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Wednesday 29 January 2014
New Hampshire Woman Pleads Guilty to Federal Firearm ViolationsRead the Press Release
Concord, NH –Nutveena Sirirojnananont plead guilty in United States District Court for the District of New Hampshire to federal gun trafficking/export violations that include conspiracy to violate the Arms Export Control Act (AECA), making a false statement in connection with a firearm purchase, and unlicensed firearms dealing, announced United States Attorney, John P. Kacavas.
The investigation revealed that from August 2010 through September 2011, Sirirojnananont was involved in the illegal trafficking/export of approximately eight (8) firearms from the United States to Thailand. These export-controlled articles are on the U.S. Munitions List (USML) items, as defined in the International Traffic in Arms Regulations (ITAR). These charges carry a maximum sentence of twenty years and a maximum fine of $1,000,000.00."The federal regulations involving the sale and export of firearms are specifically designed to prevent guns and other weapons from falling into the wrong hands," said Bruce Foucart, special agent in charge for ICE Homeland Security Investigations in Boston. "This case clearly demonstrates that we are allied with our federal and local law enforcement partners, including the men and women of the ATF and Portsmouth Police Department. Together, we will continue to target those who attempt to profit by circumventing these laws."
The investigation involved by the cooperative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Manchester Field Office, Homeland Security Investigations (HSI), Resident Agent in Charge Manchester Office, and U.S. Attorney’s Office, District of New Hampshire (USAO-NH). This case was prosecuted by Assistant U.S. Attorney Debra M. Walsh.
Morris County, N.J., Man Convicted of Armed Bank RobberyRead the Press Release
NEWARK, N.J. – A Morris County, N.J. man has been found guilty of robbing a bank at gunpoint, U.S. Attorney Paul J. Fishman announced today.
Rahman Fulton, 35, of Randolph, N.J., was convicted by a jury Jan. 28, 2014, after a two-week trial before U.S. District Judge Stanley R. Chesler in Newark federal court. The jury deliberated three hours before returning guilty verdicts on one count of bank robbery and one count of using a firearm in furtherance of the bank robbery.
According to documents filed in this case and the evidence at trial:
Fulton was charged with robbing the PNC bank in Randolph May 25, 2012. Fulton entered the bank wearing a black cloth mask covering his head and face and holding a handgun. He demanded and received money from a bank teller. The bank teller slipped a GPS tracking device into the money she handed over to Fulton. The GPS data placed the tracking device in Fulton’s bedroom minutes after the robbery. He later lied to the police about his whereabouts during the robbery and made other incriminating statements to his girlfriend and girlfriend’s sister, including a call just 10 minutes after the robbery to someone that worked across the street from the bank asking them if they had heard about the robbery.
Fulton faces a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense, on the bank robbery conviction and a mandatory consecutive seven years in prison on the weapons conviction. Sentencing is scheduled for May 13, 2014.
U.S. Attorney Paul J. Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the charge. He also thanked the Randolph Township Police Department and Morris County Prosecutor’s Office for their contributions to the case.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Elizabeth Harris of the U.S. Attorney's Office General Crimes Unit in Newark.14-033
Defense Counsel: Carol Gillen Esq. and K. Anthony Thomas Esq., Assistant Federal Public Defenders, NewarkMoorefield Resident Enters Pleas in Federal CourtRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistELKINS, WEST VIRGINIA – A Moorefield, West Virginia, resident entered pleas of guilty before Magistrate Judge John S. Kaull.
U.S. Attorney William J. Ihlenfeld, II, announced that:
JOSE FRANCISCO RAMIREZ a/k/a “CHICO,” age 27, of Moorefield, West Virginia, entered pleas of guilty to “Possession with Intent to Distribute Methamphetamine” and “Aggravated Reentry of Previously Deported Alien. RAMIREZ, who is in custody pending sentencing, faces up to 20 years in prison on each count. This case was prosecuted by Assistant U.S. Attorney Stephen D. Warner and investigated by the Potomac Highlands Drug & Violent Crime Task Force, consisting of officers from the Federal Bureau of Investigation, and the West Virginia State Police - Bureau of Criminal Investigations, working with US Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI), the Hardy County Sheriff’s Department, the Grant County Sheriff’s Department, the Wardensville Police Department and the United States Forest Service.
Manhattan U.S. Attorney Files and Simultaneously Settles Lawsuit Against Nederlander Organization Covering Nine of Broadway’S Most Historic TheatersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today the filing and settlement of a lawsuit in Manhattan federal court against NEDERLANDER ORGANIZATION, the owners and operators of nine of Broadway’s most historic theaters, the BROOKS ATKINSON, the GERSHWIN, the LUNT FONTANNE, the MARQUIS, the MINSKOFF, the NEDERLANDER, the NEIL SIMON, the PALACE, and the RICHARD RODGERS, involving violations of the Americans With Disabilities Act (the “ADA”). The settlement, in the form of a consent decree, was entered today by U.S. District Judge Katherine Polk Failla.
Manhattan U.S. Attorney Preet Bharara said: “Today’s resolution marks the culmination of years of work to ensure that one of New York City’s leading cultural and entertainment treasures – Broadway theater – is accessible to people with disabilities. As a result of this suit and settlement, coupled with a similar lawsuit filed by the Office against the Shubert Theaters in 2003, over twenty of the leading Broadway theaters, operated by the two largest Broadway theater organizations, will be more accessible than ever before.”
According to the Complaint and Consent Decree filed in Manhattan federal court:
In the course of an investigation and negotiation over several years, the U.S. Attorney’s Office identified numerous ADA violations at each of the nine theaters operated by NEDERLANDER ORGANIZATION. Two of the theaters were constructed over one hundred years ago, in the 1910s; four of the theaters were constructed during the 1920s; and the remainder were constructed in the early 1970s and the 1980s. The ADA generally requires that, under these circumstances, barriers to accessibility be removed where it is readily achievable to do so. Throughout the Government’s investigation and the negotiation of the Consent Decree, NEDERLANDER ORGANIZATION agreed to remove hundreds of barriers to accessibility.
Under the Consent Decree, NEDERLANDER ORGANIZATION agrees to continue and eventually conclude its efforts to improve accessibility at its theaters over the next three years, as the schedules of shows at the theaters permit. NEDERLANDER ORGANIZATION will do the following:
- provide a total of 70 wheelchair accessible seating locations, and direct its ticket vendors to accord priority to persons with disabilities in selling those seating locations;
- provide a total of 134 aisle transfer seating locations for persons who are able to transfer from a wheelchair into a seat, and direct its ticket vendors to accord priority to persons with disabilities in selling those seating locations; and
- eliminate over 500 individual barriers to accessibility in theater restrooms, concession counters, waiting areas, and box offices.
In addition, NEDERLANDER ORGANIZATION will pay a $45,000 civil penalty to the United States.
Since President George H.W. Bush signed the ADA into law in 1990, the U.S. Attorney’s Office for the Southern District of New York has played a significant role in bringing numerous New York City institutions into compliance with the ADA regulations. They include Avery Fisher Hall at Lincoln Center, the Metropolitan Opera, Yankee Stadium, Madison Square Garden, the Apollo Theater, the Puck Building, the Shubert Theaters, the Rainbow Room, and Radio City Music Hall.
To file a complaint alleging that any place of public accommodation within the Southern District of New York is not accessible to persons with disabilities, use the Civil Rights Complaint Form available on the United States Attorney’s Office’s website, www.usdoj.gov/usao/nys. Complaints should be sent to:
U.S. Attorney’s Office, Southern District of New York
86 Chambers Street, 3rd Floor
New York, New York, 10007
Attention: Chief, Civil Rights Unit
Assistant U.S. Attorneys David J. Kennedy and Rebecca C. Martin are in charge of the case.
U.S. v. Nederlander Organization Consent Decree Exhibits
US v. Nederlander Organization, Inc Signed Consent Decree
U.S. v. Nederlander ComplaintMan Pleads Guilty to Transporting 16-Year-Old Girl from California to Nevada to Work as ProstituteRead the Press Release
LAS VEGAS, Nev. – A northern California man pleaded guilty today to transporting a minor female from San Jose, Calif., to Las Vegas, Nev., to work as a prostitute during May 2013, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Andrew West, 27, of Hayward, Calif., who was indicted on May 29, 2013, pleaded guilty to one count of transportation of a minor for prostitution, and is scheduled to be sentenced on April 30, 2014, by U.S. District Judge James C. Mahan. West faces a mandatory minimum of 10 years in prison and a $250,000 fine, and will have to register as a sex offender.
“We must use maximum resources to prevent our children and youth from becoming victims to sex trafficking,” said United States Attorney Bogden. “The kids who fall victim to pimps are typically physically and emotional abused and scarred for life, and we will work with our local, state and federal law enforcement partners to ensure that these child exploiters who bring kids across state lines for prostitution purposes are prosecuted.”
According to the plea agreement, in early 2013, a 16-year-old female began working as a prostitute for West in Stockton and San Jose, Calif. On May 3, 2013, West, the 16-year-old girl, and others traveled in several vehicles from San Jose to Las Vegas. The 16-year-old traveled in West’s Lexus automobile, but West told the girl that he could not ride in the vehicle with her until after they arrived in Nevada, because if he were arrested he would get into more trouble for crossing state lines with her because of her age. They arrived in Las Vegas the next day, and West, the 16-year-old girl, and another male checked into a motel on the Boulder Highway. West told the girl to make money (by committing sex acts) to pay for the room. The girl walked the Boulder Highway in search of dates, and solicited separate dates with four men who she took back to the motel room. The girl earned a total of $260, part of which was provided to West after each date. The girl was arrested on May 4, 2013, when she attempted to solicit a date from an undercover Las Vegas Metropolitan Police Department Officer in the motel parking lot.
The case was investigated the FBI and Las Vegas Metropolitan Police Department, as part of the Innocence Lost Task Force. The case is being prosecuted by Assistant United States Attorneys Nicholas D. Dickinson and Phillip N. Smith, Jr.The case was brought as part of Project Safe Childhood (PSC), 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, PSC 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 PSC, please visit www.usdoj.gov/psc.Man Pleads Guilty to Child ExploitationRead the Press Release
CONCORD, NEW HAMPSHIRE: Eric Morrison, 22, pled guilty in United States District Court for the District of New Hampshire to one count of sexual exploitation of children, announced United States Attorney John P. Kacavas.
The investigation began in 2013 when the Manchester Police received information from the United States Air Force, Office of Special Investigations, that the defendant, a member of the United States Air Force stationed at Kadena Air Base in Okinawa, Japan, was communicating with Erin Upham, a resident of Manchester. Specifically, the Air Force Special Agents informed the Manchester Police that the defendant’s communication was of a sexual nature and involved a minor child.
Search warrants were obtained for various electronic items belonging to Morrison and Upham and a forensic examination of the items revealed digital images of a minor child engaged in sexually explicit conduct. On June 19, 2013, a federal grand jury indicted both Morrison and Upham for conspiracy to produce child pornography. Morrison faces a minimum term of fifteen years in prison and is scheduled to be sentenced on May 8, 2014.
The charge was the result of an investigation by the United States Air Force, Office of Special Investigations, the Federal Bureau of Investigation, and the Manchester and Derry Police Departments and is being prosecuted under Project Safe Childhood, a nationwide initiative by the U.S. 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 (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.This case is being prosecuted by Assistant United States Attorney Helen White Fitzgibbon who is the U.S. Attorney’s coordinator for Project Safe Childhood.
Man Convicted of Armed Bank Robbery and Use of A Firearm During A Crime of ViolenceRead the Press Release
Phillip D. Webb, 33, plead guilty in the United States District Court to a four-count indictment charging him with Armed Bank Robbery, Use and Carry of a Firearm During a Crime of Violence, Possession with Intent to Deliver Cocaine, and Felon in Possession of a Firearm, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Documents filed in US District Court establish that on June 28, 2011, two women stopped at the Quick Trip station in Madison, Illinois, to buy gasoline. As the driver reentered her vehicle after paying at the pump, Webb slipped into the backseat of her car and pointed a gun at her and her mother. Webb then abducted the two victims, forcing them to drive to a nearby ATM and withdraw money from a bank account. Webb was arrested by the United States Marshals on July 18, 2011, as he fled from an apartment in Collinsville, Illinois. Upon his arrest, Webb was found in possession of two firearms, several rounds of ammunition and 26 grams of crack cocaine which he intended to distribute. Webb was a previously convicted felon, having been convicted of the offense of second degree murder in 2003.
Webb is scheduled to be sentenced in the US District Court on May 30, 2014, at which time he faces a term in prison of up to 25 years on the charge of Armed Bank Robbery, not less than seven (7) years up to Life for the charge of Use and Carry of a Firearm During a Crime of Violence, up to 20 years on the charge of Possession with Intent to Distribute Cocaine, and up to 10 years on the charge of Felon in Possession of a Firearm. Webb also faces a fine up to $1,750,000 and a term of supervised release of up to five (5) years once he is released.
The case was investigated by the Illinois State Police, the Bureau of Alcohol, Tobacco and Firearms, and the Madison Police Department. The case is being prosecuted by Assistant United States Attorneys Ali Summers and Donald Boyce.
Man Charged in Multi-Layered Credit Card Fraud and Identity Theft Scheme Involving Falsified Credit Applications and Fraudulent LawsuitsRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Arthur Robinson, age 39, of Frederick, Maryland, has been charged by a federal grand jury with two counts of bank fraud (18 U.S.C. § 1344), one count of social security fraud (42 U.S.C. § 408), one count of wire fraud (18 U.S.C. § 1343), and three counts of aggravated identity theft (18 U.S.C. § 1028A), by Indictment unsealed yesterday. The defendant faces up to 30 years in prison on each count of bank fraud, up to 20 years in prison on the count of wire fraud, up to 5 years in prison the count of social security fraud, and consecutive 2-year terms of imprisonment on each of the aggravated identity theft charges, in addition to possible fines and restitution.
According to the Indictment, from January 2002 through October 2013, the defendant devised a scheme to defraud multiple federally insured financial institutions, including Delaware-based Barclays Bank and Chase Bank. The defendant is alleged to have used multiple identities, including the identity of a minor child, to submit false and fraudulent credit applications to the banks. The Indictment further alleges that the defendant made purchases on the fraudulently obtained lines of credit and did not pay the balances. In addition, the defendant is alleged to have disputed the lines of credit with at least one credit agency, and he filed lawsuits against the lenders to fend off collection efforts. Moreover, the defendant is alleged to have obtained a new social security number, claiming to be an identity theft victim, which he then used on further fraudulent credit applications.
U.S. Attorney Oberly gave the following comments: “This case should send a clear signal that individuals who repeatedly abuse the credit services offered by the federally-backed lenders here in Delaware will be prosecuted, and false statements to the Social Security Administration in furtherance of such abuse will not be tolerated. Specifically, I want to thank officials at Barclays Bank for initially bringing its concerns about Mr. Robinson to the attention of the United States Attorney’s office in Delaware, and I thank the other institutions that cooperated in the investigation.”This case is the result of an investigation conducted by the Social Security Administration, Office of the Inspector General, and the United States Postal Inspection Service, with cooperation from the State of Maryland. The prosecution is being handled by Assistant United States Attorney Lauren Paxton, District of Delaware.
The charges in the Indictment are only allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Luzerne County Man Sentenced to 18 Years’ Imprisonment for Jewelry Store Robberies, Bank Robbery, and FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Senior United States District Court Judge James M. Munley sentenced Kirk Robinson, age 45, of Wilkes-Barre, Pennsylvania, to 18 years’ imprisonment for his involvement in two Luzerne County jewelry store robberies, a bank robbery, as well as an insurance fraud scheme.
According to United States Attorney Peter J. Smith, Robinson pleaded guilty in federal court on October 24, 2013, to conspiring with others to carry firearms in relation to the robbery of Steve Hydock Diamonds Jewelry store, Kingston, Pennsylvania, on May 5, 2008, and Dunay Jewelry store, Wilkes-Barre, Pennsylvania, on May 14, 2008. He also pleaded guilty to the armed bank robbery of the M&T Bank, Hanover Township, occurring on October 30, 2010. At his guilty plea, Robinson admitted that he planned and acted as a getaway driver in those three robberies. Additionally, Robinson pleaded guilty to using the mail in a scheme to defraud an insurance company of $43,000. Robinson admitted that the scheme involved staging a robbery with a confederate and filing a police report wherein he falsely claimed an armed robber stole jewelry from him.
Judge Munley ordered that Robinson be placed on supervised release for three years following the service of his 18-year prison sentence. In addition, Judge Munley ordered that Robinson pay restitution in the amount of $150,728 representing the value of money and jewelry stolen during the robberies and fraud scheme.
The case was investigated by the Federal Bureau of Investigation, the Kingston Police Department, the Hanover Township Police, and the Wilkes-Barre Police Department. Assistant United States Attorney John C. Gurganus, Jr. prosecuted the case.
Luzerne County Man Charged with Trafficking Heroin and CocaineRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a criminal Information was filed today in U.S. District Court in Scranton charging a Kingston resident with distributing heroin and cocaine during a four-year time period.
According to United States Attorney Peter J. Smith, the Information alleges that James Featherstone, age 33, distributed cocaine and heroin in Luzerne County from January 2009 through September 2013.
A plea agreement was filed along with the Information.
The charge stems from an investigation by The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Pennsylvania State Police, Kingston Police, and the Luzerne County District Attorney’s Office.
Featherstone faces a potential maximum sentence of 20 years in prison and a $1 million fine.
According to the terms of the plea agreement filed in the case, Featherstone has agreed to plead guilty to the charge, and the government and the defendant will recommend that Featherstone be sentenced to between 163 months and 188 months in prison.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
****Leader of Corrupt Canadian Moneygram Agents Re-Sentenced on Conspiracy & Money Laundering ChargesRead the Press Release
Peter J. Smith, United States Attorney for the Middle District of Pennsylvania, announced that the former leader of a large group of corrupt, Canadian based MoneyGram Agents has been resentenced to a lengthy term of incarceration for helping to defraud thousands of American citizens out of $4 million between January 2004 and April 2009.
JAMES E. UGOH, age 51, of Toronto, Ontario, was re-sentenced by U.S. District Court Judge Sylvia Rambo in Harrisburg yesterday afternoon to 151 months (12.6 years) incarceration. UGOH had been previously sentenced by Judge Rambo to 118 months incarceration in 2012.
In October of 2009 UGOH and three other Toronto area MoneyGram agents, KAYODE KASSIM, age 45, ABEL ONGUNFUNWA, age 51, and FELIX MORDI, age 45 , were indicted on multiple charges by a Middle District of PA grand jury. After an 18-month process, the four defendants were eventually extradited to Harrisburg where they pleaded guilty to Conspiracy to commit Mail Fraud, Wire Fraud, and Money Laundering. In 2012 the 4 were sentenced by Judge Rambo to the following terms of incarceration:
Mordi – 53 months
Ogunfunwa – 63 months
Kassim – 80 months
Ugoh – 118 monthsAfter the sentences were imposed, the government appealed to the U.S. Court of Appeals for the Third Circuit, arguing the district court erred in calculating their advisory sentencing guideline ranges. Last year the Third Circuit agreed with the government and remanded the 4 cases back to Judge Rambo for resentencing.
Thus far, only UGOH and KASSIM have been resentenced. KASSIM was resentenced in December of last year to 109 months incarceration. MORDI is scheduled to be resentenced on February 13, 2014. No date has yet been scheduled for OGUNFUNWA’s resentencing.
Between 2004 and 2009 Canadian based, mass-marketing fraudsters distributed thousands of letters and counterfeit checks to American citizens via the mail and the Internet. The communications falsely promised the recipients cash prizes, fictitious loans, commissions and other payments. The recipients were typically tricked into depositing worthless counterfeit checks into their bank accounts before sending money to the fraudsters for “taxes” and other bogus fees via the MoneyGram money transfer system.
UGOH, an expatriated Nigerian Tribal Chief living in Toronto, was the leader of a corrupt group of Canadian MoneyGram agents who conspired with the mass marketing fraudsters to intercept, launder and distribute the MoneyGram transfers sent by the victims of the mass-marketing schemes. UGOH obtained his first MoneyGram outlet in 2001. By 2008 UGOH had 12 MoneyGram outlets in the greater Toronto area, 1l operating under the name of Money Spot and 1 under the name of N & E Associates. Between January 2005 and February 2009 UGOH’s outlets paid out more Consumer Fraud Reported money transfers than any other MoneyGram agent in the world - 1,754 transfers totaling $3.4 million.
But UGOH’s money laundering activities went far beyond just his 12 MoneyGram outlets. UGOH recruited MORDI, KASSIM, and ONGUNFUNWA to launder MoneyGram transfers checks issued by approximately 28 other corrupt MoneyGram agents in the greater Toronto area. Instead of making the MoneyGram checks payable to the intended payees, UGOH and his co-conspirators would make the checks payable to third party companies controlled by MORDI, KASSIM and OGUNFUNWA. MORDI, KASSIM and UNGUNFUNWA would then deposit the checks into their bank accounts, keep an approximate 3 to 4% cut for themselves, and distribute the balance to UGOH. UGOH would then share the bulk of the funds with the mass marketing fraudsters, typically via off-shore money MoneyGram transfers to Nigeria, Jamaica or Romania, thereby effectively laundering the proceeds. The $4 million loss stipulation in UGOH’s plea agreement represented the approximate dollar value of 2,309 transfers paid out at the 18 MoneyGram outlets controlled by UGOH, MORDI, KASSIM and UNGUNFUNWA that were reported by MoneyGram customers as being fraudulently induced between 2004 and March of 2009.
The UGOH case was one of several on-going investigations of fraudulent international telemarketing schemes involving corrupt MoneyGram and Western Union agents by the U.S. Postal Inspection Service in Harrisburg and the U.S. Attorney=s Office for the Middle District of Pennsylvania. In November of 2012 the U.S. Attorney’s Office for the Middle District of PA and the U.S. Justice Department entered into a Deferred Prosecution Agreement with MoneyGram that required the company to pay $100 million into a victim restitution fund. Thus far, the Postal Inspection Service has returned approximately half of the $100 million to thousands of victims of the mass marketing schemes.
The MoneyGram agent and corporate prosecutions are being handled by Assistant U.S. Attorneys Kim Douglas Daniel and Christy Fawcett, with assistance from the Justice Department’s Asset Forfeiture and Money Laundering Section in Washington, D.C.. The Third Circuit appeal in the UGOH cases was handled by Assistant U.S. Attorney Steven Cerutti.
Kentucky Hospital Agrees to Pay Government $16.5 Million to Settle Allegations of Unnecessary Cardiac ProceduresRead the Press Release
Saint Joseph Health System Inc. has agreed to pay $16.5 million to resolve allegations that Saint Joseph Hospital violated the False Claims Act by submitting false claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary cardiac procedures, the Justice Department announced today. Saint Joseph Health System operates numerous hospitals statewide, including Saint Joseph Hospital, which is based in London, Ky.
“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “ The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk.”
The government alleged that doctors working at Saint Joseph Hospital performed numerous invasive cardiac procedures, including coronary stents, pacemakers, coronary artery bypass graft surgeries and diagnostic catheterizations, on Medicare and Medicaid patients who did not need them, and that the hospital was aware of these unnecessary procedures. These doctors were affiliated with Cumberland Clinic which is a physician group that entered an exclusive arrangement with Saint Joseph Hospital in 2008 to provide cardiology services to the hospital’s patients. Cumberland Clinic is owned by two London-based cardiologists, Satyabrata Chatterjee and Ashwini Anand.
The settlement also resolves allegations that Saint Joseph Hospital violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements that financially benefitted Chatterjee and Anand as an inducement for Chatterjee and Anand to direct more Cumberland Clinic patients to the hospital.
Dr. Sandesh Patil, one of the Cumberland Clinic cardiologists working at the hospital, performed many of the medically unnecessary coronary stents. Patil has since pleaded guilty to a federal health care fraud offense and has been sentenced to serve 30 months in prison.
“We all rely on health care providers to make treatment decisions based on clinical, not financial, considerations,” said U.S. Attorney for the Eastern District of Kentucky Kerry Harvey. “The conduct alleged in this case violates that fundamental trust and squanders scarce public resources set aside for legitimate health care needs. We will use every available tool to protect our federal health care programs and the patients who they serve.”
In connection with this settlement, Saint Joseph Hospital has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the hospital to undertake substantial internal compliance reforms and to commit to a third-party review of its claims to federal health care programs for the next five years.
"Cases such as this threaten both the health of patients and the financial integrity of the Medicare and Medicaid programs," said Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta Derrick L. Jackson. "This settlement is another example of the OIG’s commitment to protecting our beneficiaries and to recovering any money that has been improperly paid as a result of medically unnecessary procedures."
In addition to the settlement with Saint Joseph Health System, the government announced its intervention in a lawsuit alleging False Claims Act violations by Chatterjee and Anand, who referred patients for and performed the unnecessary procedures and tests, and their practice group, Cumberland Clinic, as well the practice groups each of them owned before forming Cumberland Clinic.
The government actions announced today stem in large part from a whistleblower complaint filed by three Lexington, Ky., cardiologists pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The Act also permits the government to intervene in the lawsuit and take over the allegations as it has done in this case. Drs. Michael Jones, Paula Hollingsworth and Michael Rukavina will receive a total of $2.46 million of the $16.5 million settlement with Saint Joseph Hospital.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17.1 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the FBI, HHS-OIG, the Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit, the Commercial Litigation Branch of the Department of Justice Civil Division and the U.S. Attorney’s Office for the Eastern District of Kentucky. The claims settled by this agreement are allegations only, and there has been no determination of liability.
The lawsuit is captioned United States ex rel. Jones, Hollingsworth and Rukavina v. Saint Joseph Health System et al., no. 11-cv-81-GFVT (E.D.Ky.)
Justice Department Sues to Stop Florida Tax Return Preparer from Preparing Federal Tax Returns for OthersRead the Press Release
The United States has asked a federal court in Fort Lauderdale, Fla., to per manently bar Keisha Stewart and her co mpany, Professional Tax Services Inc., from preparing federal tax returns for others, the Justice Depart ment announced today.
According to the co mplaint, Stewart and her co mpany prepared federal inco me tax returns that in f lated inco me or included f ictitious inco me to quali fy her custo mers to receive or maximize the earned inco me tax credit. The co mplaint states that Stewart also clai med tax credits that are refundable or decrease the a mount of tax on her custo mers’ returns, including false education credits (A merican Opportunity Credit) and residential energy credits. According to the co mplaint, Stewart also falsely clai med head of household status on behalf of custo mers who did not qualify in order to i mproperly decrease her custo mers’ reported tax liabilities. The co mplaint also alleges that Stewart clai med false dependents on behalf of custo mers and also clai med the child and additional child tax credits on behalf of those custo mers. Allegedly, Stewart typically included these ite ms on her custo mers’ returns without their knowledge. The govern ment alleges that Stewart’s returns have resulted in over $1.6 million of loss annually to the United States during the tax years 2010, 2011 and 2012.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013. The IRS has tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional. In the past decade, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm.
Related Materiala:
United States v. Keisha Stewart, et al.
Complaint for Injunctive ReliefJury Finds Erie Man Guilty of Violating Federal Firearms LawsRead the Press Release
ERIE, Pa. – After deliberating approximately one hour, a federal jury of four men and eight women found Joseph Lee Ollie guilty of three counts of federal firearms violations, United States Attorney David J. Hickton announced today.
Joseph Lee Ollie, 55, was tried before Senior United States District Judge Maurice B. Cohill Jr. in Erie, Pennsylvania.
According to Assistant United States Attorney Marshall J. Piccinini, who prosecuted the case, the evidence presented at trial established that on November 25, 2011, Ollie engaged in a scheme to burglarize homes on Shadduck Road in North East, Pennsylvania, and in the matter on trial, stole a Mossberg Model 500 shotgun. Ollie’s possession of the firearm was unlawful because he was prohibited from firearm possession as a result of his prior felony convictions and as a result of a domestic abuse restraining order against him. According to information presented in court, Ollie was already convicted, and is currently awaiting sentencing, for attempting to obtain a 9mm handgun from Bob’s Gun Shop in Edinboro, Pennsylvania in April 2011, when he lied on the federal firearm transaction form by failing to disclose his prior felony convictions.
According to United States Attorney Hickton, many of the firearms unlawfully used and possessed in Northwestern Pennsylvania have come from residential burglaries. Targeting those criminals who are burglarizing homes and stealing firearms, and vigorous enforcement of those individuals who are violating federal firearms laws, are important pieces of our anti-violence strategy in the region.
Sentencing on both cases will be scheduled at a later time by Judge Cohill. The law provides for a total sentence of 30 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Pennsylvania State Police conducted the investigation that led to the prosecution of Ollie.
Jacksonville Restaurant Owner Fined $10,000 for Pattern of Hiring Illegal AliensRead the Press Release
Jacksonville, Florida – U.S. Magistrate Judge Joel B. Toomey today sentenced Juan Carlos Angel (35) to pay a $10,000 fine for engaging in a pattern of hiring illegal aliens. Angel is the owner of Peppers 5 Mexican Restaurant, on Atlantic Boulevard and other locations, in Jacksonville.
Angel pleaded guilty to the offenses on October 30, 2013.
According to court documents, in June 2013, four employees of the Jacksonville restaurant had been arrested for document fraud following a Homeland Security Investigations (HSI) audit of the restaurant’s Form I-9s, or employment eligibility verification forms. After records checks were completed, it was determined that between in or around March 2011 through in and around March 2012, Angel hired employees that were citizens of other countries and were in the United States illegally. Thereafter, Angel was interviewed and admitted to knowingly hiring five illegal aliens not authorized to work in the United States, during those periods.
This case was investigated by the Jacksonville Office of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). It was prosecuted by Assistant United States Attorney Dale Campion.
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Idaho Falls Man Pleads Guilty to Possessing Child PornographyRead the Press Release
POCATELLO — Daniel Joseph Dalton, 38, of Idaho Falls, Idaho, pleaded guilty today in United States District Court to possessing sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Dalton was indicted by a federal grand jury in Pocatello on July 23, 2013.
According to court records, over 300 video files of suspected child pornography were discovered on a desktop computer owned and used by Dalton after Dalton left the computer at a local computer repair shop. When interviewed by a Bonneville County Sheriff’s detective, Dalton admitted to downloading sexually explicit images of children using Limewire peer-to-peer file sharing software. Dalton also admitted that police would find child pornography on an external hard drive at his residence.
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 five years to lifetime supervised release.
Sentencing is set for April 22, 2014, before U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Bonneville County Sheriff’s Office.
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.”
Hudson County, N.J., Man Sentenced to More Than Eight Years in Prison for Sexually Abusing Sleeping Woman on Domestic FlightRead the Press Release
NEWARK, N.J.— A Hudson County, N.J., man was sentenced today to 97 months in prison for sexually abusing a sleeping woman aboard a flight from Phoenix to Newark Liberty International Airport in August 2012, U.S. Attorney Paul J. Fishman announced.
Bawer Aksal, 49, of North Bergen, N.J., was previously convicted of one count of sexual abuse and one count of abusive sexual contact following a five-day trial before U.S. District Judge Jose L. Linares. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence presented at trial:
Aksal was a passenger on a United Airlines flight from Phoenix to Newark on Aug. 20, 2012, sitting in the middle seat in a row of three. Neither Aksal, the victim seated by the window nor the passenger in the aisle seat knew one other. Before the plane took off, the victim texted a friend complaining about Aksal’s arm encroaching into her seating area.
About one hour before landing, the aisle passenger looked to his right and saw Aksal with his body against the victim’s, his arms around her back and beneath a sweater draped over her. The victim awoke to find Aksal’s hands inside her shirt and shorts and struggled out of his grasp. The aisle passenger observed her jolting awake and he and the victim both gathered their belongings and headed to the back of the plane to report what happened to the flight attendants.
Aksal was detained upon arrival in Newark and arrested by FBI agents.
In addition to the prison term, Judge Linares sentenced Aksal to serve three years of supervised release and ordered him to pay restitution to the victim for her medical expenses. Aksal is required to register as a sex offender.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the Port Authority Police Department, under the direction of Superintendent Michael A. Fedorko, with the investigation.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Robert Frazer of the U.S. Attorney’s Office Criminal Division in Newark.
The federal government has exclusive jurisdiction over all sexual abuse cases that occur in American airplanes, as such events are outside the jurisdiction of any state.14-035
Defense counsel: Robert Degroot Esq., Newark
Houston Lake Man Pleads Guilty to 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 Houston Lake, Mo., man pleaded guilty in federal court today to possessing child pornography.
Carlos J. Scott, 46, of Houston Lake, pleaded guilty before U.S. District Judge Dean Whipple to possessing child pornography.
According to today’s plea agreement, the investigation began when the victim, identified as “Jane Doe,” reported past sexual molestation by Scott to the Kansas City, Mo., Police Department on Sept. 4, 2011. In a later interview, Jane Doe stated that Scott sexually molested her from the time she was six years old until the age of 12. Jane Doe also stated that Scott left pornography open on the computer and that he had photographs of his penis on the computer, which he would leave in places he knew she would access while using the computer. She also reported that Scott regularly exposed himself to her.
A 12-year-old cousin of the child victim was also interviewed. She repeated Jane Doe’s statements about pornography being left open on Scott’s computer.
Law enforcement officers executed a search warrant at Scott’s residence and seized his laptop computer. They also seized a desktop computer from the home of Scott’s parents, where he had lived during most of the time that the sexual abuse of Jane Doe occurred. Scott had used the computer while living with his parents.
Among the files found on Scott’s computer were images of possible child pornography and erotica as well as multiple photos of young girls playing. Detectives showed Jane Doe several of the photographs; she became emotional and identified herself in the series of photographs. Child pornography and erotica also were located on the parent’s computer. According to today’s plea agreement, there were between 10 and 150 images of child pornography.
Under the terms of today’s plea agreement, Scott is subject to a sentence of at least five years up to 10 years in federal prison without parole. The government contends and will argue at sentencing that Scott engaged in a pattern of activity involving the sexual abuse or exploitation of a minor, which would increase his offense level under the federal sentencing guidelines. 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 Teresa A. Moore. It was investigated by the Kansas City, 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."Hogsett Announces Charges Against Indianapolis Man for Health Care FraudRead the Press Release
INDIANAPOLIS -- Joseph H. Hogsett, the United States Attorney, announced today that Ronald Reed, age 46, has been charged with conspiring to commit health care fraud in a scheme that involved the sale of electric wheelchairs and scooters and the potential loss of hundreds of thousands in taxpayer dollars. This comes as Hogsett’s office has continued an effort to crack down on white collar fraud in Indiana’s business community.
“This alleged scheme not only defrauded taxpayers, but also victimized some of the most vulnerable in this community,” Hogsett said. “This case embodies a culture of corruption that is unacceptable, and together with our law enforcement partners, we’re going to put a stop to it.”
According to a federal indictment announced today, Reed was the controlling owner of the Indianapolis-based business Benchmark Mobility Corporation, which sold medical equipment including powered wheelchairs, scooters, lift chairs and hospital beds. As part of these sales, Benchmark would often bill various state and federal health care programs for reimbursement, including Medicare and Indiana Medicaid.
The indictment alleges that beginning in March 2007, Benchmark began having difficulty obtaining operating capital. In response, Reed allegedly began submitting claims to Medicare and Medicaid for used equipment that he had purchased online, refurbished, and was selling as “new.” These used pieces of equipment were often purchased on websites such as eBay and Craigslist, and employees were allegedly directed to change serial numbers and take other actions to hide the fraud.
All told, it is alleged that between March 2007 and March 2011, Reed submitted and was reimbursed for $388,872 in claims to Indiana’s Medicaid program, and $53,816 in claims to Medicare. Reed is also charged with thirteen counts of aggravated identity theft for allegedly using a Medicaid recipient’s identification without permission as part of the scheme.
According to Assistant U.S. Attorney Bradley P. Shepard, who is prosecuting the case for the government, this case was the result of a joint investigation by the Department of Health and Human Services and the Federal Bureau of Investigation. Reed faces up to 10 years in federal prison if convicted, as well as significant fines.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Garland, TX Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that KENNETH TODD PUCKETT, age 40, of Garland, Texas, pled guilty to Possession with Intent to Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C).
The charges are a result from an investigation by the Choctaw Nation Tribal Police and the Bureau of Indian Affairs and the Drug Enforcement Administration. The defendant was indicted in March, 2013.
The Information alleged that on or about September 4, 2013, within the Eastern District of Oklahoma, the defendant did knowingly and intentionally possess with intent to distribute a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment is not more than 20 years or more than life imprisonment, and/or up to a $1,000,000.00 fine and 3 years of supervised release.
Assistant United States Attorney Shannon Henson represented the United States.
Four Individuals Indicted for Drug Trafficking on the High SeasRead the Press Release
Tampa, Florida - U.S. Attorney A. Lee Bentley, III announced today that a federal grand jury returned an indictment charging Linberto Gallardo-Gonzalez (42); Uriel Julio Tapia (35); Miguel Vasquez-Barrios (37), all of Colombia, South America; and Miguel Angel Sori-Ortiz (41, Dominican Republic), with conspiracy to possess with intent to distribute five kilograms or more of cocaine, while on board a vessel subject to the jurisdiction of the United States; and aiding and abetting each other and other persons to possess with intent to distribute five kilograms or more of cocaine, while on board a vessel subject to the jurisdiction of the United States. Each faces a mandatory minimum sentence of 10 years, up to a maximum penalty of life in federal prison for each count.
On January 22, 2014, Gallardo-Gonzalez, Tapia, Vasquez-Barrios, and Sori-Ortiz were detained during the interdiction of a go-fast boat traveling at a high rate of speed and carrying 2,500 pounds of cocaine, worth an estimated $37 million wholesale value. The cocaine was seized in a historic multi-national counterdrug operation south of the Dominican Republic. This interdiction marks the first time a U.S. Coast Guard (USCG) Law Enforcement Detachment Team (LEDET) and helicopter embarked on board a foreign flagged military vessel in support of counterdrug operations. The USCG LEDET team and helicopter were operating aboard the British Royal Fleet Auxiliary (RFA) Wave Knight. The Coast Guard helicopter launched from the RFA Wave Knight when the 25-foot go-fast boat was detected with four individuals and suspicious packages on board, traveling at a high rate of speed. The helicopter crew arrived on scene and attempted to signal the go-fast boat in an effort to stop it. Ultimately, the crew resorted to firing disabling shots to stop the vessel’s engine. During the pursuit, the four individuals on board were observed jettisoning multiple packages overboard. After the vessel was stopped, a USCG LEDET team arrived at the scene and detained the four individuals aboard the boat and retrieved 45 bales of cocaine from the debris field, where the packages had been thrown overboard.
The four crewman detained on the go-fast vessel were brought to Middle District of Florida, Tampa Division for prosecution. They appeared before a United States Magistrate Judge to be advised of the charges against them and for a bond hearing. They were detained pending the resolution of the case.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.This case was investigated by OCDETF's Panama Express Strike Force, comprised of agents and analysts from the Federal Bureau of Investigation, Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, United States Coast Guard Investigative Service, and Joint Interagency Task Force South. It is being prosecuted by Assistant United States Attorney Maria Chapa Lopez.
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.
Four Defendants Plead Guilty for Role in Cocaine Trafficking OrganizationRead the Press Release
St. Thomas, USVI – Four defendants involved in a multi-kilogram cocaine trafficking organization pleaded guilty today in District Court on St. Thomas, announced United States Attorney Ronald W. Sharpe. Angel L. Negron, 53, of Puerto Rico; Edwin Monsanto, 53 of St. Thomas; Eddie Lopez-Lopez, 37,of Puerto Rico, and Stephen Torres, 27, of Puerto Rico, pleaded guilty before U.S. District Court Judge Curtis V. Gomez for their respective roles in a wide-ranging conspiracy to smuggle and distribute multi-kilograms of cocaine.
Negron-Beltran, Monsanto and Torres pleaded guilty to conspiring to traffic in cocaine, and Lopez-Lopez pleaded guilty to aiding and abetting the possession with intent to distribute cocaine. Negron-Beltran, Monsanto and Lopez face sentences ranging from 10 years to life, and maximum fines of $10 million. Torres faces up to 20 years in prison, and a maximum fine of $5 million
All four defendants were remanded to the custody of the United States Marshals Service pending sentencing, which is scheduled for June 5, 2014. The charges against these four defendants arose in connection with the investigation and prosecution of Roberto Tapia, the former Director of the Environmental Enforcement Division of the Virgin Islands Department of Planning and Natural 2 Resources (DPNR), for using DPNR as a criminal enterprise to engage in illegal drug trafficking activities. Tapia pleaded guilty in September, and is in custody awaiting sentencing. Two other co-conspirators, Angelo Hill, and Hector Alcenio, also pleaded guilty to related charges and are awaiting sentencing.
The remaining two defendants in the case, Raymond Brown, and Walter Hill, are scheduled for trial on February 18, 2014.
U.S. Attorney Sharpe commended the work of the Federal Public Corruption Task Force, which spearheaded the investigation. This Task Force is comprised of agents from the Federal Bureau of Investigation (FBI), the U.S. Drug Enforcement Administration (DEA), the Virgin Islands Police Department, the United States Marshals Service, the Internal Revenue Service Criminal Investigation Division (IRS-CI), the U.S. Department of Homeland Security, Homeland Security Investigations, the U.S. Customs and Border Protection, the United States Coast Guard, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Virgin Islands Inspector General Office.
Fort Hall Man Pleads Guilty to Possessing Sawed-off ShotgunRead the Press Release
POCATELLO – Arriyon Meeks-Ortiz, 33, of Fort Hall, Idaho, pleaded guilty today in United States District Court to possession of an unregistered firearm, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, on May 15, 2013, Fort Hall Police officers responded to a residence on the Fort Hall Indian Reservation. Meeks-Ortiz was observed to be holding what appeared to be a small bat or club. After being instructed by officers to leave the residence, Meeks-Ortiz tossed the object into a bedroom. Officers subsequently located an Iver Johnson 12-gauge shotgun with a barrel less than 18” in length on the bed in the bedroom. During an interview with law enforcement, Meeks-Ortiz said that he purchased the sawed-off shotgun in its altered condition for $100 and kept it underneath his trailer.
The charge of possessing an unregistered firearm is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Meeks-Ortiz is scheduled to be sentenced on April 22, 2014, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the Fort Hall Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Former Tinker Official Sentenced to 30 Months in Prison for Accepting BribesRead the Press Release
Oklahoma City, Oklahoma – JAMES LEE LOMAN, 71, of McLoud, Oklahoma, a former Item Manager at Tinker Air Force Base, was sentenced today to 30 months in prison for conspiring to commit wire fraud, accepting bribes, and participating in government contracting under an illegal conflict of interest, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
In July of 2013, a federal jury heard evidence that from approximately 2002 to 2006, Loman accepted large cash payments from an individual associated with Daytona Aerospace, Inc., of Deerfield Beach, Florida, in exchange for favorable treatment in the Air Force’s purchasing of aircraft replacement parts. The evidence included numerous faxes that Loman sent from his home in McLoud to the individual in Florida. Some of these faxes calculated his bribe payments based on a percentage of aircraft sales to the Air Force, beginning at 5% and ending at 10%. Other faxes kept track of the amount of bribes due and the amount already paid to him. Still other faxes were “collection letters” that used coded language. Loman drove to Florida on multiple occasions to pick up the cash in increments of approximately $50,000. The faxes showed total cash bribes in the amount of $838,200. The jury unanimously found Loman guilty on all three charges.
Today, Chief Judge Vicki Miles-LaGrange sentenced Loman to 30 months in the custody of the Federal Bureau of Prisons. The judge explained that the sentence was lower than she would normally have imposed because of Loman’s age and severe health issues. The court ordered Loman to pay $843,200.00 in restitution to the Department of Defense and has also entered a forfeiture money judgment in the amount of $838,200.00.
This sentence is the result of an investigation by the Defense Criminal Investigative Service and the United States Air Force Office of Special Investigations, with assistance from the Federal Bureau of Investigation and the Office of Inspector General for the U.S. Department of Transportation. The case was prosecuted by Assistant U.S. Attorneys Scott E. Williams and Chris M. Stephens.
Former OKC Schools Counselor and Former Tutoring Company OwnerPlead Guilty to OKC Schools Tutoring Program FraudRead the Press Release
Oklahoma City, Oklahoma – BOBBIE J. DAILEY, 62, from Midwest City, Oklahoma, pled guilty today to making false statements to a government agency by submitting false attendance records for tutoring sessions of students attending Oklahoma City Public Schools, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Co-defendant REBECCA E. COTTON, 42, of Midwest City, pled guilty on December 19, 2013, to one count of conspiring to make false statements to the government in connection with the same local tutoring program.
As part of the No Child Left Behind Act of 2001, the U.S. Department of Education provided funding for extracurricular tutoring to eligible students at eligible schools. Eligible schools were those designated by the state to be in need of improvement, and student eligibility was determined by family income. The Oklahoma City Public Schools District ("OKCPS") offered this tutoring program to eligible students at U.S. Grant High School and Roosevelt Middle School. OKCPS required tutoring providers to record student attendance at tutoring sessions on paper rosters and on a computer database which, in turn, was used to generate invoices that the tutoring providers submitted to OKCPS for payment with federal funds.
According to the Indictment filed in the case, during the 2009-2010 school year, Cotton co-owned and operated A Plus Academics, LLC ("A Plus"), a business providing academic tutoring to school children. During this same year, Cotton owned and operated Foundations Tutoring, LLC ("Foundation"”), a business that also provided academic tutoring to school children. A Plus and Foundations shared office space at 608 Askew Drive, in Midwest City. For the 2009-2010 school year, both A Plus and Foundations were state-approved tutoring providers having contracts with OKCPS to provide tutoring services. A Plus primarily tutored students at U.S. Grant High School. Foundations primarily tutored students at Roosevelt Middle School. Both companies hired teachers at the respective schools as tutors. During the 2009-2010 school year, co-defendant Bobbie Dailey was employed at U.S. Grant High School as a counselor and also as an A Plus tutor and "liaison" between A Plus and U.S. Grant High School.
At the December plea hearing, Cotton admitted that in 2009 she agreed with Bobbie Dailey that A Plus would submit student attendance rosters for students who were not, in fact, attending tutoring. Cotton admitted that OKCPS was billed for these students and that A Plus was paid by OKCPS with federal funds. Dailey pled guilty today to one count of making false statements to a governmental agency. She admitted that she submitted false attendance rosters to A Plus that were ultimately used to bill OKCPS for tutoring services never provided. The potential punishment each woman faces is up to five years in prison, followed by three years of supervised release, and a fine of $250,000. In separate plea agreements, both Dailey and Cotton agree to pay restitution to the U.S. Department of Education. Sentencing will take place in approximately 90 days.
At the December plea hearing, Cotton admitted that in 2009 she agreed with Bobbie Dailey that A Plus would submit student attendance rosters for students who were not, in fact, attending tutoring. Cotton admitted that OKCPS was billed for these students and that A Plus was paid by OKCPS with federal funds. Dailey pled guilty today to one count of making false statements to a governmental agency. She admitted that she submitted false attendance rosters to A Plus that were ultimately used to bill OKCPS for tutoring services never provided. The potential punishment each woman faces is up to five years in prison, followed by three years of supervised release, and a fine of $250,000. In separate plea agreements, both Dailey and Cotton agree to pay restitution to the U.S. Department of Education. Sentencing will take place in approximately 90 days.
This case is the result of an investigation by the Internal Revenue Service Criminal Investigation, the U.S. Department of Education, and the Economic Crimes Task Force, and is being prosecuted by Assistant U.S. Attorneys Amanda Maxfield Green and Chris M. Stephens.
Former Moore Resident Who Sought Benefits Following May Tornado Pleads Guilty to Disaster Benefits FraudRead the Press Release
Oklahoma City, Oklahoma – IRA ROBERT SCHILLING, 42, a former resident of Moore, Oklahoma, pled guilty today to committing disaster-benefits fraud in connection with a claim for benefits through the Air Force’s Safe Haven program following the May 2013 tornados in Moore, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the May 20, 2013, tornado affecting Cleveland County was declared a major disaster and the payment of disaster benefits to Tinker Air Force base civilian employees forced to evacuate their homes was authorized through the Safe Haven program. On June 26, 2013, Schilling signed an Air Force memorandum requesting evacuation allowances and benefits. In that memorandum he certified that he and his dependents evacuated their home after the storm and were residing at a Safe Haven location in Norman, Oklahoma. In court today, he admitted that the statement was false and that his false statement caused the Air Force to pay him money.
Schilling faces up to 30 years in prison, a $250,000 fine, and payment of restitution. Sentencing will take place in approximately 90 days.
This case is the result of an investigation by the U.S. Air Force Office of Special Investigations and the U.S. Department of Homeland Security Office of Inspector General and is being prosecuted by Assistant U.S. Attorney Brandon Hale and Special Assistant U.S. Attorney Dakota Davis.
Former Mingo County Commissioner Sentenced to Federal Prison for ExtortionRead the Press Release
David Baisden stripped local vendor of nearly $60,000 in county business for refusing to give him special discount
CHARLESTON, W.Va. – United States Attorney Booth Goodwin today announced that former Mingo County Commissioner David L. Baisden was sentenced to 20 months in federal prison for using his public office to commit extortion.
In June 2009, Baisden, 67, of Delbarton, West Virginia, shook down the Appalachian Tire store in Williamson, West Virginia, for a deep discount on tires for his personal car, threatening to cut off the store’s county business unless it complied. When Appalachian refused Baisden’s demand, he used his authority as the commission’s purchasing agent to make good on his threat, stripping Appalachian of nearly $60,000 in county business.
More recently, Basiden played a key role in a scheme to obstruct a federal investigation of former Mingo County Sheriff Eugene Crum. In early 2013, Baisden learned that a Mingo County drug defendant was informing to the Federal Bureau of Investigation (FBI) regarding alleged criminal conduct by Crum. Baisden and other county officials orchestrated a scheme to remove the informant’s defense attorney, who was encouraging the FBI cooperation, and replace him with another attorney handpicked by Baisden. Former Mingo County Circuit Judge Michael Thornsbury and former Mingo County Prosecuting Attorney Michael Sparks have pleaded guilty in connection with that scheme.
“The people of Mingo County and southern West Virginia are sick and tired of crooked politicians,” said U.S. Attorney Goodwin. “They deserve honest leaders who will work hard to make West Virginia a better place, not feather their own nests. These prosecutions should send a strong message: politicians are not above the law, and there are serious consequences for abusing the public’s trust.”
Goodwin’s office forced Baisden off the Mingo County Commission last October as part of a plea agreement. That agreement barred Baisden from ever seeking or serving in public office again.
As part of Baisden’s sentence, United States District Court Judge John T. Copenhaver, Jr., ordered him to repay nearly $8,000 to Appalachian Tire and the Goodyear Tire and Rubber Company to reimburse the profits he cost them. After he completes his prison time, Baisden will spend three years on federal supervised release.
The FBI and the West Virginia State Police are conducting the investigation of corruption in Mingo County. Counsel to the United States Attorney Steven Ruby and Assistant United States Attorney Haley Bunn are in charge of the prosecutions.
Former Deputy Mayor of the Village of Spring Valley Pleads Guilty to Participating in Bribery SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSEPH DESMARET pled guilty today in White Plains federal court to participating in a scheme in which he accepted over $10,000 in cash bribes in exchange for his votes, as a member of the Spring Valley Board of Trustees, to sell Village land and steer a state-funded transportation contract to a real estate development company. DESMARET pled guilty before U.S. District Judge Kenneth M. Karas.
Manhattan U.S. Attorney Bharara stated: “Every politician needs to understand that they hold office to serve the public, not themselves, and that those who violate the trust placed in them by the people do so at the risk of ending their careers behind bars. Serving the public is a great privilege and it should be treated as such.”
According to the Indictment and other documents filed in this case:
DESMARET accepted approximately $10,500 worth of cash bribes from an undercover FBI agent (“UC”) and a cooperating witness in exchange for his vote in favor of a sale of land owned by Spring Valley to a company he believed was controlled by the UC. In addition, DESMARET agreed to steer to the UC’s company New York State funding for road work associated with the project that he believed the UC’s company was developing.
DESMARET, 56, of Monsey, New York, is scheduled to be sentenced by Judge Karas on May 22, 2014. He faces a sentence of up to 40 years in prison and also faces restitution and forfeiture orders each in the amount of up to $10,500.
Mr. Bharara praised the outstanding efforts of the Federal Bureau of Investigation.
This case is being handled by the Office’s White Plains Division and Public Corruption Unit. Assistant U.S. Attorneys Douglas B. Bloom and Justin Anderson are in charge of the prosecution.
Former DMV Employee Pleads Guilty to Conspiracy to Commit Bribery and Document Fraud, Bribery and Witness Tampering in A Widespread Corruption Case at the DMV in Southern CaliforniaRead the Press Release
United States Attorney Laura E. Duffy announced that Jeffrey Bednarek, a former employee at the California Department of Motor Vehicles (“DMV”) in El Cajon, California, pleaded guilty late yesterday to his aggravated role in a conspiracy to commit bribery and identification document fraud, bribery, and witness tampering. Bednarek entered his guilty plea before U.S. Magistrate Judge William V. Gallo.
According to the plea agreement, Bednarek was a Licensing Registration Examiner at the El Cajon DMV who was responsible for conducting driving tests for driver’s license applicants. Bednarek admitted that, beginning in at least April 2009, and continuing up to at least April 26, 2012, he conspired with his co-defendants to commit federal program bribery and identification document fraud.
Bednarek admitted that he falsely entered “passing” scores for both written and behind-the-wheel tests for applicants who applied for regular (Class C) and commercial (Class A) driver’s licenses in exchange for bribes. Bednarek also acknowledged that he directed others to enter false “passing” test scores and that he created false driving test score sheets to create the appearance that the applicant had completed the test. Bednarek said in his plea agreement that during the conspiracy, he produced more than 100 fraudulent driver’s permits and licenses, and that applicants paid more than $50,000 in total bribes for permits and licenses that he fraudulently produced.
While awaiting an upcoming trial that was scheduled for December 2, 2013, Bednarek tampered with one of the Government’s witnesses, the plea agreement said. According to court documents, Bednarek was arrested on November 13, 2013 a complaint for witness tampering. On November 22, 2013, U.S. District Judge Cathy A. Bencivengo ordered that Bednarek be detained pending trial. Bednarek admitted in his plea agreement that between January 26, 2013 and November 4, 2013, he knowingly attempted to corruptly persuade a Government witness to alter his testimony, namely, to provide false testimony regarding cash bribes that Bednarek had received for his aggravating role in the conspiracy. Bednarek admitted that he intended to prevent and influence the Government witness’s testimony in the trial that was scheduled for December 2, 2013.
Of the 30 defendants charged in this widespread corruption scheme (related Criminal Case Nos. 12CR1852-CAB and 13CR0592-CAB), all 30 of the defendants, including Bednarek, have pleaded guilty to felony conduct, namely, conspiracy to commit bribery and identification document fraud. Many of these defendants have been sentenced, and several others are currently awaiting sentencing. Bednarek is next scheduled to be in court before United States District Judge Cathy A. Bencivengo for sentencing on April 25, 2014, at 9:00 a.m.
These cases are the result of an active, ongoing criminal investigation. Anyone with information about corruption at the DMV is asked to contact the Federal Bureau of Investigation at 1-877-NO-BRIBE (662-7423), or the DMV’s Investigations Branch-Office of Internal Affairs at 626-851-0173.
DEFENDANT Criminal Case No. 12CR1852-CABJeffrey T. Bednarek
SUMMARY OF CHARGESCount 1: Title 18, United States Code, Section 371 -- Conspiracy to Commit Bribery and to Produce Unauthorized Identification Documents -- statutory maximum sentence of 5 years’ custody, a maximum fine of $250,000, special assessment of $100, and a maximum term of supervised release of 3 years.
Count 2: Title 18, United States Code, Section 666(a)(1)(B) -- Bribery -- statutory maximum sentence of 10 years’ custody, special assessment of $100, and a maximum term of supervised release of 3 years.
Count 7: Title 18, United States Code, Section 1512(b)(1) -- Witness Tampering -- statutory maximum sentence of 20 years’ custody, a maximum fine of $250,000, special assessment of $100, and a maximum term of supervised release of 3 years.
INVESTIGATING AGENCIESFederal Bureau of Investigation
Department of Motor Vehicles B Investigations DivisionFormer City Clerk in Havana, KSPleads Guilty to EmbezzlementRead the Press Release
WICHITA, KAN. A former city clerk for the city of Havana, Kan., pleaded guilty Wednesday to embezzling funds from the city and from her church, U.S. Attorney Barry Grissom said. She agreed to pay restitution of approximately $14,658 to the city of Havana and $44,568 to Cross Point Baptist Church.
Diana L. Cox, 67, Havana, Kan., pleaded guilty to one count of bank fraud and one count of wire fraud.
In her plea, she admitted embezzling $14,658 from the city of Havana while she was working as city clerk. On Aug. 18, 2011, she presented documents to the Arvest Bank in Caney, Kan., falsely stating that the Havana City Council had voted to change its policy to require only one signature on checks written for city business.
She also admitted that while she was treasurer of the Cross Point Baptist Church she devised a scheme to defraud the church of approximately $44,568. On Dec. 30, 2011, she caused the church to electronically transfer approximately $2,536 to Vanderbilt Mortgage and Finance to make a mortgage payment due on her daughter’s home.
Sentencing is set for April 16. She faces a maximum penalty of 30 years and a fine up to $1 million on the bank fraud count, and a maximum penalty of 20 years and a fine up to $250,000 on the wire fraud count.
Grissom commended the FBI and Assistant U.S. Attorney Mona Furst for their work on the case.Financial Planner Sentenced for Bilking Money from His ClientsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON, OHIO –Joshua E. Knisley, 35, of Wilmington, Ohio was sentenced to 15 months in prison and five years of supervised release for bilking the funds he was entrusted to manage and oversee for his clients. Knisley was sentenced on charges of willfully filing a false federal income tax return with the Internal Revenue Service (IRS), wire fraud, and money laundering. In addition, Knisley forfeited a 2006 Jeep Commander. Knisley previously pleaded guilty to these charges on June 7, 2013.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office (IRS), and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Office (FBI), announced the sentence handed down today by U.S. District Court Judge Thomas M. Rose.
According to court documents, between January 2007 and June 2011, Knisley was a business partner with an individual in a retail boat business known as 77 Marine which was located in Centerville, Ohio. In addition, Knisley wasalso a financial advisor for several individuals. Knisley engaged in an extensive scheme to defraud his financial advising clients, various employees and customers of Marine 77, various financial institutions, and the IRS.
Knisley created false documents, to include business checks, personal financial statements, purchase agreements, business sales reports, and other financial documents. Also, Knisley concealed from his financial advising clients the fact that he continued to divert investment funds, sales proceeds, and loan proceeds entrusted to him for unauthorized personal and business purposes.
In December 2010, Knisley, who was then a resident of Bellbrook, Ohio, willfully filed a false federal income tax return with the IRS for the 2007 income tax year claiming total income in the amount of $21,967, when he actually received approximately $153,761.75 in additional total income.
The total tax loss to the IRS caused by Knisley filing false federal income tax returns with the IRS was approximately $66,908 for the 2007-2009 income tax years. In addition, Knisley caused federal employment tax losses to the IRS in the amount of approximately $68,239.98 for 2008-2011 income tax years.
In December 2010, Knisley, in his capacity of a financial advisor, illegally devised a scheme to defraud an individual by falsely informing this individual that mortgage loans placed on this individuals residences located in Davie, Florida and Lees Summit, Missouri were fully paid off.
Between December 2010 and April 2011 Knisley illegally devised a scheme to defraud an individual by fraudulently selling this individual a 2010 Ski Nautique 200 boat for $54,529.54. At the time of the sale, Knisley did not own, possess, nor was authorized to sell the boat. Knisley caused this individual to wire transfer to him $34,529.54 from a bank located in South Africa to a bank account controlled by Knisley’s business, 77 Marine.
In December 2010, Knisley illegally devised a scheme to defraud and individual by causing this individual to wire transfer to him $50,000 from a bank located in West Palm Beach, Florida to a bank account controlled by Knisley in Dayton, Ohio.
In December 2010, Knisley committed money laundering by making a check payable to cash from his personal bank account in the amount of $18,750, which were proceeds of his wire and bank fraud activities and were used to purchase a 2006 Jeep Commander.
This case was prosecuted by Assistant United States Attorney Dwight Keller and was investigated by special agents from IRS, Criminal Investigation and the FBI.
###El Paso County Man Pleads Guilty to the Sexual Exploitation of ChildrenRead the Press Release
DENVER – Kenneth Wayne Hugo, age 37, of El Paso County, Colorado, pled guilty before U.S. District Court Judge Robert E. Blackburn recently to the sexual exploitation of children, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Hugo is scheduled to be sentenced by Judge Blackburn on May 22, 2014. The defendant, who appeared at the hearing in custody, was remanded at its conclusion. Hugo was indicted by a federal grand jury in Denver on August 6, 2013. He pled guilty on January 22, 2014.
According to the stipulated facts contained in his plea agreement, this investigation began as an offshoot of an Australian investigation into citizens distributing child pornography. This investigation led authorities to Texas. As a result of a search warrant executed in Texas, federal authorities found a computer that contained evidence of emails being exchanged with an individual in Colorado Springs, Colorado, namely, Kenneth Hugo. On January 23, 2013, the FBI and the El Paso County Sheriff's Office executed a search warrant at Hugo’s residence. During the execution of the search warrant agents and deputies found images depicting prepubescent and toddler aged females being sexually penetrated. It was determined that Hugo started his collection by utilizing a Russian-based image-sharing website to download child pornography images and videos. He also used this website to meet online other like-minded individuals. Hugo also posted images on the site for others to download.
During the subsequent investigation authorities learned that the defendant had inappropriate sexual contact with prepubescent minor females. When minor children slept over at his house during the summer of 2012, Hugo would wait until the minor girls were asleep, sneak into their room, pull down the covers, pajamas and panties, and fondle them, all the while taking pictures using his cell phone camera. Forensic analysis of the items seized during the search warrant revealed 1,600 images of child pornography on the desktop computer and over 4,200 images on the laptop computer. The laptop also contained all the images Hugo had taken using his cell phone of the girls during the sleepovers. An external hard drive contained over 4,000 images of child pornography and a thumb drive contained approximately 290 such images.
Hugo was arrested on January 23, 2013 by state authorities for the sexual assault of three minor girls. Hugo pled guilty to the sexual assault of those girls in state court and was sentenced in November 2013 to an indeterminate term of imprisonment in the Colorado Department of Corrections of four years to life.
The defendant faces not less than 15 years, and not more than 30 years in federal prison for the sexual exploitation of children. He also faces a fine of not more than $250,000.
This case was investigated by the FBI and the Colorado Springs Police Department.
The defendant is being prosecuted by Assistant U.S. Attorney Valeria Spencer.
This case was brought as part of Project Safe Childhood (PSC), 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, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
Eagle Butte Woman Charged with Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, woman has been indicted by a federal grand jury for Assault Resulting in Serious Bodily Injury.
Kenna Bridwell, age 28, was indicted on January 14, 2014. She appeared before U.S. Magistrate Judge Mark A. Moreno on January 17, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Bridwell is alleged to have assaulted a woman in November 2013, as a result of a car crash near Eagle Butte. The charge is merely an accusation and Bridwell is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Bridwell was released on bond pending trial. A trial date has not been set.
Dowson Farms Pays $5.4 Million to Resolve False Claims Allegations Related to Farm Subsidy Payment LimitsRead the Press Release
Springfield, Ill. – A central Illinois family farm business, known collectively as Dowson Farms, based in Divernon, Ill., has paid $5,364,000 to the United States to resolve allegations that it conspired to avoid statutory caps on federal farm subsidy payments from 2002 through 2008, under terms of an out-of-court settlement announced today by the U.S. Attorney’s Office for the Central District of Illinois. The United States had alleged that Dowson Farms’ principal owners, John J. Dowson, John C. Dowson, Darrel Thoma, Amy D. Thoma, and Melissa D. Vorreyer, violated the False Claims Act by creating multiple entities, falsely claiming that these entities were actively engaged in farming separate and distinct from Dowson Farms. As a result, Dowson Farms’ owners allegedly received farm subsidies to which they were not entitled.
The settlement, reached out-of-court by the Dowsons and before the United States had initiated any action, is neither an admission of liability by the Dowsons nor a concession by the United States that its claims were not well founded. The settlement avoids the delay, uncertainty, inconvenience, and expense of protracted litigation that likely would have resulted from the United States’ claims. With the second of two equal payments received this week, the United States has released Dowson Farms’ principal owners from civil and administrative claims related to the operation of limited partnerships and participation by those partnerships and the Dowsons in U.S. Department of Agriculture farm subsidy programs from Jan.1, 2002, through Dec. 31, 2008.
“We are pleased with this favorable resolution of the government’s claims of misuse of farm subsidy programs,” stated U.S. Attorney Jim Lewis. “These programs are designed to help farmers withstand market price volatility and the intrinsic risks associated with farming from year to year. Any attempt to exploit the system to take more than one’s fair share is an improper use of government funds that erodes the public confidence in such programs and threatens their continued viability.”
The United States had alleged that the Dowsons evaded annual payment caps established by Congress to limit the amount of payment individuals can receive during a given crop year from farm subsidy programs, known as Direct Payments and Counter-Cyclical Payments. According to Farm Service Agency regulations, the Direct and Counter-Cyclical Payments Program provided payments to eligible producers on farms enrolled for the 2002 to 2007 crop years. While Direct Payments were tied to acreage bases and yields, Counter-Cyclical Payments provided support to counter the cycle of market prices as part of a safety net in the event of low crop prices.
Throughout this time period, Congress had established an annual limit for each qualified participant in the program. In particular, Congress permitted an individual to receive payments on up to three entities. Under what is known as the “Three Entity Rule,” no person may receive payments subject to these rules from more than three entities in which the person held substantial beneficial interest. If an individual received payments as an individual, he or she could not also receive payment from more than two entities that receive payment as a separate ‘person.’ Using this provision, along with other regulations, an individual was effectively allowed to receive payments to himself and on behalf of up to two additional entities in which the individual held up to a 50 percent interest.
According to the United States, the Dowsons allegedly created multiple limited partnerships for the apparent purpose of concealing the interests of John Dowson, his son, Chris Dowson, and John’s son-in-law, Darrel Thoma, in the entities’ farming operations. For the multiple limited partnerships established by the Dowsons, on paper, 98 percent of the purported ownership was held by various employees, including farm hands and other straw men, while the Dowsons retained only a two percent interest. The United States had asserted that the limited partners contributed nothing to establish their ownership interest and none had any authority to conduct business on behalf of their respective partnership. Meanwhile, again according to the United States, the Dowsons wholly controlled the partnerships’ finances and commodity sales. Farm Service Agency regulations specifically prohibit a person from adopting a scheme or device designed to evade the payment limitations or that has the effect of evading the payment limitations. According to the United States, the creation and use of these limited partnerships, at a minimum, had the effect of evading payment limitations.
The agreement was negotiated by First Assistant U.S. Attorney Eric I. Long on behalf of the U.S. Attorney’s Office for the Central District of Illinois and the U.S. Department of Agriculture.
Department of Defense Procurement Official Sentenced for his Role in Contract Bribery SchemeRead the Press Release
SALT LAKE CITY -A Utah man was sentenced to serve 24 months in prison for his role in a bribery and fraud scheme involving federal procurement contracts, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow of the District of Utah.
On Oct. 24, 2011, Jose Mendez, 52, of Farr West, Utah, pleaded guilty to conspiracy to commit bribery and procurement fraud, bribery, and procurement fraud. Mendez was charged in an October 2011 indictment, along with Sylvester Zugrav, 71, and Maria Zugrav, 67, owners of Atlas International Trading Company in Sarasota, Fla. The Zugravs were sentenced on Jan. 8, 2014.According to court documents, while Mendez worked as a procurement program manager for the U.S. Air Force at Hill Air Force Base in Ogden, Utah, he conspired to enrich himself and others by exchanging money and other things of value for non-public information and favorable treatment in the procurement process. Court records state that Mendez was offered approximately $1,240,500 in payments and other things of value throughout the course of the conspiracy. Mendez admitted that from approximately 2008 to August 2011, he received more than $185,000 in payments and other things of value, with promises of additional bribe payments if Atlas were to receive future contracts from the U.S. government.
In return for the bribes offered and paid, Mendez admitted he gave Atlas and the Zugravs favorable treatment during the procurement process, including disclosing government budget and competitor bid information, which helped Atlas and the Zugravs in winning contracts.
The case was investigated by the FBI and the Air Force Office of Special Investigations. The case was prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Carlos A. Esqueda of the District of Utah.
Department of Defense Procurement Official Sentenced for His Role in Contract Bribery SchemeRead the Press Release
A Utah man was sentenced to serve 24 months in prison for his role in a bribery and fraud scheme involving federal procurement contracts, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow of the District of Utah.
On Oct. 24, 2011, Jose Mendez, 50, of Farr West, Utah, pleaded guilty to conspiracy to commit bribery and procurement fraud, bribery, and procurement fraud. Mendez was charged in an October 2011 indictment, along with Sylvester Zugrav, 71, and Maria Zugrav, 67, owners of Atlas International Trading Company in Sarasota, Fla. The Zugravs were sentenced on Jan. 8, 2014.
According to court documents, while Mendez worked as a procurement program manager for the U.S. Air Force at Hill Air Force Base in Ogden, Utah, he conspired to enrich himself and others by exchanging money and other things of value for non-public information and favorable treatment in the procurement process. Court records state that Mendez was offered approximately $1,240,500 in payments and other things of value throughout the course of the conspiracy. Mendez admitted that from approximately 2008 to August 2011, he received more than $185,000 in payments and other things of value, with promises of additional bribe payments if Atlas were to receive future contracts from the U.S. government.
In return for the bribes offered and paid, Mendez admitted he gave Atlas and the Zugravs favorable treatment during the procurement process, including disclosing government budget and competitor bid information, which helped Atlas and the Zugravs in winning contracts.
The case was investigated by the FBI and the Air Force Office of Special Investigations. The case was prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Carlos A. Esqueda of the District of Utah.
Defendant Pleads Guilty to Submitting False Claims to the Federal GovernmentRead the Press Release
Maple Rapids Resident James Ortman Admits to Fraud in Conjunction with Federal Grants for Buildings he Formerly Owned in St. Johns, Michigan
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr., announced today that James Francis Ortman, 58, of Maple Rapids, Michigan, pled guilty to a felony information filed on January 8, 2014, that charged him with submitting false claims to the U.S. Department of Housing and Urban Development (HUD) in conjunction with grants awarded to him in 2008 and 2009. The grants were administered by the City of St. Johns and the Michigan State Housing Development Authority (MSHDA).
“When used appropriately, HUD grants encourage development and new job opportunities in our local communities,” said U.S. Attorney Miles. “This office will vigorously pursue those who seek to line their own pockets by diverting from their intended purpose scarce grant monies that are funded by the hard-working taxpayers of this district.”
Ortman admitted at his change of plea hearing before United States Magistrate Judge Ellen S. Carmody that in 2008 the City of St. Johns awarded him a federal grant as part of a Downtown Façade Project for his building located at the corner of North Clinton and East Walker streets. In order to receive the grant, Ortman represented to the City that the façade improvements would cost $416,999, and that the project would ultimately create four permanent jobs for low and moderate-income persons. The grant provided that if the project truly cost that amount, and if Ortman invested $216,999 of his own funds into the project, HUD would fund the remaining cost of $200,000. Ortman admitted at the hearing that he did not invest his own funds as represented and that he submitted false documents to the federal government to make it appear as if his actual costs equaled the projected amount. As a result, he received the full amount of the grant ($200,000), when he should have received less than half of this amount.
Ortman further admitted that he committed fraud in conjunction with a Rental Rehabilitation Grant that the City awarded to him in 2009. The terms of that grant required Ortman to construct apartments for income-qualified individuals in various buildings that he owned in St. Johns. Ortman admitted that he submitted claims for grant payments to the federal government for work that he did not actually complete and that he diverted those grant payments to other business ventures that were in financial trouble. As a result, many of the income-based apartments were never completed. Ortman caused a combined loss of over $200,000 to the federal government in conjunction with the façade and rental rehabilitation grants.
“HUD’s Office of Inspector General, working with the U.S. Attorney’s Office, will relentlessly hunt for predators who, despite their best efforts to conceal their theft, have swindled the taxpayer and hurt Michigan’s neediest families,” said Barry McLaughlin, Special Agent in Charge, HUD-OIG Region V. “Theft of HUD grant funding amounts to stealing from hard-working taxpayers,” added Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, in concert with our law enforcement partners, remains dedicated to pursuing those who selfishly misappropriate public funds intended for the public good.”
Ortman is awaiting his sentencing hearing, at which time Ortman will face a maximum term of imprisonment of five years, a fine of up to $250,000, and will be ordered to pay restitution to HUD. The Detroit office of the U.S. Department of Housing and Urban Development-Office of Inspector General, along with the Lansing office of the FBI, investigated the case. The prosecution of the case is being handled by Assistant U.S. Attorney Ronald M. Stella.
END
DEA Receiving Tips on Recent Heroin Overdoses via TextRead the Press Release
PITTSBURGH - The Pittsburgh Office of the Drug Enforcement Administration (DEA) has implemented the Tip411 system to receive information related to the recent heroin and fentanyl overdoses in the Pittsburgh area.
Information can be sent via text message by entering Tip411 (847411) in the “To” field, and the keyword “PGHOD” followed by the tip information in the text field. All information provided is 100% anonymous.
Customs and Border Protection Supervisor Sentenced for Possession of Child PornographyRead the Press Release
BUFFALO, N.Y.– U.S. Attorney William J. Hochul, Jr. announced today that Steven Metz, 42, of Hamburg, N.Y. who was convicted of possession of child pornography, was sentenced to five years in prison and five years of supervised release by U.S. District Court Chief Judge William M. Skretny. The judge ordered that the defendant be remanded immediately.
Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that on October 25, 2012, the defendant, a supervisor with U.S. Customs and Border Protection, was found in possession of approximately 3000 images and 70 videos of child pornography on his computer at his residence in Hamburg. Some of these files contained depictions of violence, and some of the children shown in the images and videos were prepubescent children as young as three years old. As a result of this conviction, the defendant will no longer be employed by the federal agency.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The sentencing is the culmination of an investigation on the part of Special Agents of the U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, Special Agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in charge Gregory Null, and officers of the Hamburg Police Department under the direction of Chief Michael K. Williams.Criminal Immigration Charges Brought Against Four Illegal AliensRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania and the U.S. Department of Homeland Security, Immigrations and Customs Enforcement, announced today that charges have been brought this week against the following:
Domingo Cervante-Dominguez, at 34, a native and citizen of Mexico, in the United States illegally, was charged in a one-count information filed with the Court in Harrisburg today. The information alleges that Cervante-Dominguez, an illegal alien, did enter the United States at any time or place other than as designated by immigration officers and was found in the United States in York, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, Cervante-Dominguez, faces a maximum sentence of up to 6 months’ imprisonment and a $5,000 fine.
Jorge De Leon-Estrada, age 34, a native and citizen of Guatemala, in the United States illegally, was charged in a one-count information filed with the Court in Harrisburg. The information alleges that De Leon-Estrada, an illegal alien, did enter the United States at any time or place other than as designated by immigration officers and was found in the United States in Franklin, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, De Leon-Estrada faces a maximum sentence of up to 6 months’ of imprisonment and a $5,000 fine.
Elvin Sanchez-Herrera, age 33, a native and citizen of El Salvador, in the United States illegally, was charged in a one-count information filed with the Court in Harrisburg. The information alleges that Sanchez-Herrera, an illegal alien, did enter the United States at any time or place other than as designated by immigration officers and was found in the United States in York, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, Sanchez-Herrera faces a maximum sentence of up to 6 months’ of imprisonment and a $5,000 fine.
Fidel Bautista-Salazar, age 35, a native and citizen of Mexico, in the United States illegally, was charged in a one-count information filed with the Court in Harrisburg. The information alleges that Bautista-Salazar, an illegal alien, did enter the United States at any time or place other than as designated by immigration officers and was found in the United States in Cumberland County, Pennsylvania after eluding examination or inspection by immigration officers.
If convicted, Bautista-Salazar faces a maximum sentence of up to 6 months’ of imprisonment and a $5,000 fine.
The investigations were conducted by the U.S. Department of Homeland Security, Immigration and Customs Enforcement and are being prosecuted by Special Assistant United States Attorney Brian G. McDonnell.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In these cases, the maximum penalty under the federal statute is 6 months’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offenses are not an accurate indicator of the potential sentence for a specific defendant.
****Council Bluffs Man Sentenced on Drug and Firearm ChargesRead the Press Release
DES MOINES, IA - On January 28, 2014, Scott Norman Hart, age 37, of Council Bluffs, Iowa, was sentenced in United States District Court in Council Bluffs on charges of possession of methamphetamine with intent to distribute, and carrying a firearm regarding drug trafficking, announced United States Attorney Nicholas A. Klinefeldt. Chief United States District Court Judge James E. Gritzner sentenced Hart to a total of 240 months imprisonment, that is, 180 months imprisonment on the drug charge, and a consecutive 60 months imprisonment on the firearm charge. Hart was further sentenced to concurrent terms of 5 years of supervised release on both charges. Hart was also ordered to forfeit the firearm and ammunition he possessed, and to pay a $200.00 special assessment for the Crime Victim Fund. Hart remains in the custody of the United States Marshal pending designation of the Federal Bureau of Prisons facility at which he will serve his sentence.
The charges arose from the Fugitive Task Force encountering Hart at a residence in Council Bluffs, Iowa, on November 9, 2012. Hart was wanted on a fugitive warrant for absconding from parole in Nebraska. At the time Hart was arrested, he was found in possession of approximately 95 grams of methamphetamine and a small quantity of marijuana. Also found on his person at the time of his arrest was a loaded .380 caliber pistol.
The case was investigated by the Council Bluffs, Iowa, Police Department, the United States Marshals Service, the Southwest Iowa Narcotics Enforcement Task Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Convicted Sex Trafficker Sentenced to More Than 30 Years in PrisonRead the Press Release
U.S. District Court Judge Susan C. Bucklew sentenced Andrew Blane Fields, 62, of Lutz, Fla., to serve 33 years and nine months in prison followed by five years of supervised release, the Justice Department announced today. A jury convicted Fields on Nov. 6, 2013, of five counts of sex trafficking by force, fraud and coercion, and three narcotics counts arising from his distribution of controlled substances to the sex trafficking victims as part of his scheme of coercion.
“The Civil Rights Division is committed to pursuing justice on behalf of vulnerable members of our society,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “This defendant preyed on young women living in the shadows and on the margins. Using false promises to lure them in, he cruelly exploited them for his own profit, destroying them with drugs and selling their bodies for sex. This sentence sends a clear message that the United States will not tolerate modern-day slavery and will work tirelessly to restore the rights and dignity of its victims.”
“The court’s sentence clearly reflects the seriousness of these awful sex trafficking crimes,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida. “We will continue to work with the Clearwater Area Human Trafficking Task Force and other law enforcement partners throughout the District to prosecute sex traffickers and vindicate victims’ rights.”
During the trial, five victims recounted their intense fear of withdrawal sickness and related that Fields manipulated that fear to coerce them to perform acts of prostitution for the defendant’s profit in exchange for another dose of the addictive drugs. One of the victims testified that Fields, while watching her suffer through the onset of the excruciating physical and psychological withdrawal symptoms, would compel her to serve another prostitution client by saying, “I’ll give you one pill. I’m not going to give you another until you get up and go to work. And you know you need another.”
The case was investigated jointly by Immigration and Customs Enforcement (ICE) and the Clearwater, Fla., Police Department through their participation on the Clearwater Area Human Trafficking Task Force.
“Andrew Fields used prescription pills to manipulate and coerce his victims to prostitute themselves for his own financial gain,” said Deputy Special Agent in Charge Shane Folden of Homeland Security Investigations Tampa. “Even though we can’t take away the physical and psychological damage his victims have endured, this nearly 34-year sentence ensures that additional women won’t fall prey to his sex trafficking scheme.”
“Our agency takes these human trafficking cases very seriously because these perpetrators commit unfathomable crimes,” said Chief Anthony Holloway for the Clearwater Police Department. “This defendant took over the lives of these women. We cannot – and will not – let that happen.”
Evidence presented at trial showed that Fields identified vulnerable young women, one just 18 years old, who were prostituting or working as exotic dancers, using online advertisements to lure them with promises of safe transportation and protection. The defendant then provided the victims with addictive drugs such as Oxycodone, Dilaudid and Morphine, at levels designed to intensify their dependency and addiction. The evidence showed that the defendant rapidly increased the victims’ drug use; while some victims initially used drugs only occasionally and others used a few pills a day, Fields escalated their drug use to full-blown addiction, with some victims requiring up to 15 pills a day to stave off withdrawal symptoms. The evidence showed that Fields acquired the drugs at low costs and charged the victims inflated prices to saddle them with mounting drug debts. He then manipulated their fear of withdrawal symptoms to compel them to prostitute and turn over all proceeds to him, leaving them with no money, no other access to the addictive drugs and fully dependent on Fields to avert withdrawal sickness. At times, Fields demanded that the victims engage in sexual acts with him to pay down the debts.
Evidence seized from Fields’ home included over 4,000 prescription pills, notebooks in which he recorded the victims’ debts, advertisements for prostitution, cash, condoms and books about pimping and prescription drugs.
Surveillance camera video footage admitted into evidence showed Fields entering a hospital room in the middle of the night to deliver drugs to one of the victims. The video showed Fields handing the woman pills and another object which she hid under her bed sheet. At trial, the victim testified that the pills were Dilaudid and the other object was a syringe to inject the drug intravenously.
Another victim testified that Fields threatened to contact her probation officer and to have her probation violated if she did not continue to engage in prostitution for his profit. The evidence established that Fields caused her probation to be violated when she did not submit to his demands that she continue prostituting. The defendant contacted the victim while she was incarcerated to pressure her to recruit other victims, then immediately delivered addictive drugs to her upon her release from prison.
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Clearwater Police Department, with assistance from members of the Clearwater Area Human Trafficking Task Force. Assistant U.S. Attorney Josephine W. Thomas and Trial Attorney William E. Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit prosecuted the case.
Cincinnati Man Sentenced to 27 Years in Prison for Producing Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – John Hamilton, 46, of Cincinnati was sentenced in U.S. District Court to 27 years in prison for recording a video of sexual activity between him and a minor girl between 12 and 16 years old. Hamilton was also ordered to be under court supervision for the rest of his life.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Cincinnati Police Chief Jeffrey Blackwell, and agencies in the Greater Cincinnati Internet Crimes Against Children Task Force announced the sentence handed down today by Senior U.S. District Judge Sandra S. Beckwith.
Hamilton pleaded guilty on June 26, 2013 to one count of production of child pornography. According to court documents, Cincinnati Police received a report in June 2012 that Hamilton had engaged in unlawful sexual conduct with a minor. Detectives investigating the complaint seized a computer and a forensic analysis revealed that the video was produced on February 21, 2012 in the victim’s home. Forensic analysis did not show any distribution of the video. Hamilton was arrested in October 2012. He has been in custody since his arrest.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Stewart commended the investigation by Cincinnati Police officers and investigators with the Greater Cincinnati ICAC as well as Assistant U.S. Attorney Christy Muncy who is representing the United States in this case.
Agencies participating in the Greater Cincinnati ICAC, in addition to the U.S. Attorney’s Office include the FBI, U.S. Marshals Service, U.S. Secret Service, Hamilton County Prosecutor Joe Deters, Hamilton County Sheriff Jim Neil and the police departments in Amberley Village, Blue Ash, Cincinnati, and West Chester.
Chatauqua County Business Owner Sentenced for Failing to Pay Payroll TaxesRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that John C. Creighton, 57, of Bemus Point, N.Y., who was convicted of failing to pay payroll taxes, was sentenced to 12 months in prison and ordered to pay restitution to the IRS totaling $663,627, by Chief U.S. District Court Judge William M. Skretny.
Assistant U.S. Attorney Trini E. Ross, who handled the case, stated that Creighton is the president and owner of Classic Brass Inc. in Lakewood, N.Y. In 2010 and 2011, the defendant withheld payroll taxes from the paychecks of CBI employees. Creighton failed however to make payroll tax payments to the IRS, and failed to file Forms 941 regarding the payment of payroll taxes.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service - Criminal Investigation Division, under the direction of Special Agent- in-Charge Toni M. Weirauch.Ceo of Free Truth Enterprises Sentenced to Prison for Tax Fraud and Mortgage Loan FraudRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI, OHIO -- Regina Shields, 41, of Cincinnati, Ohio was sentenced in US. District Court to 12 months and one day in prison, and ordered to pay $202,806 in restitution to the Internal Revenue Service and the lender she defrauded in a mortgage fraud scam.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office; and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by Chief U.S. District Court Judge Susan J. Dlott.
Shields pleaded guilty in June 2013 to one count of filing a false income tax return and one count of wire fraud. According to court documents, Shields formed a non-profit corporation called Free Truth Enterprises and has served as the President and CEO since 2000. From 2007 through 2010, Shields filed federal income tax returns with the IRS claiming $61,315 in false claims for income tax refunds.
“The mortgage loan offense involves a brazen scheme whereby she bid for and won a sheriff’s auction for a property that was in foreclosure,” Assistant U.S. Attorney Tim Mangan told the court. “She then purported to pay for the property using a check that had insufficient funds. To make matters worse, the Defendant then used this temporary appearance of title to apply for a sizable loan from Quicken Loans in excess of $140,000. She then used the proceeds to purchase a luxury car.”
Shields’ sentence includes restitution to the IRS in the amount of $61,315, and restitution in the amount of $141,491 to Title Source, Inc. (related to Quicken Loans).
Stewart commended the cooperative investigation by special agents of IRS-Criminal Investigation and the FBI, Assistant United States Attorney Timothy Mangan who prosecuted the case.
# # #Central Illinois Farmer, Former Elevator Manager Sentenced to Prison for Fraud SchemeRead the Press Release
Peoria, Ill. – A central Illinois farmer, Robert James Printz, 46, of Fairbury, Ill., and Timothy Boerma, 37, a former manager of Towanda Grain Company, were sentenced today for their respective roles in a scheme to defraud the elevator, Printz’s creditors, and others. Chief U.S. District Judge James E. Shadid ordered that Printz serve 121 months (10 years, 1 month) in federal prison and pay restitution in the amount of $7,038,537; Boerma was sentenced to 72 months (6 years) in federal prison and ordered to pay restitution in the amount of $6,730,594. Both men were given Apr. 15, 2014, to report to the federal Bureau of Prisons to begin serving their prison sentence. Following completion of their prison terms, both defendants were ordered to remain on supervised release for five years.
According to court documents, Printz farmed in central Illinois as Printz Farms. Boerma, of Lincoln, Ill., was employed at Towanda Grain and became manager of the elevator in April 2009. The Towanda Grain board of directors discharged Boerma from his position on May 10, 2010, the same date that the Illinois Department of Agriculture suspended Towanda Grain’s license. The Department of Agriculture later helped facilitate the sale of Towanda Grain to Evergreen FS.
On May 30, 2013, Printz and Boerma entered pleas of guilty for their respective roles in the fraud scheme. Printz pled guilty to one count each of wire fraud and money laundering related to his scheme to defraud CNH, which had extended lines of credit to Printz for operating expenses. Boerma pled guilty to one count of wire fraud.
Under terms of the plea agreement, Printz agreed to forfeit to the government a 2010 Lincoln Navigator, diamond jewelry, two Rolex watches, and a 5th wheel camper. The government dismissed forfeiture allegations regarding real estate known as: 22232 East 2750 North Rd, Lexington, Ill., 20952 E. Road, Anchor, Ill., 207 Walcrest Drive, Fairbury, Ill., 25386 Arrowhead Lane, Hudson, Ill., 19990 E 260 North Road, Fairbury, Ill., and, 162 acres of farmland in Fairbury, Ill.
Printz and Boerma pled guilty to their participation in a fraud scheme that defrauded CNH Capital, which provided Printz with a line of credit for his farming operation; Towanda Grain, and others from September 2009 to May 2010. In October 2009, at about the same time that Printz reached the maximum on his 2009 line of credit, he began to deliver grain to Towanda Grain, an elevator he had disclosed as a possible grain purchaser under his security agreement with CNH. Boerma, the Towanda Grain manager, handled the transactions with Printz, and issued grain advance checks payable only to Printz, in violation of the CNH security agreement.
From October 2009 to about January 2010, Printz admitted that he continued to obtain advances from Boerma, at more than twice the value of the grain Printz delivered. From October 2009 to April 2010, Printz received a total of approximately $13.1 million from Towanda Grain. Printz subsequently made repayments to Towanda Grain of approximately $6.1 million. To conceal funds from CNH, Printz misrepresented to his accountants the nature of the transactions and the amount of funds received.
Boerma admitted that he acted contrary to the terms of the loan agreement between Towanda Grain and CoBank, a secured lender of Towanda Grain, in making loans and advances to Printz. To conceal the payments to Printz, Boerma made false entries in the records of Towanda Grain and provided false statements to CoBank.
The charges resulted from an investigation by Internal Revenue Service Criminal Investigations; the U.S. Postal Inspection Service; and the Illinois Department of Agriculture. The case was prosecuted by Supervisory Assistant U.S. Attorney Darilynn J. Knauss and Assistant U.S. Attorney Bradley W. Murphy.Camden County, N.J., Man Sentenced to Seven Years in Prison for Illegal Weapons PossessionRead the Press Release
CAMDEN, N.J. – A Camden County, N.J., man was sentenced today to 84 months in prison for illegally possessing firearms, including assault rifles and a stolen handgun, which he sold to a confidential informant, U.S. Attorney Paul J. Fishman announced.
Ashley C. Love, 39, of Lindenwold, N.J., previously pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an information charging him with one count of possessing firearms and ammunition while being a previously convicted felon.
According to documents filed in this case and statements made in court:
Between October 2011 and November 2011, Love sold a confidential informant five firearms – three assault rifles (one of them, with compatible ammunition), a stolen 9mm Ruger handgun (with compatible ammunition), and a shotgun. All of the weapons and ammunition are now in the custody of law enforcement.
In addition to the prison term, Judge Bumb sentenced Love to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Acting Special Agent in Charge George Belsky, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office in Camden.
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Defense counsel: Lisa Lewis Esq., PhiladelphiaCali, Colombia Man Pleads Guilty to Drug Importation ConspiracyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Raul Eraso-Mejia (54, Cali, Colombia, South America) today pleaded guilty to an Information charging him with conspiring with others to distribute 5 kilograms or more of cocaine, knowing and intending that such substance would be unlawfully imported into the United States. Eraso-Mejia faces a minimum mandatory penalty of 10 years, up to life in federal prison.
According to the plea agreement, from at least 2005 through the end of 2009, Eraso-Mejia conspired with others to smuggle cocaine out of Colombia, by sea, knowing and intending that the cocaine would be ultimately imported into and distributed in the United States. Eraso-Mejia and others invested in cocaine smuggling operations and were part-owners of the cocaine.
For example, in July 2009, Eraso-Mejia was a partial owner of cocaine being smuggled from Colombia's Pacific coast, onboard a stateless self-propelled semi-submersible ("SPSS") vessel. All of the cocaine was intended for importation, by way of Mexico, for subsequent distribution in the United States. After traveling on the high seas and in international waters, co-conspirators onboard the SPSS vessel successfully off loaded the cocaine to co-conspirators embarked in go-fast vessels (GFVs) off the coast of Mexico. Thereafter, the Mexican Navy interdicted the GFVs, and seized 7,507 kilograms of cocaine.
This case was investigated by the Panama Express South Strike Force, a standing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation, comprised of agents and analysts from the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Federal Bureau of Investigation, the United States Coast Guard Investigative Service, the Naval Criminal Investigative Service, and U.S. Southern Command's Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
The case is being prosecuted by Assistant United States Attorney Christopher F. Murray.
Bureau of Prisons Inmate Sent Back to Prison for Indecent Exposure by Sexually Gratifying HimselfRead the Press Release
DENVER – Todd A. Lawton, age 31, an inmate who was housed at the United States Penitentiary (USP) in Florence, Colorado, at the time of his crime, was sentenced on Monday, January 27, 2014 by U.S. District Court Judge Philip A. Brimmer to serve one year and a day in federal prison for indecent exposure, the Department of Justice announced. Lawton will also have to register as a sex offender. The defendant appeared at the sentencing hearing in the custody of the United States Marshal. He was remanded at the conclusion of the sentencing hearing.
Lawton was indicted by a federal grand jury in Denver on June 3, 2013. He pled guilty to two counts of indecent exposure on October 16, 2013. He was sentenced on January 27, 2014. According to the stipulated facts contained in the plea agreement, between May 21, 2012 and January 22, 2013, Lawton on multiple occasions would stand on the toilet or another object in his cell in order to make his groin area visible through the cell door window to those near his cell. Then he would sexually gratify himself when female medical or food service staff approached. He was ordered many times to cease his lewd behavior, but failed to comply with correctional staff orders.
The defendant was being incarcerated in USP Florence for various crimes while incarcerated: federal inmate possessing contraband -- weapon and assault on a federal officer. He was first incarcerated for distribution of cocaine, robbery and carrying a pistol without a license, all out of the District of Columbia. Lawton was released from the Federal Bureau of Prison custody on July 18, 2013, but was picked up by U.S. Marshals Deputies to appear before a U.S. Magistrate Judge on the indecent exposure charge. Lawton was later ordered to be detained without bond pending a resolution of his case.
“This case involved calculated acts of sexual intimidation aimed at female medical and food service staff at the United States Penitentiary at Florence,” said U.S. Attorney John Walsh. “This case and sentence reflects our commitment to protect Prison staff – and also other prison inmates – from sexual abuse of whatever form.”
This case was investigated by the Federal Bureau of Prisons Special Investigative Services Department at USP Florence.
Lawton was prosecuted by Assistant U.S. Attorney David Tonini.
Bettendorf Men Indicted in Public Corruption Case and Additional Prosecutions UnsealedRead the Press Release
DAVENPORT, IA B On January 28, 2014, an indictment charging Robert L. Budd, Jr. (Budd), formerly of Brown Traffic Products, Inc. (Brown Traffic) of Davenport, Iowa, and Robert W. Webster (Webster), a former city electrician for the city of Bettendorf, Iowa, was unsealed, announced United States Attorney Nicholas A. Klinefeldt. The thirteen-count indictment charges Budd and Webster with conspiracy and bribery in connection with Webster’s work at the city of Bettendorf. The city of Bettendorf, Iowa is a government agency that has received funds under federal programs involving grants, contracts, or other forms of federal assistance in excess of $10,000 each year over the past several years and has conducted transactions with Brown Traffic in amounts exceeding $5,000.
The Budd and Webster indictment alleges that Webster received money, airfare to such places as Florida, Texas, and Nevada, tickets for race car events, and other forms of entertainment, lodging expenses for hotels and resorts in such places as Florida, Texas, Nevada, Kansas, and Illinois, meals, drinks, cigars, and golf and resort fees.
The court also unsealed two other files involving David Schiltz (Schiltz), the former CEO of Brown Traffic, and Daniel Fuchs (Fuchs), a former high-level manager and sales representative of Brown Traffic. Schiltz and Fuchs have entered guilty pleas and agreed to cooperate with the Government’s investigation. Within their plea agreements, both men admitted they conspired with Budd to corruptly give, and offer to give, things of value to Webster, and others, acting with the intent to influence and reward Webster in connection with transactions between the city of Bettendorf and Brown Traffic for traffic control devices and services.
Budd has entered a plea of not guilty and a trial is presently scheduled for April 7, 2014. Webster is expected to appear in court later this week.
The public is reminded that an indictment is only an accusation, and the defendant is presumed innocent unless and until proven guilty.
The case is being investigated by the Federal Bureau of Investigation, and is being prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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