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Friday 17 January 2014
Four People Sentenced in Large Drug Conspiracy RingRead the Press Release
United States Attorney Brendan V. Johnson announced that three women from Kyle, South Dakota, and a man from Oglala, South Dakota, convicted of Conspiracy to Distribute a Controlled Substance were all sentenced this past week by Chief Judge Jeffrey L. Viken, U.S. District Court.
The four defendants were immediately turned over to the custody of the U.S. Marshals Service. Three defendants from this drug conspiracy remain to be sentenced, which is scheduled for later this month.
Wesley Yellow Horse Sr., age 58, was sentenced to 57 months in custody, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund for Conspiracy to Distribute Marijuana.
Theresa Vocu, age 45, was sentenced to 36 months in custody, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund for Conspiracy to Distribute Methethamphetamine.
Elwanda Fire Thunder, age 49, was sentenced to 21 months in custody, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund for Conspiracy to Distribute Marijuana.
Kimberly Janis, age 51, was sentenced to 46 months in custody, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund for Conspiracy to Distribute Marijuana.
The defendants were indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury on May 15, 2012. Fire Thunder pled guilty on August 22, 2012. Janis pled guilty on April 8, 2013. Vocu and Yellow Horse were found guilty by a federal jury on August 30, 2013
A drug conspiracy investigation began on or about October 2008 that resulted in federal charges against the following 18 individuals: Abraham Romero, Richard Marshall, Lorenzo Camacho Tarango, a/k/a Lencho, a/k/a Lecho, Reyes Chavez-Rojo, Billi American Horse, Jimmy Bravo, Elwanda Fire Thunder, Kimberly Janis, Zeno Little, Norton Little Spotted Horse, Moses Montileaux, Jr., Moses Montileaux, Sr., Whisper Montileaux, Stephanie Standing Soldier, Edward Vocu, Theresa Vocu, Cassie Winters, and Wesley Yellow Horse, Sr.
During the course of the conspiracy, Romero would receive marijuana, cocaine, and methamphetamine from Chavez-Rojo and Lencho, and then the remaining above-named individuals and other persons conspired to distribute and/or distributed either marijuana, cocaine, or methamphetamine on the Pine Ridge Indian Reservation.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force, the Federal Bureau of Investigation, the Bureau of Indian Affairs Office of Justice Services, and the South Dakota Division of Criminal Investigation. Assistant U.S. Attorney Ted L. McBride and Special Assistant Laura A. Shattuck prosecuted the case.
Former Seattle Man Sentenced to Six Years in Prison for Identity Theft and Bank FraudRead the Press Release
A former Seattle resident who committed nearly $600,000 in bank fraud was sentenced today in U.S. District Court in Seattle to six years in prison, five years of supervised release and -$592,580 in restitution announced U.S. Attorney Jenny A. Durkan. CHI AHN NGUYEN, 45, recruited other members of the Vietnamese community to the scheme to defraud banks by running up credit card and cash advance debts that he never intended to repay. NGUYEN used the identities of others—many of whom participated in the schemeto access credit cards that he and others involved in the scheme used to purchase jewelry and other consumer goods or for cash advances at casinos. NGUYEN then took a share of the proceeds derived from those transactions. At sentencing, U.S. District Judge Robert S. Lasnik ordered NGUYEN to participate in drug treatment and Gamblers Anonymous as part of his supervised release.
“With the promise of easy money, this defendant led other members of a close community into criminal conduct,” said U.S. Attorney Jenny A. Durkan. “They may have thought this was a victimless crime – just some big bank that takes a loss – but in fact this conduct raises the cost of credit and banking services for all consumers.”
According to records filed in the case, NGUYEN gained access to credit cards from Bank of America, Wells Fargo, Discover, Boeing Employees Credit Union (BECU), Chase, U.S. Bank and Capital One. In April 2011 alone, NGUYEN took cash advances in excess of $16,000 at area casinos. After exhausting the available creditNGUYEN would then make fraudulent telephone and Internet payments on the accounts so that credit would be restored and additional purchases or cash withdrawals could be made. NGUYENmade these fraudulent payments using account information that was false or bank accounts that had insufficient funds to cover the payments. But by the time the banks discovered the payments were fictitious, NGUYEN and his co-schemers had already used the fraudulently obtained credit. Between February 2011 and December 2011, NGUYEN was responsible for losses totaling $588,367. As part of his plea, NGUYEN also pled guilty to a separate bank fraud scheme that he perpetrated in early 2012 in and around Chicago.NGUYEN was ultimately arrested on these charges in Hartford, Connecticut.
Two of NGUYEN’s co-schemers, Son Pham and Phone Phommavanh, also pled guilty to bank fraud. Pham pled guilty to bank fraud among other crimes in November 2013 and will be sentenced on February 7, 2014. Phommavanh pled guilty to bank fraud in December 2013 and will be sentenced on March 7, 2014.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI). The case is being prosecuted by Assistant United States Attorney Matthew Hampton.
Former Owners of Murfreesboro Ambulance Service Sentenced to Federal Prison for Defrauding MedicareRead the Press Release
Woody Medlock, Sr., 70, and his wife, Kathy Medlock, 58, of Murfreesboro, Tennessee, former owners of Murfreesboro Ambulance Service, were sentenced yesterday to federal prison for Medicare fraud and aggravated identity theft, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
Woody Medlock received a 75 month prison sentence and Kathy Medlock was sentenced to 70 months in prison.
“Health care fraud continues to be a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera. “With the investigative resources of our law enforcement partners, we will continue to pursue those who steal from the taxpayers by defrauding the Medicare program and seek appropriate penalties against those involved.”
The sentence followed the Medlocks= conviction by a jury on May 31, 2013, on 39 counts including conspiracy, Medicare fraud, making false statements related to health care matters and wire fraud. Both defendants also were convicted of two counts of aggravated identity theft for using the names and Medicare numbers of patients without lawful authority in submitting claims. Kathy Medlock was also convicted of an additional count of aggravated identity theft for use of a doctor’s name in forging and submitting multiple medical necessity forms as part of a Medicare audit.
According to the evidence presented at trial, from approximately 1996 through September 2008, the Medlocks conspired and engaged in a scheme to defraud Medicare and Medicaid by submitting claims for payment for the transportation of patients to and from dialysis treatments that were not qualified to receive ambulance transportation. The Medlocks submitted or caused to be submitted, through Murfreesboro Ambulance Service, fraudulent claims totaling more than $1.2 million and received at least $457,730.12 in fraudulent payments from Medicare for reimbursement of the ambulance transports.
Testimony at trial further showed that these fraudulent claims falsely represented that patients were on stretchers when the patients were actually transported in the front seat of the ambulance or in the captain’s chair/jump seat in the back of the ambulance and were not on stretchers. Other fraudulent claims reported that patients were transported individually, when in fact two patients had been transported simultaneously in one ambulance.
“For years, the Medlocks used their ambulances as taxpayer taxicabs,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Today’s action sends a clear message: Medicare fraud can lead to federal prison.”
“Health care fraud harms the community at large, and threatens the strength and integrity of our health care system,” said A Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “These sentences should send a strong, clear message to anyone seeking to defraud the health care system: You will get caught, and you will be brought to justice.”
“The TBI will continue to aggressively combat healthcare fraud,” said Director Mark Gwyn of the Tennessee Bureau of Investigation. “This is another case that exemplifies how collaborative efforts result in tough penalties for those who commit fraud against the healthcare system.”
This case was investigated by the United States Department of Health and Human Services - Office of Inspector General, the Federal Bureau of Investigation and the Tennessee Bureau of Investigation. The United States was represented by Assistant United States Attorney Sandra G. Moses, Special Assistant United States Attorney James S. Seaman, and Assistant United States Attorney Christopher C. Sabis.
Former Miami-Dade Department of Public Works Employee Pleads Guilty to Accepting Bribes from ContractorRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that George Brown, 50, of Hollywood, FL, pled guilty to a one-count Information charging him with accepting bribes in connection with programs receiving federal funds, in violation of Title 18, United States Code, Sections 666. Brown’s sentencing has been set for March 28, 2014 at 10:00 a.m. before U.S. District Judge James I. Cohn.
According to the Stipulated Statement of Facts executed by the parties, Brown was the Roadway Lighting Coordinator for the Department of Public Works (Public Works) in Miami-Dade County. In this capacity, Brown was responsible for, among other things, overseeing the installation and/or maintenance of more than 24,000 street lights in the county’s roadway system. In 2011, a lighting contractor offered to provide Brown with “rewards” in exchange for Public Works’ purchase of the contractor’s lighting products. Brown agreed and subsequently accepted more than $13,000 in bribes from the contractor in 2011 and 2012. The bribes included appliances, computer equipment, and other merchandise, all paid for by the contractor. Among the merchandise that Brown received from the contractor was a 2.5 ton air conditioning unit, a Samsung stainless steel refrigerator, and a KitchenAid built-in single electric convection oven. The merchandise was either shipped directly to Brown’s home address or picked up by Brown at the contractor’s business in Miami.
During the investigation, the contractor began to cooperate with law enforcement and recorded the conversations with Brown. In one recorded conversation, Brown assured the contractor that no one else knew about their arrangement. In another recorded conversation, the two discussed delivery to Brown of certain merchandise costing approximately $2,600 in exchange for Brown’s assistance on a Public Works’ project on 27th Avenue in Miami.
Brown faces a possible maximum statutory sentence of ten years in prison.
Mr. Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
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 Member of Puerto Rico National Fencing Team Charged with 26 Additional Counts of Production of Child PornographyRead the Press Release
SAN JUAN, Puerto Rico – In the first sexual extortion – or "sextortion" – case ever prosecuted in the District of Puerto Rico, a man charged with coercing female minors to engage in sexually explicit conduct was charged by a grand jury with 26 additional counts of production of child pornography, announced US Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Juan and Colorado and the Puerto Rico Crimes Against Children Task Force (PRCACTF) conducted the investigation that led to these subsequent charges.
On June 4, 2013, HSI special agents arrested Jimmy Caraballo-Colón, 25, at his place of residence, after an investigation that began in Colorado revealed he was blackmailing or “sextorting” a 17-year-old female from Colorado that he met in an anonymous Internet video chat website.
Caraballo-Colón offered the minor "game points" for removing her clothes. He then proceeded to blackmail the minor by threatening to post the nude recording on the Internet if she did not provide personal information such as her phone number, e-mail, Skype address and Facebook account information. Despite the fact that the minor complied with Caraballo-Colón’s request, the sextortion escalated as he demanded more sexually explicit acts during video chats, which he also recorded. Caraballo was then charged with 32 counts of production and one count each of possession and transportation of child pornography.
On Wednesday, January 15, 2014, a grand jury sitting in the District of Puerto Rico charged Caraballo-Colón with 26 additional charges of production of child pornography. According to the superseding indictment Caraballo-Colón induced, enticed and coerced female minors, identified as Jane Doe 1 through Jane Doe 58, with the intent that such minors engage in sexually explicit conduct to include the lascivious depiction of such conduct through videos that he allegedly used to sexually extort his victims. The 58 victims identified so far in the investigation are from several states: California, Texas, Colorado, New Hampshire, New Jersey, Oregon, Pennsylvania, North Carolina, Ohio, Vermont and New York; as well as foreign countries such as Australia, Canada and Finland.
“Predators, often disguised as peers and responsible adults, groom and befriend unsuspecting and innocent child victims to perform sexually explicit acts.” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. “This superseding indictment is a strong and clear message to predators and criminals that we will not accept tolerate this conduct ways, and will hunt them down to make sure they face justice and respond for their criminal behavior. The Federal Law Enforcement Community and the U.S. Attorney’s Office will spare no resources to arrest and prosecute these predators. Nonetheless, the community, teachers and parents must be vigilant and proactive with our children and educate them on the modus operandi of these offenders.”“Child exploitation, in all its forms, must be among the most heinous crimes a person can commit, but when the element of sexual extortion or – sextortion – is part of this unspeakable abuse, the aberration is even more nauseating and the emotional pain inflicted on the victim is just overwhelming and hard to endure,” said Angel M. Melendez, special agent in charge of HSI San Juan. “Make no doubt, HSI will continue utilizing all its resources and, along with our federal, state and local partners, will continue identifying those who victimize the most vulnerable segment of our society – our children.”
The case is being prosecuted by Assistant U.S. Attorney Elba Gorbea.
In response to the need for an island-wide approach to fighting the escalation of predatory crimes against children, HSI San Juan partnered with members of local, state and federal law enforcement, as well as local and state government officials and community leaders, to form PRCACTF in June 2011.
Through PRCACTF, local, state and federal law enforcement agencies work together with local and state government agencies to effectively pool their resources to jointly investigate all crimes against children in Puerto Rico. Through the task force, law enforcement officers are encouraged to share evidence, ideas, and investigative and forensic tools to ensure the most successful prosecutions possible. As such, PRCACTF allows law enforcement to speak with one unified voice in defense of the children of Puerto Rico.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-THE-LOST.
This investigation was conducted under HSI’s Operation Predator, an international initiative to protect children from sexual predators. Since the launch of Operation Predator in 2003, HSI has arrested more than 10,000 individuals for crimes against children, including the production and distribution of online child pornography, traveling overseas for sex with minors, and sex trafficking of children. In fiscal year 2013, more than 2,000 individuals were arrested by HSI special agents under this initiative.Former Member of Puerto Rico National Fencing Team Charged with 26 Additional Counts of Production of Child PornographyRead the Press Release
SAN JUAN, Puerto Rico – In the first sexual extortion – or "sextortion" – case ever prosecuted in the District of Puerto Rico, a man charged with coercing female minors to engage in sexually explicit conduct was charged by a grand jury with 26 additional counts of production of child pornography, announced US Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Juan and Colorado and the Puerto Rico Crimes Against Children Task Force (PRCACTF) conducted the investigation that led to these subsequent charges.
On June 4, 2013, HSI special agents arrested Jimmy Caraballo-Colón, 25, at his place of residence, after an investigation that began in Colorado revealed he was blackmailing or “sextorting” a 17-year-old female from Colorado that he met in an anonymous Internet video chat website.
Caraballo-Colón offered the minor "game points" for removing her clothes. He then proceeded to blackmail the minor by threatening to post the nude recording on the Internet if she did not provide personal information such as her phone number, e-mail, Skype address and Facebook account information. Despite the fact that the minor complied with Caraballo-Colón’s request, the sextortion escalated as he demanded more sexually explicit acts during video chats, which he also recorded. Caraballo was then charged with 32 counts of production and one count each of possession and transportation of child pornography.
On Wednesday, January 15, 2014, a grand jury sitting in the District of Puerto Rico charged Caraballo-Colón with 26 additional charges of production of child pornography. According to the superseding indictment Caraballo-Colón induced, enticed and coerced female minors, identified as Jane Doe 1 through Jane Doe 58, with the intent that such minors engage in sexually explicit conduct to include the lascivious depiction of such conduct through videos that he allegedly used to sexually extort his victims. The 58 victims identified so far in the investigation are from several states: California, Texas, Colorado, New Hampshire, New Jersey, Oregon, Pennsylvania, North Carolina, Ohio, Vermont and New York; as well as foreign countries such as Australia, Canada and Finland.
“Predators, often disguised as peers and responsible adults, groom and befriend unsuspecting and innocent child victims to perform sexually explicit acts.” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. “This superseding indictment is a strong and clear message to predators and criminals that we will not accept tolerate this conduct ways, and will hunt them down to make sure they face justice and respond for their criminal behavior. The Federal Law Enforcement Community and the U.S. Attorney’s Office will spare no resources to arrest and prosecute these predators. Nonetheless, the community, teachers and parents must be vigilant and proactive with our children and educate them on the modus operandi of these offenders.”“Child exploitation, in all its forms, must be among the most heinous crimes a person can commit, but when the element of sexual extortion or – sextortion – is part of this unspeakable abuse, the aberration is even more nauseating and the emotional pain inflicted on the victim is just overwhelming and hard to endure,” said Angel M. Melendez, special agent in charge of HSI San Juan. “Make no doubt, HSI will continue utilizing all its resources and, along with our federal, state and local partners, will continue identifying those who victimize the most vulnerable segment of our society – our children.”
The case is being prosecuted by Assistant U.S. Attorney Elba Gorbea.
In response to the need for an island-wide approach to fighting the escalation of predatory crimes against children, HSI San Juan partnered with members of local, state and federal law enforcement, as well as local and state government officials and community leaders, to form PRCACTF in June 2011.
Through PRCACTF, local, state and federal law enforcement agencies work together with local and state government agencies to effectively pool their resources to jointly investigate all crimes against children in Puerto Rico. Through the task force, law enforcement officers are encouraged to share evidence, ideas, and investigative and forensic tools to ensure the most successful prosecutions possible. As such, PRCACTF allows law enforcement to speak with one unified voice in defense of the children of Puerto Rico.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-THE-LOST.
This investigation was conducted under HSI’s Operation Predator, an international initiative to protect children from sexual predators. Since the launch of Operation Predator in 2003, HSI has arrested more than 10,000 individuals for crimes against children, including the production and distribution of online child pornography, traveling overseas for sex with minors, and sex trafficking of children. In fiscal year 2013, more than 2,000 individuals were arrested by HSI special agents under this initiative.Former Manager of D.C. Medical Office Pleads Guilty to Embezzling More Than $3.6 Million-Defendant Used Money for Jewelry, Vacations, Parties, Other Personal Expenses-Read the Press Release
WASHINGTON - Pamela J. Beard, 51, of Bowie, Md., pled guilty today to a federal mail fraud charge stemming from the embezzlement of more than $3.6 million from her former employer, announced U.S. Attorney Ronald C. Machen Jr. and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office. Among other things, Beard used the stolen money for vacations, jewelry, a timeshare, and a 50th birthday party for herself.
Beard entered the plea in the U.S. District Court for the District of Columbia. The Honorable Ketanji Brown Jackson scheduled sentencing for May 8, 2014. Under the plea agreement, Beard must pay $3,688,649 in criminal forfeiture and restitution. Under the voluntary federal sentencing guidelines, she faces between 41 and 51 months of incarceration.
According to the government=s evidence, from approximately March 1997 through February 2013, Beard was employed as a billing clerk and the office manager at the Office of Orthopaedic Medicine & Surgery, in Washington, DC. Her duties included paying vendors and creditors, as well as making payments on the business’s corporate credit card accounts. She had access to the office’s financial information and payment systems, and, as a result, could generate checks on the office’s corporate checking account. She also was authorized to use a corporate credit card to pay for business-related expenses. Beard was not authorized to use the office’s bank accounts or corporate credit card to pay for personal expenses.
From May 1, 2006, through June 26, 2013, Beard embezzled $3,688,649 from the office. She used the proceeds to pay for, among other things: a home mortgage; vehicles; a timeshare with Disney Vacation Development, Inc.; expenses associated with her husband’s landscaping business; vacations, including a trip to the Bellagio Hotel in Las Vegas; a personal trainer; jewelry, and parties, including Beard’s 50th birthday party at the Sunset Room at National Harbor, in or around February 2012, for which she spent about $18,703 on ice sculptures.
Beard embezzled the money in a variety of ways:
From May 1, 2006, through Jan. 22, 2013, Beard generated more than 100 corporate checks, totaling $1,289,736.55, on her employer’s checking account. Each check was made payable to Bank of America. Once the checks were generated by Beard through the office’s payment system, she provided them to a physician, who signed them on the office’s behalf. Because the checks were payable to Bank of America, the physician believed that they were intended to pay a corporate credit card account at Bank of America. Beard, however, deposited them at various Bank of America branches to make payments, without authorization, on Bank of America credit card accounts for Beard, her husband, and her husband’s landscaping business.
From Oct. 6, 2006, through June 26, 2013, Beard generated and mailed additional checks drawn on the office’s corporate checking account to pay personal credit card accounts for herself and her husband at American Express. She also made on-line payments from the corporate checking account to American Express. Beard conducted these financial transactions, without authorization, in the total amount of $2,207,882.02.
Finally, from April 21, 2006, through Dec. 30, 2012, Beard used the office’s corporate credit card without authorization, to purchase goods and services for her own personal use in the total amount of $191,030.56.
In announcing the guilty plea, U.S. Attorney Machen and Assistant Director in Charge Parlave commended the investigative work of special agents and analysts of the FBI’s Washington Field Office and Senior Inspector Wayne Rollock of the U.S. Marshals Service. He also praised the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Corinne Kleinman, Rosalind Pressley, and Nicole Wattelet; Assistant U.S. Attorney Catherine K. Connelly, who is handling forfeiture issues; and Assistant U.S. Attorney David Johnson, who is prosecuting the case.
14-018Former Loan Officer Sentenced to 6 1/2 Years in Prison for Investment Fraud SchemeRead the Press Release
LAS VEGAS, Nev. – A former loan officer from Henderson, Nev., who convinced at least 16 victims to give him money for a high yield investment scheme involving the foreign currency exchange market, was sentenced today to 6½ years in prison, five years of supervised release, and ordered to pay over $830,000 in restitution for his guilty pleas to federal fraud and money laundering charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Kamalu Gonzales, 47, was sentenced by U.S. District Judge Gloria M. Navarro, and was permitted to self-report to federal prison by April 17, 2014. Gonzales pleaded guilty in August 2013 to two counts of mail fraud, six counts of wire fraud, and two counts of money laundering.
“Prosecuting persons who commit financial fraud crimes is a top priority of the U.S. Attorney’s Office in Nevada,” said U.S. Attorney Bogden. “Many of these persons target elderly and other vulnerable victims. If someone promises you an investment opportunity with unusually high rates of return, it is likely that the opportunity is fraudulent and that you will lose your money.”
During 2007, Gonzales worked as a loan officer for Meridias Capital in Henderson. Gonzales helped persons refinance their homes, and placed false information in the loan applications so the individuals could obtain refinancing and cash to which they would not have otherwise been entitled. Gonzales also told individuals that he was a successful investor and trader in the foreign currency exchange market. Gonzales recruited individuals to invest with him in the market, telling them that they could earn high rates of return on their investments in a short period of time. Some of the victims wired money to Gonzales, and others borrowed money from their retirement funds or lines of credit. Gonzales also convinced some of the persons who refinanced their houses to give him some of the cash they received from refinancing for his investment fraud scheme. None of the victims agreed to pay Gonzales any commissions or fees, or agreed that he could use their investments for personal or business expenses or to pay other investors.In order to continue the scheme and to keep victims from discovering the crime, Gonzales lied to the victims repeatedly and told them their investments were doing well. As a result of the lies, some victims gave Gonzales more money to invest. Gonzales also made payments to some of the victims using monies he received from other victims.
Gonzales received approximately $1 million total from at least 16 victims in 2007 and 2008. Gonzales did not invest the victims’ funds as promised and diverted approximately $410,000 for his own personal purposes.
The case was investigated by the FBI, IRS Criminal Investigation, and the Henderson Police Department, and prosecuted by Assistant U.S. Attorneys Kathryn C. Newman and Kimberly M. Frayn.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Former District of Columbia Government Official Indicted on Charges Involving $110,000 Grant That Funded an Inaugural BallFormer Council Member Harry L. Thomas Jr. and Five Others Earlier Pled Guilty to ChargesRead the Press Release
WASHINGTON – Neil S. Rodgers, a former District of Columbia government official, was indicted today on federal charges stemming from his role in channeling $110,000 in youth and drug prevention grant funds used to pay for an inaugural ball.
The indictment, returned by a grand jury in the U.S. District Court for the District of Columbia, was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation.
Rodgers, 61, of Washington, D.C., served as the Committee Director of the Council of the District of Columbia’s Committee on Libraries, Parks, Recreation and Planning. He was indicted on three felony charges, including one count each of theft concerning programs receiving federal funds, wire fraud, and first-degree fraud. Rodgers faces a maximum sentence of 20 years of incarceration if convicted of all charges.
Six others have pled guilty to charges in the overall investigation into activities involving former Council Member Harry L. Thomas, Jr. Thomas pled guilty in January 2012 to charges stemming from a scheme in which he used more than $350,000 in taxpayers’ money that was earmarked for the arts, youth recreation, and summer programs for his own personal benefit, including paying for vehicles, clothing and trips. He resigned in January 2012 as a condition of his plea agreement and is now serving a 38-month prison sentence.
The others who have pled guilty include James Garvin and Marshall D. Banks, leaders of one of the non-profits used in the scheme. Both men, from the Langston in the 21st Century Foundation, pled guilty to misprision of a felony, a charge holding them accountable for failing to report and concealing the misappropriation of $392,000 in government grants. Additionally, Danita C. Doleman, the president of Youth Technology Institute, pled guilty to filing a false tax return in connection with her assistance in funneling public money to pay for the 51st State Inaugural Ball. Millicent D. West, the former director and chief executive officer of a non-profit organization that promotes youth opportunities, pled guilty to a criminal tax charge for her role in channeling the youth grant funds to pay for the ball. Finally, Ayawna Webster, an aide who also worked as a chief of staff for Thomas, pled guilty to attempting to interfere with the administration of the Internal Revenue Service laws.
Garvin and Banks were sentenced to three years of supervised probation, 80 hours of community service, and ordered to pay full restitution. Doleman, West, and Webster are awaiting sentencing.
“Today’s indictment charges Neil Rodgers with stealing tax dollars meant for children to throw a $100,000 black-tie party for adults,” said U.S. Attorney Machen. “This prosecution is the final step in our investigation of the criminal activities of former D.C. Council member Harry Thomas, Jr., which has resulted in six guilty pleas. The results of this investigation are a reminder of the grave consequences for government employees and others who knowingly facilitate the illegal actions of corrupt elected officials.”
“Today’s indictment is an example of what happens when a public servant becomes complicit in corrupt behavior rather than standing up to it,” said Assistant Director in Charge Parlave. “Knowingly submitting false and misleading documents to support a larger scheme at the direction of a public official is illegal. The FBI will investigate allegations of corruption at all levels and hold those who allow it accountable for their actions.”
Before becoming Committee Director, Rodgers worked for many years at the District of Columbia Department of Parks and Recreation, serving as Chief of Staff and Acting Director.
Thomas, who took office in January 2007 as the Ward 5 representative, served during his first term as Chair of the Council’s Committee on Libraries, Parks, Recreation and Planning, which involved oversight responsibility for the D.C. Department of Parks and Recreation. In that role, he worked with a non-profit public-private partnership that provided resources and developed programs to benefit children and youth in the District of Columbia.
The partnership was primarily funded by the District of Columbia government through funds designated by the Mayor and Council for particular youth-related purposes. The partnership provided grants to organizations for programs tailored for children and youth.
The charges against Rodgers deal with his role in securing funds for the 51st State Inaugural Ball, held on Jan. 20, 2009 in the Wilson Building. Thomas was closely involved in the planning the event. In addition to her work duties, Ayawna Webster was the president of a local chapter of a political organization. She and her political organization served as the host of the ball, and she then organized the event, at Thomas’s direction.
Ticket sales and other contributions failed to raise enough money to pay the expenses associated with the 51st State Inaugural Ball. Following the ball, Webster’s political organization owed vendors approximately $100,000. According to the indictment, Rodgers participated in a scheme to channel money through a grant from the public-private partnership, meant for youths, to Webster’s political organization so that these expenses would be paid.
The plan hit an obstacle, however, when questions were raised about the legality of granting money to a political organization. The grant recipient was changed to the Youth Technology Institute, another non-profit organization. Even though Rodgers knew that this organization had no involvement with the ball, according to the indictment, he requested $120,000 in grant funds on its behalf. On Feb. 5, 2009, based on the false grant paperwork submitted by Rodgers, the public-private partnership issued a check in the amount of $110,000 to the Youth Technology Institute, the indictment alleges.
In truth, after the grant was issued, the Youth Technology Institute immediately forwarded nearly the entire amount to Webster’s political organization, which paid expenses from the 51st State Inaugural Ball.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This case is being investigated by the FBI’s Washington Field Office and IRS-CI. It is being prosecuted by Assistant U.S. Attorneys James E. Smith and David Johnson, of the Fraud and Public Corruption Section of the U.S. Attorney’s Office.
14-016Former Columbus Urban League Official Sentenced to 42 Months in Prison for Fraud and Identity TheftRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Ovell K. Harrison, 55, of Columbus, Ohio was sentenced in U.S. District Court to 42 months in prison and ordered to pay $85,181.25 in restitution for fraud and identity theft he committed while Director of Education Services at the Columbus Urban League between 2004 and 2010.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor – Office of the Inspector General Labor Racketeering and Fraud Investigations, Barry McLaughlin, Special Agent in Charge, U.S. Department of Housing and Urban Development Office of Inspector General (HUD), and Columbus Police Chief Kim Jacobs announced the sentence handed down today by U.S. District Judge Algenon L. Marbley.
According to a pre-sentencing memorandum filed by Financial Crimes Chief Brenda Shoemaker prior to today’s hearing, Harrison was employed by the Columbus Urban League as the Director of Education Services from November 12, 1997 to March 10, 2010. Between 2004 and 2010, Harrison created false invoices on his Urban League computer and submitted them for payment. He utilized his work computers and equipment to prepare and submit the fraudulent invoices. Each invoice listed a service that the contractor supposedly performed for the league. Harrison listed one of four people whose identity he had stolen as the contractor on each invoice.
The Urban League processed the invoices and generated 47 checks totaling $85,181.25, for payment of services. The Urban League left the checks for pick up by Harrison or mailed them to a mailbox rented by Harrison. The contractors were unwitting persons whom Harrison knew personally and/or had previously provided services for the Columbus Urban League. Harrison endorsed the checks and deposited them into one of three bank accounts under his control.
Harrison pleaded guilty on September 13, 2013 to one count of bank fraud and one count of aggravated identity theft. His sentence consists of 18 months for the fraud followed by 24 months for the aggravated identity theft.
“The victims in this case are the Columbus Urban League and the individuals whose identities were stolen,” Ms. Shoemaker told the court. “In addition to sustaining a loss of $85,181.25, the Urban League’s reputation was tarnished as a result of Harrison’s activities. Also, some of the victims had to sort out matters with the IRS due to his actions.”
“We will prosecute those who violate a position of trust to serve people who need what social service agencies deliver using federal funds,” U.S. Attorney Stewart said.
“Today’s sentencing should be a warning to those who would defraud Department of Labor programs for personal gain and at the expense of those who should be served by these programs. The OIG will continue to work with the U.S. Attorney’s Office and our law enforcement partners to investigate crimes of this nature,” said James Vanderberg, Special Agent –in-Charge of the Chicago Regional Office of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“Mr. Harrison’s actions categorically harmed the federal government and the American taxpayer; but his action also impaired the Columbus Urban League’s ability to provide needed community services,” SAC McLaughlin said.
Harrison’s sentence also calls for him to pay restitution to the Urban League and the agency’s insurance company. He will serve three years under court supervision after his prison term. He will surrender to begin serving his sentence at a date yet to be determined by the U.S. Marshals Service and the Bureau of Prisons.
U.S. Attorney Stewart commended the investigation by Department of Labor, HUD and the Columbus Police, as well as Financial Crimes Chief Brenda S. Shoemaker, who is representing the United States in this case.
# # #Fairfax Man Sentenced to 25 Years in Prison for Producing Child PornographyRead the Press Release
Defendant victimized 13-year-old boy and another minor
ALEXANDRIA, Va. – Adam Jacob Zottoli, 32, of Fairfax, Va., was sentenced today to 25 years in prison, followed by a lifetime term of supervised release, for producing child pornography involving a 13-year-old boy and another minor.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Colonel Edwin C. Roessler, Jr., Fairfax County Chief of Police, made the announcement after sentencing by United States District Judge Leonie M. Brinkema.
Zottoli pleaded guiltyon Oct. 29, 2013. According to court documents, on March 19, 2013, a 13-year-old boy came to the attention of the Fairfax County Police Department based on concerns at school. The minor told law enforcement that he had been sexually assaulted by Zottoli over the past three years, and that Zottoli had photographed some of the incidents. Law enforcement then obtained search warrants for Zottoli’s house and computers, and the forensic review of Zottoli’s computers found images and videos of the minor, as well as videos and images of another minor. After Zottoli was arrested by the Fairfax County Police Department on April 4, 2013, he admitted to producing child pornography.
Zottoli previously was convicted of possession of child pornography on May 1, 2000 in the Eastern District of Virginia and was sentenced to serve 30 months in prison. As a result of that prior conviction, Zottoli was subject to an increased mandatory minimum sentence of 25 years in prison during today’s sentencing.
This case was investigated by the Fairfax County Police Department. Special Assistant United States Attorney Alicia J. Yass, a Trial Attorney with the Child Exploitation and Obscenity Section of the Justice Department’s Criminal Division, is prosecuting the case on behalf of the United States.
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 United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Fairbanks Man Sentenced to 77 Months in Federal Prison for Murder-For-Hire SchemeRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Fairbanks man has been sentenced in federal court for two counts of using interstate commerce facilities in furtherance of a murder-for-hire scheme. Eric Donald Grabber, age 57, was sentenced today by Chief United States District Court Judge Ralph R. Beistline, to 77 months in prison for his involvement in efforts to have a man in Indiana murdered.
According to Assistant U.S. Attorney Joseph Bottini, who prosecuted the case, Grabber was indicted by a federal grand jury in January of 2013 for causing another individual to travel in interstate commerce from Alaska to Indiana in furtherance of the scheme, and for making an interstate telephone call for the same purpose. The investigation in this case established that Grabber sought to hire a hit man in Fairbanks to murder Indiana resident George Cole. The individual recruited by Grabber went to the Federal Bureau of Investigation resident office in Fairbanks and reported the plot to agents. This individual thereafter cooperated in the investigation and recorded conversations with Grabber detailing the plot to murder Cole.
During the investigation, Grabber paid this individual a $20,000 deposit on the agreed murder price of $40,000, and had the individual travel from Fairbanks to Indiana in what Grabber believed was an effort to locate and murder Cole. When the individual advised Grabber that he had been unable to locate the intended victim, Grabber called Cole from Alaska in an effort to ascertain his whereabouts. The investigation revealed that the motive for the murder was Grabber’s belief that Cole had cheated him out of a financial investment. Grabber also held a life insurance policy on Cole for which Grabber was the beneficiary. Grabber pled guilty in August, 2013 to both counts of the indictment.
In sentencing Grabber, Chief Judge Beistline commented that this case presented a bizarre set of circumstances in that other than his involvement this case, Grabber had been a law abiding citizen and a successful businessman. Judge Beistline also noted that Cole, the intended murder victim, is a lifelong friend of Grabber, and that Cole had actually travelled to Fairbanks to speak at the sentencing hearing on Grabber’s behalf. While addressing the court at sentencing, Grabber turned to his intended victim and said “George, I did pay a confidential informant money to murder you”.
Ms. Loeffler commends the Federal Bureau of Investigation, the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Alaska State Troopers for the investigation of this case.
Enfield Man Sentenced to 57 Months in Federal Prison for Distributing HeroinRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NORMAN BARNABY, 34, of Enfield, was sentenced today by U.S. District Judge Michael P. Smith in Hartford to 57 months of imprisonment, followed by three years of supervised release, for distributing heroin.
According to court documents and statements made in court, this matter stems from “Operation Solid Sweep,” a joint law enforcement investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department’s Vice and Narcotics Squad into gang-related narcotics trafficking in Hartford’s South End. The investigation specifically targeted a drug trafficking organization headed by Angel Rosa, also known as “Little” and “Daddy, who is a member of the Los Solidos street gang. Rosa’s cousin, Angel Rosa, also known as “Mo Betta” and “Fab,” supervised the daily operations of the organization, which distributed heroin and other narcotics in the Zion Street area.
As a result of the investigation, 21 individuals were charged with various federal offenses, and law enforcement officers seized narcotics, one firearm, approximately $230,000 in cash, eight vehicles and jewelry.
The investigation, which included the use of court-authorized wiretaps, controlled purchases of narcotics and physical surveillance, revealed that BARNABY regularly purchased distribution quantities of heroin from other members of the conspiracy.
BARNABY has been detained since his arrest on April 11, 2013. On October 17, 2013, he pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute heroin.
BARNABY’s criminal history includes multiple felony convictions, including a previous federal conviction related to his role in a conspiracy to trade firearms in exchange for heroin. In August 2006, he was sentenced to 41 months of imprisonment for that offense.
Angel Rosa, aka “Little” and “Daddy,” and Angel Rosa, aka “Mo Betta” and “Fab,” have each pleaded guilty and await sentencing.
This matter is being investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, which includes members of the Connecticut State Police, Hartford Police Department, East Hartford Police Department, Connecticut Department of Correction and Connecticut National Guard. The Connecticut State Police’s Emergency Services Unit, Hartford Police Department’s Emergency Response Team, Capital Region Emergency Response Team, Drug Enforcement Administration, Homeland Security Investigations and the New Britain, East Hartford, Wethersfield and Manchester Police Departments have provided valuable assistance to the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Brian Leaming and Patrick Caruso.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Eldora Man Sentenced to 14 Years on Attempted Enticement and Child Pornography ChargesRead the Press Release
A man who attempted to entice a minor to engage in sexual activity and distributed child pornography was sentenced January 16, 2013, to fourteen years in federal prison.
Kevin Trittien, age 35, of Eldora, Iowa, received the sentence after an October 9, 2013, guilty plea to one count of attempted enticement of a minor and one count of distribution of child pornography. At the guilty plea, Trittien admitted that, in 2012, he attempted to entice an undercover officer who was posing as a minor to meet for the purpose of unlawful sex with a minor. He also admitted that, in 2012, he distributed child pornography.
Trittien was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Trittien was sentenced to 168 months’ imprisonment and fined $8,000. A special assessment of $200 was imposed, and Trittien must also serve an eight-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Garner Police Department, the Iowa Division of Criminal Investigation, the Hancock County Sheriff’s Office, and the Grundy County Sheriff’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-67.
Drug Trafficking Indictment Unsealed -- Members of Williamsport Heroin and Crack Distribution Network in Federal CustodyRead the Press Release
The United States Attorney’s Office today announced the unsealing of an 11-count indictment by the federal grand jury in Harrisburg charging the following Williamsport and Philadelphia men with conspiracy to distribute heroin, crack cocaine, and cocaine and other drug distribution charges:
Defendant Age Recent Address
MALIK S. HANNIBAL, 29 Williamsport
aka “Snow”ARNELL A. MONROE, 32 Williamsport
aka “Jigga”
aka “Andre Duckett”LAMONT CHYANNE BLOUNT, 21 Philadelphia
aka “Mont”JOEY LEHIGH ELMORE, 24 Philadelphia
aka “Yolo”DERRICK MALIK SAVAGE, 20 Philadelphia
aka “Maybach”ZURIEL AHKI LOVE, 18 Philadelphia
aka “Poppy”The indictment was returned in Harrisburg on November 20, 2013, but had been sealed pending the arrest of all the co-defendants. According to United States Attorney Peter J. Smith, the indictment alleges that from November 2012 through the date of the indictment the co-conspirators distributed heroin, crack cocaine, and cocaine to drug users and sellers in Williamsport and Lycoming and Tioga Counties.
The indictment alleges that the co-defendants were known as the “Tat-Gang” and used mobile phones, social media, two addresses in Williamsport, and multiple motor vehicles to facilitate drug distribution activities. The indictment also alleges that the co-conspirators bought, sold, traded, and possessed firearms in exchange for cash and controlled substances and to facilitate the distribution of controlled substances.
Codefendants Savage and Blount were arrested this week: Philadelphia Police officers arrested Blount in Philadelphia during the evening of January 15, 2014. The Pennsylvania State Police arrested Savage in the early morning hours of January 16, 2014 on Interstate 80, near the Interstate 81 exit. Members of the FBI and Williamsport Bureau of Police arrested Hannibal, Monroe and Elmore shortly after the indictment on November 20, 2013, and they arrested Zuriel Love on December 20, 2014. All six codefendants have been detained pending trial or pending detention hearings.
If convicted of the conspiracy and drug distribution offenses charged in the indictment, the defendants face a maximum penalty of 40 years in prison, a mandatory minimum sentence of five years’ imprisonment, a maximum fine of $5 million, and a supervised release term of at least four years.
The case was investigated by the Williamsport Bureau of Police, the Pennsylvania State Police, and the Federal Bureau of Investigation. Prosecution is assigned to Assistant United States Attorney George J. Rocktashel. Mr. Smith expressed thanks to the Philadelphia Police Department and United States Marshals Service for their assistance in apprehending the co-defendants.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 40 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Dorchester Man Guilty of Passport FraudRead the Press Release
BOSTON – A Dorchester man pleaded guilty yesterday to passport fraud.
Khanh Phan, 28, pleaded guilty before Senior U.S. District Court Judge Joseph L. Tauro to making false statements in a passport application and aggravated identity theft. Sentencing is scheduled for March 27, 2014.
On July 25, 2011, Phan submitted a passport application at a Dorchester post office. In the application, Phan claimed to be a different individual, providing the name, date of birth, and social security number of this other person, as well as a birth certificate and Massachusetts driver’s license in the other person’s name. Because Phan had worked with this individual at a Boston-based business in 2007, Phan knew not only that he was making false statements regarding his identity in the passport application, but also that he was using the name and other identifying information of a real person.
Phan faces a maximum sentence of 10 years in prison for making false statements in the passport application; and a mandatory sentence of two years in prison for aggravated identity theft, which must run consecutively to any sentence imposed for the passport fraud.
United States Attorney Carmen M. Ortiz and David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office, made the announcement today. The case is being prosecuted by Robert E. Richardson and Carlos A. López of Ortiz’s Major Crimes Unit.District Man Sentenced to 8 ½ Years in Prison for Scams That Cheated Victims Out of More Than $185,000- Posed as Car Dealer to Swindle Victims to Buy Cars He Did Not Own -Read the Press Release
WASHINGTON -- Benjamin Grey, 33, of Washington, D.C., was sentenced today to a prison term of 8 ½ years on charges stemming from a scheme in which he posed as a car dealer to defraud individuals and banks of more than $185,000, announced U.S. Attorney Ronald C. Machen Jr., Kathy A. Michalko,Special Agent in Charge, Washington Field Office, U.S. Secret Service, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Grey was found guilty by a jury in September 2013 of a total of 21 charges, including five counts of bank fraud and seven counts of wire fraud. The verdicts followed a trial in the U.S. District Court for the District of Columbia. Grey was sentenced by the Honorable Ellen S. Huvelle. Upon completion of his prison term, Grey will be placed on five years of supervised release. He also was ordered to pay $189,065 in restitution to all of his victims and the same amount in an additional forfeiture money judgment.
In sentencing the defendant, Judge Huvelle made note of evidence introduced by the government that showed a series of other frauds perpetrated by Grey over the course of several years, causing losses to various individuals and banks
According to the evidence presented at trial, Grey claimed to run car dealerships named Planet Cars and GreyMaxx. He persuaded various individuals to apply for car loans to buy luxury cars, such as BMWs, from him and Planet Cars. After each bank or credit union granted the loan, and gave the applicant a loan check to buy the car, Grey took the money and spent it. Afterwards, however, Grey never produced the promised car, and avoided contact with the victim. In fact, Grey never owned the cars in question.
As the evidence showed, each auto loan was between $29,000 and $35,000. After the scheme, each victim was left without the car – but with the car loan coming due. Some victims tried to pay the loans, even though they had been swindled; another declared bankruptcy, devastating her credit. The lending institutions lost the amounts loaned. The individual victims included an Army veteran who had served in Iraq.
Meanwhile, Grey spent the loan checks at bars, nightclubs, and retail establishments in and around the D.C. area, running up bar tabs in the thousands of dollars.
In addition, the evidence at trial showed that Grey executed other, similar confidence schemes. In August and September 2010, Grey defrauded a would-be business partner out of $34,000 by pretending that the money would finance their purchase and re-sale of luxury cars. Similarly, in April 2010, Grey – holding himself out as the owner of Planet Cars – pretended to buy a car from a legitimate car dealership in Bethesda, Md., using a worthless check drawn on a Planet Cars bank account that had been closed for a year.
In announcing the sentence, U.S. Attorney Machen, Special Agent in Charge Michalko and Chief Lanier expressed appreciation for the work done by those who investigated the case from the Metropolitan Police Department and Secret Service. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Krishawn Graham, Lenisse Edloe, and Tasha Harris, and Legal Assistant Angela Lawrence. Finally, he commended the work of Assistant U.S. Attorney Daniel Friedman, who investigated the case, Assistant U.S. Attorney Anthony Saler, who assisted with forfeiture issues, and Assistant U.S. Attorneys Jonathan Hooks and Christopher Kavanaugh, who investigated and tried the case.
14-019Deadwood Man Sentenced for Illegally Possessing A FirearmRead the Press Release
United States Attorney Brendan V. Johnson announced that a Deadwood, South Dakota, man convicted of Illegally Possessing a Firearm was sentenced on January 13, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Sean Jason Romanjenko, age 39, was sentenced to 2 years of probation, ordered to pay a $2,500 fine, and a $100 special assessment to the Federal Crime Victims Fund.
Romanjenko pled guilty to the charge on October 18, 2013. The charge related to Romanjenko knowingly being in possession of a .45 caliber pistol at a shooting range near Deadwood on December 1, 2012. Romanjenko was previously convicted of a crime and was prohibited from possessing firearms as a result of this conviction.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Unified Narcotics Enforcement Team. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
David Trine Sentenced for Operating Methamphetamine Lab in Great FallsRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on January 17, 2014, before U.S. District Judge Brian M. Morris, David Edmond Trine, 37, of Great Falls, was sentenced to a term of 124 years imprisonment, four years supervised release, and a special assessment of $100. Trine was sentenced in connection with his October 16, 2013, guilty plea to Conspiracy to Manufacture Methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica Betley, the government stated it would have proved that on October 7, 2012, law enforcement became alerted that Trine and Robert Spargur were manufacturing methamphetamine in Great Falls, Montana. Police arrived at Spargur's house. They immediately saw a plastic bottle in the garbage can that had a crystalized substance in it, which appeared to be consistent with methamphetamine.
At that point, a female came out of the front of the house. She told police there was an active methamphetamine lab in the house and that the defendant was in the back room. Another female told police the defendant would not come out, because he was not ready to go to jail. She kept yelling back at the house, "honey, please come out." At that point, officers called in the High Risk Unit, narcotics detectives, and the Great Falls Fire and Rescue Hazardous materials response team, as law enforcement had information that there was an active methamphetamine lab inside the house and Trine was refusing to come outside.
Other witnesses said they saw torn tubing and torn apart batteries in the closet and office area, as well as empty pseudoephedrine boxes inside the house and more methamphetamine lab related items around the house. According to one witness, both Trine and Spargur took turns making the methamphetamine. The witness knew the defendant and Spargur were planning on making methamphetamine that night because they would not allow her in the house earlier in the evening. She went in the house later that night and saw all of the materials had been moved to the garage. There were also big zip lock bags with pseudoephedrine boxes inside of them.
Trine ultimately came out of the house at 5:55 a.m. When law enforcement entered the house using protective gear, they found numerous items associated with making methamphetamine. Officers located a clear bottle filled with blue liquid labeled "white rice" in the southeast bedroom. There were coffee filters on a chair in the southwest bedroom. Upstairs, officers found numerous bottles containing an unknown substance consistent with "one pot" methamphetamine manufacturing. There was also an air filter mask in the closet.
Trine ultimately told police there was a ton of methamphetamine being made at Spargur's house. He said he did not cook the methamphetamine, but assisted Spargur by buying the pills and chemicals necessary to manufacture methamphetamine. Trine bought fertilizer, lye, Coleman fuel, pills, and batteries for the methamphetamine production. He said the granular substance found in the bottles around the house was fertilizer.
Trine further explained that in the past two to three months he had been living with Spargur, and they had produced a batch of methamphetamine per day. Two to four boxes of pseudoephedrine produced approximately one-fourth of an ounce of methamphetamine. He received half of the methamphetamine produced from each batch. Trine also mentioned that both himself and Spargur received pseudoephedrine from numerous people.
Law enforcement collected the bottles and coffee filters from Spargur's home and sent the evidence to the Montana State Crime Lab. The crime lab concluded that the items contained methamphetamine. Ultimately, the defendant conspired to manufacture at least 50 or more grams of a substance containing a detectable amount of methamphetamine. This investigation was a joint effort of the Great Falls Police Department and Russell Country Drug Task Force.
Davenport Man Sentenced on Federal Marijuana ConspiracyRead the Press Release
DAVENPORT, IA – On January 16, 2014, Marqueis Letrell Lewis, age 34, of Davenport, Iowa, was sentenced by United States District Judge Stephanie M. Rose to 113 months in prison for conspiracy to distribute at least 100 kilograms of marijuana, announced United States Attorney Nicholas A. Klinefeldt. Lewis was also ordered to serve four years of supervised release following the imprisonment and to pay $100 towards the Crime Victims Fund.
Beginning in approximately July 2008 and continuing until about July 31, 2012, Lewis conspired with other persons to distribute marijuana in the Davenport, Iowa area. Specifically, during the above-mentioned time period Lewis regularly purchased multiple pound quantities of marijuana directly from his co-defendant, Edwin James Goodwin, in Davenport and then further distributed the marijuana to various customers. Over the course of the conspiracy Lewis was responsible for distributing over 700 kilograms of marijuana. Goodwin pled guilty to conspiracy to distribute at least 100 kilograms of marijuana and is awaiting sentencing.
This case was investigated by the Davenport, Iowa, Police Department, the Iowa Department of Narcotics Enforcement, and the United States Drug Enforcement Administration. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Custer Couple Indicted for Destruction of Government PropertyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Custer, South Dakota, couple have been indicted by a federal grand jury for Destruction of Government Property.
Jerry Nored, age 61, and Susan Nored, age 60, were indicted on December 17, 2013. They appeared before U.S. Magistrate Judge Veronica L. Duffy on January 13, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to the Noreds leading and guiding clients on horseback rides over unauthorized trails within the Black Hills National Forest between March and December 2013. These rides caused damage in excess of $1,000 to the Black Hills National Forest.
The charge is merely an accusation and the Noreds are presumed innocent until and unless proven guilty.The investigation is being conducted by the U.S. Department of Agriculture Forest Service. Assistant U.S. Attorney Eric Kelderman is prosecuting the case.
The Noreds were released on bond pending trial. A trial date has been set for March 18, 2014.
Catoosa Man Sentenced to 9 Months in Federal PrisonRead the Press Release
TULSA, Okla. — A Catoosa man was sentenced in Federal court today for a crime involving a plot to burn down his rental house for profit, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma.
Christopher David Wiegers, 39, of Catoosa, Oklahoma, was sentenced by U.S. District Judge Gregory K. Frizzell to serve 9 months in federal prison, to be followed by 9 months of home detention, 3 years of supervised release, a $5,000 fine, and $100 Special Monetary Assessment.
“The defendant’s plot to burn down his rental house could have endangered the lives of neighbors and first responders,” said U.S. Attorney Williams. “Today’s sentencing should be a warning and deterrent to others from committing acts of arson in the future. I commend the quick actions and dedicated work by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Tulsa Fire Department for thwarting the arson plot and protecting lives and the neighborhood.”
According to court documents, in early August of 2013, a man renting the house from Wiegers informed investigators that Wiegers had offered to pay between $5,000 and $8,000 to burn down the house. On September 5, 2013, Wiegers was indicted on charges of attempted arson (Count 1) and interstate transportation in aid of racketeering enterprises (Count 2). On October 18, 2013, Wiegers pleaded guilty to Count 2.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance from the Tulsa Fire Department. Assistant United States Attorney Jeffrey Gallant prosecuted on behalf of the United States.
If you have knowledge of an arson plot, contact the Bureau of Alcohol, Tobacco, Firearms and Explosives Arson Hotline at 1-888-ATF-BOMB or 1-888-283-2662.
Capital District Man Indicted on Three Felony Charges Related to Development of Lethal Radiation DeviceRead the Press Release
Scheme Included Creation of a Remotely Operated X-ray Radiation
Emitting Device Designed to Kill Humans SilentlyALBANY, NEW YORK – Glendon Scott Crawford, age 49, of Galway, New York has been indicted on three federal felony counts related to his development of and plans to use a remotely-operated radiation-emitting device to kill human targets. The indictment, filed in U.S. District Court in Albany, New York last evening, charges Crawford with: (Count 1) Attempting to produce and use a radiological dispersal device, in violation of Title 18, United States Code, Section 2332h(a) and (c)(1); (Count2) Conspiracy to use a weapon of mass destruction, in violation of Title 18, United States Code, Section 2332a(a)(2)(C); and (Count 3) Distributing information relating to weapons of mass destruction, in violation of Title 18, United States Code, Section 842(p)(2)(A). The penalties for those offenses are, respectively: (Count 1) a maximum of life in prison, with a mandatory minimum of not less than 25 years and a $2,000,000 fine; (Count2) a maximum of life in prison and a $250,000 fine; (Count3) a maximum of 20 years in prison and a $250,000 fine. Crawford’s arraignment on the indictment has been scheduled in Albany for Wednesday, January 22, 2014 at 10:30 am before U.S. Magistrate Judge Christian F. Hummel.
The Indictment was announced by United States Attorney Richard S. Hartunian, Acting Assistant Attorney General for National Security, John Carlin, and Special Agent in Charge Andrew W. Vale of the Federal Bureau of Investigation, Albany Division. The charges filed today followed an investigation by the Albany FBI Joint Terrorism Task Force that began in April 2012 when authorities received information that Crawford had approached local Jewish organizations seeking out individuals who might offer assistance in helping him with a type of technology that could be used against people he perceived as enemies of Israel.
Crawford and co-defendant Eric J. Feight were arrested on June 18, 2013 and have been held in custody since then by order of U.S. Magistrate Judge Christian F. Hummel. Charges against Feight on a criminal complaint remain pending. The essence of the defendants’ scheme was the creation of a mobile, remotely operated, radiation emitting device, capable of killing targeted individuals silently with lethal doses of X-ray radiation. The defendants plotted to use this device against unwitting victims who would not immediately be aware that they had absorbed lethal doses of radiation, the harmful effects of which would only appear days after the exposure. This was an undercover investigation and, unbeknownst to the defendants, the device that the defendant modified and intended to use was rendered inoperable at all times and posed no danger to the public.
The Indictment announced today resulted from a long-term investigation conducted by the Albany FBI Joint Terrorism Task Force, which includes the Department of Homeland Security, New York State Police, Albany Police Department, Troy Police Department, and New York City Police Department. The United States Attorney’s Office also acknowledged the assistance of the Criminal Division and National Security Division of the United States Department of Justice. The case is being prosecuted by Assistant United States Attorneys Stephen C. Green and Richard Belliss, and Counterterrorism Section Trial Attorney Joseph Kaster.
The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty. Further questions or inquiries may be directed to Executive Assistant United States Attorney John G. Duncan at 315-448-0672.
Canadian Man Sentenced for Consumer FraudRead the Press Release
“Advance Fee” Scheme Stole From Thousands of U.S. Consumers
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Paul Price, 57, of Toronto, Canada, was sentenced on January 16, 2014, in U.S. District Court in East St. Louis, Illinois, to ten years in federal prison for his role in an advanced fee credit card scam that defrauded tens of thousands of U.S. consumers of over $10 million. Mr. Price's ex-wife, Elissa Wells, 50, of Toronto, Canada, who was also involved in the scheme, received a 55 month sentence on October 21, 2013 for her role in the offense. The Prices were originally indicted on May 22, 2008, after the successful conclusion of litigation in Canadian Courts to obtain evidence seized in a search of their business done at the request of the U.S. Attorney for the Southern District of Illinois. The Prices were recently extradited to the United States from Canada after the conclusion of legal proceedings there.
Companies operated by the Prices made “cold” calls to U.S. residents with credit problems representing that their companies could provide Visa or MasterCards to consumers for an advanced fee of several hundred dollars. However, neither defendants nor any of the companies they operated had any business relationship with Visa or MasterCard and were not in any way authorized by either to issue or market credit cards. Consumers received nothing of value for the several hundred dollars that the scan companies took from their bank accounts through electronic debits. The scheme operated from August 1999 until November 2004 when their offices were raided by members of various Canadian law enforcement agencies.
The scam operated by the Prices was one of five major advanced fee credit card schemes prosecuted by the U.S. Attorney's Office for the Southern District of Illinois between 2003 and 2008. The five scams prosecuted by this office represented over 600,000 victims with total losses exceeding $120 million dollars. None of the 600,000 victims received a credit card as a result of the fees they paid these scam companies.
According to a study done at the behest of the Federal Trade Commission in 2004, during the operation of these scams, approximately 4 1/2 million U.S. consumers, about 2.1 percent of the U.S. adult population, had been the victim of an advanced fee credit card or advanced fee loan scam. Based upon complaints received by the Federal Trade Commission, Toronto was the number one source city. Evidence introduced at the trial of one Canadian telemarketer in U.S. District Court in East St. Louis established that a single related scam company in Toronto operated five boiler rooms with 250 telemarketers on the phone simultaneously collecting tens of millions of dollars of advanced fees from U.S. consumers seeking a credit card, yet failing to provide even a single consumer with a single credit card.
Of the five scams that were prosecuted, three were Toronto based, one was based in Utah but utilized boiler rooms in Canada, the Caribbean and India, and the fifth was based in Florida.
Eleven individuals were indicted for mail and wire fraud. Nine pleaded guilty and received federal prison sentences ranging from 4 1/2 years to twenty years. Two went to trial and after being convicted by a jury received sentences of 23 and 29 years respectively. Three defendants were extradited from Canada after a lengthy legal process, two were caught as they entered the U.S. from Canada, four waived extradition from Canada and two were U.S. Citizens arrested in the United States. As a result, the advanced fee credit card scheme appears to have been completely eradicated.
"I could not be happier that this sad and sordid chapter in the annals of consumer fraud has been brought to such a decisive conclusion." said United States Attorney Wigginton. "The lessons these prosecutions should teach is that those who think they can hide behind international borders and scam U.S. residents will ultimately feel the long arm of American justice." Wigginton had high praise for the work of the Federal Trade Commission and the U.S. Postal Inspection Service. "These agencies are the vanguard of consumer protection in the United States. The FTC is an aggressive consumer protection agency that does an outstanding job of identifying and targeting threats to the American consumer. U.S. Postal Inspectors are the nation's preeminent fraud investigators." Wigginton noted.
“Consumers should never pay money in advance to get a credit card or loan,” said C. Steven Baker, Director of the Federal Trade Commission’s Midwest Region. “This scam ripped off over 40,000 people, who lost millions of dollars. The great work done by the Southern District of Illinois shows how enforcers in the United States and Canada can work together through the Toronto Strategic Partnership in fighting cross-border fraud."
This case arose out of the Toronto Strategic Partnership. The Partnership includes the FTC, the U.S. Postal Inspection Service, Competition Bureau Canada, the Toronto Police Service Fraud Squad – Mass Marketing Section, the Ontario Provincial Police Anti-Rackets Section, the Ontario Ministry of Consumer Services, and the Royal Canadian Mounted Police.
Cambria County Man Sentenced to Probation for Participating in Drug ConspiracyRead the Press Release
JOHNSTOWN, Pa. - A resident of Elmora, Pa., has been sentenced in federal court to two years probation on his conviction of conspiracy to manufacture and possess marijuana plants, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Gerald F. Knee, 62.
According to information presented to the court, in the spring of 2011, Knee conspired to manufacture and possess with the intent to distribute less than 100 marijuana plants. In addition, evidence presented to the Court at the time of Knee's guilty plea reflected that Knee conspired with George M. Lowmaster and others to grow marijuana plants with the intent to facilitate and promote Lowmaster's drug distribution organization.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the joint task force, headed by the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, for the investigation leading to the successful prosecution of Knee. Other agencies participating on the task force include the Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, Pennsylvania Attorney General's Office, Cambria County District Attorney's Office, Carrolltown Police Department, Patton Police Department, Ebensburg Police Department, Portage Police Department and Paint Township Police Department.
California Man Sentenced for Possession of A Firearm with an Obliterated Serial NumberRead the Press Release
United States Attorney Brendan V. Johnson announced that a Tracy, California, man convicted of Possession of a Firearm with an Obliterated Serial Number was sentenced on January 13, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Troy Leroy James, age 48, was sentenced to time served, 2 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
James pled guilty to the charge on October 8, 2013. The conviction stems from an incident on December 20, 2012, in Rapid City, when James was in possession of a .357 Smith & Wesson revolver, from which he knew the manufacturer’s serial number had been removed and obliterated
This case was investigated by the Unified Narcotics Enforcement Team, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Broward County Clerk Sentenced to Three Years for Stealing Identities in Tax Refund Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field office, and Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce the sentencing of Porscha Kyles, 25, of Fort Lauderdale, to three years in prison, followed by two years of supervised release and $57,328 in restitution. Kyles previously pled guilty to one count of conspiracy to possess fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, from October 2011 through February 2012, Kyles worked as a clerk of court in Broward County. Kyles had access to the Florida Department of Highway Safety and Motor Vehicle Driver and Vehicle Information Database (DAVID) in this position. On multiple occasions in 2011 and 2012, Kyles searched DAVID, copied personal identity information (names, dates of birth, and Social Security numbers) of individuals, and provided that information to a co-conspirator in exchange for a cash payment. Kyles provided over one hundred individuals’ personal identity information to the co-conspirator for the filing of fraudulent tax returns seeking refunds with the Internal Revenue Service.
Mr. Ferrer thanked the FBI and IRS-CI for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
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.
Box Elder Man Sentenced for Using Computer to Engage in Criminal Sexual ConductRead the Press Release
United States Attorney Brendan V. Johnson announced that a Box Elder, South Dakota, man convicted of Receipt of Child Pornography was sentenced on January 10, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Craig Joshua Weires, age 23, was sentenced to 6 years of imprisonment, 10 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
In April 2013, while executing a search warrant on Weires’s home, law enforcement authorities found child pornographic videos on Weires’s computer, which he had downloaded off the Internet.
The investigation was conducted by the Rapid City Police Department, Pennington County Sheriff's Office, South Dakota Division of Criminal Investigation, Office of Special Investigations from Ellsworth Air Force Base, and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Sarah B. Collins.
Weires was immediately turned over to the custody of the U.S. Marshals Service.
Blytheville-area Drug Traffickers ArrestedRead the Press Release
Little Rock -Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; William J. Bryant, Assistant Special Agent in Charge of the Little Rock District Office of the Drug Enforcement Administration (DEA); and Scott Ellington, District Prosecuting Attorney for the Second Judicial District of Arkansas; announced the unsealing of a 62-count indictment charging multiple defendants in Arkansas, Missouri and Oklahoma, with multiple drug charges. An investigation into large-scale drug trafficking resulted in the arrests of 21 defendants on methamphetamine and marijuana charges Thursday. Those arrested are scheduled to appear before United States Magistrate Judge Jerome T. Kearney at 1 p.m. today. Four defendants remain at large.
"The result of many hours of investigation by dedicated law enforcement agents and officers is clear – drug traffickers will be arrested and prosecuted to the maximum extent of the law,” stated Thyer. “We continue to target the networks supplying meth across the northeastern region of Arkansas to take the dealers, the drugs, and the weapons out of our communities.”
ASAC Bryant added, “Methamphetamine continues to be the number one drug threat to the citizens of Arkansas. As you can see in this case, it not only affects our urban areas but also our rural areas such as Manila, Arkansas. As a result of a great team effort of federal, state, and local law enforcement, this drug trafficking organization was dismantled.”
“The Arkansas State Police has made an unconditional commitment toward working with all law enforcement agencies and provide whatever resources we can to remove from our communities those individuals who provide a source of illegal drugs,” said Colonel Stan Witt.
District Attorney Ellington added, "I want to thank U.S. Attorney Chris Thyer, Bill Bryant and the DEA, Colonel Stan Witt and the Arkansas State Police, and the other federal agencies who assisted our local officers with the investigation and execution of this operation. It is good to know that when we run up against a significant distribution organization as we saw in this instance, we only have to ask for assistance and they are willing to step up and take the lead in the investigation and apprehension of those bringing methamphetamine into our community. I also want to thank our Drug Task Force for their tireless efforts in this case and every case they work."
Yesterday, federal, state and local law enforcement arrested 17 defendants during an early-morning operation focused in Blytheville. Roy Witherspoon, age 30, of Blytheville, was arrested Thursday night. One defendant, Renaldre Jackson, age 22, of Blytheville, was already in federal custody after pleading guilty to another drug charge. Two others, Quinton Wiencek, age 41, of Chaffee, Missouri and Timothy Sheard, age 35, of Jonesboro, Arkansas, were in state custody on unrelated charges. Cordero Lockhart, a/k/a “KO”, age 25; Antwon Bailey, a/k/a “Pee Wheezy”, age 27; Tamika Petty, age 26; and Jamal Shontal Piggie, a/k/a “Joker”, age 27; all of Blytheville are still at large. More than $50,000 in drug proceeds, multiple cars and motorcycles, drug paraphernalia, and several firearms were seized from multiple houses during the operation.
The DEA investigation began in late 2011 and early 2012. Multiple undercover operations and numerous law enforcement actions, including multiple seizures of methamphetamine were conducted by the DEA and 2nd Judicial Drug Task Force.
The Indictment handed down by a Federal Grand Jury January 7, 2014, charges 25 defendants in sixty-two separate counts stemming from a large-scale investigation into methamphetamine and narcotics trafficking in Northeast Arkansas. Four defendants live in Southeastern Missouri, one in Oklahoma, and one in Little Rock. The charges include conspiracy to possess with intent to distribute more than 500 grams of methamphetamine, conspiracy to possess with intent to distribute marijuana, aiding and abetting distribution of methamphetamine, misprision of a felony, and use of telephone to facilitate a drug trafficking crime. 24 of the defendants were charged with conspiracy to distribute more than 500 grams of methamphetamine. Each defendant charged with conspiracy will face a possible sentence of not less than 10 years to life imprisonment. All 25 defendants also face from one to three telephone counts which carry a statutory sentence of not more than four years imprisonment.
The investigation was conducted by the DEA and the ATF Cape Girardeau Field Office, with substantial assistance from the 2nd Judicial Drug Task Force, which includes officers from the Jonesboro Police Department, Blytheville Police Department, the Osceola Police Department, Craighead County Sherriff’s Office and the Mississippi County Sheriff’s Office. Assistance was also provided by the Southeast Missouri Drug Task Force, ATF Little Rock Field Office, FBI Jonesboro Field Office, United States Postal Inspection Service, United States Marshal Service, the Arkansas State Police, the Arkansas National Guard, and Little Rock Police Department. The case is being prosecuted by Assistant United States Attorney Chris Givens.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Arlen Mcwain of Barre Sentenced on Possession of Explosive Materials ChargeRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that on January 15, 2014, Arlen McWain, 60, of Barre, Vermont was sentenced to time served after his guilty plea to a charge that he possessed explosive materials as a convicted felon in July 2012. At the time of sentencing, McWain had been in custody in this case for approximately 18 months. United States District Judge William K. Sessions III also ordered that McWain serve two years of supervised release. As part of the conditions of his supervised release, McWain is prohibited from possessing explosive materials.
According to court records, McWain was convicted in California in 1992 of felony possession of an explosive device. He served a two year sentence in connection with that case. In this case, the Barre City Police Department received complaints from concerned citizens in July 2012 that McWain was constructing improvised explosive devices (“IEDs”) in his apartment. The Barre City Police Department obtained a search warrant for McWain’s apartment, where they recovered several small IEDs consisting of spent ammunition casings and wicking material. Law enforcement also recovered smokeless powder, several empty ammunition casings, and a loaded. 22 caliber rifle. Due to his felony criminal record, McWain was prohibited by law from possessing both the firearm and the explosive powder.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Barre City Police Department, with assistance from the Vermont State Police Bomb Squad. The case was prosecuted by Assistant United States Attorney Kevin J. Doyle. McWain is represented by Federal Defender Michael L. Desautels.
Alleged Fraudster Apprehended in Puerto VallartaRead the Press Release
SAN FRANCISCO – Martin Christopher Edwards of Napa, Calif., was apprehended on January 15, 2014, in Mexico and deported to the United States to face federal charges, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez.
FBI agents in the United States and Guadalajara, Mexico, coordinated with Mexican Immigration Officials to locate Edwards in Puerto Vallarta, Mexico. Edwards was found near the Hacienda Escondida Private Villas.
Edwards, 48, was indicted by a federal grand jury on May 30, 2013. The Indictment charged Edwards with twenty-three counts of mail fraud, wire fraud, and money laundering. Edwards was scheduled to make his initial appearance in federal court in San Francisco on June 17, 2013; however, he had failed to appear. Federal agents later learned that Edwards had absconded to Mexico.
According to the Indictment, Edwards allegedly created a fictitious entity, Dufrane Compliance Trust, that purported to provide tax compliance services to his former employer, The Wine Tasting Network, a 1-800 Flowers’ subsidiary. In his role as Vice President and General Manager, Edwards allegedly directed the Wine Tasting Network to make multiple payments to Dufrane Compliance Trust between May 2010 and approximately October 2012, totaling approximately $900,000. Edwards allegedly deposited these funds into an account he controlled and withdrew them for his own personal use, including the purchase of a BMW which has since been seized by law enforcement authorities.
Edwards is currently in custody and is scheduled to appear in district court on January 22, 2014, before the Honorable William H. Alsup, United States District Court Judge in San Francisco.
The maximum statutory penalty for each count of mail fraud and wire fraud in violation of Title 18, United States Code, Sections 1341 and 1343, respectively, is 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The maximum statutory penalty for each count of money laundering, in violation of Title 18, United States Code, Section 1957, is 10 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Katherine B. Dowling and Arvon Perteet are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rawaty Yim. This prosecution is the result of an investigation by the Federal Bureau of Investigation, Department of State, and Internal Revenue Service Criminal Investigation.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Martin Christopher Edwards must be presumed innocent unless and until proven guilty.
(Edwards Indictment)
Thursday 16 January 2014
Yuba City Man Indicted for Child Pornography OffenseRead the Press Release
SACRAMENTO, Calif. A federal grand jury returned a one-count indictment today charging Chad Carl Jaycox, 23, of Yuba City, with receiving images of child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, Jaycox received the images between April 2011 and September 2013. Jaycox was convicted in 2010 of unlawful sex with a minor, and he was on probation for that offense when federal agents executed a search warrant at his residence in September 2013. Upon the discovery of child pornography, Jaycox was arrested by state law enforcement agents for a violation of his probation. According to court documents, Jaycox is being held without bail in the Sutter County Jail on three unrelated counts involving sex with underage girls in the Yuba City area in 2013.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Matthew G. Morris is prosecuting the case.
Jaycox faces a possible sentence of 15 to 40 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet safety.
Wyoming Men Sentenced for Involuntary Manslaughter and Aiding and AbettingRead the Press Release
U.S. Attorney for the District of Wyoming Christopher A. Crofts announced today that on January 9, 2014, Alan Brown, 61, and his brother Vernon Lee Brown, 54, both Northern Arapaho Tribal Members, were each sentenced in federal court to 84 months imprisonment with the Bureau of Prisons on one count of Involuntary Manslaughter and Aiding and Abetting (Alan Brown) and Involuntary Manslaughter (Vernon Brown). The charges against Alan and Vernon Lee Brown stem from an incident that occurred on or about May 6, 2006, which resulted in the death of Tad Paul Barnson, 47, who was originally from Idaho Falls, Idaho, but resided in and around Riverton, Wyoming at the time of his death. Alan and Vernon Lee Brown are life-long Wind River Indian Reservation inhabitants and this crime occurred, in part, on the Wind River Indian Reservation. In addition to the imprisonment, Alan and Vernon Lee Brown were also sentenced to three years of supervised release following confinement and ordered to pay a $100 special assessment. The Court will determine and order an appropriate restitution amount within 60 days. This case was investigated by the Federal Bureau of Investigation, the Bureau of Indian Affairs, and the Fremont County Sheriff’s Department.
Whitesboro Man Admits to Illegal Firearm PossessionRead the Press Release
SYRACUSE, NEW YORK – Kaylon Pruitt, 23, of Whitesboro, New York pled guilty in federal court in Syracuse today to possessing a firearm as a convicted felon. Pruitt admitted that he possessed a loaded 12 gauge Mossberg Shotgun on October 15, 2013 when a New York State Parole officer visiting another person approached the front door of the defendant’s residence in Whitesboro, New York. The defendant answered the door while holding the shotgun. Pruitt was previously convicted of Burglary In the Second Degree, in Orangeburg County, South Carolina in 2010. He faces up to ten (10) years imprisonment and a fine of up to $250,000.00 when sentence is imposed on May 21, 2014 in Syracuse, according to United States Attorney Richard S. Hartunian.
The case was investigated by The New York State Division of Parole, The Village of Whitesboro Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (Syracuse, New York Office). The defendant was prosecuted by Assistant U.S. Attorney Richard R. Southwick with assistance from the Oneida County District Attorney’s Office.
For further information, contact AUSA Richard R. Southwick at (315) 448-0672.
Westchester Man Charged with Aiming High-Powered Laser Pointer at Police Helicopter; Deferred Prosecution Agreement ReachedRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), George Longworth, the Commissioner of the Westchester County Department of Public Safety (“WCDPS”), and William J. Bratton, the Commissioner of the New York Police Department (“NYPD”), announced today the filing of a criminal Complaint against PHILIP AVERY PUTTER for aiming a high-powered laser pointer at a WCDPS helicopter that was conducting aerial surveillance at the July 2013 Kensico Dam Fireworks Independence Day celebration. The Government and the defendant have entered into a deferred prosecution agreement, which was today approved in White Plains federal court by United States Magistrate Judge Paul E. Davison.
U.S. Attorney Preet Bharara stated: “Aiming a high-powered laser pointer at an aircraft is serious business; it can cause a deadly crash. The public should know that those who engage in such conduct are committing a federal crime.”
FBI Assistant Director-in-Charge George Venizelos stated: “This is no laughing matter. Plain and simple: lasers pointed at pilots can down an aircraft. The FBI is committed to investigating these incidents that continue to occur with alarming frequency.”
Westchester County Department of Public Safety Commissioner George Longworth stated: “This incident not only caused a danger to the pilots and crew of our Aviation Unit helicopters, but it also jeopardized the safety of thousands of people who were enjoying the festivities that evening at Kensico Dam Park. Blinding the pilot of any aircraft is not a silly prank. It is a crime that has the potential to cause devastating consequences.”
New York Police Commissioner William J. Bratton said, “This prank underscores the type of reckless conduct that can potentially endanger law enforcement and the communities they serve. I want to thank the investigators for their swift action that led to the apprehension of this individual.”
According to allegations contained in the Complaint filed today in White Plains federal court:
On the evening of July 3, 2013, two WCDPS helicopter pilots were assigned to conduct aerial observation of the Fireworks Celebration at the Kensico Dam in Valhalla, New York. There were approximately 10,000 to 15,000 people on the ground below enjoying the festivities.
The helicopter pilots explained that very shortly after they arrived near the Kensico Dam just after 9 p.m., the helicopter was hit by a green laser beam. The laser contact lasted approximately 4-5 seconds. One pilot said that the laser hit prevented him from being able to see objects outside the aircraft, and that after the beam struck the helicopter, his night vision was severely impaired. The other pilot said that the laser beam impaired his ability to read the flight instruments for a period of time.
WCDPS officers on the ground looked up into the sky and saw a green laser beam pointing toward the WCPD helicopter. A police officer followed the steady beam down to the ground and saw a man holding a laser pointer. That man was subsequently identified as PUTTER.
PUTTER, 40, who lives in Hawthorne, New York, has been charged with one count of aiming a laser pointer at an aircraft, which is a relatively new criminal statute enacted by Congress in February 2012 in order to address the increasing nationwide problem of laser pointers targeting aircraft.
PUTTER faces a maximum penalty of 5 years’ imprisonment. Under the terms of the deferred prosecution agreement, however, if PUTTER abides by the conditions of the agreement for six months, the Government will agree to dismiss the Complaint.
Mr. Bharara praised the investigative work of the law enforcement partners involved in the investigation, including the FBI’s Joint Terrorism Task Force and the Westchester County Department of Public Safety..
The case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorney Jason P.W. Halperin is in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
There are a number of incidents involving lasers pointed at aircraft in the metropolitan New York area that the FBI is now actively investigating. Anyone with information about such incidents is asked to call the FBI at 212-384-1000.
U.S. v. Philip Avery Putter Complaint
U.S. v. Philip Avery Putter Deferred Prosecution AgreementU.S. Attorney's Office Warns Public to Be Aware of Tax Identity Theft During Tax SeasonRead the Press Release
SHREVEPORT/LAFAYETTE/ALEXANDRIA/LAKE CHARLES/MONROE, La.: United States Attorney Stephanie A. Finley joins other federal law enforcement agencies to raise awareness about a growing problem of identity theft as it relates to tax refund fraud. The Federal Trade Commission (FTC) has named this week “Tax Identity Theft Awareness Week.” The FTC reports that the use of a Social Security number or other personal information to file a false return is one of the fastest growing forms of identity theft. Early in the year when tax refunds are due, tax thieves steal social security numbers to grab someone else’s tax refund.
Nationwide tax ID theft fraud is estimated to cost the U.S. Treasury more than $5 billion annually. The IRS has made tax identity theft a top priority and has hired new staff to explore new technologies and adopted new procedures to fight it. In fiscal year 2013, the IRS initiated 1,492 identity theft related criminal investigations, an increase of 66 percent over investigations initiated in FY 2012. Indictments and sentencing doubled in FY 2013 and the average prison term was more than three years (38 months).
Tax identity theft happens when someone files a tax return using other people’s personal information, like a Social Security number, to get an income tax refund from the IRS. It also can happen when someone uses a Social Security number to get a job or claims someone else’s child as a dependent on a tax return. Victims usually do not realize that their identity has been stolen until they do their taxes. The IRS will contact the victim saying that more than one tax return was filed using their Social Security number, or that IRS records show they received wages from an employer they do not know.
There are a number of ways for tax identity thieves to get personal information, to include:
- going through trash or stealing mail from a home or car;
- sending phony emails that look like they’re from the IRS asking for personal information;
- misusing clients’ information or passing it along to identity thieves by employees of businesses.
“With the federal income tax season upon us, it is important that the public is aware of the ways that thieves can steal your identity and your income tax refund,” Finley stated. “Tax identity is one of the biggest hassles you could face and protecting your personal information has never been more critical. Our office, along with our federal law enforcement partners, are keenly aware that these types of crimes are on the rise, and we will continue to prosecute these cases and seek the stiffest penalties available for those who try to scam innocent victims.”
“Individuals who commit violations of identity theft deserve to be punished to the fullest extent of the law,” IRS Criminal Investigation Special Agent in Charge Gabriel L. Grchan said. “IRS Criminal Investigation remains vigilant in identifying, investigating, and prosecuting those individuals who participate in Stolen Identity Refund Fraud schemes. We appreciate the Office of the U.S. Attorney for their aggressive support of identity theft tax fraud cases. It is only with the support of our law enforcement partners that we can assure American taxpayers that identity thieves will be held accountable.”
“Tax identity theft is a significant and growing issue,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “It’s critical that we make sure consumers are aware of how they can prevent it, and if they are victimized, what steps they can take to recover as quickly as possible.”
To protect yourself this tax season, it is important to know the ways that the IRS will and will not contact you if they have concerns. It is not going to be through text, email or the phone. The IRS will only contact you by mail if there is anything they have a concern with. If you receive a letter from the IRS, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.
For those who have had their identity stolen and used for fraud, the IRS will issue a special PIN to use for filing taxes. Information on the PIN program is available at http://www.irs.gov/uac/Newsroom/IRS-Combats-Identity-Theft-and-Refund-Fraud-on-Many-Fronts-2014. Please visit the FTC at ftc.gov/idtheft and the IRS at irs.gov/identitytheft for more information about tax identity theft.
Two Turkish Nationals Indicted for Smuggling Counterfeit Cancer DrugRead the Press Release
St. Louis, MO - The United States Attorney’s Office for the Eastern District of Missouri announced that OZKAN SEMIZOGLU and SABAHADDIN AKMAN, both from Turkey, have been charged with obtaining unapproved, misbranded, adulterated and counterfeit cancer treatment prescription drugs from Turkey and other foreign countries and smuggling the drugs into the United States, including three shipments sent from Turkey to Chesterfield, Missouri.
According to the indictment, which was filed this morning in St. Louis, Missouri, the defendants used shipping labels that concealed the illegal nature of the prescription drug shipments, including customs declarations falsely describing the contents as "gifts" or "documents" or “product sample” with no or low declared monetary values. Defendants also ensured that large drug shipments were broken into several smaller packages to reduce the likelihood of seizures by U.S. Customs authorities and the corresponding loss of expensive drug shipments. Additionally, the indictment states that the defendants shipped some prescription drugs requiring constant cold temperatures to maintain their stability and effectiveness in shipping boxes without insulation or any temperature protection whatsoever. Given the length of time required to ship products from Turkey to the United States, defendants were aware that on many occasions their packages of their prescription drugs arrived in the United States at temperatures outside the constant cold temperature range discussed on the drugs’ labeling.
Semizoglu and Sabhaddin Akman, both of Instanbul, Turkey, were charged by indictment by a federal grand jury with one felony count of conspiracy to smuggle merchandise into the United States and three counts of smuggling. Both were arrested this morning in Puerto Rico.
If convicted, each count of smuggling carries a maximum penalty of twenty years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the United States Food and Drug Administration, Office of Criminal Investigations, with assistance from the United States Marshal’s Service, the Office of Inspector General for the U.S. Department of Health and Human Services, Johnson County Crime Lab of Olathe, Kansas, and the United States Attorney’s Offices for the Eastern District of Missouri and the District of Puerto Rico.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Two Sentenced to Prison in Cocaine Trafficking ConspiracyRead the Press Release
PITTSBURGH – Jermaine Edmonds and William Johnson, both from Pittsburgh, were sentenced in federal court in Pittsburgh for violating federal drug trafficking laws, United States Attorney David J. Hickton announced today.
Edmonds, 35, and Johnson, 37, were sentenced by United States District Judge Arthur J. Schwab. They were both convicted at the conclusion of a jury trial in August 2013 of conspiring to possess with intent to distribute and attempting to possess with intent to distribute 500 grams or more of cocaine. Edmonds was sentenced to serve 130 months in prison followed by eight years supervised release. Johnson was sentenced to serve 120 months in prison followed by eight years supervised release.
Both Edmonds and Johnson were under court supervision following imprisonment imposed for prior drug trafficking convictions when they conspired and attempted to acquire over $90,000 worth of cocaine with the intent to distribute it in the Pittsburgh area. Edmonds’ prior drug trafficking sentence was reduced as a result of reductions to the federal crack cocaine sentencing guidelines. As a result of those reductions, he was released from incarceration in November 2011 – three years prior to when he was scheduled to be released from prison. He committed the additional cocaine conspiracy and attempt crimes less than 10 months after his prior sentence reduction.
Assistant United States Attorney Craig W. Haller prosecuted this case on behalf of the United States.
The Drug Enforcement Administration conducted the investigation leading to the convictions and sentences in this case.
Two More Defendants Plead Guilty in Manhattan Federal Court in Scheme to Exert Control over the Waste-Hauling IndustryRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SCOTT FAPPIANO and ANTHONY BAZZINI pled guilty today in Manhattan federal court in connection with their roles in an illegal scheme to exert control over the commercial waste-hauling industry in the greater New York City metropolitan area and in parts of New Jersey. FAPPIANO and BAZZINI, who were among 32 defendants charged in January 2013, in connection with the scheme, pled guilty today before U.S. District Judge P. Kevin Castel. FAPPIANO and BAZZINI are the twentieth and twenty-first defendants to plead guilty in this matter.
Manhattan U.S. Attorney Preet Bharara said: “With today’s pleas we have convicted nearly two-thirds of the defendants originally charged in this case, and we will not rest until all responsible for this scheme to control the waste-hauling industry in New York City and beyond are made to answer for their numerous crimes.”
According to the Indictment against FAPPIANO and BAZZINI, other documents filed in Manhattan federal court, and statements made at related court proceedings:
FAPPIANO, who is an associate of the Gambino Crime Family, and BAZZINI, who is a made member of the Gambino Crime Family, participated in a scheme, along with other members and associates of three different Organized Crime Families of La Cosa Nostra (“LCN”) – the Genovese, Gambino, and Luchese Crime Families – to control various waste disposal businesses in the New York City metropolitan area and multiple counties in New Jersey. Members of the scheme engaged in various crimes including extortion, loansharking, mail and wire fraud, and stolen property offenses. As part of their involvement in the scheme, FAPPIANO and BAZZINI made threats of bodily harm to a cooperating Government witness (“CW-1”), who owned a waste hauling company, in an effort to obtain payments from CW-1.
FAPPIANO, 52, of Staten Island, New York, pled guilty to one count of communicating a threat of bodily harm in interstate commerce and faces a maximum sentence of five years in prison. FAPPIANO is scheduled to be sentenced by Judge Castel on May 8, 2014, at 10:30 a.m.
BAZZINI, 54, of Glen Head, New York, pled guilty to one count of communicating a threat of bodily harm in interstate commerce and faces a maximum sentence of five years in prison. Bazzini is scheduled to be sentenced by Judge Castel on May 8, 2014, at 11:30 a.m.
Two other defendants have also recently pled guilty in connection with this case. Anthony Cardinalle, 61, of Saddle River, New Jersey, pled guilty on December 20, 2013, before Judge Castel, to participation in a racketeering conspiracy and participation in an extortion conspiracy. He faces a maximum sentence of 40 years in prison and is scheduled to be sentenced on May 23, 2014, at 11:00 a.m. Charles Giustra, 52, of Staten Island, New York, pled guilty on December 23, 2013, before Magistrate Judge Gabriel W. Gorenstein, to using a facility of interstate commerce in furtherance of a narcotics transaction. He faces a maximum sentence of eight years in prison and is scheduled to be sentenced by U.S. District Judge Colleen McMahon on March 25, 2014, at 4:00 p.m.
The charges against the remaining defendants are merely accusations, and these defendants are presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and the Westchester County Police Department.
The prosecution of this case is being handled by the Office’s Organized Crime Unit. Assistant United States Attorneys Brian R. Blais, Natalie Lamarque, and Patrick Egan are in charge of the prosecution. Assistant United States Attorney Micah Smith of the Office’s Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
U.S. v. Bazzini & Fappiano Superseding Information
Two Men Ordered to Pay $1000 Fines for Bringing Loaded Firearms into Inspection Area in Albuquerque AirportRead the Press Release
ALBUQUERQUE – Yesterday a United States Magistrate Judge entered orders in two cases that require two men to pay $1000.00 fines and to abandon their firearms for attempting to board airplanes at the Albuquerque International Sunport in Albuquerque, N.M., with loaded firearms in their carry-on luggage.
Matthew T. O’Conner, 51, of Los Angeles, Calif., and Todd A. Bourgeois, 32, of Albuquerque, N.M., each entered into an Agreement and Consent Order in separate cases to resolve alleged criminal and civil violations of federal laws that prohibit individuals from possessing firearms on their persons or accessible property when entering inspection areas in airports or boarding airplanes.
Court filings reflect that on Nov. 14, 2013, O’Connor was issued a criminal misdemeanor citation after Transportation Security Administration (TSA) officers found a Jennings J-22 firearm loaded with six rounds of .22 caliber ammunition in his luggage during the security inspection process. Bourgeois was issued a criminal misdemeanor citation on Dec. 2, 2013, after TSA officers found a Glock-19 firearm loaded with 15 rounds of 9 mm ammunition in his luggage, including a round that was chambered, when inspecting his carry-on luggage. Bourgeois’ firearm was not hidden but instead was packed at the top of an outer pouch of his carry-on luggage. Neither O’Connor nor Bourgeois was prohibited by law from possessing firearms when they were cited.
In separate Agreements and Consent Orders filed today, O’Connor and Bourgeois each admitted violating the civil regulatory prohibition against possessing firearms in airport security inspection areas or while boarding an airplane. Each man agreed to pay a $1000 fine and voluntarily abandon his firearm to resolve the misdemeanor charge and avoid further civil penalties arising from his violation.
“These two cases are part of an ongoing effort to address security challenges at airports in New Mexico as weapon seizures at airports continue to increase,” said Acting U.S. Attorney Steven C. Yarbrough. “Hopefully, cases like this will increase public awareness of federal laws and regulations that prohibit possession of weapons, explosives and incendiary devices at airports and on planes and help ensure safe air travel.”
“TSA officers at Albuquerque International Sunport recovered 17 guns from passengers at security checkpoints in 2012 and 12 guns were detected during screening in 2013,” said TSA Albuquerque Federal Security Director George Andler. “TSA continues to educate travelers on the importance of knowing what they’ve packed, both for their safety and the safety of their fellow travelers.” Director Andler also noted that “simple rules for traveling with firearms can be found on our website (www.tsa.gov), including packing the gun in a secure, locked box in your checked bag and declaring it to your airline at check-in.”
These two cases were investigated by TSA with assistance from the Albuquerque Aviation Police. Assistant U.S. Attorney William J. Pflugrath represented the United States in the judicial proceedings.
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O'Conner Order
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Burgeois Order
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Two Men Charged in Las Vegas with Biofuels Fraud SchemeRead the Press Release
Two men have been indicted by a federal grand jury in Las Vegas for offenses involving the federal renewable fuel program that allegedly netted them more than $37 million, announced the Justice Department’s Environment and Natural Resources Division, Criminal Division, and the U.S. Attorney’s Office for the District of Nevada. The 57-count indictment against James Jariv, 63, of Las Vegas, and Nathan Stoliar, 64, of Australia, includes allegations of conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering.
The indictment was unsealed late Wednesday following Jariv’s initial appearance in federal court in Las Vegas, which followed his arrest on Tuesday. Stoliar resides in Australia.
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel and to encourage biodiesel use in the United States. Biodiesel producers and importers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced or imported. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. In addition, in order to create an incentive for biodiesel in the United States to be used in the United States, anyone who exports biodiesel is required to obtain these valuable RINs and provide them to EPA. The market price charged for exported biodiesel therefore includes the value an exporter is required to later spend to acquire these RINs.
The indictment alleges that beginning around June of 2009, the two defendants, James Jariv and Nathan Stoliar, operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Jariv also operated and controlled a company based in Las Vegas, Nevada, called Global E Marketing. The government alleges that these defendants claimed to produce biodiesel at the City Farm facility, claimed to import and sell biodiesel to Global E Marketing, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, little to no biodiesel produced at City Farm was ever imported and sold to Global E Marketing as claimed. The indictment alleges that the defendants’ scheme allowed them to generate approximately $7 million in RINs that were fraudulent, which were then sold to companies that needed to obtain them.
The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, the defendants, using their company MJ Biodfuels, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel, known as B99, from companies in the United States. The defendants sold some of this biodiesel to purchasers in the United States, claiming it was pure biodiesel, known as B100, produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B100 and not RIN-less B99, the defendants were able to claim the fuel was eligible to be used to generate credits and incentives, and were able to sell the fuel for significantly more than they otherwise would have been able. The defendants also exported the RIN-less B99 they bought in the United States to Canada. The defendants then sold the biodiesel in Canada, and conspired not to acquire and provide RINs for these exports to the United States as they were required to do, but instead to keep the money they received from the sales for themselves. The indictment alleges that, in doing so, the defendants failed to give to the United States RINs worth in excess of $30 million, keeping this money for themselves instead.
The indictment alleges that the defendants created false records and made false statements to conceal their fraudulent claims of biodiesel production, importation, sale and fraudulent RIN generation. Finally, the indictment alleges that the defendants engaged in a conspiracy to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to conceal the illegal nature of the funds they received, and to attempt to protect these funds from government enforcement. Today the United States also seized and restrained the assets contained in a number bank accounts utilized by the defendants, as well as several pieces of real and personal property in Las Vegas, Nevada.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The collaborative investigation that led to today’s arrest and seizures was the result of work by the EPA’s Criminal Investigation Division and the FBI, with assistance from the United States Secret Service and the Department of Homeland Security.
The case is being prosecuted by Senior Trial Attorney Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division , Assistant U.S. Attorneys Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office in Nevada, and Trial Attorney Darrin L. McCullough of the Justice Department’s Criminal Division, Asset Forfeiture and Money Laundering Section, with the assistance of the Justice Department’s Office of International Affairs.Two Men Charged in Las Vegas with Biofuels Fraud SchemeRead the Press Release
WASHINGTON – Two men have been indicted by a federal grand jury in Las Vegas for offenses involving the federal renewable fuel program that allegedly netted them more than $37 million, announced the Justice Department’s Environment and Natural Resources Division, Criminal Division, and the U.S. Attorney’s Office for the District of Nevada. The 57-count indictment against James Jariv, 63, of Las Vegas, and Nathan Stoliar, 64, of Australia, includes allegations of conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering.
The indictment was unsealed late Wednesday following Jariv’s initial appearance in federal court in Las Vegas, which followed his arrest on Tuesday. Stoliar resides in Australia.
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel and to encourage biodiesel use in the United States. Biodiesel producers and importers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced or imported. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. In addition, in order to create an incentive for biodiesel in the United States to be used in the United States, anyone who exports biodiesel is required to obtain these valuable RINs and provide them to EPA. The market price charged for exported biodiesel therefore includes the value an exporter is required to later spend to acquire these RINs.
The indictment alleges that beginning around June of 2009, the two defendants, James Jariv and Nathan Stoliar, operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Jariv also operated and controlled a company based in Las Vegas, Nevada, called Global E Marketing. The government alleges that these defendants claimed to produce biodiesel at the City Farm facility, claimed to import and sell biodiesel to Global E Marketing, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, little to no biodiesel produced at City Farm was ever imported and sold to Global E Marketing as claimed. The indictment alleges that the defendants’ scheme allowed them to generate approximately $7 million in RINs that were fraudulent, which were then sold to companies that needed to obtain them.
The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, the defendants, using their company MJ Biodfuels, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel, known as B99, from companies in the United States. The defendants sold some of this biodiesel to purchasers in the United States, claiming it was pure biodiesel, known as B100, produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B100 and not RIN-less B99, the defendants were able to claim the fuel was eligible to be used to generate credits and incentives, and were able to sell the fuel for significantly more than they otherwise would have been able. The defendants also exported the RIN-less B99 they bought in the United States to Canada. The defendants then sold the biodiesel in Canada, and conspired not to acquire and provide RINs for these exports to the United States as they were required to do, but instead to keep the money they received from the sales for themselves. The indictment alleges that, in doing so, the defendants failed to give to the United States RINs worth in excess of $30 million, keeping this money for themselves instead.
The indictment alleges that the defendants created false records and made false statements to conceal their fraudulent claims of biodiesel production, importation, sale and fraudulent RIN generation. Finally, the indictment alleges that the defendants engaged in a conspiracy to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to conceal the illegal nature of the funds they received, and to attempt to protect these funds from government enforcement. Today the United States also seized and restrained the assets contained in a number bank accounts utilized by the defendants, as well as several pieces of real and personal property in Las Vegas, Nevada.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The collaborative investigation that led to today’s arrest and seizures was the result of work by the EPA’s Criminal Investigation Division and the FBI, with assistance from the United States Secret Service and the Department of Homeland Security.
The case is being prosecuted by Senior Trial Attorney Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, Assistant U.S. Attorneys Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office in Nevada, and Trial Attorney Darrin L. McCullough of the Justice Department’s Criminal Division, Asset Forfeiture and Money Laundering Section, with the assistance of the Justice Department’s Office of International Affairs.Two Jacksonville Men Indicted in Human Trafficking CrimesRead the Press Release
Jacksonville, Florida – Acting United States Attorney A. Lee Bentley, III announces the return by a grand jury of two indictments charging individuals in Jacksonville, Florida with human trafficking offenses. The first indictment charges Clive Sephas Nelson (23, Jacksonville) with the commercial sex trafficking of a minor female, between on or about November 29, 2013 through on or about December 15, 2013, in the Middle District of Florida. Nelson was indicted on January 15, 2014. If convicted, he faces a maximum penalty of life in prison.
The second alleges that, between in or about December 2012 through on or about May 31, 2013, in the Middle District of Florida, Erick George Brooks (29, Jacksonville) committed commercial sex trafficking of an adult female through force, threats of force, fraud, and coercion. The indictment against Brooks was returned on November 14, 2013. He was arrested on December 4, 2013 and is awaiting a trial, currently scheduled for February 3, 2014. If convicted, he faces a maximum penalty of life in federal prison.
Both cases resulted from investigations conducted by a joint human trafficking task force comprised of investigators from the Federal Bureau of Investigation (FBI) and the Jacksonville Sheriff’s Office. Both offenses are charged under the Federal Human Trafficking Statute, 18 U.S.C. § 1591, part of the Trafficking and Violence Protection Act passed by the United States Congress, in 2000.
On December 31, 2013, President Obama issued a proclamation declaring the month of January 2014 as National Slavery and Human Trafficking Prevention Month. In that proclamation, the President noted, “As we work to dismantle trafficking networks and help survivors rebuild their lives, we must also address the underlying forces that push so many into bondage. We must develop economies that create legitimate jobs, build a global sense of justice that says no child should ever be exploited, and empower our daughters and sons with the same chances to pursue their dreams.”
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
These cases were investigated by the FBI and the Jacksonville Sheriff’s Office. They will be prosecuted by Assistant United States Attorney Mac D. Heavener, III.
Tioga Man Convicted of Being A Felon in Possession of ExplosivesRead the Press Release
ALEXANDRIA, La. –United States Attorney Stephanie A. Finley announced today that a federal jury found Calvin James Doherty, 43, of Tioga, La., guilty on Wednesday of being a felon in possession of explosive material and improper storage of explosive material. United States District Judge Dee D. Drell presided over the two-day trial.
Doherty’s trial began Tuesday and ended Wednesday with the jury returning the guilty verdicts after deliberating for about 30 minutes. Witness testimony and exhibits admitted into evidence at the two-day trial established that on July 26, 2011, members of the Western District of Louisiana Violent Offender Task Force went to Doherty’s house in Tioga to arrest another person who had three outstanding felony arrest warrants pending against him. While searching the home, Task Force members found and seized a spool belonging to Doherty. The spool was wrapped with more than 700 feet of detonating cord, which is a high explosive. Doherty had a prior felony conviction for possession of methamphetamine in 2007, which prohibited him from possessing any firearm, ammunition, or explosive.
Doherty faces up to 10 years in prison, a $250,000 fine, and three years of supervised release after he completes the prison term. The sentencing date is April 25, 2014.“Those with felony records are prohibited by law from owning dangerous devices such as explosives and firearms,” Finley stated. “People who willfully commit these types of crimes will be prosecuted by this office to the fullest extent of the law. I would like to thank the prosecutor and agents for their hard work in obtaining this conviction.”
Members of the Western District of Louisiana Violent Offender Task Force, U.S. Marshals Service, Rapides Parish Sheriff’s Department, FBI, and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. is prosecuting the case as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide program to reduce violence by aggressively enforcing existing federal firearms and explosives laws.
St. Francis Man Sentenced for Abusive Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota, man convicted of Abusive Sexual Contact was sentenced on January 14, 2014, by U.S. District Judge Roberto A. Lange.
Vernon Verdell Blackhorse, age 63, was sentenced to 144 months in custody, 3 years of supervised release, a $3,000 fine, and a $100 special assessment to the Federal Crime Victims Fund.
Blackhorse was indicted for Abusive Sexual Contact by a federal grand jury on May 15, 2013. He pled guilty on November 6, 2013.
The conviction stems from an incident that took place in Eagle Butte between May 1, 2002, and August 30, 2002, when the victim was living at the home of a relative where the defendant was also staying. The victim, who was age 11 or 12 at the time, was sleeping on a couch, and Blackhorse was laying on a couch behind her. The victim woke up when she felt Blackhorse touching her over her clothing in a sexual manner. The victim jumped off of the couch and was able to end the sexual contact.
This case was investigated by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers prosecuted the case.
Blackhorse was immediately turned over to the custody of the U.S. Marshals Service.
Six Sentenced in Connection with Major False Billing Scheme at AlphaRead the Press Release
Seven defendants charged to date in ongoing fraud investigation at Massey legacy mines
CHARLESTON, W.Va. – A total of six individuals have been sentenced for their roles in a major false billing scheme involving sourcing agents at former Massey Legacy Mines (“Massey”) -- now Alpha Natural Resources (“Alpha”) -- and certain companies that provided supplies, equipment, and services to Alpha, U.S. Attorney Booth Goodwin announced today. Donald Bryan Steele, the former owner of M&S Hydraulics, a major Alpha supplier, was sentenced today to 18 months in federal prison. Steele, 43, of Barboursville, previously pleaded guilty to wire fraud and aiding and abetting in connection with the fraud scheme.
When approached by law enforcement in February 2013, Steele admitted to investigators that during the scheme, he illegally provided cash and other things of value to former Massey sourcing agents Joey R. Phalin, Edward Ellis Mullins, and Nicholas R. Coleman, in exchange for bogus invoices for payment that M&S Hydraulics knowingly had not provided. Between at least July 2007 through 2012, Steele falsely billed, through the sourcing agents, approximately $1.3 million for goods and services that were not provided.
The sourcing agents, who were generally responsible for ordering goods and services for mining operations from Alpha suppliers, participated in the illegal scheme to obtain goods for their own personal benefit. The sourcing agents hid numerous illegal transactions by creating false invoices.
Phalin, 36, of Crab Orchard, W.Va., was sentenced today to five years’ probation, the first three months of which are to be served on home confinement. Mullins, 41, of Peytona, W.Va., was sentenced yesterday to five years’ probation, the first ten months of which are to be served on home confinement. Coleman, 29, of Lester, W.Va. was sentenced yesterday to five years’ probation for his role in the scheme.
Through his cooperation, Steele identified other sourcing agents involved in the scheme. Last week, former sourcing agent Ricky R. Smith, of 49, Glen Daniels, was sentenced to 1 ½ years in federal prison. James Rodger Long II, 34, of Beckley, also a sourcing agent, was sentenced to 1 ½ years in prison.
Harold Wayne Brown, II, a former Alpha underground maintenance chief, previously pleaded guilty to making a false statement to federal authorities regarding benefits he had received from the false billing scheme. Brown, II, 41, of Madison, W.Va. is scheduled to be sentenced on Jan. 21, 2014.
The investigation was conducted by the FBI and the West Virginia State Police with cooperation from Alpha Natural Resource’s internal security team. Assistant United States Attorney Thomas Ryan is in charge of the prosecutions.
In June 2011, Alpha Natural Resources finalized the purchase of Massey, including the mining divisions located along WV Route 3 in Boone and Raleigh counties.
Sentencing for January 09 - 15, 2014Read the Press Release
Luis Armando Piceno-Ornelas, 30, of Mexico, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 15, 2014, for illegal re-entry of a previously deported alien into the United States. Piceno-Ornelas was arrested in Rock Springs, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Celso Diaz-Martinez, 41, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 14, 2014, for illegal re-entry of a previously deported alien into the United States. Diaz-Martinez was arrested in Casper, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Efrain Tzompa-Hernandez, 34, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on January 13, 2014, for illegal re-entry of a previously deported alien into the United States. Tzompa-Hernandez was arrested in Jackson, Wyoming. He received 10 months imprisonment, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Juston Jackett, 28, of Bar Nunn, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on January 10, 2014, for possession of a stolen firearm. Jackett was arrested in Bar Nunn, Wyoming. He received 55 months imprisonment, consecutive to his state case in Natrona County. Jackett was also ordered to serve three years of supervised release after confinement and to pay a $100.00 special assessment and a $500.00 fine. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.Jose Claudio Ramirez-Fuentes, 30, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 9, 2014, for illegal re-entry of a previously deported alien into the United States. Ramirez-Fuentes was arrested in Jackson, Wyoming. He received 18 months imprisonment, to be followed by one year of supervised release, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Fervin Perez-Perez, 25, of Guatemala, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 9, 2014, for illegal re-entry of a previously deported alien into the United States. Perez-Perez was arrested in Natrona County, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
San Francisco Antique Dealers Indicted for Conspiracy and Scheme to Commit Mail and Wire FraudRead the Press Release
SAN JOSE – A federal grand jury in San Jose returned a twelve count indictment charging two antique dealers with conspiracy to commit mail fraud and wire fraud, mail fraud, and wire fraud relating to a multi-million dollar investment scheme, announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and United States Postal Inspection Service Acting Inspector In Charge Rafael Nunez.
According to the indictment, Anthony Barreiro, 64, and Ernest Ray Parker, also known as Ray Parker Gaylord, 50, both residents of San Francisco and Dallas, founded and operated a business known at various times as ARTLoan Financial, LLC, ARTLoan Financial Services, Inc., and ARTLoan Financial Service, LLC (“ARTLoan”). Barreiro, who represented himself as ARTLoan’s Chairman and CEO, and Gaylord, who represented himself as its President, operated ARTLoan as a specialty finance company, whereby investors were invited to entrust funds to ARTLoan for the sole, stated purpose of providing lending capital to borrowers seeking to finance the acquisition of high-value art work. ARTLoan promised its investors regular interest payments over the term of each loan. As further security, Barreiro and Gaylord promised investors that ARTLoan would retain possession of a borrower’s artwork as collateral against the loan and, in the event of default, the tendered artwork would be forfeited to ARTLoan for the benefit of the investors.
The Indictment alleges that based on these promises, Barreiro and Gaylord obtained from investors a total of approximately $3.4 million dollars. By June 2010, as a result of their fraudulent scheme, the defendants allegedly had made approximately $1.8 million in “Ponzi” payments intended to lull investors while diverting approximately $1.5 million dollars to their own personal benefit.
According to the indictment, Barreiro and Gaylord explained to investors that ARTLoan was a licensed pawn broker that owned valuable pieces of artwork worth millions of dollars. Barreiro and Gaylord further advised investors that ARTLoan helped collectors finance the purchase of valuable pieces of artwork, many of which were purchased through public auctions, and in the process, allowed ARTLoan to cultivate business relationships with high-profile auction houses, such as Sotheby’s and Christie’s, among others. Barreiro and Gaylord allegedly explained that ARTLoan’s financing options would help collectors finance up to 50% of the value of the piece while requiring the collectors to transfer ownership of the subject artwork to ARTLoan as collateral until the conclusion of the debt obligation. Alternatively, if a collector already owned outright a particular piece of artwork, ARTLoan would provide the collector with financing of up to 50% of the appraised value of that particular piece of artwork while requiring the collector to transfer ownership of the subject artwork to ARTLoan as collateral until the conclusion of the debt obligation.
Barreiro and Gaylord allegedly explained to investors that an investment took the form of a loan agreement with ARTLoan. Barreiro and Gaylord memorialized the investments in documents that they provided to investors at the time of the investors’ initial and subsequent investments in ARTLoan. These documents provided, among other things, that the investor would deposit with ARTLoan a specific investment amount and that ARTLoan would pay the investor a certain regular rate of interest. Thereafter, Barreiro and Gaylord mailed periodic account statements to the investors reflecting principal and accrued interest, and, on certain occasions, a check payable to the investor purporting to represent an interest payment. The defendants also transmitted, via mail, electronic mail, and hand delivery, updates to investors about the business operations of ARTLoan generally.
The defendants allegedly represented to investors, among other things, that the funds deposited with ARTLoan would be used only as lending capital and would not be used to fund the business operations of ARTLoan. Instead, defendants advised investors that the monies generated from the loans to third-party collectors provided ARTLoan with sufficient capital for operations, including but not limited to salaries for Barreiro and Gaylord.
The Indictment alleges that through written and oral communications, Barreiro and Gaylord created the false and misleading appearance that ARTLoan was successfully engaging in debt financing agreements with third-party borrowers, generating regular monthly interest payments and increasing the overall value of each investor’s funds with ARTLoan. In truth, according to the Indictment, ARTLoan had not entered into any debt financing agreements, the monies obtained from investors had not been utilized to fund such debt financing agreements, ARTLoan had not secured artwork as collateral in connection with such debt financing agreements, and, the monies provided to investors as purported “interest payments” were, in fact, “Ponzi” payments designed to lull current investors as well as induce other potential investors to enter into loan agreements with ARTLoan.
Both defendants made their initial appearances on Friday, January 10, 2014, in federal court in Dallas, Texas. They made their initial appearance in federal court in San Jose, Calif., today in front of The Honorable Paul S. Grewal, United States Magistrate Judge. The defendants are currently out of custody on bond. Both defendants are scheduled to appear next on February 11, 2014 at 1:30 p.m. in front of The Honorable Howard R. Lloyd, United States Magistrate Court Judge for id of counsel and on February 12, 2014 at 9:00 a.m. in front of The Honorable Lucy H. Koh, United States District Court Judge in San Jose for status and setting.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the Defendants face a maximum statutory penalty of twenty years imprisonment, a fine of $250,000 or twice the amount of gain or loss, whichever is greater, and restitution if appropriate, for each count of the indictment. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Timothy J. Lucey is the Assistant United States Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of a multi-year joint investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service.
(Barreiro and Parker indictment)
San Fernando Valley Pastor Arrested for Running A Fraudulent Investment Scheme That Targeted Spanish-Speaking InvestorsRead the Press Release
LOS ANGELES – A Chatsworth man was arrested this morning by the U.S. Postal Inspection Service and the Federal Bureau of Investigation after being named in a federal grand jury indictment that charges him with running a multi-million dollar Ponzi scheme that targeted Latino victims.
Luis Alonso Serna, 61, who operated Architects of the Future Investments, which he purported to be a foreign currency investment company, was arrested this morning on federal charges that allege he ran a Ponzi scheme that lured more than 70 victims into investing almost $4 million.
“The Ponzi scheme is a century-old concept, but it remains a clear and present danger to the investing public,” said United States Attorney André Birotte Jr. “Cases like the one against Mr. Serna demonstrate the accuracy of the old adage that if it sounds too good to be true, it almost certainly is.”
Serna, the pastor of Zion Living Word Christian Center (formerly Amistad Cristiana) in San Fernando, was named in a superseding indictment returned on January 10. The indictment charges him with two counts of mail fraud, two counts of wire fraud and two counts of money laundering. Serna is expected to be arraigned on the indictment this afternoon in United States District Court in Los Angeles.
“The Postal Inspection Service has no shortage of Ponzi schemes to investigate, and this is another sad example of greed overcoming honest business practices,” said B. Bernard Ferguson, Inspector in Charge for the Los Angeles Division. “Relying on a reputation or relationship is not enough -- investors must still verify information, especially if there are claims of outperforming the market.”
According to the indictment, Serna claimed to be a successful investor, but he in fact operated a Ponzi scheme by soliciting funds from investors with false claims that their money would be used to purchase foreign currency. Serna allegedly promised to pay the victims monthly returns of up 20 percent. Serna and people working with him sometimes convinced victims to take liens on their homes to invest, according to prosecutors, who noted that many of those victims lost their homes and some declared bankruptcy.
Bill Lewis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, said: “The FBI is committed to pursuing criminals who prey upon the investing public through various methods, including sophisticated affinity-fraud schemes such as the one we're announcing today. Justice for the victims in this case can be attributed to the collaborative efforts of federal law enforcement.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
If he is convicted, Serna would face a statutory maximum penalty of 20 years in federal prison for each of the four fraud charges and up to 10 years in prison for both of the money laundering counts.
This case was investigated by the United States Postal Inspection Service and the Federal Bureau of Investigation.
Release No. 14-005
Saline County Man Sentenced to 16 Years in Prison for Methamphetamine Related OffenseRead the Press Release
John David Clark, 48, of Harrisburg, Illinois, was sentenced today in United States District Court in Benton to 192 months in federal prison for possessing pseudoephedrine with the intent that it be used to manufacture methamphetamine, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. Clark was charged by a Federal Grand Jury in July 2013 with possessing the pseudoephedrine on June 25, 2013 in Saline County. He pled guilty to that offense on October 11th.
“Methamphetamine is a killer. It kills peoples’ abilities to function and it robs them of their future. Hopefully sentences like these will act to deter not only those who make meth, but those who would distribute such poisons in our communities.” said United States Attorney Wigginton.
Evidence supporting the guilty plea and sentence showed that Clark was involved for over a two year period with several other individuals in the manufacture and distribution of methamphetamine in and around Harrisburg. His possession of pseudoephedrine on that date, a necessary ingredient in the manufacturing process, was in furtherance of that overall scheme.
In addition to the 16 year term of imprisonment, Clark was ordered to pay fines and special assessments to the United States totaling $200, and was placed on a 3 year term of supervised release to follow his incarceration. Under federal law, parole has been abolished meaning that Clark will be required to serve a minimum of 85% of his prison sentence.
Clark has been held without bond in the custody of the United States Marshal since his arrest on the federal charges. He was returned to the Marshal’s custody to await designation to a Federal Bureau of Prisons facility. The case was investigated by the Carmi office of the Southern Illinois Drug Task Force and was prosecuted by Assistant United States Attorney James M. Cutchin.