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17 March 2014
Third Defendant Sentenced in Bonneville Co. Traffic Stop Meth Distribution CaseRead the Press Release
POCATELLO — Angelica Campos, 27, of Caldwell, Idaho, was sentenced today to 121 months in prison and fined $500 for conspiring to distribute and to possess with intent to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Brian Ted Stewart of the District of Utah also ordered Campos to serve five years of supervised release following her prison term, and to forfeit all property used to commit the crime and proceeds derived from the crime. Campos pleaded guilty to the charges on October 23, 2013.
According to court records, an Idaho State Police trooper stopped a vehicle being driven by co-defendant Noe Gonzalez on February 12, 2013, in Bonneville County. Campos was a passenger, and both she and Gonzalez were ultimately arrested. Pursuant to a search warrant, the vehicle was searched the next day. Hidden in the dash of the vehicle, police found a white tube sock containing four baggies of methamphetamine within a larger zip lock bag. The methamphetamine totaled 95.53 grams. Police also found a handgun and loaded magazine in the glove box. Recorded calls between Campos and her sister, Vanessa Campos, revealed that Vanessa Campos planned to get the vehicle out of police impound and recover the methamphetamine before it was discovered by law enforcement. By the time Vanessa Campos recovered the vehicle, the police had already located the drugs.
Vanessa Campos, 25, and Gonzalez, 29, both of Caldwell, Idaho, were sentenced in January to serve 47 months and 151 months, respectively, for their roles in the conspiracy.
The case was the result of an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), which included the cooperative law enforcement efforts of the Idaho State Police, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Bonneville County Sheriff's Office, Idaho Falls Police Department, Madison County Sheriff's Office, Rexburg Police Department, Bingham County Sheriff’s Office, Fremont County Sheriff’s Office, Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation (IRS-CI), and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Other federal agencies participating in the OCDETF program include the Drug Enforcement Administration and the U.S. Marshals Service.
The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Temecula Student Sentenced to Federal Prison in ‘Sextortion’ CaseRead the Press Release
SANTA ANA, California – A Temecula college student who hacked into as many as 150 online accounts to extort young females into sending him nude photos and video – or submitting to Skype sessions in which he convinced two teens to undress – was sentenced today to 18 months in federal prison, concluding the latest in a series of federal “sextortion” cases in Southern California.
Jared James Abrahams, 20, was sentenced this morning by United States District Judge James V. Selna.
After being arrested last year by special agents with the FBI, Abrahams pleaded guilty on November 12 to one count of computer hacking and three counts of extortion.
Abrahams targeted young women he knew, and he identified other victims after hacking into Facebook pages. Using hacking software, Abrahams took control of victims’ email accounts, social media accounts and even their computers – which allowed him to remotely turn on web cameras and occasionally take pictures of naked victims.
Abrahams used the nude photos to extort victims by threatening to publicly post the compromising photos or videos to the victims’ social media accounts – unless the victim either sent more nude photos or videos, or engaged in a Skype session with him and did what he said for five minutes.
Several teens and women in their early 20s were victimized when Abrahams posted nude photos to their social media accounts. At least two victims consented to the Skype sessions proposed by Abrahams to keep their photos off the Internet.
“As digital devices, email accounts, and social media accounts now contain the most intimate details of the public’s daily lives, the impact of this type of hacking and extortion becomes more pronounced, troubling, and far-reaching,” prosecutors wrote in a sentencing memo filed with the court. “In some cases, this type of criminal behavior can be life-changing for the victims – especially for vulnerable victims who may feel it is impossible to rebuild their tarnished reputations. Stated differently, individuals like defendant have the ability to affect a person’s life in frightening ways by using the broad reach of the Internet.”
To avoid become a victim of sextortion, everyone should be prudent when posting images online or to any wireless communication (computer, phone, tablet), especially if the images have private or compromising content. Victims who receive extortionate threats or whose personal accounts have been compromised are urged to contact a parent, trusted adult, or law enforcement, since the situation will only worsen. The FBI was able to quickly identify Abrahams after a victim quickly reported his extortion attempts. As always, computer users are warned to ensure their passwords are difficult for others to guess, avoid opening unverified attachments, and use reliable anti-virus software with updated definitions. Lastly, computer users should cover their webcams when they are not in use.
In previous sextortion cases investigated by the FBI and prosecuted by the United States Attorney's Office, a Glendale man was sentenced in December to five years in prison (see: http://www.justice.gov/usao/cac/Pressroom/2013/142.html), and an Orange County man received a six-year prison term in 2011 (see: http://www.justice.gov/usao/cac/Pressroom/2011/123.html).
Release No. 14-031
Springfield Engineer Pleads Guilty to Fraud ConspiracyRead the Press Release
Springfield, Ill. – A sentencing date has been set in July for a Springfield, Ill., engineer, Jeremy L. VanScyoc, who has pleaded guilty to participating in a scheme to defraud the Illinois Environmental Protection Agency. VanScyoc, 37, of the 400 block of Elle Court, waived indictment and pled guilty on Mar. 10, 2014, to an information filed by the U.S. Attorney’s Office charging him with one count of conspiracy to commit mail fraud. VanScyoc appeared before U.S. District Judge Sue E. Myerscough. Sentencing is scheduled on Jul. 21, 2014.
During court hearings and in court documents, VanScyoc admitted that after he joined Environmental Management, Inc. (EMI), in October 2001, he agreed to engage in a scheme to defraud IEPA. VanScyoc admitted his participation in the submission of false claims for reimbursement to IEPA through the Leaking Underground Storage Tank fund, known as the LUST fund, which is administered by IEPA. These false claims were submitted from October 2001 through Nov. 27, 2012, for services not rendered or not rendered to the extent claimed and false claims represented as ‘actual costs’ which in fact, were inflated in excess of the true cost of the product or services.
EMI, Inc. is an environmental consulting firm located at 1154 North Bradfordton Road, in Springfield. VanScyoc joined EMI in late October 2001 and obtained a small ownership interest in 2007. One of EMI’s primary business activities was the remediation of property contaminated by petroleum leaks from underground storage tanks.
In a separate but related case, in October 2013, a federal grand jury indicted three individuals who have served or currently serve as EMI officers: Eric M. Andrews; Joel C. Andrews; and Michael R. Keebler. According to the indictment, from at least 1997 until
September 2006, Joel Andrews was the president of EMI; in or about September 1999, Eric Andrews became an officer with EMI; and on or about Apr. 1, 2001, Keebler joined the firm and became an officer in 2003. On or about Sept. 30, 2006, Joel Andrews sold the business and Keebler became the majority owner and EMI president. The indictment charges the three men with one count of conspiracy to commit mail fraud and 10 counts of mail fraud.A status conference is scheduled on Apr. 28, 2014, for the three defendants. The indictment of Eric and Joel Andrews and Keebler seeks a personal money judgment against the three defendants, jointly and severally, of at least $13.6 million, which would represent the amount of the net proceeds obtained as a result of the alleged offenses.
Members of the public are reminded that an indictment is merely an accusation; the defendants are presumed innocent unless proven guilty.
The U.S. EPA has a cooperative agreement with the state of Illinois in which IEPA and the Illinois State Fire Marshal regulate the use, maintenance and removal of petroleum underground storage tanks. The State Fire Marshal administers the preventative and permitting aspects of the program which regulates daily operation and maintenance of underground storage tank systems, including oversight for tank installation and removals. If there is a spill or leak from an underground storage tank, however, IEPA is responsible to oversee the cleanup investigation and to supervise the corrective action. IEPA also administers the state’s LUST fund. The State of Illinois imposes taxes and fees on gasoline sales which are added to the LUST fund to assist owners of contaminated sites to clean up the property.
During VanScyoc’s plea hearing and in court documents, VanScyoc admitted that on multiple occasions between Oct. 29, 2001, and Nov. 27, 2012, he agreed with others to submit fraudulent invoices to the IEPA LUST fund. These invoices were represented to be the ‘actual cost’ of work performed, when, in fact, the claims were in excess of the actual costs incurred by EMI or were otherwise inflated. VanScyoc further admitted that he created or modified invoices to make it appear as if invoices were submitted by subcontractors. These invoices exaggerated the work performed, the actual cost of the work, or both.
For the offense of conspiracy to commit mail fraud, the maximum statutory penalty is five years in prison, and a $250,000 fine or twice the amount of pecuniary gain or loss to the victim. For each count of mail fraud, the statutory penalty is up to 20 years in prison.
The charges are the result of an investigation by the U.S. Environmental Protection Service, Criminal Investigation Division, the Illinois Environmental Protection Agency and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Patrick D. Hansen.Spokane Man Sentenced to 5 Years in Federal Prison for Possessing Firearm and AmmunitionRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Jacob L. Peckham, age 25, of Spokane, Washington, was sentenced today for being a previously convicted felon in possession of a firearm and ammunition. Chief United States District Court Judge Rosanna Malouf Peterson sentenced Peckham to a five-year term of imprisonment and a three-year term of court supervision following release from Federal prison.
According to information disclosed during court proceedings, while on routine patrol on June 18, 2013, a Spokane Police Department officer observed Peckham riding a bicycle at the intersection of Empire and Cincinnati Streets. At the time, Peckham was the subject of three outstanding arrest warrants. As the officer pursued Peckham in his patrol car, he observed Peckham abandon his bicycle and backpack, and flee on foot. The officer apprehended Peckham a short distance away and arrested him. A Spokane Police Department sergeant searched Peckham incident to arrest and recovered one round of .38 caliber ammunition in Peckham's right front pants pocket. Members of the Spokane Police Department's Patrol Anti-Crime Team (PACT) arrived and recovered the bicycle and backpack. PACT members searched the area where Peckham had fled, suspecting he discarded a firearm. An officer found a fully-loaded Smith & Wesson, model 19, .357 caliber revolver in foliage approximately ten feet away from where Peckham had abandoned his backpack. When officers told Peckham they found a firearm, Peckham blurted, "Man, I'm carrying that for protection." Peckham was charged with being a previously convicted felon in possession of a firearm and ammunition and he pleaded guilty to that crime on December 13, 2013.
Michael C. Ormsby said, "Prosecuting firearms-related crimes continues to be a priority for the United States Attorney's Office for the Eastern District of Washington. Previously convicted felons should be aware that there are serious criminal penalties connected with possessing a firearm and ammunition and that this Office is committed to prosecuting aggressively firearm-related cases in the Eastern District of Washington."
This case was investigated by the Spokane Police Department, Spokane Police Department Patrol Anti-Crime Team, and Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by George J.C. Jacobs, III, an Assistant United States Attorney for the Eastern District of Washington.
13-CR-00156-RMP
Speedbump ConvictionsRead the Press Release
Defendant Counts(s) Charged Disposition Sentence John Savage
5:12-CR-351-1F Counts 1, 5, 6, 7, 8, and 9 of Indictment and Counts 1 and 2 of Superseding Information 09/03/2013:
Pled guilty to Counts 1 and 2 of Superseding Information. Bureau of Prisons 300 months on Count 1 and 60 months consecutive on Count 2 - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $200.00 - No Fine - Restitution $2,479.00 joint and several Candy Medlin
5:12-CR-351-2F 1, 5, 6, 7, and 1003/12/2013: Pled guilty to Count 1.
Bureau of Prisons 240 months - Supervised Release LIFE - Special Assessment $100.00 - Fine $9,700.00 interest waived - Restitution $2479.00 joint and several interest waived Larry Medlin
5:12-CR-351-3F 1 and 11 07/01/2013:
Pled guilty to Count 1. Bureau of Prisons 90 months - Supervised Release LIFE - Special Assessment $100.00 - Fine $6,800.00 interest waived - No Restitution Allen Bass
5:12-CR-351-4F 1 and 1201/28/2013: Pled guilty to Count 1.
Bureau of Prisons 113 months - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $100.00 - No Fine - No Restitution Larry Barefoot
5:12-CR-351-5F 1 and 1303/11/2013: Pled guilty to Count 1.
Bureau of Prisons - 121 months - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $100.00 - No Fine - No Restitution J.R. Thornton
5:12-CR-351-6F 1 and 1401/28/2013: Pled guilty to Count 1.
Bureau of Prisons 144 months - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $100.00 - No Fine - No Restitution Jamie Hunt
5:12-CR-351-7F 1, 2, and 1503/12/2013: Pled guilty to Count 1.
Bureau of Prisons 110 months - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $100.00 - No Fine - No Restitution George Myron Adams
5:12-CR-351-8F 1, 5, 6, 7, and 16 09/03/2013:
Pled guilty to Count 1. Bureau of Prisons 188 months - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $100.00 - Fine $7,300.00 - Restitution $2,479.00 joint and several Teresa Darden
5:12-CR-351-9F 1, 3, and 1701/28/2013: Pled guilty to Count 1.
Bureau of Prisons 240 months - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $100.00 - No Fine - Restitution $952.38 Steven McCall
5:12-CR-351-10F 1, 4, and 18 07/01/2013:
Pled guilty to Count 1. Bureau of Prisons 191 months - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $100.00 - Fine $9,900.00 interest waived - No Restitution Keith Britt
5:12-CR-351-11F 1 and 1901/28/2013: Pled guilty to Count 1.
Bureau of Prisons 87 months - Supervised Release 5 years - Special Conditions of Release Imposed - Special Assessment $100.00 - No Fine Christina Britt
5:12-CR-351-12F 1 and 2001/28/2013: Pled guilty to Count 1.
Bureau of Prisons 81 months - Supervised Release 5 years - Special Assessment $100.00 - No Fine - No Restitution Ryan Meyers
5:12-CR-351-13F 1 and 21 09/03/2013:
Pled guilty to Count 1. Bureau of Prisons 300 months - Supervised Release LIFE - Special Conditions of Release Imposed - Special Assessment $100.00 - No Fine - Restitution $952.38 joint and several Jackie Joyner
5:12-CR-351-14F 1 and 2201/28/2013: Pled guilty to Count 1.
Bureau of Prisons 113 months-Supervised Release 5 years – Special Conditions of Release Imposed – Special Assessment $100.00 – No Fine –No Restitution Shannon Kidwell
5:12-CR-351-15F 1 and 2303/11/2013: Pled guilty to Count 1.
Bureau of Prisons 126 months - Supervised Release 5 years - Special Assessment $100.00 - No Fine - No Restitution Jamie Denning 1
01/09/2014: 126 months custody, 5 years supervised release01/28/2013: Pled guilty to Count 1 01/30/2014: 132 months custody, lifetime supervised release
Bureau of Prisons 126 months - Supervised Release 5 years - Special Assessment $100.00 - No Fine - No RestitutionSioux Falls Man Receives Four Life Sentences for Sex TraffickingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man convicted of Sex Trafficking of a Child, Conspiracy to Engage in Sex Trafficking of a Child, and two counts of Sex Trafficking by Means of Force, Fraud, or Coercion was sentenced on March 17, 2014, by U.S. District Judge Karen E. Schreier.
Mohammed Sharif Alaboudi, age 45, was sentenced to life imprisonment on each of the four counts, and a $400 assessment to the Federal Crime Victims Fund.
On December 5, 2013, Alaboudi was convicted by a federal jury for Sex Trafficking of a Child, Conspiracy to Engage in Sex Trafficking of a Child, and two counts of Sex Trafficking by Means of Force, Fraud, or Coercion.
Alaboudi is the third person in the past four years to receive a life sentence for human trafficking in the District of South Dakota.
In 2011, the Sioux Falls Police Department (SFPD) Street Crimes Unit began investigating a criminal organization operating in and around Sioux Falls. Witnesses identified several individuals they claimed had been selling narcotics and prostitutes. In January 2012, the SFPD requested federal assistance, and a team consisting of the U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations, the Federal Bureau of Investigation, the SFPD, and the South Dakota Division of Criminal Investigation began investigating the case.
Investigators discovered that Alaboudi was living in a one-bedroom, upstairs apartment in a house several blocks from downtown Sioux Falls. Alaboudi lured multiple girls and young women to his home, where he provided drugs and alcohol. Then he would force them into engaging in sex acts with him and others who arrived at his residence, paying them with money and drugs. Witnesses described being drugged to the point of being unable to defend themselves. Alaboudi also used severe violence and threats of violence to coerce his victims into engaging in sex acts. Multiple witnesses described being beaten with objects and being threatened with further violence if they did not comply.
“Mr. Alaboudi ran a house of horror where girls and young women were assaulted and forced to engage in sex acts with strangers,” said Johnson. “This sentence ensures that he will no longer be able to profit from the pain and misery he inflicted on the most vulnerable women and children in our community.”
This case was investigated by the SFPD, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations, and the South Dakota Division of Criminal Investigation. Assistant U.S. Attorneys Kevin Koliner and Jeff Clapper prosecuted the case.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Alaboudi was remanded to the custody of the U.S. Marshals Service.
Shreveport Fire Department Dispatcher Arraigned on Child Pornography ChargesRead the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announced today that an initial appearance and arraignment hearing was held for Shreveport Fire Department Dispatcher Stephen St. John, 45, of Shreveport, before Magistrate Judge Mark L. Hornsby for possessing and receiving child pornography. He pleaded not guilty to both charges and was released on a $25,000 unsecured bond.
According to the indictment, St. John knowingly received child pornography on a computer on January 29, 2013. The images were video files depicting minors and prepubescent children engaging in sexually explicit conduct and lascivious exhibition of the genitals and pubic area. Additionally, images of child pornography were found in his possession on a computer and computer disks on September 5, 2013.
The defendant faces up to 20 years in prison for one count of possession of child pornography and from five to 20 years in prison for one count of receiving child pornography. He faces three years of supervised release for each count. He also faces a $250,000 fine for each count and forfeiture of the equipment used to acquire, store and view the child pornography.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The U.S. Postal Inspection Service, Homeland Security Investigations, U.S. Marshals Service and the Louisiana State Police investigated the case. Assistant U.S. Attorney Cytheria D. Jernigan is prosecuting the case.
Ship's Purser Convicted of EmbezzlementRead the Press Release
NORFOLK, Va. – Ismael Cuario Estrada, 66, was convicted today of embezzlement, after a four-day jury trial.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Charles T. May Jr., the Naval Criminal Investigative Service (NCIS) Acting Executive Assistant Director for Atlantic Operations, made the announcement after the verdict was accepted by Senior United States District Judge Henry Coke Morgan, Jr.
Estrada faces a maximum penalty of ten years and a fine of $250,000.00 when he is sentenced on June 25, 2014.Estrada was indicted on November 6, 2013. According to court records and the evidence presented at trial, Estrada is a retired Navy enlisted sailor who joined the Military Sealift Command (MSC) as a ship’s purser. In late 2006, he became a crewman on the USNS Arctic and remained there until March 30, 2013. In the early part of 2013, Estrada was ordered to become the purser on another USNS ship, the Laramie, whose purser was two months past his time limit on board. Estrada attempted to remain on the Arctic, but was ordered to leave for the Laramie. Contrary to the Captain’s orders, Estrada did not do the normal cash verification and placement of the ship’s money in the bank. Instead, he only did the cash verification and left the money in the ship’s vault. A cash verification on April 30, 2013 found that approximately $350,118 was missing from the $691,000 that should have been in the safe in the purser’s office, based on a cash verification that had been performed a month earlier. Estrada was then ordered off the Laramie and returned to Norfolk where he was eventually arrested and indicted for embezzlement.
This case was investigated by Naval Criminal Investigative Service. Assistant United States Attorney Steve Haynie and Special Assistant United States Attorney Christopher George are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Sex Offender Sentenced to 15 Years for Child PornRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Grandview, Mo., man who is a convicted sex offender was sentenced in federal court today for receiving child pornography over the Internet.
Robert E. Shepherd, 41, of Grandview, was sentenced by U.S. District Judge Dean Whipple to 15 years and eight months in federal prison without parole.
Shepherd, who pleaded guilty on May 15, 2013, was on state parole at the time of the federal offense after being convicted on state charges of statutory rape and statutory sodomy in Cass County in 2000 and of statutory sodomy in Clay County in 1999. He absconded from state parole during the federal criminal investigation and was a fugitive from justice for almost four years. Shepherd was arrested at the Mexican border and his parole revoked in December 2011, for which he served a year in state prison before being indicted and taken into federal custody.
Shepherd brought his computer to a computer repair facility in April 2008. Approximately a week later, a technician at the facility discovered at least one image of child pornography on the computer. The technician notified law enforcement officers, who retrieved the computer and obtained a search warrant for Shepherd’s residence. Officers seized additional computers and electronic media at Shepherd’s residence. Two videos of child pornography were discovered on the computers.
This case was being prosecuted by Assistant U.S. Attorney Katharine Fincham. It was investigated by the Grandview, Mo., Police Department and the Lee’s Summit, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Service Member at U.S. Naval Air Station in Lemoore Sentenced to 10 Years in Prison for Sex Trafficking of A MinorRead the Press Release
FRESNO, Calif. — Charles Ray Benavidez, 33, an Aviation Ordnanceman (Second Class) stationed at the United States’ Naval Air Station in Lemoore, was sentenced today by United States District Judge Anthony W. Ishii to 10 years for sex trafficking of a minor, United States Attorney Benjamin B. Wagner announced.
According to court documents, in April 2013, Benavidez knowingly recruited a 17-year-old female to engage in commercial sex acts in Kings and Tulare Counties. Benavidez was charged with sex trafficking of a minor and has been in federal custody since May 23, 2013. He pleaded guilty to the child sex trafficking charge on January 6, 2014.
“For most people, criminal acts against children are impossible to comprehend, but for the children who have been sexually exploited, these crimes are all too real,” said Mike Prado, resident agent in charge of HSI Fresno. “The physical and emotional scars are difficult, if not impossible, to outgrow. HSI will continue to work tirelessly to ensure child predators and sex traffickers receive the justice they deserve.”
This case was the product of an investigation by the Central California Internet Crimes Against Children Task force, specifically the Fresno U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Naval Criminal Investigative Service (NCIS), as well as the Porterville, Tulare and Lemoore police departments. Assistant United States Attorney Brian W. Enos prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet Safety.
Second Defendant Pleads Guilty in Scheme to Use Fresno Trucking Front to Ship Cocaine to CanadaRead the Press Release
FRESNO, Calif. —Vicente Rivaz-Felix, 28, an undocumented alien who was living in Los Angeles, pleaded guilty today to conspiracy to distribute and possess with the intent to distribute cocaine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Rivaz-Felix’s co-defendants set up a Fresno trucking company intending that cocaine would be concealed in legitimate cargo to be shipped to Canada. On September 21, 2012, Rivaz-Felix delivered eight kilograms of cocaine to a courier who had been sent to Los Angeles by his co-defendants. Law enforcement seized that cocaine and followed Rivaz-Felix back to his Los Angeles residence. A search warrant was served there on September 21, 2012, and 40 more kilograms of cocaine were seized.
This case is the product of an investigation by the Organized Crime Drug Enforcement Task Force, the Drug Enforcement Administration, Fresno Police Department, and the Fontana and Vernon Police Departments. Assistant United States Attorney Kevin Rooney is prosecuting the case.
Rivaz-Felix has been held in custody without bail since his arrest on September 21, 2012. He is scheduled to be sentenced by Judge Anthony W. Ishii on June 2, 2014. Rivaz-Felix faces a maximum statutory penalty of 20 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF Program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Santostee Man Pleads Guilty to Assaulting Navajo TeenagerRead the Press Release
ALBUQUERQUE – Jayson Gustina, 24, of Sanostee, N.M., pleaded guilty this morning to a federal assault charge under a plea agreement with the U.S. Attorney’s Office.
Gustina was arrested on Oct. 23, 2013, on a criminal complaint charging him with assault resulting in serious bodily injury and aggravated sexual abuse. On Jan. 19, 2013, Gustina was indicted and charged with assault resulting in serious bodily injury and abusive sexual contact. According to court filings, Gustina assaulted the victim, a 16-year-old Navajo girl, and attempted to rape her on Aug. 21, 2013, in Shiprock, N.M.
In entering his guilty plea, Gustina admitted assaulting the victim on Aug. 21, 2013. He also acknowledged that the victim suffered severe bruising, swelling, and a fractured cheek bone as a result of the assault.
Gustina has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Gustina faces a maximum penalty of ten years in prison.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers. It was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
San Joaquin County Man Arrested at Canadian Border on Charges of Attempting to Provide Material Support to Foreign Terrorist OrganizationRead the Press Release
SACRAMENTO, Calif. — In the early hours of the morning, Nicholas Teausant, 20, of Acampo, Calif. was arrested near the Canadian border, in Blaine, Wash. He was charged today in a complaint containing a single count of attempting to provide material support to a foreign terrorist organization, United States Attorney Benjamin B. Wagner announced.
According to the complaint, Teausant traveled to the Canadian border with the intent of continuing to travel to Syria to join the Islamic State of Iraq and Syria, a foreign terrorist organization more widely known as al-Qaida in Iraq.
This case is the product of an investigation by the Federal Bureau of Investigation and the Modesto Police Department and San Joaquin Sheriff’s Office, who are members of the Modesto/Stockton Joint Terrorism Task Force, with significant assistance from U.S. Customs and Border Protection. Assistant United States Attorneys Jean M. Hobler and Jason S. Hitt are prosecuting the case in conjunction with Trial Attorney Andrew Sigler of the National Security Division of the U.S. Department of Justice.
Teausant is expected to make his initial appearance today in the United States District Court for the Western District of Washington at 2 p.m.
The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt. If convicted, Teausant faces a maximum statutory penalty of 15 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Complaint
Salina Man Pleads Guilty to Federal Gun and Drug ChargeRead the Press Release
TOPEKA, KAN. – A Salina man today pleaded guilty today to a federal gun and drug charge, U.S. Attorney Barry Grissom said.
Stephen M. Smith, Jr., 45, Salina, Kan., pleaded guilty to one count of unlawful possession of a firearm in furtherance of drug trafficking. In his plea, he admitted that he possessed a .40 caliber handgun when he was arrested Sept. 6, 2013, at his residence in Salina. Police, who were called to the residence by a Kansas State Parole officer, seized a distribution quantity of methamphetamine and the gun.
Sentencing is set for June 9. Both sides have agreed to recommend a sentence of five years in federal prison. Grissom commended the Kansas Department of Corrections, the Salina Police Department, the I-135/I-70 Drug Task Force and the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Mike Warner for their work on the case.Ronnie Jackson Faces up to Life in Prison After Leading Robbery Spree Through Shelby CountyRead the Press Release
Memphis, TN – Ronnie Jackson, Jr., 29, of Memphis, TN, faces up to life in prison following his conviction on March 13, 2014, by a federal jury on 12 counts related to a series of robberies in and around Shelby County, announced U.S. Attorney Edward L. Stanton III.
According to the indictment and facts presented in open court, Jackson and his accomplices robbed three Dollar General Stores, a Family Dollar Store, and two Walgreens drug stores in April and May of 2012. During the last robbery, Jackson and a female accomplice went into the Walgreens at 824 West Poplar Street, Collierville, TN, to case the store. After Jackson and his female accomplice returned to their getaway vehicle, two male accomplices entered the store, forcing approximately 14 customers and five employees to the floor at gunpoint. They ordered the manager to open the safe and took more than $6,000.
One of the victims of the robbery managed to dial 911, and Collierville Police converged on the scene, arriving in time to witness one of the male accomplices attempting to enter the getaway vehicle. Jackson and his female accomplice were taken into custody and the male accomplices were apprehended after a brief foot pursuit.
Jackson was convicted on six counts of robbing a business engaged in interstate commerce (also known as “Hobbs Act” robberies), and six counts of using a firearm during a crime of violence. Each robbery carries a penalty of up to 20 years. The first firearms charge carries a penalty of seven years to life in prison and each of the other firearm charges carries a penalty of 25 years to life in prison. All firearms charges must be served consecutively and there is no parole in the federal system. He will be sentenced on June 19, 2014, at 2:00 p.m., before U.S. District Judge S. Thomas Anderson.
This case was investigated by the Safe Streets Task Force, specifically by the Federal Bureau of Investigation, the Memphis Police Department, and the Collierville Police Department. Assistant U.S. Attorney David Pritchard and Special Assistant U.S. Attorney Bo Summers represented the government.Port Arthur Businessman Guilty of Disaster Loan FraudRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – The former owner of a Port Arthur, Texas business has pleaded guilty to disaster loan fraud in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Kenneth W. Matthews, 58, of Fort Pierce, Florida pleaded guilty to conspiracy to defraud the Small Business Administration of disaster loan funds on Mar. 12, 2014, before U.S. Magistrate Judge Zachary Hawthorn.
According to information presented in court, from January 2008 to May 2010, Matthews conspired with his general contractor and subcontractor to submit falsely inflated invoices and checks for repair work done after Hurricanes Humberto and Ike in order to obtain low interest disaster repair loans extended by the Small business Administration. Matthews, the former owner of MegaBowl in Port Arthur, received SBA disaster loan proceeds of $750,000 after Hurricane Humberto and $760,000 after Hurricane Ike. After receiving the loan disbursements based upon the false invoices, the general contractor and a subcontractor would receive from Matthews a lesser amount than invoiced for the work actually done, or would kickback to Matthews a portion of the loan disbursement paid to them. The loan funds were disbursed solely for repairs and other expenses associated with the hurricanes and were not allowed for other general business or personal use. Matthews agreed to pay criminal restitution of $500,000 to the SBA and remains civilly liable for all loan proceeds.
Matthews faces up to 5 years in federal prison. A sentencing date has not been set.
In September 2005, the U.S. Department of Justice created the Hurricane Katrina Fraud Task Force, designed to deter, investigate and prosecute disaster-related federal crimes such as charity fraud, identity theft, procurement fraud and insurance fraud. The Hurricane Katrina Fraud Task Force includes members of the FBI, the Federal Trade Commission, the U.S. Postal Inspection Service, and the Executive Office for United States Attorneys, among others.
This case is being investigated by the Small Business Administration-OIG and the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Robert L. Rawls. ####Physician Sentenced to 57 Months in Federal Prison on Health Care Fraud ConvictionRead the Press Release
Co-defendants Who Were Convicted at Trial are Awaiting Sentencing on Conspiracy and Health Care Fraud Convictions
DALLAS — Dr. Nicolas Alfonso Padron, 54, of Garland, Texas, was sentenced this morning by U.S. District Judge David C. Godbey to 57 months in federal prison and ordered to pay $9,484,111 in restitution to the Centers for Medicare and Medicaid Services (CMS). Dr. Padron pleaded guilty in September 2013 to one count of count of conspiracy to commit health care fraud stemming from his role as medical director of a physician house-call company, A Medical House Calls (A Medical). Dr. Padron has been in custody since his arrest in June 2012. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Two co-defendants in the case, Lawrence Dale St. John, 67, and his son, Jeffrey Dale St. John, 42, both of Grand Prairie, Texas, were each convicted at trial in October 2013 on one count of conspiracy to commit health care fraud and 13 counts of health care fraud related to their operation of A Medical, which they owned and operated. Each count carries a maximum statutory sentence of 10 years in federal prison and a $250,000 fine. Restitution could also be ordered. Both are in custody and sentencing hearings are scheduled for March 31, 2014.
Dr. Padron joined A Medical as its medical director in December 2009. A Medical, which was also known as A+ Medical House Calls and ANM Physician House Calls, provided physician visits to Medicare beneficiaries in their homes, rather than at a doctor’s office. A Medical had locations in Mesquite, Texas; Dallas; and Carrollton, Texas. Its primary purpose was to certify and re-certify Medicare beneficiaries for home health services, regardless of the true condition of the patient.
Once A Medical established a Medicare beneficiary for physician home-visit services, it would submit billing for fraudulent care plan oversight claims. The company did not provide primary care physician services to Medicare beneficiaries.
From May 2010 to January 2012, the defendants conspired together and with others to defraud the Medicare program. A Medical, at the direction of Lawrence and Jeffrey St. John, submitted claims to Medicare using Dr. Padron’s unique Medicare number, with Dr. Padron’s permission, regardless of the claim’s merit. The defendants conspired together to bill Medicare for care plan oversight by Dr. Padron for numerous beneficiaries when Dr. Padron was out of town, including dates when he was out of the country and on a cruise.
In total, the defendants billed taxpayers for $1.4 million of services that were either not medically necessary or not rendered at all. Through the fraudulent certifications, Medicare was billed an additional $9.7 million by home health agencies.
In a separate case, Dr. Padron entered a guilty plea to one count of conspiracy to distribute a controlled substance stemming from his operation of Padron Wellness Clinic, a “pill-mill,” that he operated in Dallas. A sentencing date has not been set in this case.
The investigation was conducted by U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Medicaid Fraud Control Unit of the Office of the Attorney General of Texas. Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are in charge of the prosecution.
Pasco County Teacher Arrested for Enticement of MinorsRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that David Wendel Thompson (48, Seffner) was charged by a criminal complaint and arrested on Friday, March 14, 2014 for the enticement of minors. Thompson made his initial appearance today in Miami, Florida and is currently being detained. If convicted, he faces a mandatory minimum penalty of 10 years, up to a maximum penalty of life in federal prison.
Thompson is a teacher at Centennial Middle School in Dade City, Florida.
According to the criminal complaint, Thompson used Facebook in an attempt to knowingly persuade two minor females, from the country of Belize, to engage in sexually explicit conduct. In February 2014, Thompson had sexually explicit conversations with a 13 year old and a 15 year old female in Belize. In those conversations, he discussed flying to Belize to meet the minors and engage in sexual activity with them. On March 14, 2014, Thompson took a flight from Tampa, Florida to Belize City, Belize, with a layover in Miami, Florida. He was refused entry into Belize and arrested in the Miami International Airport.
A criminal complaint 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 U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). It will be prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Pamela Smith Pleads Guilty to Woodstock Inn EmbezzlementRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Pamela Smith, 57, of Barnard, pleaded guilty on March 12, 2014, in United States District Court in Burlington to a charge of wire fraud. U.S. District Judge William K. Sessions III released Smith on conditions pending sentencing, which has been set for July 8 in Brattleboro.
On February 18, 2014, the United States Attorney filed a one-count information charging Smith with wire fraud. According to the information, between approximately 2007 and early 2013, Smith was employed by the Shire Riverview Motel in Woodstock, Vermont. Smith worked part-time as a clerk and also performed bookkeeping services for the inn. Beginning no later than 2009 and continuing until early 2013, Smith embezzled approximately $200,000 from Shire Riverview. She did this by writing unauthorized checks to herself from the inn's checking account, then depositing the checks into her personal bank account; by stealing cash payments made by motel guests; and by using Shire Riverview funds to pay her personal expenses, including credit card, gasoline, fuel oil and telephone and Internet service bills. According to the information, Smith used about $40,000 in stolen funds to pay for improvements to a house in Barnard.
As part of her plea, Smith agreed to forfeit to the United States about $40,000 in improvements to the Barnard house, and to pay a forfeiture money judgment in the full amount of the loss.
Smith faces up to 20 years of imprisonment and a fine of up to $250,000. The actual sentence will be determined with reference to federal sentencing guidelines.
This case was investigated by the Woodstock Police Department and the Federal Bureau of Investigation.
Smith is represented by George Ostler. The prosecutor is Assistant U.S. Attorney Gregory Waples.Non-Indian Man from Chama Pleads Guilty to Assaulting Jicarilla Apache WomanRead the Press Release
ALBUQUERQUE – Alberto Acevedo, Jr., 60, an attorney in San Antonio, Texas, pleaded guilty this morning to a bribery charge in the U.S. District Court for the Western District of Texas, announced Steven C. Yarbrough, Acting U.S. Attorney for the District of New Mexico, and Aaron C. Rouse, Acting Special Agent in Charge of the FBI’s San Antonio Division.
Acevedo entered his guilty plea to a felony information charging him with bribery involving a program receiving federal funds pursuant to a plea agreement. The information charges that between March 2013 and Dec. 2013, Acevedo corruptly influenced a state court judge by giving him things of value. During that period, the state court judge was agent of the State of Texas and Bexar County, Texas, government entities that received federal assistance in 2013. The state court judge referred to in the information resigned from the bench on Feb. 14, 2014.
In announcing Acevedo’s guilty plea, Acting U.S. Attorney Steven C. Yarbrough said, “Fair and impartial judgment by those entrusted to carry out the laws is the bedrock of our legal system. We cannot and will not allow the public’s faith in our legal system to be shaken by judicial corruption.”
“Corruption in the courtroom erodes public confidence in the fair prosecution and resolution of cases and threatens to undermine our judicial system,” said Acting Special Agent in Charge Aaron C. Rouse of the FBI. “The FBI is committed to aggressively investigating and prosecuting those who are motivated by greed and who try to advance their personal agendas through bribery.”
In his plea agreement, Acevedo admitted giving gifts, payments and other things of value totaling more than $6,655 to the state court judge in exchange for favorable judicial rulings that benefitted him and his clients. Acevedo’s bribes to the state court judge included cash, car repairs, arranging the sale of a vehicle belonging to the state court judge, and registering a vehicle purchased by the state court judge. According to the plea agreement, the state court judge provided the favorable judicial rulings requested by Acevedo, including lenient sentences and less restrictive conditions of release for Acevedo’s clients.
At sentencing, Acevedo faces a maximum ten-year prison sentence and a $250,000 fine. Acevedo was released on bond pending his sentencing hearing, which has yet to be scheduled.Acting U.S. Attorney Steven C. Yarbrough praised the investigative work of the San Antonio Division of the FBI, which he noted is ongoing.
The prosecution of this case is being handled by Assistant U.S. Attorneys Mark A. Saltman and Brock E. Taylor of the U.S. Attorney’s Office for the District of New Mexico.- Acevedo Information
New York Man Sentenced to More Than 3 Years for Failing to Register as a Sex OffenderRead the Press Release
Contact: Halsey B. Frank
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Jose L.
Velazquez, 34, of Falconer, New York, was sentenced in United States District Court by Judge
D. Brock Hornby to 37 months in prison, followed by 10 years of supervised release for failing to register as a sex offender. On September 23, 2014, he pled to the charge.According to court documents, on January 16, 2009, Velazquez was convicted in Maine state court of 2 counts of gross sexual assault and one count of furnishing liquor to a minor. He was sentenced to 8 years of imprisonment with all but 3 years suspended, followed by 4 years of probation, and he was informed that he would have to register as a sex offender for life.
On March 1, 2011, Velazquez was released on probation and reminded of his obligation to register as a sex offender, which he did. On September 19, 2011, Velazquez gave written notice that he was changing his address to Biddeford, Maine and then stopped registering in
Maine.In fashioning his sentence, Judge Hornby observed that Velazquez was a high risk individual who had blatantly failed to register as he was required, and that the sentence was necessary to promote respect for the law.
The case was investigated by the United States Marshals Service.Nevada Man Sentenced for Assaulting Fort Hall Correction Center OfficerRead the Press Release
POCATELLO – Clayton Amos Lossing, 54, of McDermitt, Nevada, was sentenced today in United States District Court to 34 months in prison followed by three years of supervised release for assault on a federal officer, U.S. Attorney Wendy J. Olson announced. Lossing appeared before U.S. District Judge Brian Ted Stewart of the District of Utah. He was indicted by a federal grand jury in Pocatello on July 23, 2013, and pleaded guilty on November 19, 2013.
According to the plea agreement, on May 5, 2013, Lossing was arrested for intoxication by Fort Hall Police and transported to the Fort Hall Correction Center. During the booking process, Lossing kneed an officer in the groin, causing the officer significant pain requiring medical attention.
The case was investigated by the Fort Hall Police Department and the Federal Bureau of Investigation.
Murder for Hire Plot Against Judge Lands Septuagenarian A 20-Year SentenceRead the Press Release
DALLAS, Texas - Phillip Monroe Ballard, 72, of Fort Worth, has been ordered to federal prison for 20 years following his conviction in the attempted murder for hire of a federal judge in Texas, announced United States Attorney Kenneth Magidson of the Southern District of Texas. Ballard was convicted by a federal jury Dec. 11, 2013, after approximately two days of trial and less than an hour of deliberation.
U.S. District Judge Donald E. Walter from the Western District of Louisiana presided over the trial and sentencing today. At the hearing, additional evidence was presented including evidence that Ballard was originally indicted on tax charges and was known to use aliases in order to perpetrate his fraudulent tax schemes. Judge Walter ordered Ballard to serve a total of 240 months in federal prison to be immediately followed by three years of supervised release.
According to evidence presented at trial, from on or about Sept. 9, 2012 and continuing through Sep. 27, 2012, Ballard solicited the murder for hire of a U.S. District Judge in the Northern District of Texas. The jury heard from four government witnesses, one of whom was an informant who testified he had developed a friendship with Ballard as they both were in custody on unrelated criminal matters. He stated that Ballard had asked him if he would help him arrange the shooting death of the judge, who was presiding over his federal tax case. They eventually negotiated a price of $100,000.
The informant reported the incident to authorities and the plot was foiled before any harm came to the judge.
Ballard’s defense claimed he never had any actual intent to kill the judge. The jury disagreed and convicted him as charged.
Ballard will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by the FBI. Assistant U.S. Attorneys Mark McIntyre and Craig Feazel from the Southern District of Texas are prosecuting the case.
Modesto Man Sentenced to 10 Years in Prison for Possessing Child PornographyRead the Press Release
FRESNO, Calif. — Alberto Morales, 31, of Modesto, was sentenced today by United States District Judge Lawrence J. O'Neill to 10 years in prison for possessing child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, on February 1, 2013, Morales possessed between 300 and 600 images depicting minors engaged in sexually explicit conduct. The images also involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of pre-pubescent minors. Morales was charged with possessing child pornography by way of an indictment dated February 14, 2013, and pleaded guilty to this charge on January 6, 2014. In light of a prior conviction, Morales faced a minimum statutory period of confinement of 10 years.
“Today’s prison sentence is a reminder of the serious crime that is committed when the images of innocent children are illegally traded in cyberspace,” said Mike Prado, resident agent in charge of HSI Fresno. “Targeting these predators is a top priority for HSI. We will work tirelessly to end this type of despicable child exploitation.”
This case was the product of an investigation by the Central California Internet Crimes Against Children Task force, specifically the Fresno U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Fresno County Sheriff’s Office. Assistant United States Attorney Brian W. Enos is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet Safety.
Mexican National Sentenced to 57 Months for Meth TraffickingRead the Press Release
POCATELLO – Humberto Ontiveros-Dias, 32, a Mexican national formerly living in Rexburg, Idaho, was sentenced today in United States District Court to 57 months in prison for distribution of methamphetamine and cocaine, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Brian Ted Stewart, from the District of Utah, also ordered Ontiveros-Dias to serve four years of supervised release following his prison term, and to forfeit all property used to commit the crime and proceeds derived from the crime. He pleaded guilty to the charge on October 16, 2013.
According to the plea agreement, on March 2, 2012, Ontiveros-Dias agreed to sell an individual working as an undercover police officer an ounce of methamphetamine. The same day, Ontiveros-Dias met the undercover officer at a commercial parking lot in Rexburg. The meeting was monitored by law enforcement. During the meeting, Ontiveros-Dias sold the undercover officer two baggies of methamphetamine for $1,400. On March 9, 2012, Ontiveros-Dias agreed to sell the undercover officer an ounce of methamphetamine and an ounce of cocaine at the same parking lot in Rexburg, and was again monitored by law enforcement. During the meeting, Ontiveros-Dias sold the undercover officer approximately one ounce of methamphetamine for $1,300 and one ounce of cocaine for $1,100.
The case is the result of a joint investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation, the Madison County Sheriff’s Office, and the Idaho State Police.
Manhattan U.S. Attorney Files Civil Rights Lawsuit Against Major Real Estate Developers and Architects to Remedy Pattern and Practice of Inaccessible Design and Construction of New York City Apartment BuildingsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States filed a federal civil rights lawsuit in Manhattan federal court alleging that RELATED COMPANIES, INC. (“RELATED”), a major real estate developer based in New York City, has engaged in a pattern and practice of developing rental apartment buildings that are inaccessible to persons with disabilities. The suit alleges that RELATED, along with its affiliates TRIBECA GREEN LLC and BPC GREEN LLC, and two architecture firms, ROBERT A. M. STERN ARCHITECTS, LLP, (the “STERN FIRM”) and ISMAEL LEVYA ARCHITECTS, P.C. (the “LEVYA FIRM”), designed and constructed One Carnegie Hill and Tribeca Green, two rental complexes in Manhattan with more than 750 units in total, in violation of the design and construction provisions of the federal Fair Housing Act. These provisions of the Fair Housing Act have been in effect since March 1991. The suit further alleges that the inaccessible conditions at One Carnegie Hill and Tribeca Green demonstrate a pattern and practice of discriminatory conduct by RELATED, which may result in inaccessible conditions at RELATED’s numerous other rental properties in New York City and elsewhere, and that, unless RELATED’s discriminatory practices are enjoined, the inaccessible conditions at One Carnegie Hill and Tribeca Green will likely be repeated in current projects, including the Hudson Yards luxury rental complex development.
Manhattan U.S. Attorney Preet Bharara said: “We will not allow developers and architects who deprive people with disabilities of accessible housing to evade the consequences of their failure to comply with clear, long-standing federal civil rights laws. When developers demonstrate an unwillingness to design and construct accessible housing in accordance with federal law, this Office will not hesitate to use its enforcement tools to compel the developers to make both their preexisting and future constructions accessible.”
According to the allegations contained in the Complaint and public information:
RELATED is one of the largest developers of rental housing in New York City. In addition to One Carnegie Hill and Tribeca Green, RELATED has developed numerous other high-profile rental complexes in New York City, including MiMA, 1 MiMA Tower, The Caledonia, and The Tate. Since 2010, Related also has been a co-developer for the Hudson Yards complex in Manhattan, which is expected to include a mixed rental-condominium tower at 15 Hudson Yards.
RELATED has engaged in a pattern and practice of developing its rental properties without regard to their accessibility to people with disabilities. For example, at One Carnegie Hill, which is located on Manhattan’s Upper East Side, RELATED designed and constructed a 475-unit rental complex with scores of inaccessible conditions, which include steps and excessively high thresholds that interfere with accessible routes in the common areas and within individual units; kitchens that lack sufficient width for maneuvering by people in wheelchairs; electrical outlets and mailboxes that are not fully usable by people in wheelchairs; and bathrooms that lack sufficient clear floor space for people in wheelchairs to maneuver. One Carnegie Hill was completed in 2006, 15 years after the accessible design and construction requirements in the Fair Housing Act came into effect.
Similarly, RELATED caused scores of inaccessible conditions at Tribeca Green, a 278-unit rental complex that RELATED designed and constructed in lower Manhattan. Those conditions include excessively high thresholds that interfere with accessible routes in the common areas and within individual units; bathroom fixtures that prevent installation of grab bars; doorways in the common areas that lack sufficient clearance; kitchens that lack sufficient width for maneuvering by people in wheelchairs; trash rooms that lack accessible hardware; electrical outlets and mailboxes that are not fully usable by people in wheelchairs; and bathrooms that lack sufficient clear floor space for people in wheelchairs to maneuver. Tribeca Green was completed in 2005, 14 years after the accessible design and construction requirements in the Fair Housing Act came into effect.
To ensure that RELATED’s current and future residential housing developments are accessible to people with disabilities and to redress its history of non-compliance with the Fair Housing Act, the United States seeks a court order enjoining RELATED from designing and constructing multi-family housing, such as 15 Hudson Yards, without the accessibility features required by federal law and requiring RELATED to retrofit the inaccessible conditions at all the rental properties it has developed to make them accessible. The United States also seeks damages for persons harmed by RELATED’s unlawful practices, and a civil penalty to vindicate the public interest.
In addition, the United States asserts claims against the STERN and LEVYA FIRMS based on their inaccessible designs for One Carnegie Hill and Tribeca Green, respectively. Specifically, the United States seeks to enjoin these architectural firms from designing multi-family housing without the accessibility features required by federal law, as well as damages for persons harmed by their inaccessible designs and civil penalties.
This case is being handled by the Office’s Civil Rights Unit. Assistant U.S. Attorneys Li Yu, Carina H. Schoenberger, and Emily E. Daughtry are in charge of the case.
U.S. v. Related Companies, Inc. Complaint
Man Who Viewed Child Pornography in Fresno Library Pleads Guilty to Receipt of Child PornographyRead the Press Release
FRESNO, Calif. —Victor Duane Smith, 59, of Fresno, pleaded guilty today to receipt of child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, in July 2013, law enforcement began tracking an individual who was using the Fresno County Public Library’s public wireless system to view child pornography through a file-sharing program. Investigators were able to match the computer Smith was using to the computer that had used the library’s system and watched him in the library while he used the program. Smith later confessed to the offense.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Central California Internet Crimes Against Children Task Force, and the Fresno County Sheriff’s Office. Assistant United States Attorney Michael G. Tierney is prosecuting the case.
Smith is in currently in custody and is scheduled to be sentenced by Judge Anthony W. Ishii on June 2, 2014. Smith faces a possible sentence of five to 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the "resources" tab for information about Internet safety education.
Man Who Threatened Synagogue in Fargo Pleads Guilty and Sentenced on Civil Rights ChargeRead the Press Release
FARGO - Dominique Jason Flanigan pleaded guilty on March 17, 2014 to threatening a synagogue in Fargo in 2011, North Dakota U.S. Attorney Timothy Q. Purdon and Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels announced.
U.S. District Judge Ralph R. Erickson sentenced Flanigan to one year in prison to be followed by one year of supervised release. Flanigan was also ordered to pay a $25 special assessment to the Crime Victims’ Fund.
According to documents filed with the court, on January 4, 2011, Flanigan, also known as Kadafi Al Sadar, called Temple Beth El and left a voice mail message threatening the employees of the synagogue. He was indicted under seal by a grand jury on December 12, 2012, for interfering with a federally protected activity. The indictment charged that Flanigan’s threat intimidated and interfered with Temple Beth El employees because of their religion.
“Religious freedom is a basic civil right, and we are committed to protecting the freedom of all who worship and work at religious institutions,” said Ms. Samuels. “Those who threaten that freedom will be held accountable for their actions.”
“The North Dakota United States Attorney’s Office and the Department of Justice are committed to protecting the civil rights of all North Dakotans,” said Mr. Purdon. “We take civil right violations, such as those present in this case, very seriously and work hard to see that justice is done.”
This case was investigated by the FBI and prosecuted by Assistant United States Attorney Megan A. Healy of the U.S. Attorney’s Office for the District of North Dakota and Trial Attorney Dana Mulhauser of the Civil Rights Division of the U.S. Department of Justice.
Lawyer Admits to Stealing Client FundsRead the Press Release
PHILADELPHIA - Gomer Thomas Williams, 54, of Philadelphia, PA, pleaded guilty today to one count of wire fraud in connection with a scheme to defraud clients of the legal firm where he worked. Williams was an attorney and associate with the Philadelphia law firm, Spector Gadon & Rosen (“Spector”). Between 2007 and 2012, Williams defrauded four of his trust and estate clients of approximately $503,361 by diverting funds from his clients’ accounts to his personal accounts, and by overbilling his clients for legal work that was not performed.
U.S. District Court Judge Legrome Davis scheduled a sentencing hearing for June 23, 2014. Williams faces a potential advisory sentencing guideline range of 33 to 41 months in prison, a $100 special assessment, a possible fine, and up to three years of supervised release.
For the trusts, Williams was the trustee, and, for the estates, Williams was the administrator and/or executor. Williams exercised complete control over the victim-clients’ funds, including controlling their checking accounts. Williams abused his fiduciary position in transferring funds from their accounts to pay his own personal expenses, including his mortgage.
The case was investigated by the FBI and is being prosecuted by First Assistant United States Attorney Louis D. Lappen.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Interlachen Man Pleads Guilty in Federal Court to Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Franklin Stuart King (39, Interlachen) has pleaded guilty in United States District Court, in Jacksonville, to receiving child pornography over the Internet. King faces a mandatory minimum penalty of not less than 5 years, up to 20 years in federal prison and a potential life term of supervision. King has been in custody since his arrest on October 10, 2013. A sentencing date has not yet been set.
According to court documents, an agent with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), in Jacksonville, began an investigation to identify area individuals who had access to and/or were trading images and videos depicting child pornography over the Internet. The investigation revealed that a host computer using a particular Internet Protocol (IP) address in the Jacksonville area was hosting images of child pornography, while using a particular file sharing program. The agent made a successful connection to the host computer at this IP address and successfully downloaded several image files directly from the host computer that depicted child pornography. Further investigation revealed that the IP address resolved to a particular residence located in Interlachen, where King resided. HSI agents and other officers subsequently executed a search warrant at King’s residence and seized, among other things, King’s computer and other items of electronic media.
King was at the residence during the execution of the search warrant and told agents that he viewed images of underage kids on his computer, that while using a particular file sharing program, he would do random searches on the computer, and that he had seen images of nude minor children while on the computer. King also told agents that he used certain specific search terms to find these images and videos and stated, “there is like a small spark somewhere in [his] head that likes to see [child pornography].” King said that he had been viewing child pornography for two or three years.
A subsequent analysis of King=s computer media revealed that it contained a total of 808 images depicting child pornography.
This case was investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Jacksonville Sheriff’s Office, and the Putnam County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Idaho Falls Man Sentenced for Interstate Transportation of Property Taken by FraudRead the Press Release
Defendant Ordered to Pay Over $2 Million in Restitution to Victims of Fraud
POCATELLO – Gene Edward Hinsley, 64, of Idaho Falls, Idaho, was sentenced today to five years of probation for interstate transportation of property taken by fraud, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Hinsley to serve six months of home detention and pay $2,012,539.55 in restitution to victims of the fraud.
On October 8, 2013, Hinsley was convicted by a federal jury in Pocatello on count eight of the indictment that charged him with interstate transportation of property taken by fraud. The jury was unable to reach a unanimous verdict on the remaining seven counts, including charges of wire fraud and mail fraud. Prior to sentencing, the defendant and the government entered into a post-trial agreement in which the government agreed to dismiss the remaining counts and the court could consider “relevant conduct” in determining Hinsley’s sentence.
During the six-day trial, the jury heard evidence that between 2004 and 2008, Hinsley, who was the sole owner and operator of Galaxy Coin LLC, a business located in Idaho Falls, schemed to defraud investors by obtaining money in connection with what he represented as securities issued in the form of investment contracts for speculating in the silver market. According to the evidence, Hinsley transmitted account statements and letters regarding the status of investments, by wire and the U.S. Postal Service. Hinsley did not register the securities he was selling and he was not a registered securities broker-dealer.
The government presented evidence that in 2004, Hinsley began offering an investment program that used his expertise to buy and sell silver and would generate a return on investment by selling the silver for more than the purchase price. The parties’ agreement provided that the investor would earn a profit by investing money with Hinsley, and that the investor was not expected to expend any effort to obtain the return other than providing the investment funds. According to the evidence, Hinsley misrepresented to investors that their investment was low-risk, risk free, or moderately risky; that the investors’ only risk was that they might end up with the silver; and that the investors could withdraw all or part of their invested funds upon notice. The jury heard evidence that Hinsley did not return the money when requested by investors to do so.
The government presented evidence that Hinsley’s investment scheme was structured to pay investors 80% of profits and Hinsley 20%. As Hinsley gained investors and conducted more transactions, he eventually switched to a fixed rate of return of 13% every two months, or 78% annually. Hinsley initially paid investors the returns he promised and, based on the reliability of generous investment returns and bi-monthly, e-mailed account statements, misled investors into believing he was investing prudently and obtaining consistent monthly returns. Because of these misrepresentations, investors did not attempt to remove their investment and generated a positive image to attract new investors.
The jury also heard evidence that in April 2008, Hinsley notified investors that he was unable to purchase silver due to its declining price and no one would sell to him; that he was reducing the return to 2% per month, or 24% annually; and that he would not return their investments until October 2008. In September 2008, Hinsley told investors that he would continue to pay the 2% monthly return, but would postpone payouts of the principal for an additional six months. Because Hinsley failed to maintain accurate business records, the government estimated that he issued investment contracts to over 100 investors of over $4 million, with a net loss of between $1.5 million and $2 million.
The case was investigated by the Federal Bureau of Investigation.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
# #Houston Woman Sent to Prison for Scheme to Cash Deceased Woman’s Benefit ChecksRead the Press Release
HOUSTON – Doris Hayes, 37, of Houston, has been ordered to prison for using her brother’s Social Security number to open a bank account to cash a deceased woman’s benefit checks, announced United States Attorney Kenneth Magidson. Hayes pleaded guilty to two counts of making false statements involving a Social Security number on Wednesday, Nov. 13, 2013.
Today, U.S. District Judge David Hittner, who accepted the guilty plea, handed Hayes a sentence of 33 months in federal prison to be followed by a three-year-term of supervised release. She was further ordered to pay restitution in the amount of $177,694. Hayes, currently serving time in state prison for forgery and possession of a controlled substance, requested her federal and state sentences to run concurrently. Judge Hittner denied that request.
Hayes admitted she opened bank accounts at International Bank of Commerce and University Federal Credit Union using false Social Security numbers, including that of her brother, in order to facilitate a check cashing scheme.
A previous related indictment charged Sandra Carrier, 58, of Houston, with taking part in the scheme in which she caused her deceased mother’s treasury checks from the Department of Veterans Affairs and Social Security Administration to be cashed after her mother had passed away. Some of those checks were cashed using the same bank accounts Hayes had opened with false Social Security numbers. Carrier and Hayes continued to negotiate the checks up to eight years after Carrier’s mother’s death.
The United States suffered $177,642 in damages as a result of the scheme.
Carrier pleaded guilty to related charges and received a sentence of 12 months and one day in prison.
Hayes will remain in custody pending transfer to a U.S. Bureau of Prisons facility upon completion of her state sentence.
This case is the result of a joint investigation involving multiple federal agencies including the Social Security Administration – Office of Inspector General and the Department of Veterans Affairs. Assistant U.S. Attorney Andrew Leuchtmann is prosecuting this case.
Hobbs Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Clinton Skippings, 57, of Hobbs, N.M., pleaded guilty today in Las Cruces federal court to a methamphetamine trafficking charge. The guilty plea was announced by Acting U.S. Attorney Steven C. Yarbrough, 5th Judicial District Attorney Janetta B. Hicks, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI, and Commander Mike Wilson of the Lea County Drug Task Force (LCDTF).
Skippings was arrested on Dec. 18, 2013, after he was transferred from state custody to federal custody to face charges on a federal criminal complaint alleging methamphetamine trafficking charges. According to the criminal complaint, officers of the LCDTF arrested Skippings in Hobbs, N.M., on state charges on Oct. 10, 2013, after seizing approximately 119 grams of methamphetamine, 42.6 grams of cocaine and 10 grams of cocaine base when they executed search warrants on Skippings, his residence and his vehicle. The officers also seized a firearm and more than $5800 in cash.
During today’s proceedings, Skippings entered a guilty plea to a felony information charging him with possession of methamphetamine with intent to distribute. In his plea agreement, Skippings admitted that he was in possession of methamphetamine and cocaine base that he intended to distribute when he was stopped by officers on Oct. 10, 2013. He also admitted that he intended to distribute the methamphetamine, cocaine and cocaine base seized when the officers executed a search at his residence.
Skippings is in federal custody and remains detained pending his sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, Skippings will be sentenced to ten years in federal prison. According to the plea agreement, the parties will recommend that the ten year prison sentence run concurrently with the sentence imposed on Skippings in the state case captioned State of New Mexico v. Clinton Skippings, D-506-CR-2013-00074 (5th Judicial District).
This federal case was investigated by the Las Cruces office of the DEA and the Lea County Drug Task Force, with assistance from the 5th Judicial District Attorney’s Office, and is being prosecuted by Assistant U.S. Attorney Terri J. Abernathy of the U.S. Attorney’s Las Cruces Branch Office. Assistant District Attorney Erik Scramlin of the 5th Judicial District Attorney’s Office prosecuted the aforementioned state case.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department and the Jal Police Department, and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Galena Woman Pleads Guilty to Embezzling $300,000 from EmployerRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Galena, Mo., woman pleaded guilty in federal court today to embezzling more than $300,000 from her employer.
Sarah N. Underwood,35, of Galena, waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to wire fraud, money laundering and failure to file a tax return.
According to today’s plea agreement, Underwood worked as the community manager for Fall Creek Condominium in Branson, Mo., from Jan. 15, 2007, until she was fired on Sept. 7, 2012, when her theft was discovered. Fall Creek and its owners association has 639 condominiums owned by individuals and under its association. Among other duties, Underwood was responsible for the book-keeping and financial affairs of Fall Creek, and was an authorized signatory on the checking accounts.
By pleading guilty today, Underwood admitted that she conducted numerous unauthorized electronic bank transfers and wrote $311,280 in unauthorized checks from the bank accounts of the Fall Creek Condominium Owner’s Association. Underwood deposited these checks into her bank accounts and spent the money on personal expenses and purchases.
For example, Underwood admitted that she spent $76,287 to purchase a Shelby Mustang, used $25,505 to purchase a condominium at Fall Creek and received two paychecks every two weeks from Fall Creek.
Underwood used a cashier’s check written on her employer’s bank account to purchase a 2012 Ford F350 Super Duty 4X4 Crew Cab Truck for $56,169. The truck was registered to Mstrmind Enterprises, a company owned by her and her boyfriend, which performed construction and rehabilitation work at Fall Creek. Underwood was responsible for running the business affairs of Mstrmind, while her boyfriend, who was also employed by Fall Creek, was the project manager and responsible for the actual construction or rehabilitation project. The embezzlement scheme included an $80,000 check written to Mstrmind that was purportedly payment for work performed, but Underwood could not justify the payment.
Underwood also admitted that she failed to file federal tax returns for 2010, 2011 and 2012.
Under federal statutes, Underwood is subject to a sentence of up to 31 years in federal prison without parole, plus a fine up to $525,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and IRS-Criminal Investigation.Former San Antonio Police Officer Sentenced to Federal PrisonRead the Press Release
This afternoon, 37-year-old former San Antonio Police Officer Curtis W. Lundy was sentenced to 18 months in federal prison followed by two years of supervised release for theft of honest services by wire fraud announced United States Attorney Robert Pitman, Federal Bureau of Investigation Acting Special Agent in Charge Aaron C. Rouse and San Antonio Police Chief William McManus.
According to court records, on December 15, 2012, then Officer Lundy responded to a call concerning an assault in progress at a Northside apartment complex. At the scene, Lundy detained an individual in connection with the assault after that individual admitted to Lundy that he was in possession of a user amount of marijuana. While the subject was detained, Lundy indicated that he would hold off on filing the possession of marijuana charge in exchange for a $400 payment. During subsequent phone conversations, Lundy raised the payment to $500.
The subject subsequently contacted the FBI and at the agency’s direction, the subject was able to make multiple audio recordings of cellular telephone conversations with Lundy. During one of those conversations, Lundy instructed the subject to meet in order to collect the $500. Surveillance observed Lundy, the sole occupant, arrive in a marked SAPD patrol vehicle and collect an envelope from the subject which contained $500.
Lundy pleaded guilty to the charge on October 10, 2013.
This case was investigated by agents with the Federal Bureau of Investigation together with San Antonio Police Department Internal Affairs. Assistant United States Attorney Greg Surovic prosecuted this case on behalf of the Government.
Former Portland and Bend Area Attorney Sentenced to 63 Months for Embezzling more than $1.1 Million of Client fundsRead the Press Release
EUGENE, Ore. – Today, U.S. District Judge Michael McShane sentenced Bryan Gruetter, 55, of Portland, Oregon, to 63 months in prison and ordered him to pay $1,144,487.97 in restitution. According to court documents, Gruetter, a former personal injury lawyer, embezzled more than $1.1 million from his clients between 2008 and 2012.
Gruetter, an attorney licensed to practice law in Oregon, had offices in Portland and Bend, Oregon, and primarily worked personal injury and wrongful death cases. In 2012, law enforcement began investigating Gruetter’s use of his clients’ money and determined that between January 2008 and January 2012 he had illegally diverted more than $1.1 million of his clients’ money to pay for personal and business expenses rather than to pay the clients or to pay the clients’ legal, medical, insurance, or other associated costs. When interviewed, Gruetter admitted that he was “robbing Peter to pay Paul” because his law firm’s monthly income was insufficient to cover the monthly overhead, which included personal family payments and expenses. On March 9, 2012, defendant resigned his law license, deciding not to challenge the allegations.
Currently, the Oregon State Bar through the Client Security Fund has paid more than $900,000 to some of his clients in an attempt to mitigate some of the damage Gruetter caused. In fact, the Gruetter claims exhausted the Client Security Fund reserves, requiring an increase in bar members’ annual assessments from $15 to $45 until the reserve is fully funded.
U. S. Attorney S. Amanda Marshall commented, “As a lawyer, this defendant had a solemn duty to help his clients seek justice. Instead, he betrayed their trust and victimized vulnerable individuals by lying to them and stealing their money. His conduct tarnishes a profession full of hard-working, ethical attorneys who work hard every day helping people solve complex problems. My office will not tolerate this type of behavior from professionals who violate the public's trust in this manner.”
This case was investigated by the FBI, the IRS, the Deschutes County District Attorney’s Office, and the Bend Police Department and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.
Former Eagle Resident Pleads Guilty to Child Sexual Exploitation OffensesRead the Press Release
Man was Fugitive for Ten Years
BOISE — Gerald Lee Farrell, Jr., 46, formerly of Eagle, Idaho, pleaded guilty today in United States District Court to one count of interstate travel with a minor with the intent to engage in criminal sexual activity and one count of possessing sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Farrell entered his plea in front of visiting Ninth Circuit Court of Appeals Judge A. Wallace Tashima, who was hearing the case by designation.
Farrell was indicted by a federal grand jury in Boise in September 2004. A superseding indictment was returned in October 2004. Farrell had been a fugitive since January of 2004. He was arrested in Spain in July 2013 and extradited to the United States in December 2013.
According to the plea agreement, Farrell and his wife became a host family for a 16-year-old German female exchange student in August 2003. The plea agreement further states that throughout the fall of 2003, the defendant sought various opportunities to observe the girl nude or partially nude and that he engaged her in conversations of a sexual nature. In December 2003, Farrell took the girl to Nevada. One night, she woke up to find the defendant lying across her stomach and trying to remove her panties. The girl was able to push the defendant away. According to the plea agreement, the girl told others about Farrell’s conduct when they returned to Idaho. Ada County Sheriff’s Office deputies executed a search warrant at Farrell’s Eagle home on January 4, 2004, and seized his computer and other items. Farrell and his wife fled Idaho for Switzerland approximately a week later. According to the plea agreement, a forensic examiner found video files of children under 18 engaging in sexually explicit conduct on Farrell’s seized computer hard drive. These images were of minors other than the foreign exchange student.
“This case shows that law enforcement at all levels is committed to aggressively pursuing those who would sexually exploit children,” said Olson. “Perpetrators of these crimes against our children cannot run and cannot hide. We will be patient, and we will find you. I commend the persistence of FBI Special Agent Mary Martin and the now-retired Ada County Sheriff’s Office detectives who worked long hours over many years to bring Mr. Farrell to justice. I also commend the many civilian witnesses, including those with the foreign exchange student program and the victim in this case, for their cooperation and readiness to testify so long after the crimes were committed.”
The charge of interstate travel with a minor with the intent to engage in criminal sexual activity is punished by a minimum of five years and a maximum of thirty years in prison, a maximum fine of $250,000, and up to lifetime supervised release. The charge of possession of sexually explicit images of minors is punishable by up to ten years in prison, a maximum fine of $250,000, and up to lifetime supervised release.
Sentencing is set for May 27, 2014, before the Hon. Dee V. Benson, U.S. District Judge for the District of Utah, at the federal courthouse in Boise.
The case was investigated by the Federal Bureau of Investigation and the Ada County Sheriff’s Office.
Former CME Clerk Convicted of Commodities Fraud for Manipulating Trades to Profit More Than $200,000Read the Press Release
CHICAGO — A former clerk for a lean hogs futures trader was convicted of commodities fraud for manipulating trades to profit more than $200,000 for herself to the detriment of public customers, federal law enforcement officials announced today.
The defendant, NICOLE M. GRAZIANO, 33, of Addison and formerly of Roselle, was found guilty of four counts of commodities fraud on Friday following a four-day bench trial before U.S. District Judge James Zagel in Federal Court.
Graziano’s scheme resulted in an “almost unbelievable success rate” of 90 to 100 percent of winning trades for her own account, which would have been impossible in an ordinary market setting, Judge Zagel said in delivering his verdict. Graziano faces a maximum penalty of 10 years in prison and a $1 million fine on each count. Judge Zagel set sentencing on June 25.
According to the evidence, Graziano, who was a clerk for a member broker at the Chicago Mercantile Exchange, now CME Group, secretly inserted order tickets for her own personal orders into the decks of tickets submitted by public customers. She provided the tickets and trade cards to brokers to execute during the closing bracket of trading in lean hogs futures contracts. Using her position as a clerk, Graziano fraudulently allocated favorable prices to her own trades (giving herself low prices for buy orders and high prices for sell orders), and reaped profits to the detriment of public customers. Between September 2009 and August 2010, Graziano submitted at least 89 fraudulent trade cards to the appropriate clearing firms, resulting in $213,680 in illegal profits to her during the closing bracket.
Judge Zagel said that the scheme damaged “the legitimacy of the exchange itself” and hurt customers because she took away benefits that could have gone to them for her own advantage.
The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The CME Group assisted in the investigation.
The government is being represented by Assistant U.S. Attorneys Christopher R. McFadden and Tiffany McCormick.
Former Bank Officer Sentenced for Embezzling from Elderly Customers' AccountsRead the Press Release
TULSA, Okla. — A former bank Savings Officer at Osage Federal Bank, now known as American Heritage Bank, was sentenced today to one (1) year and one (1) day in federal prison for stealing $147,466.30 from elderly customers’ bank accounts, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma.
Patricia L. Swearingin, 67, of Bartlesville, embezzled bank funds from 23 elderly customers’ accounts through the use of her position as a bank officer from November 2007 to November 2010. Swearingin pleaded guilty on December 10, 2013, to misapplying funds.
Swearingin would withdraw funds from dormant bank accounts that held certificate of deposit interest income owned and held by elderly customers. The average age of the customer was 86 years old. She would forge a customer’s name on a check and present the check to the bank’s drive-through teller, falsely stating that the account customer was waiting in her office for the cash. Swearingin would either deposit the stolen funds into her personal bank account or spend the cash for personal expenses. Most of the stolen funds were used for casino gambling.
In addition to the prison sentence, U.S. District Court Judge James H. Payne ordered Swearingin to pay restitution to American Heritage Bank in the amount of $159,022.45, which includes the $147,466.30, plus the bank costs of investigating the embezzlement, and forfeited $45,137.02 from her retirement account at American Heritage Bank.
The case was a joint investigation by the Federal Bureau of Investigation, Bartlesville Police Department, the Washington County District Attorney’s Office, and the U.S. Attorney’s Office. Assistant United States Attorneys Charles L. McLoughlin and Catherine Depew prosecuted the case on behalf of the United States.
Former Bank Employee and Ex-Boyfriend Guilty in Bank Robbery That Yielded over $500,000 with Staged Kidnapping and Fake BombRead the Press Release
LOS ANGELES – The former assistant manager of a Bank of America branch in East Los Angeles and her onetime boyfriend were convicted today of plotting a heist in which the woman wore a fake bomb to simulate a kidnapping to steal approximately $565,000 from the bank.
Following a one-week trial in United States District Court, the couple was found guilty today of conspiracy to commit bank robbery and bank robbery in the September 5, 2012 heist.
Reyes “Ray” Vega, 34, of Bell, and Aurora Barrera, 33, who now resides in Downey, each face up to 30 years in federal prison when they are sentenced on May 19 by United States District Judge Manuel Real.
During the robbery, Barrera walked into the bank with what appeared to be an explosive device taped to her body, convinced a co-worker that she had been kidnapped that morning by two black men, told the co-worker that they had to open the vault and place money outside the bank or else the kidnappers would harm them.
Barrera and her co-worker placed $565,500 of the bank’s money into bags and then threw the bags out the bank’s side door. One of Vega’s longtime friends, Richard Menchaca, picked up the money and drove it away from the bank. Menchaca met up with another accomplice, Bryan Perez, and they moved the money to a safe location. The device attached to Barrera’s body turned out to be a hoax when the Los Angeles Sheriff’s Department Bomb Squad arrived and disabled it using a robot.
Menchaca and Perez were also charged in this case, but they pleaded guilty and testified at the trial of Vega and Barrera.
According to testimony, Vega and Barrera were dating at the time of the robbery. Barrera testified at trial that she planned to marry Vega and move to Dubai, where Vega claimed to have employment opportunities. However, Barrera said she ended the relationship after learning that Vega was dating several other women at the time and that he had been charged with orchestrating the robbery. Several of Vega’s former friends also testified at trial about how he asked for help in planning the robbery and how he bragged about it afterwards.
Although a small portion of the money has been recovered, the majority remains outstanding. The FBI, which led the investigation, continues to pursue leads to recover the remainder of the stolen money.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Huntington Park Police Department.
Release No. 14-032
Fargo Man Sentenced in Methamphetamine Conspiracy and for Attempted Escape from CustodyRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on March 17, 2014, Earl Russell St. Claire Jr., 24, Fargo, N.D., was sentenced by U.S. District Judge Ralph R. Erickson to serve 25 years in prison for conspiring to possess with the intent to distribute and distribution of a controlled substance and also for attempting to escape from custody on June 15. 2013.
The conspiracy involved the transportation or distribution in excess of 500 g of methamphetamine. St. Claire, Jr. was viewed by the conspiracy as their leader or supervisor and would look to him for guidance in their distribution of the methamphetamine. Judge Erickson also ordered St. Claire, Jr. to serve five years of supervised release and to pay a $200 special assessment to the Crime Victims Fund.
The case was investigated by Homeland Security Investigations, Drug Enforcement Administration, Fargo and Moorhead Police Departments, and Cass County Drug Task Force.
First Assistant U.S. Attorney Chris Myers prosecuted the case.
Eastern North Carolina Methamphetamine Distribution Organization Dismantled “Operation Speed Bump”Read the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced the recent sentencing of a group of targets in an Organized Crime Drug Enforcement Task Force (OCDETF) prosecution focusing on methamphetamine production in Johnston, Sampson and Wayne Counties in the Eastern District of North Carolina. The results of this indictment in the larger investigation, code named Operation SPEED BUMP, was a total of 16 convictions and the sentencing of those defendants. This drug trafficking organization operated in Johnston, Sampson and Wayne Counties since at least 2008 and was responsible for manufacturing large amounts of domestically produced methamphetamine.
Mr. Walker statedThese defendants created havoc on the law-abiding residents in the area by their distribution of large amounts of methamphetamine. My office stands ready to prosecute organizations like this to the full extent of the law.”
“Meth brings violence and addiction to our communities, and North Carolina law enforcement at all levels is committed to rooting out the criminals who make and deal this dangerous drug. We’re making a dent in North Carolina’s meth problem through cases like this one,” Attorney General Roy Cooper stated.
To date, 78 methamphetamine cooks and significant precursor purchasers have been prosecuted by the U.S. Attorney’s Office as part of Operation SPEED BUMP. In October of 2012, a grand jury in this District returned a twenty-four count indictment against sixteen individuals involved in this methamphetamine production ring. All sixteen of those individuals have been sentenced. Six of these individuals were from Johnston County, six were from Sampson County and four were from Wayne County. They traveled throughout the District to buy pseudoephedrine, steal anhydrous ammonia, and cook methamphetamine. This group is responsible for purchasing over five (5) kilograms of pseudoephedrine for the purpose of manufacturing methamphetamine and the ultimate production of almost five (5) kilos of methamphetamine. This group possessed multiple firearms during the course of this conspiracy.
Sentences in these cases range from 81 months to 360 months imprisonment. See the attached list of individual defendants and their sentences. Operation SPEED BUMP is an on-going investigation into domestic methamphetamine production that has been ongoing since 2008 and has spanned at least 15 counties in the Eastern District of North Carolina to date.
The North Carolina State Bureau of Investigation Special Services Unit leads a multi-agency, collaborative effort to target methamphetamine production in the Eastern District of North Carolina. Other agencies involved in this portion of the investigation included the Johnston County Sheriff’s Office, the Sampson County Sheriff’s Office and the Wayne County Sheriff’s Office. Assistant United States Attorney Jennifer E. Wells prosecuted the cases for the government.
Dearborn Resident Charged WithAttempting to Support A Foreign Terrorist OrganizationRead the Press Release
A 22-year old Dearborn, Michigan resident was charged today in a criminal complaint with attempting to provide material support to a foreign terrorist organization, specifically Hizballah, announced United States Attorney Barbara L. McQuade.
Joining in the announcement was Paul Abbate, Special Agent in Charge, Federal Bureau of Investigation, Detroit Division.
Mohammad Hassan Hamdan appeared in federal court in Detroit this afternoon before United States Magistrate Judge R. Steven Whalen where he was temporarily detained pending a detention hearing which will take place on Monday, March 24 at 1pm.
The complaint alleges that on March 16, 2014, Hamdan attempted to fly to Lebanon and onto Syria to fight on behalf of Hizballah in the Syrian civil war. Hizballah is a designated terrorist organization under U.S. law, which makes it illegal to provide money, goods or services to a terrorist organization. Hamdan is a Lawful Permanent Resident of the U.S. who immigrated in 2007.
If convicted, Hamdan faces up to 15 years in prison and a $250,000 fine.
A criminal complaint contains merely accusations, and the defendant is presumed innocent unless and until proven guilty.Dallas Man Sentenced to 10 Years in Federal Prison on Methamphetamine ConvictionRead the Press Release
DALLAS — Angel Medina, Jr., aka “June Bug,” of Dallas, was sentenced this morning by U.S. District Judge David C. Godbey to 120 months in federal prison following his guilty plea in October 2013 to one count of possession of methamphetamine with intent to distribute. Medina, 27, has been in custody since his arrest in May 2013. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
On May 7, 2013, a federal grand jury sitting in the Northern District of Texas returned a five-count indictment against Medina, Jr., alleging that he sold methamphetamine and cocaine base (crack cocaine) on multiple occasions. According to documents filed in the case and evidence presented in court, Medina sold narcotics to an undercover officer with the Dallas Police Department. In October 2013, Medina pleaded guilty to Count Five of that indictment, admitting that he knowingly sold an ounce of methamphetamine on June 24, 2012, to what turned out to be an undercover officer.
The case was investigated by the Dallas Police Department; it was prosecuted by Assistant U.S. Attorney Jason D. Schall.
Dallas County Man Sentenced to 70 Months in Federal Prison in Investor Fraud CaseRead the Press Release
Defendant Sold “Salad Bowl” Franchises in California and Texas
DALLAS — A Irving, Texas, man who pleaded guilty in April 2013 to one count of wire fraud stemming from his role as registered agent, director and incorporator of The Salad Bowl Franchise Corporation, was sentenced this morning by U.S. District Judge David C. Godbey.
Michael David Carroll, 38, was sentenced to 70 months in federal prison and ordered to pay $1,437,040 in restitution. Judge Godbey ordered that Carroll surrender to the Bureau of Prisons by May 16, 2014. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.
According to documents filed in the case, as well as testimony at today’s sentencing hearing, from November 2008 through September 2010, Carroll ran a scheme to defraud potential investors, and to obtain money and property under false and fraudulent pretenses, by fraudulently inducing investors to purchase a “Salad Bowl” franchise from him.
As part of the scheme to defraud, Carroll obtained funds from several investors by selling “Salad Bowl” franchises to investors in California and Texas. He provided false financial data to investors including inflated daily and monthly sales figures at some franchise locations. He also falsely represented to some investors that investment funds would be used only to fund franchise construction expenses and to purchase franchise restaurant equipment related to that investor. Carroll, however, admitted that he co-mingled investor funds into his operating account and then used investor funds for his own personal use.
Carroll falsely represented to some investors that some franchise equipment at particular franchise store locations would be fully owned by the investor as part of a “turnkey operation,” when in fact, Carroll had only leased some of the franchise equipment. He also fraudulently altered financial statements to represent falsely inflated sales to deceive potential investors about income generated by retail sales at franchise store locations.
Carroll admitted that he forged his business partner’s signature on a $23,000 loan secured by account receivables on a “Salad Bowl” restaurant. He also admitted concealing his bankruptcy filings from several potential investors in order to deceive them about his true financial condition and history.
The FBI investigated the case and Assistant U.S. Attorney David L. Jarvis prosecuted.
Colorado Man Pleads Guilty to Bank Robbery in LawrenceRead the Press Release
TOPEKA, KAN. – A Colorado man pleaded guilty today to a bank robbery in Lawrence, U.S. Attorney Barry Grissom said.
Matthew W. Headley, 37, Canon City, Colo., pleaded guilty to a Sept. 5, 2013, robbery at the US Bank, 1807 W. 23rd Street in Lawrence. In his plea he admitted he was wearing a golf hat and pajama pants when entered the bank and handed a teller a note saying, “100s and 50s now.” Officers of the Lawrence Police Department arrested him soon after that at a convenience store not far from the bank.
Sentencing is set for June 9. Both sides have agreed to recommend a sentence of 24 months in federal prison. Grissom commended the Lawrence Police Department, the FBI and Assistant U.S. Attorney Mike Warner for their work on the case.Bridgeport Woman Sentenced to Prison for Embezzling from Shelton Travel AgencyRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHRISTINA TARTAGLIO, 34, of Bridgeport, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to nine months of imprisonment, followed by three years of supervised release, for embezzling from her employer. TARTAGLIO also must spend the first six months of her supervised release in home confinement under electronic monitoring.
According to court documents and statements made in court, between 2008 and 2011, TARTAGLIO was employed as a corporate travel consultant, office manager, and accounting assistant for a travel agency located in Shelton. During that time TARTAGLIO embezzled from the travel agency by drafting refund checks from the agency to clients who were not due any refunds, forged the clients’ signatures, endorsed the checks, and then deposited them into her personal bank account. Also, where a commission was due to the travel agency, TARTAGLIO entered all or part of the commission as a credit payable to a random client or a fictitious name and then wrote a check for the credit amount to that name. She then endorsed each check and deposited it into her bank account. She also created checks payable to vendors or suppliers for operating expenses, changed the payee on a check to a fictitious name created by her, endorsed and then deposited the checks in her account.
Through this scheme, TARTAGLIO embezzled $94,237.05. She was ordered to pay full restitution.
On June 10, 2013, TARTAGLIO pleaded guilty to one count of wire fraud.
This matter was investigated by the U.S. Secret Service, the Shelton Police Department and the Connecticut Financial Crimes Task Force, which includes federal, state and local law enforcement agencies. The case was prosecuted by Assistant U.S. Attorney Felice M. Duffy.
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U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Bourbonnais Tax Preparer Charged with Filing False Income Tax Returns and with Aiding in the Preparation of False Income Tax Returns for OthersRead the Press Release
Urbana, Ill. – A Bourbonnais tax preparer, Robert J. DeAngelo, 62, of St. Pauls Drive, is scheduled to make his initial court appearance on Apr. 2, 2014, before U.S. Magistrate Judge David G. Bernthal in Urbana. A grand jury indicted DeAngelo last week on three counts of filing a false income tax return and 14 counts of aiding and assisting in the preparation of false income tax returns.
According to the indictment, DeAngelo operated a home office that provided tax services, including preparing and filing federal income tax returns for its clients. The indictment alleges that DeAngelo prepared and filed tax returns as a sole proprietorship, on behalf of himself and his wife, which understated gross receipts and overstated expenses for 2008, 2009, and 2010. DeAngelo allegedly claimed an adjusted gross income of $3,647 in 2008, when, in fact, his actual adjusted gross income was approximately $44,244. For 2009, DeAngelo allegedly understated his gross receipts by approximately $40,690, and claimed an adjusted gross income of $486.00. In 2010, DeAngelo allegedly falsely claimed an adjusted gross income of $346.00. As a result, for each return, DeAngelo qualified and claimed the earned income credit.
The indictment further alleges that for 2007 through 2010 tax years, DeAngelo created false employee business expense deductions for his tax return clients, without their knowledge. As a result, these tax returns provided larger refunds for DeAngelo’s clients, and resulted in an overall tax loss of approximately $50,193 to the United States.
The charges are the result of an investigation by Internal Revenue Service Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller.
If convicted, for each count of filing a false income tax return and for aiding and assisting in the preparation of false income tax returns, the statutory penalty is up to three years in prison.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Baggage Handlers at San Diego International Airport Charged with Smuggling Drugs via AircraftRead the Press Release
SAN DIEGO – Four baggage handlers at San Diego International Airport were indicted by a federal grand jury Friday on charges that they conspired to smuggle cocaine and methamphetamine onto aircraft by exploiting their ability to pass unchecked through security screening areas.
It’s believed to be the first federal drug prosecution of airport employees at San Diego’s largest airport.
The indictment alleges that Felix Samuel Garcia, Paulo Mendez Perez and Saul Bojorquez, all current or former employees of Delta Global Services, which provides ground services for several airlines, flashed badges numerous times and walked through checkpoints with drugs in their backpacks. Brian Alberto Gonzalez, also a DGS employee, allegedly worked as a courier.
According to the indictment, the drug-toting baggage handlers connected with drug couriers during clandestine meetings in airport restrooms in the secured area of Terminal 2, where they would wait for adjoining stalls to become available and once inside, would hand off the cocaine and methamphetamine under the stalls’ divider.
Also charged were seven alleged couriers, drug suppliers and middlemen. After the bathroom rendezvous, the couriers would board flights and proceed to destinations like New York City, Nashville, Detroit, Baltimore and Hawaii, where they were met by other members of the drug trafficking organization. While the street price of methamphetamine in San Diego is about $5,000 a pound, the value skyrockets to $25,000 a pound in Hawaii.
The alleged traffickers charged in the indictment include Sergio Mejia-Gamboa, Angel Ortega, David Camacho, Jesus Morales, Candelario Perez, Israel Acosta and Henry Garcia-Arambula. All were arrested last week during sweeps by federal agents. All defendants are in custody but Ortega.
The following defendants are scheduled to be arraigned tomorrow before U.S. Magistrate Judge Ruben B. Brooks: Garcia; Mejia-Gambo; Camacho; Morales; Acosta and Gonzalez.
According to a complaint, agents seized 8 kilograms (17 pounds) of cocaine with an estimated street value of $144,000; 18 pounds of methamphetamine with an estimated street value of $90,000 in San Diego and up to $450,000 in Hawaii; and $103,846 in cash during the yearlong investigation.
“This was a brazen scheme to smuggle drugs right under the noses of airport security officials,” said U.S. Attorney Laura Duffy. “We aren’t going to let dangerous drugs fly in unchecked bags in the overhead bins of commercial aircraft.”
“Throughout this investigation, DEA San Diego’s Narcotic Task Force worked closely with law enforcement counterparts nationwide, including airport authorities, to ensure the successful apprehension and dismantlement of this drug trafficking organization,” said DEA San Diego Assistant Special Agent in Charge Gary Hill. “All agencies involved understand how important the security protocols of our airports are, and will continue to work together to formulate plans to thwart other criminal elements from exploiting and circumventing airport security in the future.”
DEFENDANT Case Number 14cr0657 Felix Samuel Garcia Age: 29 Imperial Beach, CA Paulo Mendez Perez Age: 36 Chula Vista, CA Sergio Mejia-Gambo Age: 22 San Bernadino, CA Angel Ortega Age: 26 San Bernadino, CA David Camacho Age: 27 San Bernadino, CA Jesus Morales Age: 21 San Bernadino, CA Candelario Perez Age: 24 Fresno, CA Israel Acosta Age: 48 San Bernadino, CA Brian Alberto Gonzalez Age: 30 San Diego, CA Saul Bojorquez Aviles Age: 26 Chula Vista, CA Henry Garcia-Arambula Age: 22 San Berndino, CA CHARGESConspiracy to Possess Controlled Substances with Intent to Distribute – Title 21, U.S.C., Section 846 and 841 (a) (1); Maximum Penalties: 20 years in prison
Possession of Cocaine and Methamphetamine with Intent to Distribute – Title 21, U.S.C., Section 841 (a) (1); Maximum Penalties: 10 years to life in prison
INVESTIGATING AGENCYNarcotic Task Force
Drug Enforcement Administration*Indictments and complaints are not evidence that the defendant committed the crime charged. All defendants are presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
15 March 2014
Former CEO of Long Island’s Synergy Brands, Inc. Convicted of One Billion Dollar Check Kiting SchemeRead the Press Release
Mair Faibish, the former Chief Executive Officer of Synergy Brands, Inc., was convicted today by a federal jury in Brooklyn on all three counts of the indictment for defrauding Signature Bank out of $26 million through a massive check kiting scheme, for making false statements to the United States Securities and Exchange Commission (“SEC”) and for defrauding investors by overstating the value of the company. The jury’s verdict followed a three-week trial in United States District Court held before the Hon. Eric N. Vitaliano.
The guilty verdicts were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, James T. Hayes, Jr., Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations (“HSI”), New York Field Office; and Acting Nassau County Police Commissioner Thomas Krumpter.
“Through lies and deceit, the defendant and his co-conspirators took advantage of banks, auditors and unsuspecting investors and stole millions of dollars. Their representations and assurances were not worth the paper the checks were written on. We will vigorously pursue and bring to justice those who would defraud FDIC insured banks and the investing public,” stated United States Attorney Lynch. Ms. Lynch thanked HSI and the Nassau County Police Department for their hard work and dedication through the course of the investigation and prosecution.
The evidence at trial established that Faibish was the former CEO of Synergy Brands, Inc. (“Synergy”), a publicly held food products company that traded on the NASDAQ and Over-the-Counter (“OTC”) exchanges and manufactured and distributed various food products. Together with his co-conspirators, Faibish executed a check-kiting scheme on behalf of Synergy to funnel approximately $ 1.3 billion worth of checks that were not backed by sufficient funds through Signature Bank, Capital One Bank and various Canadian banks. Faibish caused those checks to be deposited into bank accounts of associated food manufacturers and distributors in Canada. The Canadian companies then sent checks in corresponding amounts, which were also not backed by sufficient funds, back to Faibish-controlled third party companies. Because the banks made deposited funds immediately available for withdrawal, the scheme artificially inflated the companies’ account balances while the scheme was ongoing. The defendant and his co-conspirators used Synergy’s fraudulently inflated bank account balances to book millions of dollars in fictitious accounts receivable and revenue.
As a result of this fraud, FDIC insured Signature Bank lost approximately $26 million that the defendant and his co-conspirators had withdrawn before the bank uncovered the scheme. Following the scheme’s collapse, Synergy was taken into bankruptcy and its publicly traded stock became essentially worthless, causing hundreds of thousands of dollars in investor losses.
The trial evidence further established that Faibish falsely inflated the values of Synergy’s sales, cost of goods sold and pre-paid expenses in filings with the SEC for the quarter ending June 30, 2008. These material misrepresentations were breaches of the defendant’s fiduciary duties to investors.
When sentenced by Judge Vitaliano, Faibish faces a sentence of up to 30 years’ imprisonment for bank fraud and securities fraud conspiracy as a result of the check kiting scheme.
The government’s case is being prosecuted by Assistant United States Attorneys Sylvia S. Shweder and Jack Dennehy.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendant:
MAIR FAIBISH
Age: 54
Residence: Huntington Station, New York
E.D.N.Y. Docket No. 12-CR-265