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11 March 2014
Grand Jury Returns IndictmentsRead the Press Release
MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.Minneapolis felon charged with possessing shotgun
James Reedus Berry, age 53, of Minneapolis, is charged with one count of being a felon in possession of a firearm and one count of possession of an unregistered firearm. Because he is a felon and three or more of his prior convictions were for violent or drug crimes, Berry is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.
If convicted, Berry faces a potential maximum penalty of ten years in prison on the unregistered firearm count. This case is the result of an investigation by the Minneapolis Police Department, and United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It is being prosecuted by Assistant U.S. Attorney Julie E. Allyn.Former postal employee charged with theft of mail
Debra Sue Morrow, age 60, of Faribault, was charged with one count of theft of mail by postal employee.
If convicted, Morrow faces a potential maximum penalty of five years in prison. This case is the result of an investigation by the U.S. Postal Service-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Sarah E. Hudleston.Minneapolis felon charged with possessing five firearms
James Herman Pegues, age 48, of Minneapolis, was charged via a superseding indictment with one count of being a felon in possession of a firearm. Because he is a felon and three or more of his prior convictions were for violent or drug crimes, Pegues is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.
If convicted, Pegues faces a potential maximum penalty of life in prison. This case is the result of an investigation by the Fridley Police Department, and ATF. It is being prosecuted by Assistant U.S. Attorney LeeAnn K. Bell.Minneapolis man charged with receiving, distributing and possessing child pornography
Michael Thomas Schnapp, age 30, of Minneapolis, was charged with one count of receipt of child pornography, one count of distribution of child pornography, one count of attempted distribution of child pornography, and one count of possession of child pornography.
If convicted, Schnapp faces a potential maximum penalty of 40 years in prison on the receipt, distribution and attempted distribution counts, and 20 years on the possession count. This case is the result of an investigation by the Minneapolis Police Department and the Minnesota Internet Crimes Against Children Task Force. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.
Distribution, receipt and possession of child pornography is against the law. In addition to prosecuting these cases, the Justice Department is presently funding a study focused on the correlation between involvement in child pornography and hands-on sexual abuse of children. A 2008 study (The Butner Study) published in the Journal of Family Violence found that up to 80 percent of federal inmates incarcerated for possession, receipt, or distribution of child pornography also admitted to hands-on sexual abuse of children, ranging from touching to rape.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 U.S. 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 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.”
Grand Jury Returns IndictmentsRead the Press Release
MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.Felon charged with possessing a .45-caliber pistol
Trevor James Beckman, age 30, unknown address, is charged with one count of being a felon in possession of a firearm. Because he is a felon and three or more of his prior convictions were for violent crimes, Beckman is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.
If convicted, Beckman faces a potential maximum penalty of life in prison. This case is the result of an investigation by the Rochester Police Department, and United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It is being prosecuted by Assistant U.S. Attorney Carol M. Kayser.Minneapolis felon charged with possessing a nine-millimeter pistol
Andre Maurice Cox, age 41, of Minneapolis, was charged with one count of being a felon in possession of a firearm.
If convicted, Cox, also known as Anthony White, faces a potential maximum penalty of ten years in prison. This case is the result of an investigation by the Minneapolis Police Department, and the ATF. It is being prosecuted by Assistant U.S. Attorney Surya Saxena.St. Paul felon charged with possessing a nine-millimeter pistol
Michael Anthony Vargas, age 31, of St. Paul, was charged with one count of being a felon in possession of a firearm. Because he is a felon and three or more of his prior convictions were for violent crimes and/or drug trafficking, Vargas is subject to the federal armed career criminal statute, which mandates a minimum sentence of 15 years in federal prison upon conviction.
If convicted, Vargas faces a potential maximum penalty of life in prison. This case is the result of an investigation by the St. Paul Police Department, and ATF. It is being prosecuted by Assistant U.S. Attorney LeeAnn K. Bell.Four Indicted for Operating Food Stamp Fraud from Cleveland StoreRead the Press Release
Four men from Northeast Ohio were charged in a five-count indictment with engaging in a conspiracy to defraud the food stamp and Women, Infants and Children programs from a store on Detroit Avenue in Cleveland, law enforcement officials said.
Indicted are: Bashir Mohamed, age 31, of Cleveland; Yusuf Maalin, 45, of Cleveland; Ali Shire Ahmed, 54, of North Olmsted, Ohio; and Farah Hasan Warsame, 27, of Cleveland.
The indictment alleges that Mohamed, Maalin, Ahmed, and Warsame conspired to illegally allow customers to redeem food stamp and WIC benefits at Bashir Market, 8401 Detroit Avenue, in exchange for cash, ineligible items, and credit towards overseas wire transfers.
Mohamed, Maalin, and Warsame allegedly worked at the market and redeemed the food stamp and WIC benefits for the cash, unauthorized items, or credit towards overseas funds transfers. The credit for overseas funds transfers was tracked on a ledger kept at the market, according to the indictment.
Mohamed or Maalin would then provide Ahmed with cash or a check that Ahmed would take to Columbus, Ohio, to send overseas by wire transfer. The indictment alleges that the conspiracy involved the attempted redemption of approximately $670,612 in food stamp and WIC benefits, according to the indictment.
The conspiracy took place between 2008 and last year, according to the indictment.
In addition to the conspiracy charge, Mohamed, Maalin, Ahmed, and Warsame are also charged with counts of food stamp fraud, unlawful food stamp redemptions, and WIC fraud. Ahmed is charged with one count of money laundering.
The indictment results from an investigation conducted by the United States Department of Agriculture, Office of the Inspector General; the Federal Bureau of Investigation; and Department of Homeland Security, Homeland Security Investigations.
The case is being handled by Assistant United States Attorneys Matthew W. Shepherd and M. Kendra Klump.
If convicted, the defendants’ sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Four from Buffalo Indicted for Buying Gift Cards with Fraudulent Credit CardsRead the Press Release
Four people from Buffalo, New York, were indicted on charges that they used fraudulent credit cards to buy $19,500 worth of gift cards from a Walmart and Rite Aid in Cleveland, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are Ricky Butler, 37, Cherise Luper, age 22, Brianna Davis, age 20, and Larry Cross, age 22. They face charges of access device fraud, aggravated identity theft, unlawful possession of a document-making implement, and conspiracy to commit the same.
The indictment alleges that the four individuals fraudulently obtained credit cards that they later used to purchase gift cards valued at approximately $19,500 from the Walmart stores at 3400 Steelyard Drive and 10000 Brookpark Road and the RiteAid store at 10502 St. Clair Avenue, all in Cleveland, as well as two stores in New York.
It further alleges that the defendants acquired and produced counterfeit identification cards that they used in the identity-theft and access-device scheme.
In all, they obtained 39 gift cards, each worth $500, according to the indictment.
If convicted, the defendants’ sentences will be determined by the Court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ role in the offense, and the characteristics of the violation. In all cases, the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorneys M. Kendra Klump, Robert W. Kern, and James L. Morford following an investigation by the United States Secret Service and the Bedford Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Wisconsin Resident Sentenced in Federal Court for Defrauding Charity Based in Union Grove, WIRead the Press Release
United States Attorney James L. Santelle, of the Eastern District of Wisconsin, announced that on March 11, 2014, Michael Wayne Lowstetter (age: 35) of Xenia, Ohio (formerly of Union Grove, Wisconsin) was sentenced to 30 months in a federal prison by United States District Judge Charles N. Clevert, Jr. Lowstetter had previously pleaded guilty to two counts of mail fraud, in violation of Title 18, United States Code, Section 1341. The District Judge also imposed a term of three years’ supervised release, to follow the term of imprisonment, and a special assessment of $200.
According to the plea agreement and other documents filed with the court, Lowstetter defrauded Shepherds Baptist Ministries of more than $400,000 during the 2009-2012 time frame by using his position as Vice President for Finance to divert funds to himself. Shepherds Baptist Ministries is a faith-based organization headquartered in Union Grove, Wisconsin. It provides vocational training and other services to individuals with intellectual disabilities.
In addition to the above term of imprisonment, Lowstetter will be required to pay restitution in the amount of $453,737.12 to Sheperds and its insurer. In sentencing the defendant, Judge Clevert noted that the “ripple effects” of his crime, which involved a betrayal of trust, would continue to be felt by Sheperds Ministries and its clients and donors, and by Lowstetter’s family. He also noted that, even in a case where the defendant accepts responsibility and has suffered on account of his actions, it is important that others be deterred from engaging in financial fraud by the imposition of a sentence of imprisonment.
The case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Jonathan H. Koenig.
Former Teacher Sentenced to 25 Years in Prison for Production of Child Pornography and Other ChargesEric Justin Toth Left Washington, D.C. Area Upon Discovery of Crimes; Former FBI Ten Most Wanted Fugitive Was Captured in NicaraguaRead the Press Release
WASHINGTON – Eric Justin Toth, 32, a former private school teacher and camp counselor, was sentenced today to 25 years in prison on child pornography and other charges.
Toth left the Washington, D.C. area in 2008, amid an investigation that began with the discovery of pornographic images on a school camera that had been in his possession. After charges were filed against him, he became the subject of an international search and later was placed on the FBI’s list of Ten Most Wanted Fugitives. He was apprehended in Nicaragua last year and pled guilty in December 2013 in the U.S. District Court for the District of Columbia.
The sentence was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Rod J. Rosenstein, U.S. Attorney for the District of Maryland; John W. Vaudreuil, U.S. Attorney for the Western District of Wisconsin; Robert L. Pitman, U.S. Attorney for the Western District of Texas; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; John S. Leonardo, U.S. Attorney for the District of Arizona; Andrew M. Luger, U.S. Attorney for the District of Minnesota; John McCarthy, State’s Attorney for Montgomery, County, Md.; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD), and J. Thomas Manger, Chief of the Montgomery County, Md. Police Department.
Toth pled guilty on Dec. 12, 2013, to three counts of production of child pornography and one count each of misuse of a Social Security number and identity theft. He was sentenced by the Honorable Rudolph Contreras, who today accepted a plea agreement signed by the parties.
Following completion of the prison term, Toth will be placed on supervised release for the rest of his life. Upon his release, Toth also must register as a sex offender, receive sex offender treatment, and observe limits on his use of the Internet and his contacts with minors.
The guilty plea resolved charges and potential charges in several jurisdictions, including the District of Columbia, Maryland, Wisconsin, Texas, Minnesota, Arizona, and Florida.
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“For the next 25 years, Eric Toth will be where he deserves to be – in a federal prison where he cannot harm any more children,” said U.S. Attorney Machen. “Behind bars, Toth will no longer be able to manipulate and sexually exploit our most vulnerable victims. The FBI deserves tremendous credit for tracking Toth to Nicaragua and bringing him to the District of Columbia to face justice. The five-year manhunt that led to his capture demonstrates the depth of our commitment to defending children from sexual predators.”
“Eric Toth spent five years on the run from justice, but today he learned his fate and will spend a substantial time behind bars where he will not be able to harm our children or the community,” said Assistant Director in Charge Parlave. “I want to thank the dedicated agents, analysts and prosecutors who spent countless hours vetting tips from the public, chasing leads and eventually tracking down Toth. Their work is representative of the high priority the FBI places on finding those who perpetrate crimes against children.”
“This defendant’s crimes must be answered for,” said State’s Attorney McCarthy. “Thanks to the work of law enforcement forces around the world, Toth will be punished for his reprehensible actions, and his victims will be spared further trauma. Today, justice takes its course.”
“This defendant used his position to exploit vulnerable youth in various communities,” said Chief Lanier. “I am pleased that the efforts of the Metropolitan Police Department, along with our local and federal law enforcement partners, led to this fugitive being captured and ultimately sentenced.”
The investigation of Toth began in June 2008 with the discovery of images depicting child pornography on a camera at a private school in the District of Columbia, where he had been teaching. School administrators called the police, and security officers immediately escorted Toth from the school campus. Toth left the area soon thereafter, while the law enforcement investigation was continuing. Federal charges were filed against him in 2008 in the District of Columbia and Maryland. Toth, meanwhile, remained at large, traveling to multiple places.
Toth was placed on the FBI’s Ten Most Wanted Fugitives list in April 2012 and finally apprehended in Nicaragua in April 2013.
The three child pornography charges included in the guilty plea stem from photographs and videos that Toth took of children while working in 2005 as a camp counselor in northwest Wisconsin; as a teacher in 2006 at the private school in the District of Columbia; and at a private home in Maryland in 2007. These photographs and videos were located on a camera and media card found at the school in June 2008 and on a thumb drive found in Toth’s car when it was located at the Minneapolis-St. Paul International Airport in August 2008. Additionally, Toth pled guilty to misuse of a Social Security number for using someone else’s identifying information while working in Texas from 2009 until 2012. The identity theft charge stems from Toth’s use, in Texas, Florida, and elsewhere, of yet another person’s identifying information on a fraudulently obtained passport.
As part of the plea agreement, Toth will not face charges for additional images of child pornography that were found on computers that Toth used. In June 2009, after law enforcement learned that Toth had been living and working at a homeless shelter in Phoenix, authorities discovered a laptop computer that Toth had been using that contained images depicting child pornography. Toth had already left Phoenix at the time of this discovery. In addition, after Toth’s arrest, law enforcement discovered images and videos depicting child pornography on a laptop computer that Toth used when he lived in Texas and Nicaragua.
This case was investigated by the FBI’s Washington Field Office; the Metropolitan Police Department; the Montgomery County, Md., Police Department, and other agencies.
This case was prosecuted by Assistant U.S. Attorney Cassidy Kesler Pinegar of the U.S. Attorney’s Office for the District of Columbia, Special Assistant U.S. Attorney LisaMarie Freitas of the U.S. Attorney’s Office for the District of Maryland, and Assistant State’s Attorney Donna Fenton of the Montgomery County, Md. State’s Attorney’s Office.
Assistance during the investigation was provided by the U.S. Attorney’s Offices from the Western District of Wisconsin; the Western District of Texas; the Southern District of Florida; the District of Arizona, and the District of Minnesota; the Montgomery County, Md. State’s Attorney’s Office; the U.S. Embassy Managua Regional Security Office; the Diplomatic Security Service Criminal Investigative Liaison Branch; U.S. Customs and Border Protection; the U.S. Marshals Service's National Sex Offender Targeting Center; and the National Center for Missing and Exploited Children - Sex Offender Tracking Team.
The Nicaraguan National Police (NNP) Commissioner's Office, the NNP Trafficking in Persons Unit, and the Nicaraguan Immigration Service performed crucial work in securing Toth’s apprehension.
Those assisting from the U.S. Attorney’s Office for the District of Columbia include Assistant U.S. Attorneys Julieanne Himelstein, Catherine K. Connelly, David Johnson and Virginia Cheatham, and former Assistant U.S. Attorneys Angela Schmidt and Michelle Zamarin. Paralegal Specialist Toni Donato also provided assistance.
14-061Former Nissan Employee and Two Others Plead Guilty in Scheme to Defraud NissanRead the Press Release
Kenneth Carter, 45, of Corona, Calif., Wendell Young, 34, of Inglewood, Calif., and Bruce Young, 50, of Compton, Calif., pleaded guilty on March 7, 2014, to participating in a scheme to defraud Nissan North America, announced United States Attorney David Rivera. They will be sentenced by Judge William J. Haynes, Jr. on May 30, 2014.
Kenneth Carter pleaded guilty to all counts in the indictment, including conspiracy to commit mail fraud, three counts of mail fraud, and conspiracy to commit money laundering. Carter faces up to 20 years in prison and a fine of $500,000 on the conspiracy to commit money laundering count, up to 20 years in prison and a fine of $250,000 on each of the mail fraud counts, and up to five years in prison and a fine of $250,000 on the conspiracy to commit mail fraud count.
Wendall Young and Bruce Young entered into plea agreements with the government whereby each pleaded guilty to one count of conspiracy to commit money laundering.
According to the indictment, from March 2007 through April 2008 Kenneth Carter was employed at Nissan’s Franklin, Tennessee headquarters as an “Arbitration Specialist.” In that role, his duties were to negotiate with attorneys who brought claims on behalf of Nissan owners, alleging that Nissan had violated “Lemon Laws” or the Federal Warranty Act.
The indictment alleged that the defendants engaged in a scheme to defraud Nissan. Bruce Young and Wendell Young, among others, would approach individuals who owned Nissan vehicles to obtain information such as the owner’s name, address, and vehicle identification numbers. Carter then used this information to file false and fraudulent claims at Nissan, requesting settlement checks. Once the checks were issued, Bruce Young, Wendell Young, and others directed the Nissan owners to deposit the checks into their bank accounts or to cash the checks.
Bruce Young and Wendell Young then told the Nissan owners to pay them a portion of the funds the owners received from Nissan. A portion of those funds were then paid to Carter and Bruce Young and Wendell Young kept a portion of those proceeds for themselves. During the course of the scheme, Carter filed approximately 80 false claims, totaling approximately $571,500.
A total of six defendants were charged in the indictment and these guilty pleas represent the final 3 defendants. The three other defendants previously entered guilty pleas, including Adrian Franklin, 40, of Chandler, Arizona, who pleaded guilty to one count of conspiracy to commit money laundering on November 18, 2013, and Francisco DeLaRosa, 40, of West Covina, Calif., and Tracey Young, 45, of Los Angeles, Calif., each pleaded guilty to one count of conspiracy to commit money laundering on February 21, 2014.
The case was investigated by the IRSB Criminal Investigation and the Tennessee Bureau of Investigation. Assistant United States Attorney Kathryn Ward Booth represents the government.
Former Lancaster, Pa., Man Facing Federal Gun and Drug ChargesRead the Press Release
ERIE, Pa. - A former resident of Lancaster, Pennsylvania has been indicted by a federal grand jury in Erie on charges of violating federal gun and drug laws, United States Attorney David J. Hickton announced today.
The two-count indictment named Nicholas Alexander Reynolds, 22, as the sole defendant.
According to the indictment presented to the court, on or about December 19, 2013, Reynolds possessed a firearm while being a convicted felon and also possessed with intent to distribute less than fifty kilograms of marijuana.
The law provides for a maximum total sentence of 15 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The United States Marshal’s Service and the Titusville Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Childersburg City Councilwoman Sentenced to Three Years in Prison for Bank Fraud and Money LaunderingRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a former Childersburg City Councilwoman to nearly three years in prison for bank fraud and laundering nearly $1 million from SouthFirst Bank, announced U.S. Attorney Joyce White Vance, U.S. Secret Service Special Agent in Charge Craig Caldwell, and IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge Inge P. Johnson sentenced BONNY JEAN CARTER, 61, to two years and nine months in prison and ordered her to repay $37,200 to SouthFirst Bank, and $949,287 to its insurance company, Zurich Financial and Security. Carter pleaded guilty in December to one count each of bank fraud and money laundering. She is to report to prison May 13.
"This defendant used her position of trust with the bank she worked for to steal nearly $1 million from the bank over 10 years," Vance said. "Stealing from a financial institution will not go unpunished, and the prison sentence Ms. Carter received today is justice finally being served."
"IRS Criminal Investigation, along with our law enforcement partners, will vigorously pursue corporate officers who violate the public trust," Hyman-Pillot said. "We are committed to investigating complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money. This sentence should serve as a deterrent to those who might contemplate similar fraudulent actions."
Carter had worked as an account clerk at the Sylacauga branch of SouthFirst Bank. In that position, between June 2004 and March 2013, she embezzled from the bank by converting money to personal savings accounts. Carter recorded journal entries to transfer money from various SouthFirst Bank general ledger accounts into personal accounts held in her daughter's name. She also skimmed amounts from checks made payable to SouthFirst Bank by depositing the funds into those personal accounts. Additionally, Carter issued debit transactions from SouthFirst Bank’s operating expense account to pay personal debts she owed.
The U.S. Secret Service and Internal Revenue Service investigated the case, which Assistant U.S. Attorney Robin Beardsley Mark prosecuted.
Former CEO of Miami Lakes Tax Preparation Business Sentenced for Structuring SchemeRead the Press Release
Wifredo A Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Carlos Rodriguez, 40, of Miami Lakes, was sentenced today to 22 months in prison, followed by two years of supervised release.
Rodriguez previously pled guilty to one count of structuring financial transactions with the intent to evade currency reporting requirements, in violation of Title 31, United States Code, Sections 5324(a)(3) and 5324(d)(2). Rodriguez is the former Chief Executive Officer of Rodri Rodri & Associates (Rodri), formerly located in Miami Lakes.
According to court documents and statements, financial institutions are required to report cash transactions in amounts over $10,000.00 to the IRS. From on or about January 4, 2012 through on or about March 22, 2012, Rodriguez was the Chief Executive Officer of Rodri, a tax preparation business. During that time, the defendant cashed or had cashed Rodri business checks in amounts under $10,000.00 at JPMorgan Chase Bank with the intent to evade the currency transaction reporting requirements of Title 31, United States Code, Section 5313(a). Pursuant to the terms of the plea agreement, the amount of money involved in the structuring violations was between $400,000 and $1 million.
According to the evidence, the tax return preparation part of the business was supervised by the defendant’s late wife Jennifer Rodriguez. The defendant was primarily responsible for the day-to-day operations of the business such as paying employees, collecting fees for the preparation of tax returns, paying business expenses, and handling customers with questions, concerns, or complaints. Nonetheless, many of the tax returns prepared by Rodri were fraudulent and contained false credits, such as education and fuel credits that the taxpayers otherwise were not entitled to have. The structured cash was used to provide cash, for a fee, to taxpayer clients in exchange for their inflated tax refunds.
As further stated in court and in court documents, the proceeds generated by the tax preparation business are traceable to the purchase of the properties listed in the indictment, including a couple of parcels of real property. According to the plea agreement, Rodriguez agreed to forfeit said properties to the United States.
As further stated in the plea agreement, Rodriguez agreed to cooperate with the IRS in its civil examination, determination, assessment, and collection of income taxes related to the defendant’s 2009 through 2012 income tax returns and any related corporate tax returns, and further agreed not to conceal, transfer, or dissipate funds or property that could be used to satisfy such taxes, penalties, and interest.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Elijah A. Levitt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Banker Sentenced for Fraud SchemeRead the Press Release
Daniel Mumbower, 35, a former banker, of Glassboro, NJ, was sentenced today to 41 months in prison for two counts of bank fraud and one count of receiving bribes by a bank employee for his role in a scheme that defrauded lenders of nearly $3 million. U.S. District Court Judge C. Darnell Jones, II, also ordered three years of supervised release, a $300 special assessment, restitution of $2,718,758, and forfeiture of $2,516,317. Mumbower must surrender to the Bureau of Prisons on May 14, 2014.
Mumbower worked as a financial specialist at Wachovia Bank in Sicklerville, New Jersey, from April 2005 through April 2008. In mid-2006, Mumbower met a corrupt loan broker, Gerald Cathie (charged elsewhere), who began bringing clients’ applications for lines of credit to Mumbower for submission to Wachovia. Through Cathie, Mumbower met Simon Aouad (charged elsewhere). Aouad also brought others’ loan applications to Mumbower. Mumbower realized that the applications Cathie and Aouad brought him contained false income and employment information and were supported by false documentation, such as false tax returns, but he processed the applications anyway. Mumbower earned a commission from Wachovia Bank for each loan that closed. Mumbower paid Cathie and Aouad a commission out of the proceeds of the loan, which was against bank policy, and Cathie paid Mumbower a cash kickback of approximately $200 per approved loan. Aouad, also, paid Mumbower kickbacks totaling approximately $10,000. The defendant processed a regular, weekly stream of fraudulent loan applications brought to him by Cathie and Aouad. Most applications were for lines of credit totaling between $50,000 and $100,000.
Mumbower received several thousand dollars in kickbacks from both Cathie and Aouad for assisting them in obtaining lines of credit for others. Most of the loans were unsecured business lines of credit. The borrowers defaulted. The total intended loss for the fraudulent lines of credit was approximately $765,000. During the same time frame, Mumbower met John Lucidi, charged elsewhere, a corrupt mortgage broker working in West Chester and Newtown Square. Lucidi was orchestrating a mortgage fraud scheme in which he and others, including Aouad, found buyers to apply for mortgages to purchase real estate located mostly in North Wildwood, New Jersey. With the knowledge of Lucidi, Aouad, and others, but unbeknownst to the lenders, the buyers applied for the mortgages using false and fraudulent income and asset information and received tens of thousands of dollars in undisclosed kickback payments for purchasing the properties. At the request of Aouad and Lucidi, Mumbower provided false verifications of deposit (VODs) purporting to show that the mortgage applicants had tens of thousands of dollars in Wachovia Bank accounts. These false VODs were provided to the mortgage lenders, including Wells Fargo Bank, PNC Bank, and others, in support of mortgage applications to purchase real estate located in West Chester, Pennsylvania; North Wildwood, New Jersey; and Boston, Massachusetts. In exchange for providing the false VODs, Aouad paid Mumbower $5,000 cash. Many of the properties purchased using the false verifications of deposits supplied by Mumbower went into default, and the lenders lost approximately $2 million.
The defendant faces a maximum possible sentence of 90 years of imprisonment, five years of supervised release, a $3 million fine, and a $300 special assessment.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the United States Secret Service. It is being prosecuted by Assistant United States Attorney Nancy E. Potts.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Arkansas State Treasurer Martha Ann Shoffner Guilty on Federal Charges of Extortion and Receipt of BribesRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and David Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation, announced today that a federal jury found former Arkansas State Treasurer Martha Ann Shoffner, age 68, of Newport, guilty on six counts of extortion under color of official right, one count of attempted extortion under color of official right, and seven counts of receipt of a bribe by an agent of a state government receiving federal funds. A forfeiture allegation of $4,020 is also included in the indictment.
Martha Shoffner was elected as Treasurer for the State of Arkansas in 2006 and 2009. The United States presented testimony that historically, the Treasurer’s Office had used between 10 and 15 bond brokers throughout the state to purchase federal agency bonds for investment. During Shoffner’s first term in office, the bond inventory levels between the brokers was relatively comparable. In mid-2010, Shoffner approached Steele Stephens, a broker with St. Bernard Financial, and requested that he purchase a house in Little Rock for her to stay in free of charge, but Stephens feared such an arrangement would be discovered. As an alternative, Shoffner suggested that Stephens make payments of $1,000 per month to her. Ultimately, it was agreed that he would pay Shoffner $6,000 every six months.
In mid-2010, Stephens made the first $6,000 payment to Shoffner at the Capitol, resulting in Stephens’ bond inventory increasing above that of other brokers for the State of Arkansas, ultimately reaching over $600 million in bond inventory in August 2012. In total, Stephens received approximately $2 billion in bond business, earning approximately $2.5 million in commissions. Stephens made a total of six payments of $6,000 from mid-2010 through December 2012. Two payments were made at the Capitol, two payments were made at Shoffner’s Little Rock residence, and two payments were made at Shoffner’s home in Newport, Arkansas. Stephens testified that he concealed the $6,000 payments in a pie box when he delivered money to Shoffner in Newport, Arkansas.
In January 2013, Stephens began cooperating with the Federal Bureau of Investigation. As part of his cooperation, he recorded a meeting with Shoffner at her home in Newport, Arkansas, wherein Shoffner acknowledged the agreement regarding the $6,000 payments and receipt of payments. Shoffner also admitted to lying during the September and December 2012 legislative audit hearings about receiving money from Stephens and would take it to her grave. In May 2013, Stephens delivered an apple pie to Shoffner with $6,000 in FBI funds in the pie box. After the broker left Shoffner’s house, Special Agents with the FBI executed a search warrant at Shoffner’s house. Shoffner had taken the cash out of the pie box and placed it in a cigarette box in a kitchen drawer. She also told the FBI that she still had $4,020 from the December 2012 payment hidden in a cigarette box. Shoffner was arrested.
Testimony also presented that in September 2009 and November 2010, Stephens provided cash for campaign events, which was not reported by Shoffner on her campaign finance reports. According to testimony, Shoffner kept the cash and never deposited it into her campaign account.
The statutory penalty for extortion and attempted extortion under color of official right, in violation of 18 U.S.C. § 1951(a), is not more than 20 years’ incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 3 years supervised release.
The statutory penalty for receipt of a bribe by an agent of a state government receiving federal funds, in violation of 18 U.S.C. § 666(a)(1)(B), is not more than 10 years’ incarceration in the Bureau of Prisons with a possible fine of up to $250,000, and not more than 3 years supervised release.
The investigation was conducted by the Federal Bureau of Investigation.
Florida Hospital System Agrees to Pay the Government $85 Million <br /> to Settle Allegations of Improper Financial Relationships <br /> with Referring PhysiciansRead the Press Release
Halifax Hospital Medical Center and Halifax Staffing Inc. (Halifax), a hospital system based in the Daytona Beach, Fla., area, have agreed to pay $85 million to resolve allegations that they violated the False Claims Act by submitting claims to the Medicare program that violated the Physician Self-Referral Law, commonly known as the Stark Law, the Justice Department announced today.The Stark Law forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital. In this case, the government alleged that Halifax knowingly violated the Stark Law by executing contracts with six medical oncologists that provided an incentive bonus that improperly included the value of prescription drugs and tests that the oncologists ordered and Halifax billed to Medicare. The government also alleged that Halifax knowingly violated the Stark Law by paying three neurosurgeons more than the fair market value of their work.
“Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public health programs.”
In a Nov. 13, 2013, ruling, the U.S. District Court for the Middle District of Florida ruled that Halifax’s contracts with its medical oncologists violated the Stark Law. The case was set for trial on March 3, 2014, on the government’s remaining claims against Halifax when the parties reached this settlement.
“This settlement illustrates our firm commitment to pursue health care fraud," said U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “Medical service providers should be motivated, first and foremost, by what is best for their patients, not their pocketbooks. Where necessary, we will continue to investigate and pursue these violations in our district.”
As part of the settlement announced today, Halifax also 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 Halifax to undertake substantial internal compliance reforms and to submit its federal health care program claims to independent review for the next five years.
“Patients deserve to know that recommendations are based on sound medical practice, not illegal financial relationships between providers,” said Inspector General for the U.S. Department of Health and Human Services Daniel R. Levinson. “Halifax now also is required to hire a legal reviewer to monitor provider arrangements and an additional compliance expert to assist the board in fulfilling its oversight obligations. Both of these independent reviewers will submit regular reports to my agency.”
The settlement announced today stems from a whistleblower complaint filed by an employee of Halifax Hospital, Elin Baklid-Kunz, 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 and take over the lawsuit, as it did in this case as to some of Baklid-Kunz’s allegations. Baklid-Kunz will receive $20.8 million of the settlement.
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 $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation and litigation was conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida and HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability, except as determined by the court’s Nov. 13, 2013, ruling.
The lawsuit is captioned United States ex rel. Baklid-Kunz v. Halifax Hospital Medical Center, et al., No. 09-cv-1002 (M.D. Fla.).
Final Defendant in Foreclosure Rescue Fraud Scheme SentencedRead the Press Release
PHILADELPHIA - John Bariana, 41, of Mullica Hill, NJ, was sentenced today to 18 months in prison for his role in a massive mortgage fraud scheme that resulted in at least 35 fraudulent mortgage loans worth more than $10 million. Bariana pleaded guilty on August 26, 2010 to 12 counts. In addition to the prison term, U.S. District Court Judge Mary McLaughlin ordered a $7,500 fine, a $1,200 special assessment, and forfeiture of $400,000 joint and several with co-defendants Edward and Jacqueline McCusker. The McCuskers were sentenced on March 6, 2014. Edward McCusker was sentenced to five years in prison, his wife Jacqueline was sentenced to one year of home confinement followed by three years of probation.
The McCuskers operated Axxium Mortgage, Inc. with Bariana. Co-defendants Jeffrey A. Bennett and Stephen G. Doherty, owners of the Doylestown law firm Bennett & Doherty, P.C., were also involved in the scheme and pleaded guilty.
The defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants took whatever equity the homeowner had left, funneled it through shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.
The defendants promised financially distressed homeowners that they would find an “investor” who would help them save their home. The defendants would then either purchase the home themselves or arrange for a straw purchaser to obtain a fraudulent mortgage and then transfer of the title of the homeowner?s residence to the straw purchaser. The McCuskers, along with Bariana, obtained the fraudulent mortgages by submitting false documents to mortgage lenders and making false claims about the purchasers’ finances. The defendants also concealed from the lender the fact that the homeowner was going to continue to reside in the home and that the mortgage payments were going to continue to be made, in part, by the distressed homeowner and funneled through the straw purchaser. Bariana and Jacqueline McCusker each acted as straw purchasers for ten homes. The defendants also recruited at least seven other persons to act as straw owners in order to obtain additional fraudulent mortgages.
Doherty solicited and referred distressed homeowners to Edward McCusker, and used fraudulent bankruptcy filings for some of the distressed homeowners to delay foreclosure until McCusker had obtained an investor and a mortgage. Bennett handled the closings for the real estate transfers, falsifying the settlement statements and manipulating the information provided to the lender in order to hide the nature of the scheme until after the loan was funded.
Doherty was sentenced to one year and one day in prison and ordered to forfeit $202,644.33; Bennett was sentenced to 18 months in prison, a $7,500 fine, a $400 special assessment and forfeiture joint and several with Doherty. A federal jury convicted the McCuskers on June 22, 2011 of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering, wire fraud and mail fraud. In addition to their prison terms, the McCuskers were ordered to forfeit $400,000; Edward McCusker was ordered to pay a fine of $12,500, a special assessment of $1,000, and was ordered to complete three years of supervised release; Jacqueline McCusker was ordered to pay a special assessment of $900.
This case was investigated by the Federal Bureau of Investigation and the Pennsylvania Department of Banking. It is being prosecuted by Assistant United States Attorney Nancy Rue.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Final 2 Defendants Sentenced in Stolen Identity and Tax Fraud SchemeRead the Press Release
STATESBORO, GA -- TIDAESHA V. TAYLOR, 27, and GREGORY F. SMITH, JR., 21, were sentenced last week before United States District Court Judge B. Avant Edenfield in Statesboro, Georgia for their roles in a stolen identity and tax fraud scheme centered in Statesboro, Georgia. In total, 13 individuals were charged, convicted, and sentenced in a scheme to steal identities and submit false tax returns that cost the American taxpayers over $1 million in bogus tax refunds.
United States Attorney Edward J. Tarver said, “In the midst of another tax season, cases like these demonstrate the substantial risks to the millions of honest tax filers of having their personal information stolen and fraudulently used. The United States Attorney’s Office will continue its efforts to protect the integrity of the federal income tax filing system and to prosecute those responsible for stealing the identities of legitimate taxpayers in order to deny them the refunds to which they are entitled.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated, “This case involved numerous individuals working together to defraud the government, as well as taxpayers, in a systematic manner. The law enforcement response, similarly, consisted of various law enforcement groups working together in a systematic manner to stem the tide of this organized criminal enterprise. The FBI will continue to dedicate significant resources and personnel toward the investigation of such groups that would do so much harm to so many.”
IRS Special Agent in Charge Veronica F. Hyman-Pillot stated, “The sentences these defendants received will not replace the losses that were incurred or the harm endured by the victims. However, they do illustrate that IRS Criminal Investigation, along with our law enforcement partners, are committed to pursuing individuals who commit these types of crimes. We will continue to unite and utilize every tool available to investigate those who conspire with each other to victimize members of our community for their own personal gain.”
In 2013, Taylor and Smith, along with 11 others, were indicted on charges ranging from a conspiracy to defraud the IRS to identity theft. According to evidence presented during guilty plea and sentencing hearings, these schemers stole personal identifiers, such as names, dates of birth, and Social Security numbers, from medical records and other sources, which they then used to submit fraudulent tax returns in order to obtain tax refunds to which they were not entitled.
Taylor and Smith were the last to be sentenced of the 13 defendants originally charged. Each of the 13 defendants and their sentences are as follows:
ERICA BALDWIN, 31, of Statesboro, Georgia, was sentenced on January 7, 2014, to 81 months in prison.
TRACY DENSON, 44, of Statesboro, Georgia, was sentenced on February 13, 2014, to 100 months in prison.
SHAKITA EASON, 30, of Statesboro, Georgia, was sentenced on January 7, 2014, to 104 months in prison.
YOLANDA EDMOND, 36, of Statesboro, Georgia, was sentenced on October 8, 2013, to 32 months in prison.
GLORIA EVANS, 44, of Statesboro, Georgia, was sentenced on October 8, 2013, to 39 months in prison.
JOSHUA MINCEY, 20, of Statesboro, Georgia, was sentenced on January 7, 2014, to 48 months in prison.
PORSCHE S. PINKNEY, 19, of Augusta, Georgia, was sentenced on January 14, 2014, to 65 months in prison.
DWAN SCOTT, 32, of Statesboro, Georgia, was sentenced on January 14, 2014, to 72 months in prison.
JENNA SCOTT, 28, of Jacksonville, Florida, was sentenced on January 23, 2014, to 75 months in prison.
GREGORY F. SMITH, JR., 21, of Stone Mountain, Georgia, was sentenced on March 5, 2014, to 95 months in prison.
ASHA K. SPAULDING, 37, of Claxton, Georgia, was sentenced on October 8, 2013, to 154 months in prison.
TIDAESHA V. TAYLOR, 27, of College Park, Georgia, was sentenced on March 5, 2014, to 75 months in prison.
ANDREA WEBB, 31, of Register, Georgia, was sentenced on January 7, 2014, to 51 months in prison.
FBI Special Agent Marcus Kirkland and IRS-CI Special Agent Gwen Weston led the investigation in this case. They were assisted by the Statesboro Police Department, the Bulloch County Sheriff’s Office, and Region 5 of the Georgia Bureau of Investigation. Assistant United States Attorney Lamont A. Belk prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Federal Jury Convicts Dallas Man on Child Pornography ChargesRead the Press Release
Defendant Faces Up to 70 Years in Federal Prison
DALLAS — Following a two-day trial before U.S. District Judge Barbara M. G. Lynn, and less than one hour of deliberation, a federal jury has convicted a 43-year-old Dallas man on various child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Ted Lynn Snider was convicted on two counts of transporting and shipping child pornography, one count of receipt of child pornography and one count of possession of child pornography. Each of the transporting and shipping child pornography counts, as well as the receipt of child pornography count, carries a statutory penalty of not less than five years or more than 20 years in federal prison and a $250,000 fine. The possession count carries a maximum statutory sentence of 10 years in federal prison and a $250,000 fine. Sentencing is set for June 27, 2014.
The government presented evidence that in May 2013, the FBI discovered a particular individual, later identified as Snider, was online sharing images and videos of young children engaged in vile and graphic sexual acts. On May 29, 2013, the FBI executed a search warrant at Snider’s residence, and while at the residence, agents spoke with him. Snider admitted he had been using a file sharing program to trade files depicting child pornography and that he maintained a categorized, child pornography collection on his computer and external hard drives. The FBI seized electronic evidence that contained hundreds of images and videos of child pornography.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI investigated. Assistant U.S. Attorney Camille Sparks and Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay prosecuted.
Federal Inmate Pleads Guilty to Murder of United States Correctional OfficerRead the Press Release
WASHINGTON—A federal inmate pleaded guilty today for the murder of United States Correctional Officer Jose Rivera, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Benjamin Wagner for the Eastern District of California.
James Ninete Leon Guerrero, 48, of Guam, pleaded guilty before U.S. District Judge Phillip Pro to one count of murder by a federal prisoner serving a life sentence. According to court documents, Guerrero aided and abetted co-defendant Jose Cabrera Sablan in the stabbing death of Officer Rivera.
Court documents allege that on June 20, 2008, as Officer Rivera was on duty conducting his daily count in the United States Penitentiary in Atwater, Calif., Sablan attacked him with an eight-inch homemade shank. Officer Rivera tried to flee, but he was knocked backwards by Sablan and tackled by Guerrero. Guerrero held Officer Rivera down as Sablan stabbed him with the shank more than 20 times. Officer Rivera was 22 years old at the time of his death and was a United States Navy veteran.
Sablan and Guerrero were indicted for murder on Aug. 14, 2008. As a result of Guerrero’s plea, he faces a mandatory sentence of life in prison. His sentencing has been scheduled for May 30, 2014, at 2:00 p.m. in the Eastern District of California.
Sablan’s case is set for trial on April 6, 2015. He is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The investigation was conducted by the Bureau of Prisons and the FBI. This case is being prosecuted by Trial Attorney Bonnie Hannan of the Criminal Division’s Capital Case Section and Assistant U.S. Attorney Duce Rice of the Eastern District of California.
Federal Inmate Pleads Guilty <br /> to Murder of United States Correctional OfficerRead the Press Release
A federal inmate pleaded guilty today for the murder of United States Correctional Officer Jose Rivera, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Benjamin Wagner for the Eastern District of California.
James Ninete Leon Guerrero, 48, of Guam, pleaded guilty before U.S. District Judge Phillip Pro to one count of murder by a federal prisoner serving a life sentence. According to court documents, Guerrero aided and abetted co-defendant Jose Cabrera Sablan in the stabbing death of Officer Rivera.
Court documents allege that on June 20, 2008, as Officer Rivera was on duty, conducting his daily count in the United States Penitentiary in Atwater, Calif., Sablan attacked him with an eight-inch homemade shank. Officer Rivera tried to flee, but he was knocked backwards by Sablan and tackled by Guerrero. Guerrero held Officer Rivera down as Sablan stabbed him with the shank more than 20 times. Officer Rivera was 22 years old at the time of his death and was a United States Navy veteran.
Sablan and Guerrero were indicted for murder on Aug. 14, 2008. As a result of Guerrero’s plea, he faces a mandatory sentence of life in prison. His sentencing has been scheduled for May 30, 2014, in the Eastern District of California.
Sablan’s case is set for trial on April 6, 2015. He is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The investigation was conducted by the Bureau of Prisons and the FBI. This case is being prosecuted by Trial Attorney Bonnie Hannan of the Criminal Division’s Capital Case Section and Assistant U.S. Attorney Duce Rice of the Eastern District of California.Erie County Man Charged with Possession of Child PornographyRead the Press Release
ERIE, Pa. - A resident of Corry, Pennsylvania, has been indicted by a federal grand jury in Erie on a charge of violating federal laws relating to the sexual exploitation of children, United States Attorney David J. Hickton announced today.
The one-count indictment named William Jay Blazes, 46, as the sole defendant.
According to the indictment presented to the court, Blazes possessed computer images depicting minors engaging in sexually explicit conduct.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Corry Police Department, the Erie County District Attorney’s Office and the Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Eagle Butte Woman Sentenced for Theft from an Indian Tribal OrganizationRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, woman convicted of Theft From an Indian Tribal Organization was sentenced on March 10, 2014, by U.S. District Judge Roberto A. Lange.
Kristi Lynn Lawrence, age 41, was sentenced to 3 months in custody and 6 months of home confinement, 3 years of supervised release with conditions, $87,809.18 in restitution, and a $100 special assessment to the Federal Crime Victims Fund.
Lawrence was indicted for Theft From an Indian Tribal Organization and Tampering with Documents by a federal grand jury on August 13, 2013. She pled guilty to Theft From an Indian Tribal Organization on December 18, 2013.
The conviction arose from incidents that occurred between October 1, 2010, and October 15, 2012, when Lawrence was an employee of the Cheyenne River Sioux Tribe Police Department. During that time, Lawrence manipulated her time sheets, after her supervisor signed them and before she personally delivered them to the payroll department, to include several hours of unauthorized overtime pay. She was paid for such unauthorized and unworked overtime hours and used the funds for her own purposes.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Ann Hoffman prosecuted the case.
Lawrence was immediately turned over to the custody of the U.S. Marshals Service.
Dubuque Man Pleads Guilty to Unlawful Possession of A Firearm by A FelonRead the Press Release
A man who shot someone in a bar fight pled guilty today in federal court in Cedar Rapids to unlawful possession of a firearm.
Tyrone Clifton, age 27, from Dubuque, Iowa, was convicted of one count of possession of a firearm by a felon.
In a plea agreement, Clifton admitted that on the morning of November 22, 2013, he was involved in an altercation in a Dubuque bar and shot someone. Clifton fled before the police arrived but was apprehended later that day in a car with a loaded 9mm pistol. Clifton had previously been convicted in Cook County, Illinois, of possession of a controlled substance with intent to deliver in 2005, possession of a controlled substance in 2006, delivery of a controlled substance in 2008, escape in 2008, and aggravated unlawful use of a weapon by a felon in 2011, all felony offenses.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Clifton remains in custody of the United States Marshal pending sentencing. Clifton faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, $100 in special assessments, and 3 years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Daniel C. Tvedt and was investigated by Dubuque Police Department and the Bureau of Alcohol, Tobacco, and Firearms.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-1003.
Dominican National Sentenced to Serve 61 Months in Prison<br /> for Trafficking Identities of Puerto Rican U.S. CitizensRead the Press Release
A Dominican national was sentenced today for his leading role in trafficking the identities and corresponding identity documents of Puerto Rican U.S. citizens.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico, Deputy Director Daniel Ragsdale of U.S. Immigration and Customs Enforcement (ICE), Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS), Director Gregory B. Starr of the U.S. State Department’s Diplomatic Security Service (DSS) and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.
Wilfredo Blanco-Diaz, 40, formerly of Caguas, Puerto Rico, was sentenced to serve 61 months in prison and three years of supervised release by U.S. District Judge Gustavo A. Gelpí in the District of Puerto Rico. Blanco-Diaz was also ordered to forfeit $422,793 in proceeds and to be removed from the United States after the completion of his sentence.
On Sept. 24, 2013, Blanco-Diaz pleaded guilty to one count of conspiracy to commit identification fraud, one count of conspiracy to commit human smuggling for financial gain and one count of aggravated identity theft. To date, 53 individuals have been charged for their roles in the identity trafficking scheme. All 49 arrested defendants have pleaded guilty and 42 defendants have been sentenced.
According to court documents, individuals located in the Savarona area of Caguas obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The identity brokers in the United States ordered the identity documents from the document suppliers in Savarona on behalf of their customers by making coded telephone calls. The conspirators were charged with using text messages, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.
The court documents indicate that some of the conspirators assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses. Some customers obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.
Blanco-Diaz was a supplier of Puerto Rican identity documents who operated in Caguas and provided Puerto Rican identities to brokers in Florida, Nebraska, North Carolina and Virginia, knowing that the identities would be sold to undocumented aliens who would then pose as U.S. citizens. Blanco-Diaz admitted that he was a manager and supervisor in the conspiracy.
Various identity brokers were operating in Rockford, DeKalb and Aurora, Ill.; Seymour, Columbus and Indianapolis, Ind.; Hartford, Conn.; Clewiston, Fla.; Lilburn and Norcross, Ga.; Salisbury, Md.; Columbus and Fairfield, Ohio; Dorchester, Lawrence, Salem and Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington and Hickory, N.C.; Hazelton and Philadelphia, Pa.; Houston; Abingdon and Albertville, Ala.; and Providence, R.I.
The charges are the result of Operation Island Express, an ongoing, nationally coordinated investigation led by the ICE Homeland Security Investigations’ (ICE-HSI) Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office and the DSS Resident Office in Puerto Rico. The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance. The ICE-HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable support.
The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer and Christina Giffin of the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of the Criminal Division’s Asset Forfeiture and Money Laundering Section and the support of the U.S. Attorney’s Office for the District of Puerto Rico. The U.S. Attorney’s Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio, Middle District of Pennsylvania, District of Rhode Island, Southern District of Texas and Western District of Virginia provided substantial assistance.
Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html . Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline . Anyone who may have information about particular crimes in this case should also report them to the ICE tip line or website.
Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft . Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html ; www.ssa.gov/pubs/10064.html ; www.fbi.gov/about-us/investigate/cyber/identity_theft ; and www.irs.gov/privacy/article/0,,id=186436,00.html .Deported Alien Charged with Re-entering U.S. IllegallyRead the Press Release
ERIE, Pa. - A former resident of Guanajuato, Mexico has been indicted by a federal grand jury in Erie on a charge of violating federal immigration laws, United States Attorney David J. Hickton announced today.
The one-count indictment named Alfredo Ramos-Gallegos, 40, as the sole defendant. According to the indictment presented to the court, on or about February 8, 014, Ramos-Gallegos was found to be unlawfully present within the United States. Ramos-Gallegos had been previously deported and removed from the United States on May 8, 2000. The defendant subsequently reentered the United States, and was found to be present in this country without the permission of either the Attorney General of the United States or the Secretary of the Department of Homeland Security.
The law provides for a maximum total sentence of 2 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christine A. Sanner is prosecuting this case on behalf of the government.
The Mentor Police Department and the Bureau of Customs and Border Protection conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Delaware Man Charged with Passing Counterfeit $100 BillsRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, today announced that a grand jury returned a one-count indictment charging William Powell, 23, of Wilmington, Delaware, with passing counterfeit United States currency.
The indictment alleges that Powell passed counterfeit $100 Federal Reserve Notes.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Gregory C. Sasse, following investigation by agents of the United States Secret Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Dayton Sex Offender Sentenced for Illegal Re-entry into U.S.Read the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – Fausto Osuna-Cruz Jr., 27, was sentenced to a total of 88 months in prison for illegal reentry into the United States following deportation, and for violating supervised release for a prior conviction of illegal reentry. Cruz is also a convicted sex offender.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, and Field Office Director Rebecca Adducci, Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations (ERO) announced the sentence imposed today by U.S. District Judge Timothy Black.
According to court documents, on August 28, 2013, HSI agents found Cruz in the Montgomery County Jail. Cruz was in the jail because he had been arrested on local charges stemming from an altercation. Cruz is a citizen of Mexico. Cruz had been previously deported and removed by immigration authorities from the United States on or about January 28, 2009 and again on February 6, 2012. Furthermore, as of August 28, 2013, Cruz had not obtained permission from either the United States Attorney General or the Secretary for Homeland Security to reapply for readmission to the United States following his deportation and removal.
Prior to his deportations and removals, Cruz was convicted of aggravated felony offenses punishable by greater than a year imprisonment, specifically on or about July 22, 2008 for unlawful sexual conduct with a minor in Clinton County, Ohio and again on or about September 17, 2010 for illegal reentry of removed alien-removal subsequent to conviction for commission of aggravated felony in federal court. He was sentenced then to serve 24 months imprisonment for the 2010 federal illegal reentry offense, and he was released in 2012 and deported to Mexico, after which he promptly returned illegally. Today’s sentence includes 70 months imprisonment on the new illegal reentry charge, followed by 18 months imprisonment for violating the terms of his supervised release stemming from his prior federal illegal reentry conviction.
U.S. Attorney Stewart acknowledged the investigation by ERO, as well as Assistant U.S. Attorneys Andrew Hunt and Vipal Patel, who prosecuted the case.
# # #Corpus Christi Man Sentenced in Child Pornography CaseRead the Press Release
CORPUS CHRISTI, Texas – Jose Gutierrez III, 21, has been ordered to prison following his conviction of possession of child pornography, announced United States Attorney Kenneth Magidson. Gutierrez pleaded guilty Nov. 8, 2013.
Today, Senior United States District Judge Janis Graham Jack considered the very low rate of successful treatment for individuals who are sexually attracted to children and subsequently handed him a total of 80 months in federal prison. He will also have to pay a $5,000 fine to a known victim of the child pornography series he possessed. In handing down the sentence, Judge Jack noted that Gutierrez has been interested in child pornography since he was 15 years old, accounting for most of his teenage and adult life. Gutierrez was further ordered to serve the rest of his life on supervised release following completion of his prison term and he will be ordered to register as a sex offender.
On Nov. 3, 2012, Homeland Security Investigations (HSI) identified a user on the Internet that was making files of suspected child pornography available to other users. That person was ultimately identified as Gutierrez who lives in Corpus Christi.
Agents and officers executed a federal search warrant on his home, at which time he admitted to using the Internet to acquire images of child pornography. Gutierrez stated that his interest in child pornography had begun several years prior and that he had continued to engage in this behavior despite knowing it was illegal. Several computers and other electronic storage devices were seized from Gutierrez which were later found to contain numerous images of child pornography.
Previously released on bond, Gutierrezwas taken into custody following the sentencing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI with the assistance and support of the Corpus Christi Police Department’s Internet Crimes Against Children Task Force investigated the case. Assistant United States Attorney Lance Duke is prosecuting.
The 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."
Conway Businessman Pleads Guilty to Bank Fraud and Tax EvasionRead the Press Release
BOSTON – A Conway, Massachusetts businessman pleaded guilty today in U.S. District Court in Springfield for using $2.6 million of company funds to pay for personal expenses.
George J. Rosa III pleaded guilty before U.S. District Judge Michael A. Ponsor to bank fraud and tax evasion. Sentencing is scheduled for May 29, 2014.
As the owner and president of the Hallmark Institute of Photography, Rosa spent approximately $2.6 million of company funds for his own purposes, such as construction at his personal residence, gambling, and approximately $55,000 on clothing, footwear, and accessories. Rosa disguised these expenses by reconfiguring them on the company’s books as proper business expenses. In doing so, Rosa defrauded the People’s United Bank in connection with a series of corporate loans, two of which were guaranteed by the Small Business Administration, by submitting the altered books to the bank. Rosa also used the company’s altered books as a basis to file false income tax returns for himself and the company.
Rosa faces a maximum of 30 years in prison on the charge of bank fraud and five years of in prison on the charge of tax fraud, five years of supervised release, and a $1 million fine or twice the gross gain or loss of his crime.
United States Attorney Carmen M. Ortiz, William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, and Daniel J. O’Rourke, Assistant Inspector General of the Small Business Administration, Office of Inspector General, Investigations Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Clarks Summit Man Pleads Guilty to Threatening to Kill the PresidentRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 42-year-old Clarks Summit man pleaded guilty yesterday before Senior U.S. District Court Judge James M. Munley to posting a threat to kill the President of the United States on the White House website.
According to United States Attorney Peter J. Smith, the defendant Nicholas Savino admitted to sending a threat on August 16, 2013, that read: “President Obama the Anti-Christ. As a result of breaking the constitution you will stand down or be shot dead.”
Savino was indicted by a federal grand jury in September 2013, as a result of an investigation by the United States Secret Service and Clarks Summit Police.
Under the terms of the plea agreement, Savino will forfeit to the United States three firearms and approximately 11,000 rounds of ammunition seized by agents from his apartment and vehicle during the investigation.
Judge Munley scheduled sentencing for June 11, 2014. Savino remains detained in prison pending sentencing. He faces up to five years in prison and a $250,000 fine.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Clarks Summit Man Charged with Producing Child Pornography and Online Enticement of A MinorRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Clarks Summit man was indicted today by a federal grand jury in Scranton on charges of producing child pornography and online enticement of a minor.
According to United States Attorney Peter J. Smith, the grand jury alleges that Taylor Bzdyr, age 20, used a computer and a cell phone to persuade a 13-year-old female to engage in sexual acts which were transmitted live via Skype. The indictment alleges that Bzdry engaged in such conduct between October 2012 and March 5, 2014.
The charges stem from an investigation by the Federal Bureau of Investigation, Border Patrol Agents in California, and the New Westminster Police Department in British Columbia, Canada.
If convicted, Bzdyr faces a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison if he is convicted of the child pornography charge; and faces a 10-year mandatory minimum sentence and a possible life sentence if he is convicted of online enticement of a minor.
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."
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.
Cincinnati Man Pleads Guilty to Producing Child Porn Victimizing A Child He BabysatRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI –Caleb Zachary Storey, 30, Cincinnati, pleaded guilty in U.S. District Court to producing sexually explicit photographs of a child he was babysitting in the family’s home, and trading child pornography through an email account. Under terms of the plea agreement, he will spend 32 years in prison and will be under court supervision for the rest of his life.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, FBI Cincinnati, Cincinnati Police Chief Jeffrey Blackwell, Hamilton County Sheriff Jim Neil and members of the Greater Cincinnati Internet Crimes Against Children Task Force (ICAC) announced the pleas entered today before Senior U.S. District Judge Sandra Beckwith.
Storey pleaded guilty to one count of production of child pornography, which is punishable by at least 15 years and up to 30 years in prison, and one count of possession of child pornography. That crime carries a maximum sentence of ten years in prison.
According to court documents, FBI agents and members of the FBI Violent Crimes Against Children Section, Major Case Coordination Unit, investigating a case in Savannah, Georgia found a sexually explicit image of a child and traced it to an address in Cincinnati. Further investigation determined that the photo was taken at the family’s home. The child’s parents identified Storey as their in-home child care provider when the photograph was taken.
On January 8, investigators searched Storey’s residence and found evidence that he had been trading child pornographic images using an email account and a photograph-sharing website. Preliminary forensic examination of computer and storage media seized from his residence have identified at least four other boys, all less than eight years old, pictured in pornographic images taken by Storey. The FBI arrested Storey on January 8 based on a criminal complaint. 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/.
The FBI Child Exploitation Task Force includes the Regional Electronics and Computer Investigations (RECI) unit from Hamilton County Sheriff Jim Neil’s Office and the Cincinnati Police Department. Other agencies participating in the Greater Cincinnati ICAC include Homeland Security Investigations (HSI), the U.S. Marshals Service, U.S. Secret Service, Hamilton County Prosecutor Joe Deters, and the police departments in Amberley Village, Blue Ash, and West Chester.
U.S. Attorney Stewart commended the FBI agents and task force officers who are investigating the case, as well as Assistant U.S. Attorney Christy Muncy who is representing the United States in this case.
Charleroi Man Found Guilty of Violating Federal Firearms LawsRead the Press Release
PITTSBURGH – On Feb. 28, 2014, after deliberating approximately one hour, a federal jury of nine men and three women found Thomas David Steiner guilty of one count of violating federal firearms laws, United States Attorney David J. Hickton announced today.
Steiner, 39, formerly of Charleroi, Pa., was tried before Chief United States District Judge Joy Flowers Conti in Pittsburgh, Pa.
According to Assistant United States Attorney Jessica Lieber Smolar, who prosecuted the case, the evidence presented at trial established that in and around August of 2007, Steiner, a convicted felon, possessed assorted ammunition. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm or ammunition.
Judge Conti scheduled sentencing for June 26, 2014, at 3:30 p.m. The law provides for a total sentence of not less than 15 years in prison, to a maximum of life, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offense and the prior criminal history, if any, of the defendant.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pennsylvania State Police conducted the investigation that led to the prosecution of Steiner.
Charge Filed Against Federal Prison InmateRead the Press Release
Shamarr Joel Pitts, 25, of Philadelphia, Pennsylvania, was charged by indictment with one count of possession of contraband in prison, on or about November 14, 2013, in the Federal Detention Center in Philadelphia, Pennsylvania, announced United States Attorney Zane David Memeger. The indictment charges that Pitts possessed a sharp metal object with a handle made of cloth wrapped with a shoelace that was an object designed or intended to be used as a weapon.
If convicted of all counts, Pitts faces a maximum sentence of five years imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.
This case has been investigated by the Federal Bureau of Investigation and the Federal Bureau of Prisons. The case has been assigned to Assistant United States Attorney Thomas M. Zaleski.
Click here to view the indictment
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Broward County Tax Preparer Pleads Guilty to Contempt of CourtRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that Dianelys Armengol Guevara, 28, of Pembroke Pines and Dallas, Texas, pled guilty today before U.S. District Judge James I. Cohn to a one-count Information charging her with contempt of court for violating a court order forbidding her from acting as a tax preparer.
According to the factual proffer filed in court, Guevara had worked as a professional tax preparer at Liberty Tax Services, in Hollywood, from 2005-2009. In 2010, the Department of Justice’s Tax Division filed a civil complaint against Guevara, based on a civil IRS investigation, alleging that Guevara had filed tax returns improperly claiming First Time Homebuyer Credits, various education credits, deductions, and expenses. In January 2011, U.S. District Judge Cecilia M. Altonaga entered a judgment which permanently barred Guevara from acting as a federal tax return preparer. However, on or about January 13, 2011, Guevara began willfully disobeying that judgment by continuing to prepare, and assist in preparing, federal tax returns, from her home in Pembroke Pines. Guevara admitted to preparing approximately 130 federal tax returns after the Court had entered its order. Audits by the IRS found that many of these returns prepared by Guevara also made illegitimate claims to education credits and other deductions, resulting in an average under-payment of approximately $3,358 per return.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Jared M. Strauss.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Brooklyn, N.Y., Brothers Admit Traveling to New Jersey to Violently Extort Divorce Consent from Reluctant HusbandRead the Press Release
TRENTON, N.J. - A pair of Brooklyn brothers have admitted on consecutive days to crossing state lines as part of a plan to violently coerce an unwilling husband to grant his wife a religious divorce, U.S. Attorney Paul J. Fishman announced.
Avrohom Goldstein, 34, pleaded guilty today to an information charging him with traveling in interstate commerce to commit extortion. Moshe Goldstein, 31, entered his guilty plea March 10, 2014, to the same charge. Both brothers entered their guilty pleas before U.S. District Judge Freda L. Wolfson in Trenton federal court.
According to documents filed in this case and statements made in court:
On Oct. 9, 2013, Moshe Goldstein, Avrohom Goldstein and a group of conspirators – including David Hellman, 31, their father, Jay Goldstein, 59, Simcha Bulmash, 30, Ariel Potash, 40, Binyamin Stimler, 38, and Sholom Shuchat, 29 – traveled from New York to a warehouse in Edison, N.J., with the intent of forcing a Jewish husband to give his wife a "get," a document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.
During their guilty plea proceedings, Moshe and Avrohom admitted that when they arrived at the warehouse, the group met with an individual who, unbeknownst to them, was an undercover FBI agent posing as the “husband’s” brother in law. The brothers admitted that they discussed a plan and prepared to confine, restrain and threaten the victim.
The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 68, and Martin Wolmark, 55 – in connection with the scheme. All of the defendants reside in Brooklyn, except Potash and Wolmark, who live in Monsey, N.Y.
Hellman, the first defendant to plead guilty, admitted the same conduct in Trenton federal court on March 6, 2014; the charges against the alleged conspirators remain pending.
Moshe and Avrohom Goldstein also admitted that on Aug. 22, 2011, they and others went to a residence in Brooklyn where they restrained, assaulted and injured a man in an attempt to extort a divorce from him. That conduct will be considered by the court during sentencing, currently scheduled for June 16, 2014, for Moshe Goldstein and June 20, 2014, for Avrohom Goldstein. Each brother is bailed on a $500,000 bond and subject to GPS monitoring.
The brothers each face a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to the guilty pleas. He also thanked the Lakewood, N.J., Police Department for their role.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.
The pending charges and allegations against related defendants are merely allegations, and they are considered innocent unless and until proven guilty.
14-082
Defense counsel: Moshe Goldstein: Roger Stavis Esq., New York
Avrohom Goldstein: Charles Waldron Esq., Lawrenceville, N.J.Goldstein, Avrohom Information
Goldstein, Moshe InformationBellevue Man Attempted to Possess Controlled SubstanceRead the Press Release
PITTSBURGH – An Allegheny County resident guilty in federal court to a charge of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Lee Michael, 25, waived prosecution by indictment and pleaded guilty to a one-count information before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that on or about March 6, 2013, Michael attempted to possess with intent to distribute a quantity of a mixture and substance containing a detectable amount of methylone, a Schedule I controlled substance.
Judge Hornak scheduled sentencing for July 30, 2014, at 9:30 a.m. The law provides for a total sentence of not more than 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Katherine A. King and Troy Rivetti are prosecuting this case on behalf of the government.
Homeland Security Investigations, the United States Postal Inspection Service, and the Pennsylvania State Police conducted the investigation that led to the prosecution of Lee Michael.
Barksdale Resident Pleads Guilty to Receiving Child PornographyRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that Isaac Boger, 22, of Bossier City, La., pleaded guilty before U.S. District Judge S. Maurice Hicks to receiving child pornography.
According to evidence presented at the guilty plea, law enforcement authorities detected multiple files containing child pornography being downloaded at a residence on Barksdale Air Force Base. Boger’s home and computer were searched on January 10, 2013 and more than 9,000 files of child pornography, many containing hard core sex involving children, were found on his computer. Boger was an active duty member of the U.S. Air Force when arrested.
Boger faces five to 20 years in prison, a lifetime of supervised release, and up to a $250,000 fine for one count of receiving child pornography. A sentencing date of June 26, 2014 was set. Immigrations and Customs Enforcement-Homeland Security Investigations, U.S. Air Force – Office of Special Investigations, Louisiana State Police, and Bossier City Marshals Office conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp. Tips may be reported anonymously.
Armored Car Employee Charged with Theft and Tax EvasionRead the Press Release
Tanika Victoria Little, 35, of Philadelphia, PA, was charged today in a superseding indictment with two counts of bank theft and one count of tax evasion. Little was an employee of Brink’s, Inc., a national armored truck company which delivered cash to banks, among other businesses. On February 15, 2011 and on March 1, 2011, Little came into possession of incorrectly routed bags of cash totaling approximately $110,000 in $20 denominations. The indictment alleges that Little failed to deliver the bags of cash to Bank of America's Drexel Hill branch and began making deposits into her personal bank accounts in $20 denominations. It is further alleged that Little, whose annual income from Brink=s was approximately $41,000 at the time, deposited approximately $41,840 in cash in $20 denominations into three different bank accounts between March 2, 2011 and June 1, 2011. On June 29, 2011, within an eight-hour period of time, Little allegedly purchased 27 money orders, totaling approximately $13,000, with cash from eight different retail establishments in South Philadelphia, PA. In addition, in 2011, Little allegedly reported that she had paid approximately $25,000 for exterior and interior home improvements in cash, including $2,000 for a remodeled bathroom, $4,300 for a remodeled kitchen, $8,500 for a remodeled basement, and $9,000 for rebricking of her home’s exterior.
The indictment alleges that when Little’s 2011 federal income tax return was filed, she evaded taxes by falsely reporting that her total gross income was $28,870, when her true gross income was approximately $138,870, as demonstrated by her alleged acquisition of the missing money, her deposits and expenditures.
If convicted, Little faces a maximum possible sentence of 65 years imprisonment, a five-year term of supervised release, a fine of up to $2.1 million, and a $300 special assessment.
The case was investigated by United States Secret Service and Internal Revenue Service Criminal Investigations. It is being prosecuted by Assistant United States Attorney Anita Eve.
Click here to view the indictment
A Superseding Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525
10 March 2014
Wichita Store Owner SentencedFor Trafficking Counterfeit Designer GoodsRead the Press Release
WICHITA, KAN. - A woman who owns a retail store in Wichita was ordered to pay $25,000 and placed on five years federal probation for trafficking in counterfeit designer goods, U.S. Attorney Barry Grissom said. She also forfeited all the counterfeit goods that investigators seized from her store.
Glenda Sue Morgan, 55, Wichita, Kan., pleaded guilty to one count of trafficking in goods bearing counterfeit trademarks. In her plea, she admitted selling the counterfeit goods as “replicas” at her business, The Fabulous Store at 9131 E. 37th North in Wichita. On April 2, 2013, undercover law enforcement officers bought about $500 worth of such items including a “Chanel” bracelet and sunglasses, a “Michael Kors” purse and a “Prada” purse. When investigators served a search warrant they seized 400 replica items with a retail value of about $14,000.
In June 2009, more than $1 million in counterfeit goods was seized by Homeland Security Investigations from the same location. At the time, Morgan forfeited ownership of the items and they were destroyed, but she was not charged criminally.
Grissom commended Homeland Security Investigations, the Wichita Police Department and Assistant U.S. Attorney Brent Anderson for their work on the case.Wichita Man Sentenced for Distributing Child PornRead the Press Release
WICHITA, KAN. - A Wichita man was sentenced Monday to five years in federal prison for distributing child pornography, U.S. Attorney Barry Grissom said.
Amel Kevin Loop, 54, Wichita, Kan., pleaded guilty to one count of distributing child pornography. In his plea, he admitted that in November 2012 an FBI agent used the Internet to download images of child pornography from Loop’s computer. The images were transferred using an encrypted peer-to-peer network. The images included sexually explicit photos of a child no more than two years old.
Grissom commended the FBI and Assistant U.S. Attorney Jason Hart for their work on the case.U.S. Attorney's Office Announces A Federal Forfeiture Action Against A Marijuana Warehouse and Related Marijuana FundsRead the Press Release
DENVER -- Colorado U.S. Attorney John Walsh announced today that his office has filed in United States District Court in Denver a civil forfeiture complaint seeking forfeiture of a Denver area marijuana warehouse and illegally connected funds. The forfeiture case stems from a criminal case indicted by a state-wide grand jury that returned indictments that were ultimately prosecuted in Jefferson County.
As revealed by the Verified Complaint, in the Summer of 2012, the Criminal Tax Enforcement Section of the Colorado Department of Revenue, subsequently joined by the Drug Enforcement Administration (DEA), initiated an investigation into an illegal marijuana growing and distribution operation based in a warehouse at 5105 East 39th Avenue in Denver. Investigators determined that the Warehouse produced hundreds of pounds of processed marijuana, and then illegally distributed the drugs to several retail marijuana stores in the metropolitan area in violation of Colorado and Federal law.
The investigation resulted in a Colorado State Grand Jury Indictment charging numerous individuals and entities with 71 counts of drug, tax, and fraud violations of Colorado state law; 8 guilty pleas have been entered, and several cases remain pending in the Jefferson County, Colorado District Court. The individuals involved in the Drug Trafficking Organization utilized various Limited Liability Companies to hold ownership of the assets, and utilized various bank accounts to buy and equip the Warehouse, fund the operations, and receive the illegal proceeds. In addition to the warehouse, the Complaint seeks forfeiture of over $850,000 in seized funds that are the proceeds of the illegal operation, which were used to promote the illegal operation, and which were involved in money laundering.
According to the indictment referred to above, and other information from state authorities, the underlying case involves out of state diversion of marijuana, fraud on investors, false reporting to state law enforcement and regulatory authorities, filing of false and incomplete tax returns, and other broad-scale criminal activity that necessitated action to protect and enforce federal priorities as outlined in the Department of Justice’s marijuana enforcement guidance published on August 29, 2013.
“The U.S. Attorney’s Office continues to engage in focused enforcement of violations of federal law as it pertains to marijuana, and to work closely with our local and state law enforcement partners,” said U.S. Attorney John Walsh. “In this case, the warehouse and money that is the subject of this forfeiture action were proceeds of an illegal scheme perpetrated by certain individuals who were not only violating federal law, they were violating Colorado state law, as is demonstrated by the guilty pleas obtained in Jefferson County.”
Click here for the Verified Complaint for Forfeiture.
Two Former Officers at Roxbury Correctional Institution Sentenced for Conspiring to Assault an InmateRead the Press Release
Lanny Harris, a former sergeant at Roxbury Correctional Institution (RCI) in Hagerstown, Md., and Philip Mayo, a former correctional officer at RCI, were sentenced today for conspiring with other RCI officers on March 8-9, 2008, to assault an inmate at the prison, identified as K.D.
Both Mayo and Harris previously pleaded guilty to conspiring to assault K.D. during the midnight shift (11 p.m. to 7 a.m.). Mayo and Harris cooperated with authorities during the federal investigation and testified for the prosecution at the trial of former RCI officer James Kalbflesh, who was convicted for his role in the assaults on K.D. and the subsequent coverup. U.S. District Judge James K. Bredar sentenced Harris and Mayo to each serve 30 months in prison.
During their testimony at Kalbflesh’s trial and in court documents filed in connection with their respective guilty pleas, Harris and Mayo each admitted that they met with other officers at RCI during the midnight shift and agreed to assault K.D. in retaliation for a prior incident involving K.D. and another officer. Harris, Mayo and two other correctional officers entered K.D.’s cell in order to assault the inmate, and the officers then went through with their plan and assaulted K.D.
“Every person in America has the right to be free from cruel and unusual punishment,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels. “To ensure that this right is protected, the Justice Department will continue to vigorously prosecute correctional officers who violate the rights of inmates.”
To date, 16 current or former officers at RCI have been convicted in connection with a series of assaults that K.D. suffered on March 8-9, 2008. There are 12 former RCI officers still awaiting sentencing before Judge Bredar, and two who were convicted in state court have already been sentenced.
The case was investigated by the FBI’s Frederick Resident Agency and prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division, with the help of Assistant U.S. Attorney Michael Cunningham for the District of Maryland.
Two District Men Sentenced to More Than 20 Years in Prison for Armed Kidnapping and Other Charges in Attack-Defendants Bound Victim and His Friend, Held Them for Hours-Read the Press Release
WASHINGTON - Aaron Thorpe, 33, and Melvin Knight, 36, both of Washington, D.C., were sentenced today to more than two decades in prison on armed kidnapping and other charges stemming from an attack in which they held a man and woman for hours while searching a house for illegal drugs and cash, U.S. Attorney Ronald C. Machen Jr. announced.
The defendants were found guilty in July 2013, following a trial in the U.S. District Court for the District of Columbia, of armed kidnapping, armed burglary, a weapons offense, and related charges. They were sentenced by the Honorable Richard J. Leon.
Thorpe was sentenced to 25 years in prison, and Knight was sentenced to more than 22 years of incarceration.
According to the government’s evidence, early Jan. 28, 2013, Thorpe and Knight lay in wait outside the home of the victim, who lived in the 6400 block of Kansas Avenue NW. They were armed with handguns and wearing ski masks and dark clothing. When the victim and his female friend approached the home, Thorpe and Knight emerged from behind a car, forced the victim and his friend against the wall of the home at gunpoint, and handcuffed them.
In the course of trying to handcuff the victim, who was resisting restraint, Knight discharged his firearm. A neighbor, hearing the gunshot, looked out a window and saw three men – the victim, Thorpe, and Knight. The neighbor described Thorpe and Knight as two men in masks and in all black, one with a shirt that had the word “POLICE” written across it. The neighbor saw the men force the victim into his home and clearly saw one of them holding a gun.
After the neighbor’s call to police, the Metropolitan Police Department (MPD) arrived on the scene and knocked on the door; no one responded. More units responded over the next few hours, including the department’s Emergency Response Team.
Meanwhile, once inside, Thorpe and Knight had forced the victim and his friend to the floor. The two defendants then bound their legs and mouths with duct tape, and began searching through the home for illegal narcotics and cash. They demanded that the victim tell them where to look, and threatened him and his friend, stating, “We’re not leaving any witnesses.”
While lying face down on the floor, fearing for his life and that of his friend, the victim saw one of the defendants’ guns on the floor. He was able to break his hands free and attempted to reach for the gun. At that point, one of the assailants jumped on him, beat him severely in the head and face with another gun, and threatened to kill the victim’s friend if he did not relent. The male victim complied and the two defendants bound his hands with flexi-cuffs again.
The defendants later hid and/or attempted to destroy evidence of their crimes, unbound the victims, and threatened them to tell a false story to police about what had happened inside the home. Finally, at about 3:40 a.m., Thorpe and both victims walked out of the home; police officers then went in and located Knight upstairs. Both defendants were placed under arrest.
In announcing the sentences, U.S. Attorney Machen commended the actions of the Metropolitan Police Department officers, detectives, and others who worked on the case. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Candace Battle and Debra McPherson, Legal Assistant Tammy Scott, Intelligence Specialists Francis Morgan and Sharon Johnson, and intern Christopher Kaltsas. Finally, he commended the efforts of Assistant U.S. Attorneys Emory V. Cole and Brittain Shaw, who investigated and prosecuted the case.
14-060Tacoma, Wash. Man Pleads Guilty to Trafficking Oxycodone and Making Illegal Cash DepositsRead the Press Release
FRESNO, Calif. —David Ruem, 32, of Tacoma, Wash., pleaded guilty today to one count of conspiring to distribute oxycodone and hydrocodone, one count of conspiring to structure cash deposits, and one count of aggravated structuring, United States Attorney Benjamin B. Wagner announced.
According to court documents, Ruem’s co-conspirators obtained prescriptions for oxycodone and hydrocodone from a doctor in Visalia, Calif., filled those prescriptions at pharmacies in Modesto, and then transported and mailed the pills to Washington for distribution on the black market. Ruem illegally sold the oxycodone and hydrocodone and then deposited the cash proceeds of those sales into bank accounts held by co-conspirators in California. He made the cash deposits in amounts of $10,000 or less to attempt to prevent Currency Transactions Reports from being filed by the banks on his cash deposits. Currency Transactions Reports are reports prepared by financial institutions for any transaction involving more than $10,000 in cash. These reports are filed with the Department of Treasury and are made available to law enforcement.
Ruem is scheduled to be sentenced by Judge Anthony W. Ishii on June 2, 2014. Ruem faces up to 20 years in prison and a $1 million fine for conspiring to distribute oxycodone, up to five years in prison and a $250,000 fine for conspiring to structure, and up to 10 years in prison and a $500,000 fine for aggravated structuring. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act. This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multijurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.
Squaw Valley Marijuana Cultivation OperationRead the Press Release
FRESNO, Calif. — Bounseuth Thourakhone, 54, of Laos, was sentenced to three years and three months in prison and Bounhome Singharath, 63, of Las Vegas, entered a guilty plea today for their involvement in a marijuana cultivation operation in Squaw Valley in eastern Fresno County, U.S. Attorney Benjamin B. Wagner announced.
According to court documents, law enforcement officers found 1,429 marijuana plants at a grow site on Ripple Lane in Squaw Valley. Singharath was leaving the grow site in knee high rubber boots and camouflage pants and Thourakhone was hiding in the bathroom of a trailer on the property. Singharath said he is a resident of Las Vegas and had been living at the grow site for approximately two months for the purpose of growing marijuana. Thourakhone also admitted to growing marijuana there.
Singharath is scheduled for sentencing on May 19, 2014. He faces a mandatory minimum prison term of 10 years, a maximum prison term of life and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the U.S. Drug Enforcement Administration and Fresno County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.
San Joaquin County Law Enforcement Dog Trainer Sentenced to 15 Months in Prison for Perjury and Making False Statements to Law EnforcementRead the Press Release
FRESNO, Calif. — Stephen J. Johnson, 66, of Linden, was sentenced today by United States District Judge Lawrence J. O'Neill to 15 months in prison for committing perjury before a federal grand jury and making false statements to the FBI United States Attorney Benjamin B. Wagner announced.
According to court documents, Johnson, a law enforcement dog trainer who worked in the Central Valley, was charged with conspiring to obstruct an FBI investigation into Bob Holloway, former owner of Road Dog Cycle in Denair, along with Holloway, retired Stanislaus County Deputy Sheriff Dave Swanson, and Gary Ermoian, a private investigator from Stanislaus County. Johnson was also charged with two counts of making false statements to the FBI and six counts of perjury before a federal grand jury.
At trial, the wiretap evidence revealed that in September 2007, Ermoian, acting on confidential law enforcement information received from Swanson, alerted Holloway that search warrants might be executed at Holloway's residence and business. Thereafter, Ermoian and Holloway discussed how to hide evidence from law enforcement, and, along with Johnson, discussed possible law enforcement surveillance activity at Road Dog Cycle. However, when interviewed by the FBI in 2008, Johnson denied assisting Holloway in hiding evidence and informing Holloway about law enforcement surveillance. Johnson then testified under oath before a federal grand jury later in 2008 and further denied assisting Holloway.
Ermoian and Johnson were convicted at trial on all charges, but Swanson was acquitted. Holloway had pleaded guilty to racketeering charges prior to trial. Last year, the Ninth Circuit Court of Appeals reversed the obstruction of justice count against Ermoian and Johnson. Johnson therefore had to be re-sentenced on the perjury and false statement counts of which he was convicted.
This case was the product of an investigation by the Central Valley Gang Impact Task Force, a task force composed of state and federal law enforcement agencies, including the Modesto Police Department, the Stanislaus County Sheriff's Department, the Stanislaus County District Attorney's Office and the FBI. Assistant United States Attorneys Mark E. Cullers and Laurel J. Montoya prosecuted the case.Owner of Cosmetology Schools Reaches $50,000 Settlement Regarding Submission of False Department of Education Tuition ClaimsRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma and the Department of Education announce the settlement of a civil lawsuit brought by the United States of America, acting on behalf of the U.S. Department of Education, against Shirley Zey Smith, a cosmetology school owner.
Ms. Smith was the owner, manager and operator of cosmetology schools located in Oklahoma, Arkansas, and Texas, including the School of Hair Design, Poteau Beauty College, Texarkana Cosmetology Careers, Sherman Cosmetology College, and Mena Cosmetology College. Both School of Hair Design and Poteau Beauty College were approved by the Department of Education to participate in the “Title IV Funding” program, which provides assistance to students for their tuition and fees through grant money and student loans. The other three schools were not approved to participate in “Title IV Funding”.
The lawsuit alleged Shirley Zey Smith and her staff caused students attending her three unapproved schools to submit false claims to the Department of Education, by applying for federal financial aid using the federal school code assigned to the two approved schools.
Pursuant to the settlement agreement, Smith will pay $50,000.00 in penalties and damages.
The case was investigated by the United States Department of Education Regional Inspector General’s Office located in Dallas, Texas. Assistant United States Attorney Robert Gay Guthrie represented the United States in the United States District Court for the Eastern District of Oklahoma, located in Muskogee, Oklahoma.
Ohio Couple Sentenced for Attempting to Defraud Creditors and Fraudulently Obtaining Tax Refund MoneyRead the Press Release
Orlando, Florida – U.S. District Judge Gregory A. Presnell today sentenced Stephen Richnafsky (38, North Royalton, OH) to 20 months in federal prison for mail fraud and obstruction of Internal Revenue laws. The court also ordered Richnafsky to make full restitution to the Internal Revenue Service (IRS) in the amount of $42,021.88. Additionally, Richnafsky's domestic partner, Scylina Spikes (40, North Royalton, Ohio), was sentenced to two years of probation for her role in the mail fraud scheme. Richnafsky and Spikes both pleaded guilty on November 19, 2013.
According to court documents, between July 2009 and August 2010, Richnafsky and Spikes conspired to evade their debts by mailing fraudulent documents, through the U.S. Mail, to their creditors. These documents included letters disguised as official documents, fraudulent promissory notes, and other documents directing creditors to collect funds from fictitious "treasury accounts." The documents also included bills and account statements which were stamped or handwritten with statements such as "accepted for value and returned for value," and IRS Forms that were fraudulently presented as forms of payment. When creditors refused to accept these documents in satisfaction of Richnafsky’s and Spikes's debts, Richnafsky and Spikes would attempt to file personal liens against the employees, executives, and attorneys of the creditors. Richnafsky also filed four fraudulent tax returns, which falsely claimed taxes withheld from interest income from financial institutions. For tax years 2005-2008, Richnafsky claimed that the IRS had withheld more than $181,000 in interest income, when in fact no such income had ever been withheld. As a result of these filings, the IRS issued a refund of $42,021.88 to Richnafsky.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorney Vincent S. Chiu.
Nampa Man Sentenced for His Role in Drug and Gun CaseRead the Press Release
BOISE –Nearia “Nick” William Pinnell, 42, of Nampa, Idaho, was sentenced today to thirty-three months in prison for conspiracy to distribute methamphetamine and possession of a fully-automatic machine gun, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Pinnell to serve three years of supervised release. He pleaded guilty to the charges on December 17, 2013.
According to court documents and Pinnell’s admission in court, he entered into a conspiracy with others to distribute methamphetamine. Other co-conspirators were already distributing methamphetamine when Pinnell became involved in approximately February 2013. Pinnell continued to sell small amounts of methamphetamine until approximately April 2013. Judge Lodge recognized that Pinnell was less involved in the drug conspiracy than the many of the other co-conspirators. In June 2013, law enforcement agents recovered a firearm from Pinnell. Approximately one month later, in July 2013, agents executed a search warrant at Pinnell’s residence and recovered additional firearms, including a fully-automatic machine gun. Pinnell had not registered the automatic firearm as required under the National Firearms Act.
Pinnell is one of eleven defendants indicted on July 9, 2013, in a case including charges of conspiracy to distribute methamphetamine, distribution of methamphetamine, distribution of cocaine, and unlawful possession of firearms. All eleven defendants have pleaded guilty, including defendant Jeramie Mahler, who pleaded guilty last week to conspiracy to distribute methamphetamine and discharging a firearm in furtherance of a drug trafficking crime. Pinnell is the third defendant to be sentenced; co-defendants Wendy Harrison and Bobbi Eileen Woolsey were both sentenced previously to 84 months in prison.
The case was investigated by the Treasure Valley Metro Violent Crimes Task Force, with assistance from the Nampa Police Department. The Treasure Valley Metro Violent Crimes Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole.
The case is being prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Monessen Woman Pleads Guilty in Credit Card SchemeRead the Press Release
PITTSBURGH - A Westmoreland County resident has pleaded guilty in federal court to a charge of conspiracy, United States Attorney David J. Hickton announced today.
Lashara Martia Holmes, 28, of Monessen, Pa., pleaded guilty to one count before Senior United States District Judge Gustave Diamond.
In connection with the guilty plea, Holmes conspired with other persons to use an unauthorized credit card at a retail store in Pittsburgh, Pa.
Judge Diamond scheduled sentencing for July 8, 2014, at 12 p.m. The law provides for a maximum total sentence of not more than 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The Western Pennsylvania Financial Crimes Task Force (WPFCTF), conducted the investigation that led to the successful prosecution of Holmes. The WPFCTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in Western Pennsylvania. Partnering in this effort are the United States Attorney's Office for the Western District of Pennsylvania, the United States Secret Service, the United States Postal Inspection Service, the Department of Homeland Security, the Allegheny County District Attorney's Office, the Allegheny County Police Department, the City of Pittsburgh Bureau of Police and the Pennsylvania State Police.
Man Sentenced to Almost Five Years in Prison for Las Vegas, Nev. Mortgage Fraud SchemeRead the Press Release
LAS VEGAS, Nev. – A Henderson, Nevada man has been sentenced to 57 months in prison and ordered to pay $834,000 in restitution for his role in a mortgage fraud scheme that caused over $1 million in losses to federally insured financial institutions, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Lance Kellow, 37, was sentenced on Friday, March 7, 2014, by U.S. District Judge Gloria M. Navarro. Kellow was convicted by a jury in March 2013 of one count of conspiracy to commit mail and wire fraud, three counts of wire fraud, and one count of bank fraud.
“Hundreds of persons have now been convicted and sentenced to prison for committing fraud in the lending and housing industries in southern Nevada,” said U.S. Attorney Bogden. “Since 2008, we have worked diligently with our federal, state and local law enforcement partners to prosecute federally the most egregious cases of this type of fraud.”
Lance Kellow, an experienced loan officer and licensed mortgage broker in southern Nevada, used his experience and knowledge to commit mortgage fraud for profit. On four different occasions, Lance Kellow and his brothers, Jason and Vince Kellow, lied to mortgage lenders in order to get real estate and money for their own use.
Beginning in January 2007, the brothers conspired to sell their houses to their cousin, who was not qualified to buy them, for a significant profit. The brothers placed false information about their cousin’s employment and finances in mortgage loan applications, and helped him qualify for the loans by depositing cash in his bank account and omitting and paying down his debt, all without informing the lenders. As a result of the false statements in the loan applications, the lenders made loans to the cousin that they would not have otherwise made. Using this scheme, the Kellow brothers received over $500,000 in cash from these sales. The cousin then defaulted on the mortgages, causing losses to the banks in excess of $1 million.
Lance Kellow was permitted to self-report to federal prison by June 5, 2014.
Jason Kellow pleaded guilty to conspiracy to commit bank fraud, and was sentenced in March 2013 to 33 months in prison and ordered to pay $1 million in restitution. Vinson Kellow pleaded guilty to wire fraud and was sentenced in April 2013 to seven months in prison.
The case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorneys Kathryn C. Newman and Christina Brown.
This case was handled in connection with the President's Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.