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Tuesday 7 January 2014
Truth or Consequences Woman Pleads Guilty to Prescription Drug Trafficking ChargesRead the Press Release
ALBUQUERQUE –Roberta Capps, 53, of Truth or Consequences, N.M., pled guilty this morning to prescription drug trafficking charges in federal court in Las Cruces, N.M. Capps entered her guilty plea was entered without the benefit of a plea agreement.
Roberta Capps and her husband Michael Capps, 52, were arrested on May 21, 2013, on criminal complaints alleging that they unlawfully distributed quantities of Oxycodone and Oxymorphone to a DEA confidential source on three occasions between Dec. 10, 2012 and Jan. 15, 2013. On June 19, 2013, the couple was charged in a five-count indictment with one count of conspiracy and three counts of distribution of Oxycodone. The fifth count charged Michael Capps with being a felon in possession of a firearm.
According to the indictment, Roberta Capps and Michael Capps conspired to distribute Oxycodone and unlawfully distributed Oxycodone on three separate occasions on Dec. 10, 2012, Dec. 18, 2012 and Jan. 15, 2013. Court filings reflect that the couple sold the Oxycodone to an individual who unbeknownst to them was a confidential source for the DEA and that Roberta Capps admitted knowing that it was illegal to sell prescription medications to others during a recorded conversation with the source.
Today, Roberta Capps entered guilty pleas to Counts 1 through 4 of the indictment charging her with conspiracy and distribution of Oxycodone. At sentencing, Roberta Capps faces a maximum penalty of 20 years in prison. Capps remains on conditions of release at a half-way house pending her sentencing hearing which has yet to be scheduled.
Michael Capps has entered a not guilty plea to the charges against him. Charges in an indictment are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces office of the DEA and the Truth or Consequences Police Department and is being prosecuted by Assistant U.S. Attorney Amanda L. Gould of the U.S. Attorney’s Las Cruces Branch Office.
Transient Sentenced to Fifty-One Months in Federal Prison for Robbing Albuquerque Bank in March 2013Read the Press Release
ALBUQUERQUE – Sheldon David Weisman, 56, was sentenced this morning to 51 months in federal prison followed by three years of supervised release for robbing an Albuquerque-area bank in March 2013.
Weisman was arrested on March 15, 2013 based on a criminal complaint alleging that he robbed the Wells Fargo Bank located at 8333 Montgomery Blvd. NE in Albuquerque that day. At the time of his arrest, Weisman was homeless and living out of his vehicle. Weisman subsequently was indicted on a bank robbery charge in April 2013.
Court filings reflect that Weisman entered the bank on the afternoon of March 15, 2013, and handed a note demanding cash to a bank teller. After the bank teller complied with Weisman’s demand and Weisman left the bank with a bag of cash, a bank employee observed Weisman drive away in a vehicle bearing a Texas license plate. After a description of the vehicle was relayed to law enforcement authorities, an officer of the Albuquerque Police Department executed a traffic stop of a vehicle fitting the description and arrested Weisman. A search of Weisman’s vehicle revealed the bank robbery note and a bag containing cash.
On Oct. 7, 2013, Weisman pled guilty to the indictment without the benefit of a plea agreement.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department and was prosecuted by Assistant U.S. Attorney William J. Pflugrath.
Tennessee Men Plead Guilty to Illegally Trafficking Narwhal TusksRead the Press Release
Jay G. Conrad, of Lakeland, Tenn., pleaded guilty today in the District of Maine to conspiring to illegally import and traffic narwhal tusks, conspiring to launder money, and illegally trafficking narwhal tusks, announced Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division . A plea agreement was also unsealed today in which Eddie T. Dunn, of Eads, Tenn., pleaded guilty in the District of Alaska to conspiring to illegally traffic, and trafficking, narwhal tusks.
According to the plea agreements, beginning in approximately 2003, Dunn and Conrad partnered to buy more than 100 narwhal tusks from a Canadian resident who each knew had illegally imported the tusks from Canada into Maine. After receiving the tusks in Tennessee, Dunn and Conrad marketed and sold the tusks using a combination of internet sales via the “Ebay” auction website and direct sales to known buyers and collectors of ivory. Buyers were located throughout the United States, including in Alaska and Washington. Throughout the conspiracy, Dunn and Conrad made payments to the Canadian supplier for the narwhal tusks by sending the payment to a mailing address in Bangor, Maine, or directly to the supplier in Canada. The payments allowed the Canadian supplier to purchase and re-supply Dunn and Conrad with more narwhal tusks that they could then re-sell. Dunn sold approximately $1.1 million worth of narwhal tusks and Conrad sold between $400,000 and $1 million worth of narwhal tusks as members of the conspiracy.
“In this conspiracy, Dunn and Conrad flouted U.S. law and international agreements that protect marine mammals like the narwhal from commercial exploitation,” said Acting Assistant Attorney General Dreher. “If left unchecked, this illegal trade has the potential to irreparably harm the species. The Justice Department will continue to investigate and prosecute wildlife traffickers in order to protect these species for future generations to enjoy.”
“The cooperation between Service and NOAA investigators and between the United States and Canada that led to these prosecutions reflects the type of partnerships needed to protect narwhals and other species worldwide from wildlife trafficking,” said William C. Woody, Assistant Director for Law Enforcement for the U.S. Fish and Wildlife Service.
“NOAA OLE takes the unlawful importation of protected marine mammals very seriously,” said NOAA-Office of Law Enforcement Special Agent in Charge Logan Gregory. “NOAA OLE will continue to investigate those who unlawfully import marine mammal products and profit from marine protected species such as the narwhal.”
“This investigation uncovered and dismantled a wildlife trafficking network that spanned from New Brunswick to Tennessee and reached as far as Alaska,” said Karen Loeffler, U.S. Attorney for the District of Alaska. “The results reached demonstrate the close cooperation between the United States and Canada and their law enforcement officers whose duty it is to investigate, stop and deterthose who illegally target diminishing wildlife resources and do so for commercial gain.”
A narwhal is a medium-sized whale with an extremely long tusk that projects from its upper left jaw. Narwhals are marine mammals protected by the Marine Mammal Protection Act and are listed on Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). It is illegal to import parts of marine mammals into the United States without the requisite permits/certifications, and without declaring the merchandise at the time of importation to U.S. Customs and the U.S. Fish and Wildlife Service. Narwhal tusks are commonly collected for display purposes and can fetch large sums of money.
Dunn is scheduled to be sentenced by U.S. District Judge Ralph R. Beistline in the District of Alaska on March 20, 2014. The maximum penalty Dunn faces for conspiring to illegally traffic, and trafficking, narwhal tusks is five years of incarceration and a fine of $250,000. The maximum penalty Conrad faces for conspiring to illegally import and illegally traffic narwhal tusks, conspiring to commit money laundering crimes and illegally trafficking narwhal tusks is twenty years of incarceration and a fine of $250,000. The trial of Co-defendant Andrew J. Zarauskas is set to begin in Bangor, Maine, on February 4, 2014. Co-defendant Gregory R. Logan is pending extradition from Canada to the District of Maine.
These cases are part of Operation Nanook, a multi-agency effort to detect, deter and prosecute those engaged in the unlawful trafficking of narwhal tusks. The cases were investigated by agents from National Oceanic and Atmospheric Administration - Office of Law Enforcement and the U.S. Fish and Wildlife Service - Office of Law Enforcement, with extensive support and collaboration from Environment Canada, Wildlife Enforcement. The cases are being prosecuted by Trial Attorney Todd S. Mikolop of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Steven E. Skrocki of the District of Alaska.
# # #Tampa Man Sentenced to 18 Months in Prison for Theft of Government FundsRead the Press Release
Tampa, FL – U.S. District Judge Susan C. Bucklew today sentenced Rodney Andre McCray (31, Tampa) to 18 months in federal prison for theft of government funds. As part of his sentence, the court also ordered McCray to pay $78,728.00 in restitution to the Internal Revenue Service, and entered a money judgment in the amount of $3,500.00, the proceeds of the theft personally received by McCray.
McCray pleaded guilty on October 8, 2013.
According to court documents, during the summer of 2012, McCray and another person agreed that McCray would receive fraudulently acquired income tax refund deposits in a bank account opened in McCray’s name. McCray then opened a Bank of America bank account for the purpose of receiving the "drop money," or the fraudulent income tax return deposits. McCray was the only authorized signatory on the bank accounts.
Thereafter, fraudulent Form 1040 U.S. Individual Income Tax Returns ("1040 Returns") were filed with the IRS, directing that any refunds from the returns be deposited into McCray's Bank of America checking account. The 1040 Returns were false and fraudulent, in that the returns: (1) included false information, such as false interest and dividends earned information and related false withholding information; and (2) were filed in the name and on behalf of individuals who did not sign, authorize, or in any way give permission for the returns to be filed. In many cases, the fraudulent 1040 Returns were filed on behalf of deceased persons. In those instances, the 1040 Returns were filed together, with a form stating that McCray was authorized to receive refunds on behalf of the deceased filers, which was also false.
As a result of this scheme, McCray was complicit in converting approximately fifteen fraudulently-acquired U.S. Treasury refunds through his Bank of America account, resulting in a total loss of approximately $78,728.00 to the U.S. Treasury.This case was investigated by Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorney Jay G. Trezevant.
Supporting Documents for Deferred Prosecution Agreement: U.S. V. JPMorgan Chase Bank, N.A.Read the Press Release
U.S. v. JPMorgan Chase - Deferred Prosecution Agreement Packet
Stockton Man Pleads Guilty to Drug and Gun Charges as A Result of Operation Gideon IVRead the Press Release
SACRAMENTO, Calif. — Luis Magana, 20, of Stockton, pleaded guilty today to dealing firearms without a license and to distribution of methamphetamine in a case resulting from Operation Gideon IV, United States Attorney Benjamin B. Wagner announced.
Operation Gideon IV was an ATF surge that targeted violent criminals in an effort to dismantle criminal organizations operating in Stockton. Experienced undercover ATF special agents from throughout the U.S. were deployed with local ATF agents and Stockton police officers to conduct covert investigations into some of the most violent criminals in Stockton and surrounding areas. Operation Gideon IV ran from January to April 19, 2013, charging 55 individuals and seizing 84 firearms.
“Today’s guilty plea represents another win for law enforcement in successfully removing and locking up another gun trafficker and preventing collateral damage to innocent victims,” said Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Joseph M. Riehl. “These traffickers are the primary source and supply of arming violent criminals in our communities.”
According to court documents, special agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted an extensive investigation into Magana’s gun and drug dealing activities. During the course of this investigation, undercover special agents purchased and seized more than 2.9 kilograms of methamphetamine from Magana. Additionally, although Magana did not have a license to sell firearms, Magana sold undercover special agents five firearms during four separate transactions in February, March, and April, 2013.
This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.
Magana was taken into custody today after entering his guilty plea. His co-defendants, Erik Moreno and Juvenal Junez, both of Stockton, have already entered guilty pleas on drug distribution charges.
Magana is scheduled to be sentenced by Judge Lawrence K. Karlton on April 1, 2014. Magana faces a maximum statutory penalty of 40 years in prison and a $5 million fine for the drug distribution conviction. He faces a maximum sentence of five years in prison and a $250,000 fine for the gun conviction. 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.
South Windsor Man Who Stole Firearms from East Windsor Gun Store Is SentencedRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JORDAN MARSH, 27, of South Windsor, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to five years of probation for stealing a firearm from a federally licensed firearms dealer.
According to court documents and statements made in court, on December 11, 2012, MARSH stole a Windham Weaponry 5.56 mm caliber semi-automatic rifle from the front counter of Riverview Gun Sales, a former federal firearms dealer located in East Windsor. The theft was captured on the store’s video surveillance system, which shows MARSH entering the store, standing in front of the rifle, picking up the firearm and leaving the store. Though there were several employees standing behind the counter, none were near MARSH, and none saw him take the firearm. No one at the store realized the firearm was missing until the Hartford Police retrieved it from MARSH’s hotel room on December 17, 2012, two days after MARSH had been arrested for attempting to steal a Bushmaster .50 caliber rifle from Riverview.
Earlier in 2012, MARSH was convicted of a state felony stemming from his prior thefts of approximately 12 firearms from Riverview.
On August 27, 2013, MARSH pleaded guilty in state court to firearms and probation violation offenses stemming from his attempted theft of the Bushmaster .50 caliber rifle, and was sentenced to eight years of incarceration. He is currently detained in state custody.
In this federal case, MARSH faced a sentencing guideline range of 46 to 57 months of imprisonment. Instead of imposing a concurrent sentence of incarceration, Judge Shea, with agreement of the parties, imposed a five-year term of probation, the maximum allowed under the law. The court expressed concern that MARSH was a danger to the public, noted that he was on state probation for the first Riverview theft when he committed the second Riverview theft, and decided that the maximum term of federal supervision was necessary to make sure that he did not re-offend.
As special conditions of probation, the court ordered that MARSH and his residence be subject to searches by the U.S. Probation Office upon reasonable suspicion, that MARSH not enter or associate with any person or business that sells firearms, that he not attempt to purchase or possess any firearms, and that he agree to the installation of computer software that will monitor his Internet activity and alert the U.S. Probation Office if he attempts to purchase a firearm over the Internet. MARSH was also ordered to receive mental health counseling and treatment.
“By imposing the longest term of probation available, today’s federal sentence supplements the state court’s eight-year jail sentence by maximizing the protection afforded to society and simultaneously providing the defendant with the supervision and mental health counseling he so clearly needs,” stated U.S. Attorney Daly.
On August 22, 2013, David Laguercia, the owner and operator of Riverview Gun Sales, pleaded guilty to one count of transfer of a firearm before completion of background check, and one count of failure to maintain proper firearm records. Laguercia also entered a guilty plea on behalf of Riverview Sales, Inc. to one count of making false entries in dealer’s records. Laguercia and his business await sentencing.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Hartford and East Windsor Police Departments. The case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Six Involved in Southeastern Connecticut Narcotics Distribution Ring Plead GuiltyRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that six men pleaded guilty yesterday in New Haven federal court to heroin distribution offenses. The defendants were arrested in April 2013 as part of a Homeland Security Investigations (“HSI”) and New London Police Department-led investigation into the large-scale trafficking of heroin and cocaine from the Dominican Republic and Puerto Rico into and around southeastern Connecticut.
According to court documents and statements made in court, Luis Ariel Capellan Maldonado, also known as “Ariel,” regularly procured multi-kilogram quantities of heroin from the Dominican Republic and worked with several individuals to distribute the drug in southeastern Connecticut. Operating out of his apartment building on Hawthorne Drive in New London, Capellan Maldonado supplied customers with raw heroin, often in quantities of 50 to 150 grams. He also had access to kilogram quantities of cocaine and sometimes supplied cocaine to wholesale cocaine distributors in New London.
The investigation revealed that Capellan Maldonado coordinated the shipment of heroin, and sometimes cocaine, via human couriers from the Dominican Republic to the United States. He also obtained heroin from other sources in New York City and Rhode Island.
Capellan Maldonado, 27, a citizen of the Dominican Republic, pleaded guilty on November 6, 2013, and awaits sentencing. Yesterday, the following six individuals pleaded guilty to heroin conspiracy charges:
MIGUEL MORALES, also known as “Neow,” 49, of New London,
JOSE MORALES, 53, of New London,
LESTER FANTAUZZI, 47, of Niantic,
EMMANUEL BLANCO BALBUENA, 29, of New London,
JOSE REYNOSO-MONEGRO, also known as “Culito,” 44, of New York, N.Y.,
EDWIN CEPEDA, 34, of GrotonMore than 100 individuals have been charged with federal and state offenses as a result of this investigation. To date, 26 of the 49 defendants charged with federal offenses have pleaded guilty.
This matter is being investigated by Homeland Security Investigations; U.S. Secret Service; U.S. Postal Inspection Service; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection, Office of Air and Marine; Connecticut State Police; New London Police Department, Norwich Police Department, Waterford Police Department, Groton Town Police Department, East Lyme Police Department and Putnam Police Department. The United States Marshals Service; ICE Enforcement and Removal Operations; Drug Enforcement Administration; HSI Assistant Attaché, Santo Domingo, Dominican Republic; HSI Arecibo, Puerto Rico Resident Office; Internal Revenue Service – Criminal Investigation; Connecticut Department of Correction, Parole and Community Services; and the Groton City, Willimantic, New Haven and Bristol Police Departments have provided valuable assistance to the investigation.
The federal case is being prosecuted by Assistant United States Attorneys Alina P. Reynolds, Sarah P. Karwan and Henry K. Kopel. The state cases are being prosecuted by the State’s Attorney for the New London Judicial District and Senior Assistant State’s Attorneys Paul Narducci and Stephen Carney.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Senegal National Convicted of Making False Statements During Application Process for Permanent ResidencyRead the Press Release
PROVIDENCE, R.I. – Serigne Diokhane, 39, of Woonsocket, R.I., a native of Dakar, Senegal, was convicted today by a federal court jury in Providence of making false representations to immigration officials when applying for permanent residency in the United States. Diokhane faces up to five years in federal prison, followed by up to 3 years supervised release and a fine of up to $250,000 when he is sentenced by U.S. District Court Judge Mary M. Lisi on April 3, 2014.
Diokhane’s conviction was announced by United States Attorney Peter F. Neronha, Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations, and Warwick Police Chief Colonel Stephen M. McCartney.
According to the government’s evidence, in February 2012, Serigne Diokhane applied to the U.S. Citizenship and Immigration Service (USCIS) field office in Johnston, R.I., for permanent resident status in the United States. During an application interview, Diokhane signed a sworn statement denying he had ever used any other name in any situation or on any application. A routine background investigation and check of USCIS computer data files revealed that fingerprints taken from Diokhane matched a person identified as Mohamed Sy, 39, of Mauretania, who had submitted an application for asylum at the Newark, New Jersey Immigration Center in September 1998. A Warwick Police Department fingerprint expert examined both sets of fingerprints and confirmed they matched and belonged to Serigne Diokhane.
Serigne Diokhane was indicted by a federal grand jury and arrested on June 12, 2013, on one count of making false representations to government officials.
The case was prosecuted by Assistant U.S. Attorney Zechariah Chafee.
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Salisbury Man Sentenced to 13 Years in Prison for Bank RobberyRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Gary Allen Mitchell, age 43, of Salisbury, Maryland, today to 13 years in prison followed by three years of supervised release for bank robbery. Judge Motz enhanced Mitchell’s sentence upon find that he is a career offender based on two prior federal bank robbery convictions – one each in Maryland and Delaware.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Salisbury Police Chief Barbara Duncan; and Wicomico County State’s Attorney Matthew Maciarello.
According to his plea agreement, on March 21, 2013, Mitchell robbed the PNC bank in the 300 block of Civic Avenue in Salisbury. Mitchell gave the teller a note stating that he was robbing the bank, that he would harm the teller if she did not comply with his demands, and that he had a gun. Mitchell had his hand in his pocket as if he had a gun. Mitchell further advised the teller not to pull the alarm, nor give him any marked money, dye packs or tracking devices. The teller gave Mitchell $4,177, including a tracking device within a stack of $50 bills, as per bank policy. Mitchell became angry that the teller included the tracking device, and threw the stack of money on the counter.Police officers arrested Mitchell, who was found smoking crack cocaine shortly after the bank robbery, and recovered the proceeds of the robbery. At the time of the robbery, Mitchell was on supervised release for a previous federal bank robbery conviction.
United States Attorney Rod J. Rosenstein praised the FBI, Salisbury Police Department and Wicomico County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Bonnie S. Greenberg, who prosecuted the case.Rodney Miller Sentenced to 21 Months in Prison for Tax FraudRead the Press Release
St. Thomas, USVI B District Court Judge Curtis V. Gomez today sentenced Rodney E. Miller, Sr., former Chief Executive Officer of Schneider Regional Medical Center, to 21 months in federal prison for income tax fraud, announced United States Attorney Ronald W. Sharpe and Internal Revenue Service Special Agent in Charge Jose A. Gonzalez.
Miller, 41, was remanded to the custody of the United States Marshals Service to begin serving his sentence at the conclusion of today’s hearing. In addition to the prison sentence, Judge Gomez ordered Miller to serve one year of supervised release upon completion of his prison sentence, and pay $86,798 in restitution to the Virgin Islands Bureau of Internal Revenue.
According to the evidence presented at trial, in 2006 Miller received taxable income and compensation from his position as CEO of Schneider Regional Medical Center in the amount of $510,947. The evidence further showed that Miller had funds directed to several bank accounts. When he filed his 2006 income tax return, Miller only reported income in the amount of $265,198, and a tax owing of $39,810. However, based on his true income for 2006 ($510,947) Miller’s tax liability was actually $126, 608, more than three times what he claimed he owed on his 2006 return.
“Individuals who evade taxes and commit tax fraud undermine the integrity and fairness of the income tax collection system,” U.S. Attorney Sharpe said. “With the assistance of the Internal Revenue Service and our partners at the Virgin Islands Bureau of Internal Revenue, tax cheats in the Virgin Islands will be vigorously investigated and prosecuted.”
“Today, justice is served, as Miller is being held accountable for intentionally violating his responsibility to pay his fair share of taxes to the VI BIR as mandated by law,” Special Agent in Charge Gonzalez said.
The case was investigated by the Internal Revenue Service, Criminal Investigation Division, and prosecuted by Assistant United States Attorney Kim L. Chisholm.
Purported Environmental Product Inventor and Developer Sentenced to 48 Months in Prison for $5 Million Fraud SchemeRead the Press Release
Theodore Sweeten, the president of Symtech International, Inc. (“Symtech”), was sentenced today in federal court in Brooklyn, New York, to 48 months in prison to be followed by three years of supervised release. As part of the sentence, Sweeten was ordered to forfeit more than $600,000 to the government and pay $5,001,949 in restitution to the defrauded investor. Sweeten was remanded into federal custody. In June 2013, Sweeten pleaded guilty to a charge of wire fraud for defrauding an individual investor of $5 million through, among other things, false representations about his investment and environmental expertise.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Theodore Sweeten conned an unsuspecting investor of $5 million by claiming to have expertise in environmental and financial products, when in reality, his only expertise was in fraud. Sweeten told the victim his money would be safe until their investment goals were accomplished. Instead, he and his cohorts simply stole the money and gave the victim phony documents and a trail of lies, each one more fanciful than the last. Those who seek to prey on the investing public through lies and deceit are on notice that they will be held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the FBI, the agency responsible for leading the government’s investigation.
Sweeten, who claimed he developed and patented the “Clean Air Valve” among other environmental products, defrauded an investor of $5 million by lying to him about his expertise in their joint venture agreement. Sweeten, and two others, induced the victim to make the investment in order to “lease” a credit line of $100 million, which in turn would enable them to generate millions of dollars in profit through special investment programs.1 In furtherance of that scheme, Sweeten and his co-conspirators falsely represented that the victim’s funds would be held in an attorney escrow account pending confirmation of the posting of $100 million in the leased-funds account. In fact, they simply distributed the victim’s $5 million among themselves and falsely represented that a $100 million account had been created at HSBC by sending the victim fabricated bank documents on HSBC letterhead.
When the victim discovered that the bank documents on HSBC letterhead were phony, he requested a refund of the $5 million that he had deposited into the attorney escrow account. In response, Sweeten and his co-conspirators told the victim that the money had been disbursed to the investors who created the $100 million account. Sweeten then claimed innocence and placed the blame for the victim’s lost funds on his co-conspirators. In particular, Sweeten concealed from the victim the fact that he had requested and received more than $600,000 of the escrowed funds more than four months prior to the issuance of the fabricated HSBC documents. When the victim eventually confronted Sweeten about the money that Sweeten had withdrawn from the attorney’s escrow account, Sweeten lied to the victim yet again and told him that he had invested the withdrawn funds on the victim’s behalf into other highly profitable projects, including a gold mine project. Sweeten continued with these lies to the victim, in emails and telephone conversations, for more than three years after stealing the victim’s money.
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes and Marcia M. Henry.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendant:
THEODORE SWEETEN
Age: 61
Residence: Ashland, Oregon
E.D.N.Y. Docket No. 12-CR-471
1 The charges against the co-defendants are merely allegations, and they are presumed innocent unless and until proven guilty.
Postal Carrier Arrested for Theft of Government PropertyRead the Press Release
Tampa, Florida – Acting United States Attorney A. Lee Bentley, III announces the arrest of Orville Dwight Hylton (40, Riverview), on a federal complaint, charging him with theft of government property. If convicted, he faces a maximum penalty of 10 years’ imprisonment for each offense.
According to the complaint, Hylton, a United States Postal Service mail carrier, attempted to sell nearly $20,000 worth of fraudulently obtained United States Treasury checks, in other peoples’ names, for a discounted amount. The addresses on the fraudulent tax refund checks were located in the same postal zip code, where Hylton delivered the United States mail
This case was part of an ongoing joint investigative effort by the Federal Bureau of Investigation, United States Postal Service - Office of the Inspector General, Internal Revenue Service – Criminal Investigation, and the Hillsborough County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Kelley Howard-Allen.
A criminal complaint is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent until, and unless, proven guilty.
Pharmacist Arrested in New Jersey, Charged with Assembling Illegal Drug LabRead the Press Release
NEWARK, N.J. – A Colorado man today admitted his role in a conspiracy to transport women across state lines for prostitution in New Jersey and other states, U.S. Attorney Paul J. Fishman announced.
James Roy Smith, 36, a/k/a “Mister Smith,” of Lakewood, Colo., pleaded guilty before U.S. District Judge Stanley R. Chesler to a superseding information charging him with conspiracy to transport women across state lines to work as prostitutes, and transportation of a victim across state lines with the intent that the victim work as a prostitute.
According to documents filed in this case and statements made in court:
From February 2009 through June 27, 2010, Smith conspired to operate a prostitution business in numerous locations around the United States, including New Jersey, New Mexico, Nebraska, and Pennsylvania. The women would be transported between states by air as well as in a Cadillac Escalade registered to Smith’s uncle. In order to attract and locate local customers, the conspirators would place advertisements for escort services on Craigslist as well as Backpage. com.
Smith admitted that in late June 2010, he conspired to transport six women from New Jersey to Philadelphia, Pa., to work as prostitutes. During that time, while checked in at the Econolodge in Elizabeth, N.J., he also caused a victim to be transported between these two states with the intent that the victim work as a prostitute.
The count of interstate transportation for the purpose of engaging in prostitution is punishable by a maximum potential penalty of 10 years in prison and the count of conspiracy to engage in that same offense is punishable by a maximum potential penalty of five years in prison. Both counts are also punishable by a fine of $250,000. Sentencing is scheduled for April 29, 2014.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea. He also thanked FBI offices in Omaha, Neb., and Salt Lake City, Utah; the Union County, N.J., Prosecutor’s Office; the Elizabeth, N.J., Police Department; and the Clay County, Neb., Sheriff’s Office for their roles.
The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Criminal Division in Newark.
14-007
Defense counsel: Brooke M. Barnett Esq., Newark
Smith, James Roy Superseding Information
Owner of Hobbs Gun Shop and His Parents Plead Guilty to Federal Firearms ChargesRead the Press Release
ALBUQUERQUE – The owner of a gun shop in Hobbs, N.M., and his parents, who assisted their son in operating the gun shop, pleaded guilty this afternoon in Las Cruces federal court to violating the federal firearms laws, announced Acting U.S. Attorney Steven C. Yarbrough and Special Agent in Charge Bernard J. Zapor of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Carlos Jonathan Cruz, 31, the owner of Hobbs Satellite Company Guns & Ammo, and his parents, Carlos Carlon Cruz, 60, and Norma M. Cruz, 56, were indicted in June 2013 and charged with violating the federal firearms laws by making false statements in connection with the acquisition of firearms by an individual who was acting as a “straw purchaser” and buying firearms on behalf of others. Carlos Jonathan Cruz also was charged with unlawfully selling thousands of rounds of ammunition to an alien illegally in the United States, unlawfully possessing an unregistered sawed-off shotgun, and unlawfully possessing firearms with obliterated serial numbers.
During today’s proceedings, Carlos Jonathan Cruz pled guilty to a felony information charging him with (1) making false statements in connection with the acquisition of firearms by an individual who was acting as a “straw purchaser,” and (2) unlawfully possessing firearms with obliterated serial numbers. In entering his guilty plea, Carlos Jonathan Cruz admitted that on April 23, 2013, he knowingly aided and abetted the making of a false statement by a straw purchaser who bought two firearms at his gun shop for an individual who was working as a confidential informant for the ATF. Cruz also admitted possessing a firearm with an obliterated serial number on May 29, 2013.Carlos Jonathan Cruz’s parents each pled guilty to a felony information charging them with (1) making false statements in connection with the acquisition of firearms by an individual who was acting as a “straw purchaser,” and (2) unlawfully selling ammunition to a prohibited person. In entering their guilty pleas, Carlos Carlon Cruz and Norma Cruz admitted that on April 9, 2013, they sold 2,500 rounds of ammunition to an alien who was illegally in the United States. They also admitted that on April 23, 2013, they knowingly aided and abetted the making of a false statement by a straw purchaser who bought two firearms at his gun shop for an individual who was working as a confidential informant for the ATF.
Under the terms of their plea agreements, Carlos Jonathan Cruz and Carlos Carlon Cruz will be sentenced to prison terms not to exceed 41 months of imprisonment and Norma Cruz will be sentenced to a prison term not to exceed 30 months of imprisonment. They also are required to forfeit approximately 165 firearms, 25,703 rounds of ammunition and six silencers. Their sentencing hearings have yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance from the Drug Enforcement Administration and the Hobbs Police Department, and is being prosecuted by Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office. Assistant U.S. Attorney Cynthia L. Weisman is handling the forfeiture proceedings.
Omaha Woman Sentenced for Interstate Prostitution Enterprise ConspiracyRead the Press Release
United States Attorney Deborah R. Gilg announced that Tabatha N. Ashburn was sentenced on Monday, January 6, 2014, by U.S. District Judge Laurie Smith Camp to a term of probation for five years, twelve months of which must be served under the location monitoring program.
Ms. Ashburn pled guilty on October 7, 2013, to one count of conspiracy to use facilities in interstate commerce in aid of a racketeering enterprise, that is, a business enterprise involving prostitution, and to induce travel in interstate commerce with intent to engage in prostitution.
Starting in approximately April 2008, and continuing to in or about January 2012, Defendant assisted in operating three “spas” in Omaha, Nebraska. The spas had different names over time, but were frequently referred to as the 93rd Street Spa, the 72nd Street Spa and the It Works Spa (collectively, the “Spas”). Defendant entered an arrangement to purchase one of the Spas as an ongoing business and make payments over time. Defendant never ultimately completed the purchase of that Spa location.
Each of the Spas was, in fact, a front for prostitution. The majority of customers received sex acts from workers, rather than legitimate spa services, in exchange for money. Defendant had “sessions” with customers during which she provided sex acts in exchange for money. Some customers traveled to the Spas from Iowa and from other states to obtain sex acts for money.
Customers paid a fee that varied by the length of the “session.” That fee was kept by the Spas. Customers separately negotiated a “tip” with the worker, which the worker kept. During certain periods of time, workers at the Spas were required to pay a daily fee to the Spas for “booth rental.”
During certain periods of time, Defendant herself worked at the front desk, answering the phones, taking appointments and collecting money. During other periods of time, Defendant oversaw and managed workers who handled these duties at the front desk.Defendant placed advertisements for the Spas on the internet. The Spas also maintained a website accessible over the internet. The website advertised available services and contact information, and included a “Members Only” section. Established customers of the Spas were given a user name and password by which they could access the “Members Only” section. Members accessing this section could read about the female workers providing services and view provocative pictures of them.
Customers arranged appointments for “sessions” using cellular telephones and other facilities in interstate commerce. The website also allowed customers to communicate with the Spas by e-mail and to set up appointments online.Defendant also helped maintain a computerized record keeping and management system, entitled “Spa Manager.” The Spa Manager system generated text messages to workers’ cell phones to notify them of appointments for which they had been scheduled. The Spa Manager system also tracked various data related to the spas’ operation.
The investigation was conducted by the Federal Bureau of Investigation, the Omaha Police Department and the Internal Revenue Service, under the auspices of the Child Exploitation Task Force, which also includes the Council Bluffs Police Department, the Douglas County Sheriff’s Office, the La Vista Police Department, the Mills County Sheriff’s Office and the Nebraska State Patrol.
During the time when Defendant assisted in managing the Spas, there were an overall total of more than twenty workers providing commercial sex acts.Non-Indian Man Sentenced to Probation for Assaulting an Indian ChildRead the Press Release
ALBUQUERQUE – Jose J. Romero, 39, a non-Indian resident of Isleta Pueblo, was sentenced on Jan. 3, 2014 to 18 months of probation for his misdemeanor simple assault conviction.
Romero entered a guilty plea on Sept. 26, 2013, to a misdemeanor information charging him with simple assault of an individual who had not attained the age of 16 years. In his plea agreement, Romero admitted striking an Indian child under the age of 16 years in the face on Jan. 16, 2013. He further admitted that his unlawful conduct occurred within Isleta Pueblo.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services and the Isleta Pueblo Tribal Police Department and was prosecuted by Assistant U.S. Attorney Novaline D. Wilson.
Non-Indian Man Pleads Guilty to Assaulting an Indian During a Home Invasion on Santa Clara PuebloRead the Press Release
ALBUQUERQUE – Cristian K. Watson, 20, a resident of Tierra Azul, N.M., pleaded guilty this morning to a felony information charging him with assault resulting in serious bodily injury under a plea agreement with the U.S. Attorney’s Office.
Watson was arrested on Feb. 27, 2012, on a criminal complaint charging him with assault with a dangerous weapon and with the intent to do bodily harm. According to the criminal complaint, Watson assaulted an enrolled member of the Shoshone Band of Indians who was living in Santa Clara Pueblo during a home invasion on Feb. 12, 2012.
During today’s plea hearing, Watson entered a guilty plea to an assault charge and admitted assaulting the victim on Feb. 12, 2012. Court records reflect that on that day, Watson and an accomplice, Joshua Phillips, 21, a member and resident of Ohkay Owingeh Pueblo, committed a home invasion at a Santa Clara Pueblo residence for the purpose of robbing the owner. Watson admitted repeatedly stabbing the victim, who lived in the residence, while helping Phillips steal pills from the victim. In his plea agreement, Watson acknowledged that the victim sustained five puncture wounds as a result of the assault, each of which required multiple staples to close.
A sentencing, Watson faces a maximum penalty of ten years in prison. Watson remains in federal custody pending his sentencing hearing, which has yet to be scheduled.
Phillips previously entered a guilty plea to a felony information charging him with aiding and abetting an assault resulting in serious bodily injury and was sentenced on Dec. 13, 2013, to ten months in prison followed by three years of supervised release.
The case was investigated by the Bureau of Indian Affairs, Office of Justice Services, Northern Pueblos Agency, with assistance from the Santa Clara Pueblo Tribal Police Department and the Espanola Police Department, and is being prosecuted by Assistant U.S. Attorney Presiliano A. Torrez.
Modesto Man Sentenced to over Six Years in Prison for Bank RobberyRead the Press Release
SACRAMENTO, Calif. — Troy Foster Mitchell, 47, of Modesto, was sentenced today by United States District Judge Lawrence K. Karlton to six years and five months in prison and ordered him to pay $10,114 in restitution for bank robberies in Modesto and Stockton, United States Attorney Benjamin B. Wagner announced.
According to court documents, on May 14, 2013, while on supervised release after serving a prison term for a previous conviction, Mitchell entered the Valley First Credit Union in Modesto and passed a note to the bank teller demanding $5,000 in cash. The teller complied with the demand, and while she was doing so, another teller, recognizing Mitchell, walked by and said, “Hi, Troy.” Mitchell acknowledged her, and departed the credit union with $5,000 in cash.
Mitchell had filed an auto loan application with the bank on April 3, 2013, that included a copy of his driver’s license. Immediately following the robbery, a bank employee retrieved the application and gave it to the Modesto Police Department. Surveillance photos of the robber were consistent with Mitchell’s driver’s license photo. The application and driver’s license in the file listed Mitchell’s home address.
According to the plea agreement, on May 31, 2013, Mitchell entered the Bank of the West in Stockton and passed a note to the bank teller demanding all of the $100 bills without a dye pack. The teller gave Mitchell $5,114. Mitchell departed the bank, leaving the demand note behind. The demand note was written on the back of a voided paycheck made out to Troy F. Mitchell and listed Mitchell’s home address.
This case is the product of an investigation by the Federal Bureau of Investigation, the Modesto Police Department, and the Stockton Police Department. Assistant United States Attorney Sherry D. Hartel Haus prosecuted the case.
Mexican National Sentenced to Ten Years in Federal Prison for Methamphetamine Trafficking and Firearms ConvictionRead the Press Release
ALBUQUERQUE – Sergio Saenz-Amaya, 30, a Mexican national illegally in the United States, was sentenced earlier today to 120 months in federal prison for his methamphetamine trafficking and firearms conviction. Saenz-Amaya will be deported after he completes his prison sentence.
Saenz-Amaya and his co-defendant, Manuel Adrian Aldarette, 32, also a Mexican national illegally in the United States, were arrested on a criminal complaint in Oct. 2012, after Saenz-Amaya and Aldarette engaged in a drug trafficking transaction with a person who unbeknownst to them was a confidential informant with Homeland Security Investigations (HSI). Saenz-Amaya and Aldarette subsequently were indicted and charged with possession of methamphetamine with intent to distribute. Saenz-Amaya also was charged with using a firearm in furtherance of a drug trafficking crime.
Saenz-Amaya pled guilty to possession of methamphetamine with intent to distribute and using a firearm in relation to a drug trafficking crime on Aug. 1, 2013.
Aldarette pled guilty to possession of methamphetamine with intent to distribute on Aug. 12, 2013. Aldarette remains in federal custody pending his sentencing hearing, which has yet to be scheduled. At sentencing, Aldarette faces a maximum of 20 years in prison. He will be deported after serving his prison sentence.
This case was investigated by the Albuquerque office of HSI and the Albuquerque Police Department and was prosecuted by Assistant U.S. Attorney Lynn W.Y. Wang.
Mercer Pedophile with Child Pornography Pleads Guilty to Federal ChargeRead the Press Release
BLUEFIELD, W.Va. – A 60-year-old Mercer County pedophile faces up to 20 years in prison after pleading guilty yesterday to possession of child pornography, U.S. Attorney Booth Goodwin announced. Johnny Richard Rowe, of Bluewell, W.Va., entered a guilty plea on Jan. 6 before Senior United States District Court Judge David A. Faber in Bluefield.
On June 19, 2013, Rowe possessed pictures of prepubescent minors having sex or performing sexual acts. Rowe possessed the images depicting child pornography on his personal computer.
Rowe is scheduled to be sentenced on May 12, 2014.
The West Virginia Internet Crimes Against Children Task Force and the Mercer County Sheriff’s Department conducted the investigation. Assistant United States Attorney Lisa Johnston is in charge of the prosecution.
This case is being brought as part of U.S. Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia.
Medical Device Manufacturer Charged With<br /> Major Securities Fraud SchemeRead the Press Release
ArthroCare Corporation, a medical device manufacturer based in Austin, Texas, and that trades on the NASDAQ stock exchange, has agreed to pay a $30 million monetary penalty to resolve charges that senior executives at the company engaged in a securities fraud scheme that resulted in more than $400 million in shareholder losses, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Robert Pitman of the Western District of Texas.
John Raffle and David Applegate, both former senior vice presidents of ArthroCare, previously pleaded guilty to conspiracy to commit securities and wire fraud in connection with the fraud scheme. ArthroCare’s former chief executive officer, Michael Baker, and chief financial officer, Michael Gluk, are scheduled to stand trial on related charges on May 5, 2014. Defendants are presumed innocent unless and until proven guilty at trial.
As part of the agreed-upon resolution, the department today filed a criminal information in the Western District of Texas charging ArthroCare with one count of conspiracy to commit securities fraud and wire fraud. In addition to the monetary penalty, ArthroCare also agreed to cooperate with the department in its continuing investigation and prosecution of individuals responsible for the scheme and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect violations of the federal securities laws and federal laws relating to the company’s relationships and transactions with health care providers. ArthroCare had previously entered into a multi-million dollar settlement agreement with shareholder victims.
In the deferred prosecution agreement, ArthroCare admitted that senior executives of the company inflated ArthroCare’s revenue by tens of millions of dollars; concealed the nature and financial significance of ArthroCare’s relationship with its largest distributor, DiscoCare Inc., and other distributors; and used a series of sham transactions to manipulate ArthroCare’s revenue and earnings as reported to investors. ArthroCare admitted that its executives determined the type and amount of product to be shipped to distributors, notably DiscoCare, based on ArthroCare’s need to meet sales forecasts, rather than the distributors’ actual orders.
ArthroCare further admitted that these executives and others then caused ArthroCare to “park” millions of dollars worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter so the company could report these shipments as sales in its quarterly and annual filings and so the company would appear to have met or exceeded internal and external earnings forecasts.
According to the Information, between December 2005 and December 2008, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 to reflect the results of an internal investigation, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. The drop in ArthroCare’s share price caused an immediate loss in shareholder value of more than $400 million.
This case was investigated by the FBI’s Austin Field Office. The case is being prosecuted by Deputy Chief Benjamin D. Singer and Trial Attorneys Henry P. Van Dyck and William Chang of the Criminal Division’s Fraud Section. Significant assistance was provided by the SEC’s Fort Worth, Texas, Office.Medical Clinic Owner and Other Patient Recruiters Plead Guilty in Miami for Roles in $8 Million Health Care Fraud SchemeRead the Press Release
Several patient recruiters, including a medical clinic owner, pleaded guilty today in connection with a health care fraud scheme involving Flores Home Health Care Inc., a defunct home health care company.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.
At a hearing held before U.S. District Judge Ursula Ungaro of the Southern District of Florida, Lerida Labrada, 59, of Miami, pleaded guilty to conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison, and Mayra Flores, 49, and German Martinez, 36, both of Miami, pleaded guilty to conspiracy to defraud the United States and receive health care kickbacks, which carries a maximum penalty of five years in prison. Sentencing has been scheduled for March 14, 2014.
According to court documents, the defendants worked as patient recruiters for the owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Labrada also owned and operated a Miami medical clinic that provided fraudulent prescriptions to patient recruiters and to the owners and operators of Flores Home Health.
Flores Home Health was operated for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.
The defendants would recruit patients for Flores Home Health and would solicit and receive kickbacks and bribes from the owners and operators of Flores Home Health in return for allowing the agency to bill the Medicare program on behalf of the recruited Medicare patients. These Medicare beneficiaries were billed for home health care and therapy services that were not medically necessary and/or not provided.
From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for fraudulent claims for home health services.
The case is being investigated by the FBI and HHS-OIG and was 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 Southern District of Florida. This case is being prosecuted by Trial Attorney A. Brendan Stewart of 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, are 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.govMedical Clinic Owner Pleads Guilty in Miami for Role in Multiple Health Care Fraud Schemes Totaling over $20 MillionRead the Press Release
The owner and operator of a Miami medical clinic pleaded guilty today in connection with multiple health care fraud schemes involving the defunct clinic Merfi Corp.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.
Isabel Medina, 49, of Miami, pleaded guilty before U.S. District Judge Ursula Ungaro of the Southern District of Florida to conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison. Sentencing has been scheduled for March 14, 2014.
According to court documents, Medina was an owner and operator of Merfi, a Miami medical clinic which employed physicians, physician assistants and other medical professionals who were authorized by law to dispense prescriptions for home health care services. Through Merfi, Medina and her co-conspirators provided fraudulent home health and therapy prescriptions and other medical documentation to the owners and operators of Flores Home Health Care Inc. and other home health care agencies, as well as to patient recruiters, in return for kickbacks and bribes.
Flores Home Health and these other home health care agencies purported to provide home health and therapy services to Medicare beneficiaries, but were in fact operated for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.
Medina has acknowledged that her involvement in fraudulent schemes at multiple home health care companies, including Flores Home Health, resulted in losses to the Medicare Program exceeding $20 million.
The case is being investigated by the FBI and HHS-OIG and was 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 Southern District of Florida. This case is being prosecuted by Trial Attorney A. Brendan Stewart of 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, are 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.govMedical Clinic Owner Pleads Guilty in Miami for Role in Multiple Health Care Fraud Schemes Totaling over $20 MillionRead the Press Release
The owner and operator of a Miami medical clinic pleaded guilty today in connection with multiple health care fraud schemes involving the defunct clinic Merfi Corp.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.
Isabel Medina, 49, of Miami, pleaded guilty before U.S. District Judge Ursula Ungaro of the Southern District of Florida to conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison. Sentencing has been scheduled for March 14, 2014.
According to court documents, Medina was an owner and operator of Merfi, a Miami medical clinic which employed physicians, physician assistants and other medical professionals who were authorized by law to dispense prescriptions for home health care services. Through Merfi, Medina and her co-conspirators provided fraudulent home health and therapy prescriptions and other medical documentation to the owners and operators of Flores Home Health Care Inc. and other home health care agencies, as well as to patient recruiters, in return for kickbacks and bribes.
Flores Home Health and these other home health care agencies purported to provide home health and therapy services to Medicare beneficiaries, but were in fact operated for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.
Medina has acknowledged that her involvement in fraudulent schemes at multiple home health care companies, including Flores Home Health, resulted in losses to the Medicare Program exceeding $20 million.
The case is being investigated by the FBI and HHS-OIG and was 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 Southern District of Florida. This case is being prosecuted by Trial Attorney A. Brendan Stewart of 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, are 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.
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.
Medical Clinic Owner and Other Patient Recruiters Plead Guilty in Miami for Roles in $8 Million Health Care Fraud SchemeRead the Press Release
Several patient recruiters, including a medical clinic owner, pleaded guilty today in connection with a health care fraud scheme involving Flores Home Health Care Inc., a defunct home health care company.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.
At a hearing held before U.S. District Judge Ursula Ungaro of the Southern District of Florida, Lerida Labrada, 59, of Miami, pleaded guilty to conspiracy to commit health care fraud, which carries a maximum penalty of 10 years in prison, and Mayra Flores, 49, and German Martinez, 36, both of Miami, pleaded guilty to conspiracy to defraud the United States and receive health care kickbacks, which carries a maximum penalty of five years in prison. Sentencing has been scheduled for March 14, 2014.
According to court documents, the defendants worked as patient recruiters for the owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Labrada also owned and operated a Miami medical clinic that provided fraudulent prescriptions to patient recruiters and to the owners and operators of Flores Home Health.
Flores Home Health was operated for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.
The defendants would recruit patients for Flores Home Health and would solicit and receive kickbacks and bribes from the owners and operators of Flores Home Health in return for allowing the agency to bill the Medicare program on behalf of the recruited Medicare patients. These Medicare beneficiaries were billed for home health care and therapy services that were not medically necessary and/or not provided.
From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for fraudulent claims for home health services.
The case is being investigated by the FBI and HHS-OIG and was 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 Southern District of Florida. This case is being prosecuted by Trial Attorney A. Brendan Stewart of 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, are 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.
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.
Manhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Filing of Criminal Charges Against and Deferred Prosecution Agreement with JPMorgan Chase Bank, N.A., in Connection with Bernard L. Madoff’s Multi-Billion Dollar Ponzi SchemeRead the Press Release
Charges to Be Deferred for Two Years Under an Agreement Requiring JPMorgan to Admit to Its Conduct; Pay $1.7 Billion to Victims of Madoff’s Fraud; and to Reform Its Anti-Money Laundering Policies
$1.7 Billion Payment by JPMorgan is the Largest Ever Bank Forfeiture and Department of Justice Penalty for a Bank Secrecy Act Violation
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 criminal charges against JPMorgan Chase Bank, N.A. (“JPMorgan” or the “Bank”), consisting of two felony violations of the Bank Secrecy Act, in connection with the Bank’s relationship with Bernard L. Madoff Investment Securities (“Madoff Securities”). The case is assigned to United States District Judge Lewis A. Kaplan.
Also today, Mr. Bharara announced an agreement (the “Agreement”) with JPMorgan, under which the Bank agreed to accept responsibility for its conduct by stipulating to the accuracy of an extensive Statement of Facts; to pay a $1.7 billion penalty to the victims of the Madoff fraud through a parallel civil forfeiture complaint; to refrain from future criminal conduct and cooperate fully with the Government; and to continue reforms of its Bank Secrecy Act (“BSA”)/Anti-Money Laundering compliance program. The criminal charges are contained in a two-count felony Information (the “Information”). Assuming the Bank’s continued compliance with the Agreement, the Government has agreed to defer prosecution on the Information for a period of two years, after which time the Government will seek to dismiss the charges.
Manhattan U.S. Attorney Preet Bharara said: “Today, the largest financial institution in the country stands charged with two criminal offenses. Institutions, not just individuals, have an obligation to follow the law and to police themselves. They must exercise due care not only with their own money but with other people’s money also. In this case, JPMorgan connected the dots when it mattered to its own profit, but was not so diligent otherwise. Fortunately, with today’s resolution, the bank has accepted responsibility and agreed to continue reforming its anti-money laundering practices. Most importantly, the victims of Bernie Madoff’s epic fraud are $1.7 billion closer to being made whole.”
FBI Assistant Director-in-Charge George Venizelos said: “J.P. Morgan failed to carry out its legal obligations while Bernard Madoff built his massive house of cards. Today, J.P. Morgan finds itself criminally charged as a consequence. But it took until after the arrest of Madoff, one of the worst crooks this office has ever seen, for J.P. Morgan to alert authorities to what the world already knew. In order to avoid these types of disasters in the future – we all need to be invested in making our markets safer and more equitable. The FBI can’t do it alone. Traders, compliance officers, analysts, bankers, and executives are the gatekeepers of the financial industry. We need their help protecting our markets.”
In separate actions, the United States Department of the Treasury, Office of the Comptroller of the Currency (“OCC”), and the Financial Crimes Enforcement Network (“FinCEN”), announced that they had also reached agreements with JPMorgan.
According to the documents filed today in Manhattan federal court:
Since 1986, JPMorgan and its predecessor institutions served as the primary bank through which Madoff ran his Ponzi scheme. Madoff Securities maintained a series of linked checking and brokerage accounts at JPMorgan – collectively referred to as the “703 Account.” Madoff was a client of the Bank’s broker/dealer banking group, an investment bank group that comprised personnel from various business lines that serviced the needs of broker/dealer clients. JPMorgan designated a banker as Madoff’s “relationship manager,” who was principally responsible for Madoff’s business with the Bank, as well as for the Bank’s first-line BSA responsibilities, including certifying that the Madoff relationship “complies with relevant legal and regulatory-based policies,” and “that the necessary due diligence has been performed.”
Early on in its relationship with Madoff Securities, JPMorgan, because of its unique vantage point as the firm’s banker, had reason to be suspicious about Madoff. For example, in the early 1990s the Bank learned that Madoff and a prominent client of JPMorgan’s Private Bank (the “Private Bank Client”) were engaged in what looked like round-tripping, check-kiting transactions. Another bank involved in these transactions (“Madoff Bank 2”) recognized them as suspicious and without any legitimate business purpose. In or about 1996, unlike JPMorgan, Madoff Bank 2 not only filed a suspicious activity report (“SAR”) with law enforcement, but it actually closed down Madoff’s account. As a result, Madoff moved all of his accounts from Madoff Bank 2 to JPMorgan, where the size of these transactions became much larger. For example, in December 2001 alone, the Private Bank Client engaged in approximately $6.8 billion worth of transactions with Madoff through a series of circular $90 million transfers.
Over the years, other parts of the Bank developed their own suspicions about Madoff. In 2006, an entirely different part of the Bank – a derivatives trading desk located in the London branch of JPMorgan’s Investment Bank – became interested in Madoff. The trading desk began receiving requests to issue derivatives tied to the performance of various Madoff “feeder” funds – funds that sent investor money to Madoff Securities. In order to hedge and offset the risk created by these products, JPMorgan invested the Bank’s own capital directly in the feeder funds. The Bank initially issued about $100 million of Madoff-linked products in 2006 and early 2007. Then, because of continued demand for these products, in the summer of 2007, the traders on the London desk sought to write more than $1 billion in Madoff-linked derivatives – a large deviation from normal risk limits, which therefore had to be approved by the Investment Bank’s Chief Risk Officer. In June 2007, the Chief Risk Officer convened a committee to consider authorizing a request for more than $1.3 billion of the Bank’s proprietary capital to be invested directly into Madoff feeder funds to hedge the issuance of additional derivative products tied to the performance of Madoff feeder funds. Ultimately, the Chief Risk Officer – who at one point was told by a senior colleague that there is a “well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme” – rejected the proposal and set the Madoff risk limit at $250 million.
Over the next several months, JPMorgan began to have increasing concerns about its exposure to Madoff. In late 2007, the London trading desk hired its own due diligence staff; on the first day of his job, the newly-hired head of hedge fund due diligence was directed to review the Madoff feeder fund positions and offer any insight into how Madoff was able to generate his purported returns. Ultimately, in October 2008, the London desk’s due diligence team circulated a negative memorandum describing continuing concerns about Madoff. Among other things, the memorandum described the inability of JPMorgan to validate Madoff’s trading activity or custody of assets, questioned Madoff’s “odd choice” of a one-man accounting firm, and generally made the point that JPMorgan “seem[ed] to be relying on Madoff’s integrity” with little reason to do so.
About two weeks after the circulation of this memorandum, on October 29, 2008, JPMorgan filed a report with regulators in the United Kingdom, listing Madoff Securities as the “main subject – suspect” and repeating many of the concerns from that earlier memo. The report to the UK regulators concluded that Madoff’s returns were “probably” “too good to be true,” and “as a result,” JPMorgan was withdrawing about $300 million of its own money from the Madoff feeder funds. On November 19, 2008, the Bank filed a second report, notifying U.K. regulators about an additional planned transaction involving its position in the feeder funds, lest JPMorgan “be considered party to laundering the proceeds of crime.” As part of a broader directive to reduce generally the Bank’s exposure to hedge funds, between October 2008 and Madoff’s arrest on December 11, JPMorgan redeemed approximately $288 million of its approximately $370 million position in the Madoff feeder funds.
Although JPMorgan filed a report with UK regulators about its concerns relating to Madoff, it failed to do so in the United States. While the suspicions raised by the UK bankers led to JPMorgan’s own redemptions from Madoff feeder funds, during the same time, U.S.-based anti-money laundering compliance officers at JPMorgan never looked into Madoff, and nor was the relationship sponsor alerted about the London desk’s concerns. And while certain senior compliance officers in the United States were provided with all of the relevant facts – critically, the London traders’ suspicions about Madoff and the fact of the decades-long banking relationship with Madoff – the U.S. compliance officers did very little to investigate those suspicions, failed to raise these concerns with the bank’s anti-money laundering department, and failed to file a SAR.
Meanwhile, the balance in the 703 Account that held the billions Madoff stole from his customers was being drained. In August 2008, the account held approximately $5.6 billion. But by October 16, 2008 – the date of the negative memorandum described above – the balance had fallen to $3.7 billion. And on October 29, when the Bank filed its report in the U.K., the balance had fallen another $700 million, to about $3 billion. Over the next five weeks before Madoff’s arrest, a little over $2 billion exited the 703 Account. By the time Madoff was arrested on December 11, 2008, only about $234 million remained in the 703 Account. Of those lost billions, the vast majority went to the very funds in which JPMorgan had built a position, including about $288 million that went back to JPMorgan itself to pay for its redemptions from the feeder funds.
As a result of the foregoing conduct, this Office has entered into a Deferred Prosecution Agreement with JPMorgan, which has been submitted today to Judge Kaplan. Pursuant to the Agreement, the Bank has agreed to the following terms and conditions. First, JPMorgan has agreed to waive indictment and to the filing of the Information, charging the Bank with violations of the Bank Secrecy Act. Count One of the Information charges that JPMorgan failed to maintain an effective anti-money laundering program in 2008, as required under the BSA. Specifically, Count One alleges that JPMorgan failed to enact adequate policies, procedures, and controls to ensure that information about the Bank’s clients obtained through other lines of business – or outside the United States – was shared with compliance and AML personnel. Count Two of the Information alleges that JPMorgan violated the BSA by failing to file a Suspicious Activity Report on Madoff Securities in October 2008.
Second, pursuant to the Agreement, JPMorgan agrees to acknowledge responsibility for its conduct by, among other things, stipulating to the accuracy of a detailed Statement of Facts.
Third, JPMorgan agrees to pay a non-tax deductible penalty of $1.7 billion, in the form of a civil forfeiture, which the Government intends to distribute to the victims of the Madoff fraud, consistent with the applicable Department of Justice regulations, through the ongoing remission process. To effectuate that forfeiture, the Office has today filed a parallel civil forfeiture complaint, which has been assigned to United States District Judge Andrew L. Carter, Jr. The $1.7 billion penalty represents the largest ever financial penalty imposed by the Department of Justice for a violation of the Bank Secrecy Act, and the largest forfeiture from a bank. Information about the remission process, including instructions for filing a claim, can be found on its website at www.madoffvictimfund.com.
Fourth, JPMorgan agrees to various cooperation obligations, including (1) cooperation in connection with this Office’s ongoing investigation of the fraud at Madoff Securities; (2) an obligation to report any criminal conduct by any employee acting within the scope of his employment at JPMorgan; (3) reporting to this Office any BSA-related investigation or proceeding in which JPMorgan is involved; and (4) committing no subsequent federal crimes.
Fifth, JPMorgan agrees to continue reforming its Bank Secrecy Act/Anti-Money Laundering compliance programs and procedures, consistent with a pair of consent orders previously entered by the Bank’s principal regulators, and to provide quarterly reports and other information to this Office about its progress.
In consideration of these obligations, the Government has agreed to defer prosecution on the Information for a period of two years, after which time – assuming that the Bank does not violate the Agreement – the Government will seek to dismiss the charges.
Mr. Bharara praised the work of the FBI. He also thanked the OCC and FinCEN.
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. Attorneys Arlo Devlin-Brown and Matthew L. Schwartz are in charge of the prosecution.
U.S. v. JPMorgan Chase - Deferred Prosecution Agreement Packet
Man Convicted at Trial for Role in Nearly $3 Million Health Care Fraud Scheme Involving the Operation of Euless Healthcare Corp. Is Sentenced to 72 Months in Federal PrisonRead the Press Release
Defendant Also Ordered to Pay $880,000 in Restitution
DALLAS — Godwin Umotong, 58, was sentenced, by U.S District Judge David C. Godbey, to 72 months in federal prison and ordered to pay $880,000 in restitution following his conviction at trial in April 2013 on charges stemming from his involvement in the operation of Euless Healthcare Corporation (EHC) and Medic Healthcare Incorporated (Medic). Umotong is the last of six defendants sentenced in the conspiracy. Judge Godbey ordered that Umotong, a resident of Houston, surrender to the Bureau of Prisons in March. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Umotong, an employee of EHC and Medic, and coconspirator Comfort Gates, 48, an employee of Medic, were each convicted at trial on one count of conspiracy to commit health care fraud. Umotong was convicted on five counts of health care fraud.
Other defendants in the case who have been convicted and sentenced are listed below. Each was also ordered to pay restitution of amounts ranging from approximately $195,000 to $1.4 million.
Ovsanna Agopian, 58, of Houston, 120 months in federal prison
Boghos Babadjanian, 55, of Sherman Oaks, Calif., probation
Leslie Omagbemi, 56, of Dallas, 30 months in federal prison
Munda Massaquoi, 69, of Houston, 37 months in federal prison
Comfort Gates, 48, of Houston, 72 months in federal prison
ECH was located on West Bedford Euless Road in Hurst Texas, and Medic, which operated from October 2009 to May 2011, was located on Bonhomme Road in Houston. Agopian, 58, was the operator of both EHC and Medic.
According to documents filed in the case and evidence presented at trial, Agopian, Umotong, Omagbemi, Massaquoi and Gates conspired together to submit, or cause to be submitted, fraudulent claims to Medicare for diagnostic tests and office visits. Agopian recruited unlicensed doctors to work for EHC and Medic by telling them that they would treat beneficiaries in the beneficiaries’ homes. Medicare does not pay for services performed by unlicensed persons. Nevertheless, these recruits went to beneficiaries’ homes and purported to conduct medical examinations, including ordering diagnostic tests. In total, more than $2.7 million was fraudulently billed, and of that amount, Medicare paid more than $1.3 million.
The case was investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant U.S. Attorney Michael Elliott prosecuted.
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, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the HEAT Strike Force, go to: www.stopmedicarefraud.gov.
Lawton Woman Sentenced to 33 Months in Prison for Large-Scale ATM TheftRead the Press Release
Oklahoma City, Oklahoma – Maria Estelle Martin, 48, of Lawton, was sentenced today to 33 months in prison for embezzling cash from a credit institution, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to court records, Martin worked as an armed security guard for a security company that serviced Lawton-area ATM machines for local banks and credit unions. Her duties included replenishing ATMs with cash from the financial institutions’ vaults. In late 2011 and early 2012, Martin embezzled cash by taking it from the vaults and keeping it rather than using it to replenish the ATMs. Martin gambled away the stolen money through frequent visits to Lawton-area Indian casinos, where she would sometimes put over $70,000 into a single slot machine.
At today’s sentencing, United States District Judge Robin J. Cauthron sentenced Martin to serve 33 months in federal prison. Upon her release from prison, Martin will be on supervised release for five years and will be required to pay $847,942.50 in restitution to the corporate victims of her theft.
This case was the result of an investigation conducted by the Federal Bureau of Investigation and the Lawton Police Department. The case was prosecuted by Assistant U.S. Attorneys Brandon Hale and Chris M. Stephens.
Last Man Ordered to Prison for Wells Fargo RobberyRead the Press Release
HOUSTON - Justin Levar Taylor, 33, of Houston, has been sentenced to federal prison for his role in the robbery of the Wells Fargo Bank on Kirby Drive in Houston in December 2012, announced United States Attorney Kenneth Magidson. Taylor and three others - Aaron Derrow, 43, Terrance Jackson, 35, and Willie Wright III, 32, all also of Houston - each pleaded guilty in the case.
Today, U.S. District Judge Judge Nancy Atlas sentenced Taylor to 51 months for the bank robbery as well as a consecutive seven years for brandishing a firearm during a crime of violence for a total of 135 months in federal prison.
On Friday Dec. 28, 2012, Derrow and the others robbed the Wells Fargo Bank at 5202 Kirby Drive in Houston. All of the men were wearing various disguises, and Wright, Derrow and Taylor were armed with pistols. Jackson and Derrow jumped over the teller counter while Wright and Taylor controlled the lobby. Derrow threatened a male teller with his gun while filling a bag with money. After getting the money, the two jumped back over the teller counter and all four ran out of the bank to their getaway vehicle, a stolen white Toyota pickup truck. All were apprehended a short time later at a residence several miles away.
In December 2013, Judge Atlas sentenced Derrow to 51 months for aggravated bank robbery as well as a consecutive seven years for brandishing a firearm during a crime of violence for a total of 135 months in federal prison. Wright was sentenced to 46 months for aggravated bank robbery as well as a consecutive seven years for brandishing a firearm during a crime of violence for a total of 130 months in federal prison. Jackson was given a sentence of 108 months for his conviction of aggravated bank robbery.
All have been and will remain in custody.
The case was investigated by the FBI’s Bank Robbery Task Force and is being prosecuted by Assistant United States Attorney Jennie Basile.
Laguna Pueblo Man Pleads Guilty to Domestic Assault by a Habitual Offender ChargeRead the Press Release
ALBUQUERQUE – Matthew Louis Brown, 25, pleaded guilty this morning to a domestic assault by a habitual offender charge, announced Acting U.S. Attorney Steven C. Yarbrough and DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of BIA’s Office of Justice Services.
Brown, a member of the Pueblo of Laguna who resides in Mesita, N.M., was arrested on Oct. 2, 2013, based on a two-count indictment alleging that (1) he assaulted his intimate partner, a member of the Pueblo of Acoma, and (2) he assaulted the victim causing her serious bodily injury. Brown was charged federally as a habitual domestic violence offender because he has two prior domestic violence convictions in the Pueblo of Laguna Tribal Court.
This morning, Brown pled guilty to Count 1 of the indictment and admitted assaulting the victim, his intimate partner and the mother of his child, by striking her in the face multiple times with a closed fist and kicking her head while she was on the ground. Brown also admitted that the victim sustained serious bodily injury as a result of his attack and that he committed this crime on July 25, 2011, in a location within the Pueblo of Laguna.
Court records reflect that Brown previously was convicted on domestic violence charges before the Pueblo of Laguna Tribal Court in 2004 and 2008.
Brown was remanded into federal custody after entering his guilty plea and will remain detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Brown faces a maximum sentence of ten years in federal prison.
This case was investigated by the Laguna/Acoma Agency of BIA’s Office of Justice Services and the Pueblo of Laguna Police Department and is being prosecuted by Special Assistant U.S. Attorney David Adams. It was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Information: Federal Court Initial AppearancesRead the Press Release
The United States Attorney's Office today announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Strong in Great Falls, on January 6, 2014, and entering pleas of Not Guilty were:
- DANIEL FLANSBURG, a 20-year-old resident of Hays appeared on charges of assault resulting in serious bodily injury and assault with a dangerous weapon. If convicted, FLANSBURG faces possible penalties of 10 years in prison.
- CHERYL L. GUARDIPEE, a 39-year-old resident of Cut Bank appeared on charges of theft of government funds and false statements. If convicted, GUARDIPEE faces possible penalties of 10 years in prison.
- PEDRO MARTINE ROBLEDO, a 19-year-old resident of Cut Bank appeared on charges of involuntary manslaughter and assault resulting in serious bodily injury. If convicted, ROBLEDO faces possible penalties of 10 years in prison.
- RHONDA LEE WRIGHT, a 48-year-old resident of Richland, Washington appeared on charges of possession with intent to distribute methamphetamine and distribution of methamphetamine. If convicted, WRIGHT faces possible penalties of a mandatory minimum of 10 years in prison and could be sentenced to life in prison.
The indictment is merely a formal charging document. It is not proof of guilt and all persons indicted are presumed to be innocent of any crime until proof of guilt is established by trial or guilty plea.
The U.S. Attorney's Office is currently transitioning its media program to new media contacts. Resources and this transition may affect the amount of information the office can process and disclose in a timely manner. Therefore, if any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html.
To access the district court's calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Holly Man Sentenced to 25 Years in PrisonFor Production of Child PornographyRead the Press Release
Chad Alan Cole, 45, of Holly, Michigan, was sentenced today to 25 years in federal prison after having pleaded guilty to production of child pornography, U.S. Attorney Barbara L. McQuade announced today. Judge Arthur J. Tarnow imposed the sentence.
Joining McQuade in the announcement was Special Agent in Charge Paul M. Abbate of the Federal Bureau of Investigation (FBI).
Evidence established that Cole, who had previously been convicted of distributing obscene material to children, met a 12 year-old girl from Idaho online. Over the course of several months, Cole befriended the child before eventually convincing her to create sexually explicit pictures and videos of herself. Cole also sent images and videos of himself masturbating to the child, and convinced the child to engage in sexually explicit conduct over Skype. After his arrest, Cole admitted to engaging in similar behavior with 10-20 other minors.
Cole previously worked as a firefighter for the Village of Holly and a 911 dispatcher for the City of Auburn Hills before being terminated as a result of his prior sex offense.
This case was first investigated by and subsequently brought to the attention of the FBI by local authorities in Lewiston, Idaho. It was prosecuted by Assistant United States Attorney Kevin M. Mulcahy of the General Crimes Unit.
Former President of Tatitlek Native Village Sentenced to 18 Months for Misapplication of Tribal FundsRead the Press Release
Lori “Sue” Clum (formerly Johnson), 46, of Anchorage, Alaska, was sentenced today by United States District Court Judge Sharon L. Gleason, to 18 months in prison.
According to Assistant U.S. Attorney Aunnie Steward, Clum was elected as President of the Native Village of Tatitlek, a federally recognized tribe, in October 2007. Clum was voted out of office in April 2008 but refused to accept the results of this election and maintained control of the tribal bank accounts for another year, during which time she misapplied $112,000 of tribal funds for her personal benefit. Clum used the money to gamble, pay personal debts, and purchase a four wheeler among other things. Clum finally relinquished control of the tribal bank accounts after she was arrested for illegal drug possession in March 2009.
In a separate but related matter, Clum confessed judgment in a civil case brought by the Native Village of Tatitlek for a total of $150,000 that she misapplied, which amount included disputed payroll for Clum. Clum was arrested on January 13, 2013, on state charges that she was selling drugs and alcohol in Tatitlek. These charges are still pending.
At sentencing, Judge Gleason noted the importance of deterring this type of conduct in remote communities with fragile economies where fraud like this has an enormous impact, as well as the emotional impact on a small community.
Clum’s brother, James Kramer of Valdez, Alaska, is scheduled for sentencing on January 22, 2014, for his role in accepting $20,000 from Clum. Kramer accepted the money knowing he was not entitled to it, and he failed to file a tax return to include this money as well as other income he had received in 2009.
Ms. Loeffler commends the FBI, IRS Criminal Investigations, and EPA Office of Inspector General, with assistance from the Valdez Police Department, for the investigation of this case.
Former Mining Supply Businessman Sentenced to Federal Prison ForRead the Press Release
ILLEGAL CASH STRUCTURING SCHEME
BLUEFIELD, W.Va. – A former mining supply businessman was sentenced to federal prison after pleading guilty earlier this year to structuring thousands of dollars in bank transactions, announced U.S. Attorney Booth Goodwin. Michael J. Prasatek, Sr., 67, of Bluefield, was sentenced yesterday to 16 months in prison. The sentence was handed down by Senior United States District Court Judge David A. Faber. Prasatek, a former businessman who managed several supply companies in and around southern West Virginia since 1978, knowingly provided a coal mine operator with bogus invoices in a scheme known as “selling cash.”
During the scheme, in exchange for fake supply invoices, Prasatek received a check in the amount of the fictitious invoice and later deposited the money into his personal bank account. Prasatek then returned the cash to his associate for a fee. Prasatek knew that the false invoice could be used for unlawful purposes such as filing a false tax deduction.
To further his scheme, Prasatek opened up checking accounts at two McDowell County banks using the names “Michael Prasatek DBA Prestige Paving & Sealing” and “Michael Prasatek DBA Quality Services” and routinely structured cash withdrawals. “Structuring” involves the breaking down of cash transactions in amounts of $10,000 or less for the purpose of avoiding a financial institution’s reporting requirements to the IRS.
Prasatek admitted that beginning in May 2010 until December 20111, he structured several cash transactions totaling approximately $55,000, to intentionally avoid the mandatory financial reporting requirements.
The Court also sentenced Prasatek to three years’ supervised release and ordered him to pay a $3,000 fine.
The investigation was conducted by the IRS. Assistant United States Attorney Thomas Ryan handled the prosecution.
Former Head Teller at Lynrocten Credit Union Pleads GuiltyRead the Press Release
LYNCHBURG, VIRGINIA – The former head teller of the Lynrocten Credit Union in Lynchburg pled guilty today in the United States District Court for the Western District of Virginia in Lynchburg to federal embezzlement charges.
Teresa Wieringo Humphries, 58, of Madison Heights, Va., waived her right to be indicted and pled guilty today to a one-count Information charging her with embezzlement from a Federal Credit Union.
“Ms. Humphries participated in a massive fraud scheme in which she stole over a million dollars from her employer by falsifying loan documents,” United States Attorney Timothy J. Heaphy said today. “Her brazen and persistent acts of fraud violated the trust placed in her by the Lynrocten Credit Union and its customers. This office will continue to vigorously investigate and prosecute instances of financial fraud and do our best to provide restitution to the victims of these crimes.”
According to evidence presented at today’s hearing by Assistant United States Attorney Daniel Bubar, Humphries had been the head teller at the Lynrocten Credit Union since the mid-1980s. Beginning in 2000, and continuing until the credit union’s liquidation, Humphries, and the manager of the credit union, carried out several schemes to embezzle and steal funds from the credit union’s deposits through the unauthorized and fraudulent origination of loans in the names of credit union members. She and the manager also used a check kiting scheme to obtain additional monies of the credit union and conceal and facilitate the fraudulent loan scheme.
The funds created through both the loan and check writing schemes were eventually funneled to the Lynrocten Credit Union accounts of Humphries and the manager and their family members. Between 2007 and the liquidation of the Lynrocten Federal Credit Union in 2013, Humphries personally stole approximately $3,000-$4,000 per month that she deposited into the accounts belonging to her family members. In total, Humphries stole in excess of $1 million from the Lynrocten Federal Credit Union. The overall loss to the credit union, however, was in excess of $7 million, and contributed to the ultimate collapse of that financial institution.
At sentencing, Humphries faces a maximum possible penalty of up to 30 years in prison and/or a fine of up to $1 million.
The investigation of the case was conducted by the Federal Bureau of Investigation, the United States Secret Service and the Lynchburg Police Department. Assistant United States Attorneys Anthony Giorno and Daniel Bubar are prosecuting the case for the United States.
Former Casino Employee and Wife Sentenced to Probation for Scheme to Embezzle Money from CasinoRead the Press Release
ALBUQUERQUE – John Hoffman, 43, of Rio Rancho, N.M., was sentenced this morning to two years of probation for his felony conviction for embezzling money belonging to an Indian gaming establishment. His wife and accomplice, Michelle Fischer, 43, also received a two-year probationary sentence for her misdemeanor conviction for stealing from an Indian gaming establishment. The Hoffmans jointly were ordered to pay $74,830.43 in restitution to the Santa Ana Star Casino, the victim of their criminal conduct.
Hoffman pled guilty in March 2013 to a felony information charging him with embezzling money belonging to the Santa Ana Star Casino, which is operated by Santa Ana Pueblo. At the time, Hoffman was employed in the Marketing Department of the Santa Ana Star Casino. Hoffman admitted that, from Dec. 2010 to Aug. 2011, he abused his position at the Santa Ana Star Casino by gaining access to active and inactive “Player’s Club” cards and adding money and credits to the cards without proper basis or authority. Hoffman also admitted giving the cards to Fischer knowing that she intended to distribute the cards to others who would use the cards to gamble and who would give Hoffman and Fischer a percentage of their winnings.
Also in March 2013, Fischer pled guilty to a misdemeanor information charging her with theft of money belonging to the Santa Ana Star Casino. In entering her guilty plea, Fischer admitted obtaining “Player’s Club” cards to which she was not entitled from a casino employee, and giving the cards to others who used the cards to gamble with the understanding that she would receive a percentage of the winnings. Fischer also admitted that she also used some of the cards to gamble knowing that she was not entitled to do so and for the purpose of obtaining a financial benefit.
This case was investigated by the Santa Ana Tribal Police Department and was prosecuted by Assistant U.S. Attorney Kyle T. Nayback.Former Caregiver SentencedRead the Press Release
ABINGDON, VIRGINIA – A local woman who previously pleaded guilty to food stamp fraud and bank fraud, was sentenced last week in the United States District Court for the Western District of Virginia in Abingdon.
April Darlene Avery, 41, of Glade Spring, Va., previously waived her right to be indicted and pled guilty to one count of food stamp fraud and one count of bank fraud. On January 3, 2014 in U.S. District Court in Abingdon, she was sentenced to 30 months of Federal incarceration. She was also ordered to pay $153,759 in restitution to the victim of her bank fraud and $3,936 in restitution for overpayment of public assistance benefits.
“This defendant repeatedly stole from her elderly client,” United States Attorney Timothy J. Heaphy said today. “Rather than perform her important duty as a caregiver, Ms. Avery took advantage of a senior citizen by taking money from her accounts. For that despicable conduct, she has justly been held accountable.”
According to evidence presented in court by Assistant United States Attorney Jennifer Bockhorst, Avery was employed full-time as a caregiver for an elderly woman. While employed as a caregiver, Avery forged the signature of the elderly woman in her care and negotiated checks, as a means of obtaining funds from accounts of the victim to which she was not entitled. In total, Avery stole more than $153,000 from the victim.
In addition, between April 2012 and March 2013, while being employed, Avery knowing used and acquired food stamp coupons worth approximately $3,936 to which she was not entitled.
The investigation of the case was conducted by the United States Secret Service, the Washington County Sheriff’s Office and the Virginia Department of Social Service. Assistant United States Attorney Jennifer Bockhorst will prosecute the case for the United States.
Former CEO Sentenced for Shipping Commercial Industrial Machines to IranRead the Press Release
ROME, Ga. - Mark Mason Alexander, a/k/a Musa Mahmood Ahmed, has been sentenced to 18 months in prison for conspiring to send water-jet cutting machines to Iran in violation of the United States trade embargo.
"Today's sentence demonstrates that the United States will continue to vigorously pursue and bring to justice those who evade our economic sanctions," said United States Attorney Sally Quillian Yates. “The trade embargo against the Islamic Republic of Iran is not limited to those who specifically seek to supply the country with military items or with items for use in its nuclear weapon proliferation program. Rather, businesses and individuals who engage in commercial transactions with businesses and individuals in the Islamic Republic of Iran are cautioned that they are still subject to prosecution under existing sanctions.”
"This is the latest example of the commitment of the U.S. Department of Commerce's Office of Export Enforcement to protect our national security through effective enforcement of U.S. export control laws" said Robert Luzzi, Special Agent-in-Charge of the Office of Export Enforcement's Miami Field Office. "We will continue to work aggressively with our law enforcement partners including Homeland Security Investigations, Atlanta Field Office, to investigate arrest and convict those individuals who illegally export U.S technology to state sponsors of terrorism."
"The magnitude and scope of the threats facing the United States is complex and wide-ranging, and that's why HSI investigates individuals who try to export sensitive technologies to hostile nations," said Brock D. Nicholson, special agent in charge of HSI Atlanta. "Homeland Security Investigations, along with our partners like the Department of Commerce, take pride in protecting our country, and today's sentencing is just the latest example of our effective investigative efforts."
According to United States Attorney Yates, the charges and other information presented in court: Between October 2006 and June 2008, Alexander conspired with two Iranian businessmen to sell Hydrajet water-jet cutting systems to customers located in Iran. Hydrajet Technology, located in Dalton, Ga., manufactured the water-jet cutting systems which were used for the precision cutting of materials such as aluminum, glass, granite and steel. These machines were distributed to customers in the Middle East through Hydrajet Mena, another company that Alexander partly owned which was located in the United Arab Emirates and for which Alexander worked as the CEO.
In 2007, as part of the conspiracy, Alexander negotiated the sale of two water-jet cutting systems to companies located in the Islamic Republic of Iran: the Parand Machine Company and the Negin Sanat Sadr. Company.
In July 2007, after Alexander negotiated the terms of these sales and before the machines were shipped to the Islamic Republic of Iran, the Department of Commerce had conducted a community outreach meeting with Alexander, as the CEO of Hydrajet Technology. This outreach program was designed to make exporters, like Alexander, aware of the various export restrictions, including the trade embargo against Iran, and to educate exporters about the process for legally exporting items from the United States.
The evidence further established that the machines that Alexander conspired to sell were in fact manufactured in Dalton, Ga. He concealed the true destination of these machines by causing them to be trans-shipped to the Islamic Republic of Iran via Alexander’s company in the United Arab Emirates. Alexander additionally instructed Hydrajet Mena employees to travel to Islamic Republic of Iran to install the machines and to conduct software training for the Iranians who would operate them.Alexander, 53, of Roswell, Ga., was sentenced on Monday January 6, 2013, by United States District Judge Harold L. Murphy to 18 months in prison to be followed by three years of supervised release. Alexander was found guilty by a jury on September 26, 2013, of Conspiracy to violate the International Emergency Economic Powers Act.
This case was investigated by the U.S. Department of Commerce and the Department of Homeland Security.
Assistant United States Attorney Tracia King prosecuted 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 home page for the U.S. Attorney’s Office for the Northern District of Georgia Rome Division is http://www.justice.gov/usao/gan/.
Former Bank Employee Pleads Guilty in Fraud SchemeRead the Press Release
Baltimore, Maryland –Jill Dail, age 59, of Cambridge, Maryland, pleaded guilty today to bank fraud in connection with a scheme in which she and her brother, Jeffrey Dail, fraudulently obtained mortgage loans in the names of family members, using the proceeds for their own benefit.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to her plea agreement, Jill Dail was a loan settlement processor in the mortgage department at a Salisbury, Maryland, bank until she was terminated in June 2007, as part of a reduction in the bank’s workforce. Shortly thereafter, Dail was privately hired by the manager of the bank’s mortgage department to continue to do the same loan processing work she had performed as an employee of the bank. The bank manager paid Dail out of his own funds and gave her full access to the bank premises, computer system and loan files. Dail continued to represent herself as a bank employee in her dealings with title companies and other businesses.
Jill Dail admits that beginning before January 2006 through at least August 2009, she and her brother, Jeffrey Dail, applied for mortgage loans in the names of family members and used the proceeds of the loans for their personal benefit. The Dails forged the signature of family members and bank officials on the loan applications, causing the bank to approve the applications and authorize the distribution of the loan proceeds at settlement. In each instance, the family members whose identities were used on the loan applications, and whose properties were used as collateral for the loans, had no knowledge of the applications or the loans.
Based on the assurances of Jill Dail, with whom the title company had a well-established business relationship, title company employees notarized the signatures of the family members on the settlement documents and disbursed the loan funds at settlement, as directed by Jill Dail, to Jill Dail herself, to Jeffrey Dail, and to their creditors. The balance of loan funds still unpaid is approximately $357,150.
Jill Dail faces a maximum sentence of 30 years in prison and a $250,000 fine. U.S. District Judge J. Frederick Motz scheduled her sentencing for April 3, 2014 at 9:30 a.m.
Jeffrey Scott Dail, age 49, of Cambridge, Maryland, pleaded guilty on December 5, 2013 to his participation in the scheme and faces a maximum sentence of 30 years in prison and a $250,000 fine. Jeffrey Dail is scheduled to be sentenced on February 21, 2014 at 12:00 p.m.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage Fraud/index.html.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Kathleen O. Gavin, who is prosecuting the case.
Forfeits Nearly $2 Million in Cash, as Well as A Residence and VehicleRead the Press Release
ROOFING COMPANY OWNER PLEADS GUILTY TO CONSPIRING TO SMUGGLE ILLEGAL ALIENS AND INSURANCE FRAUD
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – Gregory J. Oldiges, 55, the owner of Williams Brothers Roofing and Siding, pleaded guilty in U.S. District Court to conspiring to bring illegal aliens to work for his roofing company, and to conspiring to commit wire fraud by sending fraudulent invoices to insurance companies for work by his company.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Marlon Miller, Special Agent in Charge, Homeland Security Investigations, and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office announced the pleas entered today before U.S. District Judge Walter H. Rice.
According to court documents, between 2004 and 2013, Oldiges’ company entered into at least 39 purported subcontracts with illegal aliens to perform roofing services in the Dayton area. Oldigesand/or other Williams Brothers’ employees knew that many of these illegal aliens used aliases or other false names when entering into these subcontracts. In several instances, Williams Brothers’ employees -- with Oldiges’knowledge -- provided the illegal aliens with the false names/aliases to use for the subcontracts (as well as other fraudulent documentation prepared by the company, including false IRS 1099 forms bearing fake names and Social Security numbers). Oldiges also knew and/or directed employees to prepare the necessary fraudulent documentation (including the subcontracting agreements and IRS Forms) in order for the company to be able to write off the illegal aliens’ labor costs on the company’s corporate tax returns.
Between 2009 and 2012, Williams Brothers invoiced its customers approximately $11.75 million for roofing work performed by its illegal workforce, for which Williams Brothers paid the illegal workers approximately $1.7 million.
Oldiges also financed the smuggling of some of the illegal workers into the United States. For instance, Oldigesdirected a company employee on at least two occasions to go to Texas to give thousands of dollars in cash to an illegal alien subcontractor and to drive the workers back to Dayton, knowing that the money would ultimately be paid to human smugglers or “coyotes” to bring the illegal alien subcontractor and his crew across the border from Mexico into Texas. Oldigesrecouped the cost of the smuggling fees by withholding a portion of the amount Williams Brothers paid the illegal alien subcontractor for work performed on roofing contracts.
Oldiges also pleaded guilty for his involvement in a scheme to defraud insurance providers on roofing jobs by faxing or emailing “dummy” or “duplicate” invoices to insurance companies that reflected inflated invoice amounts over and above the amount the company actually charged its customers. Between approximately November 2010 and December 2012, Oldiges knowingly submitted or caused to be submitted at least 80 fraudulent invoices totaling approximately $1.369 million to various insurance companies when the actual amount that Williams Brothers charged its customers for this work was approximately $1.24 million.
“The schemes perpetuated by this defendant were pervasive, touching nearly every aspect of the business. These unscrupulous tactics clearly gave his company an unfair advantage over competitors,” said Marlon Miller, special agent in charge for HSI Detroit, which covers Michigan and Ohio “When companies engage in these types of schemes, workers are often exploited and businesses that play by the rules simply cannot compete.”
“This case shows that the appearance of success can be a mask for a tangled financial web of lies,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money.”
The plea agreement includes a sentencing range of at least 24 months and up to 57 months imprisonment, restitution in an amount to be determined by the court, and forfeiture of real estate, deposit and investment accounts containing nearly $2 million and a vehicle.
Judge Rice scheduled a sentencing hearing for Oldiges for April 8. A Williams Roofing employee, Jim Honius, pleaded guilty on December 19, 2013 to one count of wire fraud for his role in the insurance fraud scheme. He is scheduled for sentencing on April 8.
U.S. Attorney Stewart commended the cooperative investigation by HSI and IRS special agents, as well as Assistant U.S. Attorneys Vipal Patel, Alex Sistla and Pam Stanek, who are prosecuting the case.
Federal Jury Finds Convicted Felon Guilty of Possessing A FirearmRead the Press Release
Orlando, FL - Acting U.S. Attorney A. Lee Bentley, III announces that a federal jury today found Brian K. Hatten (33, Orlando) guilty of possession of a firearm by a convicted felon. Based on his prior felony convictions, Hatten faces a mandatory minimum penalty of 15 years, up to life in federal prison. His sentencing hearing is scheduled for March 28, 2014, before U.S. District Court Judge John Antoon, II.
Hatten was indicted on October 23, 2013.According to testimony and evidence presented at trial, Orlando Police Department officers arrested Hatten, after he fled from them, at an intersection west of downtown Orlando. During his flight from officers, Hatten became entangled on a fence and officers found packages of marijuana, a semi-automatic pistol loaded with four rounds of ammunition, and a cell phone in Hatten’s possession. An investigation revealed that Hatten had at least six previous felony convictions, including various drug offenses, robbery, battery on a law enforcement officer, and aggravated assault with a firearm. As such, he was not permitted to possess a firearm or ammunition under federal law.
This case was investigated by the Orlando Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). It is being prosecuted by Assistant United States Attorney E. Jackson Boggs Jr.
It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. Acting United States Attorney A. Lee Bentley, III, along with Julie Leon, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
This case is also a part of ATF’s Frontline strategy - an effective method in reducing violent crime and improving the quality of life in communities where law enforcement efforts are focused.
Fairfield Man Accused of Possessing Weapons on Unh Campus Charged with Federal Firearms OffenseRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that WILLIAM DONG, 23, of Fairfield, has been charged by federal criminal complaint with the unlawful transport into Connecticut of an assault weapon purchased in Pennsylvania. The complaint was unsealed today during DONG’s appearance in New Haven federal court.
As alleged in the criminal complaint, in approximately September 2013, DONG traveled to Pennsylvania, purchased a Bushmaster model XM-15-E2S, .223 caliber semi-automatic rifle and transported the rifle back to Connecticut. This firearm is considered a prohibited assault weapon under Connecticut state law.
On December 3, 2013, West Haven Police arrested DONG in the vicinity of the University of New Haven after he was found in possession of two handguns on his person, and the Bushmaster rifle, which was seized from his nearby car. The complaint alleges that DONG told police that he had purchased the rifle from a seller in Pennsylvania in September 2013 through an advertisement placed on www.armslist.com.
Although it is not unlawful under federal law for an individual, who is not a prohibited person, to possess this Bushmaster firearm, it is a federal violation for an individual to purchase this firearm outside of Connecticut and travel into the state with it, since it is a prohibited firearm under Connecticut state law.
The charge carries a maximum penalty of five years of imprisonment and a $250,000 fine.
DONG, who has been detained in state custody since his arrest on December 3, appeared today before U.S. Magistrate Judge Joan G. Margolis in New Haven. He agreed to the entry of a federal order of detention and waived his right to a speedy indictment and a probable cause hearing.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, working together with the West Haven Police Department. This case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.
PUBLIC AFFAIRS CONTACT:
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Tom Carson
(203) 821-3722
[email protected]Executive Director of Local Charity Pleads Guilty to FraudRead the Press Release
TAMPA, FL – Acting United States Attorney A. Lee Bentley, III announces that Lyndon Jones (45, Sarasota) today pleaded guilty to theft of government funds. Jones faces a maximum penalty of 10 years in federal prison.
According to the plea agreement, Jones served as executive director of ManUp of Greater Sarasota, which ran a summer youth program to assist Sarasota community youth in the development of good leadership and professional skills. From at least as early as June 19, 2009, and continuing through on or about September 29, 2011, Jones stole at least $76,707.12 in federal funds from a Community Development Block Grant, which he used for his own benefit. He stole the funds by fraudulently submitting duplicate billing for the hours worked by the students. One set of billing was submitted to the grant administrator, and a second set was submitted to the students’ employers (e.g., the Sarasota Manatee Airport and Sarasota Memorial Hospital). Both paid Jones, for him to make payment to the students. However, Jones kept the second set of payments for himself. In addition, the airport paid the students at a rate of $14.00 per hour. But Jones actually remitted an amount equal to $8.00 an hour to the students, keeping the difference for himself.
This case was investigated by U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG). It is being prosecuted by Assistant United States Attorney Thomas N. Palermo.
Defendant Sentenced for Possession of A Firearm by A Convicted FelonRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that John Edward Baker, 42, of Lizella, Georgia was sentenced on Tuesday, January 7, 2014, to serve thirty (30) months imprisonment in a case of possession of a firearm by a convicted felon. The sentence was handed down by the Honorable Marc T. Treadwell, United States District Court Judge, in Macon, Georgia.
Ms. Baker entered a plea of guilty to the charges on September 4, 2013. In his plea agreement, the defendant admitted that on May 23, 2011, while serving a warrant on another individual who was hiding at Mr. Baker’s residence, the U.S. Marshals Service found a .357 caliber revolver and pictures of Mr. Baker holding the above-mentioned weapon. Mr. Baker had previously been convicted of two felony drug offenses in Superior Court in Putnam County in February and June of 2004.The case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearms, U.S. Marshals Service and the Bibb County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Verda M. Colvin.
For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Defendant Sentenced for Conspiracy to File False Federal Tax Returns and Identity TheftRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Edna Yvonne Orr Goff, 37, of Thomaston, Georgia, was sentenced on January 7, 2014 to serve thirty six (36) months imprisonment for conspiracy to file false federal tax returns and aggravated identity theft by the Honorable Marc T. Treadwell, United States District Judge.Ms. Goff and Michelle Blankenship were indicted on February 15, 2013 and charged with conspiracy to submit false tax returns and identity theft. In essence, the charges involved the use of stolen tax payer identity information by Ms. Goff and Ms. Blankenship to file fraudulent tax returns with the Internal Revenue Service. The scheme resulted in a total loss of over $200,000.00 to the government.
Ms. Blankenship appeared in court on June 4, 2013 and entered a plea of guilty. She was sentenced on November 14, 2013 to serve eight (8) years in prison. In addition, she was ordered to pay restitution to the IRS in the amount of $224,136.00. Goff was ordered to pay restitution in the amount of $15,000.00.
“Filing false tax returns and identity theft causes a rippling effect of loss to all law abiding citizens. hose committing these and other crimes will remain a focus of the Department of Justice,” said United States Attorney Michael Moore.
“These unscrupulous defendants thought they had figured out a clever scheme for obtaining money from the government,” stated IRS Criminal Investigation, Special Agent in Charge, Veronica F. Hyman-Pillot. “As the defendants in this case have learned, stealing from the American people will not be tolerated and you will be held accountable.”
The case was investigated by the Internal Revenue Service, Criminal Investigations. The case was prosecuted by Assistant United States Attorney Charles L. Calhoun.
For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Daniel Cruz Stone and Daniel Manglona Cruz Sentenced in U.S. District CourtRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant Daniel Cruz Stone, age 34, and Daniel Manglona Cruz, age 57, were sentenced today in the District Court of Guam. Cruz is Stone’s uncle. Each pled to an Information charging Conspiracy to Distribute more than 50 grams of methamphetamine.
Credit for the investigation is given to the Drug Enforcement Administration (DEA), U.S. Postal Service Inspectors, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Task Force Agents from the Superior Court of Guam’s Probation Office assigned to the DEA, and the Guam Police Department. The case was handled by Assistant U.S. Attorney Clyde Lemons.
Cruz was sentenced to 87 months in prison and five years supervised release. Stone received 70 months in prison, five years supervised release and a fine in the amount of $12,500. He was also ordered to participate in a substance abuse program. Both defendants are awaiting a designation from the Bureau of Prisons.
On August 9, 2011, a postal inspector seized a package addressed to Cruz containing 212 grams of ice. Cruz was detained and admitted the package was his. He then agreed to call his co-defendant/nephew (STONE) who sold ice for him. His nephew showed up at the Agana Shopping Mall and was arrested.Colorado Man Pleads Guilty to Transporting Women to Work as ProstitutesRead the Press Release
NEWARK, N.J. – A Colorado man today admitted his role in a conspiracy to transport women across state lines for prostitution in New Jersey and other states, U.S. Attorney Paul J. Fishman announced.
James Roy Smith, 36, a/k/a “Mister Smith,” of Lakewood, Colo., pleaded guilty before U.S. District Judge Stanley R. Chesler to a superseding information charging him with conspiracy to transport women across state lines to work as prostitutes, and transportation of a victim across state lines with the intent that the victim work as a prostitute.
According to documents filed in this case and statements made in court:
From February 2009 through June 27, 2010, Smith conspired to operate a prostitution business in numerous locations around the United States, including New Jersey, New Mexico, Nebraska, and Pennsylvania. The women would be transported between states by air as well as in a Cadillac Escalade registered to Smith’s uncle. In order to attract and locate local customers, the conspirators would place advertisements for escort services on Craigslist as well as Backpage. com.
Smith admitted that in late June 2010, he conspired to transport six women from New Jersey to Philadelphia, Pa., to work as prostitutes. During that time, while checked in at the Econolodge in Elizabeth, N.J., he also caused a victim to be transported between these two states with the intent that the victim work as a prostitute.
The count of interstate transportation for the purpose of engaging in prostitution is punishable by a maximum potential penalty of 10 years in prison and the count of conspiracy to engage in that same offense is punishable by a maximum potential penalty of five years in prison. Both counts are also punishable by a fine of $250,000. Sentencing is scheduled for April 29, 2014.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea. He also thanked FBI offices in Omaha, Neb., and Salt Lake City, Utah; the Union County, N.J., Prosecutor’s Office; the Elizabeth, N.J., Police Department; and the Clay County, Neb., Sheriff’s Office for their roles.
The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Brooke M. Barnett Esq., Newark
Smith, James Roy Superseding Information
Canyon County Man Admits to Aggravated Identity Theft and Possessing Several False ID DocumentsRead the Press Release
BOISE – Jordan Schoo, 34, of both Nampa and Grangeville, Idaho, pleaded guilty today in United States District Court to identity theft by possession of five or more false identification documents and aggravated identity theft, U.S. Attorney Wendy J. Olson announced. Schoo was charged in an 11-count indictment filed in federal court in Boise on August 14, 2013.
According to the plea agreement, Schoo admitted that on March 20, 2013, he knowingly possessed nine false and fraudulent Idaho driver’s licenses, each with his own photograph but with the identifying information of actual people, such as names, dates of birth, and driver’s license numbers. Schoo possessed a tenth false identification with a different person’s photograph. According to the plea agreement, Schoo used, and intended to use, the documents to purchase goods on credit from various businesses participating in interstate commerce, such as Best Buy.
Schoo obtained the means of identification of people he impersonated from a number of sources, including that of a former roommate from Colorado. Schoo also used the means of identification taken from his mother’s business. He used the various false identities that he possessed to purchase goods from both local and on-line retailers, including a 60” television and a car audio and security system. Schoo also obtained credit cards in the names of various victims. As part of the scheme, he opened and maintained a mailbox under a false name at a commercial mailbox store.
The charge of identity theft by possession carries a maximum prison term of five years; the charge of aggravated identity theft carries a mandatory two year prison sentence, which must run consecutively to the prison term on the identity theft by possession charge.
Sentencing is set for April 1, 2014, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise.
United States Attorney Wendy Olson stated that, “The United States Attorney’s Office is committed to protecting the financial security of the citizens of Idaho and will pursue identity theft offenders and holds them accountable for the extensive damage that they cause to victims.”
The case was investigated by the United States Postal Inspection Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Grangeville Police Department.
Business Owner Indicted for $493,000 Employment Tax SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., business owner was indicted by a federal grand jury today for a scheme to defraud the government by failing to pay over to the Internal Revenue Service more than $260,000 that he collected from his employees in employment taxes. Along with more than $232,000 that he allegedly failed to pay as his employer portion of the taxes, the total loss to the government was more than $493,000.
Joseph Patrick Balano, 52, of Kansas City, Mo., was charged in a four-count indictment returned by a federal grand jury in Kansas City, Mo.
According to the indictment, Balano was the owner of Global Employment Group, Inc., doing business as Staffing Connections (Global Employment) in Grandview, Mo., and Kansas City, Mo. Two earlier businesses – Labor Connections and Labor Connections II – were dissolved in 2006, the indictment says, ostensibly because of employment tax issues. In their place, Balano formed Global Employment in December 2006. Employees who had been working for Labor Connections and Labor Connections II began working for Global Employment. Business operations stayed in the same location.
Today’s indictment alleges that Balano withheld employment taxes from his employees; however, instead of paying over those taxes to the government, Balano allegedly kept most of those taxes for his own personal use. The total allegedly withheld from employees but not paid to the IRS from April 2008 to April 2009 was $260,770. In addition, Balano allegedly failed to pay the employer portion of the taxes to the IRS as well, in the amount of $232,672. The total amount of loss to the government was $493,443.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by IRS-Criminal Investigation.