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Tuesday 4 February 2014
Uniontown Man Indicted on Child Pornography ChargesRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today that William T. West, 29, of Uniontown, Ohio, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct.
The indictment charges that from on or about November 12, 2013, through on or about January 20, 2014, West knowingly received and distributed, by computer, numerous computer files, which contained visual depictions of real minors engaged in sexually explicit conduct.
On January 21, 2014, images of child pornography were also found on his ASUS laptop computer, according to the indictment.
If convicted, the sentence in this case will be determined by the Court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Carol M. Skutnik. The case was investigated by the Federal Bureau of Investigation, Canton Office.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Two Men Sentenced to Federal Prison for Methamphetamine ConspiracyRead the Press Release
Two men who conspired to distribute methamphetamine were sentenced on November 14, 2013, and January 31, 2014, each to one year in federal prison.
Robert Skarin, 54, and William Meisner, 54, both from Sioux City, Iowa, received the prison term after July 23, 2013, and August 26, 2013, guilty pleas to conspiracy to distribute methamphetamine.
At the guilty pleas, each admitted that from the beginning of 2013 through April 2013 they distributed more than 50 grams of actual (pure) methamphetamine in the Sioux City, Iowa area. Each further admitted that on at least two occasions they traveled together to Omaha, Nebraska, to obtain methamphetamine for later distribution in Sioux City. On April 3, 2013, law enforcement conducted a traffic stop of a vehicle driven by Skarin with Meisner as passenger. A search yielded a brown paper bag rolled up and hidden inside Skarin’s right sock. The bag contained over 80 grams of actual (pure) methamphetamine. Skarin and Meisner intended to distribute some or all of this methamphetamine.
Both were sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Skarin was sentenced to 12 months’ and one day imprisonment. He must also serve a five year term of supervised release after the prison term. Meisner was sentenced to 12 months’ imprisonment. He must also serve a five year term of supervised release after the prison term. A special assessment of $100 was imposed to each of them. There is no parole in the federal system. Skarin and Meisner are being held in the United States Marshal’s custody until they can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, which consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and the Woodbury County Attorney’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-4035.
Two Federal Inmates Found Guilty of Racially-Motivated MurderRead the Press Release
ATLANTA - A federal district court jury found Donald R. LaFond and Jason Robert Widdison guilty of second-degree murder. LaFond and Widdison are both federal prison inmates.
“This verdict shows that, even within the federal prison system, violent offenders must be prosecuted to the fullest extent of the law,” said United States Attorney Sally Quillian Yates. “The fact that this particular homicide was motivated by racial animus makes these defendants’ actions all the more reprehensible. The Department of Justice and its Bureau of Prisons endeavor to protect the life and safety of every federal inmate. We remain vigilant and will do everything we can to ensure that prisons are as safe as possible for every inmate and employee.”
Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: "The FBI, with assistance from the U.S. Bureau of Prisons, Special Investigations Section, was determined to bring these two violent inmates forward and hold them accountable for the murder of a fellow inmate with the firm understanding that within the federal prison system, the rule of law still applies."
According to United States Attorney Yates, the charges and other information presented in court: On March 1, 2011, LaFond and Widdison, both members of white supremacist prison gangs, were exercising inside the special housing unit recreation area of the United States Penitentiary in Atlanta, Ga. The victim, a white inmate who was not a gang member, joined the defendants in the area and attempted to make conversation and walk around with them.
After a short period of time, LaFond and Widdison suddenly began to punch the victim from both front and behind, knocking the victim to the ground. Both LaFond and Widdison then stomped on the victim’s head and neck, as many as ten times each. A correction officer witnessed the incident and intervened. Both men complied with the officers’ orders to stop beating the victim, but by then, the victim was unconscious. The victim was taken to a hospital but never regained consciousness. As a result of his injuries, the victim died on April 5, 2011.
The evidence at trial showed that, in the weeks leading up to the assault, Donald R. LaFond, Jr., 53, of New Bedford, Mass., and Jason Robert Widdison, 35, of Morgan, Utah expressed anger towards the victim because the victim refused to protest the fact that he had a black cellmate. The defendants pressured the victim to take any steps necessary to be reassigned to another cell. Further evidence showed that the victim refused to comply with the defendants’ demands and that the defendants regarded this refusal as a violation of their gang code.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorneys Nekia S. Hackworth and Brent Alan Gray are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Tucson Tax Return Preparer Sentenced to Prison for False Return SchemeRead the Press Release
TUCSON, Ariz. – On Feb. 3, 2014, Margarita Gomez, 32, of Tucson, was sentenced by U.S. District Judge John A. Jarvey to 30 months imprisonment. Gomez pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue Laws. Gomez was also ordered to pay $200,408 in restitution to the Internal Revenue Service (IRS).
Gomez operated a tax return preparation service (M & M Tax Service) in Tucson, Ariz., and conducted a scheme to obtain, and to aid others to obtain, the payment of more than $200,000 in federal tax refunds from the IRS through the preparation and filing of federal individual income tax returns that contained false refund claims. Gomez admitted to soliciting clients who did not have legal status to work or reside in the United States, preparing false W-7 Forms, and manufacturing other fraudulent documentation. Gomez also intentionally filed clients' federal individual income tax returns without signing the tax returns as the paid tax return preparer and directed certain federal income tax refunds issued to her clients to be transmitted to either her personal bank account or to a mail drop over which she had control.
The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigation. The prosecution was handled by Mary Sue Feldmeier, Assistant U.S. Attorney, District of Arizona, Tucson, and Danny N. Roetzel, Trial Attorney, Department of Justice, Tax Division.
CASE NUMBER: CR-13-00621-TUC-JGZ
RELEASE NUMBER: 2014-008_GomezFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Speech Therapist and Office Manager Charged with FraudRead the Press Release
HOUSTON – Rebecca Lee Rabon, 44, and Tiffany Nicole Thompson, 31, both of Houston, have been charged in a 44-count indictment alleging conspiracy to commit health care fraud, health care fraud and aggravated identity theft, announced United States Attorney Kenneth Magidson along with Special Agent in Charge Janice Flores of the Defense Criminal Investigative Service (DCIS) - Southwest Field Office in Arlington.
The sealed indictment, returned Jan. 30, 2014, was unsealed late yesterday as Rabon made her initial appearance before U.S. Magistrate Judge Frances Stacy. After the hearing, Judge Stacy permitted Rabon’s release upon posting bond. Just a short time ago, Thompson turned herself in to federal authorities and is expected to appear before Judge Stacy at 2:00 p.m. today.
“As the investigative arm of the Department of Defense - Office of Inspector General, one of the primary missions of the DCIS is the detection of fraud, especially the type that targets critical funding for health care for our warfighters, their families and military retirees,” said Flores. “This investigation demonstrates the commitment of DCIS in rooting out and stopping health care fraud.”
The indictment alleges Rabon, the owner of Rabon Communication Enhancement (RCE) fraudulently billed TRICARE and Blue Cross and Blue Shield of Texas approximately $3,784,642 for speech therapy and swallowing therapy services that were not provided to patients. Of that amount, the indictment alleges approximately $1,285,827.67 was paid on the fraudulent claims. Rabon and Thompson also allegedly submitted fraudulent claims for themselves and three employees of RCE for services that were not provided. Two individuals are identified in the indictment as victims of identity theft.
Rabon and Thompson both face up to 10 years in federal prison for each of the conspiracy to commit health care fraud and 36 substantive health care fraud charges. Rabon, who is also charged with five counts of mail fraud, faces up to 20 years in prison on each of those charges. If convicted of either of the two counts of aggravated identity theft, each also face an additional two-year-term which must be served consecutively to any sentence for the underlying offenses. There is also a possibility of up to a $250,000 fine for conviction of any of the offenses.
DCIS investigated the case. Assistant United States Attorney Julie Redlinger is prosecuting.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Speech Therapist and Office Manager Charged with FraudRead the Press Release
HOUSTON – Rebecca Lee Rabon, 44, and Tiffany Nicole Thompson, 31, both of Houston, have been charged in a 44-count indictment alleging conspiracy to commit health care fraud, health care fraud and aggravated identity theft, announced United States Attorney Kenneth Magidson along with Special Agent in Charge Janice Flores of the Defense Criminal Investigative Service (DCIS) - Southwest Field Office in Arlington.
The sealed indictment, returned Jan. 30, 2014, was unsealed late yesterday as Rabon made her initial appearance before U.S. Magistrate Judge Frances Stacy. After the hearing, Judge Stacy permitted Rabon’s release upon posting bond. Just a short time ago, Thompson turned herself in to federal authorities and is expected to appear before Judge Stacy at 2:00 p.m. today.
“As the investigative arm of the Department of Defense - Office of Inspector General, one of the primary missions of the DCIS is the detection of fraud, especially the type that targets critical funding for health care for our warfighters, their families and military retirees,” said Flores. “This investigation demonstrates the commitment of DCIS in rooting out and stopping health care fraud.”
The indictment alleges Rabon, the owner of Rabon Communication Enhancement (RCE) fraudulently billed TRICARE and Blue Cross and Blue Shield of Texas approximately $3,784,642 for speech therapy and swallowing therapy services that were not provided to patients. Of that amount, the indictment alleges approximately $1,285,827.67 was paid on the fraudulent claims. Rabon and Thompson also allegedly submitted fraudulent claims for themselves and three employees of RCE for services that were not provided. Two individuals are identified in the indictment as victims of identity theft.
Rabon and Thompson both face up to 10 years in federal prison for each of the conspiracy to commit health care fraud and 36 substantive health care fraud charges. Rabon, who is also charged with five counts of mail fraud, faces up to 20 years in prison on each of those charges. If convicted of either of the two counts of aggravated identity theft, each also face an additional two-year-term which must be served consecutively to any sentence for the underlying offenses. There is also a possibility of up to a $250,000 fine for conviction of any of the offenses.
DCIS investigated the case. Assistant United States Attorney Julie Redlinger is prosecuting.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.South Florida Couple Charged with Money Laundering and Smuggling in Gold InvestigationRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, Scott J. Israel, Sheriff, Broward County Sheriff’s Office (BSO), and Addy Villanueva, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), announce the arrests of defendants Natalie Ladin, 61, and Jed Ladin, 65, both of Lauderdale-by-the-Sea, Florida. Natalie and Jed Ladin made their initial appearance in federal court on February 3, 2014 before U.S. Magistrate Judge Patrick Hunt in Fort Lauderdale. A pretrial detention hearing is scheduled for both defendants on Friday, February 7, 2014, at 10:30 a.m. before U.S. Magistrate Judge Hunt.
The criminal complaint, which was unsealed after the defendants’ arrest on January 31, 2014, charges Natalie and Jed Ladin with conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h); conspiracy to smuggle gold, in violation of Title 18, United States Code, Section 371; entry of goods by false statements, in violation of Title 18, United States Code, Section 542; and smuggling of gold, in violation of Title 18, United States Code, Section 545. If convicted, the defendants face a statutory maximum sentence of 20 years in prison.
According to the complaint, Natalie Jewelry, doing business as Golden Opportunities, smuggled Guatemalan scrap gold into the United States that was significantly undervalued: from January 2012 until November 2013, two Guatemalan companies sent gold with a declared value of $6,451,90, yet during that same period Natalie Jewelry wire transferred $24,317,665 to Guatemala for those imports. Natalie Ladin and Jed Ladin were the owners of Natalie Jewelry, located in Hallandale Beach, Florida.
Mr. Ferrer commended the investigative efforts of ICE-HSI, BSO and FDLE. This case is being prosecuted by Assistant U.S. Attorney Michael Thakur.
A complaint is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Six More Defendants Sentenced and One More Defendant Pleads Guilty in Staged Automobile Accident SchemeRead the Press Release
92 defendants have been charged to date in Operation Sledgehammer I-VI
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, Florida Department of Financial Services, and Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, announce that defendants Elias Sebastian Munguia, 41, clinic owner, of Miami, Aleida Capdevila, 62, clinic office manager, of West Palm Beach, Yenisleydi Ramos, 26, front desk receptionist and secretary, of West Palm Beach, Juan Francisco Avon, 62, licensed massage therapist, of Miami, Oscar Montiel Martinez, 34, staged accident participant, recruiter and check casher, of Lake Worth, and Teresita Mena, 52, staged accident participant and check casher, of West Palm Beach, were sentenced today by U.S. District Judge Kenneth A. Marra for their participation in an automobile insurance fraud scheme involving staged automobile accidents. Also announced today is the guilty plea of defendant Amaury Tomas Contino, 30, staged accident recruiter, of Lake Worth, for his involvement in said scheme.
Specifically, Elias Sebastian Munguia was sentenced to 102 months in prison, followed by three years of supervised release; Aleida Capdevila was sentenced to 53 months in prison, followed by three years of supervised release; Yenisleydi Ramos was sentenced to 50 months in prison, followed by three years of supervised release; Juan Francisco Avon was sentenced to 38 months in prison, followed by three years of supervised release; Oscar Montiel Martinez was sentenced to 76 months in prison, followed by three years of supervised release; and Teresita Mena was sentenced to 66 months in prison, followed by three years of supervised release. In addition, Munguia was ordered to pay $3,491,516.93 in restitution; Capdevila was ordered to pay restitution in the amount of $1,039,928.19; Ramos was ordered to pay restitution in the amount of $1,666,028.08; Avon was ordered to pay restitution in the amount of $866,801.60; Martinez was ordered to pay restitution in the amount of $1,359,208.73 and Mena was ordered to pay restitution in the amount of $1,321,459.87.
Each of the defendants previously pled guilty to one count of conspiring to commit mail fraud, in violation of Title 18, United States Code, Section 1341, all in violation of Title 18, United States Code, Section 1349; and multiple counts of mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2. In addition, Munguia, Capdevila, Ramos, Martinez and Mena pled guilty to one count of conspiring to commit money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1), all in violation of Title 18, United States Code, Section 1956(h). Mungia, Capdevila and Mena also pled guilty to multiple counts of money laundering, and Martinez pled guilty to one substantive count of money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), and 2.
Amaury Tomas Contino pled guilty today to one count of conspiring to commit mail fraud, in violation of Title 18, United States Code, Section 1341, all in violation of Title 18, United States Code, Section 1349, and six counts of mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2. Judge Marra will sentence Contino on April 18, 2014 at 3:00 p.m. in West Palm Beach. At sentencing, Contino faces a possible maximum statutory sentence of 20 years in prison for each count of conspiracy to commit mail fraud and substantive mail fraud, to be followed by up to three years of supervised release. Contino also will be ordered to pay restitution to the victims of his offenses.
According to court documents, between approximately October 2006 and December 2012, the conspiracy members staged automobile accidents by recruiting individuals to participate in the accidents. Oscar Montiel Martinez and Teresita Mena served as accident participants and Oscar Montiel Martinez and Amaury Tomas Contino recruited others to participate in staged accidents. The participants were referred to as “Perro” and “Perra” or “Macho” and “Hembra.” Thereafter, the clinic owners, including defendant Munguia, caused the submission of false insurance claims through chiropractic clinics that were controlled by members of the conspiracy. To execute the scheme, the true owners of the chiropractic clinics, including Munguia, recruited individuals who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics. The co-conspirators also hired complicit licensed chiropractors, and licensed chiropractic physicians’ assistants, including Juan Francisco Avon, who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Thereafter, complicit clinic employees, prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services. Twenty-one clinics participated in this scheme. Elias Munguia was the “true owner” of three of those clinics. Munguia’s aunt, Aleida Capdevila, served as the office manager of two of the clinics.
Furthermore, according to court records, once fraud proceeds were received from the insurance companies, the clinic owners, including Munguia and Capdevila, also recruited individuals including Oscar Montiel Martinez, Yenisleydi Ramos, and Teresita Mena, to help the clinics launder the insurance proceeds.
Starting with Operation Sledgehammer I in June 2011 and including the defendants charged in Operation Sledgehammer VI, 92 defendants have been charged for their participation in this automobile insurance fraud scheme. Of those 92 defendants, 56 have been charged federally by the U.S. Attorney's Office, resulting in court-ordered restitution of more than $5 million to the defrauded insurance companies. Thirty-six defendants have been charged by the Palm Beach County State Attorney's Office.
Mr. Ferrer commended the efforts of the FBI, IRS-CI, the Florida Department of Insurance Fraud, the Palm Beach County State Attorney's Office, and the Greater Palm Beach County Health Care Fraud Task Force for their outstanding work in this case. Mr. Ferrer also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance in this investigation. The federal cases are being prosecuted by Assistant U.S. Attorney A. Marie Villafaña and the state cases are being prosecuted by the Palm Beach County State Attorney's Office.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
San Felipe Pueblo Man Sentenced to Eighty-Seven Months in Federal Prison for Assaulting Intimate PartnerRead the Press Release
ALBUQUERQUE – Valentino Sanchez, 24, a member of San Felipe Pueblo, N.M., was sentenced this morning to 87 months in federal prison followed by three years of supervised release for his conviction on two assault charges.
Sanchez was arrested on May 22, 2012, after investigation revealed that he had assaulted the victim, his intimate partner, by repeatedly striking and punching her on the head and back with his hands, kicking her, and striking her on the head and back with a stick. As a result of the assault, the victim suffered an orbital fracture to the right side of her face and a small traumatic subarachnoid hemorrhage to the left front part of the brain.
On Jan. 16, 2013, Sanchez pled guilty to assault with a dangerous weapon and assault resulting in serious bodily injury. In entering his guilty plea, Sanchez admitted assaulting the victim, a San Felipe Pueblo woman, with a stick on May 14, 2012. He also admitted that the victim sustained serious bodily injuries as a result of the assault. The offenses occurred on San Felipe Pueblo land.
The case was investigated by the Bureau of Indian Affairs, Office of Justice Services, Southern Pueblos Agency, and was prosecuted by Assistant U.S. Attorney Presiliano A. Torrez. It was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Rosebud Man Sentenced for Possession of Child PornographyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota, man convicted of Possession of Child Pornography was sentenced on February 3, 2014, by U.S. District Judge Roberto A. Lange.
Jeremy Gunhammer, age 20, was sentenced to 36 months in custody, 5 years supervised release, a $100 special assessment to the Federal Crime Victims Fund, and was ordered to register as a sex offender.
Gunhammer was indicted for Possession of Child Pornography by a federal grand jury on June 12, 2013. He pled guilty on November 19, 2013.
The conviction stems from incidents that took place between January 1, 2013, and May 31, 2013, when Gunhammer used the Internet to receive and possess numerous images of child pornography.The investigation was conducted by the Federal Bureau of Investigation, South Dakota Division of Criminal Investigation, South Dakota Internet Crimes Against Children Task Force, Rosebud Sioux Tribe Law Enforcement Services, Bureau of Indian Affairs, Pennington County Sheriff’s Office, Rapid City Police Department, Sioux Falls Police Department, and the U.S. Marshals Service. Assistant U.S. Attorneys Tim Maher and Sarah Collins prosecuted the case.
Gunhammer was immediately turned over to the custody of the U.S. Marshals Service.
Rosebud Man Sentenced for Possession of Child PornographyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota, man convicted of Possession of Child Pornography was sentenced on February 3, 2014, by U.S. District Judge Roberto A. Lange.
Jeremy Gunhammer, age 20, was sentenced to 36 months in custody, 5 years supervised release, a $100 special assessment to the Federal Crime Victims Fund, and was ordered to register as a sex offender.
Gunhammer was indicted for Possession of Child Pornography by a federal grand jury on June 12, 2013. He pled guilty on November 19, 2013.
The conviction stems from incidents that took place between January 1, 2013, and May 31, 2013, when Gunhammer used the Internet to receive and possess numerous images of child pornography.The investigation was conducted by the Federal Bureau of Investigation, South Dakota Division of Criminal Investigation, South Dakota Internet Crimes Against Children Task Force, Rosebud Sioux Tribe Law Enforcement Services, Bureau of Indian Affairs, Pennington County Sheriff’s Office, Rapid City Police Department, Sioux Falls Police Department, and the U.S. Marshals Service. Assistant U.S. Attorneys Tim Maher and Sarah Collins prosecuted the case.
Gunhammer was immediately turned over to the custody of the U.S. Marshals Service.
Roanoke Endodontist Pleads Guilty to ObstructionRead the Press Release
ROANOKE, VIRGINIA – A local endodontist, with a practice on Starkey Road, pled guilty this afternoon in the United States District Court for the Western District of Virginia in Roanoke to an obstruction charge.
Robert Stanley Kidder, 66, of Roanoke, Va., waived his right to be indicted on January 24, 2014, and pled guilty this afternoon to a one-count Information charging him with obstruction of a criminal investigation of health care offenses.
“Dr. Kidder devised a scheme through which he obtained portions of payment for his services from both patients and their insurance carriers,” United States Attorney Timothy J. Heaphy said today. “’When an employee discovered his fraud, he tried to keep her silent, then modified and destroyed records documenting his crimes. For his brazen acts of obstruction of justice, Dr. Kidder has been held accountable.”
“Attempting to destroy evidence and encourage deceit during a federal investigation is a serious crime in and of itself,” said Acting Special Agent in Charge D.J. Hathaway, “and as witnessed in today’s plea is not a crime that will be overlooked nor tolerated by law enforcement during any of their investigations.”
According to evidence presented at today’s guilty plea hearing by Assistant United States Attorney Jennie Waering, Kidder’s endodontic practice accepted cash and private dental insurance for procedures. However, Kidder required all patients to pre-pay for a portion of their service. Often times, after insurance payment was received, Kidder was overpaid for his services. When an overpayment occurred, Dr. Kidder was responsible for refunding his patients, which, in several cases, he chose not to do.
In April 2012, a new employee discovered that Kidder was not issuing some of these refunds. When confronted with this information, Kidder fired the new employee and began manipulating his practice’s accounting information to “zero-out” patients’ account balances without issuing refunds. In November 2012, the recently fired employee took legal action against Kidder regarding her termination. Within days of that disclosure, Kidder began issuing refunds to those patients whose accounts had not already been zeroed out.
In December 2012, Kidder began a course of action with one of his employees to obstruct a potential employment civil law suit and potential criminal investigation into healthcare fraud offense. As part of his obstructive conduct, Kidder staged a break-in at his office where all the computers containing accounting information were stolen. In addition, Kidder repeatedly advised and instructed his employee in what she should say to attorneys and the Federal Bureau of Investigation. The employee reported this information to the FBI.
During recorded conversations, the transcripts of which were entered into the record during today’s hearing, Kidder told the employee “just say no, nothing was zeroed out because the accounts are gone, there’s no way that can be proven anyway.”
Furthermore, after an employee received a subpoena to appear before a Federal Grand Jury, Kidder instructed the employee what lies to tell the Federal Grand Jury and what would happen to them both if she told the truth.
At sentencing, Kidder faces a maximum possible penalty of up to five years in prison and/or a fine of up to $250,000.
The investigation of the case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Jennie L.M. Waering is prosecuting the case for the United States.
Rittman Man Indicted for Methamphetamine ConspiracyRead the Press Release
A federal grand jury sitting returned a two-count indictment charging Jesse C. Lyons, age 32, of Rittman, Ohio with conspiracy to possess with the intent to distribute more than 50 grams of methamphetamine, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Additionally, Lyons was charged with one count of attempted possession with intent to distribute more than 50 grams of methamphetamine on January 15, 2014.
The investigation is being conducted by the United States Postal Inspection Service with assistance from the Summit County Sheriff’s Office and the Wadsworth Police Department. The case is being prosecuted by Special Assistant United States Attorney, Kevin Culum.
If convicted, the sentence of Lyons will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, his role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Rexburg Man Sentenced for Distributing Meth and Unlawfully Possessing FirearmsRead the Press Release
POCATELLO – Noe Munguia-Diaz, a/k/a Juan Ernesto Medina-Munguia, 35, of Rexburg, Idaho, was sentenced today to 144 months in prison followed by four years of supervised release for distributing methamphetamine and illegally possessing weapons, U.S. Attorney Wendy J. Olson announced. The Hon. Terry J. Hatter, Jr., Senior U.S. District Judge for the Central District of California, also ordered Munguia-Diaz to pay a $900 special assessment and forfeit the firearms he unlawfully possessed.
On September 10, 2013, Judge Hatter found Munguia-Diaz guilty of six counts of distributing methamphetamine, one count of possession with intent to distribute methamphetamine, and two counts of unlawfully possessing firearms. He waived his right to trial by a jury in August 2013.
During the two-day trial, Judge Hatter heard evidence that Munguia-Diaz sold methamphetamine to other individuals on six occasions between March 23, 2011, and October 19, 2012. During one of the sales, Munguia-Diaz also sold a handgun. Judge Hatter also heard evidence that on March 4, 2013, when Munguia-Diaz was arrested, Rexburg police officers found over $4,500 in the possession of the defendant and his female passenger; evidence that Munguia-Diaz had deposited that day a total of $15,000 between two different banks; and a loaded handgun. A search warrant executed on Munguia-Diaz’s residence later that day recovered approximately one ounce of methamphetamine from a heating vent in the defendant’s bedroom. Munguia-Diaz admitted to officers that he had methamphetamine in his house and that the firearm in the car belonged to him.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Madison County Sheriff’s Office, with assistance by Bingham Co. Sheriff’s Office, Blackfoot Police Department, Federal Bureau of Investigation, Fremont Co. Sheriff’s Office, Idaho State Police, Jefferson Co. Sheriff’s Office, Rexburg Police Department, and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Registered Sexual Offender Sentenced to Return to PrisonRead the Press Release
PENSACOLA, FLORIDA – Pensacola resident Clay C. Keys, 53, was sentenced today on his guilty plea to a federal indictment charging him with the receipt and distribution of child pornography and possession of ammunition by a convicted felon. Keys was previously convicted in state court for a lewd and lascivious act upon a child, and was a registered sexual offender.
Keys was found guilty of using peer-to-peer software between April 2009 and August 2013 to share thousands of images of child pornography online. A federal search warrant was obtained for Keys’ residence in August 2013, and law enforcement officers discovered more than 10,000 images and videos of child pornography. Chief United States District Judge M. Casey Rodgers sentenced Keys to 15 years in federal prison to be followed by a lifetime of supervised release.
Keys was also sentenced to 10 years in prison for possession of ammunition by a convicted felon, which will run concurrent with his sentence for child pornography.
In announcing the sentence imposed by the court, United States Attorney Pamela C. Marsh credited the success of this prosecution to the joint efforts of the Department of Homeland Security, the Pensacola Police Department, and other members of the Internet Crimes Against Children Task Force, whose joint investigation led to the complaint in the case.
The case was prosecuted by Assistant U.S. Attorney David L. Goldberg.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Department of Justice in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. Led by 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 exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.Pittsford Man Sentenced on Drug Trafficking<br /> and Firearms ChargesRead the Press Release
ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Jerry Pulsifer, 28, of Pittsford, N.Y., who was convicted of possession of cocaine with intent to distribute and possessing a firearm in furtherance of a drug trafficking offense, was sentenced to 130 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Charles E. Moynihan, who handled the case, stated that Pulsifer was arrested on August 8, 2010, after members of law enforcement responded to the Red Carpet Inn on West Henrietta Road, in Henrietta, N.Y.. A resident called the police to report a male who was using drugs in his hotel room at the location. Upon arrival, Monroe County Sheriff’s deputies could smell a strong odor of marijuana coming from room 143. Deputies could smell an even stronger odor of marijuana coming from the room once the defendant opened the door.
Pulsifer admitted to smoking marijuana when asked about the smell and gave an additional amount of marijuana to the deputies. Further investigation revealed that the defendant possessed 30 bags of cocaine, packaged for distribution, concealed inside of a hair spray can with a false bottom, a Smith & Wesson Model 1000 20 gauge shotgun, over $42,000.00 in United States currency, as well as other items associated with drug trafficking.
The sentencing is the result of an investigation on the part of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, and the Monroe County Sheriff’s Office, under the direction of Sheriff Patrick M. O’Flynn.
Owner of Rocky Mount Based Tax Return Preparation Business Sentenced to 100 MonthsRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, Senior United States District Judge W. Earl Britt sentenced LARRY D. HILL, JR. , age 41, of Rocky Mount, North Carolina, to 100 months imprisonment, followed by three years of supervised release.
"During tax filing season, return preparers and taxpayers should be aware of the serious consequences facing those who aid or assist in the filing of fraudulent tax returns," said Special Agent in Charge Jeannine A. Hammett, IRS-Criminal Investigation. "Those who fly in the face of the tax laws face investigation, prosecution, and if convicted, significant prison sentences and substantial fines. Today's sentence sends a strong message to unscrupulous return preparers who think they can get away with tampering with our nation's tax system."
HILL was named in a Criminal Information filed on April 29, 2013, charging him with one count of conspiring to submit false claims for federal income tax refunds to the IRS, and one count of filing a false 2010 federal income tax return. On August 5, 2013, HILL pled guilty to the charges.
According to the investigation, HILL owned and operated Hill’s Tax Service (HTS), a tax return preparation business which, at various times, maintained offices in Rocky Mount, Farmville, Scotland Neck, Hollister, and Wilson. Between 2010 and 2012, HILL and his co-conspirators filed well over 2,000 federal income tax return for HTS customer that claimed, collectively, over $14 million in tax refunds. A significant number of the HTS returns reported materially false information – including false dependents, income, and withholdings – in order to maximize the earned income tax credit and otherwise cause the issuance of inflated refunds. HILL and his co-conspirators pocketed a portion of every fraudulent tax refund that was issued. According to the investigation, HILL profited the most from the long-running scheme, collecting, on average, $1,000 or more from each unlawful refund.
The investigation of this case was conducted by the Internal Revenue Service-Criminal Investigation. The case was prosecuted by Assistant United States Attorney Adam F. Hulbig
Oran Man Sentenced to 110 Years for Sexually Exploiting Four Children and Possessing Child PornographyRead the Press Release
Februay 4, 2014A man who sexually exploited four children and possessed child pornography was sentenced February 3, 2014, to 110 years in federal prison.
Benton Stong, age 76, of Oran, Iowa, received the sentence after a September 17, 2013, jury verdict finding him guilty of one count of sexual exploitation of children and four counts of possession of child pornography.
The evidence at trial showed that, in 2012, Stong used, persuaded, induced, and enticed four children to engage in sexually explicit conduct for the purpose of producing visual depictions of this conduct. The evidence also showed that, between 2009 and 2012, Stong possessed child pornography at his residence in Oran.
Stong was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Stong was sentenced to 1,320 months’ imprisonment. A special assessment of $500 was imposed, and Stong must also serve a life term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Fayette County Sheriff’s Office and the Iowa Internet Crimes Against Children Task Force.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-2014.
New Jersey Doctor Convicted of Taking Cash Kickbacks for Patient ReferralsRead the Press Release
NEWARK, N.J. – A doctor practicing in Newark was convicted at trial of receiving cash kickbacks for diagnostic testing referrals, becoming the 14th doctor and 16th defendant to be convicted in connection with the government’s investigation of illegal payments made by an Orange, N.J., diagnostic testing facility, U.S. Attorney Paul J. Fishman announced today.
Maryam Jafari, 43, was convicted of all three counts of a superseding indictment charging her with conspiracy and two counts of violating the federal health care anti-kickback statute after a three-week trial before U.S. District Judge Claire C. Cecchi in Newark federal court. The jury returned the guilty verdicts late Tuesday afternoon (Feb. 4, 2014) after two hours of deliberations.
According to documents filed in this case and the evidence at trial:
Jafari was a doctor licensed in New Jersey to practice internal medicine and operated an office in Newark. From 2010 through December 2011, Jafari solicited and received cash kickbacks from Orange Community MRI LLC (Orange MRI) in exchange for MRIs and CAT scans she referred to the diagnostic testing facility.
At the end of each month, OCM printed patient reports that included information such as dates of service, patient name, referring health care practitioner and medical insurance to be billed. The reports were used to tally the number of tests referred by each doctor and determine the amount of kickback payment paid to the referring healthcare provider.
On Nov. 22, 2011, Jafari met with a cooperating witness at Jafari’s office and accepted a white envelope containing $1,965 in cash, payments for three months of tests Jafari referred to Orange MRI. On Dec. 6, she accepted another payment of $420 in cash for referrals from October 2011. A trial on these charges in 2012 ended in a mistrial when the jury could not reach a unanimous verdict.
The charges of which Jafari was convicted are each punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing will be scheduled at a later date.U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell, who investigated the case with criminal investigators from the U.S. Attorney’s Office.
The government is represented by Assistant U.S. Attorneys Scott B. McBride and Deputy Chief Joseph G. Mack of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $500 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
14-040Defense counsel: Maria Noto Esq., Matawan, N.J.
Jafari, Maryam Superseding Indictment
Monroe Man Sentenced to 117 Months in Prison as A Felon with A Firearm and Possession of A Firearm During Drug TraffickingRead the Press Release
MONROE, La. –United States Attorney Stephanie A. Finley announced today that Michael Pryor, 37, of Monroe, was sentenced Monday by U.S. District Court Judge Robert G. James to 57 months in prison for one count of felon in possession of a firearm, and to an additional and consecutive 60 months in prison for one count of possession of a firearm in relation to drug trafficking. He was also sentenced to five years of supervised release, and his firearm was forfeited. He pleaded guilty October 28, 2013.
According to evidence presented at the guilty plea, on December 6, 2012, Monroe Police officers investigated reports of marijuana being sold at a home on Gordon Avenue. They visited the home, and while speaking to Pryor about the reports, they smelled marijuana and received his permission to search the home. They found a total of 33 grams of marijuana packaged for street sale, a loaded .22 caliber pistol, baggies, scales, and scissors, and three other firearms. Pryor had previously been convicted in Orleans Parish in 1997 on possession of cocaine and attempted possession of a firearm while in possession of controlled dangerous substances. He was also convicted in Orleans Parish in 2004 for possession with intent to distribute cocaine.
The Monroe Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. prosecuted the case as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide program designed to reduce violence by aggressively enforcing existing federal firearms laws.
Monroe Lawyer Sentenced to 28 Months in Prison for False Tax ClaimsRead the Press Release
MONROE, La. –United States Attorney Stephanie A. Finley announced today that Francis C. Broussard, 54, of West Monroe, La., was sentenced Monday by U.S. District Court Judge Robert G. James to 28 months in prison and three years of supervised release for making false, fictitious, and fraudulent claims to the Internal Revenue Service (IRS) in an attempt to receive more than $9.7 million in tax refunds. He pleaded guilty April 19, 2013.
According to evidence presented at the guilty plea, Broussard, who has been licensed to practice law in Louisiana since 1986, filed personal tax returns in 2009 for years 2005 to 2008 using documents containing false information in an attempt to receive a total of 9.7 million in refunds to which he was not entitled. Broussard did not receive the requested refunds.
The IRS criminal investigations unit conducted the investigation. Assistant U.S. Attorney D. Cytheria Jernigan prosecuted the case.
Miami Resident Pleads to Tax Fraud and Identity TheftRead the Press Release
TALLAHASSEE, FLORIDA – Pamela C. Marsh, United States Attorney for the Northern District of Florida, announced that Ashley Assgill Glover, 28, of Miami, Florida, pleaded guilty today to one count of theft of government property, one count of possession of unauthorized devices, and one count of aggravated identity theft.
Glover is scheduled to be sentenced by U.S. District Court Judge Mark Walker on April 18, 2014. On the first two counts, she faces maximum penalties of 10 years in prison, three years of supervised release, and a $250,000 fine. On the third count, she faces a mandatory two-year term of imprisonment that must run consecutive to the sentence imposed on the other counts, one year of supervised release, and a $250,000 fine.
On March 12, 2012, the Tallahassee Police Department stopped Glover and found her in possession of personal identifying information (PII) for more than 800 victims. Debit cards loaded with tax refunds linked to fraudulent tax returns were also found. To date, the IRS has identified fraudulent tax returns using that PII, which claim approximately $369,848 in fraudulent tax refunds.
Three months after the Tallahassee Police Department incident, Glover was stopped by Coral Springs Police Department and found in possession of PII for more than 160 victims. Then five months later, Glover was stopped by the Florida Department of Agriculture, and was found in possession of yet another list containing PII for more than 600 victims.
The case was investigated by the Tallahassee Police Department, the United States Secret Service, the Internal Revenue Service, and the Florida Department of Agriculture.
The case is being prosecuted by Assistant U.S. Attorney Winifred L. Acosta Nesmith.
Manhattan U.S. Attorney Sues and Settles with JPMorgan Chase for $614 Million for Fraudulent Mortgage Lending PracticesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Associate Attorney General Tony West, Stuart F. Delery, the Assistant Attorney General for the Justice Department’s Civil Division, Damon Smith, Acting General Counsel of the U.S. Department of Housing and Urban Development (“HUD”), David A. Montoya, Inspector General of HUD, and Richard J. Griffin, Acting Inspector General of the U.S. Department of Veterans Affairs (“VA”), announced today that the United States has filed, and simultaneously settled, a civil fraud lawsuit against JPMORGAN CHASE & CO. and JPMORGAN CHASE BANK, N.A. (collectively, “JPMORGAN CHASE”), for improperly approving thousands of residential home mortgage loans for government insurance and refinancing. In the settlement, JPMORGAN CHASE admitted, acknowledged, and accepted responsibility for, among other things, submitting false certifications to HUD, the VA, and the Federal Housing Administration (a component of HUD, and, together with HUD, “HUD-FHA”) that: (1) induced HUD-FHA and the VA to accept for government insurance and refinancing thousands of loans that were not eligible for such insurance or refinancing; and (2) ultimately resulted in substantial losses to the Government when the loans defaulted. JPMORGAN CHASE also admitted to failing to self-report to HUD-FHA hundreds of loans that it had identified as fraudulent or otherwise deficient, and to submitting loan data to HUD-FHA that lacked integrity.
To resolve the United States’ claims, JPMORGAN CHASE has agreed to pay $614 million to the United States under the False Claims Act. In addition, JPMORGAN CHASE has agreed to implement an enhanced quality control program to address the misconduct concerning the integrity of loan data submitted to HUD-FHA. The settlement was approved today by United States District Judge J. Paul Oetken.
Manhattan U.S. Attorney Preet Bharara stated: “For years, JPMorgan Chase has enjoyed the privilege of participating in federally-subsidized programs aimed at helping millions of Americans realize the dream of homeownership. Yet, for more than a decade, it abused that privilege. JPMorgan Chase put profits ahead of responsibility by recklessly churning out thousands of defective mortgage loans, failing to inform the Government of known problems with those loans, and leaving the Government to cover the losses when the loans defaulted. With today’s settlement, however, JPMorgan Chase has accepted responsibility for its misconduct and has committed to reform its business practices. This settlement adds to the list of successful mortgage fraud cases this Office has pursued.”
Associate Attorney General Tony West said: “The resolution announced today is a product of the Justice Department’s continuing efforts to hold accountable those whose conduct contributed to the financial crisis. This settlement recovers wrongfully claimed funds for vital government programs that give millions of Americans the opportunity to own a home and sends a clear message that we will take appropriately aggressive action against financial institutions that knowingly engage in improper mortgage lending practices.”
Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division, said: “The Department of Justice will continue to hold accountable financial institutions whose irresponsible mortgage lending undermines the housing market and costs the taxpayers many millions of dollars. I thank U.S. Attorney Bharara and his team for their stellar efforts in this case and look forward to our coordinated efforts in these cases.”
HUD Acting General Counsel Damon Smith said: “This settlement with JP Morgan Chase will enable HUD to recover funds lost due to Chase’s past unacceptable mortgage underwriting practices. In addition, Chase must now institute new and tighter controls to prevent abuses of FHA’s automated underwriting system. HUD will continue working with the Department of Justice to ensure that lenders are held accountable and are required to institute practices that will benefit both borrowers and the FHA insurance fund.”
HUD Inspector General David A. Montoya said: “The agreement reached with JPMC was possible due to the dedication of the U.S. Attorney’s Office for the Southern District of New York and the hard work of the talented staff at the Office of Inspector General. It also demonstrates the combined commitment of the Justice Department and the Office of Inspector General to continuing efforts to enforce FHA mortgage insurance requirements.”
Richard J. Griffin, Acting Inspector General for the Office of Inspector General, Department of Veterans Affairs, said: “I commend the efforts of the United States Attorney’s Office for the Southern District of New York to hold lenders accountable for conduct that defrauds the Government and deserving veterans who rely on VA’s loan guaranty program to purchase their homes.”
According to the Complaint filed in Manhattan federal court:
Since at least 2002, JPMORGAN CHASE has been a participant in the HUD-FHA Direct Endorsement Lender program (“DEL Program”) and the VA Home Loan Guaranty program (“Loan Guaranty Program”) – federal programs authorizing private-sector mortgage lenders to approve mortgage loans for insurance or refinancing by the Government. If a lender approves a mortgage loan for insurance and refinancing pursuant to the DEL Program or the Loan Guaranty Program and the loan later defaults, the holder of the loan may submit an insurance claim to FHA-HUD or the VA for the costs associated with the defaulted loan, which HUD-FHA or the VA must then pay. Under both the DEL Program and the Loan Guaranty Program, neither HUD-FHA nor the VA reviews a loan before it is approved for government insurance or refinancing. Consequently, it is crucial that lenders follow the rules of the DEL Program and the Loan Guaranty Program. Those rules require lenders to follow HUD-FHA’s and the VA’s underwriting requirements in determining which loans to approve for insurance or refinancing. The rules also require lenders to self-report loans that they identify as having been affected by fraud or other material deficiencies. The rules further require lenders to refrain from manipulating the loan data they submit to TOTAL Mortgage Scorecard (“TOTAL”) – a credit-rating software application maintained by HUD-FHA that determines whether a given loan qualifies for government insurance.
Notwithstanding the importance of following the rules of the DEL Program and the Loan Guaranty Program, during the period January 1, 2002, through the present (the “Covered Period”), JPMORGAN CHASE routinely violated those rules. Specifically, JPMORGAN CHASE: (1) approved thousands of loans for government insurance or refinancing that did not meet one or more of the requirements of the DEL Program or the Loan Guaranty Program; (2) failed to self-report hundreds of loans that it identified as having been affected by fraud or other material deficiencies; and (3) regularly submitted to TOTAL loan data that lacked integrity – the data was not based on documents or other information possessed by JPMORGAN CHASE employees at the time they submitted it. This conduct prompted HUD-FHA and the VA to accept for government insurance and refinancing thousands of loans that did not, in fact, qualify. When those loans ultimately defaulted, HUD-FHA and the VA suffered substantial losses that, but for JPMORGAN CHASE’s conduct, would not have occurred.
As part of the settlement, JPMORGAN CHASE has admitted, acknowledged, and accepted responsibility for the following conduct alleged in the Government’s complaint:
- It failed to self-report to HUD-FHA 582 loans that, from 2007 through 2009, it identified as having been affected by borrower or correspondent fraud or other material deficiencies.
- It approved for government insurance or refinancing thousands of loans that did not meet one or more rules of the DEL Program or the Loan Guaranty Program, and therefore were not eligible for government insurance or refinancing.
- Certain of its employees submitted data to TOTAL that lacked integrity. Specifically, when loans did not receive an “accept/approve” rating from TOTAL, these employees re-submitted the loans through TOTAL multiple times over a short period, each time entering into TOTAL hypothetical data that had not been corroborated by documents or other information possessed by the employees in order to determine data values that would generate an “accept/approve” rating. These employees communicated the qualifying data values to borrowers, thus increasing the risk of borrower fraud.
- As a result of the conduct described above, JPMORGAN CHASE induced HUD-FHA and the VA to accept for government insurance or refinancing thousands of loans that were not eligible for such insurance or refinancing, and that HUD-FHA and the VA otherwise would not have accepted for insurance or refinancing, and this resulted in substantial losses to the Government when the loans ultimately defaulted.
Pursuant to the settlement, JPMORGAN CHASE will pay the United States $614 million within 30 days of the settlement.
Under the settlement, JPMORGAN CHASE has also agreed to comply with all of the rules applicable to participants in the DEL Program and the Loan Guaranty Program, including the DEL Program requirement that it ensure the “integrity of the data supplied” to TOTAL. To ensure compliance with that data integrity requirement, JPMORGAN CHASE has agreed to implement an enhanced quality control program to review loans that it underwrites using TOTAL. Pursuant to this program, JPMORGAN CHASE must implement certain controls designed to detect instances where its employees submit to TOTAL data that is not supported by documents or other information possessed by the employees at the time the data is submitted. The details of the enhanced quality control program are subject to approval by this Office.
The case is being handled by the Office’s Civil Frauds Unit. Mr. Bharara established the Civil Frauds Unit in March 2010 to bring renewed focus and additional resources to combating financial fraud, including mortgage fraud.
By filing this case, the Government joined a private whistleblower lawsuit that had previously been filed against JPMORGAN CHASE under the False Claims Act.
The case filed today against JPMORGAN CHASE represents the eighth civil fraud lawsuit brought by this Office since May 2011 alleging fraudulent lending practices by residential mortgage lenders. In February 2012, this Office settled with Citimortgage (a subsidiary of Citibank) and Flagstar Bank. In May 2012, the Office settled with Deutsche Bank and a number of its subsidiaries. In October 2013, a jury returned a verdict against Countrywide, Bank of America, and Rebecca Mairone. Litigation is pending against Wells Fargo Bank and Kurt Lofrano; Allied Home Mortgage, Jim Hodge, and Jeanne Stell; and Golden First Mortgage and David Movtady.
The Civil Frauds Unit works in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Mr. Bharara thanked HUD-OGC, HUD-OIG and VA-OIG for their extraordinary assistance in this case. He also expressed his appreciation for the support of the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division in Washington, D.C.
Assistant U.S. Attorney Christopher B. Harwood is in charge of the case.
U.S. v. JPMorgan 13 Civ 0220 Government Complaint
U.S. v. JPMorgan 13 Civ 0220 Executed Stipulation of Settlement and JudgmentManhattan U.S. Attorney Announces the Indictment of Ross Ulbricht, the Creator and Owner of the “Silk Road” WebsiteRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today the indictment in Manhattan federal court of ROSS WILLIAM ULBRICHT, a/k/a “Dread Pirate Roberts,” a/k/a “DPR,” a/k/a “Silk Road,” in connection with his operation and ownership of Silk Road, a hidden website designed to enable its users to buy and sell illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement. ULBRICHT was arrested in San Francisco, California, on October 1, 2013, pursuant to a criminal Complaint filed in Manhattan federal court.
According to the allegations in today’s Indictment and other documents previously filed in Manhattan federal court:
ULBRICHT created Silk Road in approximately January 2011, and owned and operated the underground website until it was shut down by law enforcement authorities in October 2013. Silk Road emerged as the most sophisticated and extensive criminal marketplace on the Internet, serving as a sprawling black-market bazaar where unlawful goods and services, including illegal drugs of virtually all varieties, were bought and sold regularly by the site’s users. While in operation, Silk Road was used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to well over a hundred thousand buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.
ULBRICHT deliberately operated Silk Road as an online criminal marketplace intended to enable its users to buy and sell drugs and other illegal goods and services anonymously and outside the reach of law enforcement. ULBRICHT sought to anonymize transactions on Silk Road in two principal ways. First, ULBRICHT operated Silk Road on what is known as “The Onion Router,” or “Tor” network, a special network of computers on the Internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the networks’ users. Second, ULBRICHT designed Silk Road to include a Bitcoin-based payment system that served to facilitate the illegal commerce conducted on the site, including by concealing the identities and locations of the users transmitting and receiving funds through the site.
The vast majority of items for sale on Silk Road were illegal drugs, which were openly advertised as such on the site. As of September 23, 2013, Silk Road had nearly 13,000 listings for controlled substances, listed under such categories as “Cannabis,” “Dissociatives,” “Ecstasy,” “Intoxicants,” “Opioids,” “Precursors,” “Prescription,” “Psychedelics,” and “Stimulants.” From November 2011 to September 2013, law enforcement agents made more than 100 individual undercover purchases of controlled substances from Silk Road vendors. These purchases included heroin, cocaine, ecstasy, and LSD, among other illegal drugs, and were filled by vendors believed to be located in more than ten different countries, including the United States, Germany, the Netherlands, Canada, the United Kingdom, Spain, Ireland, Italy, Austria and France.
In addition to illegal narcotics, other illicit goods and services were openly bought and sold on Silk Road as well. For example, as of September 23, 2013, there were: 159 listings under the category “Services,” most of which offered computer-hacking services, such as a listing by a vendor offering to hack into social networking accounts of the customer’s choosing; 801 listings under the category “Digital goods,” including malicious software, hacked accounts at various online services, and pirated media content; and 169 listings under the category “Forgeries,” including offers to produce fake driver’s licenses, passports, Social Security cards, utility bills, credit card statements, car insurance records, and other forms of false identification documents.
Using the online moniker “Dread Pirate Roberts,” or “DPR,” ULBRICHT controlled and oversaw every aspect of Silk Road, and managed a small staff of paid, online administrators who assisted with the day-to-day operation of the site. Through his ownership and operation of Silk Road, ULBRICHT reaped commissions worth tens of millions of dollars generated from the illicit sales conducted through the site. ULBRICHT also demonstrated a willingness to use violence to protect his criminal enterprise and the anonymity of its users. ULBRICHT even solicited six murders-for-hire in connection with operating the site, although there is no evidence that these murders were actually carried out.
To date, approximately 173,991 Bitcoins (worth over $150 million at present exchange rates) have been seized in the course of the investigation, including approximately 29,655 Bitcoins recovered from servers used to run the Silk Road website, and approximately 144,336 Bitcoins recovered from computer hardware belonging to ULBRICHT seized upon his arrest. On January 15, 2014, the Bitcoins recovered from the Silk Road servers were ordered forfeited in connection with a civil action previously filed in Manhattan federal court on September 30, 2013, seeking the forfeiture of all assets of Silk Road, including its website and all of its Bitcoins, because those assets allegedly were used to facilitate money laundering and constitute property involved in money laundering. ULBRICHT has filed a claim in the civil action, asserting that he is the owner of the Bitcoins found on his computer hardware, and contesting the forfeiture of those Bitcoins.
ULBRICHT, 29, of San Francisco, California, is charged with one count of narcotics conspiracy, which carries a maximum sentence of life imprisonment and a mandatory minimum sentence of 10 years; one count of engaging in a continuing criminal enterprise, which carries a maximum sentence of life imprisonment and a mandatory minimum sentence of 20 years in prison; one of count of conspiracy to commit computer hacking, which carries a maximum sentence of five years in prison; and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
In December 2013, an Indictment filed in Manhattan federal court was unsealed charging three individuals, Andrew Michael Jones, a/k/a “Inigo,” Gary Davis, a/k/a “Libertas,” and Peter Phillip Nash, a/k/a “Samesamebutdifferent,” a/k/a “Batman73,” a/k/a “Symmetry,” a/k/a “Anonymousasshit,” for their alleged roles in assisting Ulbricht in the operation of Silk Road.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation and its New York Special Operations and Cyber Division, as well as the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the IRS, the New York City Police Department, U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), the New York State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Secret Service, the U.S. Marshals Service, Office of Foreign Assets Control, and NY Department of Taxation. Mr. Bharara also thanked the ICE-HSI Chicago-O’Hare office for its assistance and support, as well as the Department of Justice’s Computer Crime and Intellectual Property Section and Office of International Affairs. Additionally, Mr. Bharara praised the foreign law enforcement partners whose contributions to the success of the investigation and prosecution have been invaluable, namely, the Australian Federal Police, the Irish Republic’s Computer Crime Investigation Unit of the An Garda Siochana, the Reykjavik Metropolitan Police of the Republic of Iceland, and the French Republic’s Central Office for the Fight Against Crime Linked to Information Technology and Communication.
Mr. Bharara also noted that the investigation remains ongoing.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Serrin Turner is in charge of the prosecution, and Assistant United States Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
US v. Ross Ulbricht Indictment
Madison Parish Hospital Administrator, Two Businessmen, Sentenced for Health Care FraudRead the Press Release
MONROE, La. –United States Attorney Stephanie A. Finley announced today that the former Madison Parish Hospital administrator and two of its vendors were sentenced Monday by U.S. District Judge Robert G. James for health care fraud. They pleaded guilty in October and November of 2013.
Charles Wendell Alford, 71, of Newellton, La., received 37 months in prison and was ordered to pay $1,383,874 restitution; Barney W.I. Hughes IV, 45, of Keller, Texas, received 12 months in prison and was ordered to pay $566,874 restitution; and Henry Russell Ham, 65, of West Monroe, La., received 14 months in prison and was ordered to pay $817,000 restitution. All were sentenced to three years of supervised release.
According to evidence presented at the guilty plea, Alford served as hospital administrator for Madison Parish Hospital in Tallulah, La; Hughes served as owner of Tech Solutions of Keller, Texas; and Ham, served as owner of Insurance World in Monroe. Both Hughes and Ham paid Alford a combined total of more than $1.3 million in kickbacks for his approval and continuation of their business agreements. The hospital is a critical care facility that receives Medicare funds.
Madison Parish Hospital leased equipment and personnel from Tech Solutions to operate the hospital’s nuclear medicine and Ultrasound departments. At no time did Alford or Hughes disclose to the hospital’s board or Medicare that they had an exclusive agreement. From October 2006 to June 2012, the hospital paid Hughes’ company $2,029,504, and Hughes paid Alford $566,874 of that total. They submitted fraudulent cost reports to Medicare at least six times from December 2006 to 2011.
Madison Parish Hospital purchased a majority of its health insurance and life insurance products from Ham. Alford and Ham negotiated and set the insurance policy rates and Alford approved Ham’s billings as well as the hospital’s payments to Ham. From 2007 through April 2012, the hospital paid Ham $4,979,487, and Ham paid Alford $817,000 of that total. They submitted fraudulent cost reports to Medicare at least five times from December 2007 to 2011.
The Louisiana Legislative Auditor’s Office and the U.S. Department of Health and Human Services, Office of Inspector General, investigated the case. Assistant U.S. Attorney Joseph G. Jarzabek prosecuted the case.
Luzerne County Woman Pleads Guilty to Tampering with Consumer ProductRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced that a 35-year-old Wilkes-Barre resident pleaded guilty today in Wilkes-Barre before U.S. Magistrate Judge Karoline Mehalchick to a criminal information charging her with tampering with a consumer product that affected interstate commerce.
According to United States Attorney Peter J. Smith, the defendant, Yolanda Holman, of Wilkes-Barre, admitted that she knowingly and intentionally tainted a bottle of non-prescription children’s pain reliever with prescription pills and other medication and caused it to be taken to a retail store in Wilkes-Barre as a returned item on or about August 23, 2013.
U.S. Attorney Smith stated that suspected tainted containers related to this incident were recovered and were in the possession of law enforcement officers or otherwise destroyed. The tainted containers present no danger to the public.
The criminal information and a plea agreement were filed on December 19, 2013.
The investigation was conducted by agents of the Federal Bureau of Investigation – Scranton Resident Office. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
****Louisville Based Tobacco Wholesaler Sentenced to 18 Months for Role in Contraband Cigarette TradeRead the Press Release
LOUISVILLE, KY - A Louisville based tobacco wholesaler and retailer was sentenced in U.S. District Court yesterday, by Chief District Judge Joseph H. McKinley, Jr., to 18 months in prison followed by two years of supervised release for his role in a scheme that defrauded the Commonwealth of Kentucky of excise tax returns totaling more than $2 million announced David J. Hale, United States Attorney for the Western District of Kentucky.
Pedro “Peter” Bello, age 43, of Miami, Florida, pleaded guilty to conspiracy to commit wire fraud on May 30, 2013. According to the plea agreement, between April 5, 2007 and December 1, 2009, Bello, a/k/a Peter Bello, d/b/a, GT Northeast of Indiana/Kentucky, conspired with Israel Chavez, both of whom were licensees with the Kentucky Department of Revenue, Excise Tax Division, to deprive Kentucky of excise tax revenues. Chavez was the owner of Chavez, Inc., d/b/a, Cigarettes Direct to You (CD2U). Bello and Chavez, created fraudulent cigarette invoices for the sale of cigarettes to Chavez's business in Louisville, and made the invoices appear as if the cigarettes in question had been sold and shipped from an out of state vendor - specifically, GT Northeast of St. Louis, a business not licensed by Kentucky tax authorities, when, in fact, the cigarettes had been sold by Bello to Chavez, both of whom were license holders and therefore payment of taxes were due at the time the cigarettes were transferred.
Chavez was sentenced on December 13, 2013 to 12 months and one day in prison and agreed to restitution in the amount of $2,090,571.00 to the Kentucky Department of Revenue, from $3,214,035.66 he agreed to forfeit to the United States. Further, Chavez agreed to forfeit 10,842,192 tobacco products and tax stamps valued at $108,000 which were returned to the Kentucky Department of Revenue.
"This ATF investigation included the Kentucky Attorney General's Office of Criminal Investigations, the Louisville Metro Police Department, the U.S. Postal Inspection Service and the U.S. Internal Revenue Service. In addition, coordination with various states’ revenue/regulatory agencies has led to the collection of over $40 million in state excise taxes previously lost due to these illicit operations," stated ATF Special Agent in Charge Stuart Lowrey.
This case is being prosecuted by Assistant United States Attorneys Randy Ream and Amanda Gregory, and the civil forfeiture case was prosecuted by Assistant United States Attorney Amy Sullivan. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the United States Postal Inspection Service.
Local Woman Sentenced for False Claims in Connection with Fraudulent Tax ReturnsRead the Press Release
HOUSTON – Alisa Grisson has been ordered to federal prison following her conviction of one count of making a false claim against the government, announced United States Attorney Kenneth Magidson along with Special Agent in Charge Lucy Cruz, of Internal Revenue Service - Criminal Investigation (IRS-CI). Grissom pleaded guilty Wednesday, Nov. 13, 2013.
Today, U.S. District Judge Sim Lake, who accepted the guilty plea, handed Grissom a 30-month sentence. Grissom will also be required to serve a term of three years of supervised release following completion of the prison term.
Grisson stipulated that the tax losses to the government is $674,284.62 and has agreed to pay that in restitution to the United States.
According to the plea agreement filed in the record of the case, Grisson acknowledged she prepared tax returns in her name and in the names of others. She acknowledged she knew the returns were false and fraudulent when she prepared them and caused them to be filed with the IRS.
Grisson admitted in the plea agreement that these returns reported income that had not been earned and/or expenses that had not been incurred, thus claiming monies from the government in the form of tax refunds to which she and the other taxpayers were not entitled. Specifically, she admitted to falsely claiming a refund of more than $7.4 million for the 2009 tax year.
Grisson further agreed never again to aid or assist in preparing or presenting tax returns for any taxpayer except herself and not to oppose any civil action brought by the United States seeking to enjoin her from preparing income tax returns for others.
Grissom was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
IRS-CI conducted the investigation. Assistant U.S. Attorney Stephen L. Corso is prosecuting.
Local Woman Sentenced for False Claims in Connection with Fraudulent Tax ReturnsRead the Press Release
HOUSTON – Alisa Grisson has been ordered to federal prison following her conviction of one count of making a false claim against the government, announced United States Attorney Kenneth Magidson along with Special Agent in Charge Lucy Cruz, of Internal Revenue Service - Criminal Investigation (IRS-CI). Grissom pleaded guilty Wednesday, Nov. 13, 2013.
Today, U.S. District Judge Sim Lake, who accepted the guilty plea, handed Grissom a 30-month sentence. Grissom will also be required to serve a term of three years of supervised release following completion of the prison term.
Grisson stipulated that the tax losses to the government is $674,284.62 and has agreed to pay that in restitution to the United States.
According to the plea agreement filed in the record of the case, Grisson acknowledged she prepared tax returns in her name and in the names of others. She acknowledged she knew the returns were false and fraudulent when she prepared them and caused them to be filed with the IRS.
Grisson admitted in the plea agreement that these returns reported income that had not been earned and/or expenses that had not been incurred, thus claiming monies from the government in the form of tax refunds to which she and the other taxpayers were not entitled. Specifically, she admitted to falsely claiming a refund of more than $7.4 million for the 2009 tax year.
Grisson further agreed never again to aid or assist in preparing or presenting tax returns for any taxpayer except herself and not to oppose any civil action brought by the United States seeking to enjoin her from preparing income tax returns for others.
Grissom was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
IRS-CI conducted the investigation. Assistant U.S. Attorney Stephen L. Corso is prosecuting.
Leader of Colombian Drug Trafficking Organization Pleads Guilty to Cocaine Importation ConspiracyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Jose Samir Renteria-Cuero, a/k/a Jose Morfi (51, Cali, Colombia, South America) today pleaded guilty to conspiring with others to distribute five (5) kilograms or more of cocaine, on board a vessel subject to the jurisdiction of the United States. Renteria-Cuero faces a mandatory minimum penalty of ten years in federal prison, up to a maximum term of life imprisonment.
According to the plea agreement, Renteria-Cuero was involved in maritime cocaine smuggling operations from the 1980s until at least 2009. He started out as a mechanic, servicing go-fast vessels (GFVs) and participating in GFV smuggling operations. Eventually, he acquired GFVs and self-propelled semi-submersible (SPSS) vessels and recruited mariners to participate in maritime cocaine smuggling operations. Renteria-Cuero worked with others to transport and store cocaine in Colombia, construct and repair GFVs and SPSS vessels, and dispatched those stateless vessels from Colombia. Renteria-Cuero provided maritime cocaine transportation services aboard stateless vessels that were used to smuggle cocaine from Colombia to Mexico, via the Pacific Ocean, in international waters, knowing and intending that the cocaine would ultimately be imported unlawfully into the United States. Many of these ventures involved at least 1,000 kilograms of cocaine.
Renteria-Cuero was arrested in Cali, Colombia in March 2012, and subsequently extradited to the United States, first arriving at a place in the Middle District of Florida.
This case was investigated by the Panama Express South Strike Force, a standing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation comprised of agents and analysts from the Federal Bureau of Investigation, the Drug Enforcement Administration, Homeland Security Investigations, the United States Coast Guard Investigative Service, the Naval Criminal Investigative Service, and U.S. Southern Command's Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. The case is being prosecuted by Assistant United States Attorney Christopher F. Murray.
Law Enforcement Task Force Announces First Federal Charges for Human TraffickingRead the Press Release
U.S. Attorney says collaborative investigation has resulted in first-of-kind charges
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced this afternoon the filing of a nine count federal indictment against Jerry Mitchell, a/k/a “Tre da Great,” age 24, of Indianapolis. The charges include sex trafficking, sex trafficking of a child, transporting a child to engage in prostitution, and the production of child pornography. This follows Mitchell’s arrest by Indianapolis law enforcement and the filing of charges by Marion County Prosecutor Terry Curry, and comes as federal and local authorities have joined forces to combat human trafficking and child exploitation.
“The scourge of human trafficking is a global crisis, but the fight against modern day slavery begins right here at home,” Hogsett said. “That is why we have teamed up with law enforcement partners across this state and around the country to combat the types of horrific abuse that are alleged in this case.”
“This indictment shows the importance of partnerships across all levels to address the horrific crime of human trafficking,” said Acting Assistant Attorney General Jocelyn Samuels. “The Civil Rights Division and U.S. Attorneys offices across the country will continue their aggressive work to combat these types of crimes.”
The Investigation and Allegations
According to the federal indictment and state probable cause affidavit, an investigation into Mitchell’s alleged criminal activity began in July 2013, when officers with the Indianapolis Metropolitan Police Department were flagged down and informed by a woman that her niece, a recent runaway, had returned home and reported she had been the victim of a sexual assault. Further investigation resulted in the identification of a suspect who went by the name of “Tre,” an alleged alias of Mitchell, as well as information indicating that the defendant was operating a prostitution operation in and around the Near Northside of Indianapolis.
The indictment alleges that from May 2013 through June 27, 2013, Mitchell engaged in sex trafficking by means of force, fraud, or coercion. The allegations include female victims between the ages 19-21, as well as a minor age 17, a minor age 16, and a minor age 12. It is further alleged that Mitchell would transport the minors to facilitate their prostitution activities, and that on a number of occasions he sexually assaulted these female minors. The federal indictment alleges that on June 22, 2013, Mitchell also made a video recording of the sexual abuse of the 16 year old female victim.
Mitchell had an initial appearance before a federal magistrate judge in Indianapolis this afternoon, and was ordered detained pending trial. If convicted on all counts, he could face up to life in federal prison. Under federal law, the defendant would be required to serve a minimum of 85% of his prison term within a correctional facility.
Joint Task Force on Human Trafficking
This case was the result of a collaborative investigation spearheaded by the Indiana Protection for Abused and Trafficked Humans (IPATH), one of 42 task forces nationwide funded by the Department to address the issue of human trafficking. IPATH was created in 2006 and is chaired by the United States Attorney’s Office and the Indiana Attorney General’s Office. The group meets regularly to collaborate on cases and projects, provide additional training to law enforcement, and raise awareness in our community about human trafficking.
According to Assistant U.S. Attorney Gayle L. Helart, who is prosecuting the case for the government, this case would not have been possible without significant law enforcement assistance from the Homeland Security Investigations, the Indianapolis Metropolitan Police Department, and the Federal Bureau of Investigation.
In addition, Marion County Prosecutor Terry Curry has announced that he will continue to prosecute a pending felony child molestation case against Mitchell in Marion County Superior Court. In 2011, Curry’s office prosecuted Indiana’s first conviction under the state’s revamped human trafficking law.
The following law enforcement partners released statements in response to today’s announcement:
“The collaborative efforts of federal, state and local law enforcement partners to hold traffickers accountable and serve victims are essential. Sex trafficking – especially when it involves children who are being trafficked on the Internet – requires all of our efforts and I applaud U.S. Attorney Hogsett's leadership in this case. Human trafficking isn’t just a problem elsewhere in the world, it happens right here in Indiana.” -- Indiana Attorney General Greg Zoeller
“Few crimes strike at the heart of a community the way human trafficking does. Traffickers who prey on the emotional and physical vulnerability of their victims in the name of making a profit will be held accountable for their actions. HSI, along with our law enforcement partners in Indiana, will continue to aggressively investigate human trafficking to identify and rescue its innocent victims.” -- Gary Woolf, Resident Agent in Charge, Homeland Security Investigations Indianapolis
Informations, indictments, and criminal complaints are only a charge and are not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Kissimmee Man Pleads Guilty to over $1 Million in Tax EvasionRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Walter Medlin (70, Kissimmee) pleaded guilty today to tax evasion. He faces a maximum penalty of 5 years in federal prison. His sentencing hearing has not yet been scheduled.
Medlin was charged on November 10, 2013.
According to court documents, Medlin received more than $7.5 million in income from the sale of an interest in a landfill. Rather than report that income on his tax return, he attempted to evade his taxes by using several limited partnerships to conduct transactions for his benefit. As the result of a prior United States Tax Court ruling, Medlin knew that he could not use nominees, such as the limited partnerships, to evade his taxes in this manner. To further conceal the offense, Medlin failed to file a tax return, but submitted requests for extensions in which he falsely represented that he did not owe any taxes. The total amount of the attempted tax evasion was over $1.1 million. As part of his plea agreement, Medlin has agreed to file his tax return and pay his taxes, including penalties, and interest.
This case was investigated by the Internal Revenue Service -- Criminal Investigation. It is being prosecuted by Assistant United States Attorney Roger B. Handberg.
Justice Department Settles with Rite Aid of Michigan over Alleged HIV DiscriminationRead the Press Release
The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative, it has reached a settlement with Rite Aid of Michigan to resolve claims that Rite Aid violated the Americans with Disabilities Act (ADA).
The department found that a Rite Aid store pharmacist in Okemos, Mich., discriminated against a customer with HIV by refusing to administer a flu shot to the customer. Although the pharmacist had access to surgical gloves, she told the customer that she needed “special gloves” to administer a flu shot to him, and that he should return after the store had ordered the gloves.
“Erecting unfair and discriminatory barriers to medical care for people with HIV is unacceptable,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The ADA prohibits these types of barriers, and the Justice Department will fight to tear them down.”
Under the terms of the settlement agreement, Rite Aid of Michigan must pay $10,000 to the customer and $5,000 in civil penalties. In addition, Rite Aid must train its staff on the requirements of the ADA and implement an anti-discrimination policy.
Title III of the ADA prohibits public accommodations such as Rite Aid of Michigan from excluding people with disabilities, including people with HIV, from enjoying goods, services, privileges, facilities, advantages and accommodations provided. For more information regarding the department’s efforts to combat HIV discrimination, please visit www.ada.gov/aids/ada_aids_enforcement.htm To learn more about the obligations of public accommodations under federal disability rights statutes, call the department’s toll-free ADA information line at 800-514-0301, 800-514-0383 (TTY) or access the ADA website at www.ada.gov
Justice Department Files Fair Housing Lawsuit Against Owner and Managers of Illinois Mobile Home Park for Discriminating Against African-Americans and Families with ChildrenRead the Press Release
The Justice Department filed a lawsuit today against the owner and those responsible for the management of a 126-space mobile home park in Effingham, Ill., for violating the Fair Housing Act (FHA) by discriminating against African-Americans and families with children.
“People should not be denied the housing of their choice because of their race or because they have children,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act, which outlaws such discrimination.
“America’s strength is in its diversity,” said U.S. Attorney Stephen R. Wigginton for the Southern District of Illinois. “The Southern District of Illinois recognizes that our nation, our district and our communities depend upon each and every person being afforded the basic rights that this country gives them. As such, my office is proud to defend everyone’s right to live where they want, free from discrimination.”
The lawsuit, filed in the U.S. District Court for the Southern District of Illinois, charges that owner Lorraine Wallschlaeger, manager Barbara Crubaugh and David Crubaugh, another employee with management responsibilities, engaged in a pattern or practice of violating the FHA by imposing requirements on African-Americans interested in living at Four Seasons Estates Mobile Home Park that they did not impose on white prospective tenants, such as completing a written application and having their mobile homes inspected before being accepted into the park. The suit also charges that the defendants threatened to evict a white resident and his niece from the park if her African-American boyfriend did not leave, and refused to register the African-American boyfriend as a resident.
In addition, the lawsuit alleges that the defendants did not permit families with children to live on one of the four rows at the mobile home park.
The lawsuit arose after the residents who were subjected to the discriminatory conduct contacted HOPE Fair Housing Center, an organization in Illinois that advocates for equal opportunity in housing, who in turn contacted the Justice Department. Some of the evidence leading to the filing of today’s lawsuit came from statements made by Four Seasons officials to testers, individuals who pose as renters to gather information about possible discriminatory practices. The testing evidence in this case was developed by the department’s Fair Housing Testing Program.
The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civil penalty. Any individuals who have information relevant to this case are urged to contact the Housing and Civil Enforcement Section of the Civil Rights Division at 1-800-896-7743, mailbox #94.
The federal FHA prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Judge Sentences Carrolltown Woman to Probation for Conspiring to Launder MoneyRead the Press Release
JOHNSTOWN, Pa. - A resident of Carrolltown, Pa., has been sentenced in federal court to two years probation on her conviction of conspiracy to commit money laundering, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Theresa A. Deckard, 60.
According to information presented to the court, from March 2008 to May 9, 2011, Deckard conspired to commit money laundering.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
A joint task force, headed by the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, conducted the investigation that led to the prosecution of Deckard. Other agencies participating on the task force include the Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, Pennsylvania Attorney General's Office, Cambria County District Attorney's Office, Carrolltown Police Department, Patton Police Department, Ebensburg Police Department, Portage Police Department and Paint Township Police Department.
Johnstown Woman Sentenced to 3 Years in Prison for Possessing Crack CocaineRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., has been sentenced in federal court to 37 months in prison and three years supervised release on her conviction of possession with the intent to distribute cocaine base, commonly known as "crack," United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Ebony R. Thorne, 31.
According to information presented to the court, on Oct. 31, 2012, Thorne possessed less than 28 grams of cocaine base with the intent to distribute it.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation leading to the successful prosecution of Thorne.
Jacksonville Man Charged in Tax Return FraudRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the arrest and return by a grand jury of a thirty-five-count indictment charging Thomas Bandzul with tax fraud. Specifically, Bandzul is charged with nineteen counts of assisting in preparing a false tax return, thirteen counts of wire fraud, two counts of filing a false tax return and one count of aggravated identity theft. If convicted, he faces a maximum penalty of 3 years in federal prison for each count of assisting in preparing a false tax return and each count of filing a false return. On each wire fraud count he faces up to twenty years in federal prison. He also faces two years in prison for the aggravated identity theft charge, to be served consecutive to the wire fraud sentence. The indictment also notifies Bandzul that the United States intends to forfeit any assets, which are alleged to be traceable proceeds of the offenses. Bandzul made his initial appearance before United States Magistrate Judge Joel B. Toomey this afternoon. He was released on a $25,000 bond.
According to the indictment, between January 2008 and May 2011, Bandzul was a tax return preparer in Duval and St. Johns counties. As such, he allegedly knowingly and willfully made false claims for deductions and credits on behalf of his clients, which resulted in additional IRS tax refunds. The indictment alleges that, as part of a scheme, Bandzul would prepare and furnish one tax return to his taxpayer client, but then would make false and fraudulent claims on separate tax returns that he actually filed electronically with the IRS. By prearrangement, Bandzul was to be paid a specified fee by his clients out of the anticipated IRS refunds. Bandzul allegedly caused the additional higher tax refunds to be paid to him, through a bank clearinghouse, as additional tax preparation fees, without his clients’ knowledge or consent. In order to avoid detection by the IRS, Bandzul allegedly used various identities beside his own to electronically file tax returns. The tax loss from this scheme is alleged to be in excess of $100,000.
Additionally, the indictment alleges that Bandzul committed tax fraud on his individual tax returns by claiming a total income of $14,945 on his amended 2008 tax return, when he was paid $208,967 in fees, and by claiming $9,536 in total income on his 2009 tax return when he was paid $335,452 in fees. Finally, according to the indictment, Bandzul committed aggravated identity theft by using a client’s name and Social Security Number to electronically file a fraudulent tax return as a tax return preparer and commit wire fraud.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service - Criminal Investigation. It will be prosecuted by Assistant United States Attorney Dale R. Campion.
Jackson Man Sentenced to Prison for Possession with Intent to Distribute CocaineRead the Press Release
Jackson, Miss. – Aundra Mason, a/k/a Grey Head, 36, of Jackson, was sentenced to 27 months in federal prison followed by three years of supervised release for possession with intent to distribute cocaine, U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen announced today. Fifteen months of the sentence will run consecutively to a 135 month sentence for narcotics violations previously imposed in Texas.
Mason was one of 13 defendants indicted and convicted following an extensive investigation dubbed “Operation Paperchase” targeting illegal narcotics distribution in the City of Jackson. The FBI led the investigation with assistance from DEA, U.S. Marshals Service, Gulf Coast HIDTA, Mississippi Bureau of Narcotics, and the Jackson Police Department. The case was prosecuted by Assistant United States Attorney Erin Chalk.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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JPMorgan Chase to Pay $614 Million for Submitting False <br /> Claims for FHA-insured and VA-guaranteed Mortgage LoansRead the Press Release
The Department of Justice today announced that JPMorgan Chase (JPMC) will pay $614 million for violating the False Claims Act by knowingly originating and underwriting non-compliant mortgage loans submitted for insurance coverage and guarantees by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA). JPMC is a bank and financial services company headquartered in New York.
“The resolution announced today is a product of the Justice Department’s continuing efforts to hold accountable those whose conduct contributed to the financial crisis,” said Associate Attorney General Tony West. “This settlement recovers wrongfully claimed funds for vital government programs that give millions of Americans the opportunity to own a home and sends a clear message that we will take appropriately aggressive action against financial institutions that knowingly engage in improper mortgage lending practices.”
“The Department of Justice will continue to hold accountable financial institutions whose irresponsible mortgage lending undermines the housing market and costs the taxpayers many millions of dollars,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “I thank U.S. Attorney Bharara and his team for their stellar efforts in this case and look forward to our coordinated efforts in these cases.”
As part of the settlement, which was handled by the U.S. Attorney’s Office for the Southern District of New York, JPMC admitted that, for more than a decade, it approved thousands of FHA loans and hundreds of VA loans that were not eligible for FHA or VA insurance because they did not meet applicable agency underwriting requirements. JPMC further admitted that it failed to inform the FHA and the VA when its own internal reviews discovered more than 500 defective loans that never should have been submitted for FHA and VA insurance.
“For years, JPMorgan Chase has enjoyed the privilege of participating in federally subsidized programs aimed at helping millions of Americans realize the dream of homeownership,” said U.S. Attorney for the Southern District of New York Preet Bharara. “Yet, for more than a decade, it abused that privilege. JPMorgan Chase put profits ahead of responsibility by recklessly churning out thousands of defective mortgage loans, failing to inform the government of known problems with those loans and leaving the government to cover the losses when the loans defaulted. With today’s settlement, however, JPMorgan Chase has accepted responsibility for its misconduct and has committed to reform its business practices. This settlement adds to the list of successful mortgage fraud cases this office has pursued.”Beginning as early as 2002, JPMC falsely certified that loans it originated and underwrote were qualified for FHA and VA insurance and guarantees. As a consequence of JPMC’s misrepresentations, both the FHA and the VA incurred substantial losses when unqualified loans failed and caused the FHA and VA to cover the associated losses.
“This settlement with JP Morgan Chase will enable HUD to recover funds lost due to Chase’s past unacceptable mortgage underwriting practices,” said HUD’s Acting General Counsel Damon Smith. “In addition, Chase must now institute new and tighter controls to prevent abuses of FHA’s automated underwriting system. HUD will continue working with the Department of Justice to ensure that lenders are held accountable and are required to institute practices that will benefit both borrowers and the FHA insurance fund.”
“The agreement reached with JPMC was possible due to the dedication of the U.S. Attorney’s Office for the Southern District of New York and the hard work of the talented staff at the Office of Inspector General,” said Inspector General of the Department of Housing and Urban Development David A. Montoya. “It also demonstrates the combined commitment of the Justice Department and the Office of Inspector General to continuing efforts to enforce FHA mortgage insurance requirements.”
The FHA’s Single Family Mortgage Insurance Program enables low- and moderate- income borrowers to purchase homes by insuring qualified loans made by participating lenders, such as JPMC, against losses if the loans later default. A participating lender may only submit to the FHA creditworthy loans meeting certain requirements and must maintain a quality control program that can prevent and correct any deficiencies in the lender’s underwriting practices. The VA’s Loan Guaranty Program provides similar assistance to veterans, service members and qualifying surviving spouses.
“I commend the efforts of the United States Attorney’s Office for the Southern District of New York to hold lenders accountable for conduct that defrauds the government and deserving veterans who rely on VA’s Loan Guaranty Program to purchase their homes,” said Acting Inspector General for the Office of Inspector General, Department of Veterans Affairs Richard J. Griffin.
The settlement resolves allegations in a complaint filed by a private whistleblower.
Today’s settlement 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 is 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 .This settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Southern District of New York , the department’s Civil Division, the Department of Housing and Urban Development’s Inspector General and the Department of Veterans Affairs’ Inspector General.
Indiana Law Enforcement Human Trafficking Task Force Announces First Federal ChargesRead the Press Release
The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Southern District of Indiana announced the filing of a nine count federal indictment this afternoon against Jerry Mitchell, aka Tre da Great, age 24, of Indianapolis. The charges include sex trafficking, sex trafficking of a child, transporting a child to engage in prostitution and the production of child pornography. The indictment follows Mitchell’s arrest by Indianapolis law enforcement and the filing of charges by Marion County Prosecutor Terry Curry, and comes as federal and local authorities have joined forces to combat human trafficking and child exploitation.
“This indictment shows the importance of partnerships across all levels to address the horrific crime of human trafficking,” said Acting Assistant Attorney General Jocelyn Samuels for the division. “The Civil Rights Division and U.S. Attorneys offices across the country will continue their aggressive work to combat these types of crimes.”
“The scourge of human trafficking is a global crisis, but the fight against modern day slavery begins right here at home,” said U.S. Attorney Joseph H. Hogsett for the Southern District of Indiana. “That is why we have teamed up with law enforcement partners across this state and around the country to combat the types of horrific abuse that are alleged in this case.”
According to the federal indictment and state probable cause affidavit, an investigation into Mitchell’s alleged criminal activity began in July 2013, when officers with the Indianapolis Metropolitan Police Department were flagged down and informed by a woman that her niece, a reported runaway, had returned home and reported she had been the victim of sexual assault. Further investigation resulted in the identification of a suspect who went by the name of Tre, an alleged alias of Mitchell, as well as information indicating that the defendant was running a prostitution operation in the near-northside area of Indianapolis.
The indictment alleges that from May 2013 through June 27, 2013, Mitchell engaged in sex trafficking by means of force, fraud or coercion. The allegations include the trafficking of females between the ages of 19 and 21, as well as three minors aged 12, 16 and 17. Mitchell also allegedly transported the minors to facilitate their prostitution activities and sexually assaulted these female minors on a number of occasions. The federal indictment alleges that on June 22, 2013, Mitchell also made a video recording the sexual abuse of the 12-year-old female victim.
Mitchell had an initial appearance before a federal magistrate judge in Indianapolis this afternoon, and was ordered detained pending trial. Mitchell faces a statutory maximum sentence of life in federal prison if convicted of all counts. Under federal law, the defendant would be required to serve a minimum of 85 percent of his prison term within a correctional facility.
This case was the result of a collaborative investigation spearheaded by the Indiana Protection for Abused and Trafficked Humans (IPATH) Task Force, one of 42 task forces nationwide funded by the Department of Justice to address the issue of human trafficking. IPATH was created in 2006 and is chaired by the U.S. Attorney’s Office and the Indiana Attorney General’s Office. The group meets regularly to collaborate on cases and projects, provide additional training to law enforcement and raise awareness in our community about human trafficking.
Informations, indictments and criminal complaints are only a charge and are not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Goodwin Charges West Logan Restaurant Owner with Laundering Money Derived from Illegal Gambling OperationRead the Press Release
IRS Seizes Over Eighty Illegal Gray Machines from South Williamson, Kentucky Gambling Parlor
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin filed charges today against a West Logan restaurant owner for laundering cash proceeds of an illegal gambling operation. Since May of 2008, Gregory A. Dotson, 51, of Chapmanville and the proprietor of Giovani’s of Logan in West Logan, operated an illegal poker machine gambling parlor in the back of a tobacco store in South Williamson, Kentucky. Although payouts from poker machines, often referred to as “gray” machines, are illegal under Kentucky law, Dotson routinely paid out gambling winnings to patrons. Dotson retrieved the proceeds from the illegal gambling operation weekly and brought the cash across state lines to his office at Giovanni’s. Dotson then commingled the cash from his legitimate business with his illegal enterprise.
On August 16, 2010, Dotson traveled from West Virginia to Bristol, Tennessee with nearly $12,000 of cash proceeds from the illegal gambling operation and used those funds to help purchase a 2009 Nissan 350z sports car.
In October of 2013, agents from the Internal Revenue Service raided the gambling parlor, and seized forty machines in operation and another forty machines in storage.
The information filed today alleges that the United States intends to forfeit nearly $150,000 in cash, a $96,000 Mercedes sport-utility vehicle, a $50,000 Rolex watch, several expensive firearms, in addition to the eighty gray machines seized from the South Williamson operation.
In addition to the forfeiture, Dotson faces up to ten years in prison a $250,000 fine if convicted.
The investigation was conducted by the Internal Revenue Service with assistance from the Federal Bureau of Investigation. Assistant United States Attorney Thomas Ryan is in charge of the prosecutions.
Fourth Circuit Affirms Convictions of Boyd DefendantsRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today, the United States Court of Appeals for the Fourth Circuit affirmed the convictions and sentences of defendants Mohammad Omar Aly Hassan, Ziyad Yaghi, and Hysen Sherifi, who were charged and convicted as a part of United States v. Boyd, et al. in the Eastern District of North Carolina. Mr. Walker stated, “This decision not only affirms the convictions and sentences of these individuals, but it affirms the dedication of the many agencies involved in this investigation and prosecution to protect our nation from harms both foreign and domestic.”
The issues raised by the defendants included the sufficiency of the evidence, First or Second Amendment rights, whether portions of the government’s evidence were improperly admitted and defendants’ evidence improperly excluded, whether probable cause existed for surveillance authorized under the Foreign Intelligence Surveillance Act, and sentencing challenges including the imposition of the terrorism enhancement set forth under the United States Sentencing Guidelines. The Fourth Circuit rejected each of these challenges and went further to state: “The laudable efforts of law enforcement and the prosecutors have ensured that, on this occasion at least, we will not be left to second-guess how a terrorist attack could have been prevented.”
The indictment in United States v. Boyd, et al. alleged that, as part of the conspiracy, the multiple defendants in the case prepared themselves to engage in violent acts and were willing to die as martyrs. They also offered training in weapons and financing, helped arrange overseas travel and contacts so others could wage violent acts overseas. In addition, as part of the conspiracy, the defendants raised money to support training efforts, disguised the destination of such monies from the donors, obtained assault weapons, and trained in military tactics. Some defendants also radicalized and recruited others to believe that violent acts were a personal religious obligation.
On October 13, 2011, after a month-long trial, a federal jury convicted Hassan, Yaghi, and Sherifi. Yaghi and Sherifi were convicted on all counts, while Hassan was acquitted of conspiring to carry out attacks overseas, but convicted of providing material support to terrorists, in violation of Title 18 United States Code, Section 2339A. Sherifi was sentenced to 45 years’ imprisonment. Yaghi was sentenced to 31 years and six months of imprisonment. Hassan was sentenced to 15 years’ imprisonment.
The co-defendants in this case included Daniel Patrick Boyd, Dylan Boyd, Zakariya Boyd, and Anes Subasic. Zakariya Boyd pled guilty on June 7, 2011, to one count of Conspiracy to Provide Material Support to Terrorists, in violation of Title 18, United States Code, Section 2339A and received a sentence of nine years’ imprisonment. On September 14, 2011, Dylan Boyd pled guilty to one count of Aiding and Abetting a Conspiracy to Provide Material Support to Terrorists, in violation of Title 18, United States Code, Section 2339A, and received a sentence of eight years’ imprisonment. On February 9, 2011, Daniel Patrick Boyd pled guilty to one count of Conspiracy to Provide Material Support to Terrorists, in violation of Title 18, United States Code, Section 2339A and one count of Conspiracy to Murder, Kidnap, Maim and Injure Persons in a Foreign Country, in violation of Title 18, United States Code, Section 956(a). Daniel Boyd’s sentencing was held in abeyance until the conclusion of Subasic’s trial. On June 14, 2012, Subasic was found guilty of Conspiracy to Provide Material Support to Terrorists, in violation of Title 18, United States Code, Section 2339A and Conspiracy to Murder, Kidnap, Maim and Injure Persons in a Foreign Country, in violation of Title 18, United States Code, Section 956(a). Subasic represented himself at his jury trial. On August 24, 2012, Subasic was sentenced to 30 years’ imprisonment, and Daniel Boyd was sentenced to 18 years’ imprisonment. Subasic’s appeal is pending and will be argued separately.
Investigation of this case was conducted by the Federal Bureau of Investigation, Charlotte Division, Raleigh Resident Agency Joint Terrorism Task Force (JTTF). The Raleigh JTTF consists of the following agencies: FBI, DHS-H.S.I., Raleigh Police Department, Durham Police Department, NC State Bureau of Investigation, and NC Department of Public Safety (NC State Highway Patrol and NC Alcohol Law Enforcement). The prosecution on appeal was handled by Assistant United States Attorneys Jason Kellhofer and Kristine Fritz. The prosecution in district court was handled by Assistant United States Attorneys John Bowler and Barbara Kocher, and by then-Trial Attorney Jason Kellhofer of the Counterterrorism Section in the Justice Department’s National Security Division.
Former Wilmington Trust Officer Indicted on Bank Fraud, Bank Bribery, and Money LaunderingRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Brian D. Bailey, age 51 of Middletown, DE, was charged on February 4, 2014, in a fourteen-count Indictment with the following offenses:
- Count 1 charges the defendant with Conspiracy to Commit Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 1349. The maximum penalties for Count 1 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100 special assessment; and mandatory restitution.
- Count 2 charges the defendant with Conspiracy to Commit Bank Bribery, in violation of Title 18, United States Code, Sections 215 and 371. The maximum penalties for Count 2 are a term of imprisonment of five years; a fine of $250,000.00; a term of supervised release of two years; a $100.00 special assessment; and mandatory restitution.
- Counts 3 through 11 charge the defendant with Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 2. The maximum penalties for each of Counts 3-11 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
- Count 12 charges the defendant with receipt of a gift for procuring a loan, in violation of Title 18, United States Code, Sections 215(a)(2) and 2. The maximum penalties for Count 12 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
- Count 13 charges defendant with unlawfully providing a gift with an intent to influence a bank employee, in violation of Title 18, United States Code, Sections 215(a)(1) and 2. The maximum penalties for Count 13 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
- Count 14 charges the defendant with money laundering, in violation of Title 18, United States Code, Section 1957. The maximum penalties for Count 14 are a term of imprisonment of ten years; a fine of $250,000.00; a term of supervised release of three years; and a $100 special assessment.
Mr. Bailey made his initial appearance today before Chief United States Magistrate Judge Mary Pat Thynge. His next court appearance, an arraignment on the charges, is set for Wednesday, February 19, 2014, at 1:00 p.m.
The Indictment alleges that Mr. Bailey, the former head of Commercial Real Estate and Delaware Market Manager of the Wilmington Trust Co., engaged in a twelve-year lending relationship with James A. Ladio, the former Chief Lending Officer at Artisans’ Bank and Chief Executive Officer of MidCoast Community Bank. According to the Indictment, the defendant and Ladio approved approximately twenty-three loans and modifications to each other through their positions at Wilmington Trust, Artisans, and MidCoast, respectively. The loan relationship, as alleged in the Indictment, is summarized in the attached chart. The Indictment further alleges that the aggregate amount of all the loan facilities was in excess of $1.5 million.
United States Attorney Oberly said, “The Indictment alleges that the defendant entered into a long-term scheme with another banker to provide multiple loans to each other on terms not available to the general public, all the while failing to disclose their relationship to their respective banks. This Office remains steadfast in its continuing commitment to combat financial fraud and corruption, and to deter other individuals from similar alleged misconduct.”
“Brian Bailey is the second officer charged with bank fraud conspiracy at Wilmington Trust, a TARP bank that ended up being acquired by another TARP bank,” said Christy Romero, Special Inspector General for TARP (SIGTARP). SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud by officers of TARP banks, and perpetrators will be held accountable for their crimes.”
"The indictment of this bank official alleges the misuse of his position of trust within his corporation," said Special Agent in Charge Akeia Conner, IRS Criminal Investigation. "The IRS, along with our law enforcement partners, is committed to investigating individuals who use their position to commit fraud and to abuse public trust.”
The case was investigated by the Federal Bureau of Investigation; the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Internal Revenue, Service Criminal Investigation Division, and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz, Lesley F. Wolf, and Ilana H. Eisenstein.Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.
APPENDIX A
Date Recipient Bank/Loan No. Loan Amt. Description
July 9, 2001
Ladio
WTC
(9003)$29,000.00
Interest-only, six-month commercial demand line of credit
Jan. 4, 2002
Bailey
Artisans
$34,000.00
Automobile Loan for Ford F-150 Truck
Jan. 22, 2002
Bailey
Artisans
$40,000.00
Automobile Loan for Mercedes E-Series Sedan
Jan. 30, 2002
Ladio
WTC
(9004)$22,000.00
Interest-only, six -month commercial demand loan
Feb. 6, 2002
Bailey
Artisans
$33,000.00
Automobile Loan for Porsche Boxster
July 3, 2002
Ladio
WTC
(9005)$27,000.00
Interest-only, six month commercial demand loan (extension of Jan. 2002 loan, adding $5,000.00 in additional funds; extended again, at same terms, on Dec. 23, 2002)
Oct. 8, 2003
Bailey
Artisans
$15,000.00
Unsecured consumer demand loan
Nov. 18, 2003
Ladio
WTC
(9006)$69,138.46
Five-year term loan issued to pay- off $29K and $27K loans, set forth above, and for working capital
Date Recipient Bank/Loan No. Loan Amt. Description
June 30, 2004
Bailey
Artisans
$20,000.00
Interest-only commercial working capital line of credit
Aug. 13, 2004
Ladio
WTC
$9,000.00
(1001/1099)Interest-only, commercial working capital demand line of credit
Sept. 29, 2004
Ladio
WTC
$20,000.00
(1101/1199)Interest-only, unsecured working capital line of credit
April 4, 2005
Ladio
WTC
$150,000.00
(1201/1299)Interest-only unsecured commercial demand line of credit
May 3, 2006
Bailey
Artisans
$175,000.00
(3281)Two-year, interest-only, commercial line of credit
May 3, 2006
Ladio
WTC
$165,000.00
(5001)Interest-only, commercial demand line of credit with three-year expiration
March 14, 2007
Ladio
WTC
$225,000.00
(5101)Unsecured, interest-only commercial line of credit
Dec. 4, 2007
Bailey
MidCoast
$200,000.00
(1003)
Five year commercial loan, the proceeds of which were used to pay-off May 2006 Artisans loan.May 30, 2008
Bailey
MidCoast
$33,000.00
(1011)Consumer Loan to refinance a 2007 Mercedes E-Class Sedan
Sept. 9, 2008
Ladio
WTC
$285,000.00
(5101)Increase in March 2007 line, adding $60,000.00 and changing to a demand loan
Date Recipient Bank/Loan No. Loan Amt. Description
Nov. 10, 2008
Bailey
MidCoast
$37,000.00
(1016)Eighteen-month, unsecured consumer term loan
Aug. 7, 2009
Bailey
MidCoast
$70,000.00
(1000)Three-year, interest-only, unsecured consumer line of credit
March 31, 2010
Bailey
MidCoast
$100,000.00
(1000)Increase in Aug. 2009 line of credit by $30,000.00
July 12, 2010
Ladio
WTC
$615,162.13
Forbearance agreement between Ladio and WTC after WTC called four outstanding Ladio demand loans
Oct. 29, 2010
Ladio
MidCoast Cust. A
$650,000.00
Private loan secured by Ladio, in part, to make payments under Forbearance Agreement obligations with WTC
July 14, 2011
Ladio
MidCoast Cust. B
$650,000.00
Private loan secured by Ladio to pay off outstanding balance under Forbearance Agreement to WTC
May 23, 2013
Bailey
MidCoast
$90,000.00
Secured, home equity line of credit, the proceeds of which were used to pay-off $100,000.00 unsecured MidCoast line of credit
Former Wilmington Trust Officer Indicted on Bank Fraud, Bank Bribery, and Money LaunderingRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Brian D. Bailey, age 51 of Middletown, DE, was charged on February 4, 2014, in a fourteen-count Indictment with the following offenses:
- Count 1 charges the defendant with Conspiracy to Commit Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 1349. The maximum penalties for Count 1 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100 special assessment; and mandatory restitution.
- Count 2 charges the defendant with Conspiracy to Commit Bank Bribery, in violation of Title 18, United States Code, Sections 215 and 371. The maximum penalties for Count 2 are a term of imprisonment of five years; a fine of $250,000.00; a term of supervised release of two years; a $100.00 special assessment; and mandatory restitution.
- Counts 3 through 11 charge the defendant with Bank Fraud, in violation of Title 18, United States Code, Sections 1344 and 2. The maximum penalties for each of Counts 3-11 are a term of imprisonment of thirty years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
- Count 12 charges the defendant with receipt of a gift for procuring a loan, in violation of Title 18, United States Code, Sections 215(a)(2) and 2. The maximum penalties for Count 12 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
- Count 13 charges defendant with unlawfully providing a gift with an intent to influence a bank employee, in violation of Title 18, United States Code, Sections 215(a)(1) and 2. The maximum penalties for Count 13 are a term of imprisonment of 30 years; a fine of $1,000,000.00; a term of supervised release of five years; a $100.00 special assessment; and mandatory restitution.
- Count 14 charges the defendant with money laundering, in violation of Title 18, United States Code, Section 1957. The maximum penalties for Count 14 are a term of imprisonment of ten years; a fine of $250,000.00; a term of supervised release of three years; and a $100 special assessment.
Mr. Bailey made his initial appearance today before Chief United States Magistrate Judge Mary Pat Thynge. His next court appearance, an arraignment on the charges, is set for Wednesday, February 19, 2014, at 1:00 p.m.
The Indictment alleges that Mr. Bailey, the former head of Commercial Real Estate and Delaware Market Manager of the Wilmington Trust Co., engaged in a twelve-year lending relationship with James A. Ladio, the former Chief Lending Officer at Artisans’ Bank and Chief Executive Officer of MidCoast Community Bank. According to the Indictment, the defendant and Ladio approved approximately twenty-three loans and modifications to each other through their positions at Wilmington Trust, Artisans, and MidCoast, respectively. The loan relationship, as alleged in the Indictment, is summarized in the attached chart. The Indictment further alleges that the aggregate amount of all the loan facilities was in excess of $1.5 million.
United States Attorney Oberly said, “The Indictment alleges that the defendant entered into a long-term scheme with another banker to provide multiple loans to each other on terms not available to the general public, all the while failing to disclose their relationship to their respective banks. This Office remains steadfast in its continuing commitment to combat financial fraud and corruption, and to deter other individuals from similar alleged misconduct.”
“Brian Bailey is the second officer charged with bank fraud conspiracy at Wilmington Trust, a TARP bank that ended up being acquired by another TARP bank,” said Christy Romero, Special Inspector General for TARP (SIGTARP). SIGTARP and our law enforcement partners will aggressively investigate allegations of fraud by officers of TARP banks, and perpetrators will be held accountable for their crimes.”
"The indictment of this bank official alleges the misuse of his position of trust within his corporation," said Special Agent in Charge Akeia Conner, IRS Criminal Investigation. "The IRS, along with our law enforcement partners, is committed to investigating individuals who use their position to commit fraud and to abuse public trust.”
The case was investigated by the Federal Bureau of Investigation; the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Internal Revenue, Service Criminal Investigation Division, and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz, Lesley F. Wolf, and Ilana H. Eisenstein.Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.
APPENDIX A
Date Recipient Bank/Loan No. Loan Amt. Description
July 9, 2001
Ladio
WTC
(9003)$29,000.00
Interest-only, six-month commercial demand line of credit
Jan. 4, 2002
Bailey
Artisans
$34,000.00
Automobile Loan for Ford F-150 Truck
Jan. 22, 2002
Bailey
Artisans
$40,000.00
Automobile Loan for Mercedes E-Series Sedan
Jan. 30, 2002
Ladio
WTC
(9004)$22,000.00
Interest-only, six -month commercial demand loan
Feb. 6, 2002
Bailey
Artisans
$33,000.00
Automobile Loan for Porsche Boxster
July 3, 2002
Ladio
WTC
(9005)$27,000.00
Interest-only, six month commercial demand loan (extension of Jan. 2002 loan, adding $5,000.00 in additional funds; extended again, at same terms, on Dec. 23, 2002)
Oct. 8, 2003
Bailey
Artisans
$15,000.00
Unsecured consumer demand loan
Nov. 18, 2003
Ladio
WTC
(9006)$69,138.46
Five-year term loan issued to pay- off $29K and $27K loans, set forth above, and for working capital
Date Recipient Bank/Loan No. Loan Amt. Description
June 30, 2004
Bailey
Artisans
$20,000.00
Interest-only commercial working capital line of credit
Aug. 13, 2004
Ladio
WTC
$9,000.00
(1001/1099)Interest-only, commercial working capital demand line of credit
Sept. 29, 2004
Ladio
WTC
$20,000.00
(1101/1199)Interest-only, unsecured working capital line of credit
April 4, 2005
Ladio
WTC
$150,000.00
(1201/1299)Interest-only unsecured commercial demand line of credit
May 3, 2006
Bailey
Artisans
$175,000.00
(3281)Two-year, interest-only, commercial line of credit
May 3, 2006
Ladio
WTC
$165,000.00
(5001)Interest-only, commercial demand line of credit with three-year expiration
March 14, 2007
Ladio
WTC
$225,000.00
(5101)Unsecured, interest-only commercial line of credit
Dec. 4, 2007
Bailey
MidCoast
$200,000.00
(1003)
Five year commercial loan, the proceeds of which were used to pay-off May 2006 Artisans loan.May 30, 2008
Bailey
MidCoast
$33,000.00
(1011)Consumer Loan to refinance a 2007 Mercedes E-Class Sedan
Sept. 9, 2008
Ladio
WTC
$285,000.00
(5101)Increase in March 2007 line, adding $60,000.00 and changing to a demand loan
Date Recipient Bank/Loan No. Loan Amt. Description
Nov. 10, 2008
Bailey
MidCoast
$37,000.00
(1016)Eighteen-month, unsecured consumer term loan
Aug. 7, 2009
Bailey
MidCoast
$70,000.00
(1000)Three-year, interest-only, unsecured consumer line of credit
March 31, 2010
Bailey
MidCoast
$100,000.00
(1000)Increase in Aug. 2009 line of credit by $30,000.00
July 12, 2010
Ladio
WTC
$615,162.13
Forbearance agreement between Ladio and WTC after WTC called four outstanding Ladio demand loans
Oct. 29, 2010
Ladio
MidCoast Cust. A
$650,000.00
Private loan secured by Ladio, in part, to make payments under Forbearance Agreement obligations with WTC
July 14, 2011
Ladio
MidCoast Cust. B
$650,000.00
Private loan secured by Ladio to pay off outstanding balance under Forbearance Agreement to WTC
May 23, 2013
Bailey
MidCoast
$90,000.00
Secured, home equity line of credit, the proceeds of which were used to pay-off $100,000.00 unsecured MidCoast line of credit
Former U.S. Marine Reservist Sentenced to Five Years for Federal Child Pornography ConvictionRead the Press Release
ALBUQUERQUE – Lee Baca, 23, a former U.S. Marine Reservist who resides in Albuquerque, N.M., was sentenced this morning to five years in federal prison followed by five years of supervised release for his child pornography conviction. Baca will be required to register as a sex offender after he completes his prison sentence.
Baca was charged on June 26, 2013, in a five-count indictment charging him with three counts of receipt of visual depictions of minors engaged in sexually explicit conduct and two counts of possession of visual depictions of minors engaged in sexually explicit conduct. According to the indictment, Baca received child pornography between Dec. 2012 and Feb. 2013, and possessed child pornography in March 2013, in Bernalillo County, N.M. Baca was arrested on June 29, 2013 by Homeland Security Investigations (HSI) agents, and has been in federal custody since that time.
On Sept. 25, 2013, Baca entered a guilty plea to Count 1 of the indictment, a receipt of child pornography charge. In his plea agreement, Baca acknowledged that the investigation leading to his arrest began in Oct. 2012, when an agent with the New Mexico Attorney General’s Office (NMAGO) working in an undercover capacity identified an IP Address that was being used to participate in the distribution of child pornography. On March 5, 2013, after investigation revealed that the IP Address was subscribed to Baca’s residence, HSI agents and officers of the Albuquerque Police Department (APD) executed a federal search warrant at Baca’s residence and seized Baca’s computers and computer-related media.
In his plea agreement, Baca admitted to participating in a voluntary interview while the search was ongoing and telling the agents and officers that he used file-sharing programs to download child pornography. Baca acknowledged that an ongoing forensic examination of his computers and computer-related media uncovered more than 2000 videos and images consistent with child pornography. Baca also acknowledged that an examination of the images and videos on his computers and computer-related media by the National Center for Missing and Exploited Children revealed 564 images and seven videos of 47 children who have been identified as child pornography victims and have been rescued.
This case was investigated by the Albuquerque office of HSI, the NMAGO and APD. The case was prosecuted by Assistant U.S. Attorney Marisa A. Lizarraga as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 74 federal, state and local law enforcement agencies associated with the ICAC Task Force, which is funded by a grant administered by the NMAGO. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.Former St. Landry Parish School Board Member Sentenced to 33 Months in Prison for Bribery ChargesRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that former St. Landry Parish School Board member Quincy Richard Sr., 51, of Opelousas, La., was sentenced by U.S. District Judge Richard T. Haik to 33 months in prison for one count of conspiracy to commit bribery and two counts of bribery. He was also ordered to serve three years of supervised release and to pay a $10,000 fine. A jury found him guilty after a two-day trial on August 20, 2013.
During trial, the witness testimony and documents presented revealed that Quincy Richard was shown to have conspired with fellow St. Landry Parish School Board member John Miller, 72, of Opelousas, to receive bribe money from former school board superintendent candidate Joseph Cassimere in return for their support. In July, August and September of 2012, Richard and Miller had a number of private meetings with Cassimere where they negotiated price and payment from Cassimere in exchange for their favorable individual votes as school board members in support of Cassimere’s candidacy for superintendent. At the same time the screening process for the superintendent position was ongoing, and by the week of September 16, 2012, five applicants had been publicly named; the final vote was scheduled for September 26, 2012. Unknown to both school board members, Cassimere had reported Richard and Miller’s plans to the authorities and became a cooperating party in the investigation.
The defendants met with Cassimere on September 24, 2012, at the Quarters Restaurant in Opelousas and received $5,000 each in return for their votes. During the conversation, they made it clear that Cassimere’s payment was for their services, efforts, influence, and due diligence relating to the votes of other members of the school board who would support Cassimere’s candidacy. Trial testimony revealed that Richard advised Cassimere that he could recoup the $10,000 bribe by adding that amount to his salary request. Richard and Miller provided Cassimere with instructions on how to justify the salary increase since it was above the amount advertised for the superintendent’s position. The September 24, 2012 discussion was videoed and surveilled by the FBI. After the defendants exited the restaurant, they were confronted by agents who recovered the $5,000 payments in the possession of Quincy and Miller.Miller was indicted on October 24, 2012, and resigned from his position as a school board member on July 28, 2013. He pleaded guilty to conspiracy to commit bribery on July 1, 2013. Miller was sentenced on November 19, 2013, to home detention for 10 months and ordered to pay a $15,000 fine.
“This closes the door on a very unfortunate chapter for the School Board in Opelousas,” Finley stated. “Quincy Richard was thinking only of himself and not about the children, the community and the School Board he was elected to serve. This sentence should send a message that public corruption will not be tolerated. I hope the Opelousas School Board can now move forward to take care of the important work that needs to be addressed for the citizens of Opelousas.”
“Public corruption is unacceptable within any level or function of government, but when it infiltrates our schools and future generations of the citizenry, there is an even greater need for full accountability,” said Michael J. Anderson, FBI Special Agent in Charge, New Orleans Division.
The Federal Bureau of Investigation, Alexandria Resident Agency, conducted the investigation with the assistance of the U.S. Department of Education, Office of Inspector General. Assistant U.S. Attorney Howard C. Parker prosecuted the case.Former Littleton Police Officer Sentenced to 48 Months in Federal Prison for Firearm and Drug TraffickingRead the Press Release
DENVER – Jeffery Allan Johnston, age 46, of Parker, Colorado, was sentenced yesterday by U.S. District Court Judge Philip A. Brimmer to serve 48 months in federal prison, followed by 3 years of supervised release for firearm and drug trafficking crimes, United States Attorney John Walsh and Federal Bureau of Investigation (FBI) Denver Division Special Agent in Charge Thomas Ravenelle announced. Judge Brimmer also ordered a preliminary order of $25,000 in asset forfeiture in lieu of forfeiture of his residence, which was used to facilitate his criminal conduct. That money will be paid into the federal asset forfeiture fund. At the conclusion of the hearing Judge Brimmer ordered Johnston be remanded into the custody of the U.S. Marshals.
Johnston was first arrested based on a Criminal Complaint issued on July 19, 2013. He then waived his Constitutional right to indictment, and was charged by Information on August 15, 2013. He pled guilty before Judge Brimmer on October 28, 2013. He was sentenced yesterday, February 3, 2014.
According to court documents, including the stipulated facts contained in the plea agreement, as well as other court documents, in April 2012, a source told law enforcement that he (the source) attended a party at Johnston’s home. While at the party, the source claims he observed behavior consistent with the use of illegal drugs. On July 16, 2013, a source received a message from Johnston. In cooperation with the FBI, the source returned Johnston’s call and had a coded conversation about providing Johnston with MDMA. On July 19, 2013, the source, working with the FBI, traveled to Johnston’s residence. Through monitored and recorded calls before the meeting, the source had agreed to deliver 75 MDMA pills to Johnston. The source and Johnston then met at Johnston’s residence. The exchange of money and MDMA took place in the kitchen of the residence. Johnston received approximately 9.9 grams of MDMA, in the form of 37 pills and 6.3 grams of powder MDMA. Johnston paid the source $1,300 for the drugs. Following the transaction, Johnston was taken into custody and a federal search warrant was executed at the residence.
During the search agents found the MDMA used during the controlled exchange in a kitchen drawer. They also found a stainless steel Colt Officers Model .45 caliber pistol located in a small black bag, loaded with seven rounds in the magazine and one in the chamber located above the kitchen drawer that contained the drugs. Investigators eventually located a small amount of cocaine, steroids, hundreds of prescription pills, additional firearms, and hundreds of rounds of ammunition in the residence. They also found 8 other firearms, including an AR-15 and two 12 gauge shotguns. At all pertinent times, the defendant was employed as a sworn police officer.
“As a police officer who violated the public’s trust, a four year federal prison sentence is just and appropriate given the circumstances,” said U.S. Attorney John Walsh. “The fact that Johnston was involved in trafficking illegal drugs while also serving as a law enforcement officer is particularly disturbing.”
“Yesterday’s sentencing illustrates that public servants are not above the law and must be held accountable for failing to uphold their oath to maintain the public’s trust,” said FBI Denver Special Agent in Charge Thomas Ravenelle.
"Jeff was a good officer who dedicated twenty years to the Littleton community,” said Littleton Police Department Chief Doug Stephens. “His private life choices have cost him greatly and should serve as an example of how drugs ruin lives."
This case was investigated by the Federal Bureau of Investigation (FBI) with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) who traced the firearms.
Johnston was prosecuted by Assistant U.S. Attorneys Guy Till and David Conner with assistance regarding the asset forfeiture from Assistant U.S. Attorney Tonya Andrews.
Former Federal Bureau of Prisons Employee Charged with Fraudulently Obtaining Compensation BenefitsRead the Press Release
James L. Santelle, the United States Attorney for the Eastern District of Wisconsin, announced that Christopher A. Seifer (age: 43) of Westfield, Wisconsin, has been indicted by a federal grand jury in Milwaukee. The indictment charges Mr. Seifer with four counts of mail fraud, in violation of Title 18, United States Code § 1341, and one count of theft of government property, in violation of Title 18, United States Code, § 641.
The indictment alleges that Mr. Seifer submitted over 1,380 false and fraudulent claim forms seeking reimbursement from the federal government for mileage expenses he falsely claimed to have incurred by driving to health clubs for rehabilitation. The indictment alleges that Mr. Seifer did not, in fact, travel to the health clubs on at least 1,380 of the dates, between March 28, 2006 and October 2, 2012, for which Mr. Seifer sought reimbursement of travel expenses.As a result of the false travel-expense claims, according to the indictment, Mr. Seifer fraudulently obtained over $87,289.99 in reimbursement payments from the Department of Labor’s Office of Workers Compensation Program, which provides disability-related benefits to federal workers who suffer disabilities as a result of work-related injuries. According to the indictment, Mr. Seifer had formerly been employed by the United States Bureau of Prisons as an Electronics Technician at the Federal Correctional Institution in Oxford, Wisconsin.
Each of the mail fraud counts subjects Mr. Seifer to a possible term of imprisonment of up to twenty years, a fine of up to $250,000, or both; a mandatory $100 special assessment; and up to three years of supervised release. The theft of government property count subjects Mr. Seifer to a possible term of imprisonment of up to 10 years, a fine of up to $250,000, or both, plus a mandatory $100 special assessment and up to three years of supervised release.
In announcing this indictment, James L. Santelle, United States Attorney for the Eastern District of Wisconsin commented: “This prosecution and others like it reflect our continuing, focused work in investigating and prosecuting those individuals, including employees of the federal government, who wrongly use taxpayers’ monies for their own purposes. The partnership among the United States Department of Labor and the United States Department of Justice in identifying and cataloguing the many instances of fraud, as alleged in this indictment, is not only critical to our appropriate response to behaviors involving false claims but also reflects the unified mission and strategy of all law enforcement entities here in Eastern Wisconsin.”
“These efforts reflect the importance of ongoing collaboration between federal agencies” stated John Oleskowicz, Special Agent in Charge of the United States Department of Justice, Office of Inspector General, Chicago Field Office. Oleskowicz continued “We hope that this prosecution will deter others from stealing federal funds.”
This case has been investigated by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering & Fraud Investigations and The U.S. Department of Justice Office of the Inspector General, Chicago Field Office. An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Former Employee of Local Oil Company Pleads Guilty to Wire Fraud in A Scheme to Defraud EmployerRead the Press Release
Kevin D. Dowell, 37, of St. Louis, Missouri, entered a plea of guilty in federal district court to wire fraud in a scheme to defraud and embezzle from the FKG Oil Company, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Dowell faces a prison sentence of up to 20 years, a fine of up to $250,000, up to 3 years of supervised release after serving his sentence, and mandatory restitution. Sentencing has been scheduled for May 30, 2014.
As part of the plea, Dowell admitted that while he was the Manager of the Human Resources Department of FKG Oil Company in Belleville, Illinois, and during the time period mid-2010 to April 2013, he falsified mileage expense reports, used a company credit card for personal expenses, and would transfer funds electronically from the company’s bank account directly to his personal bank account in Missouri. Dowell admitted that he caused a direct loss of $87,419 and an additional $26,565 in investigative expenses for a total loss of $113,984.
This crime was reported to the Belleville Police Department and a full investigation was performed by a third party firm. At completion of the full investigation, the case was turned over to the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Norman R. Smith.
Falsifying expense reports is a crime. To report suspicious activity to the F.B.I. call (217) 522-9675 or email [email protected]. To report public corruption, call (877) 884-7633 or (877) U-TIP-OFF. To report health care fraud, call (888) 557-9503.)
Former Cumberland Man Pleads Guilty to Bank Fraud and Tax Evasion ChargesRead the Press Release
Contact: Halsey B. Frank
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Walter
Scott Fox, 56, formerly of Cumberland, Maine, and now of Canton, Georgia, pleaded guilty in
U.S. District Court to bank fraud and tax evasion charges.
According to court documents, from 1995 until 2011, Fox used his position as a loan
officer at Casco Northern Bank and at its successor, KeyBank, to originate or authorize over
$14,000,000 in fraudulent loans and lines of credit using the identities of four real individuals,
without their knowledge or consent. He used over $5,800,000 of the fraudulent proceeds to keep
the loans current and prevent the detection of his scheme. He used almost $8,200,000 for
personal expenses including to pay for his children’s educations and family vacations, and to
support his business, “The Boathouse.” Fox failed to report receiving any of this income to the
Internal Revenue Service (“IRS”) causing a tax loss of over $1,300,000 between 2006 and 2011.The scheme was discovered in 2012 when KeyBank denied an increase for one of the
credit lines because it did not fit the model for its community development loans. With no funds
available to make payments and keep the scheme afloat, all the fraudulent loans became
delinquent by August, 2012. Fox abruptly resigned his position at KeyBank on September 7,
2012 when a supervisor became concerned about the delinquent loans and made inquiries about
the status of his loan portfolio.Fox faces a sentence of up to 30 years of imprisonment and a fine of up to twice the gain
or loss on the bank fraud charge and up to five years and a fine of up to twice the loss on the tax
evasion charge. He will be sentenced after the completion of a presentence investigation report
by the United States Probation Office.
The case was investigated by the Federal Bureau of Investigation and IRS - Criminal
Investigations.