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1 April 2014
Collin County Man Guilty in Plano ISD Embezzlement SchemeRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – A 59-year-old Princeton, Texas man has pleaded guilty in connection with his role in a conspiracy to embezzle over $2.5 million from the Plano Independent School District, announced U.S. Attorney John M. Bales today.
Kris Wilson Gentz pleaded guilty to an Information charging him with conspiracy to commit federal program fraud today before U.S. Magistrate Judge Don Bush.
According to information presented in court, from August 2001 to December 2013, Gentz was employed by the Plano ISD as a Manager and Security and Fire Systems Security Support Specialist. Gentz was responsible for ensuring that Plano ISD schools were equipped with fire and security alarms that were properly maintained. Between 2004 and December 2013, Gentz and two other individuals set up two companies called Fire System Specialists (FSS) and Digital Security Solutions (DSS) that were allegedly in the business of maintaining fire safety systems and security systems. Gentz and his co-conspirators generated fraudulent FSS and DSS invoices and submitted them to Plano ISD for payment. Gentz, in his Plano ISD management role, corruptly approved these invoices; however the services and products referenced on the invoices were never provided or delivered. When payment was made to FSS and DSS, Gentz and his co-conspirators would split the profits between themselves. Over the course of the scheme, Gentz and his co-conspirators obtained over $2.5 million from Plano ISD. Gentz acknowledged that he had abused the position of trust that Plano ISD had given him.
“Public corruption always involves the breach of a position of trust,” said U.S. Attorney Bales, “and, even apart from the financial impact, erodes the trust of taxpayers and the community. We commend Plano ISD for discovering the corrupt conduct and reporting it to the authorities, and we recognize our law enforcement partners for their quick action in addressing this case. We intend this case to be a message that we will not tolerate public corruption in the Eastern District of Texas or anywhere else.”
"The FBI, Department of Education, Plano Police Department and Plano Independent School District should be commended for their collaborative investigative efforts which led to a quick resolution in this matter," said FBI Special Agent in Charge Diego Rodriguez.
“Today’s action shows that this individual not only knowingly and willfully abused his position of trust for personal gain, but he did so at the expense of the educational development of children. That is unacceptable," said Marcus Culpepper, Assistant Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Southwest Regional Office. “As the law enforcement arm of the U.S. Department of Education, I’m proud of the work of OIG special agents and our law enforcement colleagues for holding this man accountable for his criminal actions and for cheating Plano’s students.”
Gentz faces up to five years in federal prison. A date for sentencing has not yet been set.
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The case is being investigated by the Federal Bureau of Investigation, the U.S. Department of Education, Office of Inspector General and the Plano Police Department. The case is being prosecuted by Assistant U.S. Attorney Shamoil T. Shipchandler.Chief Executive Officer of ACI Capital Group Sentenced to 63 Months in Prison for Using Investment Advisory Firm to Steal Clients’ Money and Lying to the SECRead the Press Release
BROOKLYN, NY – Fredrick Douglas Scott, 29, the Chief Executive Officer of ACI Capital Group LLC (“ACI”), an investment adviser registered with the Securities and Exchange Commission (“SEC”), was sentenced today in federal court in Brooklyn, New York, to 63 months in prison to be followed by three years of supervised release. As part of the sentence, Scott was ordered to pay more than $1,388,190 in restitution to the defrauded victims. In September 2013, Scott waived indictment and pleaded guilty to engaging in a wire fraud conspiracy to steal over a million dollars from investors, and lying to officials from the SEC who were conducting a regulatory examination of ACI.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Filed Office (“FBI”).
“Fredrick Douglas Scott claimed to be a part of history. In reality he was a con man and a thief who fleeced unsuspecting retail investors, his so-called clients, out of more than a million dollars. Rather than help his clients invest their hard earned money, Scott stole their money for his own personal use to buy expensive dinners, clothes, and other goods and services. Scott then lied to SEC examiners who were investigating his firm. Instead of a place in the history books, Scott’s crimes bought him a room with the Bureau of Prisons for 63 months. We remain committed to protecting the retail investor from the effects of fraudsters like Scott,” stated United States Attorney Lynch. Ms. Lynch thanked the FBI, the agency responsible for leading the government’s investigation, and the SEC, Division of Enforcement in New York, for their assistance in this case.
ACI was founded by Scott in 2009 and purported to be an investment banking and advisory firm with an office located at 477 Madison Avenue, New York, New York. ACI registered as an Investment Adviser with the SEC in July 2011 and, pursuant to its most recent regulatory filing, claimed to manage $3.7 billion in assets. While Scott touted his bona fides as an investor to potential clients, including distributing the May 2010 issue of Ebony magazine, which described him as “the youngest African American hedge fund founder in history,” in reality, Scott used ACI to execute his fraudulent scheme, causing over a million dollars in losses.
In connection with his scheme, Scott worked with intermediaries or finders to locate potential victims. Once a potential victim was identified, Scott promised a high rate of return for providing short-term financing to businesses purportedly associated with ACI. Once victims wired money to ACI, Scott stole the funds for his personal use. Scott used client funds to purchase personal items at Louis Vuitton, the Apple Store, Starbucks, Fair Bail Bonds, True Religion Jeans, Tao Restaurant, the Hampton Inn SoHo, and Dizzy’s Coca-Cola Club, among others. Scott also wired stolen client funds to his personal checking account.
The sentencing proceeding was held before U.S. District Judge Roslynn R. Mauskopf.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The government’s case is being prosecuted by Assistant United States Attorney James P. Loonam.
The Defendant:
FREDRICK DOUGLAS SCOTT
Age: 29
Chicago Man Admits Stealing More Than $1 Million Worth of Iphones and IpadsRead the Press Release
NEWARK, N.J. - A Chicago man today admitted he stole more than $1 million worth of iPhones and iPads from Verizon Wireless through an elaborate scheme that involved misappropriating corporate purchasing accounts and then diverting the shipments by bribing Federal Express drivers, U.S. Attorney Paul J. Fishman announced.
Stephen Gunn, 36, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an indictment charging him with one count of conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court: Gunn accessed the online accounts of dozens of Verizon’s customers, including several customers located in New Jersey, and used those accounts to place unauthorized orders for electronics products, primarily, smart phones and accessories. He directed the fraudulently ordered products be shipped to addresses in Texas, including several addresses that did not exist, via Federal Express.
At Gunn’s direction, two Federal Express drivers intercepted the shipments, removed the contents, and re-shipped the contents to addresses in Illinois provided by Gunn. In exchange, Gunn paid the drivers each thousands of dollars. Gunn fraudulently obtained approximately 1,700 items—including several hundred Apple iPhones and iPads, Blackberry devices, and Motorola phones—worth more than $1 million.
The conspiracy to commit wire fraud count to which Gunn pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gain or loss from the offense. Sentencing is scheduled for July 15, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Daniel V. Shapiro of the U.S. Attorney’s Office Computer Hacking and Intellectual Property Crimes Section of the Economic Crimes Unit in Newark.
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Defense counsel: David Holman Esq., Assistant Federal Public Defender, NewarkGunn, Stephen Indictment
Cheektowaga Man Sentenced on Gun ChargeRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Kevin Zimmerman, 24, of Cheektowaga, N.Y., who was convicted of being an armed career criminal in possession of a firearm, was sentenced to 180 months by Chief U.S. District Judge William M. Skretny.
According to Assistant U.S. Attorney George C. Burgasser, who handled the case, the defendant was previously convicted in State Court in 2010 of four counts of Attempted Burglary. Zimmerman then stole two firearms during the commission of burglaries in 2012 making him a felon in possession of firearms which he then sold to Gander Mountain and the Buffalo Gun Center.
The sentencing is the culmination of an investigation on the part of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the U.S. Marshal’s Violent Felony Fugitive Task Force, under the direction of Marshal Charles Salina and the New York State Parole Division, under the direction of Commissioner Jeffrey Fischer.Caribbean Corridor Strike Force Dismantles Drug Trafficking Organization Responsible for Transporting Drugs and Money Between Puerto Rico-Culebra-St ThomasRead the Press Release
SAN JUAN, PR – This morning, the Caribbean Corridor Strike Force (CCSF) dismantled a drug trafficking organization responsible for the importation of multi-kilogram quantities of cocaine into Puerto Rico and the transportation of drug money between Puerto Rico-Culebra-St. Thomas announced United States Attorney Rosa Emilia Rodríguez-Vélez today.
On March 27, 2014, a federal grand jury returned a five-count indictment charging David Pina-Lico, aka El Negro; Alexis Acosta-Monell, aka Pulpo; Johnathan Saldaña-Garcia; Victor Cruz-Resto, aka Pulga, Charlie Martinez-Pimentel, aka Pajarito; Noel Rodriguez-Lopez, aka Gordo, aka Gordo Gurabo; Israel Adorno-Perez, aka Rafita, Aka Gafita with participating in a conspiracy to import controlled substances, conspiracy to possess controlled substances, namely cocaine, conspiracy to launder monetary instruments, and money laundering.
The investigation leading to today’s arrests uncovered that members of this organization would take orders from individuals in Puerto Rico interested in purchasing kilogram quantities of cocaine in St. Thomas. The organization would receive the money for the payment of the narcotics from the buyers in Puerto Rico and would coordinate the delivery of the money to the sellers in St. Thomas. Once the money arrived to St Thomas, the organization would arrange for the smuggling of the narcotics into Puerto Rico. The organization coordinated the movement of drugs and money in phases: The money was first moved from the east coast of Puerto Rico to Culebra, either in motor vessels or via the ferry; once the money arrived to Culebra, it was then transported to St. Thomas in motor vessels. The drugs were smuggled into Puerto Rico using the same system, from St Thomas to Culebra, and then to Puerto Rico.
The indictment includes a forfeiture allegation for the proceeds obtained as a result of the organization’s illegal activities, the motor vessels that were used during the smuggling operations, and a vehicle.
“These arrests are a clear indication of the success of the Caribbean Corridor Strike Force in the fight against drug trafficking. Today’s arrests dismantles an organization that coordinated not only the traffic of drugs within the eastern Caribbean, but also the movement of drug money, essential to the success of these illegal activities,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “We will continue maximizing all of our combined resources to investigate and prosecute those who disregard our laws and try to smuggle illegal contraband into our jurisdiction.”“The DEA Caribbean Division will continue its effort to fight the drug trafficking organizations who continue to utilize the eastern Caribbean Corridor between Puerto Rico and the U.S. Virgin Islands, using the Islands of Culebra and Vieques as transshipment points,” said Vito Salvatore Guarino, Special Agent in Charge of the DEA Caribbean Division. “These arrests are one more example that the Caribbean Corridor Strike Force continues to prove its value as an effective tool to coordinate multi-agency efforts to disrupt and stop the flow of drugs between Puerto Rico and the U.S. Virgin Islands via Culebra and Vieques.”
“These arrests are proof that Homeland Security Investigations remains vigilant and that along with our partners in the Caribbean Corridor Strike Force will continue using our robust investigative authorities to identify, investigate and apprehend those involved in drug trafficking,” said Angel M. Melendez, special agent in charge of HSI San Juan. “HSI and our CCSF partners will not tolerate the importation of illegal drugs into the United States through Puerto Rico.”
The case was investigated by agents from the Caribbean Corridor Strike Force (CCSF). The CCSF is an initiative of the U.S. Attorney's Office created to disrupt and dismantle major drug trafficking organizations operating in the Caribbean. CCSF is part of the Organized Crime Drug Enforcement Task Force (OCDETF) that investigates South American-based drug trafficking organizations responsible for the movement of multi-kilogram quantities of narcotics using the Caribbean as a transshipment point for further distribution to the United States. The initiative is composed of DEA, HSI, FBI, US Coast Guard, US Attorney Office for the District of Puerto Rico, and PRPD's Joint Forces for Rapid Action.
The case is being prosecuted by Assistant United States Attorney Carlos R. Cardona.The defendants are facing terms of imprisonment from 10 years to life for the narcotics violations and up to 20 years for the money laundering violations. Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
Carbon County Man Sentenced to Prison for Federal Firearms OffenseRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Carbon County man was sentenced yesterday, in federal court in Scranton by Senior United States District Judge Edwin M. Kosik, to serve 30 months in prison on the charge of being an unlawful user of controlled substances in possession of firearms.
According to United States Attorney Peter J. Smith, Jordan Bachert, age 29, of Lansford, Carbon County, previously admitted to being an unlawful user of controlled substances in 2011 and 2012, a time period in which he purchased and possessed several firearms in Carbon County. Bachert pled guilty on October 9, 2013 to a criminal information filed on September 16, 2013.
In addition to the prison term, Senior Judge Kosik also ordered that Bachert be supervised by a probation officer for two years following his release from prison.
The case resulted from an investigation concerning drug and firearms trafficking in Carbon and Schuylkill Counties conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Nesquehoning and Lansford Police Departments in Carbon County.
The case was prosecuted by Assistant United States Attorney Robert J. O’Hara.
Brothers Charged in Fraud on Pennsylvania BusinessRead the Press Release
PHILADELPHIA - An indictment was unsealed yesterday charging Owen Moore, 50, of Pottstown, PA, and Larry Moore, 52, of East Hampton, Connecticut, in a scheme to defraud a Pennsylvania corporation, announced United States Attorney Zane David Memeger. The indictment charges the brothers with conspiracy to commit mail fraud and mail fraud for conspiring to defraud Siemens Corporation of $263,739.84. Owen Moore is also charged with wire fraud.
The alleged scheme was carried out between February 2008 and May 2010, while Owen Moore was employed as finance manager at Siemens’ Malvern, Pennsylvania office. Larry Moore owned and operated Benchmark Solutions, LLC, out of East Hampton, Connecticut. The indictment alleges that Owen Moore directed his brother to submit fraudulent invoices to Siemens from Benchmark Solutions. Larry Moore deposited 19 checks from Siemens and forwarded half of the proceeds to his brother.
It is further alleged that Owen Moore defrauded Siemens of an additional $42,291.28 which was used for tuition and other expenses not authorized by the company. Moore allegedly had some of his employees charge the expenses on their company-issued credit cards which he then approved.
If convicted, Owen Moore faces an advisory sentencing guideline range of approximately 46 to 57 months in prison plus restitution; Larry Moore faces an advisory sentencing guideline range of approximately 30 to 37 months in prison plus restitution.
The case was investigated by the Secret Service. The case is being prosecuted by Assistant United States Attorney Christopher Diviny.
Click here to view the indictment
An Indictment or Information 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, 215-861-8525Bronx Man Pleads Guilty to Drug ChargesRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr., announced today that Tyrus Harris, 36, of the Bronx, N.Y., pleaded guilty before U.S. District Judge Frank P. Geraci, Jr., to conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine. The charge carries a mandatory minimum penalty of five years in prison, a maximum 40 years, a fine of $5,000,000.00, or both.
Assistant U.S. Attorney Frank H. Sherman, who handled the case, stated that the defendant participated in a conspiracy to distribute cocaine from 2005 until August 2012. During the time period of the conspiracy, in New York City, Harris arranged for the distribution of quantities of cocaine with others to individuals who were transporting the drugs to Rochester and distributing them. The defendant admitted that at least 3.5 kilograms of cocaine was involved in this conduct.
The plea is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, investigators with the Rochester Police Department, under the direction of Chief Michael Ciminelli, and Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office.
Sentencing is scheduled for June 30, 2014, at 4:00 p.m. before Judge Geraci.Branson Man Indicted for Clean Water Act Violations, Falsified Reports of Pollution DischargeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Branson, Mo., man was indicted by a federal grand jury today for making false statements.
Earl Patrick Kearney, 60, of Branson, was charged in a 12-count indictment returned by a federal grand jury in Springfield, Mo.
Kearney was employed by the Overlook subdivision and the Morningside development in Stone County, Mo., to operate their wastewater treatment facilities from May 2010 to August 2011. Kearney was responsible for conducting wastewater sampling at the facilities and submitting those results to the Missouri Department of Natural Resources.
Today’s indictment alleges that Kearney altered the reports he submitted to the state so that it appeared the Overlook subdivision and the Morningside development were in compliance with their wastewater discharge permits.
Kearney submitted quarterly Wastewater Discharge Monitoring Reports that reported sampling results for total phosphorous, one of the pollutants that is required to be reported for both facilities. All of the reports represented that the Overlook subdivision and Morningside development wastewater treatment facilities were in compliance with their permits. However, the actual laboratory testing data that Kearney received, following his submission of samples for testing, placed both wastewater treatment facilities in violation of their permits during every quarter for which samples were analyzed. After Kearney received the laboratory testing data, he allegedly caused the numbers to be altered on the reports that were subsequently submitted to the state.
The Overlook subdivision wastewater treatment facility discharged to Table Rock Lake. The Morningside development wastewater treatment facility discharged to an unnamed tributary to Brush Creek, a tributary of Table Rock Lake.
Kearney is charged with five counts of making false statements in regard to the Overlook subdivision reports and seven counts of making false statements in regard to the Morningside development reports.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Steve Mohlhenrich. It was investigated by the Environmental Protection Agency, Criminal Investigation Division and the Missouri Department of Natural Resources.Bowling Green Man Guilty of Growing Marijuana in Mammoth Cave National Park and Warren CountyRead the Press Release
BOWLING GREEN, Ky. - A Bowling Green, Kentucky man pleaded guilty today, in United States District Court to conspiracy to manufacture marijuana inside Mammoth Cave National Park and inside a residence located in Warren County, Kentucky announced David J. Hale, United States Attorney for the Western District of Kentucky.
Robert Williams, age 28, pleaded guilty to a four-count federal indictment admitting that between May 4, 2011, and continuing to on or about October 8, 2011, he and co-defendant Ryan Pitcock, of Bowling Green, knowingly and intentionally conspired and agreed together and with each other to manufacture less than 50 Kilograms of marijuana, a schedule I controlled substance inside Mammoth Cave National Park. Williams also admitted to manufacturing marijuana and mushrooms containing psilocin and psilocybin within their residence in Warren County.
According to the plea agreement, search warrants obtained by Kentucky State Police for Williams’ and Pitcock’s apartment in Warren County revealed an extensive marijuana growing operation, processed marijuana for distribution, mushrooms containing psilocin and psilocybin being grown and packaged for distribution, and several stun guns.
Pitcock pleaded guilty to the charges on August 21, 2012 and was sentenced by Chief Judge Joseph H. McKinley, Jr. to 12 months and one day in prison followed by a two year period of supervised release.
If convicted at trial, Williams faces a combined maximum term of 20 years in prison, a fine of $1,5000,000 and a two year period of supervised release.
The case is being prosecuted by Assistant United States Attorney Joshua Judd, and it was investigated by the National Park Service Rangers and the Kentucky State Police.
Billings Bank President Sentenced for $413,000 Bank Fraud, Money Laundering SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former president of the Bank of Billings in Billings, Mo., was sentenced in federal court today for a $413,000 bank fraud and money laundering scheme.
Matthew D. Spillman, 35, of Nixa, Mo., was sentenced by U.S. District Judge Beth Phillips to 30 months in federal prison without parole. The court also ordered Spillman to pay $179,952 in restitution to the Bank of Billings and $233,952 in restitution to BancInsure.
Spillman was the president of Bank of Billings until he was terminated for misappropriating bank funds. Spillman engaged in a scheme to defraud and embezzle from the Bank of Billings from May 20, 2011, until he was suspended from his position on April 13, 2012.
On Oct. 11, 2013, Spillman pleaded guilty to bank fraud and money laundering. As a part of the fraud scheme, Spillman caused the bank to grant loans in nominee names, and kept the loan proceeds for himself. Spillman also added debt to loans without the borrowers’ knowledge, and converted the additional funds to his own use. He advanced funds on bank customers’ lines of credit, and converted those funds to his own use. Spillman used a bank credit card for personal expenses. He embezzled and converted to his own use loan payments made by bank customers. Spillman also caused the bank to issue cashier’s checks without depositing funds to cover those checks.
By pleading guilty, Spillman acknowledged that the total financial harm he caused the Bank of Billings as a result of his scheme to defraud was $413,905.
This case was prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FBI, the FDIC-Office of Inspector General and IRS-Criminal Investigation.
Beaver Falls Teen Charged in Shooters Place BurglaryRead the Press Release
PITTSBURGH - A Beaver County resident has been indicted by a federal grand jury in Pittsburgh on charges of conspiracy, stealing firearms from the inventory of a Federally Licensed Firearms Dealer, and possession of stolen firearms, United States Attorney David J. Hickton announced today.
The three-count indictment named Kyle Jones, 19, formerly of Beaver Falls, Pa., as the sole defendant.
According to the Indictment, in or around February of 2014, Jones, along with another individual known to the grand jury as JS, conspired to burglarize Shooters Place, a Federally Licensed Firearms Dealer, located at 416-F Constitution Boulevard in New Brighton, Pa. The Indictment further charges that on or about Feb. 7, 2014, Jones and JS stole and illegally possessed 14 firearms from Shooters Place.
The law provides for a maximum total sentence of 25 years in prison, a fine of $750,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, in conjunction with the Patterson Township Police Department, the Beaver County Sheriff’s Office, the Beaver County Detective Bureau, the Pennsylvania State Police, the Beaver Falls Police Department, and the New Brighton Police Department, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Baltimore Man Sentenced to 10 Years in Prison in Armed Robbery SpreeRead the Press Release
Co-Conspirators Admitted to Committing up to 22 Armed Robberies of Stores and Businesses
Baltimore, Maryland - U.S. District Judge Marvin J. Garbis sentenced Dion Mitchell Doram, age 23, of Baltimore, Maryland today to 10 years in prison followed by five years of supervised release for commercial robbery and possession of a firearm in furtherance of a crime of violence.
The sentence 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; Chief James W. Johnson of the Baltimore County Police Department; and Anne Arundel County Police Chief Kevin Davis.
According to his plea agreement and court documents, Doram, Quindell Gardner, Tavon McPhaul and others robbed stores in the Baltimore area. After deciding which place to rob, the conspirators would steal a car to use during the robbery. They also used a gun during the robberies to steal cash and cigarettes.
Doram admitted that he participated in at least four armed robberies of convenience stores. On June 21 and June 30, 2012, Doram entered stores on West 41st Street, and on Washington Boulevard, respectively, in Baltimore, brandishing a sawed-off shotgun. Money and cigarettes were taken from employees in each robbery.
On July 4, 2012, Doram entered a store on North Dundalk Avenue in Dundalk, Maryland, carrying a sawed-off shotgun. Gardner entered the store with Doram and stole money and cigarettes from an employee. Doram and Gardner left the store and escaped in a stolen vehicle driven by McPhaul. Witnesses saw the getaway car and provided a description to police.
Shortly thereafter, while Doram waited in the get-away car, Gardner entered a convenience store on Eastern Avenue in Baltimore brandishing the same sawed-off shotgun Doram had used earlier that day. After stealing cash from an employee, Gardner and Doram escaped in the car driven by McPhaul. Police responding to the scene spotted the car and a chase ensued. Doram and Gardner jumped out the car during the chase and were arrested by Baltimore Police officers. McPhaul abandoned the car and escaped on foot, carrying the sawed-off shotgun, but was subsequently arrested.
Quindell Ryeshawn Gardner, and Tavon McPhaul, both age 22, and both of Baltimore, previously pleaded guilty to their roles in committing robberies. Gardner admitted to participating in 22 armed robberies and McPhaul admitted to participating in 12 armed robberies, with Gardner going into the store to commit the robbery and McPhaul driving the getaway vehicle. Judge Garbis sentenced McPhaul to 145 months in prison. Gardner is scheduled to be sentenced on June 5, 2014. Gardner and the government have agreed that if the Court accepts his plea agreement, he will be sentenced to between 15 and 25 years in prison.
United States Attorney Rod J. Rosenstein praised the FBI, the Baltimore City and Baltimore County Police Departments and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Benjamin M. Block, who prosecuted the case.
Atlanta, Ga. Man Sentenced to More Than 15 Years in Prison for Firearms ChargesRead the Press Release
CHARLOTTE, N.C. – Tommie Lee Williams, 43, of Atlanta, Ga. was sentenced on Monday, March 30, 2014 to serve 184 months in prison for federal firearms violations, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also sentenced Williams to serve five years under court supervision following his prison term.
Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division joins U.S. Attorney Tompkins in making today’s announcement.
Williams pleaded guilty in January 2013 to one count of brandishing a firearm during and in relation to a drug trafficking crime and one count of felon in possession of a firearm. According to court documents and yesterday’s sentencing proceedings, in October 2011 Williams brandished a firearm during a drug transaction with an undercover officer. In November 2011, while conducting a traffic stop of the vehicle in which Williams was a passenger, law enforcement recovered an Uzi .45 caliber assault rifle and ammunition from a backpack that belonged to Williams. At the time of the offenses, Williams was a convicted felon and was prohibited from possessing a firearm.
Williams has been in federal custody since February 2012. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by ATF. The prosecution for the government was handled by Assistant U.S. Attorney Ann Claire Phillips of the U.S. Attorney’s Office in Charlotte.
Allen County, Kentucky, Resident Guilty of Stealing Hydrocodone Pills from Her Employer – A Scottsville, Kentucky, PharmacyRead the Press Release
– Former pharmacy employee further admits to conspiring with others to sell and distribute the stolen hydrocodone pills worth $29,808
BOWLING GREEN, Ky. – A former employee of Stovall’s Prescription Shop, located in Scottsville, Kentucky, pleaded guilty today in United States District Court, to conspiracy to distribute the pain killer, hydrocodone, that was stolen from her employer, and conspiring to sell over $5,000 of stolen hydrocodone that had not been made available to consumers for retail purchase, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Lynn Harper Denton, age 46, of Allen County, Kentucky pleaded guilty before Chief Judge Joseph H. McKinley Jr., to two charges in a seven count indictment. According to the plea agreement, between May 2012, and continuing to October 16, 2012, in Allen County, Kentucky, Denton, a former employee of Stovall’s Prescription Shop, conspired with Jeffrey Clay Stinson and Katherine Virginia Rookstool, to knowingly possess and distribute hydrocodone. Denton admitted to stealing over 10,000 hydrocodone pills from Stovall’s Prescription Shop and selling them to Rookstool, who then sold the pills to Stinson. Stinson sold the pills to others. Stinson pleaded guilty to federal charges and is awaiting sentencing. Rookstool has an April 21, 2014 trial date.
Further, Denton admitted that while employed at Stovall’s Prescription Shop, between May 2012, and continuing through October 16, 2012, that she and Rookstool conspired to sell and distribute over $5,000 of stolen hydrocodone that had not been made available to consumers for retail purchase. This is a violation of 18 USC § 670 (theft of medical products) and is the first such prosecution in the Western District of Kentucky. The retail value of the stolen hydrocodone was $29,808.
The charges against Denton expose her to a maximum sentence of no more than 30 years in prison, a $750,000 fine, and a period of five years of supervised release.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the U.S. Food and Drug Administration's Office of Criminal Investigations, Owensboro domicile, the Allen County Sheriff’s Department, and the Scottsville, Kentucky Police Department.
Albuquerque Man Pleads Guilty to Federal Commercial Armed Robbery, Firearms and Carjacking ChargesRead the Press Release
ALBUQUERQUE – Joel Meeks, 20, of Albuquerque, N.M., pleaded guilty this morning to violating the Hobbs Act by interfering with a business involved in interstate commerce by robbery and the federal carjacking and firearms laws. Under the terms of his plea agreement, Meeks will be sentenced to prison for 20 to 25 years followed by a term of supervised release to be determined by the court.
Meeks and his co-defendant Raul Ortega, 21, also of Albuquerque, were arrested in April 2013, on an eight-count indictment charging the pair with offenses stemming from a series of armed robberies of commercial businesses and home invasions, including armed robbery and carjacking, occurring in Bernalillo County, N.M., from Dec. 6, 2012 to Jan. 17, 2013.
According to the indictment, Meeks robbed a business called “Up in Smoke” at gunpoint on Dec. 6, 2012. Meeks also was charged with robbing a business called “PDQ” at gunpoint on Dec. 7, 2012, and with discharging his firearm while committing the offense. Meeks and Ortega were jointly charged with committing carjackings on Jan. 13, 2013 and Jan. 17, 2013. The two men allegedly brandished firearms while committing the carjackings.
Today, Meeks pled guilty to Counts 3 and 4 of the indictment, which charged him with robbing the PDQ store on Dec. 7, 2012 and with discharging a firearm while robbing the store. In his plea agreement, Meeks admitted robbing the PDQ store by pointing a pistol at the store clerk and demanding cash. Meeks discharged the pistol in the direction of the store clerk as he fled from the store.
Meeks also pled guilty to Count 5, which charged him with the Jan. 13, 2013 carjacking, and admitted that Ortega and he forcibly entered a home and robbed the homeowner of his credit cards, identification and other objects. Meeks and Ortega assaulted the homeowner to obtain the PIN number for his ATM car, his car keys and his car. They also threatened to harm the homeowner and his family if he contacted the police, and left him face-down in a bathtub full of water to facilitate their escape.
In entering his guilty plea to Count 7, charging him with the Jan. 17, 2013 carjacking, Meeks admitted that Ortega and he forcibly entered another home by knocking the homeowner down, beating him and tying him up when the homeowner answered the door. Meeks and Ortega robbed the homeowner of his credit cards, ATM card and other items, and forced the homeowner to provide the PIN number for his ATM card. Meeks and Ortega also robbed the homeowner of his car keys and car, and threatened to kill him if he screamed or called the police.
Meeks remains in custody pending his sentencing hearing, which has yet to be scheduled.
On Feb. 19, 2014, Ortega entered guilty pleas to Counts 5 and 7 of the indictment, which charged him with the Jan 13, 2013 and Jan. 27, 2013 carjackings. Ortega also pled guilty to Count 6, which charged him with using a firearm during the Jan 13, 2013 carjacking. Under the terms of his plea agreement, Ortega will be sentenced to prison for 12 to 20 years followed by a term of supervised release to be determined by the court. His sentencing hearing also has not been scheduled.
This case was brought as part of a law enforcement initiative launched in July 2012, by the FBI’s Violent Crimes and Major Offender Squad and the Albuquerque Police Department’s Armed Robbery Unit that targets suspects implicated in commercial armed robberies. This initiative is part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under the worst of the worst anti-violence initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from our communities for as long as possible.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department, with assistance from the 2nd Judicial District Attorney’s Office and is being prosecuted by Assistant U.S. Attorney Jon K. Stanford.
Alabama Man Pleads Guilty to Stolen Identity Refund Fraud and Firearms OffensesRead the Press Release
Deundra Milhouse, an Alabama resident, pleaded guilty today to several charges involving stolen identity refund fraud (SIRF) and firearms offenses, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama. Milhouse pleaded guilty to one count of access device fraud, one count of aggravated identity theft and one count of being a felon in possession of a firearm. He was indicted in December 2013 and has been detained since his arrest in late January 2014.
According to the plea agreement, Milhouse was involved in SIRF crimes—the use of stolen identities to steal money from the Internal Revenue Service (IRS) by filing fraudulent tax returns claiming refunds in the victims’ names—from spring 2011 through late 2013. In 2011 and 2012, he received over $80,000 in fraudulently obtained tax refunds in a bank account he controlled. By 2013, he switched to using prepaid debit cards to receive the refunds.
Milhouse also admitted in his plea agreement that his car was stopped while he was driving on Oct. 8, 2013, in Elmore County, Ala. He managed to flee on foot and threw away a handgun that he had been carrying, which he was prohibited from owning as a convicted felon. Numerous prepaid debit cards and documents with personal identifying information were found in the car. Milhouse also admitted that a later search of his house uncovered more documents with personal identifying information of victims, as well as over 200 prepaid debit cards, a computer used to file tax returns and a magazine and ammunition for the discarded handgun. As part of his plea, Milhouse detailed that his conduct involved an attempted fraud loss of over $400,000 and more than 250 victims, and that he had at least one felony conviction for a crime of violence prior to owning the handgun.
At sentencing, Milhouse faces a maximum sentence of 10 years in prison on the access device fraud count and a maximum sentence of 10 years on the felon in possession of a firearm count, plus a mandatory two-year consecutive sentence for aggravated identity theft.
This case was investigated by special agents of the IRS - Criminal Investigation and by the Elmore County Sheriff’s Office. Trial Attorneys Jason Poole and Michael Boteler of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.
31 March 2014
Winnebago Man Sentenced for Assault on A Federal OfficerRead the Press Release
United States District Court Judge Joseph F. Bataillon sentenced Milton James LaRose, age 26 of Winnebago, Nebraska, for his conviction of assaulting a federal officer. LaRose was sentenced to time served (seven months) and was further ordered to serve 6 months at the Dismas Charities residential reentry center in Sioux City, Iowa.
LaRose was encountered on the Winnebago Indian Reservation by a BIA officer on July 11, 2013. The officer had been called due to a report of a disturbance. When the officer attempted to arrest LaRose and place him in handcuffs, LaRose pulled away and punched the officer in the eye. LaRose continued to struggle and resist arrest until the officer was able to gain control of him.
This case was investigated by the Federal Bureau of Investigation.
West Virginia Man Sentenced to Prison for Traveling to Have Sex with Minor FemaleRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A West Virginia man was sentenced to a lengthy prison term for traveling across state lines to have sex with a minor female.
United States Attorney William J. Ihlenfeld, II announced ANTHONY ALLEN PENNINGTON, age 24 of Berkeley Springs, was sentenced to fourteen years prison and supervision for life as a result of his conviction for “Traveling in Interstate Commerce with the Intent to Engage in Illicit Sexual Conduct.”
PENNINGTON previously admitted that in May of 2013 he traveled from West Virginia to Pennsylvania with the intent to engage in sexual activity with a fifteen year old girl. PENNINGTON had texted with the victim that night and made arrangements to pick up the victim and her friend in Morgan County, West Virginia. The girls rode their bikes to an area where PENNINGTON picked them up and drove them to Pennsylvania. PENNINGTON had sexual intercourse with one of the girls and then returned them to West Virginia.
U.S. District Court Judge Judge Gina M. Groh enhanced PENNIGNTON’s sentence, finding that he was a repeat and dangerous sex offender based upon his conviction in 2010 for sexual assault in the third degree in Morgan County, West Virginia. In the prior case PENNINGTON was convicted of having sex with a female minor when he was 20 and the victim was 14.
PENNINGTON was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was prosecuted by Assistant U.S. Attorney Jarod J. Douglas and investigated by the Morgan County Sheriff’s Department.
Two Sentenced in Connection with Sunshine Pharmacy Health Care FraudRead the Press Release
Fort Myers, Florida – United States District Judge John E. Steele today sentenced Delmer Holmes Parrish (44) and Patricia Parrish (74), both of Naples, for their roles in a conspiracy to commit health care fraud that operated from Sunshine Pharmacy in Naples, Florida. Delmer Holmes Parrish, a licensed Pharmacist, was sentenced to two years in federal prison. Patricia Parrish was sentenced three years of probation, to include 120 days of home confinement, and ordered to pay a $5,000 fine. Both were also ordered to pay restitution to the United States in the amount of $351,358.14, the proceeds of the crime. Pursuant to their agreement, this amount was paid in full, immediately following the sentencing. As part of the plea agreement, Delmer Holmes Parrish also permanently relinquished his Pharmacist License to the State of Florida.
According to court documents, from in or around February 2009, through in or about July 2012, Delmer Holmes Parrish and Patricia Parrish participated in a conspiracy to defraud federal health care benefit programs out of approximately $351,358.14. Both, along with others, used Sunshine Pharmacy and Sunshine Solutions, both in Naples, to further their unlawful scheme to defraud the government. The co-conspirators submitted and caused claims to be submitted for reimbursement from the Medicaid, Medicare, and TRICARE programs for prescriptions not filled or provided to beneficiaries and recipients, including prescriptions for patients that had not been written or authorized by any duly licensed physician. In addition, the co-conspirators submitted and caused claims to be submitted for reimbursement for prescriptions for beneficiaries and recipients who were deceased. In carrying out the offenses, the conspirators also used the means of identification of individuals who were enrolled in the Medicaid, Medicare, or TRICARE programs without their knowledge or consent. The conspirators also took steps to hide and conceal the scheme to defraud. As a result of the scheme, the government was defrauded of approximately $351,358.14.
According to Brian Martens, Acting Special Agent in Charge of Health and Human Services, Office of Inspector General, in Tampa, “today’s sentencing, which is punctuated by the defendants’ having made 100% restitution to Medicare, clearly demonstrates the success of the Strike Force model.”
This case was brought as part of the Medicare Strike Force and was investigated by the United States Department of Health and Human Services, Office of Inspector General; Department of Defense, Defense Criminal Investigative Service; and the Drug Enforcement Administration with assistance from the Naples Police Department; Collier County Sheriff's Office; and the United States Secret Service. It was prosecuted by Assistant United States Attorney David G. Lazarus.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Topeka Man Sentenced for Robbery at Kaw Valley BankRead the Press Release
TOPEKA, KAN. - A Topeka man was sentenced Monday to two years in federal prison for robbing a Topeka bank, U.S. Attorney Barry Grissom said.
Cade Michael Sharples, 37, Topeka, Kan., pleaded guilty in U.S. District Court in Topeka to one count of bank robbery.
In his plea, he admitted that on Sept. 17, 2013, he robbed the Kaw Valley Bank at 3000 SE Croco Road in Topeka. Sharples gave the teller a letter saying, “I’m here to rob you. I have a gun. Do as I say and you won’t get hurt.” He left the bank with the money and walked to his car, which was parked in a stall at a carwash nearby. Police released surveillance video from the robbery and received tips leading them to Sharples. He was arrested in Council Bluffs, Iowa.
Grissom commended the Topeka Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.Three Convicted for Distribution of PainkillersRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistCLARKSBURG, WEST VIRGINIA – Three people charged in connection with a Bridgeport, West Virginia, painkiller distribution ring have been convicted.
DAVID S. ROKISKY, age 46, of Tampa, Florida; his sister, Deborah M. TATE, age 56, of Tampa, and Nino L. MANCINO, age 43, of Fairmont, entered pleas of guilty to “Conspiracy to Possess and Distribute Hydrocodone” before Magistrate Judge John S. Kaull. As part of a related investigation, a federal search warrant was executed at Ms. Tate’s Fairmont residence and agents found packages containing hydrocodone pills which had been obtained through prescriptions in Florida and sent to Tate and Mancino for them to resale.
ROKISKY, TATE and MANCINO each face up to 10 years in prison. The case was prosecuted by Assistant United States Attorney John C. Parr and investigated by the Greater Harrison County Drug and Violent Crimes Task Force, which is comprised of officers and agents from the Bridgeport Police Department, the Clarksburg Police Department, the Drug Enforcement Administration, and the West Virginia State Police.
In other hearings before Judge Kaull:
JAUNITA FARNSWORTH, age 31, of Clarksburg and MARVIN PIERRE LEDBETTER, JR. a/k/a “MO,” age 28; and AMANDA LILLY DANIELS, age 25, of Michigan, entered pleas of guilty to “Possession with Intent to Distribute Oxycodone.” FARNSWORTH, LEDBETTER and DANIELS each face up to 20 years in prison.
Co-defendant WILLIAM MURPHY, age 24, of Clarksburg, entered a plea of guilty to “Use and Carry of a Firearm in Relation to a Drug-Trafficking Offense.” MURPHY possessed a Winchester shotgun in furtherance of a conspiracy to distribute oxycodone. MURPHY faces at least 10 years and up to life in prison. As part of the plea agreements, the defendants will forfeit firearms, ammunition and currency which was seized in December of 2013.
This case was prosecuted by Criminal Chief Shawn A. Morgan and investigated by the Greater Harrison County Drug and Violent Crime Task Force.
ANGELA NELSON, age 34, entered a plea of guilty to “Distribution of Heroin within 1,000 feet of a Protected Location.” NELSON faces up to 40 years in prison. Co-defendants FARRAH ECHARD, age 25, and GREG WILLIAMS, age 41, of Morgantown, entered pleas of guilty to “Distribution of Heroin.” ECHARD and WILLIAMS face up to 20 years in prison. This case was prosecuted by Wesley and investigated by the West Virginia State Police-Bureau of Criminal Investigations.
CHRISTOPHER VICKERS, age 24, of Clarksburg, entered a plea of guilty to “Distribution of Heroin within 1,000 feet of Monticello Avenue playground.” VICKERS faces up to 40 years in prison.
DAMIAN ALLEN, age 27, of Clarksburg, entered a plea of guilty to “Distribution of Crack Cocaine and Heroin within 1,000 feet of the Harrison Street Playground.” ALLEN faces up to 40 years in prison.
These cases were prosecuted by Assistant U.S. Attorney Andrew R. Cogar and investigated by the Greater Harrison County Drug and Violent Crime Task Force.
RONALD SNYDER, age 39, of Buckhannon, West Virginia, entered a plea of guilty to “Failure to Update Sex Offender Registration” and faces up to 10 years in prison. This case was prosecuted by Morgan and investigated by the United States Marshals Service and the West Virginia State Police.
CHRISTY D. RUBLE, age 32, of West Milford, West Virginia, former officer in charge of the West Milford post office, entered a plea of guilty to “Embezzlement” of $15,238.65 from postal accounts. RUBLE faces up to 10 years in prison and must make restitution of the monies embezzled. This case was prosecuted by Assistant U.S. Attorney Brandon Flower and investigated by the U.S. Postal Service, Office of Inspector General.
JEREMY NATHAN FERRARO, age 33, entered a plea of guilty to “Theft of Mail” and faces up to five years in prison. The case was prosecuted by Assistant U.S. Attorney Michael D. Stein and was investigated by the United States Postal Inspection Service.
Texas Man Sentenced for Theft of SSDI BenefitsRead the Press Release
Contact: Halsey B. Frank
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Carroll
Freemont Pennell, 69, currently of Cushing, Texas and formerly of Brunswick, Maine, was sentenced in U.S. District Court by Judge George Z. Singal to 2 years of probation and ordered to pay $29,512 in restitution for stealing Social Security Disability Insurance (SSDI) benefits.According to court documents, Pennell was pastor, president and spiritual leader of the
Word of God Fellowship Church in Brunswick for which he was paid a salary. In 1997, Pennell applied for and obtained SSDI benefits after injuring his back while working in the shipping department at Grumbacher Brush Company. To get those benefits, Pennell concealed his church salary from the Social Security Administration by having the church pay it to his wife. As a result, Pennell received $146,829 worth of SSDI benefits to which he was not entitled. The court’s ability to award full restitution was limited by the five-year statute of limitations.
In fashioning his sentence, Judge Singal observed that Mr. Pennell was as much a thief as someone who pickpockets parishioners. He corrupted his church and contributed to the public’s cynical belief that its leaders are hypocrites. Nevertheless, Judge Singal found that probation was appropriate for Mr. Pennell given his advanced age and serious health problems.
The investigation was conducted by Office of the Inspector General for the Social
Security Administration.Talladega Scrap Yard Owner Forfeits $1.3 Million for Financial StructuringRead the Press Release
BIRMINGHAM -- A Talladega scrap yard owner pleaded guilty today to structuring $119,400 in cash transactions, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.
EDWARD M. HINDMAN, 61, owner of Hindman's Wrecker Service & Salvage in Talladega, entered his guilty plea to one count of structuring before U.S. District Judge L. Scott Coogler. Hindman must forfeit $119,400 to the government as part of his plea agreement. He is scheduled for sentencing June 26.
Hindman also agreed to civilly forfeit $1,148,981 in a civil forfeiture action brought by the United States against money seized from Hindman's bank account in March 2011. In a Stipulation of Settlement filed today in the civil case, Hindman admitted no wrongdoing, but acknowledged that the government had reasonable cause to seize the money in 2011 and commence the forfeiture proceedings.
The U.S. Attorney's Office brought the criminal charge against Hindman in an information filed Thursday in U.S. District Court. His plea agreement with the government also was filed Thursday. Hindman acknowledges in the plea agreement that he intentionally structured, and directed others to structure, cash withdrawals at First National Bank Talladega in amounts less than $10,000 to avoid triggering the bank's requirement to file a Currency Transaction Report with the U.S. Treasury Department on all transactions greater than $10,000.
Between Feb. 23, 2011, and March 5, 2011, Hindman wrote, or directed others to write, 16 checks payable to "cash," which were cashed at the Talladega bank, according to his plea agreement. All the checks were just below the reporting requirement amount and totaled $119,400. The cash withdrawals were used to fund the operation of Hindman's salvage yard, according to his plea.
The Internal Revenue Service, Criminal Investigation Division, investigated the case. Assistant U.S. Attorney Amanda Wick is prosecuting the case and Assistant U.S. Attorney Jennifer Murnahan represents the government in the civil case.
Sikorsky Aircraft Corporation to Pay $3.5 Million to Settle Allegations Under the False Claims ActRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that SIKORSKY AIRCRAFT CORPORATION of Stratford, Conn., which manufactures Black Hawk helicopters and spare parts for the helicopters for the U.S. Military and for friendly nations has entered into a civil settlement in which it will pay $3.5 million to resolve allegations that it violated the False Claims Act arising from the submission of inflated costs in the pricing of spare parts.
The government alleges that from February 7, 2008 through September 8, 2011, Sikorsky failed to disclose accurate, complete and current cost and pricing data to the Army Aviation and Missile Life Cycle Management Command (“AMCOM”). AMCOM is one of the purchasing commands of the Army that is charged with purchasing spare parts for the Black Hawk.
The Truth In Negotiations Act requires that contractors disclose accurate, complete and current cost and pricing data to the government during the negotiation process. When determining the prices to be charged to the government, Sikorsky failed to disclose that it had lower prices for certain parts. As a result, the government paid artificially excessive prices for those parts.
The Black Hawk repair work was principally performed at the Corpus Christi Army Depot in Corpus Christi, Texas.
“In this era of shrinking defense budgets, it is particularly important to guard the public coffers and safeguard against the unnecessary expenditures of funds from American taxpayers,” said U.S. Attorney Daly. “Failure to disclose accurate, complete and current cost and pricing data created an uneven playing field in the negotiation process which tilted unfairly in Sikorsky’s favor.”
“Unethical decisions and instances of fraud occurring within the Defense contractor community continue to burden the U.S. Defense budget and puts U.S. military readiness at a disadvantage,” stated Craig W. Rupert, Special Agent in Charge, Defense Criminal Investigative Service (DCIS) Northeast Field Office. “With the current state of the economy, taxpayers can ill-afford to overpay for warfighter necessities required to carry out our Defense mission. This investigative effort and resulting settlement reflects DCIS’ commitment to safeguarding our military members and protecting the taxpayer’s interests by ensuring transparency and accountability in the Department of Defense procurement system.”
This investigation was conducted by the Defense Criminal Investigative Service, Defense Contract Audit Agency, Department of Defense Office of Inspector General-Audit Division, and the Defense Contract Management Agency. The investigation was led by Assistant U.S. Attorney Alan M. Soloway.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Seven Indicted in Florida in Mortgage SchemeRead the Press Release
Seven individuals have been indicted in the Southern District of Florida for their alleged participation in a mortgage fraud scheme in the Miami area.
The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Inspector General David A. Montoya of the Department of Housing and Urban Development and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency’s Office of the Inspector General.
A 19-count indictment, returned on March 13, 2014, by a federal grand jury and unsealed today, charges Miami-Dade County residents Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo with one count of conspiracy to commit wire and bank fraud. Some of those defendants have also been charged with bank fraud and wire fraud. Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez were taken into custody today and made their initial appearances before United States Magistrate Judge Jonathan Goodman in Miami, while the other three defendants remain at large.
As alleged in the indictment, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez owned or controlled various real estate properties in the Miami area. They enlisted mortgage brokers and other individuals, including Perez and Angulo, to recruit straw buyers to act as qualifying mortgage applicants to fraudulently purchase condominiums in the properties. The defendants prepared and caused to be prepared loan documents containing false statements and representations relating to the buyers’ income, assets and other information necessary to enable lenders to assess the buyers’ qualifications to borrow money, which induced the lenders to make loans to finance the condominiums. Luis Michael Mendez and Marie Mendez are alleged to have submitted their own fraudulent loan applications for two condominiums, and they, as well as Luis Mendez and Stavroula Mendez, advanced the buyers cash to close the transactions.
After the loans were funded, the defendants allegedly caused fraudulent payments to be made from the loan proceeds to pay kickbacks through shell companies to the brokers, recruiters and straw buyers, as well as to pay the mortgages to conceal the conspiracy. Eventually, the conspirators were unable to make mortgage payments, causing many of the condominium units to go into foreclosure and leading to losses by the lenders.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by HUD-OIG and FHFA-OIG. The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.Sentences Handed Down for Asbestos Abatement Violations at Former Air Force Base in Atwater, Calif.Read the Press Release
FRESNO, Calif. —Patrick Bowman, 47, of Los Banos, Calif.; and Rudolph Buendia III, 51, of Planada, Calif., were sentenced today for violating the asbestos work-practice standards of the National Emissions Standards for Hazardous Air Pollutants, United States Attorney Benjamin B. Wagner announced. United States District Judge Lawrence J. O’Neill sentenced Bowman to 27 months in prision, and Buendia to 24 months in prison.
Sentencing for Joseph Cuellar is currently scheduled for June 16, 2014. A restitution hearing as to all three defendants is also scheduled for June 16.
According to court documents, Joseph Cuellar was the administrative manager of Firm Build Inc., Patrick Bowman was its president, and Rudolph Buendia was its construction project site supervisor. From September 2005 to March 2006, Firm Build operated a demolition and renovation project in the former Castle Air Force Base in Atwater, California. They were to turn Building 325 into a mechanic training center for the Merced County Board of Education. The defendants hired local high school students from the Workplace Learning Academy in Merced to perform some of the renovation.
According to court documents, the students and other employees removed and disposed of approximately 1,000 linear feet of pipe insulation and additional tank insulation which the defendants knew contained regulated asbestos-containing material without utilizing proper protective equipment (in the form of Tyvek suits, full-face respirators, bootie or footwear coverings, gloves, hair hoods or caps, and shower equipment) or taking protective measures (wetting the asbestos containing materials, sealing the asbestos debris in secure plastic bags, using negative air pressure in the building) in violation of federal law. Asbestos became airborne during this illegal asbestos abatement. In performing the asbestos abatement project in this manner, defendants knowingly exposed Firm Build employees, Workplace Learning Academy students, as well as other subcontractors and their employees to hazardous airborne asbestos.
U.S. Attorney Wagner said: “Exposing student workers and subcontractors at a construction site to hazardous asbestos in order to cut corners and save money is not just reckless. The sentences imposed today should remind all who may be involved in handling such materials that disregarding federal environmental laws can result in prison time. I am grateful for the support of the investigations bureau of the Merced County District Attorney’s Office, and of Cal-EPA and the California Department of Justice, in the course of the investigation and prosecution of this case.”
“There is no safe level of exposure to asbestos,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “Directing student workers to illegally remove demolition debris containing asbestos, knowing they had neither the training nor the proper personal protective equipment, threatens their health and safety. EPA and its partner agencies will continue to protect those vulnerable to these crimes by vigorously prosecuting those who place profit above the public health and the environment.”
This case was the product of an investigation by the U.S. Environmental Protection Agency, assisted by Cal-EPA, the investigations bureau of the Merced County District Attorney, and the California Department of Justice. Assistant United States Attorneys Samuel Wong and Melanie Alsworth prosecuted the case.
Sapulpa Man Pleads Guilty to Possessing Child PornographyRead the Press Release
TULSA, Okla. — A Sapulpa man pleaded guilty in federal court today to possessing child pornography, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma. A total of at least 20,116 images and videos were found in the defendant’s possession.
Paul D. Edwards, 64, of Sapulpa, entered a plea of guilty before U.S. Magistrate Judge Paul J. Cleary to one (1) count of possession and attempted possession of child pornography and five (5) counts of receipt and attempted receipt of child pornography. Edwards is a former Certified Public Accountant for local municipalities and school districts. He has been unemployed since 2008.
According to court documents, in October of 2011, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Philadelphia office initiated an investigation into individuals utilizing an international website to distribute and collect child pornography. Between February and March of 2013, the HSI obtained log files from Russian law enforcement regarding a user profile which was later traced to Edwards’ residence. There were 20,116 images and videos collected from Edwards’ residence.
Edwards was charged on November 5, 2013. For Count 1, Edwards faces a maximum penalty of twenty (20) years and a $250,000 fine.
The case was investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The case is being prosecuted by Assistant United States Attorney Jeffrey Gallant on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Riverside County Art Dealer Pleads Guilty in Federal Cyberstalking Case, Admitting He Extorted Victims with Threats of AttackRead the Press Release
LOS ANGELES – The owner of a Temecula art gallery who stalked, harassed and attempted to extort as much as $300,000 from art world professionals pleaded guilty today to two federal stalking charges.
Jason White, 43, of Temecula, pleaded guilty today in the cyberstalking case before United States District Judge Stephen V. Wilson.
As a result of today’s guilty pleas, White faces a maximum statutory sentence of 10 years in federal prison when he is sentenced on June 9.
White was arrested by the FBI on February 12 after engaging in a six-month stalking and extortion scheme that targeted art world professionals with whom he had had business relationships. When those business relationships ended, White posted derogatory information about his former associates on websites he had created, and then used threatening emails to demand hundreds of thousands of dollars in exchange for taking the websites down. White repeatedly made extortionate demands through harassing text messages and emails, and when his demands were not met, he threatened violence against the victim families.
In one part of the scheme, White targeted his former employer, an art publisher, as well as his supervisor at the art publisher’s company. After creating derogatory websites in the art publisher’s name, White allegedly sent threatening text messages to the art publisher, the publisher’s son, and his former supervisor, according to court documents. In a text message to his former supervisor, he threatened to find her family and make her pay with “fear, anguish, and pain.” On several occasions, White obtained pictures of her child and sent pictures of the child to the victim with comments such as “it will be very unfortunate if something was to happen to him.”
The case against White was investigated by the Federal Bureau of Investigation, Art Crime Team.
Release No. 14-037
Rio Arriba County Man Pleads Guilty to and is Sentenced for Driving While Intoxicated in the Carson National ForestRead the Press Release
ALBUQUERQUE – David J. Martinez, 36, of El Rito, N.M., pleaded guilty today in federal court to an aggravated driving under the influence misdemeanor charge, and was sentenced immediately thereafter.
Martinez was arrested on Sept. 27, 2013, and charged in a criminal complaint with aggravated driving under the influence of intoxicating liquor and several other misdemeanors and infractions for failing to comply with the New Mexico motor vehicle code and the U.S. Forest Service’s timber harvesting regulations. According to the criminal complaint, a U.S. Forest Service officer encountered Martinez in the Carson National Forest while Martinez was driving a pickup truck loaded with timber. The officer executed a traffic stop because the timber on Martinez’s truck was not properly tagged as required by law as a condition to lawfully harvest timber off of National Forest Systems lands. The officer determined that although Martinez had a timber removal permit, he was not in compliance with certain federal timber harvesting regulations.
During the traffic stop, the officer noted the smell of intoxicants coming from Martinez’s mouth as he talked, and observed that Martinez’s eyes were watery and blood-shot. In response to questioning by the officer, Martinez admitted he “was drinking a beer now,” and that he drank two beers before he was stopped. At the time, Martinez was concealing a 30-pack of beer that was missing 16 cans of beer under a coat on the front passenger seat of his truck. After Martinez failed standard field sobriety tests, the officer administered a preliminary breath test (PBT) to Martinez, which registered a breath alcohol content of .166. Thereafter, Martinez was given the opportunity to provide a breath sample at the New Mexico State Police office in Espanola, N.M. Although he was informed of the consequences of a refusal, Martinez refused to submit to a chemical test as required by New Mexico’s Implied Consent Act.
On Oct. 1, 2013, Martinez was charged in a four-count information with (1) aggravated driving under the influence, a Class A misdemeanor; (2) driving under the influence, a Class A misdemeanor; (3) driving with an open container of alcohol, an infraction; and (4) violating the terms and conditions of his timber harvesting permit, a Class B misdemeanor.
Today Martinez entered a guilty plea to Count 1 of a four-count superseding information charging him with aggravated driving under the influence, first offense. In entering his guilty plea, Martinez admitted that on Sept. 27, 2013, he was stopped by a U.S. Forest Service officer for failing to have a load tag on his timber-loaded truck while he was driving in the Carson National Forest. Martinez also admitted that he had been drinking beer before the stop and that he had an open container of beer in his truck cab when he was stopped. Martinez acknowledged that a PBT test confirmed that he had been drinking alcohol, and that he refused to take a breath test even though it meant that he could be charged with aggravated driving under the influence.
Immediately after entering his guilty plea, Martinez was sentenced to credit for the time he already has served in federal custody (four-days) followed by a year of supervised probation with special conditions. The special conditions of Martinez’s probation include the requirement that an ignition interlock device be placed on his vehicle for a year, that he attend DWI school and the Victims’ Impact Panel, and that he perform 24 hours of community service.
Special Agent in Charge Robin L. Poague of the Southwestern Region of the U.S. Forest Service said, “Federal regulations authorize Forest Service officials to enter orders permitting Forest Service officers to issue federal violation notices for violations of the state motor vehicle code on National Forest System lands and roads. This ensures consistent enforcement of the motor vehicle code throughout the state and across agencies. The current order authorizing Forest Service officers to issue federal violation notices in the Carson National Forest has been in place since May 2012. The prosecution of Martinez on this DUI charge was initiated pursuant to this authority.”
This case was investigated by the El Rito Ranger District of the U.S. Forest Service, with assistance from the New Mexico State Police, and is being prosecuted by Assistant U.S. Attorney William J. Pflugrath.
Ottawa Woman Sentenced for Peddling Rx DrugsRead the Press Release
KANSAS CITY, KAN. – An Ottawa woman was sentenced Monday to 30 months in federal prison for peddling prescription drugs, U.S. Attorney Barry Grissom said.
Brandi Bivens, 32, Ottawa, Kan., pleaded guilty to one count of conspiracy to distribute Oxycodone, Hydrocodone, Methadone and Morphine. In her plea, she admitted she conspired with her mother and co-defendant, Connie Edwards, as well as other co-defendants, from November 2007 to February 2012 to distribute prescription drugs.
The investigation began when the Franklin County Drug Enforcement Unit received information that Edwards was selling prescription drugs in Ottawa. Investigators set up surveillance and observed Bivens and Edwards picking up prescriptions at pharmacies. Investigators made undercover purchases of prescription drugs from them. State prescription drug records showed that from 2009 to August 2010, Bivens received 1,056 Morphine tablets, 351 Hydrocodone tablets, 432 Oxycodone tablets and 1,520 Oxycontin tablets.
Co-defendants include: Connie Edwards, who was sentenced to 300 months in federal prison.
Grissom commended the Ottawa Police Department, the Franklin County Sheriff’s Office, the Kansas Bureau of Investigation, the Kansas Attorney General’s Office and Assistant U.S. Attorney Sheri McCracken for their work on the case.
Shirley Price, who was sentenced to 84 months.
Tamara Ledom, who was sentenced to 216 months.
Brittany Edwards, who was sentenced to 15 months.
Angela Mitchell, who was sentenced to probation for one year.Office Manager of Moberly, Missouri, Funeral Home Indicted on Fraud ChargesRead the Press Release
St. Louis, MO – BEVERLY SUSAN RENE SMITH was indicted by a federal grand jury on charges involving her alleged theft of approximately $176,000 from Million-Taylor Funeral Home. These funds were intended to cover customer’s funeral expenses.
According to the indictment, Smith was hired by the original owner of the Million-Taylor Funeral Home (MTFH) in Moberly. James Taylor, Sr. hired Smith in 2001 as the office manager, a job she held from 2001 to June 2012. Her position included payroll expenses and expenses to vendors for the costs of funerals. She also received payment for funerals, which she recorded in a financial ledger. Additionally, she was required to report all of MTHF’s financial transactions to their accounting firm, Federated Funeral Directors of America (Federated). Smith also had access to MTHF’s banking, general fund and escrow accounts.
To pay for funeral expenses of a client, MTHF first used money from its general operating fund to cover these expenses. Then Smith was supposed to recoup payment for the funeral expenses from the representatives or family members of the deceased, from the life insurance of the deceased and/or from pre-needs insurance accounts of the deceased. When the payments were received, Smith was to deposit them back into the general fund. If she was not able to recoup full payment for funeral expenses of a client, she reported this information to Federated and informed them that the account was a bad account and that they should write it off as no further effort would be made to recoup payment for these expenses. This way she was able to conceal that she had stolen some client payments made for funeral expenses, which she deposited into the escrow account.
While James Taylor, Sr. operated MTHF, he allowed customers to pay money for their expected funeral expenses before they died. MTHF deposited this money into MTHF’s escrow account. He and Smith were the only employees who had access to the escrow account. The indictment alleges that after James Taylor, Sr. died in 2006, Smith concealed the existence of the escrow account from other MTHF employees. On several occasions Smith took the payments that were sent to MTHF for funerals, and instead of depositing them into the general fund, she deposited the funds into the escrow account. Smith was able to withdraw funds from the escrow account undetected to use for her personal use, including the purchase of clothing and jewelry. She hid the withdrawals by manipulating the financial records of MTHF.
Smith, Higbee, Missouri, was indicted by a federal grand jury on one felony count of wire fraud last Thursday, March 27. She appeared earlier today in federal court in St. Louis.
Additionally, upon a finding of guilt, Smith will be subject to a forfeiture allegation, which will require the forfeiture of all money and property derived from the illegal activity.
If convicted, this charge carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentence, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by the Federal Bureau of Investigation and the Missouri State Highway Patrol. Assistant United States Attorney Anthony Franks is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.New York City Man Pleads Guilty to Oxycodone Distribution ChargeRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that William
Waters, 32, of Bronx, New York, pleaded guilty in U.S. District Court in Bangor to possession with the intent to distribute oxycodone.Court records reveal that on March 15, 2013, Waterville Police Department officers encountered the defendant and Ebony Howard who they believed to be body-carrying a large quantity of oxycodone tablets. Howard and Waters were taken to police headquarters where
Howard ultimately surrendered a package containing 645 oxycodone 30 mg tablets. Waters admitted that he obtained the tablets in New York City and gave them to Howard who was doing him a favor. Waters planned to distribute the drugs to Maine customers.
Waters faces up to 20 years in prison and a $1,000,000 fine. He will be sentenced after the completion of a presentence investigation report by the United States Probation Office.The case was investigated by the Maine Drug Enforcement Agency and the Waterville
Police Department.Navajo Man Sentenced to Life in Prison for Sexually Abusing Three ChildrenRead the Press Release
PHOENIX– On March 31, 2014, Billy C. Young, 61, of Kayenta, Arizona, on the Navajo Nation, was sentenced by U.S. District Judge Stephen M. McNamee to life in prison. Young was found guilty by a federal jury on Jan. 15, 2014, of two counts of aggravated sexual abuse of a minor, one count of sexual abuse, and one count of sexual abuse of a minor.
U.S. Attorney John S. Leonardo stated, “Those who sexually abuse children rob them of their childhood and their innocence. This sentence ensures that Young will never again have the opportunity to harm another child.”The evidence at trial showed that Young molested three different girls, all under the age of 15 years old, over a 25 year period.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Christine Keller and Sharon Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-13-08084-PCT-SMM
RELEASE NUMBER: 2014-019_YoungFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Montgomery County Man Indicted for Deceptive Telemarketing Fraud Scheme That Allegedly Defrauded Clients of More Than $6.265 MillionRead the Press Release
Allegedly Engaged in Deceptive Practices To Offer Debt Management Services
Greenbelt, Maryland - A federal grand jury today returned a superseding indictment against Richard A. Brennan, age 42, of Clarksburg, Maryland, which added charges of conspiracy, mail, wire and telemarketing fraud, and filing false tax returns, to the several gun charges contained in the original indictment. The original indictment was returned under seal on March 5, 2012, and was unsealed on March 12, 2014, upon Brennan’s arrest.
The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Maryland Attorney General Douglas F. Gansler.
According to the superseding indictment, Brennan was an attorney who operated law offices and other businesses in Frederick, Maryland and elsewhere, that offered debt management and settlement services. Brennan’s firms recruited customers from around the United States through telemarketers.
In 2007, the Maryland Attorney General’s Office began an investigation into allegations that Brennan’s firms engaged in unfair and deceptive trade practices, including: that they sold debt management services to customers and administered debt management plans from their offices in Frederick, although they could not lawfully do so in Maryland; that they held themselves out as non-profit credit counseling agencies, when they were for-profit entities; and that the employees of Brennan’s firms almost always recommended that the debt clients enter into debt settlement plans that were profitable for Brennan’s firms, but not necessarily an appropriate resolution of the clients’ financial problems. In addition, Brennan’s firms represented to clients that the funds collected from debt clients would be placed in a trust account and used to administer the clients’ debt management plans, with payments made timely to the clients’ creditors. Instead, the funds were used to pay Brennan’s business operation and personal expenses and the firms did not make timely payments to clients’ creditors because of lack of funding in the trust account.
On October 18, 2007, Brennan signed an agreement with the Maryland Attorney General’s Office acknowledging that he was responsible for creating and implementing the alleged unfair or deceptive practices of his companies and agreed to “cease and desist” such practices and abide by the requirements set out in the agreement.
The eight count superseding indictment alleges that between October 19, 2007 and April 2010, Brennan conspired with others to continue to make false representations to new and existing debt clients to convince them to engage or retain Brennan’s firms to negotiate settlement of their debts with creditor companies. Brennan and his co-conspirators used telemarketing to execute the scheme and, in doing so, victimized at least 10 people over the age of 55. Brennan and his coconspirators would mail or email contracts and power of attorney forms to clients, which authorized Brennan’s companies to make periodic debits from their accounts, but which failed to make disclosures required under the agreement with the Attorney General’s office, and which omitted any mention of his restrictions from providing such services. Brennan allegedly deposited all funds debited from debt clients’ accounts into one account which he then used to pay the operating expenses of his firms, as well as to fund lavish personal expenses, including several luxury vehicles, international travel, exotic firearms and furnishings for his residence.
The superseding indictment alleges that to evade the restrictions in the agreement, Brennan renamed his firm multiple times and moved its physical operating location on several occasions. In addition, Brennan and co-conspirators allegedly formed new entities in order to open bank accounts using entity names besides those of Brennan’s firms in order to disguise ownership and avoid scrutiny from regulatory authorities.
According to the superseding indictment, Brennan used the deceptive practices to defraud debt clients over more than $6.265 million during the course of the conspiracy.
The superseding indictment also charges that Brennan filed false tax returns in 2006 and 2007. For example, the indictment alleges that in 2007, Brennan reported an adjusted gross income of negative $576,273.10 when he had unreported business receipts that year of at least $9,229,802.
Finally, Brennan faces four gun charges, including: that he illegally possessed 11 machineguns; transported a handgun from Maryland to a person in Virginia who was not a licensed importer; manufactured firearms without having registered as required by law; and possessed an unregistered sawed off shotgun.
Brennan faces a maximum sentence of 20 years in prison for the conspiracy and mail fraud counts; a maximum of 10 years in prison, consecutive to any other sentence, for using telemarketing to victimize ten or more people over the age of 55 in the course of committing the fraud conspiracy; a maximum of three years in prison for each of the two tax charges; and a maximum of 10 years in prison for each of the four firearms charges. An initial appearance and arraignment on the superseding indictment is scheduled for April 7, 2014, at 1:30 p.m. in U.S. District Court in Greenbelt. Brennan is released under the supervision of U.S. Pretrial Services.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised ATF, U.S. Postal Inspection Service, IRS-Criminal Investigation, and the Maryland Attorney General’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Adam K. Ake, who is prosecuting the case.
Members of Cocaine Trafficking Organization Indicted on Federal ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistPotomac Highlands Drug Task Force investigation leads to 73-count indictment
MARTINSBURG, WEST VIRGINIA – A large drug trafficking organization was disrupted as a result of a 73-count federal indictment charging cocaine trafficking and money laundering.
United States Attorney William J. Ihlenfeld, II, who announced the charges on Monday in Wheeling, said that the lead defendant in the case is Cedric Malachi JONES, also known as “BG”, 32 years old, of Palm Coast, Florida. JONES is charged with “Conspiracy to Distribute Cocaine and Cocaine Base,” “Conspiracy to Launder Monetary Instruments,” “Money Laundering,” “Distribution of Cocaine and Cocaine Base,” “Distribution of Cocaine and Cocaine Base within 1,000 Feet of a Protected Location,” and “Possession with Intent to Distribute Cocaine.”
JONES is alleged to be the leader of a group that caused controlled substances to be transported from other parts of the country to Keyser, West Virginia, for redistribution. JONES is also alleged to have laundered money that was generated as a result of the drug trafficking. JONES faces a total of 58 counts.
Others named in the indictment include:
- Ebony Ishia Haynes Jack, age 32, of Palm Coast, Florida
- Patrice Dominique Stephens a/k/a “Everett Backstreets,” 34, of Westernport, Maryland
- Paul Harland Ellis, 35, of Keyser, West Virginia
- Tequila L. Smith, 32, of Ranson, West Virginia
- Dixie Sherylann Layman, 40, of Keyser, West Virginia
- Sheena Collins, 26, of Oakland, Maryland
- Travis Sinclair Howard, 34, of Palatka, Florida
- Samaria Alice Clifford, 32, of Keyser, West Virginia- Robert Lee Jessie, 34, of Keyser, West Virginia
- Christopher Lee Redman, 30, of Keyser, West Virginia
- Adrian Nicholas Sanchez a/k/a “ACE,” 30, of Cumberland, Maryland
- Troy Aaron Wilt, 30, of Keyser, West VirginiaIf convicted, each defendant faces up to life in prison on the conspiracy charge, up to 20 years in prison on the money laundering charges, and up to forty years in prison on any sales of controlled substances that occurred near protected locations. Under the Federal Sentencing Guidelines the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. The charges contained in the Indictment are merely accusations, and each defendant is presumed innocent unless and until proven guilty.
This prosecution of this case is being handled by Assistant United States Attorney Jarod J. Douglas. It was investigated by the Potomac Highlands Drug & Violent Crime Task Force, which consists of officers from the Federal Bureau of Investigation and the West Virginia State Police - Bureau of Criminal Investigations.
Updates on the status of this case will be made by media releases as well as via the official Twitter feed of the United States Attorney’s Office, @NDWVnews.
Martinsburg Man Sentenced to Prison on Cocaine Trafficking ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA – A Martinsburg man was sentenced to federal prison for trafficking in crack cocaine.
United States Attorney William J. Ihlenfeld, II announced that TIMOTHY WILLIAMS, age 24, of Martinsburg, West Virginia was sentenced to 188 months in prison due to his conviction for “Conspiracy to Distribute Crack Cocaine.” U.S. District Court Judge Gina M. Groh applied enhancements to WILLIAMS’ sentence due to his possession of a firearm, his maintaining of a drug-involved premise and his use of violence.
WILLIAMS was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, the Berkeley County Sheriff’s Department, and the Jefferson County Sheriff’s Department.
In other matters before Judge Groh, THEOFANIS MAVROUDIS, age 46, of Charles Town, West Virginia, was sentenced to 63 months in prison and lifetime supervision due to his conviction for “Failure to Register as Sex Offender.” MAVROUDIS was remanded to the custody of the United States Marshal pending designation to a Federal institution. The case was investigated by the United States Marshals Service and prosecuted by Assistant U.S. Attorney Jarod J. Douglas.
CHERA SCHLEYCOLE, age 27, of Martinsburg, was sentenced by Judge Groh to 12 months in prison and three years of supervised release for “Straw Purchase of Firearms,” “Delivery of Firearm to a Convicted Felon,” and “False Statement to Law Enforcement Officers.” The case was investigated by the Berkeley County Sheriff’s Department and the ATF, and was prosecuted by Assistant U.S. Attorney Paul T. Camilletti.
In matters before Magistrate Judge James E. Seibert, MISTY ANN TARMAN, age 51, of Martinsburg, entered a plea of guilty to “Aiding and Abetting the Distribution of Crack Cocaine.” TARMAN faces up to 20 years in prison when she is sentenced. This case was investigated by the Eastern Panhandle Drug & Violent Crime Task Force and prosecuted by Douglas.GWEN LITTEN, age 33, of Kearneysville, West Virginia, entered a plea of guilty to “Theft of Government Money.” As part of her plea, LITTEN must make restitution to the Social Security Administration in the amount of $10,853.00. LITTEN, who is in custody pending sentencing, faces up to 10 years in prison. This case was investigated by the Social Security Administration, Office of Inspector General, and prosecuted by Douglas.
Marion, Indiana, Resident Gets 60 Years in Prison for Solicitation to Commit Murder and Attempted MurderRead the Press Release
JACKSONVILLE, FLORIDA – U.S. Attorney Pamela C. Marsh announced the sentencing today of Robert Eugene Spiker, 45, of Marion, Indiana, by U.S. District Court Judge Mark E. Walker. On January 17, 2014, Spiker pleaded guilty to two counts of Solicitation to Commit Murder of a Federal Judge and an Assistant United States Attorney, and one count of Attempted Murder of an Assistant United States Attorney. Spiker was sentenced today to a total of 60 years in prison, followed by three years of supervised release.
Spiker admitted that between March and April of 2013 he made numerous written threats and devised a plan to murder an Assistant United States Attorney and a Federal Magistrate Judge in Jacksonville, Florida. On separate occasions, Spiker attempted to solicit other individuals to kill the victims for payment or “in-kind” services. Spiker’s written threats and directives included his intention to attack the federal prosecutor in the courtroom. He also directed one assailant to kill the judge without regard to the presence of his family members: “If his family gets in the way, so be it.” Finally, on April 11, 2013, Spiker attempted to smuggle a metal “shank” into the courtroom for the purpose of murdering the federal prosecutor. Prior to his entry into the courtroom, Spiker was searched, and the weapon was confiscated.
This case was investigated by the Federal Bureau of Investigation, the U.S. Marshals Service, and the Baker County Sheriff's Office. The case was prosecuted by Assistant U.S. Attorney Frank Williams.
Manhattan U.S. Attorney Files and Simultaneously Settles Civil Fraud Lawsuit Against Broker and Distributor of Dairy Products for $1.26 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed and simultaneously settled a civil fraud lawsuit against a broker and a distributor of dairy products, alleging that defendants used false statements to buy federally subsidized dairy products. Specifically, the lawsuit alleges that HUGH HENLEY (“HENLEY”); two companies that Henley owns and operates, PRESTIGE PROTEINS and PRESTIGE MILK PROTEINS, LLC (collectively, “PRESTIGE”); and AGRI-DAIRY PRODUCTS, INC. (“AGRI-DAIRY”), defrauded the United States by conspiring to submit, and submitting, two false bids to the United States Department of Agriculture (the “USDA”) for the purchase of federally subsidized goods in 2009. As alleged in the Complaint, through those false bids, defendants fraudulently bought more than two million pounds of dairy products at federally-subsidized discount prices and unlawfully resold those products at market prices for substantial profits. The settlement requires defendants to admit to the false bidding, and collectively pay damages of $1,265,055. The settlement was approved Friday, March 28, 2014, by U.S. District Judge William H. Pauley.
Manhattan U.S. Attorney Preet Bharara said: “The federal government set up a program to help domestic manufacturing in the dairy industry by selling dairy products at federally subsidized low prices. The defendants engaged in lies and other deceptive conduct to skim product from this program so they could illegally sell it, rather than manufacture the intended product. Those who want to abuse federal programs should understand that such conduct will not be tolerated by this Office.”
According to the allegations contained in the Complaint filed Monday, March 24, 2014, in Manhattan federal court:
PRESTIGE, which is owned and operated by HENLEY, brokers the importation and distribution of dairy products in the United States. AGRI-DAIRY distributes dairy products in the United States. In 2009, the USDA invited qualified dairy product companies to submit bids for the purchase of discounted nonfat dry milk (“NDM”) through a federal program, the Dairy Product Price Support Program. The bidders were required to certify that they could and would domestically manufacture the product into casein, a common protein product. In particular, each bidder was required to certify that it had the facilities to manufacture casein domestically and that the bidder would use the NDM solely for domestic conversion into casein within 90 days. The purpose of the certification was to ensure that the federally subsidized NDM would be used to benefit the domestic manufacturing industry.
The defendants conspired to exploit this federal program by obtaining the federally discounted NDM and re-selling it on the open market, contrary to the program requirements and certifications. Specifically, defendants agreed that HENLEY, in the name of PRESTIGE, would submit two bids to the USDA falsely certifying that he had the facilities to manufacture the NDM into casein and would do so within 90 days. They did so knowing that PRESTIGE lacked the ability to manufacture the NDM into casein domestically. HENLEY and AGRI-DAIRY further agreed that AGRI-DAIRY would advance PRESTIGE the funds to pay the USDA for the dairy products, that AGRI-DAIRY would then sell the NDM at market prices, and that PRESTIGE and AGRI-DAIRY would split the net profits from the resale.
HENLEY, in the name of PRESTIGE, then submitted two false bids to the USDA and won the contracts each time. AGRI-DAIRY wired HENLEY the funds to allow PRESTIGE to pay the USDA, as an advance against profits from the resale of the NDM. Then, instead of converting the NDM into casein, defendants resold the NDM to AGRI-DAIRY’S customers at market prices after each purchase. Further, because the USDA required a certification of conversion to casein within 15 days of conversion as a condition of the sales, HENLEY twice falsely certified that PRESTIGE had, in fact, converted the NDM to casein, when it had not.
As a result of their conspiracy to submit false bids to the USDA, defendants collectively made a total of more than $630,000 from their resale of the discounted NDM they unlawfully acquired from the USDA.
In connection with the settlement, HENLEY and PRESTIGE will pay the United States $632,527 in damages, and AGRI-DAIRY also will pay $632,527 in damages, for a total settlement amount of $1,265,055.
As part of the settlement, HENLEY, PRESTIGE, and AGRI-DAIRY admitted, acknowledged, and accepted responsibility for the following facts:
- On or about June 1, 2009, and November 25, 2009, Henley presented two bids to the USDA to purchase discounted NDM;
- In those bids to purchase NDM, Henley falsely certified that the NDM would be used solely for domestic conversion into casein or caseinate, one of USDA’s requirements for purchasing the NDM;
- The two false bids were made pursuant to an agreement between Agri-Dairy and Henley, by which the NDM would not be used for the purpose of domestic conversion into casein or caseinate, but instead would be sold by Agri-Dairy to third parties, with the net profits from the sales split between Henley and the Prestige entities, on the one hand, and Agri-Dairy, on the other;
- Pursuant to that agreement, the NDM that Henley acquired from the USDA in connection with the June and November 2009 bids was not converted to casein, but was resold by Agri-Dairy; the net profits from those sales were split between Henley and the Prestige entities, on the one hand, and Agri-Dairy, on the other; and
- On or about October 5, 2009, and March 9, 2010, Henley falsely certified that the NDM purchased from the USDA in connection with the June and November 2009 bids had been converted to casein or caseinate, when in fact that had not occurred.
Mr. Bharara thanked the USDA, Office of the Inspector General, for its assistance in this case.
The case is being handled by the Office’s Civil Frauds Unit.
U.S. v. Henley Prestige AgriDairy Complaint
U.S. v. Henley Stipulation and Order of Settlement
U.S. v. Agridairy Stipulation and Order of SettlementLos Angeles-Area Gang Member Who Trafficked Teens as Prostitutes Sentenced to 30 Years in Federal PrisonRead the Press Release
RIVERSIDE, California – A Lynwood gang member who pleaded guilty to federal sex trafficking charges – admitting that he used force, fraud and coercion to cause teen-age girls to work as prostitutes across Southern California – was sentenced this morning to 360 months in federal prison.
Paul Edward Bell, 30, a member of the Rolling 60s Crips street gang, was sentenced by United States District Judge Virginia A. Phillips.
Bell “not only used his fists, a cane, a shoe, and other objects against the females, he also pepper sprayed one of the victims in her face,” prosecutors wrote in a sentencing brief filed with the court. “He also threatened the victims with physical abuse, put a gun to the head of one of the victims, and locked at least two of the victims in his apartment. The physical and mental abuse and anguish suffered by the victims at the hands of defendant has and will continue to deeply affect the victims and their families.”
The sentencing brief notes that Bell was previously convicted in two prior state court cases with crimes related to sex trafficking.
Bell is among eight defendants convicted in the case stemming from a federal grand jury indictment filed in August 2012.
Bell and his co-defendants used minors as prostitutes for their own financial gain. Bell was the leader of the organization that preyed on vulnerable victims, convinced them to become prostitutes, and verbally and physically abused them when they did not perform as required. Bell specifically admitted that in 2011 he forced at least four minor victims – aged 15 to 17 – to work as prostitutes in Lynwood and Compton.The other seven defendants in this case who previously pleaded guilty are:
Samuel Rogers, also known as Bone, 24, of Moreno Valley, another alleged member of the Rolling 60s, who pleaded guilty to sex trafficking of a minor and is currently scheduled to be sentenced on April 14;
Gary Rogers, who used monikers such as G Man, 25, of Moreno Valley, another alleged member of the street gang and Samuel Rogers’ brother, who pleaded guilty to conspiracy to engage in sex trafficking and is scheduled to be sentenced on April 11;
Christopher Weldon, Bell’s half-brother, who is also known by several names, including Chris Roc, of Compton, who pleaded guilty to one count of conspiracy to engage in sex trafficking and received a six-year prison sentence;
Javiya Brooks, who is also known by several permutations of Shady Blue, 21, of Lynwood, who was the lead prostitute for Bell, who pleaded guilty to one count of conspiracy to engage in sex trafficking and is scheduled to be sentenced on April 21;
Kimberly Alberti, 21, of Riverside, who was the lead prostitute for Samuel Rogers, who pleaded guilty to one count of conspiracy to engage in sex trafficking and received a two-year sentence;
Kristy Harrell, 22, of Riverside, who was Gary Rogers’ lead prostitute, who pleaded guilty to interstate transportation in the aid of racketeering and is scheduled to be sentenced on April 28; and
Su Yan, 32, of Rosemead, a Chinese national who allegedly assisted Bell with his prostitution business, who pleaded guilty to interstate transportation in the aid of racketeering and was sentenced to 18 months in prison.
This case resulted from an investigation by the Inland Child Exploitation/Prostitution Task Force, which is comprised of agents, deputies and officers with the Federal Bureau of Investigation, the Riverside County Sheriff’s Department, the Riverside Police Department, the San Bernardino Police Department, the Pomona Police Department, and the Ontario Police Department.
The investigation in this case began in January of 2011, when the Riverside County Sheriff’s Department learned that teen-age girls attending schools in the Inland Empire were being recruited to work as prostitutes. The investigation later revealed that Alberti attended one of the schools and recruited underage females by “grooming them” – or gaining their trust and telling them that they could make large sums of money by working as prostitutes for Alberti's pimp. The girls who were successfully recruited to work as prostitutes were brought to the Los Angeles area, where they were housed at hotels or at the pimps’ apartments. Some of the victims were housed at Bell's apartment. The Rogers brothers and Bell also often housed the victim prostitutes at motels located in the Los Angeles area.
The United States Attorney’s Office is working with the Justice Department’s Child Exploitation and Obscenity Section to prosecute this case.
Release No. 14-036
Los Angeles Physician Assistant Pleads Guilty <br /> in Two Medicare Fraud CasesRead the Press Release
A Los Angeles physician assistant pleaded guilty today to defrauding Medicare by signing fraudulent prescriptions for durable medical equipment while working at two separate medical clinics in California.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office and Special Agent in Charge Erick Martinez of Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.
Erasmus Kotey, 77, of Montebello, Calif., pleaded guilty before U.S. District Judge Margaret M. Morrow in the Central District of California to one count of health care fraud and one count of conspiracy to commit health care fraud. Sentencing is scheduled for Sept. 8, 2014.
According to court documents, Kotey was a physician assistant who worked at medical clinics in and around Los Angeles County. From approximately November 2007 through February 2008, Kotey engaged in a scheme to commit health care fraud through his work at a clinic located at 866 North Vermont Avenue in Los Angeles. In addition, from approximately April 2008 through December 2008, Kotey engaged in a conspiracy to commit health care fraud through his work at a clinic located at 943 South Atlantic Boulevard, Suite 218, in Monterey Park, Calif.
At both clinics, Kotey signed prescriptions and other medical documents for medically unnecessary power wheelchairs and other durable medical equipment (DME). Kotey and his co-conspirators then sold the prescriptions to DME supply companies, knowing that the prescriptions were fraudulent. Based on these fraudulent prescriptions, the DME supply companies then submitted false and fraudulent claims to Medicare.
Combined, the two indictments allege that fraudulent prescriptions from Kotey were responsible for approximately $7 million in false and fraudulent claims to Medicare, and Medicare paid approximately $3 million on those claims.
The cases were investigated by the FBI, HHS-OIG and the IRS and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The cases are being prosecuted by Trial Attorney Fred Medick of the Fraud Section and Assistant U.S. Attorneys Kristen Williams and Cathy Ostiller of the Central District of California.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Lincoln Man Sentenced for Selling Firearm to a Prohibited PersonRead the Press Release
United States Attorney Deborah R. Gilg announced that Ashley F. Gerbig was sentenced on Monday, March 31, 2014, by U.S. District Judge Laurie Smith Camp to a term of forty-six month in prison. Mr. Gerbig pled guilty on October 28, 2013, to selling a firearm and ammunition to a prohibited person. On March 7, 2013, Mr. Gerbig sold a firearm and ammunition to a law enforcement cooperating witness. The cooperating witness was a convicted felon who had previously informed Mr. Gerbig of his or her status as a convicted felon.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms.
Leader of $30 Million Bakersfield Mortgage Fraud Scheme and Wife SentencedRead the Press Release
FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced San Diego residents David Crisp, 34, to 17 years and 7 months in prison, and Jennifer Crisp, 31, to five years on probation for charges stemming from their involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007, United States Attorney Benjamin B. Wagner announced. David Crisp was ordered to pay more than $28 million in restitution to lenders. He was taken into custody after today’s hearing. Jennifer Crisp was ordered to pay $1,689,952 in restitution.
U.S. Attorney Wagner stated, “David Crisp lived in the fast lane, steering a real estate company that was all image and no substance. Today he crashed hard, and the prison sentence he began this afternoon is the final bit of devastation caused by his mortgage fraud scheme.”
“David Crisp rose to real estate millionaire by participating in a massive mortgage fraud scheme that contributed to the real estate bubble that devastated the savings of so many Californians,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento division. “He flaunted his ill-gotten wealth with an extravagant lifestyle that included exotic cars, Armani suits, bodyguards and private jets. His sentencing reflects the gravity of his crimes.”
According to court documents, David Crisp and Carl Cole, who was sentenced last month to 17 years and seven months in prison, owned and operated Crisp & Cole Real Estate (CCRE), a real estate brokerage, and Tower Lending, an affiliated mortgage brokerage. Between January 2004 and September 2007, these defendants and others at CCRE and Tower Lending carried out a conspiracy to defraud mortgage companies and federally insured financial institutions. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. David Crisp admitted in his plea agreement that he and the co-conspirators caused losses of close to $30 million to the defrauded lenders due to the conspiracy.
According to her plea agreement, Jennifer Crisp acted as a straw buyer for CCRE and purchased several properties by submitting loan applications to lenders containing material misstatements and omissions of material information.
Last week, co-defendant Jayson Peter Costa was sentenced to 78 months in prison due to his participation in the scheme. Sentencing dates for the remaining defendants are as follows: Michael Angelo Munoz on May 5, 2014; Jeriel Salinas on May 12, 2014; and Sneha Mohammadi on June 9, 2014. Robinson Nguyen has completed his 27-month sentence. The trial of the remaining co-defendant is set for April 8, 2014. The charges as to that defendant are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Before David Crisp and the other defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to this scheme. Three are scheduled to be sentenced on June 2, 2014: Jerald Allen Teixeira
(1:09-cr-375 – one count of wire fraud for false statements on loan documents), Megan Balod (1:10-cr-016 – four counts of wire fraud for acting as a straw buyer), and Christopher Lance Stovall (1:10-cr-271 – four counts of mail fraud for making false statements on loan documents). Two are scheduled to be sentenced on May 27, 2014: Kevin Patrick Sluga (1:10-cr-001 – four counts of wire fraud for false verification of employment letters), and Leslie Sluga (1:10-cr-002 – two counts of wire fraud for acting as a straw buyer).This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.
This case was done in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
L.A.-Area Physician Assistant Pleads Guilty in Medicare Fraud CasesRead the Press Release
LOS ANGELES – A physician assistant pleaded guilty today to defrauding Medicare by signing fraudulent prescriptions for durable medical equipment while working at two Los Angeles-area medical clinics.
Erasmus Kotey, 77, of Montebello, pleaded guilty before United States District Judge Margaret M. Morrow to one count of health care fraud and one count of conspiracy to commit health care fraud.
Judge Morrow is scheduled to sentence Kotey on September 8, at which time he faces a statutory maximum sentence of 20 years in federal prison.
According to court documents, Kotey was a physician assistant who worked at Los Angeles County medical clinics. From approximately November 2007 through February 2008, Kotey engaged in a scheme to commit health care fraud through his work at a clinic located at 866 North Vermont Avenue in Los Angeles.
(The scheme involving the clinic on North Vermont Avenue also involved Susanna Artsruni, a North Hollywood woman who has pleaded guilty and admitted she caused $25 million in fraudulent claims to be submitted to Medicare, see: http://www.justice.gov/usao/cac/Pressroom/2014/002.html.)
In addition, Kotey engaged in a conspiracy to commit health care fraud from approximately April 2008 through December 2008, through his work at a clinic at 943 South Atlantic Boulevard in Monterey Park.
At both clinics, Kotey signed prescriptions and other medical documents for medically unnecessary diagnostic tests, power wheelchairs and other durable medical equipment (DME). Co-conspirators then sold the prescriptions, knowing that the prescriptions were fraudulent. Based on these fraudulent prescriptions, the testing facilities and DME supply companies then submitted false and fraudulent claims to Medicare.
In the two cases combined, fraudulent prescriptions from Kotey were responsible for approximately $7 million in false and fraudulent claims to Medicare, and Medicare paid approximately $3.5 million on those claims.
The cases against Kotey are the product of an investigation by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; and IRS - Criminal Investigation.
The cases were brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to Health Care Fraud Unit.
Release No. 14-038
Kirkland Plastic Surgeon Agrees to Pay $125,000 to Settle DEA Drug Diversion ClaimsRead the Press Release
A plastic surgeon who practices in Kirkland, Washington has agreed to settle federal civil penalty claims brought by the U.S. Attorney’s Office on behalf of the Federal Drug Enforcement Administration (DEA). Based on evidence and information obtained through its investigation, DEA contends that from 2007 through 2011, Dr. Gavin Dry forged at least 265 prescriptions under another physician’s name – and with Dr. Dry’s minor son falsely listed as the patient – so that Dr. Dry could obtain controlled substances (primarily Adderall and other amphetamines) for his own personal use. DEA also contends that Dr. Dry committed multiple recordkeeping violations.
In 2011, Dr. Dry voluntarily entered into an in-patient chemical dependency treatment program, which he successfully completed. Since January 2012, Dr. Dry has practiced under the terms of, and in compliance with, a monitoring contract with the Washington Physicians Health Program. In May 2012, after DEA initiated its investigation, Dr. Dry voluntarily surrendered his DEA registration, which meant that he could no longer prescribe certain medications, including amphetamines.
Under the terms of the parties’ settlement, Dr. Dry has agreed to pay the government $125,000 in order to resolve its claims prior to the commencement of litigation. The settlement is not an admission of legal fault or responsibility by Dr. Dry.
DEA and the United States Attorney’s Office were assisted in their investigation of this matter by the Department of Health and Human Services and the Bellevue Police Department.
Justice Department Files Lawsuit to Stop Las Vegas Man from Preparing Tax ReturnsRead the Press Release
The Department of Justice filed a civil lawsuit today in the U.S. District Court for the District of Nevada to stop Bill Sunga Modina, who allegedly does business as 5M Financial and 6M Financial, from preparing federal tax returns. According to the complaint, Modina has prepared over 2,200 tax returns since 1992.
The complaint alleges that Modina understates his customers' federal tax liabilities by reporting false or inflated employee business expenses and inflated or fabricated charitable contributions. In addition, the complaint alleges that Modina has failed to provide his preparer identifying number on tax returns he prepared, thereby obscuring his identity as the tax return preparer. According to the complaint, Modina’s activities have resulted in an estimated average tax loss of over $4,400 per return, and the total tax loss could allegedly be as high as $9,680,000 due to Modina’s false and fraudulent return preparation.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 . The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website . An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Bill Sunga Modina, etc.
Complaint for Permanent Injunction and Other Equitable ReliefJoplin Attorney Pleads Guilty to Stealing $586,000 from ClientsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., attorney pleaded guilty in federal court today to stealing more than $586,000 from his clients.
Daniel D. Whitworth, 58, of Joplin, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a three-count federal information that charges him with wire fraud, money laundering and false statements on tax returns.
Whitworth was the owner of a law practice in Joplin. By pleading guilty today, Whitworth admitted that he embezzled approximately $586,739 from 22 of his legal clients between 2004 and Oct. 18, 2013. Whitworth spent these embezzled funds on personal loans and items unrelated to the legal matters of his clients.
Law enforcement officers investigated complaints made to the Office of Chief Disciplinary Counsel of the Missouri Supreme Court about Whitworth’s theft of client money. Investigators determined from bank records and speaking with former clients that Whitworth repeatedly took money from and for clients. He claimed that money would be used to resolve the matter that the client had pending before the court. In many instances, Whitworth deposited the client’s money either into his attorney trust account or into his personal bank accounts. After depositing his client’s money, Whitworth would then withdraw money and pay for personal expenses and items that were entirely unrelated to his client’s legal case.
Whitworth also admitted that he failed to report the embezzled funds on his personal income tax returns for the years 2009-2011, which the plea agreement says totaled $448,835. Whitworth did not file an income tax return for 2012, according to the plea agreement, and therefore did not report the embezzled funds during this year as well.
Under the terms of today’s plea agreement, Whitworth must surrender his license to practice law in any and all jurisdictions and forfeit to the government a $586,739 money judgment.
Under federal statutes, Whitworth is subject to a sentence of up to 33 years in federal prison without parole, plus a fine up to $750,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Missouri Highway Patrol and IRS-Criminal Investigation.Johnny Wayne Neeley Sentenced to Serve 96 Months in Prison for Conspiring to Distribute OxycodoneRead the Press Release
GREENEVILLE, Tenn. – Johnny Wayne Neeley, 39, of Sneedville, Tenn., was sentenced on Mar. 31, 2014, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 96 months in federal prison for conspiring to distribute oxycodone and possessing with intent to distribute oxycodone. Upon his release from prison, Neeley will be subject to three years of supervised release. There is no parole in the federal system.
In October 2012, Neeley and 11 other individuals were named in an 18-count indictment charging them with drug trafficking of oxycodone, oxymorphone, and methamphetamine, firearms violations, and money laundering. The charges were the result of a lengthy investigation of individuals who traveled to Florida, Tennessee, and Georgia to obtain oxycodone and other drugs to distribute throughout eastern Tennessee. The total conspiracy involved over 778,000 milligrams of oxycodone, which is the equivalent of nearly 26,000 dose units of 30 milligram oxycodone.
Neeley was the only individual charged in the indictment who elected to proceed to trial. According to the evidence presented at trial, Neeley paid for, or “sponsored, individuals to travel on commercial airlines to pill mills in Tampa, Fla., to obtain oxycodone for distribution in the Eastern District of Tennessee. He also paid for, or “sponsored,” individuals to travel to pill mills in the Eastern District of Tennessee to obtain oxycodone for distribution. Evidence at trial also showed that Neeley himself distributed controlled substances, including oxycodone, Xanax, and Suboxone, in the Eastern District of Tennessee on numerous occasions. Several officers testified about the October 2012 arrest of Neeley and Greg Rhea, at Rhea’s Morristown residence, where the two were found barricaded inside a room in the house, which was found to contain controlled substances, including oxycodone and oxymorphone, and three firearms.
All 12 individuals charged in the indictment have now been convicted and Neeley was the next to last to be sentenced. A sentencing hearing for Gregory Allen Rhea is scheduled for April 14, 2014, in U.S. District Court, Greeneville, Tenn.
U.S. Attorney William C. Killian commended the law enforcement agencies involved in this investigation and stated, “The U.S. Attorney’s office will continue to work closely with all law enforcement agencies to cut off the illegal supply lines of oxycodone and other prescription narcotics. This sentence is an example of the punishment that awaits those who traffic prescription drugs and the ‘pill mills’ that supply criminal organizations.”
Agencies involved in this investigation included the Tennessee Bureau of Investigation, Morristown Police Department, and Hawkins County Sheriff’s Department. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
John Acosta-bermudez Charged with Reentry After DeportationRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that John Acosta-Bermudez, a Columbian citizen who has landed immigrant status in Canada, appeared today in United States District Court in Burlington on a charge that he reentered the United States after having been deported. U.S. Magistrate Judge John M. Conroy ordered that the defendant be detained pending his next hearing.
According to the criminal complaint, immigration officials at the Route 5 Port-of-Entry in Derby Line observed a black vehicle enter the United States in mid-morning on March 29, 2014. The car did not stop at the Port for inspection, but instead headed south on Interstate 91. A Border Patrol agent followed and stopped the car on the highway. Acosta-Bermudez was driving and an undocumented alien was the passenger. Acosta-Bermudez has twice been deported from the United States following a New York robbery conviction and a federal passport fraud conviction. As a deportee, Acosta-Bermudez cannot return to the United States without the advance permission of the Attorney General.
The United States Attorney emphasizes that the charge against Acosta-Bermudez is merely an accusation and that the defendant is presumed innocent unless and until he is proven guilty.
If convicted, the defendant faces up to 20 years of imprisonment and a fine of up to $250,000. The actual sentence would be determined with reference to federal sentencing guidelines.
Acosta-Bermudez is represented by Assistant Federal Public Defender David McColgin. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Iowa Man Pleads Guilty to <br /> Sexually Exploiting 10-year-old GirlRead the Press Release
An Iowa man pleaded guilty today in the District of Massachusetts to federal child exploitation charges moments before his jury trial was scheduled to begin this morning.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Acting Inspector in Charge Shelly Binkowski of the U.S. Postal Inspection Service (USPIS) made the announcement.
Joshua Dunfee , 32, of Oxford Junction, Iowa, pleaded guilty before U.S. District Court Chief Judge Patti B. Saris to the coercion and enticement of a child to engage in illicit sexual activity and the sexual exploitation of a child to produce child pornography. Sentencing is scheduled for June 27, 2014.
Dunfee posed as “John” from “Hunt Photography” on Facebook and communicated with a Massachusetts mother who was seeking employment as a model and believed Hunt Photography to be a legitimate business. In October 2011, Dunfee contacted the mother and told her that Hunt Photography had a client willing to pay $20,000 for a mother-daughter bikini modeling contract. Dunfee told the mother that in order to apply she would need to audition her daughter for him immediately and persuaded the mother to take her minor daughter out of school.
At Dunfee’s further direction, the mother placed her daughter on webcam for him to view for a 48-minute video call. During this time, Dunfee was able to see and hear the mother and her minor daughter, but they were unable to see or hear him. During the “audition,” Dunfee directed via instant messenger that the minor be posed for him—first in a bra and underwear and then completely naked. Dunfee knew that the girl was a minor.
On Nov. 3, 2011, federal agents executed a search warrant at Dunfee’s residence, where law enforcement had traced the illicit conduct via IP address records. A forensic examination of Dunfee’s computers (obtained during the execution of the search warrant) revealed various activities consistent with the use of certain platforms to communicate while posing as Hunt Photography, including Facebook, Skype and Windows Live Messenger Chat.
The case was investigated by law enforcement in Massachusetts, the USPIS, the Jones County, Iowa, Sheriff’s Office, the Massachusetts State Police, the Attleboro Police Department and the Department of Justice High Technology Investigative Unit. Substantial assistance was provided by the U.S. Attorney’s Office for the District of Iowa.
The case is being prosecuted by Trial Attorney Herbrina Sanders of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Stacy Dawson Belf of the District of Massachusetts’s Major Crimes Unit.
This case is brought as part of Project Safe Childhood, which is a nationwide initiative created by the Department of Justice in 2006 that is designed to protect children from online exploitation and abuse. Led by the U.S. Attorney’s Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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