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21 February 2014
Second Superseding Indictment Add Five Defendants and More Robbery Charges in Case of Jewelry Store Robbery RingRead the Press Release
PHILADELPHIA - A second superseding indictment1 was unsealed today charging five more defendants with participating in an alleged jewelry store robbery ring, announced U.S. Attorney Zane David Memeger. The indictment alleges that the defendants committed eight jewelry store robberies between July 13, 2011 and November 3, 2012, of more than $3,502,544 worth of merchandise.
Darrell Williams, 43, David Story, 45, Rufus Lawson, 47, Kenneth L. Williams, 51, Anthony Lockwood, 36, and Derrick Sherrill, 41, all of Philadelphia, are charged with conspiracy to commit robbery which interferes with interstate commerce. Those defendants are also charged, along with Brian Sheed, 21, and Amin Abdur-Rahe Shabazz, 22, both of Philadelphia, with robbery which interferes with interstate commerce. Darrell Williams, Story, Lawson, Kenneth L. Williams, and Lockwood are also charged with using and carrying a firearm during a crime of violence. The second superseding indictment adds the conspiracy charge, three robbery counts, and two firearms counts. Defendants Lawson, Sheed and Shabazz were charged in the previous indictment.
The indictment details the robberies as follows: on July 13, 2011, Darrell Williams and David Story committed an armed robbery of the Tourneau jewelry store at 160 North Gulph Road, in King of Prussia, Pennsylvania; on January 9, 2012, Darrell Williams, Story, Rufus Lawson, Anthony Lockwood, and Kenneth L. Williams robbed Govberg Jewelers, located at 292 Montgomery Avenue, in Ardmore, Pennsylvania; on February 22, 2012, Darrell Williams, Story, Lawson, and Kenneth L. Williams committed an armed robbery of Bernie Robbins Jewelers, located at 595 E. Lancaster Avenue, in Saint Davids, Pennsylvania; on April 13, 2012, Darrell Williams, Story, and Lawson committed a second armed robbery of the Tourneau store in King of Prussia; on August 22, 2012, Story committed a third robbery of the Tourneau store.
If convicted, Darrell Williams, David Story, Rufus Lawson, and Kenneth L. Williams each face a maximum sentence of life in prison; Darrell Williams and Story face a mandatory
1An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
2 minimum sentence of 57 years; Lawson faces a mandatory minimum sentence of 32 years; Kenneth Williams faces a mandatory minimum sentence of seven years; defendants Lockwood, Sherrill, Sheed, and Shabazz each face a maximum sentence of 20 years in prison. All defendants also face possible fines, supervised release and special assessments.
This case is being investigated by the FBI Violent Crimes Task Force, Philadelphia Police Department, Radnor Township Police Department, Lower Merion Township Police Department, Upper Merion Township Police Department, Limerick Township Police Department, Upper Providence Township Police Department, Evesham Township (New Jersey) Police Department, Lawrence Township (New Jersey) Police Department, U.S. Federal Probation, Pennsylvania State Parole, and Philadelphia County Probation. The case is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.Release.pdf
Indictment.pdfUNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Sacramento Man Pleads Guilty to Trafficking in Counterfeit Viagra and CialisRead the Press Release
SACRAMENTO, Calif. — Rickey Lee Campbell, 60, of Sacramento, pleaded guilty Thursday to conspiracy to traffic in counterfeit goods, United States Attorney Benjamin B. Wagner announced.
This case is the product of an investigation by the Federal Bureau of Investigation and the Sacramento County Sheriff’s Hi-Tech Crimes Task Force. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.
According to court documents, law enforcement received information about “Viagra” and “Cialis” being offered for sale through the Internet on Craigslist. Law enforcement later conducted controlled drug purchases of counterfeit Viagra from Campbell, who used the alias “Diamond Jim.” The residences of Campbell and his co-conspirator, Susan Yvonne Eversoll, 47, were later searched and more than 6,000 counterfeit tablets resembling Viagra and Cialis in shape, size, and color were found. Authorities also recovered computers and electronic devices the conspirators used to sell the counterfeit goods.
Campbell is scheduled to be sentenced by United States District Judge Troy L. Nunley on May 8, 2014. Eversoll, who pleaded guilty to the conspiracy on December 5, 2013, is scheduled to be sentenced by Judge Nunley on March 6, 2014. Each defendant faces up to 10 years in prison for their role in the conspiracy. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Rochester City Employee Indicted on Drug ChargeRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester has returned a one-count indictment charging Christopher Kendrick, 37, of Rochester, N.Y., with possession with intent to distribute of five kilograms or more of cocaine. The charge carries a maximum penalty of life in prison, a fine of $10,000,000, or both.
Assistant U.S. Attorney Frank H. Sherman, who is handling the case, stated that Kendrick was arrested on February 4, 2014 after his vehicle was stopped by New York State Police on Interstate 490 near Chili. According to the indictment, a search of the vehicle uncovered 24 kilograms of cocaine in a hidden compartment. At the time of his arrest, the defendant was employed by the City of Rochester as an operations worker.
Kendrick has been ordered detained in custody pending trial by U.S. Magistrate Judge Marian W. Payson.
The complaints are the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major Wayne C. Olson, and the Monroe County District Attorney’s Office, under the direction of Sandra Doorley.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Reputed Aryan Brotherhood of Texas Gang Leader and a Fellow Gang Member Plead Guilty to Federal Racketeering ChargesRead the Press Release
An alleged general of the Aryan Brotherhood of Texas gang (ABT) and a fellow gang member pleaded guilty today to racketeering charges related to their membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
James Francis Sampsell, aka “Skitz,” 44, of Odessa, Texas, and Fredrick Michal Villarreal, aka, “Big Mike,” 35, of Houston, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.
According to court documents, Sampsell, Villarreal and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Sampsell, Villarreal and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other activities.
By pleading guilty to racketeering charges, Sampsell and Villarreal admitted to being members of the ABT criminal enterprise.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for Oct. 7, 2014, Sampsell and Villarreal each face a maximum penalty of life in prison.
Sampsell and Villarreal are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 21 defendants have pleaded guilty.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.
The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Southern District of Texas.Reputed Aryan Brotherhood of Texas Gang Leader and A Fellow Gang Member Plead Guilty to Federal Racketeering ChargesRead the Press Release
HOUSTON – An alleged general of the Aryan Brotherhood of Texas gang (ABT) and a fellow gang member pleaded guilty today to racketeering charges related to their membership in the ABT’s criminal enterprise, announced United States Attorney Kenneth Magidson and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
James Francis Sampsell, aka “Skitz,” 44, of Odessa, and Fredrick Michal Villarreal, aka, “Big Mike,” 35, of Houston, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.
According to court documents, Sampsell, Villarreal and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Sampsell, Villarreal and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other activities.
By pleading guilty to racketeering charges, Sampsell and Villarreal admitted to being members of the ABT criminal enterprise.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for Oct. 7, 2014, Sampsell and Villarreal each face a maximum penalty of life in prison.
Sampsell and Villarreal are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 21 defendants have pleaded guilty.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; sheriff’s offices in Harris, Tarrant, Atascosa, Orange and Waller Counties; police departments in Alvin, Carrollton and Mesquite Texas; as well as the Montgomery and Atascosa County District Attorney’s Offices.The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Southern District of Texas.
Previously Convicted Baltimore Felon Exiled to over 16 Years in Prison on Gun and Drug ChargesRead the Press Release
Jury Found that Defendant Brandished a Gun While Selling Marijuana
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Ira Taylor, age 32, of Baltimore, Maryland, today to 195 months in prison followed by five years of supervised release for being a felon in possession of a gun and ammunition, distribution and possession with intent to distribute marijuana, and brandishing a firearm in furtherance of a drug trafficking crime.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore City State’s Attorney Gregg L. Bernstein; and Baltimore Police Commissioner Anthony W. Batts.
According to testimony presented at Taylor’s five day trial, on November 13, 2012, a man who was operating an unlicensed cab (a “hack”) in the 1800 block of Rosedale Street in Baltimore, attempted to purchase marijuana from Taylor. Taylor handed the man a “dime bag” of marijuana. The man took out $85 intending to get $10 to pay Taylor for the marijuana. Taylor drew a gun and pointed it at the man, demanding all the money and taking back the marijuana. Taylor ordered the man out of the car and told him to start walking towards North Avenue. According to trial testimony, the man did so, begging Taylor not to shoot him or steal his car. Taylor fired his gun at the man and slashed a tire on the car. A short time later, two Baltimore Police officers turned from North Avenue onto Rosedale Street and Taylor fled. Taylor was found hiding under a row of bushes and arrested. Police found a loaded .38 caliber revolver, with four live cartridges and one spent cartridge, on the ground nearby. Officers searched Taylor and recovered: two small bags of marijuana, $85 in balled-up cash, $19 in neatly-folded cash and a knife.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department and Baltimore City State’s Attorney=s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Scott Lemmon, Benjamin Block, Debra Dwyer and Special Assistant United States Attorney H. Brandis Marsh, Jr., a cross-designated Baltimore City Assistant State’s Attorney assigned to Exile cases, who prosecuted the case.
Postal Carrier Charged with Stealing from MailRead the Press Release
PITTSBURGH - A Leetsdale, Pa., woman has been indicted by a federal grand jury in Pittsburgh on charges of theft of mail by postal employee, United States Attorney David J. Hickton announced today.
The three-count indictment, returned on Feb. 18, named Michelle M. Frizzell, 44, as the sole defendant.
According to the indictment, Frizzell, being an employee of the United States Postal Service, did steal, abstract and remove gift cards from greeting cards on two separate occasions. In addition, she was also charged with embezzling a greeting card on another occasion.
The law provides for a maximum total sentence for each count of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The United States Postal Service – Office of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pittsburgh Man Possessed Child PornographyRead the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania, pleaded guilty in federal court to a charge of Possession of Material Depicting the Sexual Exploitation of a Minor, United States Attorney David J. Hickton announced today.
Michael Powers, 65, of Pittsburgh, Pa., pleaded guilty to one count before United States District Judge Terrence F. McVerry.
In connection with the guilty plea, the court was advised that, on or about June 21, 2013, Powers knowingly possessed videos and images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct.
Judge McVerry scheduled sentencing for June 13, 2014, at 1:30 p.m. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Powers.
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.
Philadelphia Woman Sentenced for <br /> Her Role in Deadly FirebombingsRead the Press Release
Kidada Savage, 31, of Philadelphia, was sentenced today to life in prison for her role in the Oct. 9, 2004, firebombing that killed six members of a federal witness’s family. Savage is the sister of Kaboni Savage, who ordered the firebombing and who was sentenced to death for 12 counts of murder in aid of racketeering.
Acting Assistant Attorney General Mythili Raman for the Justice Department’s Criminal Division, United States Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division made the announcement.
Kidada Savage was convicted on May 13, 2013, of six counts of murder in aid of racketeering, all related to the firebombing of Eugene Coleman’s family home. Coleman was a federal witness at the time. Six people, including four children, were killed in the arson. Kaboni and Kidada Savage were also convicted of conspiracy to commit murder in aid of racketeering, retaliating against a witness by murder and using fire to commit a felony.
Kidada Savage acted as a go-between for her brother, who was in federal custody awaiting a drug trial, and Lamont Lewis, who committed the firebombing. Lewis pleaded guilty and is awaiting sentencing. Robert Merritt and Steven Northington were also convicted in the case. Northington was sentenced to life; Merritt is awaiting sentencing.
The case was investigated by the FBI, the Internal Revenue Service – Criminal Investigation Division, the Philadelphia Police Department, the Philadelphia District Attorney’s Office and the Maple Shade Police Department in New Jersey. The United States Bureau of Prisons, United States Marshals Service and the Philadelphia / Camden High Intensity Drug Trafficking Area Task Force also assisted in the investigation.
The case was prosecuted by Trial Attorney Steve Mellin of the Criminal Division’s Capital Case Section and Assistant U.S. Attorneys David E. Troyer and John M. Gallagher.Parker County Man Charged with Hate Crime for Assault Based on Victim's Sexual OrientationRead the Press Release
FORT WORTH, Texas – Brice Johnson, 19, of Springtown, Texas, has been charged in a federal criminal complaint with willfully causing bodily injury to a person because of the actual or perceived sexual orientation of that person, the Justice Department’s Civil Rights Division, Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas, and Diego Rodriguez, Special Agent in Charge of FBI Dallas Division announced.
The complaint was filed on Feb. 12, 2014, in U.S. District Court in Fort Worth, Texas. Johnson has been in state custody since his arrest on Sept. 10, 2013, and he made his initial appearance in federal court yesterday afternoon.
“Suspected crimes of this nature will simply not be tolerated,” said U.S. Attorney Saldaña. “With the assistance of all our partners, hate crimes will be prosecuted to the fullest extent of the law.”
“We will thoroughly investigate all suspected violations of the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act in our community,” said SAC Rodriguez.
According to the affidavit filed with the criminal complaint, in the early morning hours of Sept. 2, 2013, the adult male victim, identified as A.K., connected with Johnson through the cell phone application for MeetMe.com. A.K.’s MeetMe.com page indicated he was a gay man, while Johnson’s page indicated he was not gay. During their communications, Johnson said that he was interested in engaging in sexual activity with A.K. He invited A.K. to his home, gave A.K. his cell phone number and address and they exchanged text messages planning their sexual activity.
After A.K. showed up at the house, Johnson severely beat him, then put him into the trunk of A.K.’s car and drove him to a friend’s home. Based on ligature marks on A.K.’s wrists, it appears that he was bound with an electrical cord while he was in the trunk of the car. Individuals at the home told Johnson to take A.K. to the hospital or they would call the police, and Johnson eventually drove the victim to an Emergency Medical Services station in Springtown.
A.K. was hospitalized for 10 days in Fort Worth, and he was diagnosed and treated for multiple skull and facial fractures. The investigation revealed that on the night of the incident, Johnson saved A.K.’s cell phone number using a gay slur as a contact name and Johnson later stated that he was playing a prank on the victim because of his sexual orientation, again using a gay slur when referring to A.K. According to the affidavit, A.K. said that he had no physical contact with Johnson prior to the attack.
A federal complaint is a written statement of the essential facts of the offenses being charged and must be made under oath before a magistrate judge. The defendant is presumed innocent until proven guilty. However, the statutory maximum penalty upon conviction for the offense as charged is 10 years in federal prison and a $250,000 fine. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment, and an indictment could include other charges that increase the maximum penalty.
The investigation is being conducted by the FBI, the Springtown Police Department and the Parker County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Cara Foos Pierce and Trial Attorney Saeed Mody of the Civil Rights Division.
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Orange County Man Sentenced in White Plains Federal Court to 13 Years in Prison for Receiving and Possessing Child PornographyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL LOCATENA was sentenced yesterday before United States District Judge Cathy Seibel in White Plains federal court to 13 years in prison for receiving and distributing child pornography.
U.S. Attorney Preet Bharara stated: “Those who receive and distribute child pornography endanger and victimize the most vulnerable in our communities. The stiff prison sentence imposed on Michael Locatena should serve to deter others who would engage in these crimes.”
According to the the Indictment and statements made during court proceedings:
LOCATENA, 46, of Chester in Orange County, New York, downloaded at least 1,400 images and videos of child pornography from the Internet using a peer-to-peer file-sharing program, and saved the child pornography on external hard drives.
Yesterday’s sentencing followed LOCATENA’s guilty plea on February 7, 2012, and a three-day sentencing hearing that began in July 2013 and continued over the last two days. At the sentencing hearing, Judge Seibel heard testimony from a minor victim concerning prior sexual abuse of the victim by LOCATENA. Judge Seibel concluded that the Government demonstrated by a preponderance of the evidence that the abuse occurred, and concluded that the conduct should be considered in determining the appropriate sentence for LOCATENA.
LOCATENA also testified at the hearing. He maintained that he did not engage in inappropriate activity with the minor victim, denied any sexual interest in children, and insisted that he had “inadvertently” downloaded all of the child pornography. In sentencing LOCATENA, Judge Seibel stated that much of LOCATENA’s testimony was “incredible” and “preposterous,” and she made a finding that he committed perjury during his testimony.
Mr. Bharara thanked the FBI, the Rockland County Computer Crimes Task Force, the New York State Police, the Orange County District Attorney’s Office, and the Orange County Child Protective Services for their work in the investigation.
In June 2011, LOCATENA was previously convicted, after a jury trial, in Orange County of Criminal Possession of a Loaded Firearm in the 2nd Degree and sentenced to 4 years’ imprisonment. That sentence will run concurrently with the sentence imposed today.
The case is being handled by the Office’s White Plains Division. Assistant United States Attorney Marcia Cohen is in charge of the prosecution.
Oglala Man Sentenced for Felony Child Abuse and NeglectRead the Press Release
United States Attorney Brendan V. Johnson announced that an Oglala, South Dakota, man convicted of Felony Child Abuse and Neglect was sentenced on February 20, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Yellow Hawk was immediately turned over to the custody of the U.S. Marshals Service.
Norman Yellow Hawk, age 48, was sentenced to 10 years of imprisonment, 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Between January and December 2007, in Allen, South Dakota, Yellow Hawk knowingly sexually abused one of his children.
The investigation was conducted by the Federal Bureau of Investigation. The sentencing was handled by Supervisory Assistant U.S. Attorney Gregg S. Peterman.
Nine Trey Gang Leader, Enforcer and Cocaine Supplier Convicted of Multiple Racketeering OffensesRead the Press Release
ALEXANDRIA, Va. – Thaddaeus Snow, a/k/a “Storm,” 34, of Manassas, Va., and William Sykes, a/k/a “Black,” 29, of Bealeton, Va., were convicted today by a federal jury of charges that included conspiracy to commit racketeering, violence in aid of racketeering, robbery, conspiracy to distribute cocaine base, conspiracy to commit sex trafficking by force and coercion, and firearms offenses. Jameel Aleem, a/k/a “Nino B,” 33, of Washington, D.C., was convicted of conspiracy to distribute cocaine base.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Colonel Edwin C. Roessler, Jr., Fairfax County Chief of Police, made the announcement after the verdict was accepted by United States District Judge Leonie M. Brinkema.
The defendants face a maximum penalty of life when they are sentenced on May 9, 2014. Snow faces a mandatory minimum of forty years in prison, Sykes faces a minimum of twenty years, and Aleem is subject to a mandatory term of ten years.
“These defendants and their fellow gang members threatened the safety of our communities by committing acts of violence, dealing drugs, and dehumanizing women through prostitution by force and coercion,” said Acting U.S. Attorney Boente. “The 37 convictions that have been obtained against members of the Nine Trey Gangsters over the past year reflect the outstanding cooperation of federal, state and local law enforcement to combat these pernicious crimes.”
“The multiple convictions returned by the jury today send a clear message to members of these violent criminal enterprises: we will not tolerate your illegal activities,” said Assistant Director in Charge Parlave. “The FBI, through the Northern Virginia Gang Task Force and our partners in local law enforcement, will continue to track down and arrest these brutal gang members who resort to using violent acts in an attempt to threaten our communities.”
Snow, Sykes and Aleem were indicted by a federal grand jury on Sept. 26, 2013, along with twenty-one other members and associates of the Nine Trey Gangsters street gang, on charges of conspiracy to commit racketeering, violence in aid of racketeering, conspiracy to commit sex trafficking, conspiracy to commit robbery, conspiracy to distribute 280 grams or more of crack cocaine and multiple counts related to the possession and use of firearms.
According to court records and evidence presented at trial, the Nine Trey Gangsters are a Bloods street gang set of the United Blood Nation that was founded in New York City in the early 1970’s. Thaddaeus Snow led a “line-up” of the Nine Trey Gangsters, which operated as a criminal enterprise in Virginia and committed criminal activity in multiple states. From 2008 until the date of the indictment, Snow’s line-ups of Nine Trey gangsters engaged in racketeering activity involving the sex trafficking of women using force and coercion in Virginia, Maryland, North Carolina, New York and elsewhere; the commission of robberies; and the distribution of cocaine, crack, marijuana, heroin, ecstasy and prescription painkillers. The evidence at trial also showed that Snow, Sykes and other Nine Trey Gangsters dealt in counterfeit United States currency and used counterfeit currency to finance wholesale drug purchases.
In addition, the evidence at trial showed that Snow and his subordinate gang members undertook several acts of violence. On or about April 1, 2010, Snow directed Nine Trey Gangsters to give a female victim a “buck-fifty,” consisting of slashing the woman’s face with a knife from mouth to ear with the aim of requiring 150 stiches to close the wound, because the woman had stolen proceeds of Snow’s drug sales and used some of Snow’s drug supply. The slashing was carried out by Sykes. Sykes and other gang members beat a man unconscious who may have stolen drugs from a gang member, and Sykes also committed a shooting on April 12, 2010, after the shooting victims became involved in a dispute with one of the gang members. Additionally, Sykes slapped and choked a prostitute when she concealed money she earned from him.
Snow, Sykes and Aleem were convicted following a trial that began on Feb. 11, 2014. With the conviction of these three defendants, all twenty-four individuals named in the Sept. 26, 2013 indictment have now been convicted. The following individuals named in the indictment previously pleaded guilty, admitted their involvement with the Nine Trey Gangsters and have been sentenced in federal court: Antawn Minor, a/k/a “Noid,” 33, of Manassas, Va., pleaded guilty to conspiracy to distribute crack cocaine. He was sentenced to 168 months in prison.
Deontae Holland, a/k/a “D-Boy,” 27, of Bealeton, Va., pleaded guilty to conspiracy to commit racketeering and conspiracy to distribute crack cocaine. He was sentenced to 15 years in prison.
Markeith Kerns, a/k/a “LTK,” 20, of Summerduck, Va., pleaded guilty to conspiracy to commit racketeering and conspiracy to distribute crack cocaine. He was sentenced to 10 years in prison.
Janee Yates, a/k/a “Alizia,” 24, of Warrenton, Va., pleaded guilty to conspiracy to commit racketeering and conspiracy to distribute crack cocaine. She was sentenced to 10 years in prison.
Nicole Yates a/k/a “Merlot,” 27, of Fairfax, Va., pleaded guilty to conspiracy to commit sex trafficking and conspiracy to commit robbery. She was sentenced to 10 years in prison.
Aayron Marshal, a/k/a “Mook ,” 23, of Warrenton, Va., pleaded guilty to conspiracy to distribute crack cocaine. He was sentenced to 10 years in prison.
Lionel Ritchie, a/k/a “Boogie,” 30, of Remington, Va., pleaded guilty to conspiracy to distribute crack cocaine. He was sentenced to 7 years in prison.
Candy Minor, 29, of Fredericksburg, Va., pleaded guilty to conspiracy to commit sex trafficking. She was sentenced to two years in prison.The following individuals named in the indictment previously pleaded guilty, admitted their involvement with the Nine Trey Gangsters and are awaiting sentencing: Curtis Martino, a/k/a “Curtis Dodd,” a/k/a “Red Rum,” 30, of Elkridge, Md., pleaded guilty to conspiracy to commit racketeering and discharging a firearm during a crime of violence.
George Williams, a/k/a “Champ,” 29, of Bealeton, Va., pleaded guilty to conspiracy to commit racketeering and discharging a firearm during a crime of violence.
William Sharp Manning a/k/a “Ill Will,” 25, of Warrenton, Va., pleaded guilty to conspiracy to commit racketeering and conspiracy to distribute crack cocaine.
James Watson, a/k/a “Black Kat,” 35, of Gainesville, Va., pleaded guilty to conspiracy to commit racketeering.
Christopher Head a/k/a “Briss,” 26, of Washington, D.C., pleaded guilty to conspiracy to commit racketeering and conspiracy to distribute crack cocaine.
Kaleef Tweedy, a/k/a “Bloody Tweed,” 24, of Dumfries, Va., pleaded guilty to conspiracy to commit sex trafficking, conspiracy to commit robbery and discharging a firearm during a crime of violence.
Justin Finley, a/k/a “J Mo,” 24, of Manassas, Va., pleaded guilty to conspiracy to distribute crack cocaine.
Stephon Greene a/k/a “Blitz,” 21, of Manassas, Va., pleaded guilty to conspiracy to distribute crack cocaine.
LaTonya Snow, a/k/a “Lady Dynasty,” 30, of Manassas, Va., pleaded guilty to conspiracy to transport a person interstate for the purpose of prostitution.
Devante Jordan, a/k/a “Trey,” 21, of Alexandria, Va., pleaded guilty to conspiracy to commit robbery and discharging a firearm during a crime of violence.
Joshua Pendleton Brooks a/k/a “Wacko,” 27, of Manassas, Va., pleaded guilty to conspiracy to distribute crack cocaine.
Deyonka Gaskins, 29, of Manassas, Va., pleaded guilty to conspiracy to distribute crack cocaine.
Gracier Isique, 29, of Manassas, Va., pleaded guilty to conspiracy to distribute cocaine.The 24 defendants convicted in this indictment brings the total number of Nine Trey Gangster gang members and associates recently convicted in the Eastern District of Virginia to 37 individuals. On April 2, 2013, an indictment was filed in Richmond against eight Nine Trey Gangster gang members and associates charging them with conspiracy to distribute 280 grams or more of crack cocaine. All eight of those defendants have previously pleaded guilty to the drug conspiracy charge. Five other Nine Trey Gangsters have been convicted in Richmond for illegal possession of firearms and dealing in counterfeit currency.
This case was investigated by the FBI’s Washington Field Office and the Fairfax County Police Department, with assistance from the Northern Virginia Regional Gang Task Force, Hampton Police Department, Fauquier County Sheriff’s Office, Manassas City Police Department and the United States Marshals Service. Assistant United States Attorneys Adam B. Schwartz and Dennis M. Fitzpatrick are prosecuting the Alexandria defendants on behalf of the United States. Assistant United States Attorneys Angela Mastandrea-Miller and Adam B. Schwartz are prosecuting the Richmond defendants.This case is part of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation dubbed Operation “Ruby Red,” which has been focusing on the illegal distribution of narcotics by alleged organized crime members.
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.New Jersey Man Charged in Violation of Mann ActRead the Press Release
NEWARK, N.J. – Federal agents arrested a Middlesex County, N.J., man today in Mercer County, N.J., for violating the Mann Act, a federal law prohibiting interstate transportation of a minor for illicit purposes, U.S. Attorney Paul J. Fishman announced.
Jayme Shannon, 51, of East Brunswick, N.J., was arrested at a residence in East Windsor, N.J., this morning by FBI agents and detectives with the Bergen County Prosecutor’s Office on a federal complaint charging him with interstate transportation of a minor for illicit purposes. Shannon is scheduled to make his initial appearance before U.S. Magistrate Judge Mark Falk in Newark federal court this afternoon.
According to the Complaint:
In September 2013, Shannon met the 15-year old victim in the internet chat room “Chatavenue.com” and continued to communicate with the victim in September and October 2013.
On Oct. 14, 2013, Shannon arranged to meet the victim at the Skyview Motel in Fort Lee, N.J. After renting a motel room that morning, Shannon drove from New Jersey to New York, where he picked up the victim. Shannon then drove the victim from New York to the motel for the purpose of engaging in sexual conduct and did, in fact, engage in sexual conduct with the victim in the motel.
On Oct. 14, 2013, police officers found Shannon and the victim inside the Skyview Motel. Fort Lee Police arrested Shannon, who was charged in New Jersey Superior Court with sexual assault and endangering the welfare of a child.
The federal count with which Shannon is charged carries a minimum penalty of 10 years in prison and a maximum penalty of life imprisonment.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli; and the Fort Lee Police Department, under the direction of Chief Keith Bendul, with the investigation leading today’s arrest.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
14-057
Shannon Complaint
New Jersey Doctor Who Provided Spa Services Pleads Guilty in Medicare Fraud SchemeRead the Press Release
Dr. Chang Ho Lee, 68, of Palisades Park, N.J., pleaded guilty today to health care fraud and agreed to forfeit more than $3.4 million in fraud proceeds.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
According to court documents, Lee, who is a medical doctor, and two others recruited patients by offering free lunches and recreational classes and provided them with spa services, such as massages and facials, then falsely billed Medicare for more than $13 million using those patients’ Medicare numbers. Lee and the others billed Medicare for physical therapy, lesion removals and other services that were neither medically necessary nor provided. The scheme took place at three clinics: URI Medical Center and Sarang Medical PC in Flushing, N.Y., and 999 Medical Clinic in Brooklyn, N.Y. Lee received more than $3.4 million through the submission of the fraudulent claims.
Lee is scheduled to be sentenced by United States District Judge Raymond J. Dearie of the Eastern District of New York on June 13, 2014. At sentencing, he faces a maximum sentence of 10 years in prison and approximately $3.4 million in mandatory restitution.
The case was investigated by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The case is being prosecuted by Senior Trial Attorney Nicholas Acker and Trial Attorney Bryan D. Fields from the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.New Haven Man Sentenced to More Than Four Years in Prison for Distributing Cocaine and HeroinRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that EMORY JAMES, also known as “Emmo,” 42, of New Haven, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 55 months of imprisonment, followed by three years of supervised release, for trafficking narcotics.
According to court documents and statements made in court, this matter stems from “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven. Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms. More than 100 individuals were charged as a result of the investigation.
On September 19, 2013, JAMES pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, cocaine and heroin.
JAMES’s criminal history includes at least seven felony convictions, including five drug-related offenses.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments have provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.
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(203) 821-3722 [email protected]New Britain Transportation Company Manager Imprisoned for Falsifying and Destroying RecordsRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DARIUSZ SZTEBOROWSKI, the manager of New Britain-based transportation company Wisla Express, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 14 months of imprisonment, followed by three years of supervised release, for falsifying and destroying driver records that are required to be maintained under federal motor carrier safety regulations for inspection. SZTEBOROWSKI was also ordered to pay a $20,000 fine.
On January 17, 2014, Wisla Express was sentenced to a five-year term of probation and ordered to pay a $75,000 fine.
“Wisla Express drivers, at Mr. Szteborowski’s direction, routinely drove many more hours than allowed by federal transportation safety regulations,” stated U.S. Attorney Daly. “Mr. Szteborowski then attempted to cover up these violations by submitting numerous false driver logs to federal regulators. Driver safety regulations for commercial motor vehicle carriers exist to protect not only passengers, but everyone who travels our nation’s roads. We believe that this investigation and prosecution may have prevented a highway tragedy caused by fatigued drivers, and we hope that this sentence will serve as fair warning to other commercial operators.”
According to court documents and statements made in court, Wisla Express, located at 157 Broad Street in New Britain, is a commercial motor carrier that employs drivers to operate vans and minibuses to transport individuals to and from airports, and tour buses carrying passengers to locations outside of Connecticut. SZTEBOROWSKI, a manager of Wisla Express was responsible for the day-to-day operations of the company, including scheduling driving assignments and maintaining the company’s driving records.
The Federal Motor Carrier Safety Administration (“FMCSA”), a division of the U.S. Department of Transportation, administers and enforces the federal commercial motor vehicle laws and regulations to ensure that commercial motor vehicle carriers and drivers fully comply with the responsibilities imposed on them to operate their vehicles in a safe and unimpaired manner. Federal regulations prohibit drivers from driving in excess of certain maximum allowable driving hours over defined periods, and require commercial motor carriers to maintain truthful and accurate driving records.
Between September 2008 and September 2010, SZTEBOROWSKI scheduled and assigned drivers to trips knowing that the drivers would be exceeding the regulated limits of on-duty driving time, and also instructed drivers and others to falsify driving logs by recording that the drivers were off-duty during times when they were, in fact, driving. In order to pay drivers for time actually spent working for Wisla Express, SZTEBOROWSKI instructed drivers to submit separate pay sheets and notes that accurately detailed their hours. SZTEBOROWSKI then destroyed the pay sheets and other documentation that accurately recorded the drivers’ hours.
In response to an FMCSA investigation of Wisla Express that was initiated in August 2010, SZTEBOROWSKI produced the falsified driver logs and withheld other records that would conflict with the logs.
On February 22, 2013, SZTEBOROWSKI, 50, of Rocky Hill, pleaded guilty to one count of submitting a false statement to the U.S. Department of Transportation. On February 25, 2013, Wisla Express pleaded guilty to the same charge.
During his three-year term of supervised release, SZTEBOROWSKI and his wife cannot be involved, directly or indirectly, in Wisla Express or any other business under the jurisdiction of the U.S. Department of Transportation.
U.S. Attorney Daly commended the investigative efforts of the agents of the New England Regional Office of the U.S. Department of Transportation, Office of Inspector General, and the Federal Motor Carrier Safety Administration. The Connecticut Department of Motor Vehicles Commercial Safety Division provided valuable assistance to the investigation.
This matter was prosecuted by Assistant U.S. Attorneys Felice M. Duffy and David E. Novick.
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(203) 821-3722 [email protected]Nelson County, Kentucky, Felon Guilty of Possession with the Intent to Distribute 400 Pounds of MarijuanaRead the Press Release
LOUISVILLE, Ky. – A Nelson County, Kentucky, felon pleaded guilty in United States District Court today to a single count indictment charging him with possession and intent to distribute marijuana announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to information presented in court, Joseph P. O’Bryan, age 45, attempted to sell 400 pounds of marijuana for $320,000 to a law enforcement confidential informant on October 8, 2013. At the time of the sale, defendant O’Bryan was on supervised release for a prior, federal felony conviction. According to conduct stipulated in the plea agreement, O’Bryan will forfeit $22,100 to the United States for money received during the sale of 22 pounds of marijuana to a law enforcement confidential informant on February 28, 2013.
If convicted at trial, defendant O’Bryan would face a mandatory minimum sentence of five years in prison, a maximum sentence of 40 years in prison, and a period of supervised release up to and including life.
O’Bryan is scheduled for sentencing before Senior Judge Charles R. Simpson III, on Friday, May 16, 2014 at 3:00pm in Louisville.
This case is being prosecuted by Assistant United States Attorney Stephanie Zimdahl and was investigated by the United States Drug Enforcement Administration (DEA).
Muskogee Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that JOSHUA RAY HIGGINS, age 27, of Muskogee, Oklahoma, pled guilty to Possession with Intent to Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B).
Charges arose from an investigation by the Muskogee Police Department and the Drug Enforcement Administration. The defendant was indicted in December, 2013.
The Indictment alleged that on or about November 15, 2013, within the Eastern District of Oklahoma, the defendant did knowingly and intentionally possess with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment is not less than 5 and not more than 40 years imprisonment and/or up to a $5,000,000 fine.
Assistant United States Attorney Shannon Henson represented the United States.
Montville Man Who Illegally Received Social Security Benefits Is SentencedRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOHN FRANCIS WILLIAMS, 58, of Montville, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to three years of probation for illegally receiving Social Security benefits. As part of his sentence, WILLIAMS was ordered to pay restitution in the amount of $42,156.20.
According to court documents and statements made in court, the defendant’s birth name was Russell Fithian. Sometime prior to 1993, the defendant obtained the Social Security card and birth certificate of a John Francis Williams. In 1993, the defendant applied for and received a replacement Social Security card in the name of John Francis Williams. Thereafter, he used the name John Francis Williams.
In August 2009, the defendant applied for Social Security retirement income benefits under the name of John Francis Williams, who would have turned 62 that year and had reached eligible retirement age. The defendant was 54 at the time of his application and was not eligible for retirement benefits under his true identity. The defendant thereafter received monthly benefits, totaling $42,156.20, until February 2013.
In 2013, the defendant legally changed his name to John Francis Williams.
On October 8, 2013, WILLIAMS pleaded guilty to one count of theft of government property.
This matter was investigated by the Office of the Inspector General for the Social Security Administration and was prosecuted by Assistant U.S. Attorney Felice Duffy.
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(203) 821-3722 [email protected]Meth Dealer Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Haley Nicole Jordan, 33, of Creola, was sentenced today in federal court for her involvement in the possession with intent to distribute methamphetamine ice. Jordan was originally indicted in two counts, conspiracy to possess with intent to distribute methamphetamine, and possession with intent to distribute methamphetamine ice. She took her case to trial in federal court in November of 2013, which resulted in a mistrial. Jordan entered into a guilty plea to the charge of possession with intent to distribute just before the second trial commenced in December of 2013.
At the sentencing hearing today, United States District Court Judge Kristi K. Dubose found the advisory guideline range to be 78 to 97 months. The judge imposed a sentence of 24 months imprisonment, to be followed by a three-year term of supervised release. The judge ordered that Jordan undergo a period of six months’ drug counseling and treatment at the Home of Grace as a condition of her supervised release, to commence when she is released from prison. Jordan was not ordered to pay a fine, but the judge ordered that Jordan pay the mandatory $100 special assessment.
The case was investigated by the Mobile County Sheriff’s Office. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
McLaughlin Man Charged with Assault with A Dangerous Weapon and Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Brendan V. Johnson announced that a McLaughlin, South Dakota, man has been indicted by a federal grand jury for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury.
River Grey Bull, age 19, was indicted on February 12, 2014. He appeared before U.S. Magistrate Judge William D. Gerdes on February 18, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Grey Bull is alleged to have assaulted a man with a knife in January 2014. The charge is merely an accusation and Grey Bull is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy Morley is prosecuting the case.
Grey Bull was released on bond. A trial date has not been set.
Maryland Man Sentenced to 49 Years in Prison for First-Degree Murder While Armed in 2012 Shooting in Southeast Washington-Victim and Defendant Were Close Family Friends-Read the Press Release
WASHINGTON – Grant Johnson, 39, of Bladensburg, Md., was sentenced today to 49 years in prison on charges of first-degree premeditated murder while armed and other offenses for the May 2012 slaying of a Maryland man, U.S. Attorney Ronald C. Machen Jr. announced.
Johnson was found guilty by a jury in October 2013, following a trial in the Superior Court of the District of Columbia. In addition to the first-degree murder charge, the jury found Johnson guilty of second-degree murder while armed, armed robbery, and several firearms offenses. Johnson was sentenced by the Honorable Herbert B. Dixon, Jr. Upon completion of his prison term, Johnson will be placed on five years of supervised release.
According to the government’s evidence, the victim, Ricardo Lancaster, 32, drove his company truck to the 800 block of Burns Street SE on May 30, 2012. He arrived at 11:22 p.m. with several hundred dollars to purchase a quantity of marijuana from Johnson. Johnson and Mr. Lancaster were old family friends, having grown up together in the 700 block of Adrian Street SE. Since childhood, Johnson was widely known as the best friend of Mr. Lancaster’s brother.
Sitting in the passenger seat of Mr. Lancaster’s company truck, Johnson shot Mr. Lancaster once in the right cheek at close range. He then went to the driver’s side of the vehicle, where Mr. Lancaster was still seated, and through the open window, shot him, again at close range, in the neck. Mr. Lancaster was found dead the next morning, still seated in the driver’s seat of his company vehicle on Burns Street. His personal cell phone was missing and he had $3 on his person. No marijuana was in the car. Hours after the murder, Johnson provided his girlfriend with several hundred dollars in cash for his share of the rent.
When asked by his best friend – Mr. Lancaster’s brother – whether he had seen or spoken to Mr. Lancaster prior to the murder, Johnson lied, claiming that he had not. The government’s evidence included cell phone records that showed that Mr. Lancaster and Johnson were in repeated contact the night of the murder, and Johnson’s DNA was found on a Doritos bag discarded on the passenger side floor of Mr. Lancaster’s company vehicle.
In announcing the sentence, U.S. Attorney Machen praised the work of the detectives, officers, and crime scene technicians who investigated the case for the Metropolitan Police Department. He also expressed appreciation to the FBI’s Cellular Analysis Survey Team. He commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Marian Russell, Sandra Lane, Kendra Johnson, and Fern Rhedrick; Lead Paralegal Specialist Sharon Newman; Victim/Witness Advocates Marcia Rinker and Jennifer Clark; Victim Witness Security Specialist Katina Adams-Washington; Former Intelligence Specialist Lawrence Grasso and Intelligence Specialist Zachary McMenamin, and Litigation Technology Specialist Thomas “Ron” Royal. Finally, he recognized the work of Assistant U.S. Attorneys Kimberley Nielsen and Robert Feitel, who investigated the case and prosecuted the case at trial.
14-046Manhattan U.S. Attorney Announces Extension of Claims Process for Madoff Victim Fund to Give Victims Additional Time to File ClaimsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the claims deadline for petitions for remission of forfeiture to the Madoff Victim Fund (the “MVF”) will be extended to April 30, 2014. This extension was recommended by Special Master Richard C. Breeden, who is administering the MVF on behalf of the Department of Justice.
To date, the MVF has received approximately 9,000 claims from victims of the crimes committed in connection with the fraud at Madoff Securities. Approximately 94% of claims come from individuals who either did not file a bankruptcy claim or whose claim was denied as an indirect investor. Roughly 75% of claimants have recovered nothing, or less than 10% of their losses, since Madoff Securities collapsed. Approximately 60% of claims have come from residents of the United States, with the remaining 40% of claims coming from victims of the fraud in more than 75 countries.
In announcing the extension, Manhattan U.S. Attorney Bharara said: “We are very pleased at the response the Madoff Victim Fund has received from thousands of victims of this historic fraud. The MVF is reaching a much broader universe of victims than previous efforts, including many indirect investors who have not yet recovered anything in the five years since Madoff’s arrest. The theft of these victims’ savings was every bit as real as for direct investors, and we are determined to help every genuine victim who lost money as a result of the Madoff fraud.”
Special Master Breeden noted: “Claims are pouring in to MVF from all over the world. Many of these claims are proving quite complex, often with investments that flowed through three or more intermediaries. The average claim we have received to date includes more than 75 pages of transactions and financial records. Therefore, we believe that thousands of additional claimants will benefit from having a bit more time to complete and file properly documented claims.”
Information concerning MVF and its claim process is published at www.madoffvictimfund.com. Eligibility is open to all persons who invested their own money in Madoff Securities either directly, or indirectly through feeder funds, family trusts or other pooled investment vehicles, and who lost their funds as a direct result of the collapse of the firm. Claimants must be the “ultimate investors” who lost their own funds in the collapse of the firm, not intermediaries who managed money on behalf of others or claims purchasers after the fact. Thus, banks, insurance companies, feeder funds, trust companies, hedge funds and similar entities are generally not eligible to recover from MVF, while the actual individuals whose money was lost by investing through such firms are eligible to seek a recovery. Frequently Asked Questions on the MVF’s website outline the specific criteria for eligibility and measurement of net losses. Claim forms are available for download at www.madoffvictimfund.com. All final decisions concerning claims will be made by the Department of Justice.
After reading the materials published on the website, potential claimants can email additional questions to [email protected], or call MVF’s hotline at 001 (866) 624-3670.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The Madoff Securities cases are being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew L. Schwartz, Randall W. Jackson, John T. Zach, Arlo Devlin-Brown, Christopher Frey, and Paul M. Monteleoni are in charge of the cases.
Manhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Insider Trading Charges Against Former Senior Managing Director of Investment BankRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal Complaint charging FRANK PERKINS HIXON, JR., a former Senior Managing Director of Evercore Group, LLC, a subsidiary of Evercore Partners Inc. (“Evercore”), with insider trading offenses. Specifically, HIXON is alleged to have used inside information to trade and cause others to trade in the securities of Evercore, Westway Group Inc. (“Westway”), and Titanium Metals Corporation (“Titanium”). HIXON is also charged with making false statements to FBI agents. The defendant was arrested on these charges this morning at his apartment in New York, New York, and presented this afternoon in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara said: “As we have often said, those like Frank Perkins Hixon, Jr., who illegally manipulate the market by allegedly trading on material non-public information exploit law-abiding investors and traders. In this case, the alleged wrongdoing was compounded, when Hixon tried to evade detection by lying to investigators and to his company.”
Assistant Director-in-Charge George Venizelos said: “This is the same old song: Another high-ranking finance official allegedly broke the law and abused his position in a thinly veiled attempt to make illegal trades. The alleged use of material information gleaned through confidential meetings at Evercore was deceptive and more importantly illegal. When Hixon was confronted about his back door trades, he allegedly doubled down and lied to the FBI agents who interviewed him. The integrity of our markets remains a paramount concern of the FBI. We’ll continue to pursue these cases until that message is crystal clear.”
According to the allegations contained in the Complaint unsealed today in Manhattan federal court:
Between April 2010 and January 2014, HIXON was a Senior Managing Director with the Mining and Metals Group of Evercore Group, LLC. HIXON used material non-public information that he acquired as part of his employment with Evercore to trade and cause trades in brokerage accounts belonging to the mother of his young child (“Individual A”), who lived in Austin, Texas, and to HIXON’s close relative (“Individual B”), who lived in Johns Creek, Georgia.
In 2011, HIXON led an Evercore team in advising Westway about a non-public offer from another company (“Company A”) to purchase some of its business components and, more generally, in connection with potential transactions concerning Westway’s other business components. Company A’s offer was made in early September 2011, and a Special Committee was formed around that time to consider the offer and other strategic alternatives. Those developments were not announced publicly until December 15, 2011. Meanwhile, between October 21 and December 15, 2011, HIXON purchased, and caused to be purchased, 229,000 shares of Westway for Individual A’s brokerage account by logging into Individual A’s account from various locations, including Evercore’s Manhattan office. As the negotiations for the contemplated Westway transactions became protracted, HIXON sold and caused to be sold about 140,000 of the Westway shares that had accumulated in Individual A’s account, for a profit of approximately $260,000.
In October 2012, HIXON was invited, along with other Evercore personnel, to meet with a Special Committee of Titanium’s board of directors to discuss a potential engagement in connection with an unspecified $3 billion transaction. At the October 23, 2012, pitch meeting, which HIXON attended by teleconference from London, England, HIXON and the rest of the Evercore team learned that the transaction being considered was an acquisition of Titanium by Precision Castparts Corp. (“PCP”), a manufacturer of complex metal components and products. HIXON also learned the approximate offer price, and that the transaction was likely to close before year’s end.
Within approximately one hour of the meeting with the Special Committee, HIXON began buying 20,000 Titanium shares for Individual A’s account from a mobile device traced back to London, England. Eight days later, 20,000 more shares of Titanium were purchased for Individual A’s account. Most of the logins to the account corresponding with these purchases traced back to Evercore’s Manhattan office. That same day, 15,000 shares were purchased for Individual B’s account. After market close on November 9, 2012, Titanium announced PCP’s tender offer for its shares. The next trading day, November 12, 2012, all 40,000 of Individual A’s shares of Titanium were sold for a profit of approximately $180,000. Later that month, Individual B’s Titanium shares were sold for a profit of approximately $72,350.
On January 14, 2013, HIXON attended an Evercore partnership meeting at which he learned that Evercore would be announcing record financial results for the fourth quarter of 2012. After the partnership meeting that day, HIXON spoke to Individual B by phone. During the two days preceding the bank’s January 30, 2013, announcement, HIXON, logging into Individual A’s account from Evercore’s Manhattan offices and from his home in Manhattan, bought 27,000 shares of Evercore for the account. Meanwhile, the day before the announcement, 10,000 shares of Evercore were purchased for Individual B’s account. After Evercore’s earnings release, Individual A and Individual B sold all of the Evercore shares the next day, and reaped a combined profit of approximately $94,700.
In February 2013, Evercore asked HIXON to respond to a request from the Financial Industry Regulatory Authority (“FINRA”) and to identify any known names from a list of people and entities who had traded in Titanium stock prior to PCP’s tender offer. Although Individual A and B were both on the FINRA list, HIXON responded by email: “No known relationships.”
When Evercore confronted HIXON about his failure to identify Individual A – who, as noted above, is the mother of his young child – HIXON claimed not to know Individual A by her legal name, which was what appeared on the FINRA list, and to know her only by a different name she uses. Documents produced by Evercore, including text messages and emails between HIXON and Individual A, make clear that HIXON had, in fact, long been aware of Individual A’s legal name. And bank records show that he wrote numerous large checks to Individual A, in her legal name, from 2009 to 2010. On January 28, 2014, HIXON met with two FBI agents and told them, among other things, that he had never traded in or even accessed Individual A’s brokerage account.
When Evercore confronted HIXON about his failure to identify Individual B, his close relative, HIXON responded that the associated location given for Individual B on the FINRA list—Duluth, Georgia—was inaccurate, because Individual B lives in Johns Creek, Georgia. Johns Creek shares a zip code with portions of Duluth, and was only incorporated as its own city in December 2006. The city reflected on the brokerage account statements for Individual B’s account is Duluth.
HIXON, 55, of New York, New York, has been charged in the Complaint with five counts of securities fraud (Counts One through Three, Five, and Six), two counts of securities fraud in connection with a tender offer (Counts Four and Seven), and one count of making a false statement (Count Eight). The securities fraud and fraud in connection with a tender offer charges each carry a maximum term of 20 years in prison, and the false statement charge carries a maximum term of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and thanked the Securities and Exchange Commission, which has filed civil charges in a separate action. Mr. Bharara also thanked Evercore for its cooperation in this matter.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Sarah E. McCallum is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Frank Perkins Hixon, Jr., Complaint
Man Sentenced for Assault Resulting in Serious Bodily InjuryRead the Press Release
U.S. Attorney Christopher A. Crofts announced that on February 20, 2014, thirty year old Ronan Whiteplume, an enrolled Northern Arapaho Tribal member, was sentenced by United States District Court Judge Scott Skavdahl for assault resulting in serious bodily injury, to 51 months imprisonment, three years of supervised release, a $100.00 special assessment, and $21,230.43 in restitution. Mr. Whiteplume had previously pled guilty to this offense, which stemmed from an assault during the summer of 2013. This case was investigated by Bureau of Indian Affairs Law Enforcement with the assistance of the Federal Bureau of Investigation.
Local Doctor Sentenced for Making False Statement to AgentRead the Press Release
St. Louis, MO – DR. ERICK FALCONER was sentenced to five months in prison, followed by five months of home confinement, on charges of making a false statement to federal agents regarding his purchases of misbranded Botox® from a foreign unlicensed drug wholesaler, some of which had counterfeit exterior packaging. Additionally, as part of his plea agreement, Dr. Falconer previously forfeited $20,000 to the Government.
According to court documents, during the summer of 2009, Dr. Falconer received a facsimile transmission from an unlicensed drug wholesaler that offered low prices for assorted prescription drugs, including "Botox (Turkish)" for $354.99 a vial, listing a 1-800 telephone number and an individual’s "g-mail" address for contact purposes. The facsimile was sent to his medical practice, The Youthful Body, Inc., in Florissant, MO. During this same time frame, the FDA-approved version of Botox® was sold through licensed drug wholesales at higher prices in the United States, typically $525 a vial. From August 2009 through February 2013, Dr. Falconer and his corporation made over fifty separate purchases of these counterfeit drugs, which he provided to his patients without informing them of the source of the drugs. During an interview in February 2013 with special agents of the U.S. Food and Drug Administration ("FDA"), Dr. Falconer told the agents he had only made three purchases of the illegal drugs from this unlicensed foreign wholesaler. On April 26, 2013, FDA issued a public safety alert regarding "fraudulent versions of Botox found in the United States" with counterfeit exterior cartons.
Falconer, of St. Louis, Missouri, pled guilty last November to one felony charge of making a false statement. He appeared today for sentencing before United States District Judge Carol E. Jackson.
"Healthcare professionals who buy medicines outside of the supply chain that FDA oversees jeopardize their patients’ safety," said Special Agent in Charge Patrick J. Holland of FDA’s Office of Criminal Investigations, Kansas City Field Office. "FDA will not hesitate to bring to justice all those who put the public’s health at risk by violating federal law."
This case was investigated by the U.S. Food and Drug Administration, with assistance from the Office of Inspector General for the U.S. Department of Health and Human Services.
Local Biotech Firm Fined $250,000 for Concealing Toxic Nature of Product from the FDARead the Press Release
San Diego biomedical device manufacturer Valor Medical, Inc. was fined $250,000 today by U.S. District Judge Dana M. Sabraw for intentionally withholding unfavorable test results from the Food and Drug Administration about products under development for the treatment of aneurysms.
Valor had been seeking FDA approval to proceed with clinical trials of the devices in question, including one intended for use in blood vessels in the brain, known as Neucrylate AN, and one intended for use in blood vessels near the heart, called Neucrylate AVM. But the actual preclinical test results would have cast doubt on the safety of Neucrylate, so the company concealed the results.
No Americans were harmed because the FDA never permitted clinical trials to proceed in the United States. However, one death and two strokes occurred as part of clinical trials of the product in Europe, where the European authorities were also unaware of the undisclosed test reports.
Former Valor CEO and current member of the Board of Directors H. Clark Adams and Valor Regulatory and Clinical Affairs Manager Cathy Bacquet pleaded guilty to misdemeanors, and Valor founder Dr. Charles Kerber and Chief Scientist Peter Friedman entered into Deferred Prosecution Agreements, for their roles in the matter.
Because Neucrylate is considered be a Class III medical device under the Food, Drug and Cosmetic Act (“FDCA”), premarket approval from the FDA is required before it can be sold in the United States. In order to perform clinical trials on humans to obtain the data needed to support an application for premarket approval, Valor needed to obtain an investigational device exemption (“IDE”) from the FDA. The regulations relating to investigational device exemptions require the applicant to submit “reports of all prior clinical, animal and laboratory testing of the device.”
As the device is intended to be permanently implanted in the body, biocompatibility is very important. The FDA evaluates the biocompatibility of medical devices pursuant to international standards, which require a series of at least three tests. Two of the three tests typically performed to satisfy these requirements are the mouse lymphoma assay (MLA) and the chromosomal assay (CAA) tests.
According to sentencing documents filed with the court, Valor sent samples of Neucrylate to a laboratory to perform the CAA and MLA tests in early 2007. Shortly thereafter, the lab reported to Alan Donald, a consultant hired by Valor, that all the chromosomes in the CAA test had been destroyed by initial contact with the Neucrylate, indicating toxicity.
The lab asked if Valor wanted the lab to dilute the samples of Neucrylate and try the test again, which is the standard protocol. Donald requested that no further testing be performed. The final report, dated April 25, 2007, indicated that “no chromosomes were present to be scored.” While the destruction of all chromosomes indicated that the Neucrylate was cytotoxic, the official conclusion to the report stated that no conclusion could be drawn from the testing because the testing had not been completed pursuant to the testing protocol.1
At about the same time, the laboratory sent an email to Friedman, with the preliminary results of the MLA test attached, advising that “all testing has been completed and the test article is considered to be mutagenic.” Friedman forwarded the email, with the attached preliminary results, to Donald, Adams, and Kerber later that same day. Adams replied to all, saying “Let’s huddle and determine how we overcome this obstacle. I have confidence that we can find an answer.”
Neither the CAA test results nor the MLA test results were ever provided to the FDA by Valor, which filed two separate investigational device exemption applications and responded to several additional requests for information from the FDA (virtually all of which specifically requested that the CAA and/or MLA tests be performed).
The FDA rejected all of Valor’s IDEs for Neucrylate.
After a December 2010 inspection of Valor uncovered the CAA test, the FDA sent a warning letter to Adams at Valor. The letter referenced the failure to disclose the CAA testing as a violation of the regulations requiring an applicant to submit all preclinical testing to the FDA.
When responding to the FDA on behalf of Valor, Defendant Bacquet claimed that Valor “inadvertently” left out the CAA and MLA tests in the application for the IDE. Valor blamed this “unintentional violation” on Valor’s reliance on the work of consultant Alan Donald, who had separated from the company nearly a year before that IDE was filed. The letter falsely stated that “Prior to February 10, 2011, the existence of this report [the MLA] was not known to VM management or Quality/Regulatory staff.” This statement was contradicted by a series of emails between Friedman, Kerber, Adams, and Donald from the time period when the MLA results were received by Valor in 2007, as well as by presence of the MLA report on the computers of Friedman and Bacquet.
The American people depend on the FDA to determine that there is sufficient scientific basis to believe that a proffered medical device is safe and effective before permitting clinical trials on human beings. The FDA, in turn, depends on the full and truthful disclosure of all pre-clinical testing by device manufacturers to make an educated determination. When information is withheld from the FDA, as in the instant case, the decision-making process is corrupted.
____________________
1The lab’s internal Quality Event Details Form noted that the samples for the CAA test were “cytotoxic,” and the results were valid, but the sponsor was “choosing to cancel the study rather than perform dilutions” so a “full conclusion as to the genotoxicity of the sample will not be made.”
DEFENDANT Criminal Case No. 14cr0196-DMSValor Medical, Inc. San Diego, California
Date of Incorporation: 2007 SUMMARY OF CHARGESFailure to Provide Required Information, a felony, in violation of Title 21, United States Code, Section 331(q)(1)(B) and 333(a)(2)
INVESTIGATING AGENCY
Maximum Penalty for a corporation: 5 years of probation, a $500,000 fine, $400 special assessmentU.S Food and Drug Administration, Office of Criminal Investigations
Leesburg Man Sentenced for Role in Procurement Fraud Scheme Affecting over $33 Million in Federal ContractsRead the Press Release
ALEXANDRIA, Va. – Anthony R. Bilby, 40, of Leesburg, Va., was sentenced today to 16 months in prison, followed by two years of supervised release, for conspiracy to commit wire fraud and major government fraud. Bilby also was ordered to forfeit $1,065,103.90, representing his personal proceeds from the conspiracy.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Carlton Mann, Chief Operating Officer, Department of Homeland Security (DHS), Office of Inspector General; Brian D. Miller, General Services Administration (GSA) Inspector General; Peggy E. Gustafson, Small Business Administration (SBA) Inspector General; and Richard J. Griffin, Acting Inspector General, Department of Veterans Affairs, Office of Inspector General, made the announcement after sentencing by United States District Judge Anthony J. Trenga.
Bilby pleaded guiltyon December 2, 2013. According to court documents, from April 2007 through November 2012, while Bilby was employed by two service-disabled veteran-owned small businesses, he participated in a conspiracy to obtain government contracts through fraud and misrepresentation. During this time period, Bilby caused employees at a nominal competitor to submit inflated bids on the same procurements for which Bilby submitted bids on behalf of his employers. Bilby also gained improper access to the procurement process through co-conspirators working within the government. These co-conspirators provided Bilby and others with internal government cost estimates, so that Bilby knew how much the government was willing to pay before he drafted his and his competitor’s bids. Bilby also drafted portions of internal procurement documents in a manner that increased his odds of winning contracts without facing actual competition.
One of Bilby’s employers, with Bilby’s knowlege and assent, agreed to pay ten percent of its profits on a contract worth more than $24 million to co-conspirators within the government. These co-conspirators, in turn, provided Bilby and his employer with improper access to documents and a competitive advantage in obtaining the contract. In total, the conduct of Bilby and others resulted in the award of more than $33 million in federal contracts through fraudulent procurement practices.
This case was investigated by the Offices of the Inspector General for DHS, GSA, SBA, and the VA, with assistance from DHS’s Office of the Chief Security Officer, Cyber Forensic Branch. Assistant United States Attorney Kosta S. Stojilkovic is 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.Leader of Interstate Methamphetamine and Oxycodone Ring SentencedRead the Press Release
PITTSBURGH - The leader of a drug ring that brought kilograms of methamphetamine and 10,000 narcotic pills into the Western District of Pennsylvania for sale has been sentenced in federal court to 10 years’ incarceration.
United States District Judge Davis S. Cercone imposed the sentence on Joshua Shaffer, 36, of Hiawatha, Iowa.
Judge Cercone also imposed a two-year period of incarceration on co-conspirator Joe Cesa, 26, of Kersey, Pa., and accepted a guilty plea from a third conspirator, Keith Alfred Hayes, 48, of Sykesville, Pa.
According to evidence presented to the Court, between February 2010 and September 2011, a conspiracy to distribute oxycodone tablets and methamphetamine existed in Jefferson County in Northwestern Pennsylvania and surrounding counties. Shaffer was the source-of-supply for the conspiracy, sending methamphetamine and oxycodone to Pennsylvania from his Florida home, utilizing couriers traveling by car and mailed packages.
Shaffer generally sold the oxycodone tablets for up to $25 each, and the methamphetamine wholesaled for $5,600 an ounce. The pills would then be sold to drug addicts for $35 or $40 apiece, and the methamphetamine would be packaged for individual use and sold. Oxycodone is a highly-addictive narcotic drug that is frequently abused in Western Pennsylvania.
Cesa was a street seller of oxycodone provided to him by Shaffer or one of the other seven co-defendants. Hayes drove shipments of drugs from Florida to Pennsylvania at Shaffer’s direction. All nine defendants charged in the indictment have now pleaded guilty.
Judge Cercone scheduled sentencing for July 11, 2014 at 10:00 am for Hayes. The law provides for a total sentence of up to 20 years in prison and a fine not to exceed $1,000,000 for Hayes. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Assistant United States Attorney Gregory J. Nescott is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and the Pennsylvania State Police conducted the investigation that led to the prosecution of Joshua Shaffer, Joe Cesa, and Keith Hayes. The Jefferson County District Attorney's Office also assisted in a related investigation targeting other oxycodone distributors.
Kidada Savage Sentenced for Deadly FirebombingsRead the Press Release
PHILADELPHIA – Kidada Savage, 30, of Philadelphia, was sentenced today to life in prison for her role in the October 9, 2004, firebombing that killed six members of a federal witness’s family. Savage is the sister of Kaboni Savage who ordered the firebombing and who was sentenced to death for 12 counts of murder in aid of racketeering. Kidada Savage was convicted, on May 13, 2013, of six counts of murder in-aid-of racketeering, all related to the firebombing of Eugene Coleman’s family home. Kaboni and Kidada Savage were also convicted of conspiracy to commit murder in aid of racketeering, retaliating against a witness by murder, and of using fire to commit a felony (the Coleman murders). Coleman was a federal witness at the time. Six people, including four children, were killed in the arson.
Today’s penalty verdict was announced by United States Attorney Zane David Memeger, Acting Assistant Attorney General Mythili Raman for the Justice Department’s Criminal Division, and Special Agent-in-Charge Edward J. Hanko of the FBI’s Philadelphia Division.
Kidada Savage acted as a go-between for her brother, who was in federal custody awaiting a drug trial, and Lamont Lewis, who committed the firebombing. Lewis pleaded guilty and is awaiting sentencing. Robert Merritt and Steven Northington were also convicted in the case. Northington was sentenced to life; Merritt is awaiting sentencing.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Philadelphia Police Department, the Philadelphia District Attorney’s Office, and the Maple Shade, New Jersey Police Department. The United States Bureau of Prisons, the United States Marshals Service, and HIDTA (High Intensity Drug Trafficking Area) also assisted in the investigation. The case was prosecuted by Assistant United States Attorneys David E. Troyer and John M. Gallagher and Trial Attorney Steve Mellin, of the Criminal Division’s Capital Case Unit at the U.S. Department of Justice.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Kidada Savage Sentenced for Deadly FirebombingsRead the Press Release
PHILADELPHIA – Kidada Savage, 31, of Philadelphia, was sentenced today to life in prison, and a consecutive ten-year sentence, for her role in the October 9, 2004, firebombing that killed six members of a federal witness’s family. Savage is the sister of Kaboni Savage who ordered the firebombing and who was sentenced to death for 12 counts of murder in aid of racketeering. Kidada Savage was convicted, on May 13, 2013, of six counts of murder in aid of racketeering, all related to the firebombing of Eugene Coleman’s family home. Kidada Savage was also convicted of retaliating against a witness by murder, and of using fire to commit a felony (the Coleman murders). Coleman was a federal witness at the time. Six people, including four children, were killed in the arson.
Today’s sentence was announced by United States Attorney Zane David Memeger, Acting Assistant Attorney General Mythili Raman for the Justice Department’s Criminal Division, and Special Agent-in-Charge Edward J. Hanko of the FBI’s Philadelphia Division.
Kidada Savage acted at the behest of her brother, who was in federal custody awaiting a drug trial, and recruited Lamont Lewis to commit the firebombing. Lewis pleaded guilty and is awaiting sentencing. Robert Merritt and Steven Northington were also convicted in the case. Northington was sentenced to life; Merritt is awaiting sentencing.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Philadelphia Police Department, the Philadelphia District Attorney’s Office, and the Maple Shade, New Jersey Police Department. The United States Bureau of Prisons, the United States Marshals Service, and HIDTA (High Intensity Drug Trafficking Area) also assisted in the investigation. The case was prosecuted by Assistant United States Attorneys David E. Troyer and John M. Gallagher and Trial Attorney Steve Mellin, of the Criminal Division’s Capital Case Unit at the U.S. Department of Justice.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Kevin W. Techau Sworn in as New United States AttorneyRead the Press Release
Kevin W. Techau today took the United States Attorney’s oath of office as the newest United States Attorney for the Northern District of Iowa. Techau succeeds Stephanie M. Rose as the District’s presidentially appointed United States Attorney and Sean R. Berry as the District’s court appointed United States Attorney. He was nominated by President Barack Obama on November 7, 2013, and was confirmed by the full Senate on February 12, 2014.
A public investiture ceremony for Mr. Techau is planned for the future but no date or details have yet been determined.
“I am honored and excited to serve as United States Attorney for the Northern District of Iowa. This is a great office, full of smart and passionate people. I look forward to working with other members of the District’s exceptional legal and law enforcement communities. I thank President Obama for nominating me and Senator Harkin for his recommendation and unwavering support through this process,” Techau said.
Techau most recently served as Associate General Counsel at American Equity Investment Life Insurance Company, where he worked since 2007. Prior to that, Techau served as a Commissioner of the Iowa Department of Public Safety from 2002 to 2007 and as Director of the Iowa Department of Inspections and Appeals from 1999 to 2002. He was an Assistant Federal Public Defender with the Iowa Federal Defender’s Office from 1996 to 1999 and worked in private practice at the law firm of Grefe & Sidney from 1992 to 1996.
From 1985 to 1992, Techau served as a Judge Advocate with the United States Air Force. After leaving active duty, he served with the Iowa Air National Guard from 1993 to 2011. In 2011, he retired from the Iowa Air National Guard as a Colonel with 27 years of military service.
Mr. Techau was born in Iowa City and graduated from Marion High School. He received his law degree in 1984 from the University of Iowa College of Law and his undergraduate degree in 1981 from the University of Iowa.
For a photograph, go to http://www.justice.gov/usao/ian/meetattorney.html.
Justice Department Sues to Shut Down Detroit Tax PreparerRead the Press Release
The United States filed a lawsuit today to bar Margaret Brown, a Detroit tax return preparer, from preparing federal tax returns for others, the Justice Depart ment announced.
According to the complaint, Brown prepared tax returns that falsely clai med business inco me, business expenses and education credits. For exa mple, the co mplaint states that Brown prepared a tax return in 2011 that reported that the custo mer had a barber business with inco me of $9,673 and expenses of $124. The custo mer did not have a barber business in 2011, according to the co mplaint, and had no idea where Brown obtained such infor mation. In another exa mple listed in the co mplaint, Brown allegedly reported $4,000 in qualified education expenses on a custo mer’s 2011 tax return. The co mplaint alleges that neither the custo mer nor her dependents attended college in 2011.
The complaint also alleges that for tax years 2010 and 2011, Brown failed to co mply with due-diligence require ments i mposed by federal law on tax preparers who claim the Earned Inco me Tax Credit on their custo mers’ tax returns.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found at this website. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Margaret Brown
Complaint for Permanent Injunction and Other Relief
Jackson Man Sentenced for Aggravated Identity Theft and Wire FraudRead the Press Release
Jackson, Miss. – Mark C. Hooten, 44, of Jackson, a local minister and a former subcontractor for DIRECTV, was sentenced on February 20, 2014, to serve a total of 54 months in federal prison for aggravated identity theft and wire fraud, announced U.S. Attorney Gregory K. Davis. Hooten was also ordered to pay restitution totaling $384,651.26 to DIRECTV, the victim of his fraudulent activity. He pled guilty to the charges on November 13, 2014 before Senior U.S. District Judge Tom S. Lee.
Hooten admitted unlawfully using the social security numbers of existing DIRECTV customers without their permission to fabricate additional DIRECTV customer accounts under the pretext of establishing additional satellite service. He fraudulently obtained commission payments for fictitious satellite TV installations from DIRECTV and Dixon Security, a Mississippi company with whom Hooten subcontracted as a satellite TV service installer.
This case was investigated by the U.S. Secret Service and prosecuted by Assistant United States Attorney Carla J. Clark.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Our nation-wide commitment to reducing gun crime in America.
Jackson Man Sentenced for Aggravated Identity Theft and Wire FraudRead the Press Release
Jackson, Miss. – Mark C. Hooten, 44, of Jackson, a local minister and a former subcontractor for DIRECTV, was sentenced on February 20, 2014, to serve a total of 54 months in federal prison for aggravated identity theft and wire fraud, announced U.S. Attorney Gregory K. Davis. Hooten was also ordered to pay restitution totaling $384,651.26 to DIRECTV, the victim of his fraudulent activity. He pled guilty to the charges on November 13, 2014 before Senior U.S. District Judge Tom S. Lee.
Hooten admitted unlawfully using the social security numbers of existing DIRECTV customers without their permission to fabricate additional DIRECTV customer accounts under the pretext of establishing additional satellite service. He fraudulently obtained commission payments for fictitious satellite TV installations from DIRECTV and Dixon Security, a Mississippi company with whom Hooten subcontracted as a satellite TV service installer.
This case was investigated by the U.S. Secret Service and prosecuted by Assistant United States Attorney Carla J. Clark.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Our nation-wide commitment to reducing gun crime in America.
Indictment Charges Pair with Arson That Destroyed Factory in BridesburgRead the Press Release
PHILADELPHIA – James Pickup, 30, and Shawn Workman, 20, both of Philadelphia, Pennsylvania, were charged today by indictment in an arson conspiracy that caused damage to company that does business with the United States Navy, announced United States Attorney Zane David Memeger. According to the indictment, on December 16, 2012, the defendants set a fire inside a factory owned by Arco Sales Company, located at 2211 Wakeling Street, in Philadelphia. Arco manufactured and sold renewable and non‑renewable aircraft, missile components, and Naval items to federal government agencies throughout the United States.
The indictment alleges that the defendants committed a burglary at the factory earlier in the day, stealing liquor and computer equipment. They allegedly set the fire to destroy any evidence they left behind. The arson resulted in a four-alarm fire that completely destroyed the factory.
If convicted the defendants face a mandatory minimum sentence of five years in prison up to a maximum of 20 years, a $250,000 fine, and up to three years of supervised release.
The case was investigated by Bureau of Alcohol, Tobacco, Firearms and Explosives and is being prosecuted by Assistant United States Attorney Jeanine Linehan.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Idaho Falls Man Sentenced to 96 Months for Meth TraffickingRead the Press Release
POCATELLO – Sammy Joe Aguirre, 27, of Idaho Falls, Idaho, was sentenced today in United States District Court to 96 months in prison for possession with intent to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Aguirre to serve three years of supervised release and perform 100 hours of community service following his release from prison. Aguirre pleaded guilty to the charge on November 19, 2013.
According to the plea agreement, on March 21, 2013, law enforcement officers observed Aguirre traveling from Idaho Falls to Rupert, Idaho, where he obtained approximately one pound of methamphetamine. While transporting the methamphetamine back to eastern Idaho, Aguirre’s vehicle was stopped, he was arrested and law enforcement seized the methamphetamine. Aguirre admitted in court that he obtained the methamphetamine with the intention of distributing it to others.
Aguirre’s co-defendant, Emilio Raymond Martinez, of Rigby, Idaho, was sentenced in January 2014 to 80 months in prison for possession with intent to distribute methamphetamine. According to court documents, on February 26, 2013, during execution of a search warrant at a residence in Bonneville County, officers found Martinez in possession of methamphetamine, which he intended to distribute, and paraphernalia.
The case is the result of a joint investigation of the Organized Crime and Drug Enforcement Task Force (OCDETF), led by the Idaho State Police, with assistance from the Idaho Falls Police Department and Bonneville County Sheriff’s Office. Other federal agencies participating in the OCEDTF program include the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation (IRS-CI), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and U.S. Marshals Service.
The OCDETF program is a federal, multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Gaines County Man Sentenced to 121 Months in Federal Prison for Possessing Prepubescent Child PornographyRead the Press Release
LUBBOCK, Texas — Jose Fidencio Perez, 40, of Seagraves, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 121 months in federal prison, following his guilty plea in October 2013 to one count of possession of prepubescent child pornography and aiding and abetting, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, Perez used a file sharing program on his computer to download child pornography. In the course of searching for depictions of sexually explicit conduct, Perez downloaded and viewed numerous videos depicting minors engaged in sexually explicit conduct.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Office of the Attorney General of New Mexico Investigations Division. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Four Philadelphia Men Charged in $4.4 Million Dollar Jewelry HeistRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, and Stephen E. Vogt, Special Agent in Charge of the Baltimore Field Office of the Federal Bureau of Investigation, announced today that defendants, DARRELL WILLIAMS, a/k/a “Blue,” age 43 of Philadelphia, DAVID STORY, a/k/a “Dawoo,” age 46 of Philadelphia, RUFUS LAWSON, a/k/a “Ru,” “Alonzo Nowell,” age 48 of Philadelphia, and WILLIE HAWKINS SMITH, age 22 of Philadelphia, have been charged with one count of conspiracy to commit Hobbs Act Robbery, in violation of Title 18, United States Code, Section 1951; one count of committing Hobbs Act Robbery; and one count of possessing and using a firearm in furtherance of a crime of violence, in violation of Title 18, United States Code, Section 924(c), for their roles in the November 1, 2011, armed robbery of Stuart Kingston Jewelers, located in Wilmington, Delaware. Jackie Howard, an unindicted co-conspirator in this robbery, was separately indicted in the Eastern District of Pennsylvania.
If convicted, Darrell Williams, David Story, Rufus Lawson, and Willie Hawkins Smith each face a maximum sentence of life in prison. Darrell Williams, David Story, Rufus Lawson, and Willie Hawkins Smith also face a mandatory minimum sentence of 7 years. All defendants also face possible fines, supervised release and special assessments.
According to the Indictment, which was unsealed yesterday in Delaware’s District Court, in the weeks leading up to the robbery, the defendants targeted Stuart Kingston Jewelers. Prior to the robbery, the defendants cased the jewelry store so that they would be familiar with the store’s lay-out. On November 1, 2011, the defendants drove to Stuart Kingston Jewelers in two separate vehicles. One car was a rented white U-Haul cargo van, which displayed a stolen New York State license plate to conceal the U-Haul van’s true license plate. The other car was a rented Nissan Sentra, which was used to conduct counter-surveillance during the armed robbery. Upon arriving at the store, four of the defendants, armed with a handgun, hammers, zip-ties, and duct tape, conducted a take-over style robbery of Stuart Kingston Jewelers. A fifth defendant remained outside the store in the Nissan Sentra acting as a look-out.
At the time of the robbery, surveillance cameras were operating throughout Stuart Kingston Jewelers, and the front door to the store was locked. One of the defendants, however, was able to gain entry by showing his face to the security camera, which caused an employee to unwittingly and remotely unlock the door. Once the front door was unlocked, all of the defendants entered the jewelry store. The remaining defendants wore coats, gloves, and masks to conceal their identities.
Two of the defendants immediately tied up three store employees with zip-ties and duct tape, while the remaining defendants smashed the display cases, removed the jewelry, and placed the jewelry into bags. The defendants robbed the store of hundreds of pieces of jewelry, including valuable earrings, brooches, necklaces, and rings, all of which possessed an estimated retail value of approximately $2,427,216.50. The defendants also forced an employee to open and empty the jewelry store’s vault, which was located in the back of the store. The defendants took possession of, among other items, a piece of jewelry known as the “Liberty Bell Ruby.” The “Liberty Bell Ruby is the largest mined ruby in the world, found in east Africa in the 1950s. It weighs approximately four pounds, is approximately eight and a half thousand carats, and is sculpted into the Liberty Bell. It has approximately fifty diamonds set in it and possessed an estimated retail value of approximately $2,000,000.00.
This case was investigated by the FBI, Wilmington Resident Agency. Assistant United States Attorney Jamie M. McCall is prosecuting this case.
For further information, contact Assistant United States Attorney Jamie M. McCall or United States Attorney Charles M. Oberly, III.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former Owner of Long Beach Hospital Charged in Health Care Fraud Scheme That Paid Tens of Millions of Dollars in Kickbacks for Referrals for Spinal Surgeries Billed to Workers’ Comp ProgramsRead the Press Release
Santa Ana, California – The former owner of Pacific Hospital in Long Beach was charged today in a long-running health care fraud scheme that involved tens of millions of dollars in illegal kickbacks in exchange for referrals of thousands of patients who received spinal surgeries. The referrals to the hospital led to more than $500 million in bills being fraudulently submitted during last five years of the scheme, much of which was paid by the California worker’s compensation system.
Michael D. Drobot, 69, of Corona Del Mar, was charged this morning in a criminal information with orchestrating a wide-ranging conspiracy and with paying illegal kickbacks.
In a plea agreement also filed this morning, Drobot agreed to plead guilty to the two counts which could send him to federal prison for as long as 10 years.
From 1997 to 2013, Drobot, who owned Pacific Hospital until late last year, ran a scheme in which he billed workers’ compensation insurers hundreds of millions of dollars for spinal surgeries performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks. For referrals for spinal surgeries, Drobot typically paid a kickback of $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery. Some of the patients lived as much as hundreds of miles away from Pacific Hospital, and closer to other qualified medical facilities. The patients were not informed that the medical professionals had been offered kickbacks to induce them to refer the surgeries to Pacific Hospital.
Drobot and his co-conspirators concealed the kickback payments by entering into bogus contracts with the doctors, chiropractors, and others who received kickbacks. In reality, the contracts merely provided a cover story for the kickback payments.
The kickbacks were financed largely by money generated from inflated prices for medical devices implanted into state workers’ comp patients during spinal surgeries. Drobot set up a scheme that exploited a now-repealed California law known as the spinal “pass-through” legislation, which permitted hospitals to pass on to workers’ comp insurers the full cost of medical devices implanted in spinal surgery patients. Specifically, Drobot used shell companies to inflate the costs of those devices and then billed the insurers at the inflated rates.
“The spinal pass-through, the provision of California law that allowed Pacific Hospital to fraudulently inflate the cost of the medical hardware used during spinal surgeries, was a vital component of defendant Drobot’s ability to pay kickbacks to the doctors, chiropractors, marketers, and others who had referred patients to Pacific Hospital for surgeries and other medical services,” according to the charging document filed today.
As part of the health care fraud scheme, Drobot admitted in his plea agreement that he paid bribes to California State Senator Ronald Calderon in exchange for Calderon performing official acts to keep the spinal pass-through law on the books. Calderon was indicted on federal charges yesterday for allegedly accepting bribes from Drobot, as well as undercover FBI agents seeking official acts in relation to other matters.
As part of his plea agreement, Drobot has agreed to cooperate in the government’s ongoing investigation of the health care fraud scheme, which has been dubbed Operation “Spinal Cap.” Drobot has also agreed to cooperate in the government’s prosecution of Ronald Calderon and his brother, who was also indicted yesterday.
“Drobot has agreed to plead guilty in the health care fraud scheme, and as part of this agreement, he admits paying bribes to Ron Calderon in exchange for the senator’s help in keeping alive a law that brought massive profits to Drobot’s companies,” said United States Attorney André Birotte Jr. “Drobot also paid kickbacks, which are illegal under both California and federal law because they corrupt the doctor-patient relationship and may encourage medical professionals to recommend procedures that are not necessary, not in the patients’ best interest or actually harmful to the patient.”
Drobot has agreed to surrender and be arraigned in this case in United States District Court in Santa Ana on March 31.
“The charges allege that the defendant used kickbacks and other tactics to ensure the system worked to his advantage,” said Bill Lewis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The insurance scheme victimized multiple sectors of society, including insurance companies, the taxpayers and spinal patients.”
California Insurance Commissioner Dave Jones said: “Insurance fraud is a multi-billion dollar drain on California’s economy, which results in higher insurance premiums for California businesses and consumers. The co-conspirators lined their pockets by ripping off insurance companies to the tune of hundreds of millions of dollars. This is one of the largest workers’ compensation fraud cases in the history of the Department of Insurance – our successful investigation of this complex criminal scheme underscores our commitment to bring law breakers to justice regardless of who they are.”
Tom Frost, Special Agent in Charge with the Postal Service Office of Inspector General, stated: “We are committed to preserving Postal Service resources by vigorously investigating allegations of fraud and corruption. We are grateful for the efforts of the U.S. Attorney’s Office and our State and Federal partners in this investigation.”
The ongoing investigation into abuses involving the spinal pass-through law and kickbacks paid for spinal surgery patients is being conducted by the Federal Bureau of Investigation; IRS – Criminal Investigation; the California Department of Insurance; and the United States Postal Service, Office of Inspector General.
Release No. 14-025
Former Newton, Iowa Doctor Pleads Guilty of Health Care Fraud and Illegal Distribution of Controlled SubstanceRead the Press Release
DES MOINES, IA - The United States Attorney for the Southern District of Iowa, Nicholas A. Klinefeldt, announces that Lafayette James Twyner, Jr., age 64, a former doctor in Newton, Iowa, pleaded guilty in United States District Court on February 21, 2014, to one count of health care fraud and one count of illegal distribution of a schedule III controlled substance resulting in death, announced United States Attorney Nicholas A. Klinefeldt. If approved by the district court at sentencing, the plea agreement calls for Twyner to serve a total of 8 years of incarceration, which will include 5 years in prison and 3 years of home and/or community confinement.
“The illegal distribution and abuse of prescription drugs is a significant problem,” explained Klinefeldt. “Our office, and the federal, state, and local law enforcement agencies that assisted with this prosecution, take seriously our duty to protect the public from such practices,” he added.
Federal law permits doctors, pharmacists, and other health care professionals with U.S. Drug Enforcement Administration registrations to lawfully dispense controlled substances if they are doing so in the usual course of their professional practices and for a legitimate medical purpose, but makes it illegal for them to knowingly issue a prescription to someone who is abusing or diverting a drug.
The indictment, filed October 23, 2012, charges Twyner with prescribing controlled substances in a manner likely to cause, and that did cause, dependence, addiction, and in one case, death, as well as failing to change his prescribing practices, even after being made aware of obvious signs of patient drug abuse and diversion. Additionally, the indictment alleges he caused various insurance companies to be billed for prescriptions and services that were not for a legitimate medical purpose.
Twyner surrendered his registration to prescribe controlled substances to the U.S. Drug Enforcement Administration in April 2011, shortly after a federal search warrant was executed at the location of now-defunct Urgent Care Clinic in Newton, where he then practiced medicine. According to public records from the Iowa Board of Medicine, Twyner, who was first licensed in Iowa in 1976, surrendered his license to practice medicine in 2012, and agreed to pay a $10,000 fine. Twyner was cited by the Iowa Board of Medicine for “engaging in a pattern of willful and repeated violation of the laws and rules governing the practice of medicine in Iowa, placing patients at risk of serious harm, when he prescribed excessive controlled substances to numerous patients, including patients with known drug histories.”
The investigation was a joint local, state, and federal effort, spearheaded by the U.S. Department of Health and Human Service, Office of Inspector General, the U.S. Drug Enforcement Administration-Office of Diversion Control, and the Jasper County Sheriff’s Office. Other assisting agencies were the Mid-Iowa Narcotics Enforcement (MINE)-East Task Force, Federal Bureau of Investigation (FBI), Jasper County Attorney’s Office, and Iowa Board of Medicine. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Former Miami Securities Professional Sentenced to 37 Months for Securities Fraud in Connection with Multi-State Investment SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Drew J. Breakspear, Commissioner, State of Florida, Office of Financial Regulation, Bureau of Financial Investigations, announce that Daniel Paez, 27, of Miami, was sentenced today before U.S. District Judge William P. Dimitrouleas to 37 months in prison in connection with a scheme to defraud investors in Florida and several states.
According to court documents, Paez was the President of Fly High Investments, Inc., a Miami-Dade investment fund. From in or around September 2010, through in or around April 2012, Paez obtained more than $500,000 in funds from investors via telephone solicitations and through the Internet. Paez told investors that Fly High Investments was a hedge fund that managed more than $50 million, and he promised investors that their money would be invested in safe and secure investments. Paez also promised a fixed rate of return and that investors could withdraw their money whenever they wished. Instead, according to the Information, Paez spent the bulk of the money raised from investors at casinos, and also withdrew large amounts of cash for his personal benefit. Paez did invest certain investor monies in stocks and other securities, but often in high risk investments or penny stocks that were materially different than the specific investments promised to investors during their sales pitch.
When investors contacted Fly High Investments and Paez to inquire about the status of their funds, Paez misled investors into believing their money was safe and had been invested profitably. Paez ultimately stopped returning calls and ignored requests for the return of investor funds. According to the Information, there were approximately 17 victim investors who were located in Florida and other states, including California, South Dakota, New Jersey and Minnesota. None of these investors received any return on their investment and they lost all of the money they invested with Fly High Investments and Paez.
Mr. Ferrer commended the investigative efforts of the FBI and the State of Florida, Office of Financial Regulation, Bureau of Financial Investigations. The matter is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Integrity Bank Branch Manager Charged with Bank LarcenyRead the Press Release
The U.S. Attorney's Office for the Middle District of Pennsylvania announced today that Sandra R. Powers, 57, Harrisburg, Pennsylvania, was charged in a criminal Information with bank larceny involving $125,815.00. A plea agreement was also filed indicating that Powers intends to plead guilty when she appears in federal court for her arraignment. She faces up to ten years' imprisonment and $250,000 in fines as a result of the charges.
According to U.S. Attorney Peter J. Smith, Powers was employed as a branch manager for Integrity Bank's Allentown Boulevard and Colonial Road branches located in Harrisburg, Pennsylvania. The charges filed today indicate that Powers stole $125,815.00 from a customer's account between May 2012 and March 2013. Powers was terminated by Integrity Bank in March 2013 and subsequently made full restitution to the bank.
The case was investigated by the FDIC Office of Inspector General and the FBI and is assigned to Senior Litigation Counsel Bruce Brandler for prosecution.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
* * * *Former Clayton County Police Officer Assigned to U.S. Marshals Service Fugitive Task Force Sentenced to Ten Years in Prison for Drug TraffickingRead the Press Release
ATLANTA – Dwayne Penn, formerly a police officer with the Clayton County Police Department assigned to the U.S. Marshals Service Fugitive Task Force, was sentenced today to ten years in prison for conspiring to distribute cocaine.
“The public rightfully expects police officers to protect them from drug dealers, not go into business with them,” said United States Attorney Sally Quillian Yates. “The defendant crossed over to become one of the bad guys, and now he will suffer their fate.”
Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: “The FBI, as the lead investigative agency and coordinating body for the Atlanta Public Corruption Task Force consisting of numerous local, state, and other federal agencies, regards all public corruption matters, in particular those involving law enforcement officials, to be a priority investigative matter. As such, the FBI asks that anyone with information regarding such activity to contact their nearest FBI field office.”
Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division commented, “It is always disturbing when someone in a position of trust such as a law enforcement officer tarnishes the badge by violating his or her oath. Law enforcement officers are held to a higher standard and any misconduct that they engage in will not be tolerated. Penn’s actions were deplorable and he is deserving of the sentencing handed down today.”
According to United States Attorney Yates, the charges, and other information presented in court: In August 2013, Penn, who was employed with the Clayton County Police Department at the time, conspired with Adrian Austin, an Atlanta-based drug dealer, to use Penn’s official position as a police officer to stage a fake traffic stop of a car that he and Austin believed would contain six kilograms of cocaine, conduct a fake arrest of the car’s occupant, seize the cocaine for themselves, and then sell the cocaine, sharing their ill-gotten gains. Fortunately, the person whom Penn and Austin sought to recruit for this corrupt endeavor was cooperating with federal law enforcement and agreed to record his/her meetings with Penn and Austin.
In the lead up to the fake arrest and seizure, Penn and Austin met face-to-face with the confidential informant on two separate occasions to plan their operation. Penn drove his police car to the planning meetings. While together, Penn, Austin, and the confidential informant discussed the confidential informant obtaining cocaine from his/her drug source of supply. Penn would then conduct a fake traffic stop and arrest of the confidential informant in front of the source, using Penn’s police vehicle and lights, and seize the cocaine, leading the source to mistakenly believe the drugs had been seized by law enforcement. They would divide up the seized cocaine among themselves according to the plan. As part of the charade, Penn agreed to handcuff the confidential informant, put the drugs in the trunk of his police car, and drive the confidential informant to a second location. During one of the meetings, Penn even drove Austin and the confidential informant around the parking lot, scouting out possible spots for various events the next day. Penn reassured the confidential informant that they could cover his/her tracks with the source of supply to deflect suspicion.
As planned, on the morning of August 28, 2013, Penn and Austin arrived at the appointed Decatur parking lot. Penn drove his police car and parked it in view of where the drug deal was to occur. While waiting, Penn ran the tags of a number of vehicles in the area through law enforcement databases. Penn also called task force officers with the DeKalb County Police Department and DeKalb County Sheriff’s Office and asked if DeKalb County had any surveillance vehicles that fit the description of vehicles Penn saw in the parking lot that morning. Penn rebuffed offers of assistance from his fellow officers, claiming he was just doing surveillance.
Before the deal’s consummation, the confidential informant met with Austin in Austin’s car in the parking lot. Austin relayed information between the confidential informant and Penn over his cellphone. The confidential informant and Austin discussed the imminent deal, with the confidential informant’s describing where s/he would put the drugs after receiving them.
The confidential informant exited Austin’s car and shortly thereafter met with the supposed drug dealer (also a law enforcement source) in the parking lot in view of Penn. The confidential informant received a shopping bag containing six kilogram-size bricks of fake cocaine, walked back to his/her vehicle, and placed the bag inside, placing two kilogram bricks in the back seat and leaving the remaining four kilogram bricks in the shopping bag in the front seat.After the confidential informant emerged from his/her vehicle, Penn sped over in his police car with the lights on and blocked the confidential informant from leaving. Penn jumped out of his car with his firearm drawn and pointed it at the confidential informant. Penn was wearing a bulletproof vest, which read “Police,” and a black baseball hat. Penn ordered the confidential informant to get on the ground and to keep his/her “hands behind your back,” which the confidential informant did. Penn holstered his firearm, picked up the confidential informant from the ground, and patted him/her down. Penn then ushered the confidential informant into Penn’s police car. The confidential informant told Penn that s/he had already taken his/her two and that there were four in the bag. Penn walked over to the confidential informant’s vehicle and removed the shopping bag with the four kilogram bricks from the front seat, leaving the confidential informant’s share (two kilograms) in the car. Penn placed the shopping bag in the trunk of his police car, told the confidential informant to “get out of here,” and drove away with the cocaine-like substance, leaving the confidential informant and the two kilogram bricks behind at the parking lot.
Penn and Austin were arrested shortly afterward in the vicinity of the Decatur parking lot. Each had a loaded firearm with a round in the chamber. The shopping bag with substituted cocaine was recovered from Penn’s vehicle.
On August 28, 2013, Penn was terminated from the Clayton County Police Department and the Marshals Service Task Force.
Penn pleaded guilty to conspiring to distribute over five kilograms of cocaine, pursuant to a negotiated plea agreement, on January 21, 2014. His codefendant, Adrian Austin, pleaded guilty to the same charge on January 14, 2014.
In addition to the ten-year term of imprisonment, Penn was also sentenced by United States District Judge Amy Totenberg to five years of supervised release, 120 hours of community service following his release from prison, and ordered to pay a $100 special assessment.
Sentencing for Austin is scheduled for April 10, 2014, at 2:00 p.m. also before United States District Judge Totenberg.
The case is being investigated by Special Agents of the Federal Bureau of Investigation and Drug Enforcement Administration.
Assistant United States Attorney Scott Ferber is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Former Broadlands Loan Officer Sentenced for Mortgage FraudRead the Press Release
Straw buyers, false applications used to buy 36 homes with $20 million in loans
ALEXANDRIA, Va. – Ging-Hwang “Felicia” Tsoa, 59, of Broadlands, Va., was sentenced today to 30 months in prison, followed by three years of supervised release, for her role in a mortgage fraud conspiracy that involved approximately 36 properties in northern Virginia and nearly $20 million in fraudulently obtained loans. Tsoa also was ordered to pay approximately $1.4 million in restitution to lenders and to forfeit to the government $45,738 in proceeds of her crimes.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by United States District Judge James C. Cacheris.
A federal jury convicted Tsoa of conspiracy and bank fraud charges on Nov. 15, 2013.
According to court records and evidence at trial, Tsoa used her position as a loan officer at First Empire Mortgage in Fairfax, Va., and Lifetime Financial Services in Herndon, Va., to defraud mortgage lenders as part of a scheme to profit from fraudulently obtained mortgage loans and the purchase of residential real estate in northern Virginia. As part of the scheme, co-conspirator Robert Mikail recruited five individuals, known as “straw buyers,” to serve as nominal purchasers in these transactions. Tsoa worked with Mikail and co-conspirator Bing-Sing “Cindy” Wang, the owner of Lifetime Financial Services, to falsify critical information on the straw buyers’ loan applications in order to get the loans approved, the transactions closed, and her commissions paid. In particular, virtually all of the fraudulent loan applications falsely identified Mikail’s Ashburn, Va. jewelry store, Opus Jewelry, as the borrower’s employer, which the conspirators would then falsely verify to the lenders as part of the loan approval process.
In total, the conspiracy involved the purchase of approximately 36 homes in and around Ashburn, Va. from 2005 through 2007, and approximately $19.9 million in loan proceeds disbursed on the basis of fraudulent loan applications. According to the evidence at trial, Tsoa served as the loan officer on at least nine of these transactions, which resulted in approximately $1.4 million in losses to lenders.
Co-conspirator Wang pleaded guilty to a conspiracy charge on Nov. 20, 2012, and was sentenced to 24 months in prison on Feb. 26, 2013. Co-conspirator Mikail pleaded guilty to a conspiracy charge on July 17, 2013, and was sentenced to 52 months in prison on Jan. 10, 2014.
This case was investigated by the FBI’s Washington Field Office. Assistant United States Attorneys Paul J. Nathanson and Jasmine H. Yoon prosecuted 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.First Two Retailers Sentenced for Food Stamp FraudRead the Press Release
In Less Than Two Years, Defendants Obtained Over $1.4 Million in Payments for Food Sales That Never Occurred; To Date, Eight Retailers Have Pleaded Guilty in Food Stamp Fraud Schemes
Baltimore, Maryland – U.S. District Judge George L. Russell, III sentenced Hyung Cho, age 40, to 38 months in prison followed by three years of supervised release, and his mother Dae Cho, age 67, to 18 months in prison for food stamp and wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash. Judge Russell also entered an order that the defendants forfeit $371,439.21 and pay restitution of $1.4 million. Both defendants resided in Catonsville, Maryland and are Korean citizens who are illegally present in the United States. The defendants have further agreed not to object to any proceedings that may be brought to remove them from the United States upon completion of their sentence.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture’s Office of Inspector General, Northeast Region; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Dae Cho co-owned K&S Market, a convenience store located at 3910 West Belvedere Avenue in Baltimore. Dae and Hyung Cho operated the store. According to their plea agreements and court documents, the store participated in the Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources, then use the EBT card to purchase approved food items from participating retailers.
Dae Cho completed the required government form in March of 2004 to become an authorized retailer in the program. Dae and Hyung received training and instruction regarding the requirements of the food stamp program, including that it was a violation of SNAP regulations to trade cash for SNAP benefits. Nevertheless, from June 2011 through May 2013, Dae and Hyung Cho exchanged SNAP benefits for cash at less than face value of the EBT benefits, in violation of the food stamp program rules, and kept up to 50 percent of the benefits for themselves, using the cash to pay rent and other bills. Dae Cho has estimated that about $25,000 to $30,000 worth of food stamp benefits were exchanged in this manner per month and that this occurred approximately 50 times a day.
As a result of these unlawful cash transactions, Dae and Hyung Cho obtained more than $1,400,000 in payments for food sales that never occurred.
Eight of the 10 convenience store owners or operators who were indicted in September 2013 in connection with schemes to illegally redeem food stamp benefits in exchange for cash have pleaded guilty to food stamp fraud and/or wire fraud. Yesterday, Jung Kim, age 52, of Ellicott City, Maryland, pleaded guilty to food stamp fraud and wire fraud. Kim owned and operated C&C Market, located at 4752 Park Heights Avenue in Baltimore. From November 2010 to April 2013, Kim obtained over $400,000 in payments for food sales that never occurred. Judge Russell scheduled Kim’s sentencing for June 20, 2014.
John Cunningham, age 54, of Baltimore, pleaded guilty on February 18, 2014 to wire fraud. Cunningham co-owned a corporation that owned Cunningham’s Amoco, a BP gas station and convenience store located at 4419 Park Heights Avenue in Baltimore. U.S. District Judge Richard D. Bennett scheduled his sentencing for May 21, 2014.
Amara Cisse, age 50, who owned Simbo Food Mart, located at 2103 West Pratt Street in Baltimore, and his wife Fanta Keita, age 45, who worked at the store, both of Windsor Mill, Maryland, pleaded guilty on December 3, 2013 to food stamp fraud and are scheduled to be sentenced on March 6, 2014.
Abdullah Aljaradi, age 52, and Ahmed Ayedh Al-Jabrati, age 58, both citizens of Yemen residing in Baltimore, have each pleaded guilty to wire fraud. Aljaradi and Al-Jabrati operated two convenience stores, Second Obama Express and D&M Deli and Grocery, located next door to each other at 901 Harlem Avenue in Baltimore. From October 2010 to July 2013, the defendants obtained over $2 million in payments for food sales that never occurred. U.S. District Judge William D. Quarles, Jr. scheduled sentencing for Aljaradi on April 30, and Al-Jabrati for March 25, 2014.
Dae and Hyung Cho are the first to be sentenced. Two more retailers were indicted in January 2014.
United States Attorney Rod J. Rosenstein praised USDA’s Office of Inspector General and FBI for their work in the investigation. U.S. Attorney Rosenstein expressed appreciation to Secretary Ted Dallas and the Maryland Department of Human Resources, as well as U.S. Citizenship and Immigration Services - Office of Fraud Detection and National Security for their assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Judson T. Mihok, Kathleen O. Gavin, Leo J. Wise and Peter M. Nothstein, who are prosecuting the cases.
Federal Prison Sentences Handed Down to San Antonio Businessmen for Roles in $133 Million Real Dollar Loss Fraud and Tax SchemeRead the Press Release
In San Antonio today, United States Chief District Judge Fred Biery handed down prison sentences to three individuals for their roles in what is believed to be the largest real dollar loss fraud and tax related case ever prosecuted in the Western District of Texas announced United States Attorney Robert Pitman, Acting FBI Special Agent in Charge Aaron C. Rouse and IRS-Criminal Investigation Special Agent in Charge Steve McCollough.
John Bean, owner of Synergy Personnel, a Professional Employer Organization (PEO) based in San Antonio, as well as an agent, representative, officer, license holder and accountant of several San Antonio and Austin based PEOs, including Service Professionals, was sentenced to six years in federal prison followed by three years of supervised release and ordered to pay over $120 million in restitution after pleading guilty to a money laundering charge and a mail fraud conspiracy charge in March 2013.
Pat Mire, owner and manager of several San Antonio-based PEOs, including Service Professionals, was sentenced to three years in federal prison followed by three years of supervised release and ordered to pay $10 million in restitution after pleading guilty to a money laundering charge and a mail fraud conspiracy charge in November 2011.
Mike Solis, an executive assistant at several San Antonio based PEOs, including Service Professionals, was sentenced to two years in federal prison followed by three years of supervised release after pleading guilty to a mail fraud conspiracy charge in December 2012.
A fourth defendant, John D. Walker, II, owner and manager of several San Antonio-based PEOs, including AK of Nevada, Inc., United Focus, Inc. and Safe Staff, Inc., was sentenced to five years probation and ordered to pay $450,000 restitution after pleading guilty to a Klein tax fraud conspiracy charge and a false statements charge in May 2012.
“This was a multi-faceted fraud scheme that victimized companies who relied on the defendants for payroll services, honest workers who relied on insurance coverage, and the taxpayers. At heart, the defendants were clever bandits who covered their tracks with layers of shell corporations and bank accounts, and siphoned off monies for their own luxury. The hard work of the investigators and the prosecutor untangled their devious scheme and brought the defendants to justice,” stated United States Attorney Robert Pitman.
Today’s sentencing hearings for Larry Kimes, the manager of AccounTex Financial Services, LLC, and Charles Pircher, manager of a series of PEOs based in San Antonio, including Service Professionals, were continued. This morning, Judge Biery revoked Kimes’ bond and remanded him into federal custody. Kimes, who pleaded guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge last month, will be sentenced in approximately 30 days. Pircher, who pleaded guilty to the same two charges in November 2013, will be sentenced in approximately 60 days.
By pleading guilty, the defendants admitted that between 2002 and 2008, they participated in a scheme in which they stole more than $133 Million from the clients of a series of PEOs operated by the defendants. The PEOs entered into staff leasing agreements with various client companies to manage the companies’ payroll and insurance programs. Kimes, Pircher and the other co-conspirators diverted to their own use and benefit clients’ monies that should have been paid for payroll taxes and insurance premiums.
“Motivated by greed, the defendant perpetrated an extensive fraud scheme, designed to steal money from their clients and taxpayers over a number of years. The FBI will continue to work with our partners to identify, investigate and prosecute others, like the defendant, who seek unjust enrichment by victimizing others,” stated Acting FBI Special Agent in Charge Aaron C. Rouse.
“The defendants involved in this, the largest ever single criminal tax case in San Antonio's history, knowingly violated our country's Tax laws. They chose to ignore their responsibilities and live a lavish lifestyle on money belonging to their employees and to the U.S. Government. IRS Special Agents will continue to aggressively pursue these types of very serious tax crimes,” stated IRS-Criminal Investigation Special Agent in Charge Steve McCollough.
This case was investigated by agents with the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Thomas J. McHugh prosecuted this case on behalf of the Government.
Federal Jury in San Antonio Convicts Los Zetas Associate in Drug Distribution and Kidnapping SchemeRead the Press Release
Los Zetas associate and Eagle Pass, TX, resident Jose Luis Rodriguez (a.k.a. “Pollo”), age 36, faces up to life in federal prison after a jury in San Antonio convicted him this afternoon of federal kidnapping and drug charges announced United States Attorney Robert Pitman, Acting FBI Special Agent in Charge Aaron C. Rouse, San Antonio Division, and Acting Drug Enforcement Administration Special Agent in Charge Steven S. Whipple, Houston Division.
The jury convicted Rodriguez of one count of conspiracy to possess with intent to distribute cocaine, three substantive counts of possession with intent to distribute cocaine and one count of conspiracy to kidnap. Evidence presented during trial revealed that from September 2006 until April 2007, Rodriguez and others conspired to distribute more than 1,600 kilograms of cocaine from Mexico through Eagle Pass and transported it to San Antonio then ultimately to Cleveland, OH; Memphis, TN; Saginaw, MI; and, New York, NY. During the course of the investigation, authorities seized a total of approximately 113 kilograms of cocaine and in excess of $2 million in drug proceeds attributed to Rodriguez and his co-conspirators.
Evidence also revealed that Rodriguez and others conspired in early 2007 to unlawfully kidnap an Eagle Pass resident and hold him hostage in Piedras Negras, Mexico, for the purpose of collecting money and property in order to satisfy an illegal drug debt owed by the Eagle Pass resident.
Rodriguez, who was arrested in Mexico on a provisional arrest warrant and extradited to the U.S. last year, remains in federal custody. Sentencing is scheduled for May 21, 2014, before United States District Judge Royce C. Lamberth.
This case was investigated by agents with the Federal Bureau of Investigation and the Drug Enforcement Administration.Federal Jury Finds Non-Indian Man Guilty on Assault and Firearms Charges Arising out of Shooting at Isleta Pueblo ResidenceRead the Press Release
ALBUQUERQUE – A federal jury sitting in Santa Fe, N.M., returned a verdict late this afternoon finding Federico Lujan, 26, of Serafina, N.M., guilty on assault and firearms charges after a four-day trial, announced Acting U.S. Attorney Steven C. Yarbrough, Special Agent in Charge DuWayne W. Honahni, Sr., of District IV of BIA’s Office of Justice Services, and Chief Kevin Mariano of the Isleta Pueblo Tribal Police Department.
Lujan, a non-Indian man, was arrested on July 5, 2012, on a criminal complaint alleging aggravated assault charges arising out of the discharging of a rifle while threatening and menacing two Isleta Pueblo women and ten children in an Isleta Pueblo residence. Lujan subsequently was indicted and charged with two counts of aggravated assault and one count of discharging a firearm in relation to a crime of violence.
Trial of this case began on Feb. 18, 2014, and concluded late this afternoon when the jury returned a verdict of guilty on all three counts of the indictment. The trial evidence established that on the morning of July 5, 2012, Lujan drove to the victims’ residence armed with a .22 caliber rifle loaded with a high-capacity magazine carrying almost 50 rounds of ammunition. After Lujan got out of his vehicle with the loaded rifle, one of the two adult victims peered out the window to see a stranger with a rifle standing in her yard. The adult victim heard shots fired as she ran to get the children who were in the residence to safety.
While one adult victim stayed in the home to protect the ten children who were present, the other adult victim went outside to try to defuse the situation. While speaking to Lujan, she learned that Lujan was shooting outside the residence because he believed that someone had taken his baseball cap from him the night before and that the cap was inside the residence. When the victim denied knowing about the baseball cap, Lujan pointed the rifle at her, threatened to kill her, and fired his rifle again but did not hit the victim. As Lujan drove away, the victim got the license plate number for Lujan’s vehicle. Lujan was arrested shortly thereafter by tribal police officers who were responding to a call from the victims. Following the arrest, the officers found a rifle in Lujan’s vehicle.
The jury deliberated approximately four and a half hours before returning its guilty verdict.
Lujan was remanded into custody after the jury returned the guilty verdict and will remain detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Lujan faces up to 18 months in prison on each of the two aggravated assault charges. Lujan also faces a mandatory ten years in prison for discharging a firearm which must be served consecutive to any prison sentence imposed on the assault charges.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services and the Isleta Pueblo Tribal Police Department, with assistance from the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the FBI’s crime lab in Quantico, Va., and is being prosecuted by Assistant U.S. Attorneys Mark T. Baker and Holland S. Kastrin.