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25 March 2014
Former IRS Employee Indicted for Taxpayer ID Theft, Tax Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former employee of the Internal Revenue Service is among three defendants who have been indicted for stealing taxpayers’ identity information in order to receive fraudulent tax refunds.
Taylor S. Knight, 32, and Michael J. Moore, 27, both of Kansas City, Mo., and Michael Stalcup, 42, of Farley, Mo., were charged in a six-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Tuesday, March 18, 2014. The indictment was unsealed and made public today upon their arrests and initial court appearances.
According to the indictment, Knight worked as an employee of the IRS at the office at 333 W. Pershing Rd., Kansas City, from March 2009 to January 2012. Taylor allegedly abused her position of trust by accessing the information of three taxpayers without authorization.
On Sept. 30, 2011, Knight allegedly used the information from two of the victim taxpayers to submit a bogus online application for three prepaid debit cards. These debit cards were issued and mailed to the residence of Moore’s grandmother, the indictment says. Moore allegedly monitored the mail sent to his grandmother’s address and retrieved the three prepaid debit cards.
For one of the victim taxpayers, the indictment says, Knight submitted a bogus online application for a prepaid debit card that was approved and mailed to an address in Oak Grove, Mo.; this debit card was never used. The indictment alleges that Knight submitted this false online application to test whether her scheme to defraud the IRS was viable.
On Oct. 17, 2011, one of the conspirators allegedly submitted a 2010 tax return for two of the victim taxpayers, who were married and filed their taxes jointly. The IRS approved a $46,572 refund, the indictment says, of which $5,000 was deposited on a debit card that had been obtained by Knight. The IRS attempted to deposit the remaining $41,572 refund on the other debit cards obtained by Knight, according to the indictment, but the receiving banks rejected the deposits.
Moore allegedly telephoned the IRS and falsely claimed to be the victim. He allegedly provided the IRS representative pertinent personal identification information for both victims and requested the IRS to send the remaining tax refund to a new address located in Independence, Mo. Moore identified this address, the indictment says, because it was his former residence and he knew it was unoccupied.
In August 2011, the victim taxpayers filed legitimate amended tax returns. According to the indictment, a $46,734 refund check was sent to the Independence address. Moore allegedly received the refund check at his former residence and gave it to Knight. Knight allegedly paid Stalcup $500 to help her cash the refund check. Knight allegedly obtained false identification documents – including Social Security cards and driver’s licenses – so that she and Stalcup could assume the identity of the victim taxpayers. They attempted to cash the refund check at a local gas station, but the business refused and reported the incident to law enforcement.
The federal indictment charges Knight, Moore and Stalcup with participating in a conspiracy to defraud the United States by using the identification of genuine taxpayers to fraudulently induce the IRS into issuing tax refund payments based on false information submitted by co-conspirators.
In addition to the conspiracy, Knight and Moore are charged together with one count of the theft of government money, two counts of aggravated identity theft, one count of mail fraud and one count of the misuse of a Social Security number.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Trey Alford. It was investigated by the Treasury Inspector General for Tax Administration.Former Financial Advisor Sentenced to 24 Months in Prison on Bank Fraud ChargesRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that Christopher Williams of Bryant, Arkansas appeared before United States District Judge Susan Weber Wright to be sentenced for bank fraud. After receiving testimony from the case agent and a letter written on behalf of the elderly lead victim, Judge Wright sentenced Williams to 24 months’ imprisonment to be followed by 5 years’ of supervised release. Judge Wright also ordered Williams to pay over $200,000 in restitution to the victims of his offense.
A federal grand jury indicted Williams in January 2013 on charges of bank fraud and aggravated identity theft. Williams pled guilty to bank fraud in December 2013. When entering his plea, Williams admitted that after losing his job as a financial adviser at Charles Schwab in June 2012, he reestablished contact with a former client. During visits to the client’s Little Rock home, Williams obtained sensitive financial account information that he used to access the client’s online account at Bank of America and also deceived the client into signing personal checks made payable to third-party organizations under Williams’s control. Williams then used the client’s personal identifiers to create an E*TRADE online brokerage account to facilitate the transfer of money out of the client’s Bank of America account and opened credit cards in the client’s name for Williams’s own personal use. The scheme persisted until his arrest in December 2012.
The United States Attorney acknowledges the valuable assistance of Special Agent Charles Briscoe of the Office of the Inspector General for the Social Security Administration, Special Agent Lee Wood of the United States Secret Service, and Special Agent Amy Briscoe of the United States Naval Criminal Investigative Service for their extraordinary work on this investigation. Assistant United States Attorney Alexander D. Morgan prosecuted the case for the United States.
Former Army National Guard Soldier Pleads Guilty in Connection with Bribery and Fraud Scheme <br /> to Defraud the U.S. Army National Guard BureauRead the Press Release
A former soldier of the U.S. Army National Guard has pleaded guilty for his role in a bribery and fraud scheme that caused approximately $70,000 in losses to the U.S. Army National Guard Bureau, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Former Sergeant First Class Michael Rambaran, 51, of Pearland, Texas, pleaded guilty today to one count of conspiracy, one count of bribery and one count of aggravated identity theft. Sentencing is scheduled for June 24, 2014 before U.S. District Judge Lee H. Rosenthal in Houston.
The case arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against 25 individuals, 22 of whom have pleaded guilty.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP). The G-RAP was a recruiting program that offered monetary incentives to Army National Guard soldiers who referred others to join the Army National Guard. Through this program, a participating soldier could receive bonus payments for referring another individual to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.
Rambaran admitted that between approximately February 2008 and August 2011, while he was a recruiter for the National Guard, he obtained the names and Social Security numbers of potential soldiers and provided them to recruiting assistants so that they could use the information to obtain fraudulent recruiting referral bonuses by falsely claiming that they were responsible for referring those potential soldiers to join the Army National Guard, when in fact they were not. In exchange for the information, Rambaran admitted that he personally received a total of approximately $29,000 in payments from the recruiting assistants.
Co-conspirators Edia Antoine, Ernest A. Millien III and Melanie Moraida pleaded guilty to conspiracy and bribery in connection to this scheme. Antoine and Millien are each scheduled to be sentenced on Aug. 24, 2014. Moraida is scheduled to be sentenced on Aug. 26, 2014. All of these sentencing hearings are set before U.S. District Judge Rosenthal in Houston.
Another alleged co-conspirator, Christopher Renfro, who was indicted on Aug. 7, 2013, remains charged with two counts of wire fraud and two counts of aggravated identity theft. Trial is currently scheduled for June 16, 2014, before U.S. District Judge Rosenthal in Houston. An indictment is only an accusation, and a defendant is presumed innocent unless and until proven guilty.
The cases are being investigated by special agents from the San Antonio Fraud Resident Agency of Army CID’s Major Procurement Fraud Unit. This case is being prosecuted by Trial Attorneys Sean F. Mulryne, Heidi Boutros Gesch and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas.Former Air National Guard Recruiting Assistant Pleads Guilty to Conspiracy to Defraud Department of DefenseRead the Press Release
Max P. Andolsek, 52, of Tullahoma, Tenn., pleaded guilty yesterday in U.S. District Court to conspiracy to defraud the Department of Defense, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Andolsek, a former recruiting assistant for the Air National Guard, and two other individuals, were indicted on July 17, 2013. He faces up to five years in prison and a fine of $250,000.
“Our nation’s men and women who are considering serving their country through enlistment in the military deserve to be dealt with candidly and with honesty,” said U.S. Attorney David Rivera. “Recruiters are the first faces of the military seen by many considering service. Those who attempt to profit financially by fraudulently manipulating our nation’s recruitment programs undermine their effectiveness, particularly when we are experiencing lean financial times for our nation’s defense. All attempts to defraud our nation’s military will be vigorously pursued by this office and our law enforcement partners.”
“Recruitment into the United States Military should be about service to one’s country and not service to one’s wallet,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “This plea is the result of the efforts of the FBI and our law enforcement partners to investigate and bring to justice any who would commit blatant and outrageous fraud against the United States.”
According to evidence presented at the plea hearing, between December 2006 and July 2009, Andolsek conspired with Aaron L. Osborne, a full-time Air National Guard recruiter, to make materially false statements or representations to the Department of Defense in order to embezzle money from the Air National Guard Recruiting Assistance Program (“G-RAP”).
Andolsek admitted to the Court that he had contracted with Document and Packaging Brokers, Inc. (“Docupak”), a U.S. Department of Defense contractor, to administer the G-RAP Program, which was designed to allow airmen, officers, and retirees of the Air National Guard to voluntarily serve as recruiting assistants. To participate in the G-RAP Program these individuals were required to complete an online application. Recruiting assistants were selected by Docupak from the pool of applicants and then received online training, including instruction as to eligibility to serve, financial issues, Air Force core values, and ethics.The G-RAP Program was also designed to encourage recruiting assistants to reach out in their communities to find qualified individuals, who were not already working with a full time recruiter, to become Air National Guard Airmen. Once a recruiting assistant identified a qualified potential airman, they would enter the information into the G-RAP website. If the person actually enlisted in the Air National Guard, a $1,000 pre-loaded VISA card would be mailed to the recruiting assistant.
Under the program regulations, full time and temporary Air National Guard recruiters were not eligible to participate in the G-RAP initiative and to be eligible to receive payment, recruiting assistants had to be the first contact with a potential airman.
G-RAP program regulations also prohibited payments being split with a full time or temporary recruiter.At his plea hearing, Andolsek admitted that Osborne, a full-time recruiter, was the first to receive the contact information of various potential airmen and then supplied that information to Andolsek. Andolsek would then enter the information on the Docupak website and receive a $1,000 payment loaded onto a VISA card each time. Whenever Andolsek made a subsequent entry that one of the potential airmen had started boot camp, he received an additional $1,000 payment loaded to the VISA card. Most of the times that Andolsek received a $1,000 payment, he paid $300 of the proceeds to Osborne.
Andolsek will be sentenced on October 10, 2014. Provisions outlined in the plea agreement require that Andolsek make restitution in the amount of at least $14,000.
Aaron Osborne and co-defendant Arvalon Michelle Harleston, both from Clarksville, Tenn. are scheduled for trial on September 23, 2014, before United States District Court Judge Kevin H. Sharp.
An indictment is merely an accusation and is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the Federal Bureau of Investigation and the Tennessee Bureau of Investigation. Assistant United States Attorney Kathryn Ward Booth represents the government.
Federal, State, and Local Effort Yields 41 Indictments for Drugs, Firearms, and Counterfeiting in Obion and Weakley CountiesRead the Press Release
Jackson, TN – At least 36 individuals were arrested today in Obion and Weakley Counties as part of a combined federal, state, and local investigation of criminal activity in the area, announced U.S. Attorney Edward L. Stanton III; ATF Special Agent in Charge Jeff Fulton; and 27th District Attorney General Thomas A. Thomas.
Twelve federal indictments were unsealed today accusing 18 individuals of a variety of charges, including illegal firearm possession, illegal drug trafficking, and counterfeiting. In addition to those charged federally, General Thomas’s office announced 22 indictments were returned naming 23 individuals on state charges.
The following individuals were charged by a federal grand jury. The potential penalties each one is facing can be found on the chart attached to this release.
John Barnett III, 27, of Martin, TN, is charged with three counts of distribution of cocaine base (crack cocaine), one count of distribution of less than 50 kilograms of marijuana, and one count of being a felon in possession of a firearm.
Edwynn Taylor, 28, of Martin, TN, is charged with two counts of distribution of cocaine and one count of possession with intent to distribute cocaine base (crack cocaine).
Charles Macklin, 41, of Martin, TN, is charged with one count of distribution of cocaine base (crack cocaine), one count of possession with intent to distribute cocaine base (crack cocaine), and one count of distribution of cocaine.
Peter Graves, 36, of Martin, TN, is charged with one count of distribution of cocaine and one count of distribution of cocaine base (crack cocaine).
Eric West, 24, of Martin, TN, is charged with two counts of distribution of cocaine and two counts of distribution of less than 50 kilograms of marijuana.
Terrence Carter, 24, of Martin, TN is charged with one count of distribution of less than 50 kilograms of marijuana.
Johnson Davis, 30, of Martin, TN, is charged with one count of distribution of cocaine.
Tony Darnell Edwards, a/k/a Tony Darnell Scott, 41, of Martin, TN, is charged with one count of distribution of cocaine base (crack cocaine) and one count of distribution of cocaine.
Emanuel Ray Harris, 36, of Martin, TN, is charged with two counts of distribution of cocaine base (crack cocaine).
James Courtney Shane, 31, of Martin, TN, is charged with one count of distribution of cocaine base (crack cocaine).
Dante Brock, 33, of Martin, TN, is charged with one count of distribution of cocaine base (crack cocaine).
Laquinte Ingram, 36, of Union City, TN, is charged with two counts of distribution of cocaine base (crack cocaine).
Cedric Jones, 34, of Bradford, TN is charged with two counts of distribution of cocaine and one count of distribution of cocaine base (crack cocaine).
Cory Gentry, 40, of Union City, TN, is charged with one count of distribution of cocaine base (crack cocaine) and one count of distribution of cocaine.
Robbin Jones, 34, of Martin, TN, is charged with one count of distribution of cocaine base (crack cocaine) and one count of distribution of cocaine.
Ricky Booker, 24, of Martin, TN, is charged with one count of distribution of cocaine.
Anthony Brown, 29, of Martin, TN, is charged with two counts of distribution of cocaine base (crack cocaine).
Christopher Mitchell, 24, and Laura Petty 27, of Union City, TN, are each charged with one count of counterfeiting Federal Reserve Notes.
More than 100 individuals from law enforcement agencies across West Tennessee assisted in the early morning takedown, including FBI, DEA, ATF, U.S. Marshal’s Service, U.S. Secret Service, Tennessee Bureau of Investigation (TBI), Tennessee Highway Patrol, 27th Judicial Drug Task Force, Martin Police Department, Weakley County Sheriff’s Department, Union City Police Department, Obion County Sheriff’s Department, Milan Police Department, Dyersburg Police Department, Jackson Police Department Special Weapons and Tactics (SWAT), and Shelby County Sheriff’s Office SWAT.
This case is being investigated by the ATF, the FBI, the TBI, the Martin Police Department, the Weakley County Sheriff’s Department, the Union City Police Department, and the Obion County Sheriff’s Department. Assistant United States Attorneys Vic Ivy, James Powell, and Matt Wilson are representing the government.# # # #
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.Fairfield Woman Sentenced to 14 Months on Immigration, Money Laundering and Tax ChargesRead the Press Release
Contact: Donald E. Clark
Assistant United States Attorney
Tel: (207) 780-3257Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Mei
Juan Zhang, 31, of Fairfield, Maine, was sentenced today in U.S. District Court by Chief Judge
John A. Woodcock, Jr. to 14 months of imprisonment to be followed by 3 years of supervised release for harboring undocumented aliens for commercial advantage and private financial gain, money laundering conspiracy, and conspiracy to file false employer's quarterly federal tax returns. She was also ordered to pay restitution of $54,288 to the Internal Revenue Service. Zhang pled guilty to the charges on April 18, 2013.According to court records, between 2009 and 2011, the defendant was the manager of the Grand Asian Buffet and the Super China Buffet, located on Kennedy Memorial Drive in
Waterville. In that capacity, she managed a Chinese buffet restaurant that brought undocumented aliens into Maine to work, had them work six to seven days per week, twelve hours per day, housed them in a cramped residence on Oak Street in Waterville, transported them back and forth each day to work, paid them under the table with cash generated illegally by the employment of undocumented aliens, and filed numerous false quarterly employment tax returns in which the undocumented aliens were not disclosed and employment taxes were not properly withheld or paid. The investigation revealed that about half of the employees at the buffet over that period were undocumented, and that the defendant’s activities concealed about $250,000 in wages and thwarted the collection of about $55,000 in employment taxes.
The investigation was conducted by the U.S. Immigration and Customs Enforcement’s
Homeland Security Investigations, the Internal Revenue Service, Criminal Investigation, the U.S.
Department of Labor, Office of Inspector General, Office of Labor Racketeering & Fraud
Investigations, with assistance from the Waterville Police Department.Eagle Butte Man Charged with Sexual Abuse of A MinorRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Sexual Abuse of a Minor.
Kendahl Clown, age 20, was indicted on March 11, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 19, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 15 years in custody and/or a $250,000 fine, at least 5 years up to life of supervised release, with a violation of a condition of release possibly resulting in 5 years of additional incarceration on any such revocation, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between May 1, 2013, and June 30, 2013, Clown engaged in and attempted to engage in a sexual act with a minor.
The charge is merely an accusation and Clown is presumed innocent until and unless proven guilty.The investigation is being conducted by the Federal Bureau of Investigation and the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Clown was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Copley Man Pleads Guilty to Defrauding Investors Out of $1.8 MillionRead the Press Release
A Copley man pleaded guilty to a 14-count criminal information for operating a fraudulent investment scheme which caused investors to lose approximately $1.8 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Anthony Davian, 34, pleaded guilty to one count of securities fraud, two counts of mail fraud, four counts of wire fraud, and seven counts of money laundering. He is scheduled to be sentenced July 2.
“This defendant deceived clients to line his own pockets,” Dettelbach said. “We will continue to aggressively pursue cases in which investors are cheated out of their savings.”
The information charges that between July 2008 and July 2013, Davian used his hedge fund, Davian Capital Advisers, LLC, to promote and sell securities to at least 20 investors across several states, resulting in $1.8 million in overall investor loss.
Davian purported to sell securities in the form of shares in the various funds he created and controlled, including Davian Capital, Rubber City Gravity, Rubber City Pure Alpha, Cleveland Precious Metals Fund, and others. Instead, he used the investors’ monies to redeem earlier investors, enrich himself and pay off personal expenses, such as the purchase of an Audi Q7 Prestige, according to the information.
The investigation revealed that Davian cajoled investors’ into giving him hundreds of thousands of dollars by claiming to manage hundreds of millions of dollars to make himself appear more sophisticated than he really was and by falsifying client account statements, according to the information.
This case is being prosecuted by Assistant U.S. Attorneys Christos N. Georgalis, Matthew Cronin and James Morford following an investigation by agents of the United States Secret Service, the Internal Revenue Service and the United States Postal Service.
Clermont Woman Indicted for Tax Fraud and Aggravated Identity TheftRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal grand jury has returned an indictment charging Tanya Fox (38, Clermont) with 1 count of conspiracy to defraud the government, 5 counts of wire fraud, 10 counts of theft of government property, and 10 counts of aggravated identity theft. If convicted, she faces a maximum penalty of 10 years’ imprisonment on the conspiracy count, 20 years in prison on the wire fraud counts, 10 years in prison for the theft of government property counts, and an additional 2 years’ imprisonment for the aggravated identity theft charges, to be served consecutively to any sentence imposed on the previous charges. The indictment also notifies the defendant that the United States is seeking a money judgment of $4,055,735 for the wire fraud and theft of government property charges.
Fox was arrested and made her initial appearance on March 25, 2014, before U.S. Magistrate Judge Philip R. Lammens. She was detained pending further proceedings.
According to the indictment, Fox orchestrated a scheme to file fraudulent tax returns using identities that were stolen from a variety of sources. She would direct other individuals to open business bank accounts in the name of a fraudulent tax preparation business and have the tax refunds deposited into those accounts. Fox would then work with those individuals to withdraw the funds.
Previously, Shanterica Smith, Gerald Williams, and Delray Duncan were convicted and sentenced for providing over 2,200 names from the Orange County Health Department to Fox so that she, or a co-conspirator, could file over $3.9 million in fraudulent tax returns. Further, as part of this scheme, Fox purchased a number of automobiles, furniture, and other lifestyle items. In total, the United States alleges that Fox filed attempted to file fraudulent tax returns totaling over $5.8 million.
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 Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and the United States Postal Inspection Service. It is being prosecuted by Assistant United States Attorney Shawn P. Napier.
Chapmanville Man Pleads Guilty to Selling Prescription PainkillersRead the Press Release
CHARLESTON, W.Va. – A Chapmanville, W.Va. man who sold the powerful prescription painkiller oxymorphone, commonly sold under the brand name Opana, pleaded guilty today to a federal drug charge, announced U.S. Attorney Booth Goodwin. Carl Tomblin, 50, pleaded guilty to distribution of oxymorphone before United States District Judge John T. Copenhaver, Jr. in Charleston.
On five separate occasions in December of 2013, Tomblin sold oxymorphone to a confidential informant in exchange for cash. Tomblin admitted to law enforcement that he had been purchasing and distributing oxymorphone from approximately May of 2013 through January of 2014.
Tomblin tested positive for the drug Benzodiazepine, commonly known as Valium or Xanax. As a result, the court ordered Tomblin released on home confinement with electronic monitoring. Tomblin faces up to 20 years in federal prison when he is sentenced on June 25, 2014.
The investigation was conducted by the U.S. 119 Task Force and the West Virginia State Police. Assistant United States Attorney Haley Bunn is handling the prosecution.
The prosecution is part of an ongoing effort by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
Carbondale Man Sentenced in Madison County Tax Sale SchemeRead the Press Release
Follow @SDILNewsThe United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Barrett R. Rochman, 71 of Makonda, Ill., was sentenced in United States District Court in East St. Louis, Ill., for violating the Sherman Antitrust Act.
Evidence argued at the sentencing hearing established that Rochman participated in a price fixing scheme orchestrated by former Madison County Treasurer Fred Bathon. Bathon structured the Madison County tax sale to permit the tax buyers to charge distressed homeowners inflated interest rates from 2005-2008 in exchange for campaign contributions.
Rochman was sentenced to 16 months in prison, to serve three (3) years supervised release, to pay a $30,000 fine and a special assessment of $100. The sentence was the maximum sentence recommended by the United States Sentencing Guidelines. Former Treasurer Fred Bathon, along with tax buyers Scott McLean and John Vassen have all been previously sentenced to federal prison for their roles in this scheme.
Arguments made in court revealed that Rochman’s lawyer had reached out to prosecutors before he was charged and offered to pay a large settlement in lieu of prosecution or in exchange for a misdemeanor plea. Prosecutors said that Rochman’s conduct was too serious to be resolved solely by way of a settlement or a reduced plea and that they would not create the perception, or the reality, that one defendant would be able to buy his way out of trouble. US Attorney Wigginton noted, “Whether the case involves an elected official, a local attorney, or a wealthy businessman, my office will ensure accountability. No amount of money offered will interfere with the administration of justice.”
The charges allege that at Illinois tax lien auctions, investors bid to purchase tax lien certificates issued against delinquent tax payers. Investors are supposed to compete to purchase these tax liens by bidding on the interest rate the property owner will be required to pay prior to redeeming the tax lien attached to the owner's property. The bid opens at no more than the statutory maximum of 18% and through a competitive bidding process can be driven as low as 0 percent. The bidder offering the least penalty percentage rate, i.e., the bidder who is willing to allow the owner to redeem his property for the smallest penalty, is allowed to purchase the tax lien. As such, competitive bidding benefits financially distressed homeowners by reducing the amount of money that they have to pay to save their home from foreclosure; however, that same system reduces the profit made by tax buyers. Tax buyers prefer to receive high interest rates, which corresponds to higher profits.
For the tax sales conducted in 2005-2008, Fred Bathon structured the tax sales in a way that eliminated competitive bidding and allowed the tax buyers to engage in price fixing by only bidding the statutory maximum interest rate of 18%. The tax buyers who pled guilty today were charged with making campaign donations to Bathon in exchange for receiving property tax liens at non-competitive interest rates.
By 2007 and 2008, the bid rigging and price fixing was so pervasive that distressed homeowners were charged the statutory maximum interest rate on nearly every property tax lien sold. During the tax auction occurring November 14-15, 2007, 2,549 out of 2,574 property tax liens were awarded to bidders for the statutory maximum interest rate of 18%, which represented 99.03% of the property tax liens auctioned. During the tax auction occurring November 13-14, 2008, 2,290 out of 2,364 property tax liens were awarded to bidders for the statutory maximum interest rate of 18%, which represented 96.86% of the property tax liens auctioned.
United States Attorney Wigginton observed that if Rochman were sincere in his desire to pay back those affected, that he could agree to do so by putting the money in some sort of escrow account. “Rochman is encouraged to make victims whole by helping repay their losses. What he is not free to do is to use his fortune to evade criminal responsibility.”
The investigation was conducted through the Metro East Public Corruption Task Force by agents from the Internal Revenue Service, and the Federal Bureau of Investigation. The case is being prosecuted by US Attorney Stephen R. Wigginton and Assistant United States Attorney Steven D. Weinhoeft.
Canadian Man Sentenced for Defrauding Elderly VictimsRead the Press Release
Received Thirty Months in Prison for Stealing from Vulnerable Seniors
ALBANY, NEW YORK – JASON S. KATZ, age 47, of Quebec, Canada, was sentenced today to thirty months in prison by United States District Court Judge Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent-in-Charge Nicholas J. DiNicola. The defendant was also fined $10,000 and required to pay restitution of $8,000 to two victims. The sentence follows KATZ’s September 27, 2013 guilty plea to two counts of wire fraud. Judge D’Agostino ordered that KATZ begin serving his sentence immediately.
According to the plea agreement, between May and August 2012, KATZ was involved in an international telemarketing scheme targeting elderly victims. The victims, ages 95 and 86 at the time, were repeatedly solicited over the telephone and instructed to wire tens of thousands of dollars to KATZ’s bank account in Plattsburgh, NY. The victims were told the money would be used to help arrange for the release of the victim’s child or grandchild from a Mexican jail and to pay fines associated with traffic accidents. At times, the caller impersonated the victim’s child or grandchild. KATZ was in Europe on a cruise in July 2012 when one of the victims wired him $42,000 under the belief that the funds would be used to help procure the release of her grandson from a Mexican jail. Judge D’Agostino described the fraud as “despicable.”
This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations, the Columbia Township Police Department in Brooklyn, Michigan, and the Waterloo, New York Police Department. The case was prosecuted by Assistant United States Attorney Wayne A. Myers.
California Man Sentenced to Federal Prison for Racially Motivated Assault on White Man and African-American WomanRead the Press Release
Billy James Hammett, 30, of Marysville, Calif., was sentenced today by U.S. District Judge John A. Mendez to serve 87 months in prison for violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act in a 2011 racially motivated attack against a white man and an African-American woman in Marysville. The court also ordered Hammett to pay restitution in the amount of $175 and to serve three years of supervised release following his prison sentence. Hammett pleaded guilty on Dec. 17, 2013, and his co-defendants, Perry Sylvester Jackson, 28, and Anthony Merrell Tyler, 33, have also pleaded guilty and are awaiting sentencing.
According to documents filed with the court, around 10:45 p.m. on April 18, 2011, a white man and an African-American woman parked their car at a convenience store in Marysville. Shortly afterward, the three defendants, each of whom has white supremacist tattoos, attacked the man and woman based on race. After calling the male victim a “[racial slur]-lover,” Jackson punched him twice in the head through the open passenger window. At the same time, Hammett kicked the woman in the chest. A few seconds later, Tyler smashed the car’s windshield with a crowbar. As the attack continued, the woman managed to take refuge inside the convenience store. All three assailants then descended upon the male victim and began attacking him in the parking lot. He sustained abrasions on his right forearm and knees, while the woman suffered bruising to her chest. At the end of the incident, Tyler used a racial slur to refer to an African-American witness.
In sentencing the defendant, Judge Mendez said he found surveillance video footage of the assault “disturbing.” He noted that Hammett’s attack on the victims was “unprovoked and unwarranted,” and that the victims continue to suffer.
During the sentencing hearing, Judge Mendez also specifically considered Hammett’s background and criminal history, which includes a conviction in 2006 for assaulting a 72-year-old black man, also in Marysville. According to court records, Hammett made racial comments immediately before the unprovoked attack. In addition, Hammett has been affiliated with a number of white supremacist gangs, including Supreme White Power. He has tattoos of the words “white power” across his abdomen, a large swastika on the right side of his torso and the word “skinhead” written across the top of his back. Judge Mendez stated during the sentencing hearing that Hammett poses “a serious threat to the public.”
“The defendant and his associates accosted the victims in public and assaulted them because of their race,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The department is committed to stamping out racial violence and will continue to prosecute hate crimes vigorously.”
“Racially-motivated violence has no place in civilized society,” said U.S. Attorney Benjamin B. Wagner for the Eastern District of California. “This office has a history of prosecuting those who perpetrate crimes of hate, and as long as these crimes continue, we will be there to enforce the law and uphold this nation’s constitutional values.”
Jackson is scheduled to be sentenced on April 22, 2014, and Tyler is scheduled to be sentenced on July 8, 2014. Each defendant faces a statutory maximum sentence of 10 years in prison and a fine of $250,000.
This case was investigated by the FBI with the assistance of the Yuba County Sheriff's Office and the Yuba County District Attorney's Office. The case is being prosecuted by U.S. Attorney Wagner and Trial Attorney Chiraag Bains of the Justice Department's Civil Rights Division.
California Man Indicted on Charges of Domestic Violence Resulting in Death of A SpouseRead the Press Release
Baltimore, Maryland - A federal grand jury has indicted Dellando Recardo Campbell, age 31, of Lemoore, California, on charges of interstate domestic violence resulting in the death of a spouse, in connection of the death of Serika Dunkley Holness. The indictment was returned on February 5, 2014. Campbell, who was arrested in California on February 7, 2014, was transported to Maryland. Campbell had an initial appearance today in U.S. District Court in Baltimore and was detained, pending a detention hearing scheduled for Friday, March 25, 2014.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
The indictment alleges that Campbell conspired with Ryan Dave Holness to murder Ryan Holness’ wife, Serika Dunkley Holness. DNA evidence found in Holness’ car, which was recovered in Washington, D.C. the day after the murder, link Campbell to the crime.According to DNA and other evidence presented at Ryan Holness’ two week trial, Ryan Holness devised a scheme to bring his wife from New York to Maryland for the murder. On June 4, 2009, Holness and his wife traveled from New York to Maryland. Serika Holness was found murdered, stabbed multiple times in Kent County, Maryland, on June 5, 2009. Ryan Holness was convicted of domestic violence resulting in the death of a spouse and sentenced to life in prison.
If convicted, Campbell faces a maximum sentence of life in prison.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the Maryland State Police and FBI for their work in the investigation and thanked the Kings County, California, District Attorney’s Office for its assistance. Mr. Rosenstein thanked Assistant United States Attorney John F. Purcell, who is prosecuting the case.
CEO of Bankrupt Sentinel Management Group Convicted in $500 Million Fraud Scheme Before Firm’s 2007 CollapseRead the Press Release
CHICAGO ― The chief executive officer of the bankrupt Sentinel Management Group, Inc., was convicted today of defrauding more than 70 customers of over $500 million before the firm collapsed in August 2007. The defendant, ERIC A. BLOOM, misappropriated securities belonging to customers by using them as collateral for a loan that Sentinel obtained from Bank of New York Mellon Corp., which was used, in part, to purchase millions of dollars’ worth of highrisk, illiquid securities not for customers, but for a trading portfolio maintained for the benefit of Sentinel=s officers, including Bloom, members of his family, and corporations controlled by the Bloom family.
A federal jury deliberated less than two hours after a four-week trial in U.S. District Court before returning guilty verdicts on 18 counts of wire fraud and one count of investment adviser fraud. The case is one of the largest financial fraud cases ever prosecuted in Federal Court in Chicago.
Bloom, 49, of Northbrook, remains free on bond while awaiting sentencing, which was not scheduled pending post-trial motions. Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or, alternatively, a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater, and restitution is mandatory. The investment adviser fraud count carries a maximum penalty of five years in prison and a $250,000 fine. The government is also seeking a forfeiture judgment of more than $500 million. The Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
Sentinel was located in suburban Northbrook and managed short-term cash investments of futures commission merchants, commodity pools, hedge funds, and other customers. Sentinel’s head trader, Charles K. Mosley, 50, of Vernon Hills, pleaded guilty last October to two counts of investment adviser fraud and is awaiting sentencing.
“Sentinel was sinking like the Titanic,” Assistant U.S. Attorney Clifford Histed told the jury in closing arguments. “Sentinel was not a victim of the credit crisis,” he said, adding that the “financial crisis merely exposed the fraud” that had been going on for years.
According to the evidence at trial, Bloom, the president and CEO of Sentinel who was responsible for its day-to-day operations, misled customers four days before Sentinel declared bankruptcy by blaming Sentinel=s financial problems on the “liquidity crisis” and “investor fear and panic” when he knew that the actual reasons for Sentinel=s financial problems were its purchase of high-risk, illiquid securities, excessive use of leverage, and the resulting indebtedness on the Bank of New York loan, which had a balance exceeding $415 million on Aug. 13, 2007. Sentinel declared bankruptcy on Aug. 17, 2007.
Between January 2003 and August 2007, Bloom fraudulently obtained and retained under management more than $1 billion of customers’ funds by falsely representing the risks associated with investing with Sentinel, the use of customers’ funds and securities, the value of customers’ investments, and the profitability of investing with Sentinel. Bloom used customers’ securities invested in Sentinel=s “125 Portfolio” and its “Prime Portfolio” as collateral for its loan with Bank of New York to purchase millions of dollars’ worth of high-risk, illiquid collateralized debt obligations (CDOs).
Bloom lied about customers’ investments and engaged in an undisclosed trading strategy with Sentinel’s own “House Portfolio,” which they traded for the benefit of themselves and Bloom family members. The undisclosed trading strategy included extensive borrowing and a high concentration of CDOs that were inconsistent with the representations Bloom made to customers regarding separate investment portfolios. The undisclosed strategy affected all customers, regardless of the trading portfolio in which they were invested, because Bloom directed employees to use customers’ securities as collateral when Sentinel borrowed money from the Bank of New York and so-called “repo” lenders, and then used the borrowed money to carry out the undisclosed trading strategy. (Under a repurchase agreement, known as a “repo,” a party such as Sentinel, effectively a borrower, sold securities to a counterparty, effectively a lender, with an agreement to repurchase the securities at a later date.)
As part of the fraud scheme, Bloom falsely represented the returns generated by the securities in each Sentinel portfolio to customers. Rather than giving customers the actual returns generated by a particular portfolio, Bloom directed employees on a daily basis to pool the trading results for all of Sentinel’s portfolios and then allocated the returns to the various portfolios as they saw fit. To conceal the scheme, to encourage customers to invest additional funds, and to otherwise lull customers, Bloom on a daily basis caused false and misleading account statements to be created and distributed to customers, including via email. These account statements reported returns earned by customers without disclosing that the returns actually were allocated by Bloom and his employees and were not the result of the market performance of the customers’ particular portfolios. The account statements also listed the purported value of securities being held by each portfolio without disclosing that the securities were being used as collateral for Sentinel’s loan from Bank of New York.
In July and August 2007, Bloom knew that Sentinel was approaching insolvency and that defaulting on the Bank of New York loan was a real possibility, yet he caused Sentinel to take in more than $100 million in customers’ money and continued to conceal Sentinel’s true financial condition from customers.
The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago. Also assisting in the investigation were the Labor Department=s Employee Benefits Security Administration, the Commodity Futures Trading Commission, and the Securities and Exchange Commission. The CFTC and the SEC filed separate civil enforcement lawsuits following the collapse of Sentinel, which remains in bankruptcy proceedings.
The government is being represented by Assistant U.S. Attorneys Clifford C. Histed and Patrick M. Otlewski.
Brooklyn, N.Y., Man Admits Traveling to New Jersey to Violently Extort Divorce Consent from Reluctant HusbandRead the Press Release
TRENTON, N.J. - A Brooklyn, N.Y., man admitted today in Trenton federal court to traveling to New Jersey in order to coerce a Jewish man to give his wife a religious divorce – referred to as a “get” – through threats of violence, U.S. Attorney Paul J. Fishman announced.
Simcha Bulmash, 30, pleaded guilty today before U.S. District Judge Freda L. Wolfson to an information charging him with traveling in interstate commerce to commit extortion. His bail conditions include a $500,000 bond and GPS monitoring.
According to documents filed in this case and statements made in court:
On Oct. 9, 2013, Bulmash and a group of conspirators – including Jay Goldstein, 59, Moshe Goldstein, 31, Avrohom Goldstein, 34, David Hellman, 31, Ariel Potash, 40, Binyamin Stimler, 38, and Sholom Shuchat, 29 – traveled from New York to a warehouse in Edison, N.J., with the intent of forcing a Jewish man to give his wife a “get,” a divorce document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.
Bulmash admitted that when he arrived at the warehouse, the group met with an individual who, unbeknownst to them, was an undercover FBI agent posing as the husband’s brother in law. Bulmash admitted that they discussed a plan and prepared to confine, restrain and threaten the victim.
The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 68, and Martin Wolmark, 55 – in connection with the scheme. Hellman pleaded guilty to an information charging him with traveling in interstate commerce to commit extortion on March 6, 2014. Moshe and Avrohom Goldstein pleaded guilty to the same charge on March 11, 2014. The charges against the remaining alleged conspirators remain pending. All of the defendants reside in Brooklyn, except Potash and Wolmark, who live in Monsey, N.Y.
During his guilty plea proceeding, Bulmash also admitted that on Aug. 22, 2011, he and others went to a residence in Brooklyn where they restrained, assaulted and injured a man in an attempt to extort a divorce from him. That conduct will be considered by the court during sentencing, currently scheduled for July 10, 2014.
Bulmash faces a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked the Lakewood, N.J., Police Department for their role.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.
The pending charges and allegations against related defendants are merely allegations, and they are considered innocent unless and until proven guilty.
14-104
Defense counsel: Robert C. Gottlieb Esq., New York
Bulmash, Simcha Information
Brighton Man Sentenced for Defrauding InvestorsRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that John Zdanecis, 79, of Brighton, N.Y., who was convicted of mail fraud, was sentenced to five years probation by U.S. District Judge Charles G. Siragusa. The defendant was also ordered to pay $82,500 in restitution to victims.
Assistant U.S. Attorney John J. Field, who handled the case, stated that the defendant solicited investors to participate in a commodities trading pool, Comtra Limited, that he controlled. Zdanecis then used most of the money for personal and business expenses, and did not invest it in commodities as promised. To conceal his scheme, the defendant sent his investors periodic account statements that were false and misrepresented the true condition of the investments. As a result of the fraud, investors lost more than $160,000.
At sentencing, the defendant was subject to a recommended sentencing guideline range of 33 to 41 months in prison.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation.Brazilian Removed Three Times from US Charged with Illegal Re-entry After DeportationRead the Press Release
PITTSBURGH - An alien found in Pittsburgh has been indicted by a federal grand jury in Pittsburgh on a charge of illegal re-entry after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Valber Silva-Brito, 26, of Brazil, as the sole defendant.
According to the indictment presented to the court, Valber Silva-Brito, an alien, was formally removed from the United States by United States Immigration and Customs Enforcement on Oct. 16, 2007, Jan. 10, 2008 and Sept. 16, 2010. Valber Silva-Brito was found to be illegally present in Pittsburgh on June 9, 2013.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bookkeeper for Northern Kentucky Bank Admits Stealing over $100,000Read the Press Release
COVINGTON, KY -A longtime bookkeeper for a Northern Kentucky Bank admitted in federal court that she embezzled more than $100,000 from her employer, over a three year period.
Linda Penick, 58, of Dry Ridge, KY., pleaded guilty on Tuesday to bank embezzlement, before U.S. District Court Judge David L Bunning.
Penick admitted that, from 2010 until 2013, she defrauded the Grant County Deposit Bank, by transferring bank funds to her personal account and issuing cashier checks and money orders to herself. Many of these checks and money orders were made payable to her husband. Penick admitted that she used the money to pay bills and taxes.
According to the plea agreement, Penick embezzled $118,775.00, over a three year period. Penick worked at the bank for 23 years.
Penick waived her right to be indicted by a grand jury and pled guilty to the embezzlement charge by way of an information.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye K. Turner, Special Agent in Charge, FBI, jointly made the announcement.
The investigation was conducted by the FBI. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Laura K. Voorhees.
Penick is scheduled to be sentenced on July 22, 2014. The bank embezzlement offense carries a maximum penalty of 30 years in prison and a maximum fine of $1 million. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Beaver Falls Man Sentenced to 9 Years in Prison for Violating Federal Drug and Gun LawsRead the Press Release
PITTSBURGH – One resident of Beaver Falls, Pa., has been sentenced in federal court to 108 months in prison followed by five years supervised release on his conviction of violating federal narcotics and firearms laws, United States Attorney David J. Hickton announced today.
Senior United States District Judge Gustave Diamond imposed the sentence on Anitwon Maurice Peoples, 31.
According to information presented to the court, from on or about Dec. 4, 2009, and continuing thereafter to on or about Sept. 30, 2011, Peoples conspired with others to possess with the intent to distribute and to distribute 500 grams or more of cocaine. Additionally, on or about Sept. 30, 2011, Peoples, being a convicted felon, illegally possessed a Taurus 9mm semi-automatic pistol. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm.
Assistant United States Attorneys Katherine A. King and Troy Rivetti prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the federally administered Organized Crime and Drug Enforcement Task Force (OCDETF) comprised of members drawn from the Drug Enforcement Administration, the Pennsylvania State Police, the Internal Revenue Service - Criminal Investigation Division, and the Beaver Falls Police Department for the investigation leading to the successful prosecution of Peoples.
Attorney Sent to Prison for Her Role in Mortgage FraudRead the Press Release
RALEIGH – The United States Attorney’s Office announces that in federal court yesterday Chief United States District Judge James C. Dever III sentenced former attorney AMY ROBINSON, 36, of Rolesville, to 18 months imprisonment followed by 3 years of supervised release. The Court further ordered ROBINSON to make restitution of $2,613,046.37 to various banks and other victims.
The Criminal Information and other evidence showed that between 2002 and 2006, James Thomas Webb(previously sentenced to 237 months in prison) was operating a company identified as Alpine Properties, LLC. Webb promised investors that he and Alpine Properties would use investor money to purchase homes at a low value, renovate the homes, and then sell them to first-time home buyers for a higher value. During that time period, ROBINSON was a licensed North Carolina attorney who closed real estate transactions for Webb and his investors.
Evidence established that ROBINSON and Webb systematically falsified the HUD-1 settlement statements associated with numerous sales of properties from Alpine Properties to Webb’s investors. The HUD-1s contained numerous false statements and misrepresentations, including the amount of money the borrower brought to closing, the payment of closing funds to secondary, prior lien holders, and the amount of money actually paid to Webb. Each HUD-1 also contained a false certification by Webb and ROBINSON that the settlement statements were true and accurate reflection of all receipts and disbursements made by or on behalf of the parties to the transactions. ROBINSON transmitted the false documents to the lenders and banks by mail and wire. The banks and lenders relied upon the statements in issuing loans for the sale of properties from Webb’s companies to his investors.
Ultimately, after the collapse of Alpine Properties, many of the loans on the properties went into default, resulting in millions in losses to various banks and lenders. At the sentencing, the Court held ROBINSON accountable for $2,613,046.37 in losses and ordered ROBINSON to make restitution to the victims of the offense.
ROBINSON pleaded guilty on May 3, 2010 to Conspiracy to Commit Wire, Mail, and Bank fraud, in violation of Title 18, United States Code, Section 371.
Investigation of this case was conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, the United States Department of Housing and Urban Development Office of the Inspector General, and the Federal Deposit Insurance Corporation Office of the Inspector General, with the assistance of the North Carolina State Bar. Assistant United States Attorney William M. Gilmore represented the United States.
Armed Career Criminal Handed 15+ Year Prison SentenceRead the Press Release
CORPUS CHRISTI, Texas – Joel Sanchez Jr., 44, of Corpus Christi, will now be serving 188 months in federal prison following his conviction of being a felon in possession of a firearm, announced United States Attorney Kenneth Magidson. He entered a plea of guilty Nov. 7, 2013.
Late yesterday, U.S. District Judge Janis Graham Jack handed Sanchez his sentence which will be followed by five years of supervised release. Sanchez had previously been convicted in state court for numerous felonies and was determined to be an armed career criminal by the court.
On July 19, 2013, agents and officers executed a federal search warrant at Sanchez’s Corpus Christi residence. The search warrant was based on information that Sanchez was selling crack cocaine from his residence and the purchase of 3.1 grams of crack cocaine by agents during an undercover operation. During the search, agents located a Sig Sauer Model 2022, 9mm pistol in Sanchez’s room.
In federal custody since his arrest, Sanchez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charge stems from an investigation by the Bureau of Alcohol. Tobacco, Firearms and Explosives and the Corpus Christi Police Department Gang Unit. Assistant U.S. Attorney Hugo R. Martinez is prosecuting.
Appeals Court Affirms Conviction of Rochester Asbestos Contractor Violating Clean ActRead the Press Release
ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that the United States Court of Appeals for the Second Circuit affirmed the November 2010 conviction of asbestos contractor Keith Gordon-Smith, owner of Gordon-Smith Contracting. The defendant was convicted after a jury trial of multiple counts of violating the Clean Air Act and was sentenced in September 2011 to 72 months in prison and ordered to pay $300,000 in restitution by Judge Charles J. Siragusa. The company, also convicted at trial, was ordered to pay $44,000 in fines.
This is the second significant development involving environmental prosecutions and the Clean Air Act in the past several days. On March 19, 2014, the United States Attorney’s Office obtained a $24 million fine and restitution order against Tonawanda Coke for a decades long release of the poisonous gas Benzene from its production facilities which, a jury found after trial, also violated the Federal Clean Air Act.
“These cases show the commitment of this Office to protecting the community and environment, while also ensuring a level playing field for all who conduct business in this area,” U.S. Attorney Hochul said.
According to Assistant U.S. Attorney Joseph J. Karaszewski, who handled the appeal on behalf of the Government, the Court of Appeals rejected Gordon-Smith’s argument that evidence presented at trial was insufficient and therefore his conviction should be overturned. The Court of Appeals ruled that the evidence presented by the Government was sufficient to support the jury’s verdict.
Specifically, the defendant argued that there was not enough evidence to support the claim that he violated the Clean Air Act by failing to notify the Environmental Protection Agency before beginning asbestos removal at Cobbles Elementary School in Penfield, N.Y. The Court ruled that the failure to notify the EPA was deliberate, and not the result of “carelessness or some other innocent reason,” as Gordon-Smith claimed.
The jury convicted Gordon-Smith of multiple counts of failure to notify the EPA about asbestos related work done on several sites within the Western District of New York. Federal law requires that a contractor notify the EPA prior to performing any work which would disturb a jurisdictional amount of asbestos so that inspectors can ensure that proper safeguards are in place. Gordon-Smith performed major asbestos abatement or renovation work at several area projects, including schools, colleges, and the Genesee hospital complex, without ever notifying the appropriate federal agency. When EPA Criminal Investigators visited the sites, they found asbestos left behind on pipes, walls, in utility rooms and other places. Several of those locations required additional asbestos abatement to remove the material left behind.
The Gordon Smith case was investigated by Special Agents of the United States Environmental Protection Agency, Criminal Investigation Division, under the direction of William Lometti; the United States Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Cheryl Garcia; Occupational Safety Health Administration, Buffalo Office, under the direction of Art Dube, and the New York State Department of Labor, Asbestos Control Bureau, under the direction of Maureen Cox.Adams Man Charged with Possession of Child PornographyRead the Press Release
BOSTON – An Adams man was charged yesterday in U.S. District Court in Springfield with possessing child pornography.
William Guinan, 51, of Adams, Mass., was charged in an Information with possessing material involving the sexual exploitation of a minor. Pursuant to a plea agreement also filed, Guinan has agreed to a sentence of between 37 and 46 months in prison and five to 15 years of supervised release.
In October 2012, a federal agent used a computer program to conduct a search for individuals engaged in receiving, possessing, and distributing child pornography over a peer-to-peer filing sharing (P2P) network. The program successfully downloaded several files of child pornography from an IP address that agents later determined was connected to a residence in Adams. Based upon this investigation, agents obtained and executed a federal search warrant for the residence in November 2012. A computer that contained numerous files of child pornography, including three video files that were downloaded in November 2012, was located. During the execution of the search warrant, Guinan stated that he used the computer and that approximately four days earlier, he downloaded these three files of child pornography using the P2P network.
On Nov. 29, 2012, federal agents arrested Guinan. He was charged in a criminal complaint with receiving material involving the sexual exploitation of a minor. The Information filed today charges Guinan with possessing child pornography.
United States Attorney Carmen M. Ortiz and Bruce Foucart, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in New England, made the announcement. The case was investigated with assistance from the Massachusetts State Police and the Adams Police Department. It is being prosecuted by Assistant United States Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
The details contained in the information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
21 KC-area Men Indicted for Distributing Cocaine, Crack CocaineRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that 21 Kansas City, Mo., area men have been indicted by a federal grand jury, in a series of separate, but related, indictments for distributing cocaine and crack cocaine in Jackson County, Mo.
Law enforcement officers arrested 12 defendants in an operation today. During the course of the investigation, officers seized more than five kilograms of cocaine, approximately $200,000 and six firearms.
Three indictments were returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, March 19, 2014. The federal indictments were unsealed and made public today upon the arrests and initial court appearances of the defendants.
USA v. Piggie, et al
Frenklyn Piggie, 36, Olufemi Siffre, 36, James Caldwell, 36, Kidada Clayborn, also known as “Goldie,” 36, Robert Clark, 33, Frederick D. Clark, 20, David Ramsey, 52, Dawawn Orr, 33, Nathaniel Morris, 43, Kenneth Harvey, 27, Ronnie Prewitt, 32, Ryan Wilson, 34, Dennis Griffin, 55, Brian Whitley, 36, Maurice L. Campbell, 48, Leon Lee, also known as “JJ,” 33, Jerome L. Barnes, 33, all of Kansas City, Mo.; DeMichael Johnson, also known as “Shaq,” 35, of Raytown, Mo.; and Jesus Frye-Santoyo, 28, of Kansas City, Kan., were charged in a 43-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, March 19, 2014.
The federal indictment alleges that all of the defendants participated in a conspiracy to distribute five kilograms or more of cocaine and crack cocaine in Jackson County from Jan. 1, 2013, to March 19, 2014.
In addition to the conspiracy, Piggie and Frye-Santoyo are charged together in one count of possessing five kilograms or more of cocaine with the intent to distribute. Other defendants are also charged in various counts related to distributing cocaine and crack cocaine.
Piggie is also charged with one count of possessing a firearm in furtherance of drug-trafficking crimes and one count of being a felon in possession of a firearm. Frederick Clark is also charged with one count of possessing a firearm in furtherance of a drug-trafficking crime.
USA v. Bell
Terrell Bell, 29, of Raytown, Mo., is charged with one count of participating in a conspiracy to distribute cocaine and crack cocaine from Sept. 1 to Dec. 1, 2013. Bell is also charged with two counts of distributing crack cocaine.
USA v. Reed
Monroe E. Reed, 34, of Kansas City, Mo., is charged with seven counts of distributing crack cocaine and two counts of possessing crack cocaine with the intent to distribute.
Reed is also charged with possessing firearms in furtherance of drug-trafficking crimes. Reed allegedly was in possession of an S & W .22-caliber rifle, a Century Arms 7.62-caliber rifle, a Hi-Point .45-caliber rifle, a Bersa .38-caliber pistol, an Armi Tanfoglio .25-caliber pistol and a Lorcin .380-caliber pistol on Oct. 30, 2012.
Dickinson cautioned that the charges contained in these indictments are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
These cases are being prosecuted by Assistant U.S. Attorney Brent Venneman. They were investigated by the FBI, the Kansas City, Mo., Police Department and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
24 March 2014
Watertown Man Sentenced in Synthetic Drug CaseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Watertown, South Dakota, man convicted of Possession with Intent to Distribute a Controlled Substance Analogue was sentenced on March 18, 2014, by U.S. District Judge Karen E. Schreier.
Joshua Allen Hayhurst, age 25, was sentenced to time served (11 months) and 2 years supervised release.
Hayhurst was indicted by a federal grand jury on December 4, 2012, for Possession with Intent to Distribute a Controlled Substance Analogue. He pled guilty on April 15, 2013.
On June 29, 2012, law enforcement executed a search warrant for Hayhurst’s residence in Watertown, and recovered approximately two pounds of an illegal drug, commonly referred to as spice or K2. The product is made by treating plant material with controlled substance analogues. Under federal law, a controlled substance analogue has a chemical structure that is similar to certain controlled substances and has an effect on the central nervous system which is intended to be similar to those controlled substances. Where controlled substance analogues are intended for human consumption, they are treated as controlled substances. Hayhurst intended to distribute the illegal drug to others.
This case was investigated by the Watertown Police Department, the South Dakota Division of Criminal Investigation, and the U.S. Drug Enforcement Administration. Senior Litigation Counsel John E. Haak and Special Assistant U.S. Attorney Jennifer D. Mammenga prosecuted the case.
Washington County Man Sentenced to 48 Months in Prison for Conspiracy to Manufacture and Distribute MethamphetamineRead the Press Release
DAVENPORT, IA – On March 21, 2014, Kyle Joseph Boileau, age 27, was sentenced by United States District Judge Stephanie M. Rose to 48 months in prison for conspiracy to manufacture and distribute a mixture and substance containing methamphetamine, announced United States Attorney Nicholas A. Klinefeldt. Boileau was also ordered to serve three years of supervised release following the imprisonment and to pay $100 towards the Crime Victims Fund.
Beginning in during or about April 2012, and continuing until on or about December 5, 2012, Boileau conspired with others to manufacture and distribute methamphetamine in the Washington County, Iowa area. During this time period Boileau manufactured methamphetamine both for himself and several other persons. During this period other persons provided Boileau pseudoephedrine, or other materials necessary for methamphetamine manufacture, and he provided them a portion of the resultant methamphetamine he manufactured. On December 5, 2012, law enforcement approached a vehicle occupied by Boileau after it parked on the town square in Washington, Iowa. Boileau was in the process of manufacturing methamphetamine in the vehicle when it was approached. On that same date, police located a variety of items indicative of methamphetamine manufacture during a search of Boileau’s apartment residence in nearby Wayland, Iowa.
This case was investigated by the Washington-Louisa County Drug Task Force, the Iowa Department of Public Safety Division of Narcotics Enforcement, the Johnson County Drug Task Force, and the Muscatine County Drug Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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U.S. and Canadian Citizens Charged with Using Offshore Accounts and Foreign Nominee Entities to Launder $200,000Read the Press Release
Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted for conspiracy to launder monetary instruments, the Department of Justice and Internal Revenue Service (IRS) announced today. The indictment alleges that Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud. The Caribbean-based defendants allegedly assisted undercover law enforcement agents, posing as U.S. clients, in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented the funds would not be reported to the U.S. government.
The indictment was returned in the Eastern District of Virginia on March 6, 2014, and unsealed on March 12, 2014, when all three defendants were arrested in Miami, Fla. In addition to the conspiracy charge, Vandyk, St-Cyr and Poulin were each charged with two counts of money laundering.
“These charges result from an extensive investigation and are the latest demonstration of the Department’s resolve to find and prosecute those who aid money laundering and tax fraud globally," said Deputy Attorney General James M. Cole.
According to the indictment, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based in the Cayman Islands. St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens. Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada and in the Turks and Caicos. His clientele also included numerous U.S. citizens.
According to the indictment, Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government. Vandyk and St-Cyr directed the undercover agents posing as U.S. clients to create offshore foundations with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients. Vandyk and St-Cyr used the offshore entities to move money into the Cayman Islands and used foreign attorneys as intermediaries for such transactions.
According to the indictment, Poulin established an offshore foundation for the undercover agents posing as U.S. clients and served as a nominal board member in lieu of the clients. Poulin transferred wire payments from the offshore foundations to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside the United States in the name of the offshore foundation. The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the U.S. client, Vandyk and St-Cyr would liquidate investments and transfer money, through Poulin, back to the United States. According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.
“I commend IRS Criminal Investigation and the Division’s prosecutors for the extraordinary work that they have done over many months in this investigation,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “In particular, it is important to note that the IRS’s voluntary disclosure policy excludes disclosures after the government has received information about taxpayers’ identities. If the investigation team now has the names of account holders who have not yet come forward, time has run out for them.”
“As alleged in the indictment, these defendants were in the business of creating layers of transactions so their US clients could launder criminal proceeds,” said Chief of IRS-Criminal Investigation Richard Weber. “IRS Criminal Investigation is committed to unraveling complex financial and money laundering schemes and holding those accountable for creating mechanisms to hide assets offshore and dodge the tax system.”
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, each defendant faces a maximum potential sentence of 20 years in prison for each count.
The case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorneys Todd Ellinwood and Caryn Finley of the Department’s Tax Division and Assistant U.S. Attorney Kosta Stojilkovic of the U.S. Attorney’s Office for the Eastern District of Virginia are prosecuting the case.
More information about the Tax Division and its offshore banking enforcement efforts can be found at the division website.
Related Materials:
United States v. Joshua Vandyk, etc.
IndictmentU.S. Attorney Honors via ChristiFor Innovative Human Trafficking TrainingRead the Press Release
WICHITA, KAN. - Via Christi Health today received a special Community Service Award from U.S. Attorney Barry Grissom for its groundbreaking work training health care professionals to identify and assist victims of human trafficking.
“Human trafficking is a crime that hides in plain sight,” Grissom said. “Via Christi Health is leading the nation by training its health care professionals to recognize warning signs and offer victims assistance that could save lives.”
Via Christi’s human trafficking initiative already has trained more than 125 physicians, nurses and other frontline caregivers with a four-step protocol on what to look for and how to help human trafficking victims. Videos of the training are available online at:
http://www.via-christi.org/human-trafficking
“We are humbled and honored to receive this award,” said Jeff Korsmo, president and CEO of Via Christi Health. “Training our clinicians to recognize the warning signs of human trafficking so that we can help these victims is part of Via Christi’s mission to serve as a healing presence to the most vulnerable among us. The victims of this modern form of slavery need – and deserve – our help.”
Physicians, nurses and other health care workers are in a position to meet human trafficking victims who remain hidden from most of us. Victims may show up in emergency rooms seeking treatment for injuries, physical or sexual abuse and health problems. Whether they are being trafficked for commercial sex or other kinds of labor, they are most likely to seek help from health care professionals who recognize the warning signs and are trained in treating them as victims, not criminals.
Via Christi Health employees who received the award include: Nicole Ensminger, Sister Sherri Marie Kuhn, Joseph Akif, Tina Peck, Dr. Robert Stangl, Jennifer Rodgers, Kim Johnson, William “Skip” Hidlay, Deborah Wendt, Roz Hutchinson, Clint Schaefer, Tressie Maugans and Claire Hieger.
Grissom cited a report released earlier this month that was supported by a grant from the U.S. Department of Justice titled: “Estimating the Size and Structure of the Underground Commercial Sex Economy in Eight Major US Cities.”
http://www.urban.org/UploadedPDF/413047-Underground-Commercial-Sex-Economy.pdf
The report looked at the underground commercial sex economy in Miami, Dallas, Washington, D.C., Denver, Kansas City, Mo., San Diego, Seattle and Atlanta, which it estimated in 2007 totaled as much as $290 million. The report concluded that different forms of coercion and fraud are used by pimps to recruit, manage and retain control over victims. These forms include feigning romantic interest, emphasizing mutual dependency between pimps and trafficking victims, discouraging victims from giving away “sex for free” and promising victims rewards and material comforts they never see. The number of cases of pimping and sex trafficking currently being investigated and prosecuted, the study concluded, represents only a small fraction of the underground commercial sex economy.
Two Sentenced in Mortgage Fraud SchemeRead the Press Release
PENSACOLA, FLORIDA – U.S. Attorney Pamela C. Marsh announced the sentencing today of Jason Andrew Vitulano, 38, of West Palm Beach, Florida, and Marc A. Gross, 54, of Boca Raton, Florida, by U.S. District Court Chief Judge M. Casey Rodgers following acceptance of their guilty pleas in August of last year. Both Vitulano and Gross pleaded guilty to several counts that included: conspiracy to commit mail fraud and wire fraud, two counts of mail fraud, and conspiracy to commit money laundering. Gross also pleaded guilty to making false statements to a federal agent and perjury. Vitulano was sentenced to 77 months in prison, ordered to pay restitution in the amount of $4,047,140.81, and a monetary judgment in the amount of $1,404,447 was entered. As part of Gross’s sentence, the Court forfeited Gross’s personal residence valued at approximately $340,000, his retirement accounts valued at approximately $253,000, and also ordered him to pay $3,507,187 in restitution as part of the five years of probation Gross was ordered to complete.
Vitulano and Gross both admitted that between June 2007 and February 2008, they were involved in the purchase of six townhomes in Temple Terrace, Florida, and two homes in Santa Rosa Beach, Florida, all purchased in the names of straw buyers. In order to finance each of these purchases, Vitulano and Gross caused loan applications containing false information to be submitted to various mortgage lenders and financial institutions. The false information submitted included false employers and an overstatement of income and assets. The fraudulently obtained loans were foreclosed upon causing harm to the lenders.
This case was investigated by the Internal Revenue Service – Criminal Investigation, the Florida Department of Law Enforcement, and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Tiffany H. Eggers.
Two Men Sentenced in Dodge City Gang Racketeering CaseRead the Press Release
WICHITA, KAN. – Two members of a Dodge City street gang were sentenced Monday in a federal racketeering case, U.S. Attorney Barry Grissom said.
Jayson Vargas, 31, Dodge City, Kan., was sentenced to 10 years in federal prison. Juan Torres, 23, Dodge City, Kan., was sentenced to one year and a day.
Vargas pleaded guilty to one count of unlawful possession of a stolen firearm. In his plea, he admitted that on Aug. 20, 2011, he was driving a car in pursuit of his former girlfriend, who was in another car. During the chase, he pointed a handgun at her. Officers of the Ford County Sheriff’s Office stopped Vargas’ car and arrested him. They seized a .45 caliber handgun.Torres pleaded guilty to one count of aiding and abetting attempted murder, which was a violent crime in aid of racketeering. He admitted he was involved in an Oct. 4, 2008, incident in which two people were shot.
In his plea, Torres admitted he was a Diablos Viejos (DV) gang member associated with the Norteno street gang when he accompanied two co-defendants in an attack at the home of a member of the rival Sureno gang. On Oct. 4, 2008, Torres and two co-defendants gathered in a barn behind a house at 10770 Kettle Way near Dodge City, which was a hangout for the gang. Later that day, Torres and the two co-defendants drove to the home of Abel Hernandez, a known Sureno gang member, and Rumalda Hipolito. Outside the home, Hernandez?s brother and others were drinking beer. One of the Nortenos began harassing them and shouting Norteno slogans. After someone threw a beer bottle at the Nortenos? car, Torres and the two co-defendants drove away.
The three Nortenos obtained a firearm, an SKS or AK-47 style weapon and returned to Hernandez?s house, parking in an alley half a block away. After approaching the house on foot, co-defendant Gonzalo Ramirez discharged multiple rounds from the firearm. The gunshots hit the house, striking Abel Hernandez and Rumalda Hipolito. Hipolito suffered a gunshot wound to the arm. Hernandez suffered a gunshot wound to the leg. Investigators found 10 bullet holes in the house and recovered 20 shell casings at the scene. After the shooting, Torres and the two co-defendants returned to the house on Kettle Way, where they hid the car in the barn.
Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff's Office, the Kansas Bureau of Investigation, the Ford County Attorney's Office, Assistant Aaron Smith and Assistant U.S. Attorney Lanny Welch for their work on the case.
Two Medical Product Companies Pay More Than $1 Million to Resolve False Claims Lawsuit That Alleged They Overbilled Federal AgenciesRead the Press Release
LOS ANGELES – The publicly traded Stryker Corporation and the privately held Alliant Enterprises have paid the United States a total of $1.05 million to resolve a “whistleblower” lawsuit that alleged a failure to disclose complete information about projected government sales, allowing them to avoid heightened scrutiny of a government contract.
The case was resolved when a federal judge dismissed and unsealed the case on March 13.
The lawsuit alleged that Stryker and Alliant failed to disclose to government negotiators complete pricing information, which resulted in higher costs to government agencies that purchased medical products from the Federal Supply Schedule contract awarded by the Department of Veterans Affairs to Alliant. As a result of the conduct by Stryker and Alliant, the VA and other government agencies allegedly purchased products at inflated prices.
The two companies paid the settlement in December. Stryker paid the United States $911,219, and Alliant paid $151,215.
Stryker Corporation is a Fortune 500 medical technology and equipment company with several divisions, including Stryker Medical, which manufactures medical equipment. Stryker sold certain medical equipment – including critical care hospital beds, medical-surgical hospital beds and stretchers – to government purchasers through the Federal Supply Schedule pursuant to modifications to a contract that the VA had previously awarded to Alliant. The lawsuit alleged that because Alliant was used to sell the Stryker-manufactured products, the defendants provided none of Stryker’s commercial pricing history to the VA for price comparison purposes, and that Alliant understated expected sales of the products, which allegedly allowed the defendants to avoid scrutiny and overcharge the VA.
The lawsuit was filed in United States District Court in Los Angeles in 2008 by a former Stryker employee under the qui tam – or “whistleblower” – provisions of the federal False Claims Act, which allow individuals to bring lawsuits on behalf of the United States and to receive a portion of the proceeds of a settlement or judgment awarded against a defendant.
Stryker and Alliant have resolved this action without admitting any wrongdoing.
This settlement was reached by the U.S. Attorney’s Office for the Central District of California and the Department of Justice Civil Division’s Commercial Litigation Branch. The matter was investigated by the Department of Veterans Affairs’ Office of Inspector General.
Release No. 14-032a
Topeka Man Sentenced in Lawrence Armed RobberyRead the Press Release
KANSAS CITY, KAN. – A Topeka man was sentenced Monday to 84 months in federal prison in connection with an armed robbery in Lawrence, U.S. Attorney Barry Grissom said.
Mario A. King, 35, Topeka, Kan., pleaded guilty to one count of unlawful possession of a firearm in furtherance of armed robbery. In his plea, he admitted that on June 1, 2013, he used a .357 revolver to commit an armed robbery in the parking lot of a McDonald’s restaurant at 4911 West 6th Street in Lawrence, Kan.
The victim met King and another man at the restaurant in order to sell them two pounds of synthetic marijuana. During the meeting, King drew the gun and pointed it at the victim. The victim fought with King for control of the gun. The victim eventually broke free and ran into the restaurant to get help. While he was inside, the marijuana and other items belonging to him were stolen.
Co-defendants are: Justin Alcorn, 30, Topeka, who is awaiting sentencing.
Jesse J. Forbes, Jr., 39, Topeka, who is set for jury trial May 19.Grissom commended the Lawrence Police Department and Special Assistant U.S. Attorney Trent Krug for their work on the case.
Tax Return Preparer Indicted for Tax Fraud That Caused More Than $1.6 Million LossRead the Press Release
NEWARK, N.J. - A federal grand jury in Newark today returned a nine-count indictment charging a former Bergen County tax return preparer for his alleged role in filing false federal income tax returns and filing false personal returns, U.S. Attorney Paul J. Fishman announced.
Wayne Dunich-Kolb, 49, formerly of Saddle River, N.J., was charged with aiding and assisting in the filing of false federal income tax returns for tax years 2007, 2008, 2009, 2010 and 2011; and with preparing and signing his own false federal income tax returns for tax years 2007, 2008, 2009 and 2010. Dunich-Kolb’s will make his initial court appearance on March 27, 2014, before U.S. Magistrate Judge James B. Clark III.
According to the indictment: Dunich-Kolb owned and operated a tax preparation business called Dunich-Kolb LLC, which he ran from his residence in Saddle River. He caused many of his clients to form fictitious partnerships or corporations that existed in name only and had no business purpose other than to falsely reduce the clients’ tax liability.
Dunich-Kolb prepared false and fraudulent business returns for clients’ fictitious businesses by fabricating and inflating business expenses, such as advertising, travel and other miscellaneous expenses, in order to generate false and fraudulent business and partnership losses, which he then used to substantially reduce taxpayers’ taxable income on their individual federal income tax returns.
He falsified clients’ 2007, 2008, 2009, 2010 and 2011 individual federal income tax returns by fabricating and inflating deductions for unreimbursed employee business expenses, including home office, vehicle mileage and fuel expenses.
Dunich-Kolb caused these false and fraudulent individual federal income tax returns to be filed with the IRS, resulting in a total tax loss of more than $1.6 million for 10 clients.
Dunich-Kolb also falsified his own personal federal income tax returns for tax years 2007, 2008, 2009 and 2010. For these tax years, Dunich-Kolb’s client invoices reflected that he charged his clients an annual total of approximately $600,000 to $860,000 per year. Dunich-Kolb claimed approximately zero tax due and owing for tax years 2007 and 2008 and tried to obtain refunds for prior year tax payments that he never made, and substantially offset his tax liabilities for tax years 2009 and 2010 by claiming false credits for prior year tax payments that he never made.
Each of the nine tax counts carries a maximum potential penalty of three years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to the indictment.
The charges and allegations in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit.14-100
Defense counsel: TBA
Dunich-Kolb, Wayne Indictment
Statement of Manhattan U.S. Attorney Preet BhararaOn the Convictions of Former Employees of Bernard L. Madoff Investment Securities LLCRead the Press Release
“As the jury unanimously found, these five defendants played crucial roles in constructing and maintaining the house of cards that was the Madoff investment fraud. These convictions, along with the prior guilty pleas of nine other defendants, demonstrate what we have believed from the earliest stages of the investigation: this largest-ever Ponzi scheme could not have been the work of one person. The trial established that the Madoff fraud began at least as far back as the early 1970s, decades before it came to light. These defendants each played an important role in carrying out the charade, propping it up, and concealing it from regulators, auditors, taxing authorities, lenders, and investors. The scheme these defendants helped perpetrate cost innumerable investors their life savings. Now it likely will cost the defendants their freedom.”
St. Mary’s County Man Pleads Guilty to Producing Child PornographyRead the Press Release
Used a Watch Camera to Surreptitiously Film the Victim
Greenbelt, Maryland – Ronald Davis Pope, age 49, of Mechanicsville, Maryland, pleaded guilty today to production of child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; St. Mary’s County Sheriff Tim Cameron; and St. Mary’s County State’s Attorney Richard Fritz.
According to Pope’s plea agreement, from February through May 2013, Pope lived with a family and shared a bathroom with the victim, a 14 year old male. Pope placed a watch containing a hidden camera in the bathroom and recorded the victim in the shower and using the bathroom. The camera was placed in a location that allowed Pope to capture videos focused on the victim’s genital area. Pope then transferred the videos to his computer and cellular phone. The victim was not aware that he was being recorded.
On May 2, 2013, federal and state law enforcement officials executed a search warrant at Pope’s residence and seized electronic devices, including Pope’s cellular phone and laptop computer. A forensic analysis of the SD card found in the cellular phone and the laptop recovered a total of 18 videos depicting the victim dressing, undressing, showering and using the restroom. The victim’s penis is exposed in at least 12 of the videos. At least one of the five videos found on the laptop appears to be part of the same video recovered on the cellular phone.
On May 7, 2013, a package addressed to Pope arrived at his residence. The package contained a weather clock hidden camera purchased on May 1, 2013, one day before Pope’s arrest. Later that month, one of Pope’s family members retrieved a package from a post office box belonging to Pope, which contained an HD clock DVR, USB cord and a micro SD card.
In June 2013, federal law enforcement officials seized the camera watch used to record the videos of the victim. Subsequent forensic analysis of the watch camera memory revealed three videos, one of which depicts the victim showering. The spy camera watch also contained an image of Pope’s face.
As part of his plea agreement, Pope must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Pope and the government have agreed that if the Court accepts the plea agreement Pope will be sentenced to 235 months in prison followed by a lifetime of supervised release. Chief U.S. District Judge Deborah K. Chasanow has scheduled sentencing for June 3, 2014 at 9:00 a.m. Pope’s federal sentence will run concurrent to the sentence imposed in a case pending the St. Mary’s County Circuit Court involving a separate victim. In that case, Pope has agreed to plead guilty to sexual abuse of a minor and be sentenced to 25 years in prison with all but 20 years suspended.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, St. Mary’s County Sheriff’s Office and St. Mary’s County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas Mitchell, who are prosecuting the case.
St. Louis Man Pleads Guilty to Federal Drug ChargeRead the Press Release
St. Louis, MO – ELIJAH BOYKINS, St. Louis, pled guilty to possessing 28 grams of heroin, which was packaged for sale at his home on February 13, 2014. The drugs were discovered during the execution of a search warrant by the St. Louis Police Department in the City of St. Louis. In addition to the drugs, Boykins was in possession of $3,381 in cash.
Boykins admitted to possession with the intent to distribute heroin before Judge Henry E. Autrey in U.S. District Court. He faces up to 20 years imprisonment and a fine of up to $1,000,000 on the charge.
Additionally, Boykins was on federal supervised release for a 2007 gun offense and violated his supervision by the commission of the new crime. He faces additional imprisonment as a result of his supervised release violation.
Judge Autrey deferred sentencing on both matters until June 23, 2014.
This case was investigated by the St. Louis Metropolitan Police Department. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney's Office.
Southern California Man Found Guilty of <br /> Health Care Fraud and Aggravated Identity Theft <br /> for Role in $1.5 Million Medicare Fraud SchemeRead the Press Release
A Southern California man who ran a durable medical equipment (DME) supply company has been found guilty by a federal jury in Los Angeles for his role in a $1.5 million Medicare fraud scheme.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Assistant Director in Charge Bill Lewis of the FBI’s Los Angeles Field Office and Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Vahe Tahmasian, 36, of Glendale, Calif., was found guilty on March 21, 2014, in U.S. District Court in the Central District of California of one count of conspiracy to commit health care fraud, six counts of health care fraud and six counts of aggravated identity theft. Sentencing is set for June 9, 2014.
The evidence introduced at trial showed that between April 2009 and February 2011, Tahmasian operated a Medicare fraud scheme at Orthomed Appliance Inc. (Orthomed), a DME supply company in West Hollywood, Calif. Tahmasian and his co-conspirator, Eric Mkhitarian, purchased Orthomed from the previous owners and put the company in the name of a straw owner. The defendant and his co-conspirator then stole the personal identifying information of Medicare beneficiaries and doctors in the company’s patient files and used that information to submit a large volume of fraudulent claims to Medicare. The evidence showed that during a three-month period in late 2010, Tahmasian submitted more than $1.2 million in fraudulent claims to Medicare for services that were never prescribed by a physician and never provided to the Medicare beneficiaries. Tahmasian and his co-conspirator then took out more than $622,000 in cash from the company over a six-week period in early 2011. The evidence at trial showed that Tahmasian used a fake California driver’s license during the course of the fraudulent scheme. Tahmasian submitted a total of $1,584,640 in claims to Medicare and received approximately $994,036 on those claims.
Mkhitarian, Tahmasian’s alleged co-conspirator, remains a fugitive.
The case was investigated by the FBI and the Los Angeles Region of HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorney Alexander Porter of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .South Carolina Tobacco Broker SentencedRead the Press Release
Charges included Interstate Travel in Aid of Racketeering and Concealment Money Laundering.
SYRACUSE, NEW YORK – William D. Humphries, age 67, of Lake City, South Carolina, was sentenced today principally to a term of 72 months imprisonment by the Hon. Norman A. Mordue. On November 11, 2013, Humphries was convicted after a two week long jury trial of one count of interstate travel in aid of racketeering, in violation of Title 18, United States Code, Section 1952(a)(1) and (a)(3), one count of a wire fraud conspiracy to defraud Canada of tax revenue, in violation of Title 18, United States Code, Sections 1343 and 1349, one count of a conspiracy to manufacture of tobacco products without a license in violation of Title 26, United States Code, Section 5672 and Title 18, United States Code, Section 371, and forty-one counts of concealment money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i).
Between 2005 and 2006, the defendant, a tobacco broker and wholesaler from South Carolina, conspired with other individuals living on the Akwesasne Indian Reservation (AMIR) to defraud Canada of tax revenue. In 2005, the defendant began working with a major manufacturer of cigarettes that was operating on the AMIR without the federally required bond and permit. The defendant provided “Canadian Blend” cut-rag tobacco and cigarette-making supplies to the unlicensed manufacturer. This tobacco was manufactured into cigarettes and subsequently smuggled into Canada without the payment of any legally required taxes to Canada. Between the summer of 2005 and May 2006, the defendant supplied the unlicensed manufacturer with approximately one load of cut-rag tobacco per week. The defendant supplied approximately 44 loads of tobacco, with each load producing 13,200,000 contraband cigarettes, causing a tax loss to Canada of approximately $40,000,000.
The unlicensed manufacturer was also engaged in a conspiracy to distribute marijuana smuggled in from Canada and then distributed throughout the United States. The proceeds of that marijuana distribution were used to fund the cigarette smuggling conspiracy, which employed the same smuggling routes used to bring marijuana into the United States from Canada.
In February 2006, after delivering a load of tobacco to the unlicensed manufacturer on the AMIR, the defendant was stopped on the AMIR for a vehicle infraction. Law enforcement officers seized approximately $88,000 in U.S. currency paid to Humphries for the sale of tobacco. A narcotics detection canine alerted to the currency, and officers were able to smell marijuana on the money. At trial, witness testimony established that the money found on Humphries was the proceeds of marijuana distribution.
In May 2006, the unlicensed manufacturers dealing with Humphries were arrested on federal marijuana charges and thereafter cooperated with the government. However, Humphries continued to sell tobacco and cigarette-making supplies to other unlicensed cigarette manufacturers based on the AMIR. Humphries continued to receive payments in the form of proceeds of marijuana sales from unlicensed manufacturers to which he had sold Canadian blend tobacco and supplies. In an attempt to disguise the source of the money, which was criminal proceeds, Humphries began taking substantial sums of U.S. currency to the Mohawk Bingo Palace, located on the AMIR. In recorded conversations heard by the jury with one of the government informants, he explained that he was inserting large sums of currency into the electronic bingo machines and then repeatedly cashing out at the cashiers’ window in an attempt to clean the marijuana smell from the money.
At sentencing, the Court ordered Humphries pay a special assessment of $4,400. The Court also ordered a money judgment against Humphries in the amount of $7,000,000. After the defendant completes his term of incarceration, he will serve a term of supervised release of 3 years.
The prosecution arose from the investigative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Royal Canadian Mounted Police, the Alcohol and Tobacco Tax and Trade Bureau, St. Regis Mohawk Tribal Police Force, Homeland Security Investigations, the Drug Enforcement Administration, the Massena Police Department, the United States Border Patrol, and the Rensselaer County Sheriff’s Office.
The government was represented at sentencing by Assistant United States Attorney Carl Eurenius. For further information, please contact AUSA Eurenius at (315) 448-0672.
Sioux Falls Man Sentenced in Synthetic Drug and Money Laundering CaseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man convicted of conspiracy to distribute synthetic marijuana and engaging in a banking transaction involving drug money was sentenced on March 18, 2014, by U.S. District Judge Karen E. Schreier.
Corey Brandon Morrison, age 25, was sentenced to 34 months in custody, to be followed by 3 years of supervised release.
Morrison was indicted by a federal grand jury on October 10, 2012, for Conspiracy to Distribute a Controlled Substance Analogue and Engaging in Monetary Transactions in Property Derived From Specified Unlawful Activity. He pled guilty to both offenses on May 17, 2013.
Beginning around September 2011, two or more persons formed an agreement to distribute an illegal drug to customers from one or more Roll With It store locations in Sioux Falls. The illegal product, commonly referred to as spice or K2, is made by treating plant material with certain chemicals that are controlled substance analogues. Under federal law, a controlled substance analogue has a chemical structure that is similar to certain controlled substances and has an effect on the central nervous system which is intended to be similar to those controlled substances. In situations where controlled substance analogues are intended for human consumption, they are treated as controlled substances.
During Morrison’s involvement, he sold controlled substance analogues to the Roll With It stores, where the analogues were in turn sold to customers to get high.
On or about September 16, 2011, Morrison deposited $12,500 cash into his personal bank account, which were proceeds from the illegal distribution of controlled substances.
The investigation was conducted by the U.S. Drug Enforcement Administration, the Internal Revenue Service, and the Sioux Falls Area Drug Task Force. Senior Litigation Counsel John E. Haak and Special Assistant U.S. Attorney Jennifer D. Mammenga prosecuted the case.
Morrison was immediately turned over to the custody of the U.S. Marshals Service.
Saratoga Resident Pleads Guilty to Tax Evasion for Failing to Report over $1.2 Million of IncomeRead the Press Release
SAN JOSE – Liping Liu pleaded guilty today to tax evasion, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez announced.
According to the plea agreement, Liu, 56, of Saratoga, was the receptionist and office manager for her spouse’s pediatric dental and orthodontic practice. Liu created a tax evasion scheme in which she skimmed money from various sources, including rental properties and her spouse’s dental and orthodontic practice. Liu admitted that knew her actions were against the law and she was evading the assessment and payment of federal taxes throughout the course of her scheme.
Liu evaded taxes by funneling money from the dental and orthodontic practice into the various bank accounts to prevent those funds from appearing in the business bank accounts. The only funds deposited into the business bank account were insurance payments, aside from thirteen personal checks in 2006 and one personal check in 2009. Liu deposited the insurance proceeds exclusively into the business accounts because she knew the insurance company reported these payments to the IRS. Liu offered a 10% discount to dental clients if they paid in cash or by check if they left the payee section blank. Liu wrote “cash” in the blank payee section or left it blank, then deposited the checks into the non-business accounts. Liu also modified checks, in the memo and payee fields to disguise the source of the payment. This enabled her to deposit the checks into the non-business account holder’s names.
In addition, according to her plea agreement, from 2006 through 2010, Liu was a 50% partner in a limited liability corporation, HSL, which was created to hold rental property. Liu diverted rental checks paid to HSL to non-business bank accounts for the purpose of evading taxes on the HSL entity. She also changed the payee information on numerous rental checks. From 2006 through 2010, Liu omitted $2,147,741.04 in gross receipts. This resulted in additional tax due and owing of $744,248. Liu provided incomplete and false information to the family bookkeeper
Liu also admitted to engaging in a series of structured cash transactions from September 2008 to September 2009, which allowed her to continue to hide taxes from the IRS.
Liu was charged on March 19, 2014, with one count of tax evasion. She pleaded guilty to the charge. Liu’s sentencing hearing is scheduled for September 15, 2014, at 9:00 a.m. before the Honorable Ronald M. Whyte, United States District Court Judge, in San Jose. The maximum statutory penalty for each count of tax evasion, in violation of Title 26, U.S.C § 7201, is five years in prison and a fine of $250,000.
Assistant United States Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Liu indictment )
Russellville Man Charged with Meth, Illegal FirearmsRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Russellville, Mo., man was charged in federal court today with illegally possessing methamphetamine and firearms.
Emmanuel Guillen, 21, a citizen of Mexico residing in Russellville, was charged in a federal criminal complaint filed in the U.S. District Court in Jefferson City, Mo.
The complaint charges Guillen with one count of possessing methamphetamine with the intent to distribute and one count of being an illegal alien in possession of a firearm.
According to an affidavit filed in support of today’s criminal complaint, law enforcement officers executed a search warrant at Guillen’s residence on Thursday, March 20, 2014, as part of an investigation into alleged narcotics sales at that location.
Officers found a box in a bedroom closet that contained five plastic containers, the affidavit says, which contained a total of 625 grams of methamphetamine. Two bags of methamphetamine, totaling 60 grams, were found in a vehicle parked in the driveway. Officers also found 21 firearms – including handguns, rifles and shotguns – in the residence and in two vehicles parked in the driveway. Two of the firearms have shortened barrels and neither has a serial number. Officers found a small safe in the bedroom closet that contained $13,168; Guillen also had $2,504 in his wallet.
Dickinson cautioned that the charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Cole County, Mo., Sheriff’s Department, the MUSTANG Drug Task Force and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
President of East Bay University Convicted in Fraud SchemeRead the Press Release
SAN FRANCISCO – Today, a federal jury convicted Susan Xiao-Ping Su of wire fraud, mail fraud, conspiracy to commit visa fraud, visa fraud, use of a false document, false statements to a government agency, alien harboring, unauthorized access to a government computer, and money laundering, announced United States Attorney Melinda and U.S. Immigration and Customs Enforcement’s Principal Deputy Assistant Secretary Thomas S. Winkowski.
The jury found Su guilty of 31 counts all arising from Su’s visa fraud scheme, which she carried out in her role as the Founder, Chief Executive Officer, and President of Pleasanton-based Tri-Valley University, described as “a Christian higher education institution.” The guilty verdict followed a three-week jury trial before the Honorable Jon S. Tigar, United States District Court Judge.
Evidence at trial showed that Su, 43, of Pleasanton, engaged in a two-year scheme to defraud the Department of Homeland Security (DHS) by submitting fraudulent documents in support of Tri-Valley University’s petition for approval to admit foreign students and, after having obtained such approval, fraudulently issued visa-related documents to student aliens in exchange for “tuition and fees.” In her petition for approval, Su made material false representations to DHS regarding Tri-Valley University’s admission requirements, graduation requirements, administrators, instructors, class transferability, and intent to comply with federal regulations.
Three purported Tri-Valley University professors testified that they never authorized Su to use their credentials in connection with the university. Multiple Tri-Valley University employees testified that the university had no requirements for admission or graduation, and that Su routinely instructed her staff to fabricate fraudulent transcripts.
In carrying out the scheme, Su made additional false representations to DHS through Tri-Valley University’s use of the Student and Exchange Visitor Information System (SEVIS), which the United States government uses, in part, to monitor the “F-1” student visa program. Through her false representations, Su was able to unlawfully obtain and issue F-1 visa-related documents without regard to the students’ academic qualifications or intent to pursue a course of study required to maintain a lawful immigration status. Su admitted and maintained student aliens in exchange for tuition and other payments. The jury also convicted Su of harboring two Tri-Valley University student-employees to assist her in making the false representations to SEVIS. One of the harbored student employees testified that Su asked him to paint her house and to move furniture.
Su made over $5.9 million through her operation of Tri-Valley University and engaged in seven money laundering transactions using proceeds to purchase commercial real estate, a Mercedes Benz car, and multiple residences, including a mansion on the Ruby Hill Golf Club in Pleasanton, each in her name. The investigation began in May 2010 following a tip to HSI pertaining to irregularities at Tri-Valley University.
Su was indicted by a federal grand jury on Nov. 10, 2011. She was charged with wire fraud, mail fraud, conspiracy to commit visa fraud, visa fraud, use of a false document, false statements to a government agency, alien harboring, unauthorized access to government computer, and money laundering.
Su was remanded to the custody of the U.S. Marshal after the jury’s verdict. Su’s sentencing hearing is scheduled for June 20, 2014, before Judge Tigar in San Francisco. The maximum statutory penalty for each violation is as follows:- 18 U.S.C. § 1343 (wire fraud): 20 years of imprisonment, $250,000 fine, 5 years of supervised release, and restitution;
- 18 U.S.C. § 1341 (mail fraud): 20 years of imprisonment, $250,000 fine, 5 years of supervised release, and restitution;
- 18 U.S.C. § 1546(a) (visa fraud): 10 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution;
- 18 U.S.C. § 1001(a)(3) (use of a false document): 5 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution;
- 8 U.S.C. § 1324 (alien harboring): 10 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution;
- 18 U.S.C. § 1030 (unauthorized access of government computer): 5 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution; and
- 18 U.S.C. § 1957(a) (money laundering): 10 years of imprisonment, $250,000 fine, 3 years of supervised release, and restitution.
However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Wade Rhyne and Hartley West are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Noble Hughes, Janice Pagsanjan, and Rosario Calderon. The prosecution is the result of a multi-year investigation by ICE Homeland Security Investigations (HSI).
(Su superseding indictment )
Pine Ridge Man Sentenced on Assault ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man convicted of two separate incidents of assault was sentenced on March 14, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Larney was immediately turned over to the custody of the U.S. Marshals Service.
Lee Larney, a/k/a “Southern Wind”, was sentenced to 12 months of imprisonment and 3 years of supervised release for Assault on a Federal Officer, and 30 months of imprisonment consecutive and 3 years of supervised release concurrent for Assault Resulting in Serious Bodily Injury. Larney was also ordered to pay a $100 special assessment to the Federal Crime Victims for each offense.
In August 2012, at Oglala, Larney struck an Oglala Sioux Tribe police officer in the face while the officer was arresting him for intoxication. In April 2012, at Porcupine, Larney struck a man repeatedly in the face, causing a broken jaw which resulted in surgery.
The investigations were conducted by the Federal Bureau of Investigation, the Bureau of Indian Affairs Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. The cases were handled by Assistant U.S. Attorney Sarah Collins.
Philadelphia Man Admits to "Secret Shopper" and Craiglist ScamsRead the Press Release
PHILADELPHIA - Dave Brister, 57, of Philadelphia, pleaded guilty today to all counts stemming from a counterfeit check scheme that victimized dozens of people across the United States through a series of Internet-based sales scams. Brister pleaded guilty to 24 counts including conspiracy, five counts of mail fraud, 12 counts of wire fraud, two counts of presenting and transmitting counterfeit money orders, and four counts of passing and uttering counterfeit checks. U.S. District Court Judge Gene E.K. Pratter scheduled a sentencing hearing for June 17, 2014.
Brister teamed up with at least one person located outside of the United States to defraud Americans in a series of Internet-based schemes. He allegedly duped the recipients of counterfeit checks and money orders into depositing the items into their bank accounts and wiring money to him. In one scam, Brister and his co-conspirators posted advertisements on the website Craigslist.com for fake jobs, which included phony positions such as “secret shoppers” and “administrative assistants.” Whenever a person answered the advertisement and was “hired” for the fake job, Brister or a co-conspirator would send counterfeit money to the “new employee” along with a set of instructions on how to complete their new “employment” obligations. The instructions generally involved depositing the checks or money orders into their own bank accounts, keeping a portion as their “salary,” performing some simple task, and sending the rest of the money to Brister via Western Union or MoneyGram. Only after wiring the funds to Brister did the would-be employees learn that the checks and money orders they had deposited into their bank accounts were counterfeit.
In a different scheme, a co-conspirator of Brister’s would respond to advertisements on Craigslist.com for the sale of merchandise, agree to buy the advertised item, send counterfeit checks or money orders to the seller in excess of the sales price, and indicate that the difference was to be spent on a third-party delivery company. Brister’s co-conspirator would identify Brister as the representative of the third-party delivery company and ask the seller to deposit the check or money order into his account, keep enough to cover both the sales price and a little bonus, and then wire the rest to Brister. As with the fake job-offer scheme, the sellers followed the instructions and wired thousands of dollars to Brister, only to learn that the monetary instruments they had received were counterfeit, and their bank accounts had been debited.
In total, Brister received more than $98,000 in fraudulent proceeds from the various Internet-based schemes between January 2008 and August 2012. Brister and at least one co-conspirator also planned to send additional counterfeit checks and money orders to unsuspecting victims in the United States as part of their schemes.
Brister faces a possible advisory sentencing guidelines range of three to five years in prison, three years of supervised release, a fine of up to $6 million, and a $2,500 special assessment.
The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations and the United States Postal Inspection Service. It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525New York Residents Sentenced on Counterfeit Receipt Fraud SchemeRead the Press Release
St. Louis, MO – These five New York residents traveled from New York to St. Louis returning stolen merchandise to various retail stores using counterfeit driver’s licenses and receipts.
According to court documents, on November 29, 2012, Maryland Heights police officers conducted a traffic stop of a vehicle being driven by Ishaan Davis. A subsequent search revealed Toshiba laptop computers, a Star TSP 100 Future Print receipt printer, document making card stock, counterfeit State of Florida and New York driver's licenses in Davis’ name and the names of others, and assorted clothing bearing sales tags. Further investigation revealed two rooms in which Davis, Shonta V. Simpson and William Randall Estes were registered. In addition to items similar to those found in Davis’ car, in the hotel rooms, the officers found boxes of additional clothing with tags, which had been mailed from Leo Lewis in New York to Davis in St. Louis, as well as receipts showing wire transfers of money from Davis to Lewis and Ingrid Millsaps.
Through his plea in November, Davis admitted that he utilized the equipment and the laminated card stock to produce counterfeit drivers’ licenses and merchant receipts so that Simpson and Estes could return stolen merchandise for cash in states including Missouri, Pennsylvania, Indiana, Ohio and Illinois. Thirteen different driver's licenses for various states were found bearing the photographs of Simpson, Estes and others. Ann Taylor, The Loft stores, and The Gap were among the stores targeted by the counterfeit receipt scheme. Simpson had been recruited by Davis and Leo Lewis recruited Estes to participate in the fraudulent scheme. Estes received a daily rate for his participation and Simpson was promised a percentage of the money received when she returned the stolen items.
The merchandise that was fraudulently returned was stolen by individuals such as co-defendant Ingrid Millsaps from stores located in, and near, the Brooklyn, New York area. In general, Millsaps was able to steal merchandise valued at $5,000 within two to three days, which she then provided to Davis and others. On one occasion, in order to comply with a request for merchandise, Millsaps stole clothing and items valued at approximately $60,000 during a two to three week period. Millsaps also stole receipt tape and proprietorial store information from retailers, such as Ann Taylor, in order to facilitate the fraudulent scheme. Millsaps and Davis engaged in the criminal activity for approximately 11 years. Lewis admitted participating in the scheme in 2004 and 2012. Through their pleas, they agreed that a conservative estimate would place the loss as exceeding $400,000.
LEO LEWIS, Brooklyn, New York, was sentenced today to 41 months in prison.
The following co-defendants, entered guilty pleas and have been sentenced:
- Ingrid Millsaps, Brooklyn, New York, sentenced to 87 months in prison
- Shonta Simpson, Brooklyn, New York, sentenced to 18 months in prison
- William Estes, Brooklyn, New York, sentenced to 12 months and one day in prison
- Ishaan Davis, Springfield Gardens, New York, sentenced to 87 months prison
The case was investigated by the City of Maryland Heights Police Department and the United States Postal Inspection Service. Assistant United States Attorney Tracy Berry handled the case for the U.S. Attorney’s Office.
Nampa Man Sentenced to 168 Months in Prison for Drug and Gun ChargesRead the Press Release
BOISE – Darrell Ray Zirschky, 32, of Nampa, Idaho, was sentenced today to 168 months in prison for conspiracy to distribute methamphetamine and unlawful possession of a firearm, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Zirschky to serve five years of supervised release following his release from prison. Zirschky pleaded guilty to the charges on November 15, 2013.
According to information presented in court, Zirschky agreed to help others distribute methamphetamine beginning in approximately January 2013. Zirschky participated in the on-going distribution of methamphetamine until April 2013. Zirschky was present on March 25, 2013, when co-defendant Jeramie Mahler shot another person during the course of the drug conspiracy. Zirschky was later arrested by the United States Marshals Service Greater Idaho Fugitive Task Force (GIFTF) on April 9, 2013, on an outstanding arrest warrant. When agents arrested Zirschky they found a 9-millimeter handgun in his possession. Zirschky is prohibited from possessing firearms because he was previously convicted of the felony crimes of possessing a controlled substance in 2001, delivery of a controlled substance in 2001, and lewd conduct with a minor in 2004.
Zirschky and ten other individuals were indicted on July 9, 2013, in a case including charges of conspiracy to distribute methamphetamine, distribution of methamphetamine, distribution of cocaine, and unlawful possession of firearms. The defendants are responsible for distributing pounds of methamphetamine within the community. During the investigation, law enforcement agents seized twelve firearms, including a stolen firearm, and an illegal fully-automatic machine gun. All eleven defendants have pleaded guilty, including defendant Jeramie Mahler, who pleaded guilty earlier this month to conspiracy to distribute methamphetamine and discharging a firearm in furtherance of a drug trafficking crime. Zirschky is the fifth defendant to be sentenced; co-defendants Wendy Harrison and Bobbi Eileen Woolsey were both sentenced previously to 84 months in prison and Nearia Pinnell was sentenced to 33 months in prison; Daniel Vaughan was sentenced to 80 months in prison.
The case was investigated by the Treasure Valley Metro Violent Crimes Task Force, which is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole. Other agencies that contributed to this investigation include the Drug Enforcement Administration, the U.S. Marshals Service, Nampa Police Department, Caldwell Police Department, Canyon County Sheriff’s Office, and Ada County Sheriff’s Office.
The case is being prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Men Sentenced for Conspiring to Obstruct the IRSRead the Press Release
RENO, Nev. – Two men who were convicted by a federal jury in Reno of conspiring to obstruct the IRS, were sentenced today to terms of imprisonment, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Bret Ogilvie, 50, of Reno, Nev., was sentenced to five years in prison, three years of supervised release, and ordered to pay $315,286 in restitution. Linwood Tracy, 73, of Fallon, Nev., was sentenced to nine months in prison and three years of supervised release. They were each convicted of one count of conspiracy to defraud, and Ogilvie was also convicted of one count of corrupt interference with tax administration and five counts of presenting false claims to the IRS. U.S. District Court Judge Larry R. Hicks imposed the sentences.
"When criminals cheat the IRS, they steal from all taxpayers,” said U.S. Attorney Bogden. “We hope that prosecutions like this one will deter others from impeding, obstructing and threatening the IRS in their collection work."
According to the court records, from about Feb. 22 to Nov. 18, 2008, Ogilvie and Tracy conspired to impede and obstruct the IRS in their collection of income taxes by a number of means, including threatening to sue the IRS for $10 million if the IRS did not remove a tax lien on Ogilvie’s residence, by contacting businesses and telling them not to comply with IRS levies against Ogilvie, by setting up a corporation and transferring compensation that Ogilvie earned through his plumbing company to the corporate bank account in an attempt to evade taxes, by threatening to sue employees of the IRS, and by filing a frivolous lawsuit against IRS personnel in Washoe County. Between Dec. 8 and Dec. 10, 2008, and on March 30, 2011, Ogilvie also presented false claims to the IRS for income tax refunds the tax years 2006 through 2010 totaling approximately $3.9 million. Ogilvie made the claims by preparing and causing to be prepared an IRS form indicating he held a Power of Attorney for the Bret Ogilvie Trust.
The case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Ronald C. Rachow.
This case was handled in connection with the President's Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.Marion County Man Sentenced for Stolen Identity Refund FraudRead the Press Release
Fort Myers, Florida – U.S. District Judge John E. Steele today sentenced Fred Kevin Johnson to 10 months in federal prison for possession of 15 or more unauthorized access devices. In addition, he was sentenced to a consecutive term of 24 months’ imprisonment for aggravated identity theft. Johnson pleaded guilty on January 7, 2014.
According to court documents, on October 2, 2012, Johnson was stopped in a vehicle for traffic violations in Lee County, Florida. A subsequent search of his vehicle revealed that Johnson possessed multiple notebooks containing the Personal Identification Information (PII) of more than 100 individuals. Some of the PII was used to file fraudulent tax returns. The fraudulent returns were filed without the knowledge of the individuals whose PII was used by Johnson.
This case was investigated by the Internal Revenue Service - Criminal Investigation and the Lee County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
Manhattan U.S. Attorney and FBI Announce Charge Against Rikers Island Correction Officer for Deliberately Ignoring Urgent Medical Needs of Inmate Who Later DiedRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of TERRENCE PENDERGRASS, a correction officer and former captain, for deliberately ignoring the urgent medical needs of a Rikers Island inmate who had ingested a corrosive disinfectant and later died, in violation of the inmate’s rights under the United States Constitution. PENDERGRASS was taken into custody this morning, and is expected to be presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn.
Manhattan U.S. Attorney Preet Bharara said: “Jason Echevarria should not have died. As alleged, Terrence Pendergrass abused his power as a Rikers Island captain in charge of a vulnerable population of inmates with mental health issues by denying Echevarria access to medical care despite his obvious and urgent medical need for it. The Constitution protects the civil rights of everyone, including prison inmates at Rikers. The kind of conduct alleged today cannot be tolerated in our criminal justice system.”
FBI Assistant Director-in-Charge George Venizelos said: “The public’s trust in law enforcement officers to enforce the law and ensure justice should never be abused. Sadly, as alleged, Mr. Pendergrass took his authority as a supervisory correction officer to the extreme and violated the rights of an inmate in his charge to the point that it resulted in death. The FBI is the lead federal agency to investigate such abuses of power and it remains one of our top priorities.”
According to the allegations contained in the Complaint unsealed today in Manhattan federal court:
Rikers Island is a jail complex, located in the Bronx, New York, maintained by the New York City Department of Correction. At the time of his death, Jason Echevarria was an inmate incarcerated on Rikers Island in the Mental Health Assessment Unit for Infracted Inmates, a unit housing inmates who have committed infractions while incarcerated and who have been identified as needing mental health treatment.
On the afternoon of August 18, 2012, Echevarria swallowed a powerful disinfectant/detergent combination in powder form, commonly referred to as a “soap ball,” sometimes provided to inmates to assist in the cleaning and disinfecting of cells. Echevarria had been given the soap ball by a new correction officer for the purpose of cleaning Echevarria’s cell following a sewage backup. The soap ball contained, among other things, ammonium chloride, a corrosive chemical that is life threatening if ingested.
After Echevarria swallowed the soap ball, other inmates heard Echevarria banging on his cell door and asking for medical help. Echevarria also told a correction officer that he had swallowed a soap ball and needed medical attention. That correction officer in turn informed PENDERGRASS, the captain—a supervisory correction officer—on duty at that time. PENDERGRASS responded that the correction officer should only call on PENDERGRASS if he needed help with the extraction of an inmate from a cell or if there was a dead body. A short time later, the same correction officer told PENDERGRASS that he saw vomit in Echevarria’s cell, and PENDERGRASS responded that Echevarria should “hold it.”
Later the same day, a pharmacy technician assigned to distribute inmate medication saw that there was vomit in Echevarria’s cell, and that Echevarria’s skin appeared discolored. The pharmacy technician learned from a second correction officer, who was serving as an escort, that Echevarria had swallowed a soap ball, and Echevarria told both the pharmacy technician and the second correction officer that he needed medical help. The pharmacy technician informed the second correction officer that Echevarria could die if he did not receive medical attention. The second correction officer then informed PENDERGRASS that Echevarria had swallowed a soap ball and needed medical help. Notwithstanding this report, PENDERGRASS failed to contact any medical personnel about Echevarria’s condition. In fact, PENDEGRASS told the second correction officer that perhaps the officer had simply misheard Echevarria’s request for medical help, which the second correction officer responded was not the case.
The next morning, Echevarria was found dead in his cell. An autopsy revealed that Echevarria died as a result of injuries caused by the ingestion of a caustic substance, consistent with the ingestion of a soap ball. Echevarria had internal burns and scarring along his esophagus and into his trachea, indicating that he suffered aspiration of vomit into his lungs. At no point prior to his death was Echevarria provided with any medical assistance to treat his ingestion of the substances contained in the soap ball.
PENDERGRASS, 49, of Howard Beach, New York, is charged with one count of deprivation of rights under color of law. He faces a maximum sentence of ten years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI. Mr. Bharara also thanked the New York City Department of Correction, Investigation Division, and the Bronx County District Attorney’s Office for their assistance in the ongoing investigation.
The case is being handled jointly by the Office’s Civil Rights Unit and Public Corruption Unit. Assistant U.S. Attorneys Lara K. Eshkenazi and Daniel C. Richenthal are in charge of the prosecution.
The charge contained in the Complaint is merely an accusation and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Terrence Pendergrass Complaint