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25 February 2014
Defendant Sentenced in Identity Theft Tax Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that defendant Wendy Sands, 42, of Opa-Locka, was sentenced today to 26 months in prison, to be followed by three years of supervised release. Sands previously pled guilty to one count of possessing fifteen or more unauthorized access devices with the intent to defraud, in violation of Title 18, United States Code, Section 1029(a)(3), and to one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
According to court documents, on January 16, 2013, Sands met with a confidential source (CS) and Sands was unaware the CS was working for the government. During the meeting, Sands provided the CS with documents that contained personal identifying information -- including names, dates of birth, and social security numbers -- for approximately 64 stolen identities. Sands knew that these 64 stolen identities belonged to real people and that the 64 victims did not authorize her to possess their personal information. Sands also knew that the stolen personal identifying information would be used to file fraudulent tax returns.
Mr. Ferrer commended the investigative efforts IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Vanessa Snyder.
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.
Dallas Man Sentenced to Two Years in Federal Prison and Ordered to Pay $168,920 in Restitution for Fraudulently Receiving Social Security BenefitsRead the Press Release
Defendant Collected His Deceased “Father’s” Benefits
DALLAS — A Dallas man, Jose Alfredo Rodriguez, was sentenced today by U.S. District Judge Sam A. Lindsay to two years in federal prison and ordered to pay $168,920 in restitution, following his conviction at trial in October 2013 on felony offenses related to his theft of his deceased father’s Social Security retirement benefits, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
The jury deliberated just two hours to convict Rodriguez, 54, on one count of theft of government funds and three counts of making false statements. At today’s sentencing hearing, Judge Lindsay ordered that Rodriguez surrender to the Bureau of Prisons on April 4, 2014.
The government presented evidence at trial that beginning in 1989, Fernando Loya began receiving Title II Retirement Insurance benefits from the Social Security Administration (SSA). The SSA determined that Mr. Loya required a representative payee to manage his benefits on his behalf, and appointed Rodriguez, who considered Mr. Loya his father, as Mr. Loya’s payee.
In early September 2, 2011, in response to a request from the SSA to bring Mr. Loya and his identification information to the SSA office in Dallas, Rodriguez appeared without Mr. Loya and informed a SSA employee that Mr. Loya lived in Mexico. On October 27, 2011, Rodriguez called the SSA and reported that Mr. Loya had passed away in Mexico on September 15, 2011.
An investigation ensued and when confronted, Rodriguez conceded that the last time he went to Mexico to give Mr. Loya his benefits, was in 1992 or 1994. Rodriguez also conceded that he did not know how or when Mr. Loya died, but believed it may have been in 1995, and that he sent no money to Mexico for his care after 1997.
The government presented further evidence at trial that on November 15, 2008, June 7, 2009 and May 20, 2011, Rodriguez made false statements or representations in documents used by the SSA to determine continued rights to Social Security benefits for Mr. Loya. On those dates, Rodriguez stated that he had spent, respectively, $13,160, $13,640 and $14,184 for food, housing, clothing, medical and dental expenses, recreation and personal expenses for Mr. Loya, when he well knew he did not use those funds for Mr. Loya.
The case was investigated by the SSA’s Office of Inspector General. Special Assistant U.S. Attorney Nicole Dana prosecuted.
Dallas Center Man Sentenced on Child Pornography ChargesRead the Press Release
DES MOINES, IA – On February 21, 2014, Benjaman Shelabarger, a thirty-six-year-old former resident of Dallas Center, Iowa, was sentenced by United States District Court Chief Judge James E. Gritzner to 210 months in prison on child pornography charges, announced United States Attorney Nicholas A. Klinefeldt. Judge Gritzner also ordered Shelabarger to serve five years of supervised release following the period of imprisonment.
Shelabarger’s sentence was enhanced, in part, because he falsely testified during trial that a relative was responsible instead of the defendant, which the judge found constituted an obstruction of justice. Shelabager’s sentence was also enhanced because he had movies and images of very young children being sexually assaulted, used a computer, and had a large number of child pornography movies and images.
Shelabarger was originally charged in March 2013 with one count of illegally possessing child pornography, and was additionally charged with knowingly receiving child pornography when the indictment was superseded in October 2013. A jury unanimously convicted Shelabarger on both counts on November 6, 2013.
The investigation was conducted by Homeland Security Investigations, a division of the U.S. Immigration and Customs Enforcement, the Iowa Division of Criminal Investigations, Cyber Crime Unit, and the Iowa Internet Crimes Against Children (ICAC) Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Concord Doctor Pleads Guilty for Role in $27 Million Home Health Care ScamRead the Press Release
BOSTON - The former medical director of a Waltham-based home health agency pleaded guilty today for his role in a home health fraud scheme which cost Medicare over $27 million.
Dr. Spencer Wilking, 65, of Concord, pleaded guilty today before U.S. District Judge Joseph L. Tauro to health care fraud. Sentencing is scheduled for May 20, 2014. The statutory maximum penalty for the crime is 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross loss to the Medicare program or twice the gross gain to Wilking (whichever is greater), restitution to Medicare, forfeiture of any proceeds of the offense, and exclusion from the Medicare program.
From at least April 2011 through March 2012, Wilking was employed as the Medical Director for MJG Management Company, d/b/a At Home VNA (AHVNA), a home health agency located in Waltham. During this period, Wilking signed certifications and recertifications to provide AHVNA home health services to hundreds of Medicare beneficiaries who did not qualify for services under the Medicare program. To qualify for home health services under the Medicare program, the beneficiary had to be: (1) confined to his/her home, (2) in need of skilled nursing services, physical therapy, or speech therapy on an intermittent basis or occupational therapy on a continuing basis, and (3) under the care of the physician who established the plan of care for home health services.
Prior to initially certifying eligibility, Wilking had to document that he, or another qualified health care provider, had a “face-to-face encounter” with the beneficiary, which showed that the patient was homebound and in need of home health services. Despite these legal requirements, Wilking certified hundreds of Medicare beneficiaries for home health services by AHVNA, without conducting a “face-to-face encounter” with the beneficiary, the vast majority of whom were not referred to AHVNA by their primary care physician or another physician who had examined the patient. Instead, Wilking typically certified services after spending a minimal amount of time reviewing patient assessment forms that were prepared by AHVNA nurses and/or participating in brief discussions about the patients with the nurses and/or AHVNA’s Clinical Director, Janice Troisi. Had Wilking reviewed the patient files, he would have discovered that many of the files contained information demonstrating that many of the patients were not homebound because, for example, they worked, took vacations, and spent substantial time outside the home. The patient files also contained information demonstrating that many patients had not requested home health services and/or were not provided with skilled nursing services.
Wilking’s certifications and recertifications allowed AHVNA to bill Medicare Part A for payment for these home health services. In addition, Wilking, billed Medicare Part B for both the certifications and subsequent recertifications. During the relevant time period, Medicare paid AHVNA over $1 million for the services certified by Wilking where the patients had not had the required face to face encounter with a physician. In addition, during the same period, Medicare paid nearly $30,000 to Wilking for certifying and recertifying the patients. Finally, between April 2011 and April 2012, AHVNA paid Wilking approximately $42,000 to serve as the company’s medical director.
In September 2013, the owner of AHVNA Michael Galatis, 62, of Natick and the Clinical Director, Janice Troisi, 64, of Revere, were charged with conspiracy to commit health care fraud and 11 counts of health care fraud. Galatis was also charged with seven counts of money laundering. According to the indictment, between 2007 and 2012, Galatis and Troisi conspired to fraudulently induce the Medicare program to pay for home health care services that, by and large, the Medicare beneficiaries did not need nor want. They trained AHVNA nurses to recruit Medicare beneficiaries who lived in residential facilities for senior citizens by asking if they were insured by Medicare, and if so, if they would like to have a nurse visit them in their home. The indictment also alleges that they trained the nurses to manipulate the patients’ initial assessments to make it appear as though the patients qualified for home health services pursuant to Medicare’s guidelines, when that was often not the case. The home health certifications and plans of care were then signed by Wilking, who certified that the patients were homebound and in need of skilled services, when, in fact, the overwhelming majority of AHVNA’s patients were not homebound and did not need home health services. During the course of the conspiracy, AHVNA submitted more than $27 million in false and fraudulent claims to Medicare, and Medicare paid AHVNA more than $20 million.
Both Galatis and Troisi have entered not guilty pleas. If convicted, they each face up to 10 years in prison, three years of supervised release, a $250,000 fine or twice the gross loss to the Medicare program or twice the gross gain to the defendant (whichever is greater), restitution to Medicare, forfeiture of any proceeds of the offenses, and exclusion from the Medicare program.
The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
United States Attorney Carmen M. Ortiz; Phillip Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General; Office of Investigations; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys David S. Schumacher and Lisa Asiaf Schlatz of Ortiz’s Health Care Fraud Unit.
Clifton Insurance Adjuster Charged with Defrauding N.J. Turnpike Authority and Insurance Companies of over $200,000Read the Press Release
NEWARK, N.J. – The owner of a New Jersey-based insurance adjusting company was arrested today for allegedly defrauding the N.J. Turnpike Authority and certain insurance companies of more than $200,000, U.S. Attorney Paul J. Fishman announced.
Robert Napolitano, 54, of Clifton, N.J., the owner of Dawn to Dusk LLC, an insurance adjusting company that investigated and provided adjusting services to property and casualty insurance carriers in New Jersey, was arrested by special agents of the FBI and charged by complaint filed Feb. 19, 2014, and unsealed today with one count of mail fraud. Napolitano is scheduled to make his initial appearance before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court later today.
According to the complaint:
From October 2011 to June 2013 Napolitano obtained by fraud more than $200,000 from the Turnpike Authority (NJTA) and certain insurance companies in several ways, including instructing insurance companies whose motorists caused damage to the N.J. Turnpike to issue checks payable to Dawn to Dusk. After the checks were mailed to Dawn to Dusk, Napolitano did not forward the payments to the NJTA and instead shared the money with his previously charged conspirator, Gerardo A. Blasi, an NJTA claims manager.
Blasi, 55, of Clifton, pleaded guilty Dec.11, 2013, before U.S. District Judge Kevin McNulty to an information charging him with using the mails to facilitate a scheme and artifice to defraud the NJTA and certain insurance companies in connection with his theft of more than $1.5 million from the authority and the insurance companies. He is scheduled to be sentenced March 19, 2014.The fraud count with which Napolitano is charged is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney David L. Foster of the U.S. Attorney’s Office Special Prosecution’s Division.
13-061Napolitano, Robert Complaint
Civilian Navy Employee Charged with Stealing More Than $360,000 in Housing BenefitsRead the Press Release
WASHINGTON – A civilian employee of the U.S. Navy posted at the Capodichino Navy Base near Naples, Italy, was arraigned yesterday in Norfolk, Va., for allegedly obtaining more than $360,000 in housing benefits that he was not entitled to receive.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and United States Attorney Nicholas A. Klinefeldt of the Southern District of Iowa made the announcement.
Steven William Ashton, 41, was charged in a seven-count indictment returned by a grand jury in the Southern District of Iowa on Feb. 19, 2014. He is charged with theft of government funds for obtaining more than $360,000 in housing benefits, called Living Quarters Assistance (LQA), to which he was not entitled. He is also charged with presenting a falsified lease and making false statements in an effort to justify those benefits when confronted by a federal agent from the Naval Criminal Investigative Service (NCIS).
According to court documents, from April 2004 to the present, Ashton has been employed by the Navy as the NATO and Host Nation Programs Manager for the regions of Europe, Africa and Southwest Asia, managing contracts and agreements among the Navy and other countries to support the United States’ military efforts. Because he lived off-base, he was entitled to an LQA allowance to reimburse him for his payments for rent and other housing expenses. But when he allegedly moved in with his future wife and stopped paying rent in November 2005, he continued receiving the rental subsidies even though he was no longer eligible for them. When confronted by an NCIS agent investigating the matter, Ashton allegedly forged a lease in 2013 with his father-in-law – who had died in 2007 – and provided the lease along with false explanations to the NCIS agent.
Ashton is also charged with creating and submitting to the U.S. Navy various fraudulent documents to obtain other benefits. According to the indictment, Ashton created false documents to obtain a Foreigners’ Permit of Stay from the Italian government that allowed him to travel in and out of Italy without a visa and to be tax exempt for wages earned in Italy. He also allegedly created false documents to obtain a Permanent Logistic Support letter that gave Ashton Navy benefits such as purchasing tax-free gas at a savings of more than 50 percent, and a Civilian Access Card that provided him free access to U.S. military facilities world-wide, including use of the tax-free military shopping facilities. In addition, Ashton used fraudulent U.S. Coast Guard documentation purporting to show that Ashton had the licenses needed to moor a boat at discounted rates in the Bay of Naples, which saved him more than $28,000 in mooring fees.
Ashton was arrested on the Navy base in Italy and flown to Norfolk for his initial appearance. A preliminary hearing is scheduled for March 4, 2014 in the Southern District of Iowa.
This case was investigated by the NCIS and the Air Force Office of Special Investigations. The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Clifford Cronk of the Southern District of Iowa.
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Civilian Navy Employee Charged with Stealing <br /> More Than $360,000 in Housing BenefitsRead the Press Release
A civilian employee of the U.S. Navy posted at the Capodichino Navy Base near Naples, Italy, was arraigned yesterday in Norfolk, Va., for allegedly obtaining more than $360,000 in housing benefits that he was not entitled to receive.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and United States Attorney Nicholas A. Klinefeldt of the Southern District of Iowa made the announcement.
Steven William Ashton, 41, was charged in a seven-count indictment returned by a grand jury in the Southern District of Iowa on Feb. 19, 2014. He is charged with theft of government funds for obtaining more than $360,000 in housing benefits, called Living Quarters Assistance (LQA), to which he was not entitled. He is also charged with presenting a falsified lease and making false statements in an effort to justify those benefits when confronted by a federal agent from the Naval Criminal Investigative Service (NCIS).
According to court documents, from April 2004 to the present, Ashton has been employed by the Navy as the NATO and Host Nation Programs Manager for the regions of Europe, Africa and Southwest Asia, managing contracts and agreements among the Navy and other countries to support the United States’ military efforts. Because he lived off-base, he was entitled to an LQA allowance to reimburse him for his payments for rent and other housing expenses. But when he allegedly moved in with his future wife and stopped paying rent in November 2005, he continued receiving the rental subsidies even though he was no longer eligible for them. When confronted by an NCIS agent investigating the matter, Ashton allegedly forged a lease in 2013 with his father-in-law – who had died in 2007 – and provided the lease along with false explanations to the NCIS agent.
Ashton is also charged with creating and submitting to the U.S. Navy various fraudulent documents to obtain other benefits. According to the indictment, Ashton created false documents to obtain a Foreigners’ Permit of Stay from the Italian government that allowed him to travel in and out of Italy without a visa and to be tax exempt for wages earned in Italy. He also allegedly created false documents to obtain a Permanent Logistic Support letter that gave Ashton Navy benefits such as purchasing tax-free gas at a savings of more than 50 percent, and a Civilian Access Card that provided him free access to U.S. military facilities world-wide, including use of the tax-free military shopping facilities. In addition, Ashton used fraudulent U.S. Coast Guard documentation purporting to show that Ashton had the licenses needed to moor a boat at discounted rates in the Bay of Naples, which saved him more than $28,000 in mooring fees.
Ashton was arrested on the Navy base in Italy and flown to Norfolk for his initial appearance. A preliminary hearing is scheduled for March 4, 2014 in the Southern District of Iowa.
This case was investigated by the NCIS and the Air Force Office of Special Investigations. The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Clifford Cronk of the Southern District of Iowa.Chinese Nationals Sentenced in Counterfeit Sneaker CaseRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Huang Yue Feng, 33, of Queens, N.Y., and Wang He Bin, 31, of Franklin Square, N.Y., formerly husband and wife, who were convicted of conspiracy to import goods falsely classified, were sentenced to 12 months in jail by U.S. District Court Judge Richard J. Arcara. The defendants also forfeited over $400,000 in cash and property seized during the execution of search warrants at warehouses in the New York City.
Assistant U.S. Attorney John E. Rogowski, who handled the prosecution of this case, stated that Feng and Bin were involved in the importation of counterfeit Nike sneakers from China which were then distributed throughout the United States. The defendants sold the counterfeit products to a co-defendant in New York City, Malik Bazzi. Defendant Bazzi, who was also convicted in this case, then sold the counterfeit sneakers to several individuals, including people in Buffalo and Niagara Falls, who in turn resold the counterfeit products to consumers. Some of the shoes were sold out of the back of vans, at flea markets and in clothing stores.
As a result of wire taps in this case, defendant Bin was recorded taking orders, discussing payments, and directing the delivery of the counterfeit sneakers to defendant Bazzi. Defendant Feng was observed loading sneakers into a van at warehouse locations and then delivering them to defendant Bazzi. AUSA Rogowski, in asking the Court to impose a prison sentence, noted that jail sentences were needed to send a message to those involved in trafficking counterfeit goods that they faced more than mere financial consequences for engaging in their crimes.
The defendants, who were first arrested in connection with this case in September, 2007, are among 23 individuals charged in the case. Twenty-two of the defendants were convicted and one defendant was acquitted after a trial before Judge Arcara in October of 2012.
“Today’s developments bring to a successful conclusion to the largest prosecution involving violations of intellectual property rights in the Western District of New York,” said U.S. Attorney Hochul. “This prosecution is part of the government=s aggressive enforcement of customs laws that protect the investment of manufactures, such as Nike, and also protect consumers who might unwittingly purchase inferior counterfeit goods. During the course of the investigation, over 310,000 pairs of counterfeit Nike sneakers were seized by law enforcement officers. In addition, over $1,000,000 in cash from the sale of the counterfeit product was also seized.”The sentences are the culmination of an investigation on the part of Special Agents of the Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, Special Agent in Charge.
Chicago Woman Sentenced to 13 Years in Federal Prison for Swindling 1,000 Elderly Victims of Cash and Credit CardsRead the Press Release
CHICAGO — A Chicago woman was sentenced today to more than 13 years in federal prison for swindling at least 1,000 elderly victims of cash and credit cards, causing a loss of at least $800,000, over a period of five years. The defendant, TIFFANY HALL, was the mastermind of a scheme that targeted elderly victims, often widowed and living alone, and bilked some of them of their retirement and life savings.
Hall, 30, of Chicago, was sentenced to 159 months in prison and was ordered to pay $328,353 in restitution to more than 70 known, identified victims, by U.S. District Judge Amy J. St. Eve. Hall pleaded guilty to wire fraud and aggravated identity theft in January 2013, and has been in federal custody since she was arrested in early 2011.
Between 2006 and 2011, Hall, whose conduct was described as “ruthless” by Assistant U.S. Attorney Jennie Levin, spent nearly every day contacting victims and obtained cash and/or credit cards. Between 2009 and 2011 alone, Hall stole approximately $300,000 to $400,000 in cash from victims, and she used the stolen money to gamble and to purchase cars, designer bags and shoes, televisions, gift cards, clothes, consumer electronics, and other items. She also used the money to pay bills and expenses for herself and her husband, Lawrence Hall, 33, who was sentenced on Jan. 29 to 10 years in prison for his participation in the fraud scheme.
In pleading guilty, Hall admitted that, in 2006, she began calling victims and falsely telling them that she was a fraud investigator, either with the State of Illinois or a specific bank. She told the victims that their credit cards had been stolen or there was unusual activity on their accounts. After she gained the victims’ trust, she coaxed them to provide her with their credit or debit card numbers and personal identifying information, which she then used to purchase merchandise online and pay expenses for herself and her husband.
Beginning in 2007, Hall began meeting victims in person, asking them to provide her with their actual credit cards. In 2009, Lawrence Hall began recruiting runners to pick up victims’ cards and the Halls paid them in cash or allowed them to use the cards to purchase merchandise for themselves. About the same time, the Halls and their runners also started fleecing victims of their cash in addition to credit and debit cards.
Two other co-defendants were indicted with the Halls. Shana Banks, 30, of Chicago, pleaded guilty and is awaiting sentencing next month. Creassi Harris, 23, of Chicago, has pleaded not guilty and the charges are pending.
The sentence was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Chicago Police Superintendent Garry McCarthy.
Charleston Men Sentenced on Federal Drug ChargesRead the Press Release
St. Louis, MO – ADRIAN LEWIS and MELVIN QUINN, both of Charleston, Missouri, were sentenced on separate unrelated indictments for their distribution of heroin in Mississippi County. They appeared yesterday, February 24th, before United States District Judge Stephen N. Limbaugh, Jr., in Cape Girardeau, MO. Adrian Lewis was sentenced to seven years in prison. Melvin Quinn received a six-year prison sentence.
Both cases were developed by a task force of officers with the Drug Enforcement Administration, Missouri Highway Patrol and local authorities working in Charleston during the spring and summer of 2013. Lewis and Quinn are both repeat federal offenders, having sustained federal drug convictions in 2005 and 2004 respectively. Both men pled guilty last December to use of a communication facility in furtherance of a drug crime.
This case is being investigated by the Drug Enforcement Administration and the Missouri Highway Patrol. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
Cambria County Woman Sentenced to Probation with Home Detention for Marijuana Trafficking SchemeRead the Press Release
JOHNSTOWN, Pa. - A resident of Carrolltown, Pa., has been sentenced in federal court to five years probation, the first 12 months of which must be served by conditions of home confinement, on her conviction of conspiracy to distribute marijuana, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Marguerite G. Lowmaster, 67, of Carrolltown, Pa.
According to information presented to the court, from March 2009 to May 9, 2011, Marguerite G. Lowmaster conspired to distribute and possess with intent to distribute at least 10 kilograms, but less than 20 kilograms, of marijuana. In addition, evidence presented to the Court at the time of Marguerite G. Lowmaster's sentencing reflected that she conspired with George M. Lowmaster and others with the intent to facilitate and promote George M. 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 Marguerite G. Lowmaster. 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 in Marijuana Distribution ConspiracyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Korbel, California, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on February 24, 2014, by U.S. District Judge Karen E. Schreier.
Brett Aaron McFarland, age 29, was sentenced to 60 months in prison, to be followed by 4 years of supervised release.
McFarland agreed to forfeit to the United States all his interest in the proceeds of the sale of real property located in Petrolia, California, which he acquired as a result of his illegal activities.
McFarland was indicted for Conspiracy to Distribute More Than 100 Kilograms of Marijuana and Conspiracy to Commit Money Laundering on September 10, 2013. He pled guilty to the distribution conspiracy on November 12, 2013, and the other charge was dismissed at sentencing.
McFarland joined a conspiracy to illegally distribute marijuana in South Dakota and elsewhere. During his involvement, he grew, harvested, and obtained marijuana, illegally distributed it, caused it to be illegally delivered and distributed, and received payments for it. Marijuana was grown and harvested, among other places, on the real property in California, and then illegally sold. The proceeds of the marijuana sales were used to make payments on the real property.
This case was investigated by the U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in both South Dakota and California, and the Internal Revenue Service, Criminal Investigations. Assistant U.S. Attorney Connie Larson prosecuted the case.
McFarland is to turn himself in to begin his sentence on or before March 13, 2014.
California Man Sentenced in Marijuana Distribution ConspiracyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Korbel, California, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on February 24, 2014, by U.S. District Judge Karen E. Schreier.
Brett Aaron McFarland, age 29, was sentenced to 60 months in prison, to be followed by 4 years of supervised release.
McFarland agreed to forfeit to the United States all his interest in the proceeds of the sale of real property located in Petrolia, California, which he acquired as a result of his illegal activities.
On September 10, 2013, McFarland was indicted for Conspiracy to Distribute More Than 100 Kilograms of Marijuana and Conspiracy to Commit Money Laundering. He pled guilty to the distribution conspiracy charge on November 12, 2013, and the other charge was dismissed at sentencing.
McFarland joined a conspiracy to illegally distribute marijuana in South Dakota and elsewhere. During his involvement, he grew, harvested, and obtained marijuana, illegally distributed it, caused it to be illegally delivered and distributed, and received payments for it. Marijuana was grown and harvested, among other places, on the real property in California, and then illegally sold. The proceeds of the marijuana sales were used to make payments on the real property.
This case was investigated by the U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in both South Dakota and California, and the Internal Revenue Service, Criminal Investigations. Assistant U.S. Attorney Connie Larson prosecuted the case.
McFarland is to turn himself in to begin his sentence on or before March 13, 2014.
Billings Man Sentenced to Prison for Possession of Pipe BombRead the Press Release
The United States Attorney(s Office announced that MITCHELL TODD ROSS was sentenced on February 19, 2014, to a term of 16 months in federal prison with three years of supervised release to follow, before U.S. District Judge Donald W. Molloy.
Ross was sentenced in connection with his guilty plea to possession of a destructive device - a pipe bomb.
In an Offer of Proof filed with the Court, Assistant U.S. Attorney Lori Suek advised the court on November 13th, 2011, at approximately 1:06 am, the Billings Police Department (BPD) stopped on a red 1997 Pontiac Grand Am for not having a license plate lamp. Upon conducting the traffic stop, the driver, later identified as the defendant, Mitchell Todd Ross, failed to comply with police instructions and fled. After a brief foot pursuit, Ross was secured in handcuffs and placed him in the back of a patrol car.
While Ross was escorted to the patrol car, an officer looked inside Ross's car and took pictures of the contents. The items visible within the car included a hard plastic or glass pipe board and a white shirt wrapped in black electrical tape with a green fuse sticking out on the front passenger floor.
Ross's car was searched after he signed a consent form. A BPD bomb team member responded to the scene to determine if the item (suspected pipe bomb) wrapped in a white shirt with black electrical tape and a fuse sticking out of it was safe. Ross told police that a friend, whom he would not identify, approached him the previous day and asked Ross if he could do anything with a pipe bomb. Ross informed the friend he could and claimed the friend informed him the pipe bomb was a dummy. The friend asked Ross if he was interested in the pipe bomb and Ross indicated that he was.
The seized suspected pipe bomb was placed into the BPD explosives bunker. On November 18, 2011, an ATF Special Agent Explosives Enforcement Officer made the suspected pipe bomb safe. The suspected pipe bomb was made by capping the end of a shower head extension tube with a penny and cap, placing powder into the tube, and capping the end. The end without the penny had a round cap and a small hole in it where the green fuse was protruding out of the capped tube. Samples of the powder contained in the tube and the green fuse were collected and, along with the shower-head tube, were sent to the ATF Laboratory for analysis. An ATF Forensic Chemist examined the suspected pipe bomb and concluded that it contained a functional length of green pyrotechnic fuse measuring approximately 1/8 inch in diameter; two nitrate explosive mixtures, pyrotechnic stars and grain hulls; and the remains of a1/2 inch nominal diameter standard 6 inch chrome-plated brass shower arm assembly with a brass nut
US penny to one end of the shower arm effecting closure and the swivel head portion of the shower adapter securing the other end with a 1/8 inch diameter hole - of sufficient size to have accommodated a method of initiation. The ATF Explosives Enforcement Officer, after reviewing the report from the Forensic Chemist, concluded that the materials evaluated were consistent with an improvised explosive weapon; that lighting the fuse would, after a short delay, ignite the explosive filler causing the devise to explode; and that this explosion would produce blast and thermal effects and project fragments at high velocity. The pipe bomb was capable of causing property damage and injury or death to persons near the explosion.
Bernard James Horstman Sentenced on Drug ChargesRead the Press Release
The United States Attorney's Office announced that BERNARD JAMES HORSTMAN was sentenced on February 20, 2014, to a term of 120 months in federal prison with five years of supervised release to follow, before U.S. District Judge Dana L. Christensen.
Horstman was sentenced in connection with his guilty plea to conspiracy to distribute methamphetamine.
In an Offer of Proof filed with the Court, Assistant U.S. Attorney Tara Elliott advised the court that in August of 2012, the Northwest Drug Task Force (NWDTF) received information from several sources that an individual identified only as "BJ" was receiving methamphetamine through the mail and then distributing the methamphetamine throughout Northwest Montana.
Agents received information from a confidential informant who admitted to purchasing 2 grams of methamphetamine from Horstman on or about September 17, 2012. The informant had observed Horstman in possession of approximately 1/4 pound of methamphetamine.
On October 10, 2012, a DCI Agent applied for and received a state search warrant for an intercepted USPS Package addressed to the defendant. When the package was opened, agents discovered approximately 12.6 grams (contained in a small baggie further wrapped in aluminum foil) of methamphetamine located inside a DVD case.
On January 3, 2013 agents searched Horstman's Honda Civic and recovered 65 grams of pure meth. Horstman admitted that the meth was his, that he had purchased it in Fresno, California, and had transported it back to Montana.
The term pure methamphetamine refers to the purity contained in the transacted amount which is usually "cut" with inert ingredients that make the actual product less pure but more profitable as drugs are generally sold based on quantity not quality.
Baton Rouge Man Sentenced to Forty-one Months for Threatening Former United States Attorney Jim LettenRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced that the defendant, GERALD ESTRADE, 57, of Baton Rouge, LA, was sentenced today by U. S. District Judge James J. Brady to a term of imprisonment of 41 months and a three year term of supervised release following his release from federal prison.
ESTRADE previously plead guilty to threatening to kill the former United States Attorney for the Eastern District of Louisiana, James “Jim” Letten, and his family, with the intent to retaliate against him on account of his official duties, in violation of Title 18, United States Code, Section 155(a)(1).
On January 7, 2013, ESTRADE, while a patient in the Baton Rouge General Behavioral Health Unit, advised Baton Rouge General’s Chief of Security, and former BRPD Chief, Jeff LeDuff, that if he was released, he would take all of his remaining money from his bank account, travel to New Orleans, buy a gun, go to Mr. Letten’s house, hide behind a big oak tree in Mr. Letten’s front yard, and kill Mr. Letten and his dog, Rico, in front of Mr. Letten’s daughter. ESTRADE told Chief LeDuff that he wanted to kill Mr. Letten in retaliation for his failure to help him when he reached out to him from prison in 2005.
Chief LeDuff immediately advised former United States Attorney Letten and the FBI of the threat because he believed that Mr. Letten’s life was in serious danger.
Later that same day, ESTRADE was interviewed by two FBI agents. ESTRADE repeatedly stated that his intent was to travel to New Orleans and kill former United States Attorney Letten and his family. ESTRADE also advised that he had gone to Mr. Letten’s residence in 2001 and spoke to Mr. Letten briefly in his yard. ESTRADE further advised that he had sent a letter threatening Mr. Letten to the FBI in 2005 or 2006, while he was incarcerated in Allan Correctional Center. ESTRADE stated that after he sent this letter, FBI agents came to the prison to interview him and thereafter he experienced a lot of problems. ESTRADE advised that he intended to kill Mr. Letten in retaliation for the problems that Mr. Letten caused him as a result of the 2005 letter.
U.S. Attorney Walt Green stated, “All threats against public officials will be thoroughly investigated and vigorously prosecuted by this office to the full extent of the law. Our public officials should not have to live in fear for doing their jobs.”
“We thank the FBI and the U.S. Attorney’s Office in the Middle District of Louisiana for their outstanding efforts in prosecuting this case,” stated Kenneth Allen Polite, Jr., U.S. Attorney for the Eastern District of Louisiana. “Threats against public servants in an effort to impede the administration of justice cannot and will not be tolerated.”
FBI SAC Michael J. Anderson stated, “Threats of such violence are never tolerated, but those threats that could interfere with vital law enforcement functions must be swiftly addressed to prevent any chilling effects on those charged with carrying out their public safety duties.”
This investigation was handled by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Jennifer M. Kleinpeter, who serves as a Deputy Criminal Chief, and Assistant United States Attorney J. Christopher Dippel, Jr.
20 Individuals Indicted and Arrested for False Statements in Loan Applications and Bank FraudRead the Press Release
San Juan, Puerto Rico –Twenty individuals, including ringleaders, straw buyers, sellers, real estate agents, and an accountant have been charged in a 11-count indictment unsealed today and returned by a grand jury in San Juan, Puerto Rico on February 12, 2014, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico announced today. These charges stem from a scheme used by the defendants to obtain money from mortgage lending institutions. The investigation was conducted by the Department of Homeland Security (HSI), along with Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS) and the Housing and Urban Development- Office of Inspector General (HUD-OIG).
The defendants are charged with bank fraud and making false statements in loan applications. The investigation revealed that as part of the scheme and artifice to defraud, the defendants, through straw buyers, would purchase properties by obtaining mortgage loans from federally insured financial institutions in amounts substantially exceeding the selling price of the properties. The excess amount of the loans would be “kickbacked” to the defendants, and then they would default on payment of the monthly mortgage premiums.
In order to ensure the approval of the loans, the participants would create and submit false supporting documentation along with the loan application, i.e.: financial statements, bank statements, employment verification letters, tax returns, among others.
According to the indictment, the defendants aiding and abetting each other, knowingly made or caused to be made material false statements to various financial institutions for the purpose of influencing the action of other financial institutions, in connection with a loan application to obtain mortgage loans. The financial institutions are: Banco Santander de PR, Doral Bank, Banco Bilbao Vizcaya Argentaria of PR, and RG Premier Bank of PR.
The defendants are: Lina Prestol-Rodríguez, José Santana-Aponte, Carlos Vélez-De Jesús, Ángel Torres-Maymi, Brenda Mercado-Rodríguez, Marilyn Meléndez-Prestol, Johanna Rivera-Benítez, Carlos Solis-Guzmàn, José Luis Negrón-Molina, Alexander Cifuentes-Ramos, Carlos Ortiz-Dàvila, Eduardo Cora-Colón, Gabriel Branda-Collazo, Ricardo Santiago-Verdecía, Marco Antonio Ambert-Torres, José Rafael Mora-Nazario, Angélica Álvarez-Castañeda, Sheila Benabe-Gonzàlez, Adelinzy Grace-Vàzquez, and Awilda Díaz-Cabrera.
Defendant Lina Prestol-Rodríguez, the leader of the fraudulent schemes, is also charged with conspiracy to commit money laundering. It was the object of the conspiracy that Prestol-Rodríguez and her co-defendants would engage in a series of financial and monetary transactions, some in excess of $10,000.00 in criminally derived property, in order to promote the carrying-on and concealment of the bank fraud and false statements in loan applications in order to unjustly enrich themselves and eliminate existing debt obligations.
“This indictment demonstrates the commitment of the Department of Justice and the U.S. Attorney’s Office in Puerto Rico to ensure the integrity of the financial and banking system,” said Rosa Emilia Rodríguez Vélez, U.S. Attorney for the District of Puerto Rico. “The investigation and prosecution of financial crimes is one of the top priorities of the U.S. Department of Justice. Mortgage fraud is a serious issue for the banking industry and for homeowners who helplessly watch as their property values decrease, and foreclosure signs and abandoned properties take over their neighborhoods.”
“These arrests are a reflection of the success that comes when federal, state and local law enforcement agencies work together to target criminal organizations and individuals in Puerto Rico,” said Ángel Meléndez, special agent in charge of HSI San Juan. “At HSI, we follow the money trail to identify, disrupt and dismantle the most complicated financial schemes and seize criminal assets. We will continue to aggressively investigate fraudulent financial schemes that put in jeopardy the integrity of our financial system and are often a gateway to further criminal activity.”
Lester Fernàndez, Special Agent in Charge of this Region for the US Department of Housing and Urban Development – Office of Inspector General stated: “It is always disturbing when industry professionals who have fiduciary responsibilities and are expected to act as honest brokers exploit federally funded programs. HUD-OIG will continue to partner with prosecutors, law enforcement and audit agencies to aggressively pursue those engaged in activities that harm federal housing programs.”Carlos Cases, Special Agent in Charge of the FBI said: “Mortgage fraud isn’t a victimless crime. It threatens the financial health of our communities, and leaves lenders burdened with bad loans and neighborhoods with abandoned and deteriorating property. FBI will continue to utilize its financial investigative expertise to aggressively investigate criminal activities that attack our financial system.”
IRS Special Agent in Charge José A. Gonzàlez stated, “The IRS Criminal Investigation is committed to employing its financial expertise to investigate and trace the flow of the monies derived from financial violations including Mortgage Fraud. Rest assured that those willing to participate and profit from these illegal activities will be deprived of their ill-gotten gains and brought to justice.”
This case is being prosecuted by Senior Litigation Counsel Scott Anderson. The case was investigated by ICE-HSI, HUD-OIG, FBI, and IRS.
The maximum penalties for these offenses are 30 years of imprisonment, and fines up to $1 million. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.
24 February 2014
Wolcott Man Admits Impersonating Federal Officer, Falsifying Military Discharge CertificateRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BRUCE BROWN, also known as “Bruce Browne,” “Spenser Brown,” “Spenser Browne,” “Agent Brice” and “Detective Brice,” 47, of Wolcott, waived his right to indictment and pleaded guilty today in Bridgeport federal court to impersonating a federal officer and falsifying a military discharge certificate.
According to court documents and statements made in open court, on August 8, 2013, BROWN, operating a Ford Crown Victoria equipped to resemble a police vehicle, entered a shoreline residential community in Old Lyme. BROWN was wearing a bullet proof tactical vest with police insignia and was carrying a weapon and handcuffs. When approached by an Old Lyme resident, Brown stated that he was a special agent of the United States Coast Guard and was sent there to observe a Coast Guard vessel that was in the area.
While in the Old Lyme community, BROWN’s fiancée asked a friend to take BROWN out on the friend’s boat. As the boat was backing out of the slip, BROWN informed the boat owner that “I am commandeering your boat. Your boat is now a U.S. Coast Guard vessel.” BROWN then directed the owner to pilot his boat toward other vessels and at BROWN’s direction, the owner approached two boats operated by private citizens. In each instance, BROWN required the boat operators to produce their boating licenses.
BROWN then instructed the boat owner to approach an individual who was operating a jet ski. Again, BROWN asked the operator for his license. When the operator could not produce it, BROWN told him to return to the dock. The boat owner took BROWN back to the dock and then observed BROWN enter what appeared to be a police car and drive off with the emergency lights flashing. BROWN drove his car to the boat launch where the jet ski operator was removing his craft from the water. He required the jet ski operator to obtain his license. After the owner showed BROWN the license, he was allowed to leave.
Law enforcement officers subsequently located and questioned BROWN in the Old Lyme residential community. BROWN initially told them that he was a law enforcement officer sent by the U.S. Coast Guard to photograph a Coast Guard cutter that was in the area, but eventually admitted that he was not an officer. A search of BROWN’s car revealed numerous law enforcement items, including a bulletproof/tactical vest with police insignia and a TSA badge, multiple sets of handcuffs, three handguns, loaded gun magazines, significant quantities of ammunition including hollow point bullets, a knife, and a police tactical baton. BROWN was arrested on state charges at that time.
While released on bond following his arrest, BROWN took four other law enforcement badges in his possession and threw them into the Chestnut Hill Reservoir in Wolcott. BROWN subsequently informed federal authorities of his actions and, on September 27, 2013, a dive team from the Connecticut State Police recovered the badges.
Further investigation of this matter revealed that in March 2013, BROWN offered to have a “scared straight” conversation with the sons of an acquaintance who believed BROWN was a federal law enforcement officer with experience in narcotics matters. Brown arrived at his acquaintance’s home in a Crown Victoria that resembled a police vehicle, displayed a badge and had a holstered gun and handcuffs secured on his belt. BROWN individually introduced himself to the minors as “Agent Brice” and “Detective Brice.” After some initial conversation, BROWN escorted the minors up to their rooms. Their mother tried to follow, but was ordered by BROWN to stay downstairs. She heard raised voices and later learned from her son that BROWN had drawn his gun and handcuffed her son while BROWN searched his room.
Eventually, BROWN walked downstairs with one of the minors and entered the garage. BROWN removed the weapon from his holster and pointed it in proximity of the minor as they prepared to enter the garage. BROWN returned with a backpack that contained about $200, a small amount of what appeared to be marijuana and a pipe. After confirming with the mother that the money was from a legitimate source, BROWN gave her the money and took the backpack and all of its contents. While in the house, BROWN indicated that he had conducted surveillance on the boys in the prior week and related several incidents to them that seemed to authenticate that claim.
The investigation further revealed that in April 2002, BROWN was discharged from the U.S. Coast Guard “under other than honorable conditions.” In February 2013, BROWN submitted a Pistol Permit Application to the Connecticut State Police Special Licensing and Firearms Unit. In the military history section of the application, BROWN stated that he had not been discharged from the United States Armed Forces with less than an Honorable Discharge. The form required BROWN to attach a copy of his Department of Defense Discharge Form, DD-214. In box 24 of his DD-214, BROWN obliterated the words “under other than,” leaving the form to appear as if he had been discharged under “honorable conditions.”
BROWN pleaded guilty to two counts of impersonating a federal law enforcement officer, which carries a maximum term of imprisonment of three years on both counts, and one count of falsifying a military discharge certificate, which carries a maximum term of imprisonment of one year. He is scheduled to be sentenced by U.S. District Judge Stefan R. Underhill on May 19, 2014.
This matter is being investigated by the Department of Homeland Security – Office of Inspector General, Coast Guard Investigative Service, Connecticut State Police, and the Wolcott, Bristol and Southington Police Departments. The case is being prosecuted by Assistant U.S. Attorney Ray Miller.
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(203) 821-3722 [email protected]Wisconsin Man Sentenced for Possessing Child PornographyRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on Feb. 24, 2014, Robert Carey Evans, 58, of Waukesha, Wis., was sentenced by U.S. District Judge Ralph R. Erickson to 10 years in prison on 14 counts of possession of materials containing child pornography. Judge Erickson ordered Evans to pay a $1400 special assessment to the Crime Victim’s Fund and register as a sex offender for life. Evans was found guilty by a 12 person jury on Oct. 25, 2013.
This case came to the attention of law enforcement after a North Dakota Bureau of Criminal Investigations special agent assigned to the Internet Crimes Against Children Task Force discovered two computers geographically located in North Dakota that were sharing child pornography in a peer-to-peer network. A search warrant was issued for Evan’s Fargo apartment where task force officers seized more than 13 hard drives and 43 DVDs containing child pornography. A subsequent forensic examination of this media revealed more than 22,000 images and nearly 1400 videos of child pornography.
The case was investigated by Homeland Security Investigations, North Dakota Bureau of Criminal Investigation and the Fargo Police Department.
Assistant U.S. Attorney Jennifer Klemetsrud Puhl prosecuted the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.Wichita Maintenance Technician Sentenced for Stealing Equipment from EmployersRead the Press Release
WICHITA, KAN. – A Wichita maintenance technician was sentenced Monday to 16 months in federal prison for making more than $150,000 by selling equipment he stole from the companies where he worked. After completing his sentence he will serve three years on supervised release.
Mark A. Lankford, 45, Wichita, Kan., pleaded guilty in U.S. District Court in Wichita to two counts of wire fraud. In his plea, he admitted stealing equipment from two Wichita companies where he worked, Spirit Aerosystems and Fiber Glass Systems LP.
Lankford was employed as an equipment maintenance technician for Spirit Aerosystems in Wichita from October 2010 to Sept. 5, 2011. During that time he stole computer parts from Spirit with a total value of more than $466,559. He used email to offer stolen parts for sale mainly to individuals in Owing Mills, Maryland. On April 25, 2011, he offered for sale an Allen Bradley model 1785-LT programmable controller, an Allen Bradley model 1771-DLC, an Allen Bradley model 1772-LXP, an Allen Bradley model 1772-TB2 and a Siemens model 6FC5303-OAB20-1AAO, all stolen from Spirit. Law enforcement officers recovered items worth approximately $454,435, leaving a remaining loss of more than $12,123.
From March 2008 to Oct 2010, Lankford worked as a maintenance mechanic for Fiber Glass Systems in Wichita. He stole computer parts from the company with a total value of more than $41,268. He offered stolen parts for sale on eBay including an Allen Bradley Controllogix Processor 7 slot system stolen from the company.
Lankford obtained a total of more than $154,824 from selling stolen parts.
Grissom commended the FBI and Assistant U.S. Attorney Jason Hart for their work on the case.Wasilla Man Indicted for Sexual Exploitation of ChildrenRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a Wasilla man was arraigned in Federal Court in Anchorage before Magistrate Judge John D. Roberts on two counts of sexual exploitation of children: advertising and distributing child pornography.
Daniel Clinton Piaskowski, a 33-year-old man from Wasilla, Alaska, was indicted by a federal grand jury, and arrested on a warrant on February 21, 2014. The indictment comes after an investigation led by the Federal Bureau of Investigation.
The FBI’s investigation of Piaskowski is ongoing, and the FBI is seeking to determine if Piaskowski had inappropriate contact with children. Anyone with relevant information is asked to contact the FBI's Anchorage Field Office at (907) 276-4441.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Washington County Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
ALBANY, NEW YORK – CHRISTOPHER J. WHITE, age 29, of Whitehall, New York, pled guilty today in Albany before United States District Judge Mae A. D’Agostino to receipt of child pornography, announced United States Attorney Richard S. Hartunian, Joseph D’Amico, Superintendent of the New York State Police, and Andrew Vale, Special Agent in Charge, Federal Bureau of Investigation. WHITE, who was detained pending his sentencing, faces at least fifteen years of imprisonment and up to forty years of imprisonment.
As part of his guilty plea, WHITE admitted that, following his 2010 Attempted Sexual Abuse in the 1st Degree conviction in Saratoga County Court, he used the Internet to search for, receive, and view images of child pornography. Sentencing is scheduled for June 9, 2014, in Albany, New York.
This case was investigated by the New York State Police and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
United States Attorney Announces Charges Against Investor Who Defrauded Carmel, Indiana VictimsRead the Press Release
Ohio man operated a fictitious investment company which bilked over $650,000 from investors
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced today that an Ohio man has been charged with devising a scheme to fraudulently obtain money from investors in order to enrich himself by using his position as an investment advisor broker to solicit investors with promises that money they invested would be used for the purchase of investment and insurance products.
David Bridges, 37, Cincinnati, OH, had his initial appearance in court today in front of a federal magistrate judge where he waived indictment and indicated his desire to enter a plea of guilty. The losses incurred by all victims total over $650,000. Several of the victims of this scheme have been long-time residents of Hamilton County, specifically, Carmel, Indiana.
This matter began in November, 2012, when Carmel Police were notified of alleged irregularities. Carmel Police then contacted representatives of the Federal Bureau of Investigation, who have led the investigation since that time.
“The United States Attorney’s Office will aggressively pursue the prosecution of those individuals who bilk Hoosier out of their hard-earned retirement funds through fraud,” said Hogsett. “Stealing the hard-earned money that Hoosiers plan to retire on is inexcusable.”
It is alleged that Bridges created a bogus company, SD Capital LLC, to convince investors to purchase annuity contracts at SD Capital and/or roll over their IRA accounts maintained elsewhere to a purported IRA account managed by SD Capital. It was further part of the alleged scheme that the investors, in reliance on the advice of Bridges, wrote checks to SD Capital for the investment products. Bridges deposited these checks into his own bank account.
It is further alleged Bridges represented to his investors that he had purchased the investment products with their money. However, Bridges instead used all of the money he received for the Investment Products for his personal benefit, including the payment of personal expenses incurred through gambling and purchases at grocery stores, gas stations, and retail shops, in a manner materially contrary to the representations and promises he had made to the investors.
Assistant Special Agent in Charge of the Indianapolis FBI Office, Kevin P. Lyons said, “The FBI is dedicated to stopping white collar crime and protecting victims of investment fraud."
MaryAnn T Mindrum, who is prosecuting the case for the government said, Bridges could face up to 20 years in prison and a fine of up to 250,000. Bridges remains in the custody of the United States Marshal Service. No future court date has been set.
This case is the result of a collaborative investigation by the FBI and Carmel Police Department.
An Information or Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Two Women Plead Guilty to Structuring Cash TransactionsRead the Press Release
FRESNO, Calif. — Raeb Chou, of Modesto, pleaded guilty today to one count of conspiracy to structure cash transactions and one count of structuring, and co-defendant Chantha A. Chim, of Murietta, pleaded guilty today to one count of structuring, United States Attorney Benjamin B. Wagner announced.
According to court documents, Chou, Chim and co-conspirators obtained prescriptions for oxycodone and hydrocodone from pharmacies in Modesto, and then transported and mailed the pills to Washington and other states for distribution on the black market. In addition, Chou and co-defendant Phally Thach opened bank accounts into which co-conspirators deposited the cash proceeds of the oxycodone and hydrocodone sales in amounts of $10,000 or less.
After receiving the cash deposits from co-conspirators, Chou and Chim withdrew the cash from those accounts in amounts of $10,000 or less to attempt to prevent Currency Transactions Reports from being filed by the banks on her cash deposits. Currency Transactions Reports are reports prepared by financial institutions for any transactions involving more than $10,000 in cash. These reports are filed with the Department of Treasury and are made available to law enforcement. Chou withdrew more than $120,000 cash proceeds of drug distribution from her bank accounts; Chim withdrew more than $70,000 cash proceeds of drug distribution from her bank accounts.
Both defendants are scheduled to be sentenced by Judge Anthony W. Ishii on May 5, 2014. Chou faces a maximum statutory penalty of five years in prison and a $250,000 fine for conspiracy and a maximum statutory penalty of 10 years in prison and a $500,000 fine for aggravated structuring. Chim faces a maximum statutory penalty of five years in prison and a $250,000 fine for structuring. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act. This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multijurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.
Two Former Milledgeville Credit Union Employees Plead Guilty to EmbezzlementRead the Press Release
ROCKFORD — Two former employees of Milledgeville Community Credit Union, have pleaded guilty in separate federal cases to embezzling money from Milledgeville Community Credit Union, in Milledgeville, Ill. KIMBERLY KENT, 53, who was also a former Treasurer of Wysox Township, pleaded guilty in federal court today, and KELSEY SELMAN, 37, pleaded guilty on Jan. 28, 2014.
According to Kent’s written plea agreement, from October 2005 through February 2012, Kent embezzled approximately $219,600 from Milledgeville Community Credit Union, where she was the manager and responsible for supervising other employees. Kent was also responsible for her own cash drawer and for handling various transactions on accounts, including the deposit and withdrawal of funds to and from customers’ accounts. As stated in the plea agreement, to conceal her embezzlement, Kent created fictitious loans using the names of family members and fictitious certificates of deposit. In 2009, Kent was elected treasurer of Wysox Township. Kent admitted that in August 2010, in her capacity as treasurer of Wysox Township, she used funds from Wysox Township’s account at Milledgeville Community Credit Union to cover her embezzlement. Kent used the money she embezzled for personal purposes. The deposits of the credit union were insured by the National Credit Union Administration Board.
In Selman’s written plea agreement, Selman admitted that from 2007 through February 2012, she embezzled approximately $100,975.74 from Milledgeville Community Credit Union. Selman worked as a teller for the credit union handling deposits and withdrawals on accounts, including her own credit union account. According to the plea agreement, Selman repeatedly took money over that period of time, using the credit union’s computer system to apply credits to her personal account that did not have a corresponding deposit. As a result, the credit union’s records falsely reflected that Selman’s cash drawer increased by an amount to offset the deposit into her account. After she credited the money into her account, Selman used the money she embezzled for personal purposes.
Kent and Selman each face a maximum sentence of 30 years’ imprisonment, a term of supervised release of up to 5 years following imprisonment, and a fine of up to $1 million. Each defendant has repaid Milledgeville Community Credit Union for the full amount of the loss. Sentencing for Kent is set for June 2, 2014, at 2:30 p.m. Sentencing for Selman is set for May 7, 2014, at 2:30 p.m.
The guilty pleas were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.
Kent Plea Agreement
Selman Plea AgreementTwo Defendants Convicted of Conspiracy to Import HeroinRead the Press Release
Febrary 24, 2014ALEXANDRIA, Va. – Kenia Verges, 27, and Alicia Garcia Rivera, 47, of Providence, Rhode Island, were convicted today by a federal jury of participating in a conspiracy to import heroin into the Unites States.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Scot R. Rittenberg, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Washington, made the announcement after the verdict was accepted by United States District Judge James. C. Cacheris.Verges and Garcia Rivera each face a maximum penalty of twenty years in prison when they are sentenced on May 29, 2014.
Verges and Garcia Rivera were indicted on Nov. 14, 2013, by a federal grand jury on conspiracy to import heroin into the United States. According to court records and evidence presented at trial, the defendants, who are mother and daughter, were recruited by an international heroin cartel headed by a violent kingpin who recently was apprehended in Guatemala on drug charges. As part of the cartel’s scheme, the defendants each hid approximately two kilograms of heroin in seemingly innocent packaging for foodstuffs, which the defendants smuggled in their luggage onto commercial airline flights from Guatemala into the United States.
Several members of the cartel smuggled or attempted to smuggle multiple kilograms of heroin through Dulles International Airport in the Eastern District of Virginia, as well as through New York’s John F. Kennedy International Airport and Chicago O’Hare International Airport. In addition, the cartel’s managers in the United States wired and transferred millions of dollars in drug proceeds to the kingpin in Guatemala.
This case was investigated by HSI Washington. Assistant United States Attorney Gene Rossi and Special Assistant United States Attorney Edward Reilly are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Twenty-Eight Members and Associates of Paterson Bloods Street Gang Charged in Manhattan Federal Court with Distributing Heroin, Crack Cocaine, and Powder Cocaine, and with Firearms OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Aaron T. Ford, the Special Agent-in-Charge of the Newark Field Office of the Federal Bureau of Investigation (“FBI”), William Fraher, the Acting Chief of Police of the Paterson Police Department, and Gary F. Giardina, the Chief of Police of the Clifton Police Department, today announced the unsealing of a superseding indictment charging 28 members and associates of the Bloods street gang operating in Passaic County, New Jersey, principally in the city of Paterson, with distribution and possession with the intent to distribute heroin, “crack” cocaine, and powder cocaine. The indictment also charges three of the defendants with brandishing firearms in furtherance of drug trafficking activity, and with being felons unlawfully in possession of firearms.
Of the 28 defendants named in the Superseding Indictment, nine were taken into custody in a weekend sweep. Those nine defendants were presented in Manhattan federal court this afternoon before U.S. Magistrate Judge Debra Freeman and detained. Five other defendants are presently detained in state custody on unrelated charges, and will be writted into federal custody. One defendant, HAKIM LOWERY, remains at large. The other 13 defendants were arrested on earlier occasions on the underlying indictments, and all remain detained.
Manhattan U.S. Attorney Preet Bharara said: “Once again we see the convergence of drugs, guns and violence that plagues neighborhoods, threatens their inhabitants, and spreads potentially lethal narcotics from city to city and across state lines. To keep our neighborhoods free of illegal drugs and gang violence, we will continue to work closely with our local law enforcement partners to vigorously enforce federal drug and firearms laws.”
FBI Special Agent-in-Charge Aaron T. Ford said: “Dismantling violent gangs is a continuing priority for the FBI. Our efforts to address gang violence are not new, but we are working with our partners with increased manpower and increased urgency to address current circumstances. Today’s arrests and charges are the result of a successful, long term investigation conducted by the FBI, and the Paterson and Clifton Police Departments.”
Paterson Police Department Acting Chief William Fraher said: “It is critically important for cities like Paterson to leverage their existing collaborative relationships with federal and local law enforcement to reduce not only the actual violence in our communities, but also reducing the perception of fear which can be just as important.”
Clifton Police Department Chief Gary F. Giardina said: “Problems faced by law enforcement do not stop at the city borders. What is one city’s problem most likely is the next city’s and at times overlaps into the next state. It is for these reasons that it is imperative that agencies work in partnership to be successful. In this case Clifton Police worked in partnership with the Paterson Police and FBI in order to bring this investigation to a successful conclusion.”
According to the allegations in the Superseding Indictment unsealed today in Manhattan federal court:
Various “sets” of the Bloods, particularly the Fruit Town Brims and Sex Money Murder, among others, operated in Paterson, often coordinating, collaborating, and working together (defined in the Indictment as the “Paterson Bloods”). Ranking members of the Paterson Bloods would often meet to resolve disputes between their respective “soldier” members of the sets, and could direct punishment against non-members. Among these punishments were that individuals were to be assaulted or killed by members of the Paterson Bloods.
The Paterson Bloods operated the drug markets in certain central locations in Paterson, New Jersey, including, in particular: North Main Street from East Main Street to Jefferson Street (an area known as “The Main”); Graham Avenue/Rosa Parks Boulevard from Lyon Street to Franklin Street (“The Boulevard”); Graham Avenue/Rosa Parks Boulevard from 12th Avenue to Hamilton Avenue; 12th Avenue from East 22nd Street to East 24th Street; 10th Avenue from East 26th Street to East 30th Street; Governor Street from Graham Avenue to Summer Street (“Up the Hill”); and Park Avenue from Madison Avenue to East 16th Street. Members of the Paterson Bloods were permitted to sell heroin and “crack” cocaine in these areas. Generally, non-members, outsiders, and rival narcotics dealers were prohibited or prevented from distributing narcotics in areas controlled by the Paterson Bloods. Certain individuals – such as people who had grown up in areas controlled by the Paterson Bloods, people of neutral gang or neighborhood group affiliation, or marijuana dealers who often sold to members of the Paterson Bloods – were permitted to distribute narcotics in areas controlled by the Paterson Bloods, but did so without the protection of the members of the Paterson Bloods, and at the risk of being robbed by members of the gang. For example, on June 17, 2013, a drug dispute broke out in the area of 12th Avenue and 22nd Street, during which the defendant RACHAUN PARKER, a member of the Fruit Town Brims set of the Bloods, assisted an individual who was considered a “neutral” from his neighborhood. Members of the Fruit Town Brims, including defendants HAKIM LOWERY and JAMAR EDWARDS, violently beat PARKER for violating the rules of the set.
Members of the Paterson Bloods and their associates committed and conspired, attempted, and threatened to commit acts of violence to protect and expand their drug trafficking operations, and to protect fellow members of the gang. These acts included beatings, stabbings, and shootings intended to prevent people not affiliated with the Paterson Bloods from distributing narcotics in areas controlled by the gang, or to dissuade members of rival gangs, such as the Latin Kings, from encroaching on territory controlled by the Paterson Bloods.
Members of the charged narcotics-distribution conspiracy agreed to possess and distribute heroin, “crack” cocaine, and cocaine powder in the Bronx, Manhattan, and New Jersey. On at least two occasions, certain defendants, armed with loaded guns, delivered what they believed to be approximately one kilogram of cocaine to an address in the Bronx in return for delivery fees.
Charts identifying the defendants, the charges, and the maximum penalties they face, as well as their ages and residences, are attached to this release. The case is assigned to U.S. District Judge Laura Taylor Swain. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI, the Paterson Police Department, and the Clifton Police Department. The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force program, and it combined the resources and expertise of its member federal agencies in cooperation with local law enforcement.
The Office’s Violent Crimes Unit is overseeing the case. Assistant U.S. Attorneys Justina L. Geraci and Michael D. Maimin are in charge of the prosecution. Assistant U.S. Attorney Carolina A. Fornos is in charge of the asset forfeiture components of the case.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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U.S. v. Brandon, Fields et al. S3 Indictment
Three Plead Guilty to Bank Secrecy Act Violations in Connection with Check Cashing SchemeRead the Press Release
Three men have pleaded guilty in Brooklyn, N.Y., for their roles in a check cashing scheme designed to evade anti-money laundering reporting requirements, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and United States Attorney Loretta E. Lynch of the Eastern District of New York.
Robert Petrosyants, 32, and his twin brother Zhan Petrosyants, 32, both of Fort Lee, N.J., pleaded guilty today before United States District Judge Frederic Block at the federal courthouse in Brooklyn to conspiring to violate the Bank Secrecy Act by causing the filing of false Currency Transaction Reports (CTRs) for cash transactions in excess of $10,000. On Feb. 21, 2014, Lasha Goletiani, 34, of Brooklyn, pleaded guilty to the same charge. They each face a maximum penalty of five years in prison at sentencing, which will be determined at a later date.
According to court filings and facts presented during the plea proceedings, the Petrosyants twins operated medical billing companies, including DJR Capital Inc., formerly located at 45 Main Street in the DUMBO section of Brooklyn. Those billing companies filed no-fault accident claims with insurance companies on behalf of medical clinics and equipment providers. Upon receipt of payment from the insurance companies in settlement of the claims, the conspirators drew checks payable to a complex web of shell companies. These shell companies appeared to be health care related but in fact did no legitimate business and were incorporated in the names of students who had received special short-term visas to study in the United States. The checks were then cashed by Goletiani and Zhan Petrosyants at Belair Payroll Services Inc., a Flushing-based check cashing business.
Belair and its owner, Craig Panzera, pleaded guilty in November 2013 to failing to maintain an effective anti-money laundering program and agreed to forfeit over $3.2 million.
According to court documents, Goletiani and Zhan Petrosyants provided false names to Belair when cashing checks and caused Belair to file CTRs stating that the shell companies or their nominee owners received the cash. Goletiani and Zhan Petrosyants received all of the cash from checks in the names of the shell companies. At the time that many of these transactions occurred, the nominee shell company owners were not even in the country when Goletiani and Zhan Petrosyants were cashing checks in their names.
Under the Bank Secrecy Act, financial institutions, including check cashers, are required to file a CTR with the Department of the Treasury for any transaction involving more than $10,000 in currency on a single day. As part of the CTR, the check casher is required to verify and accurately record the name and address of the individual who conducted the currency transaction and the individual on whose behalf the transaction was conducted, as well as the amount and date of the transaction.
Goletiani and Zhan Petrosyants pleaded guilty to a second superseding indictment filed on Nov. 6, 2013, charging them with conspiring to cause Belair to file false CTRs. Robert Petrosyants pleaded guilty to a separate information charging the same conspiracy.
The investigation was conducted by U.S. Immigration and Customs Enforcement, Homeland Security Investigations and the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Trial Attorneys Kevin G. Mosley, J. Randall Warden and Claiborne Porter of the Money Laundering and Bank Integrity Unit of the Criminal Division’s Asset Forfeiture and Money Laundering Section, Trial Attorney Darrin McCullough of AFMLS’s Forfeiture Unit and Assistant U.S. Attorney Patricia Notopoulos of the Eastern District of New York.
The Money Laundering and Bank Integrity Unit investigates and prosecutes complex, multi-district and international criminal cases involving financial institutions and individuals who violate the money laundering statutes, the Bank Secrecy Act and other related statutes. The unit’s prosecutions generally focus on three types of violators: financial institutions, including their officers, managers and employees, whose actions threaten the integrity of the individual institution or the wider financial system; professional money launderers and gatekeepers who provide their services to serious criminal organizations; and individuals and entities engaged in using the latest and most sophisticated money laundering techniques and tools.
St. Leonard’s Man Pleads Guilty to Sexually Exploiting A Minor to Produce PornographyRead the Press Release
Took 24 Sexually Explicit Pictures of a Prepubescent Girl While She Slept, or Nude in a Bathtub
Greenbelt, Maryland – David Wayne Sweet, Jr., age 24, of St. Leonard, Maryland pleaded guilty today to sexually exploiting a minor to produce child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Calvert County Sheriff Mike Evans; and Calvert County State’s Attorney Laura Martin.
According to his plea agreement, on September 19, 2013, the Calvert County Sheriff’s Drug Enforcement Unit executed a search warrant at Sweet’s residence based on alleged drug violations. Sweet’s cell phone was seized. A subsequent review of the phone revealed 24 sexually explicit images of a prepubescent girl taken between June and September 2013, including pictures of the victim nude in a bathtub. Sweet had deleted the pictures, but law enforcement officials recovered all of the images.
Sweet was arrested on September 27, 2013. Sweet admitted that he inappropriately touched the victim while she was sleeping and took the photos.
As part of his plea agreement, Sweet must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Sweet and the government have agreed that if the Court accepts the plea agreement, Sweet will be sentenced to 20 years in prison. U.S. District Judge Roger W. Titus has scheduled sentencing for June 23, 2014 at 11:00 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the HSI Baltimore, Calvert County Sheriff’s Office and Calvert County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi O’Malley, who prosecuted the case.
Southeastern Connecticut Heroin Dealer Sentenced to 46 Months in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that EFRAIN HERNANDEZ VASQUEZ, known as “Frao,” 38, of Groton, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 46 months of imprisonment, followed by four years of supervised release, for distributing heroin.
In early 2012, Homeland Security Investigations (“HSI”), the U.S. Secret Service and the New London Police Department initiated an investigation to combat the large-scale trafficking of heroin and cocaine from the Dominican Republic and Puerto Rico into and around southeastern Connecticut.
According to court documents and statements made in court, on multiple occasions in early 2013, HERNANDEZ VASQUEZ was intercepted over a court-authorized wiretap ordering five-gram quantities of heroin from his drug supplier, Luis Ariel Capellan Maldonado, for distribution purposes.
HERNANDEZ VASQUEZ has been incarcerated since February 2013. On December 2, 2013, he pleaded guilty to one count of conspiracy to possess with the intent to distribute heroin.
More than 100 individuals have been charged with federal and state offenses as a result of this investigation.
Capellan Maldonado has pleaded guilty and awaits sentencing.
This matter is being investigated by Homeland Security Investigations; U.S. Secret Service; U.S. Postal Inspection Service; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection, Office of Air and Marine; Connecticut State Police; New London Police Department, Norwich Police Department, Waterford Police Department, Groton Town Police Department, East Lyme Police Department and Putnam Police Department. The United States Marshals Service; ICE Enforcement and Removal Operations; Drug Enforcement Administration; HSI Assistant Attaché, Santo Domingo, Dominican Republic; HSI Arecibo, Puerto Rico Resident Office; Internal Revenue Service – Criminal Investigation; Connecticut Department of Correction, Parole and Community Services; and the Groton City, Willimantic, New Haven and Bristol Police Departments have provided valuable assistance to the investigation.
The federal case is being prosecuted by Assistant U.S. Attorneys Alina P. Reynolds, Sarah P. Karwan and Henry K. Kopel. The state cases are being prosecuted by the State’s Attorney for the New London Judicial District and Senior Assistant State’s Attorneys Paul Narducci and Stephen Carney.
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(203) 821-3722 [email protected]Sophia Monique Zayas Pleads Guilty to Child Abuse Resulting in Great Bodily Injury and Subsequent Death of InfantRead the Press Release
LAS CRUCES – Sophia Monique Zayas, 32, pleaded guilty late this afternoon in Las Cruces federal court to a felony information charging her with child abuse resulting in great bodily injury, announced Acting U.S. Attorney Steven C. Yarbrough, Special Agent Carol K.O. Lee of the Albuquerque Division of the FBI, and Acting Special Agent in Charge Gregory Harper of the Air Force Office of Special Investigations.
Sophia Zayas, 32, and her husband Peter John Zayas, 29, were arrested in April 2012 by the FBI and the Air Force Office of Special Investigations on charges that between Oct. 21, 2007 and Oct. 22, 2007, they caused the death of their two-month old infant daughter. In Nov. 2012, a 16-count superseding indictment was filed charging Peter and Sophia Zayas with second degree murder, child abuse resulting in death, child abuse resulting in great bodily harm, and other child abuse-related offenses. At the time of the offenses alleged in the superseding indictment, Peter Zayas was a sergeant with the U.S. Air Force and was stationed at Holloman Air Force Base.
During today’s proceedings, Sophia Zayas pleaded guilty to child abuse resulting in great bodily harm and admitted that from Aug. 16, 2007 through Oct. 22, 2007, she placed her daughter in a situation which endangered the infant’s life. In her plea agreement, Sophia Zayas admitted that the infant suffered posterior transverse skull fractures, rib fractures, and radius and ulna fractures as a result of her conduct. The baby died of her injuries on Oct. 22, 2007.
Peter Zayas pleaded guilty to negligent child abuse on Feb. 19, 2014. In his plea agreement, Zayas admitted that from Aug. 16, 2007 through Oc. 22, 2007, he permitted his infant to be in a situation that endangered her life knowing that there was a foreseeable risk that she would be physically harmed or killed by leaving her in Sophia Zayas’ care knowing that Sophia had a history of alcohol abuse. Peter Zayas acknowledged that the infant died on Oct. 22, 2007, as a result of his negligence because it was foreseeable to him that leaving the infant in Sophia Zayas’ care could lead to harm given Sophia’s alcohol consumption and binge drinking during the Oct. 14, 2007 through Oct. 22, 2007.
Sophia and Peter Zayas have been in federal custody since their arrests and the two remain detained pending their sentencing hearings. At sentencing, each faces a penalty of 18 years in prison.
In announcing the guilty pleas, Acting U.S. Attorney Steven C. Yarbrough said, “The circumstances leading to this case are tragic. In Oct. 2007, a two-month old baby died as a result of physical abuse and neglect. Last week, Peter John Zayas admitted his negligence contributed to the baby’s death at the hands of his wife and the baby’s mother. Today, Sophia Monique Zayas admitted causing great bodily harm to the baby. I commend the investigators and prosecutors for ensuring that this baby’s death did not go unanswered.”
“One of the most difficult and challenging investigations for the FBI involves the death of a child, in this case a baby at the hands of those responsible for her care,” said FBI Special Agent Carol K.O. Lee. “The professionalism and perseverance shown by the FBI Special Agents, the Air Force Office of Special Investigations, and the U.S. Attorney's Office in this case which resulted in two guilty verdicts to include the one today should be commended.”
This case was investigated by the FBI and the Air Force Office of Special Investigations and is being prosecuted by Assistant U.S. Attorneys Maria Y. Armijo and Anna R. Wright of the U.S. Attorney’s Las Cruces Branch Office.
Several Colorado Residents Are Prosecuted for over $2 Million in Tax FraudRead the Press Release
DENVER – U.S. Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announce the prosecution of several criminal tax offenders this week in the District of Colorado. With tax filing season in full swing, federal officials remind citizens that it is important to file complete and accurate tax returns. Those who commit tax fraud and related crimes will be criminally prosecuted. Recent tax cases prosecuted in the District of Colorado include the following:
Byron Thomas Warnes, age 60, of Silverthorne, CO, pled guilty on February 13, 2014 to one count of obstructing and impeding the administration of the internal revenue laws. He was charged by an Information on September 25, 2013. Beginning in 2005, and continuing into August 2008, he undertook a series of acts, and structured his financial and business affairs in a way, which made it difficult for the IRS to be able to determine what assets he had available for collection of the back taxes and to be able to determine his taxable income and income tax liabilities for 2005 and subsequent years. Particularly he owed the IRS $140,144 in back taxes which he failed to pay from his 1992 tax return. Over the course of 2005 through 2007, he made at least $233,308 in real estate commissions as well as other income, but failed to report the majority of his income. As part of this pattern of obstructive conduct, Warnes also filed a false income tax return under reporting his real estate commission income by approximately $98,000. The government calculates the tax owed by Warnes for tax years 1992, 2005, 2005 and 2007 to be a total of $335,211. This case is being prosecuted by Assistant United States Attorney Ken Harmon.
Elizabeth A. Eurioste, age 64, of Aurora, CO, pled guilty on February 14, 2014 to one count of aiding or assisting in the preparation of a false individual federal income tax return. She was indicted by a federal grand jury in Denver on April 9, 2013. Eurioste has been preparing individual and business income tax returns since 1971. For purposes of her plea agreement, the period of relevant conduct covered is tax years 2004 through 2007, and she worked out of her own business, Eurioste Accounting, Inc. She entered false deductions, expenses, business losses, and underreported income and gains on her clients’ tax returns to reduce the amount of tax due and owing. Eurioste repeatedly created the same types of false entries on returns and for the years covered by the indictment, she had approximately 1200 clients. The total amount of tax loss resulting from Eurioste’s actions for tax years 2004 through 2007 is at least $400,000. This case is being prosecuted by Assistant United States Attorneys Anna Edgar and Suneeta Hazra.
Mathew Zuckerman, age 69, of Woody Creek, CO, pled guilty on February 18, 2014 to one count of tax evasion. He was Indicted by a federal grand jury in Denver on April 25, 2012. From 1986 through 2009, Zuckerman either failed to file an income tax return, or filed a return using incorrect amounts. In 1998, Zuckerman and a business partner formed Silicon Valley New Issues, Inc. and began to specialize in taking small companies public through reverse mergers of existing corporate shells. Zuckerman evaded corporate income taxes on several million dollars of taxable income in 1999 from Silicon Valley New Issues, Inc. and concealed his profits by not filing Form 1120 corporate tax returns, filing false Form 1120-S tax returns, filing false Form 1040 individual tax returns, and by acquiring assets such as personal residences and stock investments in corporate/trust nominee names. Over the course of the next 10 years, Zuckerman, continued to conceal his assets and business affairs from the IRS by utilizing additional corporations and trusts. For his efforts to avoid payment and collection of outstanding tax liabilities, he agrees to make restitution to the IRS in the amount of $693,706. Zuckerman is scheduled to be sentenced on July 31, 2014. This case is being prosecuted by Assistant United States Attorney Tim Neff.
Randall Vannoy Heath, age 52, of Colorado Springs, CO, was sentenced on February 18, 2014 to serve 84 months in federal prison for a false claim against the IRS and aggravated identity theft followed by 3 years on supervised release. He was also ordered to pay $172,756 in restitution to the IRS. In August 2010, Heath stole records consisting of personal information of clients from College Consultant Group, Inc. after the business had ceased operations. Heath used the records to engage in a variety of identity theft-related activities, to include production of counterfeit driver’s licenses and counterfeit government photo identifications. With this information Heath filed false 2010 Form 1040, U.S. Individual Income Tax Returns, in the victims’ names. As part of the scheme, he also created false Form W-2, Wage and Tax Statements. Heath received fraudulent refunds ranging from $7,000 to $23,000 for each of the false claims filed with the IRS, totaling over $275,000 of which resulted in the IRS issuing $172,756 in fraudulent tax refunds to Heath. The United States Postal Inspection Service assisted in the investigation. This case was prosecuted by Assistant United States Attorney Richard Hosley.
“All of us have a responsibility to follow the law, which includes filing tax returns when required and paying any taxes due,” said U.S. Attorney John Walsh. “Willfully failing to comply with the law can result in criminal consequences, as these cases show.”
“Every one of these cases falls on the IRS Dirty Dozen Tax Scam list which was released last week,” said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “Honest taxpayers should be aware of these scams to help protect themselves. Individuals who perpetrate such scams, beware it is a simple matter of time, we will find you and bring you to justice.”
Salt Lake City Man Charged with Credit Union Robbery in Connection with January Robbery of Transwest Credit UnionRead the Press Release
SALT LAKE CITY - A felony information filed in federal court Tuesday morning charges Daniel Joseph Carlton, age 66, of Salt Lake City, with credit union robbery in connection with a Jan. 10, 2014, robbery of Transwest Credit Union. The credit union is located at 39 West 2100 South, Salt Lake City.
According to an information filed in Third District Court, Carlton handed a note to a teller at the credit union demanding money. The state charges will be dismissed now that federal charges have been filed. Stephen L. Nelson, a Deputy District Attorney and Special Assistant U.S. Attorney, will join federal prosecutors in handling the federal case.
The potential maximum penalty for credit union robbery is 20 years in prison and a fine of $250,000. However, based on two previous convictions for bank robbery, Carlton appears to qualify as a career offender under federal sentencing guidelines and could be subject to an increased term of incarceration. He was on supervised release for two previous bank robberies at the time of the current alleged offense.
"Bank robbery is a federal crime,” U.S. Attorney David B. Barlow said today. “The FBI, through its Safe Streets Task Force, and local law enforcement agencies are aggressively investigating every bank robbery. Anyone who commits a bank robbery is subject to prosecution in federal court, and, if convicted, faces significant federal sentences.”
Barlow expressed appreciation for the investigative work being done by the FBI and members of its Safe Street Task Force, local law enforcement agencies, and county attorneys’ offices in investigating and prosecuting bank robberies in Utah.
FBI Special Agent in Charge Mary F. Rook stated, "The FBI is committed to working with our state and local law enforcement partners to actively investigate and apprehend bank robbery suspects throughout the region. The Safe Streets Task Force is a great example of the positive impact we can achieve through coordination and collaboration with other agencies."
James Pearson Thain
James Pearson Thain is in custody in Wyoming charged with a Jan. 29, 2014, robbery of Bank of the West in Casper, Wyo. According to the complaint, Thain displayed a handgun. A witness saw Thain and a female driver leave the bank and reported the information to law enforcement. Officers tried to initiate a traffic stop by the vehicle fled the area and was later involved in a crash. Officers found a revolver in the car with two rounds in the cylinder of the weapon. According to the complaint, Thain said the gun was for “cops, hero’s and tellers.”
The FBI and U.S. Attorney’s Office in Utah believe Thain, who wore a fake moustache, large glasses, and a beanie hat during the Wyoming robbery, may be responsible for 11 robberies in Utah and are coordinating with the U.S. Attorney’s Office in Wyoming on the Thain case.
Thain, who is 38, has previous bank robbery convictions in Utah.
Dustin Todd Byrd
Dustin Todd Byrd, 36, of Salt Lake City, currently in custody in Ada County, Idaho, after an arrest on heroin trafficking, is suspected of four recent bank robberies in Utah. Federal prosecutors expect to present the case to a grand jury in early March.
David Warren Evens
Sentencing is set for Wednesday at 2 p.m. for David Warren Evans, age 43, of Magna, who pleaded guilty in December to a Sept. 26, 2013, armed robbery of Wells Fargo Bank located at 1255 East Brickyard Road in Salt Lake City. U.S. District Judge Tena Campbell will impose the sentence. In a plea agreement, Evans admitted that he held what appeared to be a black handgun during the robbery that was visible to the teller.
He also admitted that on Sept. 11, 2013, he robbed a Wells Fargo Bank at 4740 South 900 East. He admitted he approached the teller and handed her a note that said, “This is a robbery, don’t make it a murder.”
William and Michelle Parker
William Joseph Parker, age 28, and Michelle Joyce Parker, 28, both of Tooele, are scheduled to be sentenced in April after each pleading guilty to one count of bank robbery.
William Joseph Parker admitted that on Jan. 14, 2013, he robbed the Wells Fargo Bank in Magna. He admitted he walked into the bank with a note in hand that demanded money from both drawers, indicating he had a gun and would use violence.
Michelle Joyce Parker admitted robbing a Wells Fargo Bank in Tooele on March 11, 2013.
In addition to the two robberies included in the plea agreements, the Parkers also were charged with a Feb. 5, 2013, robbery of a Wells Fargo Bank in Murray.
The Parkers were arrested after the March 11, 2013, robbery when an off-duty police officer took note of the car prior to the robbery and saw it fleeing the scene afterwards. He executed a traffic stop and found the defendants, the robbery note, and cash in the car – in addition to the couple’s two young children.
As a part of their plea agreements, the Parkers agreed to pay restitution of $5,032 to Wells Fargo Bank for all charged robberies.
Both face up to 20 years in federal prison when they are sentenced in April.
John Eugene Walker
Sentencing is set for May 13, 2014, for John Eugene Walker, age 53, of South Salt Lake City, who pleaded guilty in December to two bank robberies.
Walker admitted that he committed a May 3, 2013, robbery of U.S. Bank located at 888 East 4500 South in Salt Lake City while dressed as a construction worker and carrying a dark colored messenger style bag. He approached a teller counter and demand money. He put the money in his bag and left the bank.
He also robbed a Zions Bank at 8955 South 700 East in Sandy on May 22, 2013, while dressed in women’s clothing and carrying a light blue purse. He put the money the teller gave him in the purse.
Walker was arrested after bank employees followed him out of the bank and witnessed him getting into a dark green Toyota. The same witness saw a temporary tag on the vehicle. Surveillance photos of the robbery were released to the media and an employee from a car dealership contacted the Sandy Police after seeing news coverage of the robbery and told police officers she had recently sold a Toyota to an individual who matched the description of the suspect who robbed the Zions Bank.
Walker faces up to 20 years in prison for each of the two bank robbery convictions. Prosecutors believe Walker may qualify for an increased sentence as a career offender under federal sentencing guidelines because of his criminal history.
James Carey
James Carey, age 40, of Midvale was sentenced to 125 months in federal prison in June after pleading guilty to a Feb. 4, 2013, robbery of Chase Bank located at 1306 Woodland Avenue in Salt Lake City. Carey admitted he entered the bank and presented a note to a teller demanding $20,000 and stating that he had a gun. He brandished what appeared to be a handgun but was actually a BB gun. Carey admitted that the following day, when police tried to apprehend him, he engaged in a high speed chase. During the high speed chase, Carey threw a duffel bag and money out of the car. The chase ended after his tires were spiked and the police had executed a PIT maneuver. Carey refused to comply with officers’ commands and had to be forcibly restrained.
Mark Scott Bolinder
Mark Scott Bolinder, age 44, of Salt Lake City, is serving a 38-month federal prison sentence after pleading guilty to a Sept. 21, 2013 robbery of Chase Bank located at 6275 South Highland Drive in Salt Lake City and a Sept 23, 2013, robbery of Zions Bank located at 1635 South Redwood Road in Salt Lake City. U.S. District Judge Robert Shelby imposed the sentence in January and ordered Bolinder to pay $2,929 in restitution to the two banks.
The Unified Police Department and FBI investigated the robberies. Video surveillance photos from the robberies were released to the media and tips were received leading to Bolinder’s arrest.
Russell Allen Erxleben Sentenced to 90 Months in Federal Prison for $2 Million Ponzi SchemeRead the Press Release
In Austin this morning, 57–year-old Russell Allen Erxleben of Dripping Springs, TX, was sentenced to 90 months in federal prison followed by three years of supervised release and ordered to pay restitution for implementing a Ponzi scheme involving an estimated $2 million announced the U.S. Attorney’s Office for the Western District of Texas.
In December, Erxleben pleaded guilty to federal wire fraud and money laundering charges. According to court records, from 2005 until October 2009, Erxleben devised and implemented a scheme to defraud and to obtain money from investors by the use of fraudulent pretenses, representations and promises. Erxleben used several companies, including WALTEC Consultants, LRE Holdings, and The MDM Group, to promote investments in fraudulent ventures including investments in post-WWI German government gold bearer bonds and in a work of art purportedly by Paul Gauguin, a famous late 19th-early 20th century artist. By pleading guilty, Erxleben admitted that he used investment proceeds for the benefit of himself and his family, to pay purported dividends to previous investors, and to fund other undisclosed endeavors, contrary to promises and representations made by the defendant. In furtherance of the fraudulent scheme, Erxleben made various wire transfers using numerous financial accounts which were opened and maintained by others in an effort to avoid detection by authorities.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation and the Texas State Securities Board along with assistance from Homeland Security Investigations (HSI). Assistant United States Attorneys Matthew Devlin and Alan Buie prosecuted this case on behalf of the Government.
Randy Rivera Sentenced to 12 Years Imprisonment for Conspiracy to Distribute Crack CocaineRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Randy Ray Rivera, 35, of Springfield, Massachusetts was sentenced to 144 months in prison, having pled guilty to the charge of conspiracy to distribute 280 grams or more of cocaine base. United States District Judge William K. Sessions III, sitting in Burlington, also sentenced Rivera to 5 years of supervised release.
Court records show that Rivera, who goes by the alias "Melvin,: sold large quantities of crack cocaine to Vermonters from about late 2009 through his arrest in early 2013. Rivera sold the crack in Springfield to three different individuals from the Burlington area, who then transported it to Vermont and redistributed it here to dozens of customers. Rivera=s drug runners made regular trips to Springfield to purchase crack, sometimes picking up narcotics from him multiple times per week. The amounts they transported ranged from about 3-25 ounces per trip. Law enforcement arrested Rivera in Springfield on January 4, 2013, on his way to sell 20 ounces of crack cocaine for $22,500 to a customer who had begun working as a confidential informant. Court records also show that Rivera carried a loaded semiautomatic handgun during the conspiracy period. Rivera came to sentencing with a series of prior narcotics trafficking convictions from Massachusetts, as well a prior felony firearms offense.
For his crime, Rivera faced a maximum penalty of life in prison. In sentencing Rivera, Judge Sessions noted the seriousness of the of the offense and the large quantities of crack cocaine it involved.
The investigation was a collaborative effort of the Vermont State Police, the Drug Enforcement Administration in Vermont and Massachusetts, and the Bureau of Alcohol, Tobacco, and Firearms.
Assistant United States Attorney Christina Nolan prosecuted the case. Rivera is represented by Steve Barth of the Federal Public Defender=s Office in Burlington.
Project Safe Neighborhood Program Secures Lengthy Sentences for CarjackersRead the Press Release
Memphis, TN – Joseph Banks, 31, and Lareginald Strong, 31, both of Memphis, TN, were sentenced recently to more than 30 years each in federal prison for their roles in an October 2012 carjacking, announced U.S. Attorney Edward L. Stanton III.
According to facts revealed during their trials and at sentencing, on October 23, 2012, Banks and Strong approached a man at the carport door to his residence. Banks pointed a firearm at the victim’s head as he walked towards him. After Banks attempted to use an electroshock weapon on the victim while Strong served as a lookout, Banks chased the victim and shot at him. Banks grabbed the keys to the victim’s Lexus GS300, and he and his accomplice Strong fled the scene in the car.
Approximately ten minutes after the carjacking was reported, officers with the Memphis Police Department observed the Lexus GS300 driving on Summer Avenue occupied by Banks and Strong. The defendants refused to stop when ordered to do so and a high speed chase began. After wrecking the vehicle, Banks and Strong were taken into custody. Officers removed clothing matching the description of the robbers and two guns from the car.
Both men were convicted by a federal jury on August 1, 2013 and sentenced by Senior U.S. District Judge Jon P. McCalla. Banks was sentenced to 420 months in federal prison for one count of carjacking, one count of discharging a firearm during a crime of violence, and two counts of being a felon in possession of a firearm. Strong was sentenced to 372 months in federal prison for one count of carjacking, one count of discharging a firearm during a crime of violence, and one count of being a felon in possession of a firearm. There is no parole in the federal system.
This case was investigated by the Memphis Police Department and the Project Safe Neighborhood (PSN) Task Force. PSN is composed of representatives from the Shelby County District Attorney’s Office, Memphis Police Department, the Shelby County Sheriff ’s Office and the Bureau of Alcohol Tobacco and Firearms and Explosives. The PSN task force meets weekly to examine every gun crime committed in Shelby County as well as gun crimes from other counties submitted by the ATF.Pimp Who Was Using 16-Year-Old Girl as Prostitute in Reno, Nev., Sentenced to 10 Years in PrisonRead the Press Release
RENO, Nev. – A California man who recruited and used a 16-year-old girl to work as a prostitute, was sentenced today to a mandatory minimum of 10 years in federal prison, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Carlos Rodriguez Navarrette, aka Carlos Alberto Navarrette, aka DJ Junior, 23, of Los Angeles, Calif., who pleaded guilty in November 2013 to one count of sex trafficking of a minor, was sentenced by U.S. District Judge Miranda M. Du. Following his release from prison, Navarrette will also be placed on lifetime supervised release and must register as a sex offender.
“According to the defendant’s own admissions, he knew the victim was a minor, but he recruited and enticed her to work for him anyway,” said U.S. Attorney Bogden. “The U.S. Department of Justice will use tough federal laws to prosecute you if you knowingly disregard the fact that you are using a minor to engage in commercial sex acts.”
According to the plea agreement, on June 11, 2013, Navarrette met the 16-year-old girl at a casino in Reno and recruited her to work as a prostitute. Navarrette posted a prostitution advertisement on the website “myredbook.com,” which included photos of the 16-year-old. From about June 11 to June 13, 2013, Navarrette paid for hotel rooms and food for the girl, and arranged for her to engage in approximately four to five commercial sex acts. After the 16-year-old engaged in the sex acts, she was required to provide the money she earned to Navarrette.
Investigators with the FBI’s Innocence Lost Task Force came across the website advertisement while they were attempting to locate a woman who had been reported missing in California, as the telephone number in the advertisement was the same as the missing woman’s. An undercover investigator made arrangements to meet the girl at a Reno motel for sex. When the investigator arrived at the motel, Navarrette and an adult female directed the investigator to the 16-year-old girl, who was lying on the bed partially undressed.
The investigation was conducted by the Innocence Lost Task Force, which is made up of the FBI and the Regional Street Enforcement Team, which includes the Reno Police Department, Sparks Police Department, FBI, and UNR Police Department. The case was prosecuted by Assistant United States Attorney Carla Higginbotham.
The case has been 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."
Physical Therapist Arrested on Health Care Fraud ChargesRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DANIELLE FAUX, 46, of Weston, was arrested today on federal health care fraud charges. On February 19, 2014, a federal grand jury sitting in Bridgeport returned an indictment charging FAUX with 46 counts of health care fraud and one count of obstruction of a federal audit.
According to the indictment, FAUX owned and operated Danielle Faux PT, LLC, a physical therapy clinic located at 27 Lois Street in Norwalk, and was a part owner of Achieve Rehab and Fitness, a gym located at the same address in Norwalk. The indictment alleges that FAUX engaged in a scheme to defraud Medicare and Anthem Blue Cross Blue Shield by referring some of her patients for personal training sessions at Achieve Rehab and Fitness and then billing the sessions as if they were physical therapy procedures. The indictment also alleges that FAUX created and altered patient records when Medicare audited her practice in August 2009.
FAUX appeared before U.S. Magistrate Judge William I. Garfinkel in Bridgeport and entered a plea of not guilty. She was released on a $50,000 bond.
If convicted, FAUX faces a maximum term of imprisonment of 10 years and a fine of up to $250,000 on each of the health care fraud counts, and a maximum term of imprisonment of five years and a fine of $250,000 on the obstruction count.
The case has been assigned to Senior U.S. District Judge Warren W. Eginton in Bridgeport.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney David J. Sheldon and health care auditor Kevin Saunders.
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(203) 821-3722 [email protected]Owner of Bulk Mailing Company Sentenced to Two Years in Prison for Multimillion-Dollar FraudRead the Press Release
NEWARK, N.J. – The owner of Clevett Worldwide Mailers LLC, a Succasunna, N.J., bulk mailing house, was sentenced today to 24 months in prison for defrauding clients of more than $1 million through a fraudulent bulk-mailing scheme in which he shredded millions of pieces of mail rather than delivering them, U.S. Attorney Paul J. Fishman announced.
Mark Clevett, 37, of Randolph, N.J., previously pleaded guilty before U.S. District Judge Kevin McNulty to an indictment charging him with one count of conspiracy to commit wire fraud. Judge McNulty imposed the sentence today in Newark federal court. Clevett’s father, Harold Clevett, 68, of Middlesex, N.J., who also previously pleaded guilty to the same charge, will be sentenced March 27, 2014.
According to documents filed in this case and statements made in court:
Mark Clevett owned, and both Clevetts operated, Clevett Worldwide Mailers, which contracted with international and domestic customers to handle large mailings. Customers sent their mail jobs to Clevett Worldwide Mailers for sorting, addressing and delivery to the post office. The company received fees for each piece of mail and for the total weight of the mail that it handled.
Both father and son admitted that rather than sending their clients’ mail as contracted, they directed their employees to throw away all or part of it, and even called in a shredding company to destroy unsent mail.
Mark and Harold Clevett also acknowledged they charged their customers for the full amount of the mailings, even sending some of their customers fraudulent postal forms to make it appear as though the mailings were delivered. The pair admitted that between 2007 and June 2011, they discarded and shredded nearly 3 million pieces of customer mail and reaped nearly $1 million in illicit profits.
In addition to the prison term, Judge McNulty sentenced Mark Clevett to serve three years of supervised release and ordered him to pay restitution of restitution and forefeiture of $999,461.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s sentencing.The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Michael Robertson of the U.S Attorney’s Office in Newark.
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Defense counsel: Harold Clevett: Brian J. Neary Esq., Hackensack, N.J.
Mark Clevett: Don Larsen Esq., Montville, N.J.Ohio Resident Sentenced for Environmental ViolationsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistELKINS, WEST VIRGINIA – A 49-year old Ohio resident was sentenced to prison for violations of environmental laws by Chief Judge John Preston Bailey.
United States Attorney William J. Ihlenfeld, II, announced that BRIAN LEE COBB was sentenced to 24 months in prison and three years of supervised release for “Transportation of Hazardous Waste without a Manifest” and “Concealment of a Material Fact.” COBB was remanded to the custody of the United States Marshal pending designation to a Federal institution.
“COBB allowed the illegal transportation of hazardous waste with no regard for the dangers it posed," said David G. McLeod, Jr., Special Agent in Charge of EPA's criminal enforcement program for the Mid Atlantic. "False statements seriously weaken the integrity of the entire system. Today's sentencing demonstrates that those who refuse to comply with the law, putting the public and the environment at risk, will be vigorously prosecuted."
This case was prosecuted by Assistant U.S. Attorney David J. Perri and Special Assistant U.S. Attorney Perry McDaniel and investigated by the Environmental Protection Agency.
North Carolina Man Charged with Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Roanoke Rapids, North Carolina, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Shawn George, a/k/a Shaun George, age 38, was indicted on February 19, 2014. He appeared before U.S. Magistrate Judge Mark A. Moreno on February 21, 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, life of supervised release, and $100 to the Federal Crime Victims Fund.
On or about February 2, 2014, until February 7, 2014, George, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under state law, and having moved in interstate commerce, did knowingly fail to register and update his registration.
The charge is merely an accusation and George is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
George was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Michigan Woman Gets 4 Years in Prison for Participating in Oxycodone Trafficking SchemeRead the Press Release
PITTSBURGH - A resident of West Bloomfield, Michigan, has been sentenced in federal court to 48 months in prison for her conviction of conspiracy to distribute and possess with the intent to distribute oxycodone, a Schedule II controlled substance, United States Attorney David J. Hickton announced today.
United States District Judge Nora B. Fischer imposed the sentence on Jill Eisenshtadt, 36.
According to information presented to the court, Eisenshtadt served as a “runner” for Jason Weitzner, the leader of a large oxycodone distribution ring. Weitzner procured fraudulent prescriptions from doctors in Florida, and then used runners to fly to Pittsburgh and fill these oxycodone prescriptions at various pharmacies in the metro Pittsburgh area. Weitzner then sold the obtained oxycodone pills to local Pittsburgh drug dealers. Eisenshtadt, a one-time paramour of Weitzner, repeatedly obtained fraudulent prescriptions in Florida, filled these prescriptions in Florida, and then, when Weitzner realized that he could maximize profits by filling the prescriptions in Pittsburgh, flew to Pittsburgh on multiple occasions to further the drug conspiracy. In exchange for obtaining the oxycodone, Weitzner paid for all of Eisenshtadt’s personal expenses. Weitzner has pled guilty to the charges against him, and is due to be sentenced in April, 2014.
Assistant United States Attorney Eric S. Rosen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Drug Enforcement Agency, the Internal Revenue Service, and the Allegheny County Police for the investigation leading to the successful prosecution of Lawrence Weitzner.
Mexican National Sentenced for Firearms and Illegal Pesticides in Connection with Forest Marijuana Cultivation OperationRead the Press Release
FRESNO, Calif. — Julio Cesar Villanueva Cornejo, 33, of Michoacàn, Mexico was sentenced today to six years in prison for possessing a firearm and distributing illegal rat poison and insecticides in connection with a large marijuana cultivation operation in the Lilly Canyon area of the Sequoia National Forest, U.S. Attorney Benjamin B. Wagner announced. Villanueva was also ordered to pay $4,294 in restitution to the U.S. Forest Service for the damage to public land and natural resources caused by the cultivation operation. He is subject to deportation after he serves his prison sentence.
“Increasingly, dangerous, unregistered pesticides are being encountered by law enforcement officers who investigate illegal marijuana grows,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “Through their indiscriminate application, these unregistered pesticides pollute our lands and waters, create a significant safety risk to humans and animals, and present a mounting cleanup expense for taxpayers. Today’s sentence demonstrates the government’s commitment to hold accountable those individuals who traffic unregistered pesticides onto our public lands.”
Villanueva’s sentence follows his guilty plea last December. According to court documents, Villanueva delivered chemicals and supplies to a marijuana cultivation operation in the Lilly Canyon area of the Sequoia National Forest. The cultivation operation caused extensive environmental damage. Native oak trees and other vegetation were killed or cut down to make room for the 9,746 marijuana plants planted there. The soil was tilled, and fertilizers, and illegal pesticides, and rodenticides containing zinc phosphide and carbofuran were spread throughout the site. In addition to the illegal pesticides, two firearms, marijuana seeds, and other items associated with the cultivation operation were found.
The EPA has designated zinc phosphide as a restricted use pesticide that may only be purchased and used by, or under the supervision of, a certified applicator. In 2011, the EPA announced that it would ban zinc phosphide for residential sale due to its acute toxicity. Zinc phosphide is highly toxic to humans and wildlife. A single swallow can be fatal to a small child. Carbofuran is highly toxic to vertebrates and particularly toxic to birds. In granular form, a single grain will kill a bird; for humans, one quarter of a teaspoon is a sufficient dose to be fatal. Effective December 31, 2009, EPA cancelled all food tolerances for carbofuran and determined carbofuran is no longer eligible for re-registration.
This case is the product of an investigation by the U.S. Forest Service, U.S. Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); U.S. Environmental Protection Agency Criminal Investigation Division (EPA-CID), and the Kern County Sheriff’s Department. Assistant United States Attorney Karen Escobar handled the prosecution.
Massachusetts Man Sentenced for Tax Fraud and Mail FraudRead the Press Release
Michael Edwards was sentenced today to serve two concurrent sentences of 36 months in prison followed by three years of supervised release, and ordered to pay restitution of $573,518 to the Internal Revenue Service (IRS), the Justice Department and IRS announced. On Dec. 3, 2013, Edwards pleaded guilty to one count of corruptly endeavoring to obstruct the IRS and one count of wire fraud. Both charges arise from Edwards’ operation of his tax return preparation business, Boston Financial Associates (BFA) and Edwards’ misappropriation of income tax refunds from two of his clients in 2009.
According to court documents, Edwards admitted that he misled an IRS auditor reviewing one of his client’s 2007 and 2008 income tax returns by giving her false documentation that claimed to support the false entries on the returns. Edwards misappropriated federal income tax refunds of $573,518 from one client and $202,143 from another client. As of the sentencing date, Edwards has made restitution to one of his clients and was also ordered to pay restitution to the second client.
This case was investigated by IRS – Criminal Investigation and prosecuted by Senior Litigation Counsel Corey J. Smith of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found at the division website
Maryland Man Sentenced to 57 Months in Prison for Traveling to Engage in Illicit Sexual Conduct with A Minor and Possession of Child PornographyRead the Press Release
WASHINGTON – Thomas DeGrange, 28, formerly of Frederick, Md., was sentenced today to 57 months in prison on federal charges of traveling interstate to engage in illicit sexual conduct with a minor and possession of child pornography, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
DeGrange pled guilty in November 2013 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Beryl A. Howell. Upon completion of his prison term, DeGrange will be placed on 10 years of supervised release.
According to the government's evidence, on May 3, 2013, DeGrange began a series of online communications with a man who he believed had a sexual interest in children. The man was actually an undercover officer with the FBI's Child Exploitation Task Force, posing as the father of an under-aged girl. Over the next several days, DeGrange expressed interest in engaging in sexual acts with the undercover officer’s purported daughter. DeGrange also sent the undercover officer several images depicting child pornography. On May 7, 2013, DeGrange traveled from Maryland to a pre-arranged meeting place in Washington, D.C., for the purpose of engaging in sexual activity with the girl. When he arrived, he was arrested.
A search by law enforcement of the defendant’s home led to the discovery of a computer containing two videos depicting child pornography, 23 images depicting child pornography and other evidence of child pornography.
The defendant’s plea agreement resolved other potential federal charges in the District of Columbia and the District of Maryland.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the sentence, U.S. Attorney Machen, Assistant Director Parlave and Chief Lanier praised the work of the MPD Detectives and Special Agent of the FBI Child Exploitation Task Force. They also expressed appreciation for the assistance provided by the U.S. Attorney’s Office for the District of Maryland. Finally, they commended the efforts of Assistant U.S. Attorney Cassidy Kesler Pinegar, who prosecuted the case.
14-047Kenneth Conley Given 41-month Sentence for MCC Escape, to Be Served Consecutively to 20-Year Term for Bank RobberyRead the Press Release
CHICAGO — A Tinley Park man who escaped from the Metropolitan Correctional Center in the city’s Loop in December 2012 while he was awaiting sentencing for bank robbery, today was sentenced to 41 months in prison for the escape, which he was ordered to serve consecutively to the 20-year sentence he received last year for the bank robbery. The defendant, KENNETH CONLEY, 39, remained at large for approximately two weeks after the escape before he was apprehended in south suburban Palos Hills.
Noting Conley’s extensive criminal history, U.S. District Judge Gary Feinerman called him “incorrigible,” and said Conley “needs to be incapacitated for a lengthy time to protect the public.” The judge ordered the 41-month term to be served consecutively to the maximum 20- years sentence Conley received from a different judge for the bank robbery. Conley faced a maximum sentence of five years in prison for the escape.
Conley was also ordered to pay $1,324 in restitution to the U.S. Bureau of Prisons for damage to the MCC. Conley and another convicted bank robber, Joseph Banks, escaped through the wall of their cell and repelled down the exterior of the high-rise federal detention facility. Banks was apprehended a few days later and is still awaiting sentencing for his earlier trial conviction on four counts of bank robbery.
The sentence was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and U.S. Marshal Darryl McPherson.
Justice Department Resolves Lawsuit Alleging Disability-Based Discrimination at Nine Multifamily Housing Complexes in Mississippi, Louisiana and TennesseeRead the Press Release
The Justice Department announced today that a federal district court judge in Jackson, Miss., approved a settlement of the department’s lawsuit against the original owners and developers of nine multifamily housing complexes located in Mississippi, Louisiana and Tennessee. The complexes contain more than 800 ground-floor units that are required by the Fair Housing Act (FHA) to contain accessible features, and eight of the complexes contain leasing offices that are required by the Americans with Disabilities Act (ADA) to contain accessible features. The lawsuit alleged that the defendants failed to include important accessible features at these properties.
Under the settlement, defendants The Bryan Company, Bryan Construction Company Inc., Steve Bryan, Mid-South Houston Partners, Mid-South Development LLC aka MSD LLC, The Vineyards Apartments LLC, Windsor Lake Apartment LP and Cypress Lake Development LLC must make extensive retrofits to meet FHA requirements. These include reducing door threshold heights, replacing excessively sloped portions of sidewalks, installing new and properly sloped curb ramps, installing cane detection at stairwells, installing accessible door hardware and ensuring that there are a sufficient number of accessible parking spaces at the properties.
“The Justice Department is deeply committed to ensuring equal access to housing for persons with disabilities,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “This comprehensive settlement will ensure that individuals with disabilities will have an equal opportunity to live in and visit these nine apartment complexes.”
“ The U.S. Attorney’s Office is committed to working with the Civil Rights Division to ensure that those who design and construct multi-family apartment complexes comply with the Fair Housing laws and the Americans with Disabilities Act ,” said U.S. Attorney Gregory K. Davis for the Southern District of Mississippi. “This office remains vigilant in its efforts to eradicate discrimination and ensure that persons with disabilities have accessible accommodations in which to live.”
In May 2013, as part of the same lawsuit, the court approved a settlement resolving the department’s claims against nine architects and civil engineers who were involved with the properties. Those defendants paid a total of $865,000 toward accessibility retrofits and $60,000 to compensate aggrieved persons harmed by the inaccessible conditions alleged in the lawsuit. The following complexes will be retrofitted: Houston Levee Apartments in Cordova, Tenn.; The Vineyard at Castlewoods Apartments in Brandon, Miss.; Windsor Lake Apartments in Brandon, Miss.; Sutton Place Apartments in Horn Lake, Miss.; Twin Oaks Apartments in Hattiesburg, Miss.; Oak Hollow Apartments in Southaven, Miss.; Spring Lake Apartments in Jackson, Miss.; Cypress Lake Apartments in Baton Rouge, La.; and Pelican Pointe Apartments in Slidell, La.
The FHA prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. Title III of the ADA requires, among other things, that public accommodations comply with specific requirements related to architectural standards to ensure accessible public and common use areas. More information about the Civil Rights Division and the laws it enforces is available at the website. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the department or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Justice Department Highlights Efforts to Combat Stolen Identity Tax Refund FraudRead the Press Release
Today, the Justice Department announced the results of its ongoing efforts to combat tax refund fraud that involves identity theft. The Tax Division, in conjunction with the Internal Revenue Service (IRS) and U.S. Attorneys’ Offices (USAOs) nationwide, has prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF). According to the IRS, from 2008 through May 2012, the IRS identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names. In fiscal year 2013, the department filed more than 580 indictments or informations charging more than 880 defendants with SIRF-related crimes.
SIRF is the use of stolen or otherwise wrongfully acquired personal identification information to file a fraudulent claim with the IRS for a tax refund. These crimes occur when a social security number, or list of numbers, is stolen or bought; a false tax return showing a refund due is filed electronically, usually at the beginning of filing season before the legitimate taxpayer has filed for the year; and the refund is loaded to a prepaid card, sent to a bank account or mailed to an address accessible by those involved in the scheme.
The actual implementation of SIRF schemes is often complex to carry out. In an increasing number of cases, the identities are stolen or bought in one place; the returns are electronically filed from another location, often through difficult to trace Wi-Fi connections; refunds are directed to a distant location; checks are cashed in yet another location; and the currency then moves again.
“The Department of Justice is committed to constant vigilance in investigating and prosecuting SIRF crimes,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division. “Too often the victims of identity theft are the most vulnerable in our communities – those whose identities are stolen from medical services or nursing homes, or grieving families who learn that the identities of deceased loved ones have been fraudulently used – and all honest taxpayers are victims when wrongful refund claims are paid out. We are determined to work with the IRS to stop this crime at the door, and to seek the conviction and punishment of these criminals.”
Some of the prosecutions from 2013 that resulted in significant prison sentences for SIRF crimes include:
• Vernon Harrison a corrupt U.S. Postal Service mail carrier, was sentenced to serve 111 months in prison in October 2013. According to court documents, tax refunds were placed on debit cards and mailed to addresses on Harrison’s postal route in Montgomery, Ala., which he then stole from the mail and provided to a co-conspirator in exchange for cash.
• Lea’Tice Phillips worked for an Alabama state agency and had access to databases that contained personal identifying information. As alleged in court documents, Phillips conspired with Antoinette Djonret and others to file false tax returns using identities stolen from the database. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. Djonret was sentenced in February 2013 to serve 12 years in prison, and Phillips was sentenced in September 2013 to serve 94 months in prison.
• Angela Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge, La. According to court documents, Myers electronically filed false claims for refunds using the names and social security numbers of identity theft victims, many of whom were nursing home patients. Myers was sentenced to serve 132 months in prison in July 2013.
• Leslie Brewster a tax return preparer from Durham, N.C., was sentenced to serve 70 months in prison. According to court documents, Brewster was the manager of a branch office of a tax preparation franchise called Nothing But Taxes, and purchased personal identifying information to claim false dependents on tax returns she prepared for clients.
• Quentin Collick and Deatrice Williams were sentenced in November 2013 to serve 85 and 51 months in prison, respectively. Corey Thompson, a co-conspirator, was sentenced to serve 30 months in jail. Williams worked for a debt collection company and stole the identities of a number of individuals, then provided the stolen information to Collick, her son-in-law. Thompson worked as an independent contractor for a cable company installing cable and internet access for customers. To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers' internet service, and, along with Collick, filed false tax returns using the customers' internet access. Thompson and Collick then directed the fraudulent tax refunds to be placed on pre-paid debit cards.
In 2014, the department has continued to pursue numerous prosecutions against SIRF criminals. On Jan. 24, 2014, a jury convicted current and former corrections officers of identity theft and tax fraud; according to court documents and evidence presented at trial, the pair accessed a state prison database and used the stolen identity information to file false tax returns. A check casher was sentenced to 37 months in prison on Jan. 16, 2014, for cashing refund checks in the names of individuals who did not authorize him to cash the checks, according to court documents. A nursing home employee was convicted by a jury on Jan. 14, 2014, of conspiracy, aggravated identity theft and other SIRF-related crimes; according to court documents and the evidence presented at trial, she stole the identity information of nursing home patients and used that information to create false tax returns. An Alabama man pleaded guilty on Jan. 13, 2014, for his role in a SIRF fraud. According to court documents, he obtained stolen identities from an Alabama state employee, used those identities to file false tax returns, and recruited a bank employee to assist him in having the false tax refunds deposited into various bank accounts. A social worker pleaded guilty on Jan. 10, 2014, to identity theft and tax fraud charges. According to court documents, she illegally obtained the identifying information of her clients – minors and disabled adults who may have been abused or neglected – and sold that information to others who used the stolen identities to claim as false dependents on fraudulent tax returns they prepared.
"We're fighting identity theft head-on at the IRS and making substantial progress with the help of the Justice Department and local law enforcement," said Commissioner John Koskinen for the IRS. "We're stopping more identity theft before these fraudulent refunds go out the door. The IRS initiated nearly 1,500 identity theft related criminal investigations last year, an increase of 66 percent over 2012. Fighting fraud is an ongoing battle as identity thieves continue to create new ways of stealing personal information. The IRS is continually reviewing our policies to strengthen our systems, minimize the incidence of identity theft and help victims.
The sentences imposed against those committing SIRF crimes are significant and reflect the seriousness of these crimes. The Justice Department is committed to investigating and prosecuting tax refund fraud that involves identity theft, and will continue to work with the IRS, FBI, U.S. Secret Service, U.S. Postal Inspection Service, other federal law enforcement agencies as well as state and local law enforcement agencies to combat SIRF-related crimes. Each U.S. Attorney’s Office has a point of contact to coordinate SIRF matters for its district.
The IRS has taken steps to detect and prevent the fraud before it occurs. For example, the IRS has designed new software filters to spot false returns before they are processed and before a refund is issued. The IRS has also expanded efforts to place identity-theft indicators on taxpayer accounts to track and manage identity-theft incidents. For information from the IRS on how to protect your identity and what to do if you are a victim of identity theft, please visit the IRS’s Identity Protection webpage.
More information on the department’s enforcement efforts is available on the Tax Division’s website, as are links to identity theft information and resources.
Justice Department Highlights Efforts to Combat Stolen Identity Tax Refund FraudRead the Press Release
WASHINGTON – Today, the Justice Department announced the results of its ongoing efforts to combat tax refund fraud that involves identity theft. The Tax Division, in conjunction with the Internal Revenue Service (IRS) and U.S. Attorneys’ Offices (USAOs) nationwide, has prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF). According to the IRS, from 2008 through May 2012, the IRS identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names. In fiscal year 2013, the department filed more than 580 indictments or informations charging more than 880 defendants with SIRF-related crimes.
SIRF is the use of stolen or otherwise wrongfully acquired personal identification information to file a fraudulent claim with the IRS for a tax refund. These crimes occur when a social security number, or list of numbers, is stolen or bought; a false tax return showing a refund due is filed electronically, usually at the beginning of filing season before the legitimate taxpayer has filed for the year; and the refund is loaded to a prepaid card, sent to a bank account or mailed to an address accessible by those involved in the scheme.
The actual implementation of SIRF schemes is often complex to carry out. In an increasing number of cases, the identities are stolen or bought in one place; the returns are electronically filed from another location, often through difficult to trace Wi-Fi connections; refunds are directed to a distant location; checks are cashed in yet another location; and the currency then moves again.
“The Department of Justice is committed to constant vigilance in investigating and prosecuting SIRF crimes,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division. “Too often the victims of identity theft are the most vulnerable in our communities – those whose identities are stolen from medical services or nursing homes, or grieving families who learn that the identities of deceased loved ones have been fraudulently used – and all honest taxpayers are victims when wrongful refund claims are paid out. We are determined to work with the IRS to stop this crime at the door, and to seek the conviction and punishment of these criminals.”
Some of the prosecutions from 2013 that resulted in significant prison sentences for SIRF crimes include:
- Vernon Harrison, a corrupt U.S. Postal Service mail carrier, was sentenced to serve 111 months in prison in October 2013. According to court documents, tax refunds were placed on debit cards and mailed to addresses on Harrison’s postal route in Montgomery, Ala., which he then stole from the mail and provided to a co-conspirator in exchange for cash.
- Lea’Tice Phillips worked for an Alabama state agency and had access to databases that contained personal identifying information. As alleged in court documents, Phillips conspired with Antoinette Djonret and others to file false tax returns using identities stolen from the database. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. Djonret was sentenced in February 2013 to serve 12 years in prison, and Phillips was sentenced in September 2013 to serve 94 months in prison.
- Angela Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge, La. According to court documents, Myers electronically filed false claims for refunds using the names and social security numbers of identity theft victims, many of whom were nursing home patients. Myers was sentenced to serve 132 months in prison in July 2013.
- Leslie Brewster, a tax return preparer from Durham, N.C., was sentenced to serve 70 months in prison. According to court documents, Brewster was the manager of a branch office of a tax preparation franchise called Nothing But Taxes, and purchased personal identifying information to claim false dependents on tax returns she prepared for clients.
- Quentin Collick and Deatrice Williams were sentenced in November 2013 to serve 85 and 51 months in prison, respectively. Corey Thompson, a co-conspirator, was sentenced to serve 30 months in jail. Williams worked for a debt collection company and stole the identities of a number of individuals, then provided the stolen information to Collick, her son-in-law. Thompson worked as an independent contractor for a cable company installing cable and internet access for customers. To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers' internet service, and, along with Collick, filed false tax returns using the customers' internet access. Thompson and Collick then directed the fraudulent tax refunds to be placed on pre-paid debit cards.
In 2014, the department has continued to pursue numerous prosecutions against SIRF criminals. On Jan. 24, 2014, a jury convicted current and former corrections officers of identity theft and tax fraud; according to court documents and evidence presented at trial, the pair accessed a state prison database and used the stolen identity information to file false tax returns. A check casher was sentenced to 37 months in prison on Jan. 16, 2014, for cashing refund checks in the names of individuals who did not authorize him to cash the checks, according to court documents. A nursing home employee was convicted by a jury on Jan. 14, 2014, of conspiracy, aggravated identity theft and other SIRF-related crimes; according to court documents and the evidence presented at trial, she stole the identity information of nursing home patients and used that information to create false tax returns. An Alabama man pleaded guilty on Jan. 13, 2014, for his role in a SIRF fraud. According to court documents, he obtained stolen identities from an Alabama state employee, used those identities to file false tax returns, and recruited a bank employee to assist him in having the false tax refunds deposited into various bank accounts. A social worker pleaded guilty on Jan. 10, 2014, to identity theft and tax fraud charges. According to court documents, she illegally obtained the identifying information of her clients – minors and disabled adults who may have been abused or neglected – and sold that information to others who used the stolen identities to claim as false dependents on fraudulent tax returns they prepared.
"We're fighting identity theft head-on at the IRS and making substantial progress with the help of the Justice Department and local law enforcement," said Commissioner John Koskinen for the IRS. "We're stopping more identity theft before these fraudulent refunds go out the door. The IRS initiated nearly 1,500 identity theft related criminal investigations last year, an increase of 66 percent over 2012. Fighting fraud is an ongoing battle as identity thieves continue to create new ways of stealing personal information. The IRS is continually reviewing our policies to strengthen our systems, minimize the incidence of identity theft and help victims." The sentences imposed against those committing SIRF crimes are significant and reflect the seriousness of these crimes. The Justice Department is committed to investigating and prosecuting tax refund fraud that involves identity theft, and will continue to work with the IRS, FBI, U.S. Secret Service, U.S. Postal Inspection Service, other federal law enforcement agencies as well as state and local law enforcement agencies to combat SIRF-related crimes. Each U.S. Attorney’s Office has a point of contact to coordinate SIRF matters for its district.
The IRS has taken steps to detect and prevent the fraud before it occurs. For example, the IRS has designed new software filters to spot false returns before they are processed and before a refund is issued. The IRS has also expanded efforts to place identity-theft indicators on taxpayer accounts to track and manage identity-theft incidents. For information from the IRS on how to protect your identity and what to do if you are a victim of identity theft, please visit the IRS’s Identity Protection webpage.
More information on the department’s enforcement efforts is available on the Tax Division’s website, as are links to identity theft information and resources.
Justice Department Files Lawsuit Against Missouri National Guard to Enforce Uniformed Services Employment and Reemployment Rights ActRead the Press Release
The Department of Justice announced today the filing of a lawsuit against the Missouri National Guard (MNG) alleging that the MNG violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by requiring its dual technician employees to resign from their civilian positions prior to active duty service in the U.S. Army Guard and Reserve.
According to the complaint, filed in the U.S. District Court for the Western District of Missouri, the MNG violated the USERRA rights of dual technician Kinata Holt by requiring her resignation, as a civilian dual technician, prior to her being called to active duty with the U.S. Army Guard and Reserve. According to the complaint, by refusing to place Holt on furlough or leave of absence, the MNG’s resignation requirement denied her the benefit of 15 days of annual, paid military leave to which she would have been entitled as a dual technician. USERRA not only prohibits employers from placing additional prerequisites on civilian employees before allowing them to serve in the military, but also mandates that employers place employees who depart for military leave on “furlough” or leave of absence status and not require them to quit their civilian jobs.
This lawsuit seeks, among other injunctive relief, a court order enjoining the MNG from requiring the resignation of civilian dual technicians from their civilian positions prior to service in the U.S. Army Guard and Reserve. The suit also seeks monetary relief for those who were improperly denied military leave benefits as compensation for the damages that were incurred as a result of the USERRA violation.
“Employers have a legal obligation under USERRA to provide promised benefits to individuals who choose to serve in the military,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Civil Rights Division is committed to protecting the rights of those who choose to serve their country through military service.”
This case stems from a referral by the U.S. Department of Labor (DOL) following an investigation by the DOL’s Veterans’ Employment and Training Service. The case is being handled by the Employment Litigation Section of the Civil Rights Division.
Additional information about USERRA can be found on the Justice Department website’s Servicemember page and Employment Litigation Section page, as well as on the DOL website.