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Monday 10 February 2014
Two Men Sentenced for Federal Hate Crime Charges Resulting from 2012 New Year's Eve Attack on African-American YouthsRead the Press Release
LOS ANGELES – Two Latino men associated with the Compton 155 street gang were sentenced to federal prison today for their racially-motivated attack on African-American juveniles at a residence in Compton on New Year’s Eve 2012.
Jeffrey Aguilar, also known as “Terco”, 19, and Efren Marquez Jr., also known as “Stretch” and “Junior,” 21, were each sentenced to serve 21 months in prison.
The two defendants were sentenced by United States District Judge Terry J. Hatter Jr., who also ordered them to serve three years of supervised release after they complete their prison sentences.
Aguilar and Marquez pleaded guilty on October 17, 2013 to violating the Matthew Shepard-James Byrd Jr. Hate Crime Prevention Act after admitting their involvement in the assault.
“Hate-based crimes have no place in America,” said United States Attorney André Birotte Jr. “The defendants’ attempt to rid their neighborhood of African-Americans serves as a sickening reminder that racial intolerance still exists in some segments of our community. For this egregious conduct, the defendants have received well-deserved prison terms.”
Aguilar and another individual physically attacked a 17-year-old African-American, who was walking down a street in the city of Compton. Aguilar chased down and struck the victim in the head with a metal pipe. During the incident, Marquez threatened to shoot another African-American juvenile who was present. Both Aguilar and Marquez admitted when they pleaded guilty that the attack on the 17-year-old victim was motivated by the race and color of the victim.
“Despite the substantial progress made, violent acts of hate committed because of someone’s race continue to occur to this day, and the department will continue to use every available tool to identify and prosecute hate crimes whenever and wherever they occur," said Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division.
“The FBI is committed to the protection of civil rights and will continue to investigate allegations of crime motivated by hate,” said Assistant Director in Charge Bill L. Lewis for the FBI’s Los Angeles Field Office. “I’m hopeful that this sentencing will clarify the serious consequences for anyone contemplating senseless violence against the innocent due to their religion, race, disability, ethnic origin or sexual orientation.”
“Law enforcement is dedicated to protecting the civil rights of all members of our community and the outcome of this case is a great example of the close cooperation between all agencies involved to ensure that goal,” said Interim Sheriff John L. Scott of the Los Angeles County Sheriff’s Department.
This case is the result of an investigation conducted by the FBI and the Los Angeles County Sheriff’s Department.
Release No. 14-020
Thomas Andrew Quinton SentencedRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on February 6, 2014, before U.S. District Judge Brian M. Morris, THOMAS ANDREW QUINTON. was sentenced to a term of 48 months imprisonment, 5 years supervised release, a special assessment of $100.
QUINTON was sentenced in connection with his November 12, 2013 guilty plea to travel to engage in illicit sexual conduct. In an Offer of Proof filed by Assistant U.S. Attorney Michael Lahr, the government stated that in June 2013, members of the Internet Crimes Against Children (ICAC) Task Force in Great Falls conducted a "catch the predator" operation. An advertisement was posted on Craigslist in an attempt to target individuals in Great Falls and the surrounding area who were interested in engaging in sexual conduct with a minor child.
On June 24, 2013, a Homeland Security Investigation (HSI) Special Agent posted one such ad and received numerous responses. The agent then used an undercover persona to pose as a fictitious person named "Teresa Smith", a 38-year old female in Great Falls living with her 12-year old niece, "Katie Smith." The agent exchanged several e-mails with an individual responding to the ad who ultimately identified himself as Thomas Andrew Quinton, a Canadian citizen. The emails from Quinton contained descriptions of sexual acts Quinton wanted to engage in with "Katie". Quinton also sent a photograph of himself and two more photos of a graphic nature.
Beginning July 2, 2013, Quinton began texting the agent stating that he would be taking time off work. The agent exchanged 375 text messages with Quinton between July 2, 2013, and July 3, 2013. Many of the text messages contained descriptions of sexual acts or were of a sexual nature. Quinton was advised on multiple occasions via text and e-mail that "Katie" was a 12-year old girl.
The telephone number Quinton used was identified as a Canadian-based number out of Lethbridge, Alberta.
Quinton was given the address of the house being utilized by ICAC Task Force agents for the operation, and Quinton agreed to travel to the residence to engage in sexual conduct with "Katie". At around 4:15 p.m. on July 3, 2013, Quinton parked his truck at the residence and walked to the house where he was arrested and taken into state custody charged with violations of § 45-5-625, M.C.A., sexual abuse of children.
Law enforcement officers interviewed Quinton who stated that he had traveled from Lethbridge to Great Falls on July 3, 2013, to have sex with "Katie". He confirmed his cellular phone number was the number used for the text messaging and that he had corresponded via text messaging and e-mails with "Teresa" and "Katie" for the purpose of meeting "Katie" and engaging in sexual acts. Officers also confirmed that Quinton and his vehicle had entered the United States at the Sweetgrass Port of Entry on July 3, 2013, at 2:28 p.m.
Tax Defier, Former NFL Player Sentenced to Federal Prison for Filing Fraudulent Income Tax ReturnsRead the Press Release
This morning in Austin, Gregory P. Boyd was sentenced to 33 months in federal prison and ordered to pay $185,129.07 restitution to the Internal Revenue Service for filing income tax returns that did not accurately reflect his income announced United States Attorney Robert Pitman and Internal Revenue Service-Criminal Investigation Special Agent In Charge Steve McCullough.
In November 2013, jurors convicted Boyd of three counts of filing fraudulent income tax returns. Evidence and testimony presented during trial revealed that Boyd knowingly filed false income tax returns for 2004, 2005 and 2006. On each tax return, Boyd declared that he received zero income when in fact, he received roughly $180,000 in 2004, about $390,000 in 2005, and approximately $225,000 in 2006. The parties stipulated that Boyd owed income tax in the amount of $26,688 for 2004, at least $102,237 for 2005, and $49,155 for 2006.
Evidence at trial revealed that Boyd had not paid income taxes on any of the years 2004 through 2011. Boyd, who played football at the University of Arizona and then played in the NFL during the 1973 and 1974 seasons, worked in the field of real estate development during 2004, 2005 and 2006.
Boyd testified during the trial that he believed his tax returns were true and complied with the law, based on ideas he learned from the book “Cracking the Code” by Peter Eric Hendrickson. Hendrickson appeared at trial and testified as a witness for the defense. Boyd specifically testified that he believed, based on Hendrickson’s book, that the income tax applies only to the income of federal government employees and federal government contractors, as well as income derived from investments in federal government securities.
“Tax crimes cheat not only the government, but also every honest citizen who follows the rules and meets his or her obligations. We owe it to these citizens to bring justice to those who willfully break the tax laws,” stated U.S. Attorney Robert Pitman.
“Today’s sentence serves as a reminder during this income tax filing season that everyone has a duty to pay their fair share of taxes and those who don’t will be held accountable,” stated Internal Revenue Service-Criminal Investigation Special Agent In Charge Steve McCullough.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation. The case was prosecuted by Assistant United States Attorney Alan Buie.
St. Augustine Sex Offender Sentenced to 15 Years in Federal Prison for International Transportation of Child PornographyRead the Press Release
Jacksonville, Florida – United States District Judge Marcia Morales Howard today sentenced Charles Lee Gorish (67, St. Augustine) to 15 years in federal prison for transporting images and videos of child pornography from Florida to Canada. He was also ordered to serve a 10-year term of supervision, following his incarceration, and to register as a sex offender. Gorish pleaded guilty on October 23, 2013. He has been in custody since his arrest in St. Augustine, on September 7, 2012.
According to court documents, Gorish used a fake name to send a package, via FedEx from St. Augustine, to an individual in Ontario, Canada. The package was intercepted by Canadian law enforcement officers. It contained, among other things, two micro SD media cards containing more than 600 images and videos depicting child pornography, and thousands of images of child erotica. Canadian officials notified the St. Johns County Sheriff's Office (SJCSO), the Federal Bureau of Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations regarding the seizure of this package. Further investigation revealed that Gorish is a registered sex offender. He was convicted in Hillsborough County, Florida on February 24, 1992 of three counts of lewd and lascivious conduct on a minor child.
On September 7, 2012, FBI agents and SJCSO personnel executed a federal search warrant at Gorish's residence in St. Augustine. During an interview, Gorish admitted that he downloaded the files depicting the sexually explicit images of young boys on the SD cards from the Internet, over a period of years. Gorish was subsequently arrested.
This case was investigated by the Canadian Border Services Agency, Ottawa Police Services, the St. Johns County Sheriff's Office, the Federal Bureau of Investigation, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Soap Lake Man Sentenced to Five Years in Federal Prison for Receipt of Child PornographyRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Timothy Andrew Casey, age 49, of Soap Lake, Washington, was sentenced today after having previously pleaded guilty in November of 2013 to Receipt of Child Pornography. Chief United States District Court Judge Rosanna Malouf Peterson sentenced Casey to a five year term of imprisonment, to be followed by a 20 year term of court supervision after he is released from Federal prison. In addition, Casey will be required to register as a sex offender.
According to court records, while the Department of Interior ("DOI") was monitoring its internal electronic network traffic it discovered that a computer on the DOI network, which was registered to Timothy A. Casey, had been used to view and downloaded child pornography images. Casey was employed by the DOI at the Bureau of Reclamation ("BOR") office in Ephrata, Washington. An investigation conducted by the DOI Office of Inspector General, revealed that for approximately the last five years, while at his BOR office, Casey would search, view and then download child pornography images from his work computer onto thumb drives. Casey would then take the thumb drives home and insert them into a digital photo frame in order to view the child pornography at home. Approximately 2,800 pictures and videos depicting sexually explicit conduct by minor children were extracted from captured DOI network traffic, the work computer assigned to Casey, and three USB removable storage devices seized from Casey's residence pursuant to a search warrant.
Michael C. Ormsby said, "Federal employees are entrusted by the public to comport themselves lawfully and appropriately in the execution of their employment responsibilities. Mr. Casey violated this trust by using a government computer to commit his criminal conduct. Such conduct by any Federal employee is inexcusable and will not be tolerated. Let me be abundantly clear --the United States Attorney's Office in the Eastern District of Washington will prosecute and its investigative partners will investigate aggressively child pornography-related crimes. I commend the Department of Interior, Office of Inspector General for its superb investigative efforts in this case"
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States 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. The Project Safe Childhood Initiative ("PSC") has five major components:
- Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue child victims;
- Participation of PSC partners in coordinated national initiatives;
- Increased federal enforcement in child pornography and enticement cases;
- Training of federal, state, and local law enforcement agents; and
- Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources".
This investigation was conducted by the Department of Interior, Office of Inspector General. The case was prosecuted by Stephanie J. Lister, an Assistant United States Attorney and PSC Coordinator for the Eastern District of Washington.
CR-13-00138-RMP
Sex Offender Sentenced to Thirty Months for Failing to RegisterRead the Press Release
United States Attorney Deborah R. Gilg announced that Stephen J. Wilson, 32, was sentenced in federal court in Omaha after failing to register as a sex offender. The Honorable Joseph F. Bataillon sentenced Wilson to thirty months in federal prison. There is no parole in the federal system. After his release from prison Wilson will begin a five year term of supervised release and once again be required to register as a sex offender.
This is Wilson’s third conviction for failing to register as a sex offender. It is his first federal conviction for failing to do so.
Wilson was convicted in the State of Iowa for enticing a minor. He received a two year sentence and a twenty-five year obligation to register as a sex offender. After being released from prison in Clarinda, Iowa, in May 2013 for failing to register as a sex offender, Wilson traveled to Nebraska. He was arrested on June 13, 2013, at a residence in Bellevue, Nebraska where he had been residing. He had not registered with the Nebraska Sex Offender Registry.
This case was investigated by United States Marshal Service and was prosecuted as a part of Project Safe Childhood. Project Safe Childhood is an initiative of the United States Department of Justice designed to protect children from individuals who would exploit them online or offline and includes individuals who travel in interstate commerce and fail to register as sex offenders as required by law. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Romanian National Sentenced for Naturalization FraudRead the Press Release
Judge Revokes Defendant’s U.S. Citizenship
BOISE –Simona Rus, 36, of Ketchum, Idaho, was sentenced today to two years’ probation for unlawful procurement of United States Citizenship based on her fraudulent marriage to a United States citizen, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also revoked Rus’ citizenship and cancelled her certificate of naturalization. She pleaded guilty to the charge on November 18, 2013.
According to the plea agreement filed in the case, Rus admitted that she entered into a false marriage with a United States citizen in 2003 for the sole purpose of obtaining immigration benefits. Rus admitted that she never had a husband-and-wife relationship with her American “spouse” in the contrived marriage. In January 2009, Rus misrepresented the nature of her marriage in an application for naturalization to United States Citizenship and Immigration Services (USCIS). Based on her fraudulent application, USCIS granted Rus naturalization as a United States citizen.
“By gaming the immigration system, Rus ultimately cheated herself out of the American dream,” said Brad Bench, special agent in charge of HSI Seattle, who oversees Idaho investigations. “The outcome of this case clearly demonstrates that our nation's immigration laws are to be respected, not ignored.”
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Rochester Man Sentenced on Drug and Gun ChargesRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Alex Flecha, 28, of Rochester, N.Y., who was convicted of possession of cocaine with the intent to distribute, and possession of a firearm in furtherance of a drug trafficking crime, was sentenced to five years in prison by U.S. District Court Judge Charles J. Siragusa. The defendant also forfeited any interest he had in $25,140.00 that was seized, as drug trafficking proceeds.
Assistant U.S. Attorney Charles E. Moynihan, who handled the case, stated that on October 4, 2010, members of the Greater Rochester Area Narcotics Enforcement Team executed a narcotics search warrant at Flecha’s residence on LaGrange Avenue, in Rochester. The warrant was executed following surveillance of Flecha entering and exiting the residence and departing the location in a vehicle. Officers conducted a traffic stop of the vehicle and the defendant was taken into custody. Flecha surrendered the key to his residence to assist in the warrant execution. Officers recovered approximately 500 grams of cocaine, and other items commonly associated with narcotics trafficking, including numerous unused clear bags and a bag of cutting agent. Also found was a .45 caliber H&K semi-automatic pistol, a loaded magazine and additional loose ammunition. Officers also seized $25,140 in United States currency.
The sentencing is the culmination of an investigation on the part of the Greater Rochester Area Narcotics Enforcement Team, under the direction of Lieutenant Gerald Smith, Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, and the Rochester Police Department, under the direction of Acting Chief Michael Ciminelli.
Resident of Harrisburg and New York Convicted of Conspiracy to Distribute CocaineRead the Press Release
The U.S. Attorney’s Office for the Middle District of Pennsylvania announced that a federal jury in Harrisburg returned a verdict today finding a New York man guilty of conspiracy to traffic drugs and trafficking drugs.
According to United States Attorney Peter J. Smith, Maurice Henderson, 33, who resided in both New York and Harrisburg, was convicted of criminal conspiracy to distribute and possess with intent to distribute five kilograms and more of cocaine hydrochloride and 280 grams or more of crack cocaine and distribution and possession with intent to distribute the same drugs. The jury found him not guilty of possessing a firearm in furtherance of drug trafficking. The verdict was returned following a week-long jury trial before U.S. District Court Judge John E. Jones, III.
Evidence presented during trial established that Henderson sold crack cocaine to an individual working with the Dauphin County Drug Task Force twice and also sold crack cocaine to an undercover police officer on two occasions. Witnesses testified that over a two-year period, Henderson and his co-conspirators made frequent trips from Harrisburg to a neighborhood in New York to purchase multiple kilogram quantities of cocaine hydrochloride, using rental cars and drivers to make the trips. Upon their return to Harrisburg, members of the conspiracy cooked the bulk of the cocaine hydrochloride into “crack” cocaine, weighed it, packaged it into smaller quantities and distributed to drug dealers in the Harrisburg area.
Co-conspirators Juval Green, 34, Robert Reynoso, 35, Derrice Sassaman, 39, and Annalyn Black, 26, all previously pleaded guilty to a drug trafficking conspiracy and are awaiting sentencing. Prior to jury selection in Henderson’s case, the government filed a notice stating that because Henderson has at least two prior felony drug convictions, he is subject a mandatory 20 years’ imprisonment.
The investigation that led to Henderson’s arrest and conviction was part of a larger investigation targeting crack cocaine dealing in the 14th and Swatara Street area in Harrisburg.
The case was investigated by the Drug Enforcement Administration, the Dauphin County Criminal Investigative Division, the Dauphin County Drug Task Force, Lower Paxton Township Police, Susquehanna Township Police, the U.S. Marshal’s Service, Pennsylvania State Police, and Harrisburg Police. It was prosecuted by Assistant U.S. Attorney Christy H. Fawcett.
Randy Rider Sentenced to 10 Years in Prison for Distribution of MethamphetamineRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on February 6, 2014, RANDY LEE RIDER, 47, of Klamath Falls, Oregon, was sentenced to a term of 120 months' imprisonment and five years of supervised release, by U.S. District Judge Brian M. Morris,
Rider was sentenced in connection with his November 21, 2013, guilty plea to distribution of methamphetamine. In an Offer of Proof filed by Assistant U.S. Attorney Jessica Betley, the government stated it would have proved that beginning in January 2013, undercover agents began to buy methamphetamine from Devan Kelly. The defendant supplied Kelly with methamphetamine. These sales progressed, and in April, agents inquired into whether Kelly would sell them a pound of methamphetamine. Kelly agreed to sell a pound of methamphetamine for $23,000.00, but he first had to contact his supplier, the defendant. Kelly and the agents then agreed the sale would take place in Lewistown, Montana, on April 29, 2013.
Just prior to the deal on April 29, 2013, Kelly met with the defendant to get the methamphetamine. The sale then took place, and Kelly gave undercover agents the pound of methamphetamine. This methamphetamine was tested and the laboratory concluded it was 99.5% pure and contained 439.0 grams of actual methamphetamine.
After Kelly's arrest, agents followed the defendant to a house in Lewistown, where he was confronted and admitted he had been Kelly's methamphetamine supplier, and had given Kelly the pound of methamphetamine to sell to the agents.
This investigation was conducted by the FBI Violent Crimes Task Force.
Perry County Woman Sentenced for Methamphetamine ConspiracyRead the Press Release
On February 10, 2014, Pattsy S. Pelate, 27, of Cutler, Illinois, was sentenced in United States District Court in Benton on a one-count indictment charging conspiracy to manufacture methamphetamine, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois.
Pelate, who had previously pled guilty to the methamphetamine offense, was sentenced to 84 months in prison, to be followed by 4 years of supervised release, and fined $300. Evidence at the plea and sentencing hearings established that Pelate supplied pseudoephedrine to others for use in the manufacture of methamphetamine. The offense occurred between 2010 and November 2012, in Jackson and Randolph Counties.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Randolph County Sheriff’s Office, Perry County Sheriff’s Office, Murphysboro Police Department, and Drug Enforcement Administration.
The case is being prosecuted by Assistant United States Attorney Amanda A. Robertson.
New York Man Sentenced to Probation with Monitoring for Passing Counterfeit CurrencyRead the Press Release
PITTSBURGH - A Brooklyn, NY, resident has been sentenced in federal court to 54 months of probation, which includes six months of home detention with electronic or GPS monitoring, on his conviction of conspiracy and passing counterfeit currency, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Edwin Phillip, 29.
According to information presented to the court, Phillip conspired and passed counterfeit currency during the period of Nov. 9, 2012, through Nov. 30, 2012.
Assistant United States Attorney Shardul S. Desai prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Secret Service for the investigation leading to the successful prosecution of Phillip.
Modesto Man Pleads Guilty to Conspiring to Structure Cash Proceeds of Interstate Oxycodone and Hydrocodone TraffickingRead the Press Release
FRESNO, Calif. — Sdey Chim, 37, of Modesto, pleaded guilty today to one count of conspiracy to structure cash transactions, United States Attorney Benjamin B. Wagner announced.
According to court documents, Chim and co-conspirators obtained prescriptions for oxycodone and hydrocodone from a doctor in Visalia. After obtaining the prescriptions, co-conspirators filed the prescriptions at pharmacies in Fresno and Modesto, California, and then arranged for the pills to be shipped to Washington for sale on the black market. Chim communicated with co-defendant David Ruem to have the cash proceeds of the pill sales deposited into certain bank accounts held by co-conspirators.
The cash deposits and subsequent cash withdrawals were made in amounts of $10,000 or less to attempt to prevent Currency Transaction Reports from being filed by the banks on those cash transactions. Currency Transactions Reports are reports prepared by financial institutions for any transactions involving more than $10,000 in cash. These reports are filed with the Department of Treasury and are made available to law enforcement. In total, more than $1.5 million in cash was deposited into co-conspirators’ bank accounts in a structured manner.
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.
This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multijurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.
Chim is scheduled to be sentenced by Judge Anthony W. Ishii on April 21, 2014. He faces a maximum statutory penalty of five years in prison and a $250,000 fine for conspiracy to structure. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Modesto Man Pleads Guilty in Fraudulent Check-Cashing SchemeRead the Press Release
FRESNO, Calif. — Steven Hamman, 52, of Modesto, pleaded guilty today to three counts of conspiracy and wire fraud in connection with a fraudulent check-cashing scheme, United States Attorney Benjamin B. Wagner announced.
According to his plea agreement, between January 2009 and January 2011, Hamman conspired with others to cash stolen or fraudulently procured checks at electronic check-cashing kiosks (known as “Vcom,” or “virtual commerce” machines). Hamman used fraudulently created Vcom accounts to attempt to cash the checks, sometimes using checks that other co-conspirators previously had attempted and failed to cash. On several occasions, Hamman attempted to cash the same check more than once. During the course of the conspiracy, Hamman’s check-cashing scheme caused or threatened to cause a loss of more than $47,000 to more than 50 victims, including financial institutions and others.
This case was the product of an investigation by the U.S. Postal Inspection Service. Assistant United States Attorney Christopher Baker is prosecuting the case.
Hamman is scheduled to be sentenced by Senior U.S. District Judge Anthony W. Ishii on April 28, 2014. Hamman faces a maximum statutory penalty of 30 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Middlesex County, N.J., Woman Who Admitted Conspiring to Defraud Treasury Department Sentenced to 44 Months in PrisonRead the Press Release
NEWARK, N.J. — A Middlesex County, N.J., woman who conspired with others to defraud the U.S. Department of the Treasury of more than $1 million in income tax refunds over a four-year period was sentenced today to 44 months in prison, U.S. Attorney Paul J. Fishman announced today.
Jahmeelah Mitchell, 30, of South Plainfield, N.J., previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging her with one count of conspiracy to defraud the United States. Judge Cecchi imposed the sentence today in Newark federal court.According to documents filed in this case and statements made in court:
Between April 2008 and August 2011, Mitchell and others advised numerous people that they could receive tax refunds of several thousand dollars each by filing fraudulent federal tax returns. The scheme involved reporting inflated amounts of income and taxes withheld, which resulted in artificially inflated tax refunds.
Mitchell and her conspirators instructed others to provide Mitchell with names, Social Security numbers, dates of birth, number of dependents and addresses. After obtaining this information, Mitchell electronically filed the fraudulent tax returns using internet-based software from Mitchell’s residence. Mitchell received the tax refunds in the form of either U.S. Treasury checks or prepaid debit cards deposited into various accounts Mitchell established in the names of her conspirators. Mitchell retained a percentage of the refunds as her fee for filing the fraudulent returns.
On August 22, 2011, law enforcement agents executed a search warrant at Mitchell’s residence and recovered ledgers containing identifying information for approximately 100 individuals, as well as a stack of prepaid credit cards issued in the names of dozens of people. Subsequent analysis of this information revealed that a total of 127 people were participants and/or victims, and Mitchell filed hundreds of fraudulent tax returns seeking $1,082,638 in refunds.
In addition to the prison term, Judge Cecchi sentenced Mitchell to three years of supervised release and ordered her to pay $1,082,638 in restitution.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; IRS B Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates, for the investigation leading today’s sentencing.
The government is represented by Assistant U.S. Attorney Adam N. Subervi of the U.S. Attorney’s Office Criminal Division in Newark.
14-046
Defense counsel: Michael Pedicini Esq., Morristown, N.J.
Michigan Drug Dealer Sentenced to Federal Prison for Involvement in Drug ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A 35-year-old Michigan man who was involved in a drug distribution scheme was sentenced today to three years and ten months in federal prison, announced U.S. Attorney Booth Goodwin. Leonard Joseph Stewart, of Romulus, Michigan previously pleaded guilty in Huntington to conspiracy to distribute heroin and crack cocaine and possession of heroin and crack cocaine with intent to deliver. Stewart admitted that a part of the conspiracy, he transported heroin, crack cocaine, marijuana, and the prescription drugs hydrocodone and alprazolam, also known as “Xanax,” from Michigan to Huntington to sell. After arriving in Huntington, Stewart and his associates rented rooms at Huntington-area motels and used the rooms to prepare and distribute the illegal drugs.
On December 30, 2012, agents with the Huntington Violent Crimes and Drug Task Force executed a search warrant on Stewart’s room at the Best Western in Huntington. During the search, Stewart dove through a second-story window at the motel to elude police. Stewart was arrested a short time later. Stewart had crack cocaine and heroin on him when the police found him. Police also seized more than 46 grams of heroin, Xanax pills, digital scales and more than $4,000 in cash during the search of his hotel room.
The investigation was conducted by the FBI and the Huntington Violent Crimes and Drug Task Force. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Mexican National Sentenced to Federal Prison for Marijuana TraffickingRead the Press Release
More than 100 lbs of marijuana, cash, gun and bulletproof vest seized by authorities.
CHARLESTON, W.Va. – Jesus Alvarado-Aboyte, 31, of Mexico was sentenced today to four years in federal prison, U.S. Attorney Booth Goodwin announced. Alvarado-Aboyte previously pleaded guilty in August of 2013 to possession with intent to distribute marijuana. On March 5, 2013, police executed a search warrant at a residence on Avery Street in Parkersburg where Alvarado-Aboyte was living. Police located and seized approximately 104 pounds of marijuana, $26,323, a .40 caliber pistol, a bullet-proof vest, and digital scales along with packaging materials used for distributing marijuana from the residence. Alvarado-Aboyte waived his Miranda rights and admitted that he had been distributing marijuana in and around Parkersburg for several months leading up to March of 2013. Police also seized and forfeited a 2004 Harley Davidson motorcycle, a 2004 Ford F150 pickup truck, and a 2002 Mercedes Benz C240 which Alvarado-Aboyte acknowledged were purchased with drug money or used to facilitate drug offenses.
The Parkersburg Police Department, Parkersburg Narcotics and Violent Crimes Task Force, and Dept. of Homeland Security, Immigration and Customs Enforcement conducted the investigation. Assistant United States Attorney Joshua Hanks handled the prosecution.
Martin Woman Sentenced for Benefits FraudRead the Press Release
United States Attorney Brendan V. Johnson announced that a Martin, South Dakota, woman convicted of Benefits Fraud was sentenced on February 7, 2014, by U.S. Magistrate Judge Veronica L. Duffy.
Kelly Cottier, age 54, was sentenced to one year of probation, and ordered to pay a $25 special assessment to the Federal Crime Victims Fund and restitution in the amount of $186.23.
Cottier pled guilty to making a purchase at Sam’s Club in Rapid City with unlawfully obtained Supplemental Nutrition Assistance Program (SNAP) benefits.
This case was investigated by the Federal Bureau of Investigation and the South Dakota Department of Social Services. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Martin Woman Sentenced for Benefits FraudRead the Press Release
United States Attorney Brendan V. Johnson announced that a Martin, South Dakota, man convicted of Assault on a Federal Officer was sentenced on February 7, 2014, by U.S. Magistrate Judge Veronica L. Duffy.
Corey Whirlwind Horse, age 18, was sentenced to 3 years of probation, and ordered to pay a $25 special assessment to the Federal Crime Victims Fund.
Whirlwind Horse was indicted on September 24, 2013, by a federal grand jury for assaulting an officer employed by the Oglala Sioux Tribe Department of Public Safety on September 18, 2013.
This case was investigated by the Bureau of Indian Affairs Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Whirlwind Horse was immediately turned over to the custody of the U.S. Marshals Service.
Martin Man Sentenced for Assault on A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Martin, South Dakota, man convicted of Assault on a Federal Officer was sentenced on February 7, 2014, by U.S. Magistrate Judge Veronica L. Duffy.
Corey Whirlwind Horse, age 18, was sentenced to 3 years of probation, and ordered to pay a $25 special assessment to the Federal Crime Victims Fund.
Whirlwind Horse was indicted on September 24, 2013, by a federal grand jury for assaulting an officer employed by the Oglala Sioux Tribe Department of Public Safety on September 18, 2013.
This case was investigated by the Bureau of Indian Affairs Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Whirlwind Horse was immediately turned over to the custody of the U.S. Marshals Service.
Major Drug Trafficker Sentenced to 15 Years in PrisonRead the Press Release
ATLANTA – Jerome Bushay has been sentenced to prison for trafficking more than 185,000 pills of ecstasy (MDMA), methamphetamine, BZP (which is a drug similar to ecstasy), and ketamine.
“Bushay headed an organization that distributed a staggering amount of drugs in this district,” said United States Attorney Sally Quillian Yates. “Through his conduct, Bushay earned every day of his prison sentence. Once again, to those enticed by the allures of the drug trade— like money, cars, and clubs – be warned. It’s more likely that you will end up sitting behind bars than you will end up drinking at them.”
Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division stated, "Ecstasy is anything but what its name implies – it offers only addiction, pain, and in some instances, death.” Ketamine, often referred to as “Special K,” and BZP, commonly referred to as “Legal Ecstasy,” are all dangerous and sometimes deadly synthetic drugs. Operation Rude Beast illustrates how DEA and its local, state and federal partners are committed to removing such dangerous substances from our streets. This defendant will now have plenty of time in prison to think about his unlawful acts.”
According to United States Attorney Yates, the charges and other information presented in court: From late-2009 to late-2010, several state, federal, and international agencies conducted an investigation of an Atlanta drug trafficking organization with ties to a corrupt federal customs officer. The investigation (code named Operation Rude Beast) led to the arrest, indictment, and conviction of more than 15 defendants, including Bushay.
Bushay organized and supplied countless drug transactions – in addition to supervising several lower-level drug traffickers. In total, Bushay distributed over 185,000 pills. Bushay also used former-Customs and Border Protection Officer Devon Samuels to transport his drug money (Samuels was sentenced to 8 years for his conduct). For example, on November 12, 2010, Bushay had Samuels smuggle $40,000 in drug money into Atlanta’s Hartsfield-Jackson International Airport. Inside the airport, Samuels used his badge to bypass airport security, which resulted in the bag not being screened. Thereafter, Samuels gave the bag to Bushay’s associate, who was destined for Texas.
On December 15, 2010, law enforcement officers executed a coordinated take-down of Operation Rude Beast. As part of the take-down, agents executed a search warrant on Bushay’s home, where they recovered an arsenal of weapons and cache of drug paraphernalia. Specifically, agents recovered: (1) a Cobra 9mm pistol; (2) a .40 caliber semi-automatic pistol; (3) a Bushmaster Assault Rifle; (4) a .22 caliber rifle; (5) a Sturm Ruger Ranch Rifle with a scope; (6) a Glock semi-automatic pistol with a laser sight; (7) a Sten-Type 9mm machine gun; and (8) approximately 700 rounds of ammunition, including ballistic tipped and hollow point rounds. In addition to the weapons, agents found narcotics ledger, an electronic money counter, two digital scales, and a baseball hat with “Customs and Border Protection” embroidered on it.
Bushay, 35, of Lithonia, Ga., has been sentenced to 15 years in prison to be followed by three years of supervised release. Bushay pleaded guilty on November 22, 2013.
This case was investigated by the Drug Enforcement Administration; Immigration Customs Enforcement (ICE); ICE - Office of Professional Responsibility; ICE - Office of Inspector General; ICE - Homeland Security Investigations; Jamaican Constabulary Force - Anti-Corruption Branch; DeKalb County Police Department; Internal Revenue Service - Criminal Investigation; Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Delta Airlines Corporate Security.
Assistant United States Attorneys Jeffrey W. Davis, Dahil Goss, and L. Skye Davis prosecuted the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Madera Man Pleads Guilty to Unlawful Firearms Shipment to MexicoRead the Press Release
FRESNO, Calif. — Ernesto Salgado-Guzman, 47, of Madera, pleaded guilty to a violation of the Arms Export and Control Act by shipping firearms to Mexico, United States Attorney Benjamin B. Wagner announced.
According to court documents, Salgado-Guzman was part of a scheme to purchase in Madera more than 400 guns (mostly Ruger Model 10/22 and .22-caliber rifles) and sell them to various individuals in Oaxaca, Mexico. During the investigation, 85 of the firearms were seized (54 in Mexico and 31 in Madera).
According to court documents, between 2006 and 2009, Salgado-Guzman solicited and directed the assistance of co-conspirators to purchase firearms from a sport shop in Madera. Other co-conspirators and Salgado-Guzman transported the weapons to Mexico to be sold to individuals in Oaxaca, Mexico. Salgado-Guzman knew that a license or permit was required in order to export the firearms to Mexico, but he did not have any license or permit from the Unites States government to do so.
U.S. Attorney Wagner said: “This case involved cooperation between law enforcement officials in this district and in Mexico to prosecute participants in this gun trafficking scheme on both sides of the border. Stopping the illegal flow of guns from the Unites States to Mexico is an important objective in both countries.”
“Ernesto Salgado-Guzman will no longer be able to traffic firearms to Mexico to perpetuate the violence being committed,” stated Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Joseph M. Riehl. “This is another victory for law enforcement in the war on crime domestically and internationally.”
“Thwarting the illegal flow of guns into Mexico is crucial to reducing the violence and bloodshed in that country,” said Clark Settles, special agent in charge for HSI San Francisco, which oversees HSI’s enforcement activities in Fresno. “HSI will continue to work closely with its federal and local partners to ensure the Central Valley does not serve as a source of firearms being illicitly trafficked to Mexico or any other nation.”
This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), and various Mexican law enforcement agencies with the assistance of Fresno Police Department. Assistant United States Attorney Kimberly A. Sanchez is prosecuting the case.
Salgado-Guzman is scheduled to be sentenced by United States District Judge Lawrence J. O’Neill on May 5, 2014. He faces a maximum statutory penalty 40 years in prison and a $2.5 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Co-defendants Demetrio Sebastian Cortez-Ordaz, 47, of Madera pleaded guilty and is set for sentencing on February 24, 2014. Demetrio Cortez-Salgado, 36, of Madera, pleaded guilty and was sentenced to two years in prison.
Florencio Solanes-Morales, of Madera, pleaded guilty and was sentenced to 18 months in prison. Demetrio Sebastian Cortez-Ordaz is scheduled to appear before Judge O’Neill on February 24, 2014 for sentencing. Zeferina Salgado Guzman de Cortez, 44, of Madera, has a trial set for April 22, 2014. Gregorio Salgado-Lopez and Maria Lopez de Salgado, 50, both residents of Madera, were prosecuted in Mexico on related charges.
Leader of Stolen Identity Refund Fraud Scheme Sentenced to Five Years in PrisonRead the Press Release
ALEXANDRIA, Va. – Leurys Antonio Olivo, 29, of the Bronx, New York, was sentenced today to 60 months in prison, followed by two years of supervised release, for conspiracy to defraud the government and aggravated identity theft. Olivo also was ordered to pay restitution to the U.S. Treasury in the amount of $42,175.28.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation, made the announcement after sentencing by United States District Judge Leonie M. Brinkema.
Olivo pleaded guiltyon Nov. 21, 2013. According to court documents, Olivo, who is an illegal alien and a citizen of the Dominican Republic, organized and led a stolen identity refund fraud scheme from his base of operations in the Bronx. He obtained stolen names, social security numbers, and dates of birth of real people from sources in Puerto Rico. Olivo then caused others to file fraudulent tax returns on behalf of the identity theft victims, and caused the IRS to mail refund checks to addresses under his or his co-conspirators’ control.
Olivo sought to expand his scheme into the Eastern District of Virginia, and as part of that effort, he sold two fraudulently obtained refund checks to an undercover agent in Woodbridge, Va. Olivo also recruited a co-conspirator, Juan-Alexis Lima-Castillo, to cash fraudulently obtained refund checks for him in Virginia. Lima-Castillo previously pleaded guilty to conspiracy and was sentenced to two months in prison.
In total, Olivo caused the IRS to issue at least $351,934.28 in refund checks. The IRS was able to stop payment on a majority of the checks before they were cashed, thereby limiting actual losses to the U.S. Treasury to $42,175.28.
This case was investigated by IRS Criminal Investigation. Assistant United States Attorney Kosta S. Stojilkovic prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Lakewood Man Sentenced to Prison for Taking Dead Aunt's Social Security Benefits for 25 YearsRead the Press Release
DENVER – John W. Stitt, age 66, of Lakewood, Colorado, was recently sentenced by U.S. District Court Judge R. Brooke Jackson to serve one year and a day in federal prison for theft of government funds, U.S. Attorney John Walsh and Social Security Administration Office of the Inspector General Special Agent in Charge Wilbert Craig announced. Following his prison sentence, Stitt was ordered to spend 3 years on supervised release. He was also ordered to pay restitution to the Social Security Administration, the agency he took the funds from, totaling $236,187.70. The defendant appeared at the sentencing hearing free on bond, and was ordered to report to a designated prison on a date certain.
Stitt was indicted by a federal grand jury in Denver on April 25, 2013. He pled guilty before Judge Jackson on November 7, 2013. He was sentenced on January 29, 2014.
According to the stipulated facts contained in the plea agreement, on October 12, 1986, John Stitt’s aunt, Helen L. Stitt, passed away. She was 78 years old. John Stitt was listed as the informant on Helen’s Colorado death certificate. And since March of 1986, seven months prior to her death, he was added as an authorized signer on Helen’s bank account. Following Helen’s death, John Stitt continued to collect Social Security retirement benefits that were deposited in Helen’s bank account. This continued for 25 years – from October 1986 through November, 2011. During that time, Stitt periodically wrote personal checks bearing his deceased aunt’s name and bank account information to himself and then signed the check himself as an authorized signer. He then converted these government funds for his personal use or gain. Stitt failed to notify Social Security that his deceased aunt was still receiving benefit payments following her death. In total, John Stitt received $236,187.70 in Social Security benefits meant for his deceased aunt, all the while knowing these funds were not intended for him.
“Concealing the death of a loved one in order to steal their Social Security benefits is both despicable and criminal,” said Wilbert Craig, Special Agent in Charge of the Social Security Administration’s Office of the Inspector General, Denver Field Division. “This investigation demonstrates the seriousness with which Social Security Administration’s Office of the Inspector General responds to allegations of fraud against the Social Security Administration (SSA) and its beneficiaries. Though SSA has worked hard to improve the process by which deaths are reported and recorded, our agency will aggressively pursue the few determined individuals who attempt to defraud our system. We are pleased with the successful actions of the U.S. Attorney’s Office in bringing this individual to justice.”
This case was investigated by the Social Security Administration Office of the Inspector General’s Office of Investigations.
Stitt was prosecuted by Assistant U.S. Attorney Martha A. Paluch.
Kentucky Addiction Treatment Center, Clinical Laboratory and Two Physician Owners to Pay $15.75 Million to Resolve Allegations of Fraudulent Urine Drug TestingRead the Press Release
LEXINGTON, KY - A chain of opiate addiction recovery centers, headquartered in Harrodsburg, KY., and a Russell Springs, KY., clinical laboratory, along with two physician owners, agreed to pay the U.S. Government millions of dollars to resolve civil allegations that they fraudulently billed federal health care programs for medically unnecessary and excessive urine tests.
PremierTox 2.0, LLC (“PremierTox”), Addixxion Recovery of Kentucky, LLC d/b/a SelfRefind (“SelfRefind”), Dr. Bryan Wood and Dr. Robin Peavler have agreed to pay a total of $15,750,000, plus interest, to resolve allegations that they violated the False Claims Act by submitting claims to Medicare and Kentucky’s Medicaid program for urine tests that were medically unnecessary and more expensive than the actual tests that were performed. Under federal law, health care programs only reimburse health care providers for services that are deemed medically necessary.
“Federal health care programs are essential to many of our citizens,” said U.S. Attorney Kerry B. Harvey. “We will not tolerate efforts by misguided providers to unfairly enrich themselves at the expense of these programs and the taxpaying public. This settlement underscores the continuing commitment of our office to use every available tool to protect these vital programs from false claims.”
According to the settlement agreement, Dr. Wood and Dr. Peavler owned and operated SelfRefind, a chain of addiction treatment clinics located in 12 Kentucky cities including, Danville, Frankfort, Hazard, Middlesboro, Pikeville, Barbourville, Morehead and Carrollton. As part of its treatment program, SelfRefind required all of its patients to submit to regular urine drug screening, as often as every two weeks, to ensure that the patients were not abusing controlled substances and were taking addiction treatment medications as prescribed.
The government alleged that after Wood and Peavler became owners of PremierTox they began automatically referring all drug screens completed at SelfRefind to PremierTox clinic for additional comprehensive urine drug screening tests that were frequently unnecessary and often more expensive than suitable alternative tests. The government also alleged that PremierTox submitted false claims that misidentified the class of drug that was tested for and received a higher financial reimbursement than necessary.
Before Dr. Wood and Dr. Peavler became part owners of PremierTox, SelfRefind did not automatically refer urine samples for additional confirmation testing to outside laboratories.
According to the settlement agreement, in December 2010 when Drs. Wood and Peavler referred urine samples to PremierTox, the lab did not have the equipment necessary to test the large volume of urine samples sent to it by SelfRefind. Therefore, PremierTox froze the samples in a storage unit for many months before performing the additional tests, which by that time were medically unnecessary for the treatment of the patients. Nevertheless, PremierTox submitted claims, seeking reimbursement for the tests.
In connection with the settlement, PremierTox has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”). The agreement obligates PremierTox to undertake substantial internal compliance reforms and commit to a third-party review of its claims to federal health care programs for the next five years. The agreement also resolves allegations that the defendants violated the Stark Law, which forbids a laboratory from billing Medicare and Medicaid for certain services referred by physicians that have a financial relationship with the laboratory.
“Billing Medicare and Medicaid for laboratory tests that are not necessary contributes to the soaring costs of health care,” said Assistant Attorney General for the Civil Division Stuart F. Delery. “Providers will be aggressively investigated and held accountable for falsely billing federal health care programs.”
The Commonwealth of Kentucky is also a party to the agreement and will receive approximately $2.74 million, which represents the state’s share of the government’s recovery of Medicaid funds. The Medicaid program is funded jointly by the federal and state governments.
“Substance abuse is devastating our Commonwealth and addiction is ripping families apart,” Kentucky Attorney General Jack Conway said. “Treatment centers and their owners should be focused on patient care rather than profits. Companies that take advantage of Kentucky’s Medicaid program will not be tolerated and I am pleased that we were able to recover this money for such a vital state program and for Kentucky taxpayers.”
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17.3 billion through False Claims Act cases, with more than $12.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit (“MFCU”), Kentucky State Police, and the U.S. Attorney’s Office. The settlement agreement and Corporate Integrity Agreements resulted from joint efforts of HHS-OIG, MFCU, the U.S. Attorney’s Office, and the Civil Frauds Section of the Department of Justice in Washington, D.C.
Kansas City, Kan., Apartment Managers Pay $640,000 to Settle False Claims AllegationsRead the Press Release
KANSAS CITY, KAN. – U.S. Attorney Barry Grissom announced today that Foley Family Property Management, Inc., a California company, has agreed to pay $640,000 to the United States to settle allegations that the company submitted false claims to the U. S. Department of Housing and Urban Development in violation of the federal False Claims Act.
The company, formerly doing business as Alpha Property Management, Inc., operates apartment complexes in Kansas City, Kan., including Terrace Pointe Apartments at 641 S. 71st Terrace. The settlement resolves allegations the company submitted false claims to HUD’s Section 8 multi-family housing program for Terrace Point tenants from November 2005 through January 2011. The government contended that the company submitted claims to HUD for foreign citizens who were not eligible for Section 8 assistance because they were not in the United States lawfully. A former assistant property manager at Terrace Point accepted counterfeit citizenship documents and falsely reported Section 8 eligibility in exchange for bribes from the tenants. Under the program, the HUD housing subsidy payments were made to the company.
In a separate case, the former assistant property manager, Mary Amador, and nine former tenants previously pleaded guilty to federal criminal charges.
The company denied the allegations and, according to the terms of the agreement, the company does not admit any wrongdoing.
“Today’s settlement demonstrates our continuing commitment to protect the integrity of federal programs. It is important that limited federal assistance resources be preserved for those who lawfully qualify and need them,” said U.S. Attorney Grissom.
“The settlement should send a strong message that the United States Department of Housing and Urban Development, Office of Inspector General, will aggressively investigate those who fail to exercise integrity in connection with HUD programs. Working in conjunction with the U.S. Attorney’s Office, we will use whatever means necessary - both civil and criminal - to isolate and punish individuals or companies that commit fraud against HUD’s programs and personally benefit from the fraud perpetrated at the expense of individuals qualified to receive housing assistance,” said David Barnes, Special Agent in Charge, HUD Office of Inspector General.
Grissom commended the U.S. Department of Housing and Urban Development, OIG; the Department of Justice Civil Frauds Section; and Assistant United States Attorney Jon Fleenor for their work on the case.
The claims resolved by the settlement are allegations only; there has been no determination of liability.Justice Department Files Lawsuit Against the State of Rhode Island and the R.I. Department of Corrections Alleging Race and National Origin DiscriminationRead the Press Release
The Justice Department announced the filing of a lawsuit today against the State of Rhode Island and the Rhode Island Department of Corrections (RIDOC) alleging that the defendants are engaged in a pattern or practice of employment discrimination against African-Americans and Hispanics in violation of Title VII of the Civil Rights Act of 1964 (Title VII). Specifically, the lawsuit challenges the defendants’ use of a written examination and a video examination to screen and select applicants for entry-level correction officer (CO) positions at RIDOC as part of the department’s ongoing efforts to ensure that state and local government employers utilize non-discriminatory assessment tools in their hiring practices.
The complaint, filed in the U.S. District Court for the District of Rhode Island, alleges that the defendants require applicants for entry-level CO positions at RIDOC to undertake a multi-step selection process that includes, among other things, a written examination and a video examination taken on the same day. The complaint further alleges that the manner in which the defendants use the written and video examinations as part of their multi-step selection process disproportionately screens out African-American and Hispanic applicants, resulting in an unjustified disparate impact against these applicants.
Title VII not only prohibits intentional discrimination on the basis of race, color, sex, national origin and religion, but also prohibits employment practices that result in a disparate impact upon a protected group, unless the employer can prove that such practices validly predict an applicant’s ability to perform a job or there is a less discriminatory alternative that the employer can use. The department’s complaint states that the manner in which the defendants use the written and video examinations violates Title VII because such use is not “job related or consistent with business necessity,” as the law requires, and does not validly enable the employer to identify those applicants who are qualified for entry-level CO positions at RIDOC.
The department shares the goal of enabling public employers to hire qualified applicants to perform their critical public safety functions. In light of its findings and this shared goal, the department is seeking a court order requiring the defendants to stop using the challenged written and video examinations, develop selection procedures for entry-level CO positions at RIDOC that comply with Title VII and provide make-whole relief including, where appropriate, offers of hire, back pay and retroactive seniority, to African-Americans and Hispanics who have been or will be harmed as a result of the defendants’ use of the challenged examinations.
“Bringing an end to practices that have an unjustified discriminatory impact on the basis of race or national origin is a major priority of the Department of Justice,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Employers must be able to show that examinations like those at issue here, that disproportionately screen out large numbers of African-American and Hispanic applicants, validly distinguish between qualified and unqualified applicants for the job. Otherwise, the examinations will not serve the employer’s purposes and will violate the law.”
Additional information about Title VII and other federal employment laws is available on the Civil Rights Division’s Web site at http://www.justice.gov/crt/
Justice Department Files Lawsuit Against the State of Rhode Island and the R.i. Department of Corrections Alleging Race and National Origin DiscriminationRead the Press Release
WASHINGTON – The Justice Department announced the filing of a lawsuit today against the State of Rhode Island and the Rhode Island Department of Corrections (RIDOC) alleging that the defendants are engaged in a pattern or practice of employment discrimination against African-Americans and Hispanics in violation of Title VII of the Civil Rights Act of 1964 (Title VII). Specifically, the lawsuit challenges the defendants’ use of a written examination and a video examination to screen and select applicants for entry-level correction officer (CO) positions at RIDOC as part of the department’s ongoing efforts to ensure that state and local government employers utilize non-discriminatory assessment tools in their hiring practices.
The complaint, filed in the U.S. District Court for the District of Rhode Island, alleges that the defendants require applicants for entry-level CO positions at RIDOC to undertake a multi-step selection process that includes, among other things, a written examination and a video examination taken on the same day. The complaint further alleges that the manner in which the defendants use the written and video examinations as part of their multi-step selection process disproportionately screens out African-American and Hispanic applicants, resulting in an unjustified disparate impact against these applicants.
Title VII not only prohibits intentional discrimination on the basis of race, color, sex, national origin and religion, but also prohibits employment practices that result in a disparate impact upon a protected group, unless the employer can prove that such practices validly predict an applicant’s ability to perform a job or there is a less discriminatory alternative that the employer can use. The department’s complaint states that the manner in which the defendants use the written and video examinations violates Title VII because such use is not “job related or consistent with business necessity,” as the law requires, and does not validly enable the employer to identify those applicants who are qualified for entry-level CO positions at RIDOC.
The department shares the goal of enabling public employers to hire qualified applicants to perform their critical public safety functions. In light of its findings and this shared goal, the department is seeking a court order requiring the defendants to stop using the challenged written and video examinations, develop selection procedures for entry-level CO positions at RIDOC that comply with Title VII and provide make-whole relief including, where appropriate, offers of hire, back pay and retroactive seniority, to African-Americans and Hispanics who have been or will be harmed as a result of the defendants’ use of the challenged examinations.
“Bringing an end to practices that have an unjustified discriminatory impact on the basis of race or national origin is a major priority of the Department of Justice,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Employers must be able to show that examinations like those at issue here, that disproportionately screen out large numbers of African-American and Hispanic applicants, validly distinguish between qualified and unqualified applicants for the job. Otherwise, the examinations will not serve the employer’s purposes and will violate the law.”
Additional information about Title VII and other federal employment laws is available on the Civil Rights Division’s Web site at http://www.justice.gov/crt/.
Contact: 401-709-5357
[email protected]Judge Sentences Fraudster to 121 Months in Prison for Check SchemeRead the Press Release
Phillip Eric Weems, 36, of Philadelphia, was sentenced today to 121 months in prison for running an elaborate check-cashing scheme in which he created more than $1.2 million worth of forged and counterfeit securities. Weems recruited more than 70 co-conspirators who presented forged and counterfeit checks to check cashing businesses, financial institutions, and dog breeders. In addition to the fraud conspiracy, Weems was charged with straw purchasing three firearms. He pleaded guilty on January 30, 2013 to conspiracy to utter counterfeit and forged securities, uttering a forged security and aiding and abetting, uttering a counterfeit security and aiding and abetting, and three counts of aiding and abetting the making of false statements to federal firearms licensees.
Weems’ organization made and uttered dozens of forged checks of the County of Montgomery (PA) District Justice Courts, Avis Budget Group, A-Worx Staffing, Inc., Royal Car Center, Inc., Staples, Inc., The Wedge Medical Center, P.C., Gentile Realty Co., and a local general contractor. Weems also registered fake corporations with the Commonwealth of Pennsylvania, often using names of real franchise corporations to make an additional 488 checks appear legitimate. He opened 15 business checking accounts in the names of the fake corporations with financial institutions, including Bank of America, Wachovia, Sovereign, and TD Bank, and deposited enough money in each to make the accounts appear to have adequate funds. He cashed 294 checks at multiple check cashing companies, often on the same day, and then would often withdraw the balance of funds from the accounts before the checks could be processed. He conducted this scheme from January of 2009 through November of 2009.
In addition to the prison term, U.S. District Court Judge Juan R. Sanchez ordered Weems to pay restitution in the amount of $182,956.36, a $600 special assessment, and ordered three years of supervised release.
The case was investigated by the FBI and was prosecuted by Assistant United States Attorney Ashley Lunkenheimer.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Jackson County Man Pleads Guilty to Theft of Social Security BenefitsRead the Press Release
Charleston, W.Va. – A Jackson County man entered a guilty plea to theft of government money, U.S. Attorney Booth Goodwin announced today. Michael W. Smith, 36, of Sandyville, West Virginia, faces a maximum penalty of five years imprisonment and mandatory restitution in the amount of $10,110 dollars. Sentencing is scheduled for May 7, 2014.
In October of 2008, Smith began receiving Social Security benefits on behalf of his uncle, James Conrad, as Mr. Conrad’s representative payee. A representative payee is a person who agrees to receive benefits on behalf of the intended recipient. When Mr. Conrad died on April 29, 2009, Smith’s right to receive benefits on behalf of his uncle ended. Smith continued to take the benefit payments on behalf of his deceased uncle from May of 2009 to July of 2010 by cashing benefit checks totaling $10,100.
The Social Security Administration’s Office of the Inspector General conducted the investigation. Assistant United States Attorney Erik S. Goes handled the prosecution. The plea was taken by United States District Judge John T. Copenhaver, Jr.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office today announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Lynch in Missoula on February 7, 2014 and entering pleas of Not Guilty were:
- VON RACKHAM, a 41-year-old resident of Carmichael, California appeared on charges of conspiracy with intent to distribute methamphetamine. If convicted of the offense charged in the indictment, RACKHAM faces 40 years imprisonment, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 13-22
- MARGARET SILVIA, a 50-year-old resident of Fair Oaks, California appeared on charges of conspiracy with intent to distribute methamphetamine. If convicted of the offense charged in the indictment, SILVIA faces 40 years imprisonment, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 13-22
The indictment is merely a formal charging document. It is not proof of guilt and all persons indicted are presumed to be innocent of any crime until proof of guilt is established by trial or guilty plea.
The U.S. Attorney's Office is currently transitioning its media program to new media contacts. Resources and this transition may affect the amount of information the office can process and disclose in a timely manner. Therefore, if any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html.
To access the district court's calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Huntington Woman Sentenced to 18 Months Imprisonment for Selling Crack CocaineRead the Press Release
Huntington, W.Va. – Cory Lynn McCourt was sentenced today in federal court in Huntington by Chief U.S. District Judge Robert C. Chambers to 18 months imprisonment for possession with intent to deliver cocaine base, more commonly known as crack cocaine. McCourt had previously pleaded guilty on October 7, 2013.
In May of 2010, Huntington Police responded to a domestic violence call at McCourt’s home at 1332 Huntington Avenue, Huntington, West Virginia, which she shared with Brandon Golson. While talking to McCourt at the door, police officers observed a tan chunky substance lying on her couch which appeared to be crack cocaine. McCourt admitted the crack cocaine belonged to her and that she had been selling crack since January of 2010.
Golson was sentenced on January 27, 2014, to seven years and three months in federal prison for his role in the distribution of heroin, crack and oxycodone pills in the Huntington area.
Grapevine Man Sentenced to 72 Months in Federal Prison for Possessing Firearm While Under Protective OrderRead the Press Release
DALLAS — Raul Mirabal, 42, of Grapevine, Texas, was sentenced this morning by U.S. District Judge David C. Godbey to 72 months in federal prison following his guilty plea in June 2013 to one count of possession of a firearm by a prohibited person, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the factual resume filed in the case, Grapevine Police Department responded to a potential domestic disturbance on January 5, 2013. Responding officers discovered that Mirabal possessed a Desert Eagle .50 caliber handgun in his backpack. At the time, Mirabal was subject to a protective order issued in May 2012 by a Tarrant County court. Among other things, the protective order restrained Mirabal from harassing, stalking or threatening particular individuals or engaging in other conduct that would place particular individuals in reasonable fear of bodily injury; and explicitly prohibited the use, attempted use, or threatened use of physical force against particular individuals. Federal law prohibited Mirabal from possessing firearms because he was under the protective order.
The case was investigated by the Grapevine Police Department and Hurst Police Department. Assistant U.S. Attorneys Brian McKay and Jason Schall prosecuted.
Government Settles False Claims Act Allegations Against <br /> Kentucky Addiction Clinic, Clinical Lab and Two <br /> Doctors for $15.75 MillionRead the Press Release
SelfRefind, a chain of addiction treatment clinics, PremierTox LLC, a clinical laboratory that performs urine testing and Drs. Bryan Wood and Robin Peavler, the owners of SelfRefind and PremierTox, have agreed to pay $15.75 million to resolve allegations that they violated the False Claims Act by submitting claims to Medicare and Kentucky’s Medicaid program for tests that were medically unnecessary, more expensive than those performed or billed in violation of the Stark Law, the Department of Justice announced today. SelfRefind provides addiction services to Medicare and Medicaid beneficiaries in 12 locations across Kentucky.
“Billing Medicare and Medicaid for lab tests that are not necessary contributes to the soaring costs of health care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Providers will be investigated aggressively and held accountable for falsely billing federal health care programs.”
In December 2010, Wood and Peavler each purchased a 20 percent ownership stake in PremierTox, a new, independent clinical laboratory created to perform urine drug testing. The government alleged that, after Wood and Peavler became owners of PremierTox, SelfRefind began referring comprehensive urine drug screening tests to PremierTox that were unnecessary and many times more expensive than other suitable alternative tests. The government also alleged that PremierTox submitted to Medicare and Medicaid inflated claims that misidentified the class of drug being tested and billed for tests that were referred by SelfRefind in violation of the Stark law. The Stark Law forbids a laboratory from billing Medicare and Medicaid for certain services referred by physicians that have a financial relationship with the laboratory.
“Federal health care programs are essential to many of our citizens,” said U.S. Attorney for the Eastern District of Kentucky Kerry B. Harvey. “We will not tolerate efforts by misguided providers to unfairly enrich themselves at the expense of these programs and the taxpaying public. This settlement underscores the continuing commitment of our office to use every available tool to protect these vital programs from false claims.”
This settlement is the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Kentucky, the Kentucky Attorney General’s Office and the U.S. Department of Health and Human Services Office of Inspector General. Of the total $15.75 million settlement amount, the federal share is $13.01 million, and the remaining $2.74 million will be paid to the Commonwealth of Kentucky.This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17.3 billion through False Claims Act cases, with more than $12.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims settled by this agreement are allegations only; there has been no determination of liability.
George Theodore Sutherland Sentenced for AssaultRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on February 6, 2014, before U.S. District Judge Brian M. Morris, GEORGE THEODORE SUTHERLAND., 21, of the Box Elder, was sentenced to a term of 21 months imprisonment, 3 years supervised release, a special assessment of $100.
SUTHERLAND, was sentenced in connection with his guilty plea to assault resulting in serious bodily injury. In an Offer of Proof filed by Assistant U.S. Attorney Danna Jackson, the government stated that on or around April 3, 2012, the defendant, who is an enrolled member of the Chippewa Cree Indian Tribe, chased the victim down a road, intentionally kicking her, causing the victim to fall and strike her head on the ground.
As a result of the fall, the victim suffered a gash on her temple. The victim sought treatment at the Northern Montana Hospital Emergency Room. The victim bled a significant amount. In addition to receiving several sutures, the victim was treated for her extreme physical pain.
Fresno County Man Sentenced to Prison for Counterfeiting U.S. CurrencyRead the Press Release
FRESNO, Calif. — Richard Melella, 44, of Clovis, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 10 months in prison for conspiring to buy, receive, alter and pass counterfeit U.S. currency, United States Attorney Benjamin B. Wagner announced. Melella’s co-conspirator, Fresno resident Christina Williams, 25, is scheduled to be sentenced on April 7, 2014.
According to court documents, between August and October 2012, Melella and Williams purchased from a third-party approximately 54 counterfeit $100 Federal Reserve Notes. Williams received instructions from the seller on how to finish the bills and later used a counterfeiting device to make the bills appear more authentic. Williams and Melella shared this counterfeit currency, some of which Melella passed at a grocery store in Fresno County.
This case is the product of an investigation by the U.S. Secret Service. Assistant United States Attorney Christopher Baker is prosecuting the case.
Fresno and Tulare County Marijuana Growers SentencedRead the Press Release
FRESNO, Calif. — Jose Guadalupe Rodriguez, 19, of Terra Bella, and Erik Forest Basye, 34, of Sanger, were sentenced today for their involvement in separate agricultural marijuana cultivation cases, U.S. Attorney Benjamin B. Wagner announced.
1,313 Marijuana Plants, Two Firearms Seized from Tulare County Ag Grow
(1:12-cr-341 LJO)Following his guilty plea last year, Jose Guadalupe Rodriguez was sentenced to one year and one day in prison, to be followed by two years supervised release, for his involvement in a marijuana cultivation operation on agricultural land in Terra Bella. According to court records, drug agents discovered the cultivation operation after following a supplier to the property. The supplier had previously delivered equipment and material for other marijuana cultivation operations on public lands in Ventura, San Luis Obispo, and Kern Counties. During the execution of a federal search warrant at the Terra Bella property, agents seized 1,313 marijuana plants, two firearms, and arrested six people, including Rodriguez. The marijuana had a wholesale value of $1.5 million.
This case was investigated by the U.S. Forest Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Sheriff’s Offices of Tulare and Ventura Counties.
327 Marijuana Plants/Firearm Seized from Fresno County Ag Grow (1:12CR365 AWI)
Following his guilty plea last year, Erik Forest Basye was sentenced to 21 months in prison, to be followed by three years supervised release, for his involvement in a marijuana cultivation operation on agricultural land in Sanger. According to court records, Fresno County Sheriff narcotic detectives discovered the marijuana operation after they responded to a call regarding men unloading marijuana from a pickup truck on East Ashlan Avenue in Sanger. In responding to the call, the detectives found four men unloading 150 pounds of marijuana from the flatbed of a pickup truck and hanging it in a barn. The detectives also noticed bullet holes in the truck. The four men told the detectives that they had been shot at with a rifle when they were stealing marijuana from a grow site in the area of Zediker and Shaw Avenues in Sanger. The detectives then confirmed that there was a large marijuana grow at Zediker and Shaw Avenues.
U.S. Drug Enforcement Administration agents then obtained a federal search warrant for the grow site and found 327 marijuana plants, 700 marijuana stalks, and a .22-caliber rifle. Basye was found near the grow. Basye acknowledged that he had been living in a tent on the property for about three and a half years and that he worked at the property hanging marijuana for processing and was paid with marijuana and food.
This case was investigated by the DEA and Fresno County Sheriff’s Office. Both of these cases were investigated under the umbrella of Operation Mercury, a multi-county marijuana enforcement effort in 2012 focused on the large-scale cultivation of marijuana on agricultural lands. To date, as a result of Operation Mercury, 84 individuals have been charged federally with 45 defendants sentenced. Further, as a result of Operation Mercury, law enforcement officers eradicated nearly half a million marijuana plants and seized approximately 4,714.64 pounds of processed marijuana, 82 weapons, and $113,783 in cash.
Assistant U.S. Attorney Karen A. Escobar prosecuted both cases.
Former Sorrento Police Chief Convicted of Making False Statements in Civil Rights InvestigationRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced that EARL L. THERIOT, age 65, of Sorrento, Louisiana, pled guilty today before Chief U.S. District Judge Brian A. Jackson to making false statements to an FBI Special Agent in connection with a criminal civil rights investigation. THERIOT faces up to five (5) years in prison, three (3) years of supervised release following imprisonment, and a fine of up to $250,000.
At today’s hearing, THERIOT admitted that on November 1, 2013, while serving as the Chief of Police for the Town of Sorrento and following a 911 emergency police dispatch, he contacted an unresponsive individual at a local gas station, placed her in the front seat of his police unit, and, instead of bringing her back to her residence, transported her to his office at the Sorrento Police Department where he engaged in inappropriate sexual contact with her. THERIOT also admitted to later making numerous false statements to an FBI Special Agent and a Deputy with the Ascension Parish Sheriff’s Office who were investigating whether THERIOT violated federal civil rights laws, among other things.
On February 7, 2014, THERIOT resigned as Chief of Police as required by the Plea Agreement with the United States Attorney’s Office.
United States Attorney Green stated: “This office, along with our federal, state, and local partners, are dedicated to conducting thorough and complete investigations into credible allegations of police corruption and civil rights violations. Those who seek to obstruct such efforts by making false statements to federal investigators will face severe consequences. My special appreciation to Sheriff Jeff Wiley of the Ascension Parish Sheriff’s Office, District Attorney Ricky Babin of the 23rd Judicial District, and the FBI who worked seamlessly with my office to ensure justice was done.”
This prosecution and investigation were conducted jointly by the United States Attorney’s Office, the Federal Bureau of Investigation, the Ascension Parish Sheriff’s Office, and the District Attorney’s Office for the 23rd Judicial District.
The case is being prosecuted by Assistant United States Attorney Chris Dippel.
Former San Bernardino Teacher Sentenced to 120 Months for Enticement of A MinorRead the Press Release
LOS ANGELES – A former teacher at Arrowview Middle School in San Bernardino was sentenced this morning to 120 months in federal prison for attempting to entice a 13-year old girl in New Jersey to engage in sexual activity.
Eugene Ballantyne, 30, of Running Springs, California, pleaded guilty in July 2012 to one count of attempting to entice a minor to engage in illicit sexual activity. Ballantyne met the 13-year old New Jersey minor over the internet and began soliciting child pornography images from the minor. Acting with a federal search warrant, authorities seized Ballantyne’s computer, which revealed that Ballantyne had online relationships with several minors in which he obtained child pornography from them. One of these minors was Ballantyne’s former student. According to prosecutors, Ballantyne posed as an 18-year old in order to convince the 15-year old student to send him sexually explicit photographs. Ballantyne also admitted to traveling to Blythe, California to have sexual intercourse with a 17-year old minor that he met on the internet.
During the sentencing hearing, Chief Judge George H. King stated that Ballantyne committed the acts in a "callous manner" and described the need for the sentence to deter other internet predators.
This case is the result of an investigation by the Federal Bureau of Investigation, with significant assistance from the South Brunswick, New Jersey, Police Department. The San Bernardino County Unified School District also cooperated with the investigation.
Release No. 14-018
Former Sailor Sentenced to 30 Years in Prison for Attempted EspionageRead the Press Release
Robert Patrick Hoffman II, 40, of Virginia Beach, Va., was sentenced today to serve 30 years in prison for attempting to commit espionage against the United States.
John P. Carlin, Acting Assistant Attorney General of the Justice Department’s National Security Division; Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Charles T. May Jr., the Naval Criminal Investigative Service (NCIS) Acting Executive Assistant Director for Atlantic Operations; and Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.
“By attempting to hand over some of America’s most closely held military secrets, Robert Hoffman put U.S. service members and this country at risk,” said Acting Assistant Attorney General Carlin. “ Today, Mr. Hoffman is being held accountable for his actions. This prosecution should serve as a warning to others who would compromise our nation’s secrets. I commend the prosecutors, agents and analysts who worked diligently on this case.”
“Hoffman attempted to spy on behalf of the Russian Federation and betrayed the trust this country placed in him,” said Acting U.S. Attorney Boente. “He was willing to place American lives at risk for personal gain.”
After a five day trial that concluded on Aug. 21, 2013, a Norfolk jury found Hoffman guilty of attempted espionage, as charged in the one-count superseding indictment filed on May 8, 2013. According to court records and the evidence at trial, Hoffman is a U.S. citizen born in Buffalo, N.Y., who served for 20 years in the U.S. Navy until retiring at the rank of Petty Officer First Class on Nov. 1, 2011.
Hoffman’s rating in the Navy was as a Cryptologic Technician - Technical (CTT). In that capacity, he worked aboard or in conjunction with U.S. submarines for much of his naval career. While deployed, Hoffman operated electronic sensors and systems designed to collect data and information about potential adversaries, scanned the operating environment for threats to the submarine, and provided technical and tactical guidance to submarine commanders. Due to these duties, Hoffman held security clearances and regularly received access to classified national defense information about U.S. submarines and their capabilities and equipment, about adversaries, about specific missions, and about U.S. military and naval intelligence. As a condition of receiving access to this sensitive information, Hoffman repeatedly signed agreements not to disclose it to those unauthorized to receive it and regularly received training about his obligations to protect the information and to report without delay any suspicious contacts.
In 2012, the FBI initiated an investigation to determine if Hoffman was willing to act as an agent for a foreign government and commit espionage against the United States by divulging classified information. As part of this investigation, undercover FBI agents posing as operatives of the Russian Federation contacted Hoffman seeking defense information. In a series of responsive emails and other communications, Hoffman advised that he looked forward to “renewing [a] friendship” with his purported Russian contact, was “willing to develop a mutual trust,” and wanted compensation for his activities in the form of job assistance or payments based upon the risk and effort involved. Hoffman also emphasized, however, that the need for “security [was] paramount” and suggested they communicate by physical, rather than unsecure electronic means.
In accordance with this request, undercover agents posed a series of questions to Hoffman and directed, if he chose to reply, that he should signal his willingness to do so by means of a coded reply and then leave his answers on a pre-arranged date in the hollow at the base of a tree at a dead drop site located in Virginia Beach, Va. On three occasions in September and October 2012, Hoffman did just that and filled the drop site with encrypted thumb drives containing answers to the questions posed to him by persons he believed to be Russian agents. In his answers, Hoffman supplied, among other things, national defense information classified at the levels of secret and top secret/sensitive compartmented information. Following these disclosures, FBI and NCIS agents arrested Hoffman on Dec. 6, 2012, and the court ordered him detained.
This case was investigated by the FBI and NCIS. Assistant U.S. Attorneys Robert J. Krask and Alan M. Salsbury for the Eastern District of Virginia and Trial Attorney Heather M. Schmidt of the Counterespionage Section of the Justice Department’s National Security Division prosecuted the case on behalf of the United States.Former Sailor Sentenced to 30 Years in Prison for Attempted EspionageRead the Press Release
NORFOLK, Va. – Robert Patrick Hoffman II, 40, of Virginia Beach, Va., was sentenced today to 30 years in prison for attempting to commit espionage against the United States.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; John P. Carlin, Acting Assistant Attorney General of the Justice Department’s National Security Division; Charles T. May Jr., the Naval Criminal Investigative Service (NCIS) Acting Executive Assistant Director for Atlantic Operations; and Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.“Hoffman attempted to spy on behalf of the Russian Federation and betrayed the trust this country placed in him. He was willing to place American lives at risk for personal gain,” said Acting U.S. Attorney Boente. “Today’s sentence should serve as a clear warning to others who would willingly compromise our nation’s most sensitive classified information.”
“By attempting to hand over some of America’s most closely held military secrets, Robert Hoffman put U.S. service members and this country at risk,” said John Carlin, Acting Assistant Attorney General for National Security. “Today, Mr. Hoffman is being held accountable for his actions. This prosecution should serve as a warning to others who would compromise our nation’s secrets. I commend the prosecutors, agents and analysts who worked diligently on this case.”
“Today’s sentencing confirms insider threat exists in our society and pose an enduring risk to our national security,” said Special Agent in Charge Royce Curtin of the Norfolk Field Office of the FBI. “The FBI is dedicated to working with our law enforcement partners to vigorously investigate and disrupt any espionage activity directed against the United States. Counterintelligence continues to be a very high priority with severe consequences.”
After a five day trial that concluded on August 21, 2013, a Norfolk jury found Hoffman guilty of attempted espionage, as charged in the one count superseding indictment filed on May 8, 2013. According to court records and the evidence at trial, Hoffman is a U.S. citizen born in Buffalo, New York, who served for 20 years in the U.S. Navy until retiring at the rank of Petty Officer First Class on November 1, 2011.
Hoffman’s rating in the Navy was as a Cryptologic Technician - Technical (“CTT”). In that capacity, he worked aboard or in conjunction with U.S. submarines for much of his naval career. While deployed, Hoffman operated electronic sensors and systems designed to collect data and information about potential adversaries, scanned the operating environment for threats to the submarine, and provided technical and tactical guidance to submarine commanders. Due to these duties, Hoffman held security clearances and regularly received access to classified national defense information about U.S. submarines and their capabilities and equipment, about adversaries, about specific missions, and about U.S. military and naval intelligence. As a condition of receiving access to this sensitive information, Hoffman repeatedly signed agreements not to disclose it to those unauthorized to receive it and regularly received training about his obligations to protect the information and to report without delay any suspicious contacts.In 2012, the FBI initiated an investigation to determine if Hoffman was willing to act as an agent for a foreign government and commit espionage against the United States by divulging classified information. As part of this investigation, undercover FBI agents posing as operatives of the Russian Federation contacted Hoffman seeking defense information. In a series of responsive emails and other communications, Hoffman advised that he looked forward to “renewing [a] friendship” with his purported Russian contact, was “willing to develop a mutual trust,” and wanted compensation for his activities in the form of job assistance or payments based upon the risk and effort involved. Hoffman also emphasized, however, that the need for “security [was] paramount” and suggested they communicate by physical, rather than unsecure electronic means.
In accordance with this request, undercover agents posed a series of questions to Hoffman and directed, if he chose to reply, that he should signal his willingness to do so by means of a coded reply and then leave his answers on a pre-arranged date in the hollow at the base of a tree at a dead drop site located in Virginia Beach, Virginia. On three occasions in September and October 2012, Hoffman did just that and filled the drop site with encrypted thumb drives containing answers to the questions posed to him by persons he believed to be Russian agents. In his answers, Hoffman supplied, among other things, national defense information classified at the levels of secret and top secret/sensitive compartmented information. Following these disclosures, FBI and NCIS agents arrested Hoffman on December 6, 2012 and the Court ordered him detained.
This case was investigated by the FBI and NCIS. Assistant U.S. Attorneys Robert J. Krask and Alan M. Salsbury, and Trial Attorney Heather M. Schmidt of the Counterespionage Section of the Justice Department’s National Security Division prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former Pilot Pleads Guilty to Threatening Republic Airlines CEORead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Republic Airlines pilot pleaded guilty in federal court today to threatening the company’s CEO.
Matthew Richard Walker, 37, of Faribault, Minn., waived his right to a grand jury and pleaded guilty before U.S. Chief District Judge Greg Kays to a federal information that charges him with explicitly threatening to torture and kill the CEO of Republic Airlines and his family.
By pleading guilty today, Walker admitted that he carried and delivered threats on multiple occasions while employed by the airline. On Aug. 17, 2012, a Republic Airways employee discovered a threatening letter in the cockpit of an aircraft while it was parked at Reagan National Airport in Washington, D.C. Four identical letters were later discovered on aircraft parked at Reagan International Airport, in Charlotte, N.C., and at Kansas City International Airport, as well as aboard an aircraft en route from Reagan National Airport to Indianapolis International Airport. A fifth identical letter was also discovered in the crew room at KCI.
According to the plea agreement, Walker assured interviewing agents he had no interaction with co-workers regarding the letters; he acted completely alone both in writing and placing the letters.
Under federal statutes, Walker is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. 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 Deputy U.S. Attorney Gene Porter. It was investigated by the FBI.Former Nurse’s Assistant Sentenced to 50 Years in Prison for Sexual Exploitation of Minors and Child PornographyRead the Press Release
United States Attorney Laura E. Duffy announced that today Hector Manuel Carreon, a former nurse’s assistant in San Diego, was sentenced by United States District Judge John A. Houston to serve 50 years in federal prison based on Carreon’s convictions for sexual exploitation of a child, attempted sexual exploitation of a child, and receipt and possession of child pornography. Carreon was convicted after a trial by the Court in July 2013. Judge Houston also ordered a lifetime of supervised release and mandatory sex offender registration. Carreon has been in custody since his arrest by Special Agents with the Homeland Security Investigations in June 2012.
According to court documents, on June 26, 2012, Homeland Security Investigations executed a federal search warrant where they found Carreon in bed with his underwear pulled down to his ankles with a family member under the age of 10. Agents located multiple computers with child pornography – over 500 images and 900 videos of minors engaged in sexually explicit conduct - in the residence. Several videos contained minors under the age of 12. Agents also located three videos of Carreon sexually molesting two family members who appeared to be drugged in the videos. At sentencing today, Judge Houston stated that it was “apparent” that Carreon had drugged the minors before engaging in the video recording of the sexual molestation.
This case stems from an investigation by Homeland Security Investigations.
DEFENDANT Case Number: 12CR3149-JAHHector Manuel Carreon
Age: 47 San Diego, California SUMMARY OF CHARGESTitle 18, United States Code, Section 2251 (a) and (e) - Sexual Exploitation of a Child and Attempted Sexual Exploitation of a Child
INVESTIGATING AGENCY
Title 18, United States Code, Section 2252(a)(2) and (4) – Receipt and Possession of Child PornographyHomeland Security Investigations
Former Guatemalan Special Forces Officer Sentenced<br /> for Covering up Involvement in 1982 MassacreRead the Press Release
A former Guatemalan Special Forces officer was sentenced today to serve 10 years in prison for covering up his involvement in a 1982 massacre at Dos Erres, Guatemala.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Acting Director John Sandweg of U.S. Immigration and Customs Enforcement (ICE) made the announcement.
Jorge Sosa, 55, of Moreno Valley, Calif., was sentenced by U.S. District Court Judge Virginia A. Phillips in the Central District of California. At sentencing, the court also revoked Sosa’s U.S. citizenship.
“Jorge Sosa helped orchestrate the ruthless massacre of innocent villagers, including dozens of young children, and then lied about his past to obtain refuge in the United States,” said Acting Assistant Attorney General Raman. “And, today, he has been sentenced to serve 10 years in a U.S. prison. This prosecution demonstrates our resolve to deny safe haven to human rights violators and to ensure that these criminals are held accountable.”
“Southern California is fortunate to be home to immigrants from all over the globe, some of whom have fled persecution in their native lands,” said U.S. Attorney Birotte. “But Mr. Sosa fled his native country after being a persecutor who played a direct role in the massacre of an entire village in Guatemala. Because he is responsible for war crimes and for failing to disclose his role in a human rights offense, Mr. Sosa will be incarcerated for a lengthy period of time and will no longer be welcome in our country.”
“ICE is dedicated to identifying and investigating alleged human rights violators hiding in the United States,” said Acting ICE Director Sandweg. “Today’s sentencing reaffirms our commitment to ensuring that the United States not be used as a safe haven by those who have committed atrocities against mankind.”
Sosa was convicted by a federal jury in Riverside, Calif., on Oct. 1, 2013, of one count of making false statements in immigration proceedings and one count of unlawful procurement of naturalized U.S. citizenship. Evidence presented during trial showed that Sosa became an officer in the Guatemalan Army in 1976, was part of Guatemala’s elite Special Forces division called the Kaibiles and was an instructor at the Kaibil School. During this time, the Guatemalan Army was engaged in armed conflict with anti-government forces referred to as the “guerillas.” In early 1982, Sosa and other Kaibil instructors were chosen to be part of the Special Patrol, a small unit formedto combat guerilla forces. In early December 1982, the Special Patrol, including Sosa, was deployed along with approximately 40 other Kaibil soldiers to the village of Dos Erres to recover military rifles that had purportedly been stolen during a guerilla ambush of Guatemalan soldiers. When the Special Patrol entered Dos Erres, the rifles were not found and there was no evidence of guerilla soldiers in the area.
According to evidence at trial, while at Dos Erres, members of the Special Patrol then removed the villagers from their homes, separated the men from the women and children, and raped some of the young girls. To cover up the rapes, all of the villagers were brought to the center of the village, where the Special Patrol members systematically killed the men, women and children by, among other methods, bludgeoning them on the head with a sledgehammer, shooting them or throwing them into the village well while still alive. Testimony from two Kaibiles who participated in the massacre revealed that Sosa supervised the Special Patrol soldiers as they filled the well with Dos Erres villagers. The evidence also showed that at some point during the massacre, a villager screamed out at Sosa from the well, and Sosa responded by cursing and shooting his assault weapon and throwing a grenade into the well.
Approximately 12 years after the massacre at Dos Erres, the Argentine Forensic Anthropology Team (Equipo Argentino de Antropologia Forense, or EAAF) exhumed the 40-foot well. At trial, a member of EAAF testified that the team found 162 skeletons in the well. Of those skeletons, 67 appeared to be those of children under the age of 12.
The evidence further showed that after Sosa became aware he was being investigated for unlawfully procuring citizenship, he fled the United States to Mexico and eventually traveled to Canada. Sosa was arrested in Canada and extradited to the United States to face these charges.
The jury found that when Sosa applied for lawful permanent residence in 1997 and naturalized U.S. citizenship in 2007, he knowingly omitted the fact that he was a member of the Guatemalan military and that he had committed a crime for which he had not been arrested. During trial, a U.S. Citizenship and Immigration Service examiner testified that had Sosa been truthful about his past, his applications for permanent residence and citizenship would have been summarily denied.
Members of the public who have information about foreign nationals suspected of engaging in human rights abuses or war crimes are urged to call the toll-free ICE Homeland Security Investigations (HSI) tip line at 1-866-DHS-2-ICE or to complete its online tip form . Both are staffed around the clock. To learn more about the assistance available to victims in these cases, the public should contact HIS’s confidential victim-witness toll-free number at 1-866-872-4973. Tips may be provided anonymously.
The case was prosecuted by Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Jeannie Joseph and Dennise Willett of the U.S. Attorney’s Office for the Central District of California. Valuable assistance was provided by Trial Attorney Jay Bauer, Historian Joanna Crandall, and Paralegal Joanna Naples-Mitchell of the Criminal Division’s Human Rights and Special Prosecutions Section. The Criminal Division’s Office of International Affairs and Trial Attorney Lisa Roberts also provided assistance.
The case was investigated by Immigration and Customs Enforcement’s Human Rights Violator and War Crimes Unit and Homeland Security Investigations in Riverside, Calif.Former Guatemalan Special Forces Officer Sentenced to 10 Years in Prison for Lying About Role in 1982 Massacre to Get U.S. CitizenshipRead the Press Release
RIVERSIDE, California – A former Guatemalan Special Forces officer was sentenced today to serve 10 years in federal prison for covering up his involvement in the 1982 massacre of nearly everyone in the village of Dos Erres, Guatemala.
Jorge Sosa, 55, of Moreno Valley, received the statutory maximum sentence of 120 months in prison from United States District Judge Virginia A. Phillips.
Sosa was convicted by a federal jury on October 1 of one count of making false statements in immigration proceedings and one count of unlawful procurement of naturalized U.S. citizenship.
At today’s sentencing hearing, Judge Phillips also revoked Sosa’s U.S. citizenship that he was given after failing to disclose his role in the massacre of at least 162 men, women and children.
“Southern California is fortunate to be home to immigrants from all over the globe, some of whom have fled persecution in their native lands,” said U.S. Attorney André Birotte Jr. “But Mr. Sosa fled his native country after being a persecutor who played a direct role in the massacre of an entire village in Guatemala. Because he is responsible for war crimes and for failing to disclose his role in a human rights offense, Mr. Sosa will be incarcerated for a lengthy period of time and will no longer be welcome in our country.”
The evidence presented during last year’s trial showed that Sosa became an officer in the Guatemalan Army in 1976, was part of Guatemala’s elite Special Forces division called the Kaibiles and was an instructor at the Kaibil School. During this time, the Guatemalan Army was engaged in armed conflict with anti-government forces referred to as the “guerillas.” In early 1982, Sosa and other Kaibil instructors were chosen to be part of the Special Patrol, a small unit formed to combat guerilla forces. In early December 1982, the Special Patrol, including Sosa, was deployed along with approximately 40 other Kaibil soldiers to the village of Dos Erres to recover military rifles that had purportedly been stolen during a guerilla ambush of Guatemalan soldiers. When the Special Patrol entered Dos Erres, the rifles were not found and there was no evidence of guerilla soldiers in the area.
According to the evidence at trial, while at Dos Erres, members of the Special Patrol then removed the villagers from their homes, separated the men from the women and children, and raped some of the young girls. To cover up the rapes, all of the villagers were brought to the center of the village, where the Special Patrol members systematically killed the men, women and children by, among other methods, bludgeoning them on the head with a sledgehammer, shooting them or throwing them into the village well while still alive.
Testimony from two Kaibiles who participated in the massacre revealed that Sosa supervised the Special Patrol soldiers as they filled the well with Dos Erres villagers. The evidence also showed that at some point during the massacre, a villager screamed out at Sosa from the well, and Sosa responded by cursing and shooting his assault weapon and throwing a grenade into the well.
Approximately 12 years after the massacre at Dos Erres, the Argentine Forensic Anthropology Team (Equipo Argentino de Antropologia Forense, or EAAF) exhumed the 40-foot well. At trial, a member of EAAF testified that the team found 162 skeletons in the well. Of those skeletons, 67 appeared to be those of children under the age of 12.
The evidence further showed that after Sosa became aware he was being investigated for unlawfully procuring citizenship, he fled the United States to Mexico and eventually traveled to Canada. Sosa was arrested in Canada and extradited to the United States to face these charges.
The jury found that when Sosa applied for lawful permanent residence in 1997 and naturalized U.S. citizenship in 2007, he knowingly omitted the fact that he was a member of the Guatemalan military and that he had committed a crime for which he had not been arrested. During the trial, a United States immigration official testified that had Sosa been truthful about his past, his applications for permanent residence and citizenship would have been summarily denied.
“Jorge Sosa helped orchestrate the ruthless massacre of innocent villagers, including dozens of young children, and then lied about his past to obtain refuge in the United States,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division. “And, today, he has been sentenced to serve 10 years in a U.S. prison. This prosecution demonstrates our resolve to deny safe haven to human rights violators and to ensure that these criminals are held accountable.”
Acting Director John Sandweg of U.S. Immigration and Customs Enforcement (ICE), stated: “ICE is dedicated to identifying and investigating alleged human rights violators hiding in the United States. Today’s sentencing reaffirms our commitment to ensuring that the United States not be used as a safe haven by those who have committed atrocities against mankind.”
Members of the public who have information about foreign nationals suspected of engaging in human rights abuses or war crimes are urged to call the toll-free ICE Homeland Security Investigations (HSI) tip line at 1-866-DHS-2-ICE or to complete its online tip form. Both are staffed around the clock. To learn more about the assistance available to victims in these cases, the public should contact HIS’s confidential victim-witness toll-free number at 1-866-872-4973. Tips may be provided anonymously.
The case was prosecuted by the United States Attorney’s Office for the Central District of California and Department of Justice, Criminal Division’s Human Rights and Special Prosecutions Section. The Criminal Division’s Office of International Affairs provided assistance.
The case was investigated by U.S. Immigration and Customs Enforcement’s Human Rights Violator and War Crimes Unit and Homeland Security Investigations.
Release No. 14-019
Former Executive of Power Generation Company <br /> Charged with Fraud and Money LaunderingRead the Press Release
Asem Elgawhary, the former principal vice president of Bechtel Corporation and general manager of the Power Generation Engineering and Services Company (PGESCo), was indicted by a grand jury in Maryland today on charges that he defrauded his former employers, laundered the proceeds of the fraudulent scheme and violated federal tax laws.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland, Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Division and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement after the indictment was returned earlier today.
“As today’s indictment alleges, this high-ranking executive took millions of dollars in kickbacks from power companies in exchange for preferential treatment and, in doing so, defrauded his former employer, other companies who were playing by the rules and U.S. tax authorities,” said Acting Assistant Attorney General Raman. “He then allegedly concealed his kickback scheme by hiding the payments in off-shore bank accounts, giving false information to his former employer and destroying evidence. The Justice Department is committed to prosecuting not just the companies and individuals who pay bribes and kickbacks, but also those who solicit and accept them.”
“Mr. Elgawhary has been charged with using his corporate position for his own personal gain,” stated IRS-CI Chief Weber. “No matter what your career or position is in a corporation, all U.S. citizens are obligated to comply with the tax laws. When individuals and corporations deliberately fail to comply, IRS Criminal Investigation agents conduct investigations and recommend prosecution to the Department of Justice.”
The eight-count indictment alleges that from 1996 to 2011, Elgawhary, 72, of Maryland, was assigned by Bechtel – a U.S. corporation engaged in engineering, construction and project management – to be the general manager at PGESCo, a joint venture between Bechtel and a state-owned and state-controlled electricity company (EEHC). PGESCo assisted EEHC in identifying possible subcontractors, soliciting bids and awarding contracts to perform power projects for EEHC. The charges allege that Elgawhary used his position at PGESCo to provide preferential treatment to three power companies attempting to secure projects with EEHC in exchange for kickbacks from those power companies and their third-party consultants. The court documents allege that the power companies and their consultants paid more than $5 million in kickbacks into various off-shore bank accounts under the control of Elgawhary, including various Swiss bank accounts. In return, the power companies secured more than $2 billion in lucrative contracts.
The indictment alleges that Elgawhary then also attempted to conceal the kickback scheme and the proceeds he obtained from it. Elgawhary allegedly sent to Bechtel executives and members of the PGESCo board of directors in Maryland various documents and “Representation Letters” that falsely represented that he had no knowledge of any fraud or suspected fraud at PGESCo and that there were no violations or possible violations of law or regulations whose effects were material and should have been considered for disclosure in PGESCo’s financial statements. In addition, when Elgawhary was interviewed by counsel for Bechtel in April 2011, he claimed that he never received money from power companies or their consultants and that he did not maintain control over any foreign bank accounts. With the help of other employees at PGESCo, Elgawhary also allegedly caused evidence about the kickback scheme to be deleted and destroyed, according to the charges.
The court documents also allege that Elgawhary used money from one of his Swiss bank accounts to purchase a $1.78 million home in Maryland for two close family members. In order to conceal the origin of the money, however, Elgawhary and others made it appear that the money was from an unsecured loan from a marketing company owned and operated by another relative.
Elgawhary also allegedly obstructed and impeded the administration of U.S. tax laws by falsely claiming that he maintained only one foreign bank account and denying that he received any income from any foreign bank account. Elgawhary also allegedly failed to report any of the kickbacks as income for the tax years 2008 through 2011.
The mail and wire fraud counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The tax count carries a maximum penalty of three years in prison and a fine of $5,000.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The department has received significant assistance in this matter from its law enforcement counterparts in Switzerland, Germany, Italy and Cyprus. Significant assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the FBI’s and IRS-CI’s Baltimore Divisions. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Salem of the District of Maryland.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .Former Executive of Power Generation Company Charged with Fraud and Money LaunderingRead the Press Release
Indictment Alleges an Eight Year Scheme to Obtain Over $5 Million in Kickbacks from Three Foreign Power Companies to Secure More Than $2 Billion in Lucrative Contracts
Greenbelt, Maryland - The former principal vice president of Bechtel Corporation and General Manager of the Power Generation Engineering and Services Company (PGESCo), Asem Elgawhary, age 72, of Potomac, Maryland, was indicted today on charges that he defrauded his former employers, laundered the proceeds of the fraudulent scheme and violated federal tax laws.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief Richard Weber of the Internal Revenue Service - Criminal Investigation.
“As today’s indictment alleges, this high-ranking executive took millions of dollars in kickbacks from power companies in exchange for preferential treatment and, in doing so, defrauded his former employer, other companies who were playing by the rules, and U.S. tax authorities,” said Acting Assistant Attorney General Raman. “He then allegedly concealed his kickback scheme by hiding the payments in off-shore bank accounts, giving false information to his former employer, and destroying evidence. The Justice Department is committed to prosecuting not just the companies and individuals who pay bribes and kickbacks, but also those who solicit and accept them.”
“Mr. Elgawhary has been charged with using his corporate position for his own personal gain,” stated IRS-CI Chief Weber. "No matter what your career or position is in a corporation, all U.S. citizens are obligated to comply with the tax laws. When individuals and corporations deliberately fail to comply, IRS Criminal Investigation agents conduct investigations and recommend prosecution to the Department of Justice.”
The eight count indictment alleges that from 1996 to 2011, Elgawhary was assigned by Bechtel – a U.S. corporation engaged in engineering, construction and project management – to be the general manager at PGESCo, a joint venture between Bechtel and a state-owned and state-controlled electricity company (EEHC). PGESCo assisted EEHC in identifying possible subcontractors, soliciting bids and awarding contracts to perform power projects for EEHC. The indictment alleges that Elgawhary used his position at PGESCo to provide preferential treatment to three power companies attempting to secure projects with EEHC in exchange for kickbacks from those power companies and their third-party consultants. The power companies and their consultants allegedly paid over $5 million of kickbacks into off-shore bank accounts under the control of Elgawhary, including Swiss bank accounts. In return, the power companies secured more than $2 billion in lucrative contracts.
The indictment alleges that Elgawhary then also attempted to conceal the kickback scheme and the proceeds he obtained from it. Elgawhary allegedly sent to Bechtel executives and members of the PGESCo board of directors in Maryland documents and “Representation Letters” that falsely represented that he had no knowledge of any fraud or suspected fraud at PGESCo and that there were no violations or possible violations of law or regulations whose effects were material and should have been considered for disclosure in PGESCo’s financial statements. In addition, when Elgawhary was interviewed by counsel for Bechtel in April 2011, he claimed that he never received money from power companies or their consultants and that he did not maintain control over any foreign bank accounts. With the help of other employees at PGESCo, Elgawhary also allegedly caused evidence about the kickback scheme to be deleted and destroyed.
Elgawhary allegedly used money from one of his Swiss bank accounts to purchase a $1.78 million home in Maryland for two close family members. In order to conceal the origin of the money, however, Elgawhary and others made it appear that the money was an unsecured loan from a marketing company owned and operated by another relative.
Elgawhary also allegedly obstructed and impeded the administration of U.S. tax laws by falsely claiming that he maintained only one foreign bank account and denying that he that he received any income from any foreign bank account. Elgawhary also allegedly failed to report any of the kickbacks as income for the tax years 2008 through 2011.
The mail and wire fraud counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The tax count carries a maximum penalty of three years in prison and a fine of $5,000.
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 expressed his appreciation to law enforcement counterparts in Switzerland, Germany, Italy and Cyprus in this matter. Significant assistance was also provided by the Department of Justice Criminal Division’s Office of International Affairs.
Mr. Rosenstein commended the FBI and IRS-Criminal Investigation for their work in the investigation and thanked Assistant U.S. Attorney David Salem from the District of Maryland and Assistant Chief Daniel S. Kahn of the Department of Justice Criminal Division’s Fraud Section, who are prosecuting the case.
Former D’iberville City Manager Pleads Guilty to Federal Program FraudRead the Press Release
Hattiesburg, Miss - Michael Janus, 47, of Biloxi pled guilty today in U.S. District Court to one count of federal program fraud in connection with a $3 million grant from the Mississippi Department of Environmental Quality to the City of D’Iberville, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen.
Janus admitted that, while serving as City Manager for the City of D’Iberville, he fraudulently obtained a $180,000 “finder’s fee” in connection with the MDEQ grant.
Janus will be sentenced on May 6, 2014 at 9:30 a.m. and faces a maximum penalty of ten years in prison and a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation with assistance from the Mississippi State Auditor’s Office. Criminal Division Chief John Dowdy, Assistant U.S. Attorney Jerry Rushing and Assistant U.S. Attorney Jay Golden are prosecuting the case.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Former Bank of America Executive Pleads Guilty for Role in Conspiracy and Fraud Involving Investment Contracts for Municipal Bonds ProceedsRead the Press Release
A former Bank of America executive pleaded guilty today for his participation in a conspiracy and scheme to defraud related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.
Phillip D. Murphy, the former managing director of Bank of America’s municipal derivatives products desk from 1998 to 2002, pleaded guilty today before U.S. District Judge Max O. Cogburn Jr. in the U.S. District Court for the Western District of North Carolina to participating in a fraud conspiracy and wire fraud scheme with employees of Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products, a broker of municipal finance contracts, and others. Murphy also pleaded guilty to conspiring with others to make false entries in the reports and statements originating from his desk, which were sent to bank management.
Murphy was indicted by a grand jury on July 19, 2012. According to the indictment, Murphy participated in a wire fraud scheme and separate fraud conspiracies that began as early as 1998 and continued until 2006.
“By manipulating what was intended to be a competitive bidding process, the conspirators defrauded municipalities, public entities and taxpayers across the country,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “Today’s guilty plea reaffirms the Antitrust Division’s continued efforts to hold accountable those who corrupt and subvert the competitive process in our financial markets.”
Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issue, to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process for the award of the investment agreements and often for other municipal finance contracts.
According to the charges, Murphy conspired with CDR and others to increase the number and profitability of investment agreements and other municipal finance contracts awarded to Bank of America. Murphy won investment agreements through CDR’s manipulation of the bidding process in obtaining losing bids from other providers, which is explicitly prohibited by U.S. Treasury regulations. As a result of the information, various providers won investment agreements and other municipal finance contracts at artificially determined prices. In exchange for this information, Murphy submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.
Murphy and his co-conspirators misrepresented to municipal issuers that the bidding process was competitive and in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.“Mr. Murphy’s actions undermined the public’s trust when he conspired to manipulate a competitive bidding process,” said Richard Weber, Chief, IRS Criminal Investigation (IRS-CI). “IRS-CI has experienced great success in unraveling significant and complex financial frauds as we work in close collaboration with our law enforcement partners.”
“Mr. Murphy ripped off hard working American taxpayers and cash-strapped municipalities all in pursuit of his own lucre,” said George Venizelos, Assistant Director in Charge of the FBI’s New York Field Office. “Let this serve as a reminder to others who are entrusted to act in the public’s best interest; your lack of candor won’t go without notice.”
Murphy pleaded guilty to two counts of conspiracy and one count of wire fraud. The fraud conspiracy carries a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine. The false bank records conspiracy carries a maximum penalty of five years in prison and a $250,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Murphy, a total of 17 individuals have been convicted or pleaded guilty. Additionally, one company has pleaded guilty.
The prosecution is being handled by Steven Tugander, Richard Powers, Eric Hoffmann, Patricia Jannaco and Stephanie Raney of the Antitrust Division. Assistant U.S. Attorneys Kurt Meyers, Michael Savage and Mark Odulio of the U.S. Attorney’s Office for the Western District of North Carolina have also provided valuable assistance in this matter. The guilty plea announced today resulted from a wide-ranging investigation conducted by the Antitrust Division’s New York office, the FBI and the IRS-CI. The division coordinated its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.Today’s guilty plea is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000 or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.
Former Bank Employee Pleads Guilty to Fraud ChargesRead the Press Release
St. Louis, MO - KYLE MILLER, St. Louis, Missouri, admitted to stealing $15,000 in cash from a U.S. Bank facility in Maplewood where he worked in 2013. Miller pleaded guilty to one count of misappropriation of funds by a bank employee. He appeared before Judge John A. Ross in federal court in St. Louis this morning.
According to the plea agreement, Miller stole the cash between April 23, 2013, and July 5, 2013. He faces up to 30 years imprisonment and a $1,000,000 fine. Restitution of the stolen funds is also mandatory. Sentencing has been set for May 8, 2014.
The case was investigated by the Maplewood Police Department. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.