plea that he purposely failed to file income tax returns for those tax years, and has not paid his taxes for those years.
"With the April 15 tax deadline looming, it is important for people to have confidence that when they pay their taxes, their neighbors and co-workers are doing the same," said Sybil Smith, IRS Criminal Investigation Special Agent in Charge of the St. Louis Field Office.
Mahoney, Kirkwood, MO, pled guilty to one count of failing to file tax returns before United States Magistrate Judge Terry I. Adelman. Sentencing has been set for July 9, 2014.
He now faces a maximum penalty of one year in prison and/or fines up to $25,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by IRS Criminal Investigation. Assistant United States Attorney Howard Marcus is handling the case for the U.S. Attorney's Office.
Local Man Sentenced to Lengthy Prison Sentence on Federal Firearms ChargesRead the Press Release
St. Louis, MO – ROBERT HENNINGS was sentenced to 15 years in prison for illegal possession of a firearm. Hennings was sentenced as an Armed Career Criminal under 18 U.S.C. Section 924(e).
According to court documents, on April 14, 2013, St. Louis Metropolitan Police officers received a 911 call from a man reporting that his mother's neighbor was threatening his mother with a handgun. Officers arrived at the scene where they found the victim, who informed officers that Hennings pointed a handgun at her. While officers were still at the apartment, Hennings returned and was arrested. A search of the area revealed Hennings' coat under a bush in the front yard of the apartment building with a loaded semi-automatic pistol in the coat pocket. They also found a second magazine loaded with six rounds. The victim identified Hennings' coat and the pistol. A review of Hennings' criminal history revealed that he previously was convicted of multiple violent felonies, and as a convicted felon is forbidden by law to own or possess firearms.
Hennings, St. Louis, Missouri, pled guilty in January to one felony count of being a felon in possession of a firearm. He appeared today for sentencing before United States District Judge Carol E. Jackson.This case was investigated by the St. Louis Metropolitan Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Cristian Stevens is handling the case for the U.S. Attorney's Office.
Last Defendant Sentenced for Counterfeiting GuitarsRead the Press Release
PHILADELPHIA – Randy Gray, 27, of Fort Worth, TX, was sentenced today for his role in a scheme to traffic in counterfeit guitars carrying the marks of C.F. Martin and Company Guitars, Guild Guitars Incorporated and Gibson Guitar Corporation. The counterfeit goods bore marks that were identical with and substantially indistinguishable from genuine marks in use and registered for those goods on the principal register in the United States Patent and Trademark Office, and which are found on genuine guitars, and the use of which was meant to deceive. The scheme resulted in 165 counterfeit guitars being sold to unsuspecting pawn shops which paid a total of approximately $56,000 for the items.
Gray is one of four defendants charged in the case, each of whom pleaded guilty. In addition to one day in jail and three years of supervised release, the judge ordered the following: Gray was ordered to pay $7,617 in restitution; co-defendant Bruce Alford, 41, of Fort Worth, TX, was ordered, on December 5, 2013, to pay $8,701 in restitution and a $100 special assessment. Co-defendant Josh Davis, 39, of Galveston, TX, was ordered, on January 15, 2014, to pay $22,047.60 in restitution and serve six months of home confinement; co-defendant Romeo Rondeau, 44, of Fort Worth, TX, was ordered, on November 7, 2013, to pay $7,133.93 in restitution and serve six months of home confinement.
The case was investigated by the FBI – Allentown Resident Agency and is being prosecuted by Assistant United States Attorney John Gallagher.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Last Defendant Sentenced for Counterfeiting GuitarsRead the Press Release
PHILADELPHIA – Randy Gray, 27, of Fort Worth, TX, was sentenced today for his role in a scheme to traffic in counterfeit guitars carrying the marks of C.F. Martin and Company Guitars, Guild Guitars Incorporated and Gibson Guitar Corporation. The counterfeit goods bore marks that were identical with and substantially indistinguishable from genuine marks in use and registered for those goods on the principal register in the United States Patent and Trademark Office, and which are found on genuine guitars, and the use of which was meant to deceive. The scheme resulted in 165 counterfeit guitars being sold to unsuspecting pawn shops which paid a total of approximately $56,000 for the items.
Gray is one of four defendants charged in the case, each of whom pleaded guilty. In addition to one day in jail and three years of supervised release, the judge ordered the following: Gray was ordered to pay $7,617 in restitution; co-defendant Bruce Alford, 41, of Fort Worth, TX, was ordered, on December 5, 2013, to pay $8,701 in restitution and a $100 special assessment. Co-defendant Josh Davis, 39, of Galveston, TX, was ordered, on January 15, 2014, to pay $22,047.60 in restitution and serve six months of home confinement; co-defendant Romeo Rondeau, 44, of Fort Worth, TX, was ordered, on November 7, 2013, to pay $7,133.93 in restitution and serve six months of home confinement.
The case was investigated by the FBI – Allentown Resident Agency and is being prosecuted by Assistant United States Attorney John Gallagher.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Las Vegas Man Sentenced to 20 Years in Prison for Mortgage Fraud SchemeRead the Press Release
LAS VEGAS, Nev. – A local man who was convicted by a jury in September 2013 of conspiracy to commit mail and wire fraud for his involvement in a scheme to obtain $35 million in fraudulent mortgage loans, was sentenced today to 20 years in prison, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Jabari L. Marshall, 36, of Las Vegas, was sentenced by U.S. District Judge Gloria M. Navarro. Marshall was also ordered to pay approximately $250,000 in restitution and to forfeit up to $6.1 million in assets that were gained as a result of the crimes. Marshall has been in custody since his arrest in January 2012, and has a lengthy criminal history, including two prior federal convictions in Nevada for bank fraud/check fraud type crimes. Marshall was also on federal supervised release when he committed this crime.
“Since 2008, hundreds of persons have been prosecuted by the Nevada United States Attorney’s Office for this type of crime,” said U.S. Attorney Bogden. “By now, the message should be clear that if you get convicted of committing a mortgage fraud offense, you will spend a significant time in federal prison.”
From about 2005 to 2007, Marshall and nine co-conspirators obtained mortgage loans through the use of straw buyers and by submitting false and fraudulent loan applications to federally insured financial institutions. Once the mortgage loans were approved, the conspirators caused money from the loan transactions to be disbursed to their own use and benefit. The conspirators typically rented the homes and re-sold them for a profit, using the same scheme. Some of the homes were “flipped” or sold twice within short periods of time. The conspirators then defaulted on the loans, causing approximately $15 million in losses to the lenders. The conspirators used this fraudulent scheme to purchase 30 homes in Las Vegas between 2005 and 2007. The total value of the mortgages was approximately $35 million.Defendant Lloyd Gardley was considered to be the leader of the conspiracy. Lloyd Gardley, Candis Gardley, and Marshall recruited straw buyers, loan officers and others into the scheme. Marshall also provided false Social Security numbers and false documents for some of the loans. The other conspirators included two loan officers, two real estate agents, an escrow assistant, an accountant, and an individual who provided false verifications of rent. All nine co-conspirators were convicted and have been sentenced.
The case was investigated by the United States Postal Inspection Service and prosecuted by Assistant U.S. Attorneys Brian Pugh and Sarah E. Griswold.
This case was handled in connection with the President's Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.Las Vegas Man Indicted for Interstate Transportation of A Minor for Prohibited Sexual ContactRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a one-count indictment today against Donald J. Peel, 63, of Las Vegas, Nev., charging him with interstate transportation of a minor for prohibited sexual contact, United States Attorney Benjamin B. Wagner announced.
According to court documents, Peel initiated a sexual relationship with a 16-year-old girl in Las Vegas in late 2013. In February 2014, Peel and the minor began a five‑state trip throughout the Western United States that included Arizona, Nevada, Oregon, Washington, and California. Peel and the minor engaged in sexual conduct in each of the five states. On March 19, 2014, Peel was arrested in Weed, Calif., with the minor still accompanying him. Peel has been in custody since his arrest and is scheduled for arraignment on April 16, 2014.
This case is the product of an investigation by the Federal Bureau of Investigation, the California Highway Patrol, and the Weed Police Department. Assistant United States Attorney Matthew G. Morris is prosecuting the case.
If convicted, Peel faces a sentence of at least 10 years, and up to life in prison, and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Las Cruces Man Pleads Guilty to Possession of Forged and Counterfeited Postage StampsRead the Press Release
ALBUQUERQUE – James H. Clark, Jr., 61, of Las Cruces, N.M., pleaded guilty this afternoon to an indictment charging him with possession with intent to use forged and counterfeited postage meter stamps under a plea agreement with the U.S. Attorney’s Office.
Clark, the owner and operator of a business selling books through internet websites, was indicted on Feb. 19, 2014, and charged with possession with intent to use forged and counterfeited postage meter stamps with an aggregate value of $9,142.98.
Today Clark entered a guilty plea to the indictment. In his plea agreement, Clark admitted that on Oct. 19, 2010, he knowingly possessed 1,527 forged and counterfeited postage meter stamps that he created by copying original postage meter stamps that he purchased from stamps.com. Clark further admitted that he intended to use the forged and counterfeited stamps to mail packages through the U.S. Postal Service. He acknowledged that the total face value of the forged and counterfeited stamps was $9,142.98.
In the plea agreement, Clark and the United States stipulated that the U.S. Postal Service sustained $365,827.00 in losses as a result of Clark’s criminal activities. Under the terms of the plea agreement, Clark will be required to pay restitution to the U.S. Postal Service in that amount.
At sentencing, Clark faces a maximum penalty of five years in federal prison. His sentencing hearing has yet to be scheduled.
This case was investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistant U.S. Attorney Alexander Shapiro of the U.S. Attorney’s Las Cruces Branch Office.
La Jolla-Based Luxury Car Dealer Pleads Guilty to Campaign Finance CrimesRead the Press Release
San Diego, CA – Marc Alan Chase, the proprietor of a La Jolla-based luxury car dealership, pleaded guilty today to eight misdemeanor counts of campaign finance crimes, including conspiracy, aiding and abetting contributions by a foreign national and making a conduit or “straw” contribution in connection with a federal campaign. He faces up to eight years in prison and $800,000 in fines for his conduct.
At the same hearing, two of Chase’s corporations – South Beach Acquisitions, Inc., and West Coast Acquisitions, Inc. – consented to the filing of felony charges of conspiracy, and entered into deferred prosecution agreements with the government.
As part of his plea agreement, Chase admitted that he conspired with Jose Susumo Azano Matsura, Ravneet Singh, Ernesto Encinas and Marco Polo Cortes (all of whom were indicted on February 18, 2014) to make several illegal campaign contributions in connection with various campaigns for elective office during the 2012 primary and general election cycles. Chase confessed to helping make a series of donations by Azano, a foreign national who by law cannot provide financing to American political campaigns. In addition, Chase admitted to facilitating a conduit contribution in connection with a federal campaign—which is illegal even if the source is a citizen.
In acknowledging his participation in the conspiracy, Chase admitted that he acted to cover up the illegal activity, ensuring that Azano’s name did not appear in any public record or filing.
In addition, Chase detailed one of the earliest incarnations of the illegal campaign finance scheme, admitting that, in 2011, Azano told him to recruit friends and relatives so that each would make the maximum possible donation to “Candidate 1,” a candidate for the office of mayor of San Diego during the 2012 primary election cycle. After giving Chase this instruction, Azano “caused one of his employees” to hand Chase approximately $10,000 in cash. Chase admitted that, just as Azano had instructed him, he distributed the cash among employees, contractors and acquaintances, asking them to make the maximum allowable donation to Candidate 1. Chase told many of them that he was reimbursing them with Azano’s money.
Also as part of the plea, Chase admitted to making three large contributions totaling $180,000 in September and October 2012. According to the plea agreement, Azano told Chase to make the contributions and promised to provide financing for them. In particular, on October 2, 2012, Azano wrote a $380,000 check to “Symbolic,” which Chase deposited into one of his corporations’ bank accounts. Chase admitted that, as agreed with Azano, $180,000 of this money would be used to make campaign contributions in connection with the campaigns of “Candidate 2,” a candidate for federal office, and “Candidate 3,” who was running for mayor. The remaining $200,000 was used to pay for one Andy Warhol serigraph, depicting dollar signs, which Chase had previously sold to Azano.
Incorporated into Chase’s plea agreement was a chart detailing the transactions in September and October 2012, which is reproduced in an appendix to this news release.
Chase’s sentencing hearing has been set for November 13, 2014 at 1:30 p.m. before U.S. Magistrate Judge David H. Bartick.
Plea Agreement (click HERE)
Information 14CR0926 (click HERE)
DEFENDANT Case Number:Marc Alan Chase
Age: 52 Solana Beach, CA CHARGESCount 1: Conspiracy to Commit Offenses against the United States – 18 U.S.C. § 371.
INVESTIGATING AGENCIES
Count 2-5 and 7-8: Contribution by a Foreign National – 2 U.S.C. §§ 437g(d)(1)(A)(ii) and 441e(a)(1)
Count 6: Conduit Contribution – 2 U.S.C. §§ 437g(d)(1)(A)(ii) and 441f
Maximum penalties for all counts, total: 8 years in prison (one year per count), 1 year of supervised release, and $800,000 in fines ($100,000 per count)Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigation
San Diego Police Department*Charging documents, including indictments and informations, are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Justice Department, Federal Trade Commission Issue Antitrust Policy Statement on Sharing Cybersecurity InformationRead the Press Release
The Department of Justice and the Federal Trade Commission (FTC) today issued a policy statement on the sharing of cybersecurity information that makes clear that properly designed cyber threat information sharing is not likely to raise antitrust concerns and can help secure the nation’s networks of information and resources. The policy statement provides the agencies’ analytical framework for information sharing among private entities and is designed to reduce uncertainty for those who want to share ways to prevent and combat cyberattacks.
“The Department of Justice is committed to doing all it can to protect the security of our nation’s networks. Through the FBI and the National Security and Criminal Divisions, the department plays a critical role in preventing and prosecuting cybercrime,” said Deputy Attorney General James M. Cole. “Private parties play a critical role in mitigating and responding to cyber threats, and this policy statement should encourage them to share cybersecurity information.”
“Cyber threats are increasing in number and sophistication, and sharing information about these threats, such as incident reports, indicators and threat signatures, is something companies can do to protect their information systems and help secure our nation’s infrastructure,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division. “With proper safeguards in place, cyber threat information sharing can occur without posing competitive concerns.”
“Because of the FTC’s long experience promoting data security, we understand the serious threat posed by cyberattacks,” said FTC Chairwoman Edith Ramirez. “This statement should help private businesses by making it clear that antitrust laws do not stand in the way of legitimate sharing of cybersecurity threat information.”
In the policy statement, the federal antitrust agencies recognize that the sharing of cyber threat information has the potential to improve the security, availability, integrity and efficiency of the nation’s information systems. The policy statement also emphasizes that the legitimate sharing of cyber threat information is very different from the sharing of competitively sensitive information such as current or future prices and output or business plans, which may raise antitrust concerns. Cyber threat information is typically technical in nature and covers a limited type of information, and disseminating that information appears unlikely to raise competitive concerns.
The joint Department of Justice/Federal Trade Commission “Antitrust Guidelines for Collaborations Among Competitors” provide an overview of the agencies’ analysis of information sharing as a general matter. The agencies consider whether the relevant agreement likely harms competition by increasing the ability or incentive to raise price above or reduce output, quality, service or innovation below what likely would prevail in the absence of the relevant agreement.
Previous antitrust analysis on cyber threat information sharing was issued in October 2000, when the Antitrust Division issued specific guidance in a business review letter to Electric Power Research Institute Inc. Under the Justice Department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division will challenge the action under the antitrust laws. In that letter, the Antitrust Division confirmed that it had no intention of taking enforcement action against the company’s proposal to exchange certain cybersecurity information, including exchanging actual real-time cyber threat and attack information. In that matter, the division concluded that as long as the information exchanged was limited to physical and cybersecurity issues, the proposed interdictions on price, purchasing and future product innovation discussions should be sufficient to avoid any threats to competition. The legal analysis in that matter remains current.
Justice Department Releases Investigative Findings on Albuquerque Police DepartmentRead the Press Release
Following a comprehensive investigation, today the Justice Department announced its findings that the Albuquerque Police Department (APD) has engaged in a pattern or practice of excessive force that violates the Constitution and federal law. The department delivered a letter setting forth these findings to Albuquerque Mayor Richard J. Berry and Police Chief Gorden Eden this morning.
The investigation was launched on Nov. 27, 2012, and was conducted jointly by the department’s Civil Rights Division and the U.S. Attorney’s Office for the District of New Mexico. The investigation examined whether APD engages in an unconstitutional pattern or practice of excessive force, including deadly force, as well as the cause of any pattern or practice of a violation of the law. This investigation did not assess whether any conduct violated criminal laws. Specific cases have been referred to the Criminal Section of the division for consideration.
The department found reasonable cause to believe that APD engages in a pattern or practice of excessive force in violation of the Fourth Amendment of the U.S. Constitution. The department specifically found three patterns of excessive force:
· APD officers too frequently use deadly force against people who pose a minimal threat and in situations where the conduct of the officers heightens the danger and contributes to the need to use force;
· APD officers use less lethal force, including electronic controlled weapons, on people who are passively resisting, non-threatening, observably unable to comply with orders or pose only a minimal threat to the officers; and
· Encounters between APD officers and persons with mental illness and in crisis too frequently result in a use of force or a higher level of force than necessary.
The department also found systemic deficiencies of the APD which contribute to these three patterns, including: deficient policies, failed accountability systems, inadequate training, inadequate supervision, ineffective systems of investigation and adjudication, the absence of a culture of community policing and a lack of sufficient civilian oversight.
The department’s investigation involved an in-depth review of APD documents, as well as extensive community engagement. The department reviewed thousands of materials, including written policies and procedures, internal reports, data, video footage and investigative files. Department attorneys and investigators, assisted by policing experts, also conducted interviews with APD officers, supervisors and command staff, city officials, and with hundreds of community members and local advocates.
“We are very concerned by the results of our investigation and look forward to working with the city of Albuquerque to develop a set of robust and durable reforms,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Our work to assist police departments around the nation is intended to advance important principles. Holding police accountable for constitutional practices improves public confidence, promotes public safety and makes the job of providing police services safer, easier and more effective. Public trust has been broken in Albuquerque, but it can be repaired through this process.”
“ Today’s groundbreaking announcement marks a critical milestone in addressing problems that have plagued our community and the Albuquerque Police Department for years,” said Acting U.S. Attorney Damon Martinez for the District of New Mexico. “These findings come at a unique time for the city and the Albuquerque Police Department and provide a blueprint for changing the culture of the Albuquerque Police Department and for rebuilding broken relationships with the community it serves. Although there are difficult and systemic issues to resolve, we embrace these challenges and are very optimistic for the future of the Albuquerque Police Department .”
The Justice Department looks forward to continued cooperation with the city and the Albuquerque Police Department to resolve these findings under mutually agreeable terms that will provide accountability to the public and accomplish the remedial measures within a fixed period of time.
The full report can be found at the department website and the U.S. Attorney’s Office website . For more information about the Justice Department’s Civil Rights Division, please visit the division website . Any comments or concerns regarding the report can be directed via email or to 1-877-218-5228.
Justice Department Releases Investigative FindingsRead the Press Release
On The Albuquerque Police Department
ALBUQUERQUE – Following a comprehensive investigation, the Justice Department today announced its findings that the Albuquerque Police Department (APD) has engaged in a pattern or practice of excessive force that violates the Constitution and federal law. The Justice Department delivered a letter setting forth these findings to Albuquerque Mayor Richard J. Berry and Police Chief Gorden Eden this morning.
The investigation was launched on November 27, 2012, and conducted jointly by the Civil Rights Division and the United States Attorney’s Office for the District of New Mexico. The investigation examined whether APD engages in an unconstitutional pattern or practice of excessive force, including deadly force, as well as the cause of any pattern or practice of a violation of the law. This investigation did not assess whether any conduct violated criminal laws. Specific cases have been referred to the Criminal Section of the Civil Rights Division for consideration.
The Justice Department found reasonable cause to believe that APD engages in a pattern or practice of excessive force in violation of the Fourth Amendment of the United States Constitution. The Department specifically found three patterns of excessive force:
- APD officers too frequently use deadly force against people who pose a minimal threat and in situations where the conduct of the officers heightens the danger and contributes to the need to use force;
- APD officers use less lethal force, including electronic controlled weapons, on people who are passively resisting, non-threatening, observably unable to comply with orders, or pose only a minimal threat to the officers; and
- Encounters between APD officers and persons with mental illness and in crisis too frequently result in a use of force or a higher level of force than necessary.
The Justice Department also found systemic deficiencies of the APD, which contribute to these three patterns, including: deficient policies, failed accountability systems, inadequate training, inadequate supervision, ineffective systems of investigation and adjudication, the absence of a culture of community policing, and a lack of sufficient civilian oversight.
The Department’s investigation involved an in-depth review of APD documents, as well as extensive community engagement. The Department reviewed thousands of pages of documents, including written policies and procedures, internal reports, data, video footage, and investigative files. Department attorneys and investigators, assisted by policing experts, also conducted interviews with APD officers, supervisors and command staff, city officials; and hundreds of interviews with community members and local advocates.
“We are very concerned by the results of our investigation and look forward to working with the City of Albuquerque to develop a set of robust and durable reforms,” said Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights. “Our work to assist police departments around the nation is intended to advance important principles. Holding police accountable for Constitutional practices improves public confidence, promotes public safety and makes the job of providing police services safer, easier and more effective. Public trust has been broken in Albuquerque, but it can be repaired through this process.”
Today’s groundbreaking announcement marks a critical milestone in addressing problems that have plagued our community and the Albuquerque Police Department for years,” said Damon Martinez, Acting U.S. Attorney for the District of New Mexico. “These findings come at a unique time for the City and the Albuquerque Police Department, and provide a blueprint for changing the culture of the Albuquerque Police Department and for rebuilding broken relationships with the community it serves. Although there are difficult and systemic issues to resolve, we embrace these challenges and are very optimistic for the future of the Albuquerque Police Department.”
The Justice Department looks forward to continued cooperation with the City and Albuquerque Police Department to timely resolve these findings under mutually agreeable terms that will provide accountability to the public and accomplish the remedial measures within a fixed period of time.The full report can be found at http://justice.gov/crt/about/spl/findsettle.php and http://www.justice.gov/usao/nm/APD.html. For more information about the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt/ Any comments or concerns regarding the report can be directed to at [email protected] or 1-877-218-5228.
Jacksonville Man Indicted by Federal Grand Jury for Producing Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that a federal grand jury has returned an indictment charging Charles Franklin Hudson, Jr. (38, Jacksonville) with four counts of using a minor to produce videos depicting child pornography. He faces a mandatory minimum penalty of 15 years, up to 30 years in federal prison, and a potential life term of supervision. Hudson was arrested on January 8, 2014, and has been in custody on related state charges since that time. His arraignment and detention hearing is scheduled for April 16, 2014 at 10:30 a.m., before United States Magistrate Judge Monte C. Richardson in Jacksonville.
The indictment alleges that on or about May 17, 2011 through on or about June 28, 2012, Hudson, on at least four separate occasions, did knowingly employ, use, persuade, induce, entice, and coerce a minor to engage in sexually explicit conduct for the purpose of producing visual materials of that conduct.
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 Jacksonville Sheriff’s Office and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). 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.
Indictment Charges Former Governor with Illegal Activity in Two Congressional CampaignsRead the Press Release
Follow @USAO_CT
The United States Attorney for the District of Connecticut and the United States Postal Inspection Service announced that a federal grand jury in New Haven returned a seven-count indictment today charging JOHN G. ROWLAND, 56, of Middlebury, with offenses stemming from his efforts to conceal the extent of his involvement in two federal election campaigns. ROWLAND served as governor of Connecticut from 1995 to 2004, and in the U.S. House of Representatives from 1985 to 1991.
The indictment alleges that in approximately October 2009, ROWLAND devised a scheme to work for the campaign of a candidate seeking election to the U.S. House of Representatives from Connecticut’s Fifth Congressional District during the 2009 and 2010 election cycle, and to conceal from the Federal Election Commission (“FEC”) and the public the fact that he would be paid to perform that work. To make the illegal arrangement appear legitimate, ROWLAND drafted a sham consulting contract pursuant to which he would purportedly perform work for a separate corporate entity, referred to in the indictment as the “Animal Center.” By proposing to run the campaign-related payments to ROWLAND through the Animal Center, ROWLAND sought to prevent actual campaign contributions and expenditures from being reported to the FEC and the public.
The indictment further alleges that during the 2011 and 2012 election cycle, Lisa Wilson-Foley was a candidate for election to the U.S. House of Representatives from Connecticut’s Fifth Congressional District. Wilson-Foley’s husband, Brian Foley, owns a Connecticut nursing home company and a number of other related companies, including a real estate company. It is alleged that ROWLAND conspired with Wilson-Foley, Foley and others to conceal from the FEC and the public that ROWLAND was paid money in exchange for services he provided to Wilson-Foley’s campaign.
The indictment alleges that ROWLAND proposed to Wilson-Foley and Foley that he be hired to work on the campaign. In order to retain ROWLAND’s services for the campaign while reducing the risk that his paid campaign role would be disclosed to the public, ROWLAND, Wilson-Foley and Foley agreed that ROWLAND would be paid by Foley to work on the campaign. In furtherance of the scheme, ROWLAND, Foley and others created and executed a fictitious contract outlining an agreement purportedly for consulting services between ROWLAND and the law offices of an attorney who worked for Foley’s nursing home company. Foley made regular payments to ROWLAND for his work on behalf of Wilson-Foley’s campaign and routed those payments from his real estate company through the law offices of the attorney and on to ROWLAND. ROWLAND provided nominal services to Foley’s nursing home company in order to create a “cover” that he was being paid for those nominal services when, in fact, he was being paid in exchange for his work on behalf of Wilson-Foley’s campaign.
It is alleged that between September 2011 and April 2012, ROWLAND was paid approximately $35,000 for services rendered to Wilson-Foley’s campaign. The payments originated with Foley and constituted campaign contributions, but were not reported to the FEC in violation of federal campaign finance laws.
The indictment charges ROWLAND with two counts of falsification of records in a federal investigation, a charge that carries a maximum term of imprisonment of 20 years on each count, one count of conspiracy, a charge that carries a maximum term of imprisonment of five years, two counts of causing false statements to be made to the FEC, a charge that carries a maximum term of imprisonment of five years on each count, and two counts of causing illegal campaign contributions, a charge that carries a maximum term of imprisonment of one year on each count.
ROWLAND is expected to be arraigned tomorrow at 2:30 p.m. in New Haven.
This matter is being investigated by the U.S. Postal Investigation Service and is being prosecuted by Assistant U.S. Attorneys Liam Brennan and Christopher Mattei.
An indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
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(203) 821-3722 [email protected]Illinois Resident Sentenced to Three Years in Prison for Insider TradingRead the Press Release
SAN FRANCISCO – Bassam Yacoub Salman was sentenced yesterday to three-years in prison and ordered to pay $738,539.42 in restitution for engaging in an insider trading scheme, announced U.S. Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson,
Salman was found guilty by a jury on Sept. 30, 2013, of one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 371, and four counts of securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff. The jury found that between 2004 and 2007, Salman, 54, of Orland Park, Ill., engaged in securities fraud and insider trading relating to securities issued by United Surgical Partners International, Inc. (USPI) and Biosite Incorporated (BSTE).
The charges against Salman were part of a larger, $5.3 million, insider trading scheme first charged in 2009 against Maher Fayez Kara, of San Carlos, Calif., a former investment banker at Citigroup Global Markets Inc. in N.Y., and Maher Kara’s brother, Mounir Fayez Kara, also known as Michael F. Kara, of Walnut Creek, Calif. In July 2011, Maher Kara and Michael Kara both pleaded guilty to conspiracy and securities fraud charges.
“Insider trading is a scourge that too often victimizes innocent investors and publicly traded companies alike,” said U.S. Attorney Melinda Haag. “This sentence should warn those who might engage in insider trading that the consequences can be severe.”
“Forming a network of conspirators in an attempt to cheat the marketplace has consequences,” said FBI SAC David Johnson. “Our financial system is designed to benefit honest working people; contradicting this through white collar crimes such as insider trading have criminal implications.”
Evidence at trial showed that on or about March 23, 2007, Salman, trading in an account owned by his brother-in-law, Karim Bayyouk, caused the purchase of approximately $100,000 in Biosite call options. Salman obtained the inside information about Biosite from Michael Kara, who had first obtained it from his brother, Maher Kara, who worked at Citigroup. Two days later, on March 25, 2007, Biosite announced it was merging with another company. After the merger announcement, Salman sold the options and realized a profit of approximately $947,922. Evidence at trial showed that Salman purchased securities in United Surgical Partners International, Inc. using inside information obtained from Michael Kara and, initially, from Maher Kara.
On Sept. 4, 2013, in a separate trial, another federal jury convicted Bayyouk, 49, of Livonia, Mich., of obstructing and impeding an investigation by the Securities and Exchange Commission (“SEC”) into securities fraud and insider trading relating to Biosite Incorporated, in violation of 18 U.S.C. § 1505, arising from a telephone interview with the SEC on or about May 31, 2007. Bayyouk is scheduled to be sentenced on April 15, 2014.
The sentence was handed down by the Honorable Edward M. Chen, United States District Court Judge in San Francisco. Judge Chen also sentenced the defendant to a three-year period of supervised release. Salman will begin serving the sentence on July 7, 2014.
Assistant U.S. Attorneys Adam A. Reeves and Robert S. Leach are handling these cases with the assistance of Maryam Beros, Rayneisha Booth, and Patricia Mahoney. The prosecution is the result of a lengthy investigation by the FBI with substantial assistance from the Division of Enforcement of the SEC’s San Francisco Regional Office.
(Salman unsealed indictment )
High-Level Sinaloa Cartel Member’s Guilty Plea Unsealed; Zambada-Niebla’s Cooperation with U.S. RevealedRead the Press Release
CHICAGO — A high-level member of the Sinaloa Cartel in Mexico pleaded guilty a year ago to participating in a vast narcotics trafficking conspiracy and is cooperating with the United States, federal law enforcement officials announced today. A written plea agreement with the defendant, JESUS VICENTE ZAMBADA-NIEBLA, was made public today in U.S. District Court for the Northern District of Illinois.
Zambada-Niebla, 39, pleaded guilty on April 3, 2013, before U.S. District Chief Judge Ruben Castillo. Zambada-Niebla was arrested in Mexico in 2009, and he was extradited to the United States in February 2010.
Zambada-Niebla remains in U.S. custody and no sentencing date has been set. Under the plea agreement, he faces a maximum sentence of life in prison¸ a mandatory minimum sentence of 10 years, and a maximum fine of $4 million. If the government determines at the time of sentencing that Zambada-Niebla has continued to provide full and truthful cooperation, as required by the plea agreement, the government will move to depart below the anticipated advisory federal sentencing guideline of life imprisonment. In addition, Zambada-Niebla agreed not to contest a forfeiture judgment of more than $1.37 billion.
“This guilty plea is a testament to the tireless determination of the leadership and special agents of DEA’s Chicago office to hold accountable those individuals at the highest levels of the drug trafficking cartels who are responsible for flooding Chicago with cocaine and heroin and reaping the profits,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. Mr. Fardon announced the guilty plea with Jack Riley, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration.
Zambada-Niebla pleaded guilty to one count of conspiracy to possess with intent to distribute multiple kilograms of cocaine and heroin between 2005 and 2008. More specifically, the plea agreement describes the distribution of multiple tons of cocaine, often involving hundreds of kilograms at a time on a monthly, if not weekly, basis between 2005 and 2008. The guilty plea means that there will be no trial for Zambada-Niebla, whose case was severed from that of his co-defendants. Among his co-defendants are his father, Ismael Zambada-Garcia, also known as “Mayo,” and Joaquin Guzman-Loera, also known as “Chapo,” both alleged leaders of the Sinaloa Cartel. Zambada-Garcia is a fugitive believed to be in Mexico, and Guzman-Loera is in Mexican custody after being arrested this past February.
Zambada-Niebla admitted that between May 2005 and December 2008, he was a highlevel member of the Sinaloa Cartel and was responsible for many aspects of its drug trafficking operations, “both independently and as a trusted lieutenant for his father,” for whom he acted as a surrogate and logistical coordinator, the plea agreement states. Zambada-Niebla admitted he was aware that his father was among the leaders of the Sinaloa Cartel since the 1970s and their principal livelihood was derived from their sale of narcotics in the United States.
Zambada-Niebla admitted that he participated in coordinating the importation of multiton quantities of cocaine from Central and South American countries, including Colombia and Panama, into the interior of Mexico, and facilitated the transportation and storage of these shipments within Mexico. The cartel used various means of transportation, including private aircraft, submarines and other submersible and semi-submersible vessels, container ships, go-fast boats, fishing vessels, buses, rail cars, tractor-trailers, and automobiles.
Zambada-Niebla “subsequently assisted in coordinating the delivery of cocaine to wholesale distributors in Mexico, knowing that these distributors would in turn smuggle multiton quantities of cocaine, generally in shipments of hundreds of kilograms at a time, as well as on at least one occasion, multi-kilogram quantities of heroin, from Mexico across the United States border, and then into and throughout the United States, including Chicago,” according to the plea agreement.
On most occasions, the Sinaloa Cartel supplied this cocaine and heroin to wholesalers on consignment, including to cooperating co-defendants Pedro and Margarito Flores, whom Zambada-Niebla knew distributed multi-ton quantities of cocaine and multi-kilogram quantities of heroin in Chicago, and in turn sent payment to Zambada-Niebla and other cartel leaders. Zambada-Niebla also admitted being aware of, and directly participating in, transporting large quantities of narcotics cash proceeds from the U.S. to Mexico.
Zambada-Niebla also admitted that he and his father, as well as other members of the Sinaloa Cartel, “were protected by the ubiquitous presence of weapons,” and that he had “constant bodyguards who possessed numerous military-caliber weapons.” Zambada-Niebla also admitted that he was aware that the cartel used violence and made credible threats of violence to rival cartels and to law enforcement in Mexico to facilitate its business.
The DEA in Chicago led the investigation, joined by the Internal Revenue Service Criminal Investigation Division and the Chicago Police Department. Also assisting were the DEA=s National Drug Intelligence Center, the High-Intensity Drug Trafficking Area task force, the U.S. Attorney=s Office in Milwaukee and the Milwaukee Police Department; the U.S. Attorney=s Office for the Central District of Illinois; the Chicago and Peoria offices of the Federal Bureau of Investigation; the Chicago offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the U.S. Marshals Service; the Cook County Sheriff’s Department, and other state and local law enforcement agencies. The investigation was assisted by agents and analysts of the Special Operations Division (SOD), and attorneys from the Justice Department Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs assisted with Zambada-Niebla’s extradition.
Assistant U.S. Attorneys Thomas D. Shakeshaft and Michael J. Ferrara are representing the government.
Plea Agreement
Four Indicted in Bank and Wire Fraud Scheme Involving Real Estate Loan from Now-Failed Sonoma Valley BankRead the Press Release
WASHINGTON – Bijan Madjlessi, David Lonich, Sean Cutting, and Brian Melland were arrested yesterday on federal charges of conspiracy, bank fraud, wire fraud, money laundering, false statements to a bank, false bank entries, and attempted obstruction of justice, announced United States Attorney Melinda Haag, Scott O’Briant, Special Agent in Charge, Special Inspector General for the Troubled Asset Relief Program, Leslie DeMarco, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General, and Wade V. Walters, Special Agent in Charge, Federal Deposit Insurance Corporation, Office of Inspector General.
According to the Indictment returned by a federal grand jury on March 19, 2014, and unsealed yesterday, Madjlessi, 58, of Mill Valley, Calif., is alleged to have defaulted on a loan of more than $30,000,000, which he had personally guaranteed, relating to a real estate project known as the Park Lane Villas East in Santa Rosa, Calif. Working with attorney David Lonich, 59, of Santa Rosa, Calif., Cutting, 44, of Sonoma, Calif., then-CEO of Sonoma Valley Bank, and Melland, 45, of Santa Rosa, Calif., then-Senior Vice President of Sonoma Valley Bank, as well as a nominee borrower, Madjlessi allegedly obtained a loan from Sonoma Valley Bank to purchase his own defaulted loan on the premise that the nominee was the actual borrower when, in fact, he and Lonich were the true borrowers. According to the Indictment, Cutting and Melland failed to disclose their knowledge of the true identities of the borrowers to Sonoma Valley Bank and took steps to authorize the loan. Madjlessi’s nominee successfully obtained the loan from Sonoma Valley Bank and purchased the defaulted loan from a Federal Deposit Insurance Corporation contractor. Madjelssi, Lonich, and the nominee later settled litigation regarding the foreclosed loan, and Madjlessi and Lonich obtained title to the Park Lane Villas East.
The Indictment also alleges that Cutting helped Madjlessi and Lonich gain control of additional units at the Park Lane Villas East by issuing letters on Sonoma Valley Bank letterhead falsely stating that potential nominee buyers had sufficient funds at Sonoma Valley Bank for purchase. Madjlessi and Lonich are also alleged to have instructed the nominee to make false claims to federal agents and to a federal grand jury investigating the transactions.
Ultimately, Madjlessi and Lonich obtained refinancing on the Park Lane Villas East through Freddie Mac, but not before Sonoma Valley Bank failed in August 2010. Until it failed, Sonoma Valley Bank was insured by the Federal Deposit Insurance Corporation (FDIC), was a member of the Federal Home Loan Bank of San Francisco, and had received $8.65 million in funds from the Troubled Asset Relief Program.
All four defendants were arrested yesterday in Marin and Sonoma Counties in California and made initial appearances in federal court in San Francisco. Each defendant was released on a $250,000 bond. Defendants’ next scheduled hearing will be before the Honorable Susan Illston, United States District Court Judge, on April 18, 2014 at 11:00 a.m.
An Indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The defendants face the following charges and maximum sentences:
DEFENDANT
CHARGES
Madjlessi, Lonich, Cutting, and Melland
One count of conspiracy to commit wire and bank fraud, in violation of 18 U.S.C. § 1349, with up to 30 years of imprisonment, 5 years of supervised release, and a fine of $1,000,000.
Madjlessi, Lonich, Cutting, and Melland
One count of bank fraud, in violation of 18 U.S.C. § 1344, with up to 30 years of imprisonment, 5 years of supervised release, and a fine of $1,000,000.
Madjlessi, Lonich, Cutting, and Melland
Six counts of wire fraud affecting a financial institution, in violation of 18 U.S.C. § 1343, each with up to 30 years of imprisonment, 5 years of supervised release, and a fine of $1,000,000.
Madjlessi, Lonich, Cutting, and Melland
One count of conspiracy to make false statements to a bank, in violation of 18 U.S.C. § 371, with up to 5 years of imprisonment, 3 years of supervised release, and a fine of $250,000.
Madjlessi, Lonich, Cutting, and Melland
One count of conspiracy to launder money, in violation of 18 U.S.C. § 1956(h), with up to 10 years of imprisonment, 3 years of supervised release, and a fine of $250,000 or twice the derived property.
Madjlessi, Lonich, Cutting, and Melland
Twelve counts of money laundering, in violation of 18 U.S.C. § 1957, each with up to 10 years of imprisonment, 3 years of supervised release, and a fine of $250,000 or twice the derived property.
Cutting and Melland
One count of conspiracy to misapply bank funds, in violation of 18 U.S.C. § 371, with up to 5 years of imprisonment, 3 years of supervised release, and a fine of $250,000.
Madjlessi, Lonich, and Cutting
Five counts of false bank entries, in violation of 18 U.S.C. § 1005, each with up to 30 years of imprisonment, 5 years of supervised release, and a fine of $1,000,000.
Madjlessi and Lonich
One count of attempted obstruction of justice, in violation of 18 U.S.C. § 1512(c), with up to 20 years of imprisonment, 3 years of supervised release, and a fine of $250,000.
In addition, the defendants face a $100 mandatory special assessment for each charge against them as well as potential forfeiture and restitution if convicted. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Robert David Rees is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rawaty Yim. The prosecution is the result of a three and a half year investigation by the Special Inspector General for the Troubled Asset Relief Program, the Federal Housing Finance Agency Office of Inspector General, and the Federal Deposit Insurance Corporation Office of Inspector General, with the assistance of the Marin County Sheriff’s Office, the Sonoma County Sheriff’s Office, and the Santa Rosa Police Department.
(SVB indictment )
Former Teacher Sentenced to Prison for Using School Computer to Acquire Child PornographyRead the Press Release
PITTSBURGH - A former Butler middle school teacher was sentenced in federal court to two years imprisonment, followed by 10 years of supervised release, on his conviction of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
Senior United States District Judge Donetta W. Ambrose imposed the sentence on Jason B. Nolan, 37, of Gibsonia, Pa.
According to information presented to the court, Nolan, a former middle-school, social studies teacher in the South Butler County School District, used a laptop computer taken from the school’s library to acquire and possess images of child pornography. Nolan also used the laptop to communicate on-line with minors, including a female he believed to be 12 years of age, with whom he spoke of meeting to have sex and to whom he sent naked, sexual photographs of himself, taken in his classroom after school hours.
Assistant United States Attorney Carolyn J. Bloch prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Homeland Security-Homeland Security Investigations (HSI), for the investigation leading to the successful prosecution of Nolan.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Lincoln Resident Sentenced for Conspiracy to Distribute DrugsRead the Press Release
On April 10, 2014, Felipe G. Olmos-Torres, age 37 of Dallas, Texas, and formerly of Lincoln, was sentenced to 70 months in prison for conspiracy to distribute drugs. Olmos Torres was held responsible for the distribution of at least 15 kilograms (33 pounds) of cocaine; at least 1.5 kilograms (3⅓ pounds) of methamphetamine, and at least 40 kilograms (88 pounds) of marijuana in the Lincoln area between September of 2009 and September of 2012. Information provided to law enforcement indicated that some of the drugs were being distributed out of a Lincoln used car business operated by Olmos Torres
Following the prison term, Olmos Torres will serve five years on supervised release.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Former Chief of Staff for Illinois Department of Public Health Pleads Guilty to Bribery and Taking Kickbacks, Obstruction of JusticeRead the Press Release
Springfield, Ill. – A former Chief of Staff for the Illinois Department of Public Health, Quinshaunta R. Golden, pled guilty today to bribery and taking kickbacks related to $13 million in grant and contract funds awarded at Golden’s direction and to obstructing justice in a federal grand jury investigation. Golden appeared before U.S. District Judge Sue E. Myerscough in Springfield. Sentencing for Golden has been scheduled for Aug. 18, 2014.
Golden, 45, of Homewood, Ill., served as Chief of Staff at the Ill. Department of Public Health from 2003 to early 2008. In that capacity, Golden had significant control over the agency’s offices and had certain approval authority and control over the awarding of grants and contracts. In 2008, Golden left the Department of Public Health and took a position at the University of Chicago Medical Center.
During today’s hearing and according to court documents, Golden admitted that from August 2006 to at least October 2008, she used her position to cause the agency to issue approximately $11 million in grant funds, for programs relating to breast, cervical and prostate cancer, HIV/AIDS, and emergency preparedness, to three not-for-profit organizations: Broadcast Ministers Alliance, Access Wellness and Racial Equity, and the Medical Health Association. These organizations were then controlled by Leon Dingle, Jr., and his for-profit corporation known as Advance Health, Social and Educational Associates, Inc.
As part of the scheme, Golden caused Individual A to be hired as a paid consultant for Leon Dingle, Jr., and the three not-for-profit entities, as well as a paid consultant for an entity identified as Security Firm A. As a result, approximately $772,500 in grant funds, originally disbursed to the three not-for-profit entities, was paid to Individual A from July 2007 to April 2008, including approximately $407,500 paid to Individual A in April 2008 alone, at the end of Golden’s tenure at the Department of Public Health. As a condition of Individual A receiving grant funds, Golden admitted that she required Individual A to pay her one-half of whatever Individual A received, less any funds to be withheld for payment of taxes, which were never paid.
In addition, Golden caused approximately $2 million in contract funds to be paid by the Department of Public Health to Security Firm A to conduct background checks and interviews of Illinois nursing home residents related to the Identified Offender Program. Golden required Individual A to pay Golden kickback payments for each background investigation performed by Security Firm A.
Golden admitted that from February to April 2012, she persuaded and attempted to persuade Individual A, a material witness, with the intent to obstruct an official grand jury investigation in the Central District of Illinois. Golden met with Individual A on multiple occasions and falsely denied receiving improper kickback payments from A. Golden then admitted to Individual A that she caused grants to be issued to certain vendors and to Individual A, but encouraged and instructed Individual A not to tell the truth concerning the kickback scheme and to conceal the truth from A’s attorney, and to create a false story by saying that Individual A used the grant and contract funds for gambling and other personal expenses.
At sentencing, according to the terms of the plea agreement, the government has agreed to recommend to the court a sentence at the low end of the applicable advisory sentencing guidelines. The government agrees that calculation of the advisory sentencing guideline range would result in the government recommending a sentence of no higher than 121 months in prison. The defendant remains free to challenge the calculation and to recommend whatever sentence the defendant deems appropriate.
In the related but separate case, Leon Dingle, Jr., his wife Karin, both of Chicago, and two associates, Jacquelyn Kilpatrick, of Phoenix, Ill., and Edmond Clemons, of the same Phoenix address, were indicted in October 2012, on charges that they used millions of dollars in grant funds awarded by the Ill. Department of Public Health to grant recipients for their personal benefit and to pay personal expenses. Trial in this case is currently scheduled for June 3, 2014, before Senior U.S. District Judge Richard Mills in Springfield.
Members of the public are reminded that an indictment is merely an accusation; the defendants are presumed innocent unless proven guilty.
Central District of Illinois U.S. Attorney Jim Lewis expressed his appreciation to the federal law enforcement officers assigned and the agencies who support the Central District of Illinois U.S. Attorney’s Office’s Public Corruption Task Force: Tony Gomez, Postal Inspector in Charge, U.S. Postal Inspection Service, Chicago Division; James Lee, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Chicago Field Office; and Jim Burns, Inspector General, Illinois Secretary of State Office of Inspector General. Assistant U.S. Attorney Timothy A. Bass is prosecuting the case on behalf of the U.S. Attorney’s Office for the Central District of Illinois.
Individuals who wish to provide information to law enforcement regarding matters of alleged public corruption are urged to call the U.S. Attorney’s Office at 217-492-4450.
Five Charged with Kidnapping Wake Forest ManRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today five defendants were charged with Conspiracy to Kidnap in violation of Title 18, United States Code, Section 1201(c), in connection with the kidnapping of Frank Arthur Janssen of Wake Forest, North Carolina.
JENNA PAULIN MARTIN, 21, TIANA MAYNARD, a/k/a TIANA BROOKS, 30, JEVANTE PRICE, a/k/a FLAME, 20, MICHAEL MONTREAL GOODEN, a/k/a HOT, 21, and CLIFTON JAMES ROBERTS, 29, were all charged with kidnapping. These five individuals are in federal custody at this time.
According to the investigation, Mr. Janssen was taken from his home against his will on April 5, 2014. Through a coordinated effort involving many federal, state, and local law enforcement agencies, the FBI’s Hostage Rescue Team rescued Mr. Janssen at 11:55 pm on April 9, 2014 at a residence in Southeast Atlanta. If convicted of this charge, each defendant faces a maximum sentence of life imprisonment and a fine of up to $250,000.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The case is being investigated by the FBI Charlotte, FBI Atlanta, the Wake Forest Police Department, the North Carolina State Bureau of Investigation with assistance by the Durham County Sheriff’s Office, Raleigh Police Department, Durham Police Department, North Carolina Alcohol Law Enforcement, Garner Police Department, North Carolina Highway Patrol, RDU Police, City County Bureau of Investigation, the Cobb County Police Department, Alpharetta Police Department, Atlanta Police Department, and the Georgia Bureau of Investigation. The United States Attorney’s Office for the Eastern District of North Carolina is handling the prosecution of these cases.