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Friday 27 December 2013
Prison inmate sentenced to 9 additional years in prison for filing false tax refund claims and aggravated identity theftRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that John Richard Koesterman, 49, currently an inmate in Federal prison, was sentenced to an additional 9 years in prison on December 27, 2013. Koesterman is serving a 15-year sentence on a federal drug conspiracy conviction, and today received an additional 9-year sentence, 84 months for conspiracy to defraud the government with respect to claims and mail fraud, and a consecutive sentence of 24 months for aggravated identity theft, to be followed by three years’ supervised release. After Koesterman completes the 15-year sentence, he will begin to serve the 9-year sentence imposed today. Koesterman pled guilty on September 16, 2013. In addition to his prison sentence, Koesterman was ordered to forfeit $19,538.75 which was seized by law enforcement, and to pay restitution in the amount of $95,568.
According to filings with the court, while Koesterman was a State of Alaska inmate, he directed others in a conspiracy to defraud the United States by filing false tax returns in order to obtain fraudulent tax refunds. Between July 2009 and May 2011, Koesterman and his co-conspirators prepared and submitted approximately 55 false tax returns claiming refunds of over $275,000. Koesterman and his co-conspirators illegally obtained over $95,000 in fraudulent refund claims paid by the United States Treasury.
Court documents revealed that Koesterman obtained the names and social security numbers of individuals, many of whom were inmates with Koesterman. Koesterman then used that information to prepare and file false individual income tax returns. Koesterman also provided that information to other co-conspirators to prepare and file false tax returns. Most of the false tax returns claimed exemptions for dependents who were not known to or supported by the individual whose name and social security number was used for the false tax return. Koesterman authorized the co-conspirators to retain a portion of the money from the refunds, and directed them to mail portions of the refunds to other co-conspirators to hold the money for him.
In sentencing the defendant, United States District Court Judge Timothy M. Burgess stated that “taxpayers have to foot the bill for making good on the loss.”
“John Koesterman and his conspirators unlawfully manipulated the tax code for their own personal gain, reaping thousands of dollars in fraudulently procured tax refunds,” said Teri Alexander, Special Agent in Charge of Internal Revenue Service Criminal Investigations in the Pacific Northwest. “Today’s sentences signal that IRS Criminal Investigations will bring to justice those who abuse the tax system and attempt to swindle the honest tax paying public.”
s. Loeffler commends the Internal Revenue Service Criminal Investigations for conducting the investigation leading to the successful prosecution of Koesterman.
Postal Service Employees Indicted for Stealing Postal Money OrdersRead the Press Release
Postal Service Employees Indicted for Stealing Postal Money Orders
BIRMINGHAM -- A federal grand jury today indicted two U.S. Postal Service employees in different post offices for each stealing more than $27,000 in money orders or other postal funds, announced U.S. Attorney Joyce White Vance and Postal Service, Office of Inspector General, Special Agent in Charge Maximo Eamiguel.
In separate indictments filed in U.S. District Court, GERMAINE FOSTER, 36, of Birmingham, and SHARON HARRISON, 56, of Maplesville, are charged with theft of U.S. Postal money orders and theft of government property.
Foster worked in the Maylene post office and Harrison worked at the Shelby post office. Foster is charged with stealing about $27,650 in money orders and other postal funds. Harrison is charged with stealing about $27,291 in money orders.
Theft of Postal Service money orders carries a maximum penalty of five years in prison and a $250,000 fine. Theft of government property carries a maximum sentence of 10 years in prison and a $250,000 fine.
U.S. Postal Service, OIG, investigated the cases, which Assistant U.S. Attorney Frank M. Salter is prosecuting.
The public is reminded that an indictment is only a charge. A defendant is presumed innocent and it will be the government's responsibility to prove guilt, beyond a reasonable doubt, at trial.
Portland Gang Associate Sentenced to 20 Years in Prison After Being Convicted for Federal Gun ChargeRead the Press Release
Defendant, an Armed Career Criminal, was Just Recently Released from Federal CustodyPORTLAND, Ore. – December 24, 2013, Sid Edward Willis Jr., 34, of Portland, Oregon, was sentenced to 20 years in prison after being convicted of being a felon in possession of a firearm after he threatened a couple with a loaded .357 caliber handgun.
On May 24, 2012, at approximately 10:00 p.m., a couple drove into the Plaid Pantry parking lot located at SE 162nd and SE Division, in Portland, Oregon, to pick up a couple of things on their way home. After the male driver exited the car and went into the store the defendant walked up to the female passenger, who was still sitting in the car, and asked her "why is your man mugging me." As he was talking to the passenger the defendant showed her a silver handgun that he had tucked into his waistband. Alarmed, the passenger exited the car and went into the market to tell her boyfriend what had happened and that they needed to leave. Immediately after leaving the store, the defendant called out to the male driver and stated why "you mugging me?" The male driver turned to walk toward the defendant who then pulled out his gun and pointed it directly at the male driver’s face stating, "You can’t be mugging me...I'll kill you...I'm a gangsta.” Part of the incident at the Plaid Pantry, including the defendant pointing a gun at the victim's face, was captured on the store security video tape.
The couple immediately left the store and called 911. Portland Police Officers responded and captured defendant Willis a short time later down the street. After defendant Willis was taken into custody, officers located a loaded .357 caliber revolver hidden in some bushes where the defendant was trying to hide from the police. When he was being booked into the Multnomah County Jail the defendant blurted out to the police that he had done everything and then said, "Just give me a deal, I want 15 years in the state, don't send me to the feds!"
The defendant had been released from federal custody less than two months prior to this incident after serving a 10-year drug sentence. The defendant was arrested on federal charges and initially charged on a federal criminal complaint on May 29, 2012. On June 5, 2013, he was indicted by the federal grand jury for being a felon in possession of a firearm as an armed career criminal. The defendant pled guilty on July 22, 2013. At the time of the crime, the defendant had 10 prior felony convictions, including four felony drug trafficking offenses.
U. S. District Court Judge Anna J. Brown sentenced the defendant to 15 years in prison on the new felon in possession of a firearm charge. The new crime was also a violation of the defendant’s federal supervised release. Judge Brown also revoked the defendant’s federal supervision and imposed a consecutive five year sentence. When he is released from prison the defendant will serve an additional three years of supervised release.
This case was investigated by the Portland Police Bureau and the Gang Enforcement Team. The case was prosecuted by Assistant U. S. Attorney Scott Kerin, the Chief of the U.S. Attorney’s Office Drug Unit and former head of the Gang and Sex Trafficking Prosecution Team.
“When Congress enactedthe Armed Career Criminal Act it recognized that a very small percentage of repeat offenders commit a large percentage of violent or potentially violent crimes,” said U. S. Attorney Amanda Marshall. “The law was designed to incapacitate criminals, like the defendant, through the imposition of very lengthy prison terms in an effort to keep our community safe from our most dangerous offenders.”Jose Rios Middle School Invites Assistant U.S. Attorney Stephen Leon Guerrero for Career DayRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that Assistant U.S. Attorney (AUSA) Stephen Leon Guerrero was invited to speak at Jose Rios Middle School for Career Day on April 12, 2013. AUSA Leon Guerrero spoke to two 6th and 7th grade classes with approximately 25 students in each. He talked to them about the educational process of becoming an attorney and his duties as an Assistant U.S. Attorney. He also talked about the U.S. Attorney’s role with Red Ribbon Week, as well as the G.R.E.A.T. Program and Cyber-bullying.
The first Red Ribbon Celebration was organized in 1986 by a grassroots organization of parents concerned about the destruction caused by alcohol and drug abuse. The red ribbon was adopted as a symbol of the movement in honor of Enrique “Kiki” Camarena, an agent with the U.S. Drug Enforcement Administration who was kidnapped and killed while investigating drug traffickers. The Campaign has reached millions of children and has been recognized by the U.S. Congress. Red Ribbon Week is a chance to be visible and vocal in our desire for a drug-free community. The Campaign provides communities with a forum to bring together parents, schools and businesses to find new and innovative ways to keep kids drug free.The G.R.E.A.T. Program=s primary objective is awareness and prevention of delinquency, youth violence, and gang membership. The G.R.E.A.T. lessons, aimed at elementary and middle school students, focus on teaching life skills to help students avoid delinquent behavior and violence, and learn to solve problems.
The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the Northern Mariana Islands (“NMI”), continues to conduct presentations at various schools on the topics of Bullying and Cyber-bullying.
Attached are photos of AUSA Leon Guerrero addressing the students.
Jefferson County, Kentucky Woman Sentenced to 18 Years and 10 Months in Prison for Armed Robbery of Metro Louisville BankRead the Press Release
– Ordered to pay $213,785.62 restitution
– Getaway driver sentenced to 54 monthsLOUISVILLE, Ky. – Jillian Wojciechowski, age 30, was sentenced to 18 years and 10 months in prison, and ordered to pay restitution of $213,785.62 to Your Community Bank, by U.S. District Court Judge John G. Heyburn II, this week, for two armed robberies of the bank’s branch office located on Magisterial Drive in Jefferson County, Kentucky, announced David J. Hale, United States Attorney for the Western District of Kentucky. Dean Martin Ridge Jr., age 34, who pleaded guilty to conspiracy to rob the bank as well as unrelated drug and firearm charges, was sentenced today to 54 months by Judge Heyburn.
According to the plea agreements, Wojciechowski, Ridge and defendant John Hatton, age 30, of Louisville, conspired and robbed the Your Community Bank Branch located at 13205 Magisterial Drive, Louisville, Kentucky on September 23, 2011. Wojciechowski and Hatton brandished firearms in order to accomplish the robbery and obtained $120,714.62 in cash from the teller drawers and the bank’s vault. After taking the cash, Wojciechowski and Hatton forced the bank employees to lie on the floor and then covered them up with an entrance rug.
Further, Wojciechowski, Ridge and defendant Joshua Ewing, age 23, of Louisville, conspired and robbed the bank a second time on January 23, 2012. Wojciechowski and Ewing brandished firearms in order to accomplish the robbery and obtained $93,071.00 in cash from the teller drawers and the bank’s vault. On both occasions Ridge drove the defendants to the bank to commit the robberies and drove them away following the robberies.
Ewing was found guilty of robbing the Your Community Bank Branch and brandishing a firearm in order to accomplish the robbery, by a federal jury in Louisville, on July 3, 2013 and sentenced by Judge Heyburn to 13 years and 5 months in prison, followed by four years of supervised release and ordered to pay $93,071.00 in restitution.
Hatton was found guilty by a federal jury in Louisville, on November 20, 2013, of robbing the Your Community Bank Branch, brandishing a firearm during the robbery, and of robbing the M & I Smoke Shop, located at 5627 Preston Highway, Louisville, Kentucky on October 26, 2011. Hatton is scheduled for sentencing before Judge Heyburn on February 7, 2014.
This case was prosecuted by Assistant United States Attorneys Thomas W. Dyke, Micah Reyner and Stephanie Zimdahl and was investigated by the Louisville Metro Police Department.
Jacksonville Man Pleads Guilty to Operating A Fraudulent Investment SchemeRead the Press Release
Jacksonville, Florida – Acting United States Attorney A. Lee Bentley, III announces that Anderson Scott Hall, a/k/a Scott Hall (49, Jacksonville) today pleaded guilty to four felony counts of operating a sham investment scheme. Specifically, Hall pleaded guilty to two counts of mail fraud, one count of wire fraud, and one count of money laundering. He faces a maximum penalty of 20 years’ imprisonment for each count. A sentencing date has not yet been set.
According to the plea agreement, Hall, a licensed insurance salesman, was the architect of a sham investment scheme, which he operated for more than 10 years, between approximately 1996 through late 2011. During this time, Hall defrauded in excess of 50 victims and received more than $4 million from his victim investors. The investors included residents of the greater Jacksonville, Florida area; Columbus, Georgia; and North Carolina. A significant portion of the victim investors were either active or retired Duval County school teachers and administrators, who invested their retirement funds, including their "DROP" (Deferred Retirement Option Program) money, with Hall.
During the scheme, Hall was employed by various financial companies as an independent agent. His victim pool included current clients and client referrals. As part of this scheme, Hall incorporated a shell company, Abaco Securities International, Ltd. (ASI), in the Turks and Caicos Islands, British West Indies. Hall is listed as the Director of that company, whose only presence in the Turks and Caicos is a post office box.
As reflected in the plea agreement, Hall’s scheme included his solicitation of clients to invest their retirement savings in an investment product, which he described as ASI, promising interest rates sometimes exceeding 12%. Hall directed the victim investors to cause their retirement savings, usually held in IRAs and other investment products, to be transferred from legitimate life insurance companies and investment companies, to his sham business. Generally, Hall would deposit the clients' funds into one of several bank accounts that he maintained at SunTrust. Occasionally, as in a Ponzi scheme whereby older investors are paid money from the funds taken from newer investors, Hall would make partial payments to victim investors.
A forensic analysis of Hall’s SunTrust accounts established that he failed to invest the victim investors' funds as promised. At times, in an effort to conceal and perpetuate his scheme, Hall created sham account documents falsely reflecting that the investors' funds were invested in a legitimate investment product. These sham account statements were provided to the investors to dispel questions regarding their investments. The accounting analysis also revealed that Hall used the investors' funds to pay for personal expenses, purchase commercial property, and to buy luxury automobiles.
This case was investigated by Federal Bureau of Investigation and the Florida Office of Financial Regulation, Bureau of Financial Investigations and the DFS, Division of Insurance Fraud. It is being prosecuted by Assistant United States Attorney Mark Devereaux.
Former Teacher, Tutor and Boy Scout Volunteer Pleads Guilty to Possession of Child PornographyRead the Press Release
A former teacher at Tenino Elementary School pleaded guilty today in U.S. District Court in Tacoma to possession of child pornography, announced U.S. Attorney Jenny A. Durkan. JAMES DONALD MOBLEY, 47, was arrested in January 2013 on a criminal complaint charging him with receipt and possession of child pornography. Under the terms of the plea agreement, MOBLEY will undergo a psycho-sexual evaluation, will register as a sex offender and will undergo sexual deviancy treatment. Both the prosecution and defense will recommend a four year prison term when MOBLEY is sentenced by U.S. District Judge Ronald B. Leighton on March 21, 2014. Judge Leighton is not bound by the plea agreement and can impose a sentence up to the statutory maximum of 20 years in prison.
According to records filed in the case, the U.S. Postal Inspection Service has been investigating an international company, Azovfilms.com, which distributed child pornography through the mails and via download to personal computers. In May 2011, foreign law enforcement executed a search of the business and seized hundreds of child pornography DVDs and business records. An analysis of those records revealed that on multiple occasions between February 2009 and January 2011, MOBLEY purchased suspected child pornography from the company. In a search of MOBLEY’s home, law enforcement seized a computer, external storage devices, and DVDs of child pornography. An analysis of the items seized from MOBLEY’s home revealed 650 images of child pornography and 45 videos of child pornography.
MOBLEY was arrested as part of “Project Spade,” the investigation of Azovfilms.com. The Toronto-based website billed itself as a provider of “naturist films,” but was really a distributor of child pornography. The investigation, led in the United States by the Postal Inspection Service, has resulted in 386 children rescued from direct abuse and exploitation. So far MOBLEY is one of 348 people arrested worldwide as a result of the Spade investigation.
The case was investigated by the U.S. Postal Inspection Service (USPIS) and the Tenino Police Department.
The case is being prosecuted by Assistant United States Attorney Marci Ellsworth.
Evansville Man Charged with Possession, Distribution of Child PornographyRead the Press Release
EVANSVILLE – Joseph H. Hogsett, the United States Attorney, announced today that Mark David Yauger, age 46, of Evansville, has been charged by a federal grand jury with two counts of distribution and one count of possession of sexually explicit material involving minors. This follows an investigation as part of the U.S. Attorney’s ongoing Operation Community Watch.
“The type of behavior alleged in this case exploits children and will not be tolerated by federal law enforcement,” Hogsett said. “That is why we launched Operation Community Watch earlier this year – to protect Hoosier families and send a message to criminals that they cannot hide online.”
The indictment alleges that on March 16, 2013, agents with the Federal Bureau of Investigation’s Southwest Indiana Cyber Crimes Task Force identified Yauger as an online distributor of sexually explicit material involving minors. It is also alleged that Yauger possessed sexually explicit material involving minors in July 2013. Court documents indicate that the government has filed a forfeiture allegation identifying computer equipment used in the offense that the government will seek to seize from Mark David Yauger if he is convicted.
According to Assistant U.S. Attorney Todd S. Shellenbarger, who is prosecuting the case for the government, Yauger faces a minimum of 15 years in prison and a $250,000 fine. An initial hearing was held in Evansville before a U.S. Magistrate Judge, but no formal trial date has been set.
This arrest comes as Hogsett has announced a comprehensive crackdown on child exploitation in Indiana. Just last year, he launched “Operation Community Watch,” which will allow prosecutors and investigators to use cutting-edge techniques to identify and charge people in Hoosier communities who are engaged in the receipt and trafficking of child pornography materials.
This case was brought as part of Project Safe Childhood, a larger nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Hogsett pointed out that in the last Project Safe Childhood reporting year, the Office prosecuted 52 defendants, an increase of 37% over the prior year, and 49 defendants were convicted and sentenced. These are all-time records for the Office.
The greatest measure of the PSC program’s impact, however, is the identification and rescue of child victims of sexual exploitation and abuse. Over the last year, the U.S. Attorney’s Office successfully identified more than 120 child victims, including minors in Indiana, numerous places in the United States, Canada, Switzerland, and other countries around the world.
Led nationally by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Information, indictments, and criminal complaints are only a charge and are not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Employer Support of the Guard and Reserve (ESGR)Honors U.S. Attorney Alicia A.G. LimtiacoRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was presented with and awarded the Patriot Award on October 24, 2013 by the Employer Support of the Guard and Reserve (ESGR). She was nominated by an employee of the U.S. Attorney’s Office presently serving in the National Air Guard.
U.S. Attorney Limtiaco expressed her appreciation to all Veterans and to all service members for their courage, fortitude and commitment to protecting our freedoms as Americans, and to the ESGR for their continued efforts to raise awareness among employers about the significant role and responsibilities employers have in supporting and protecting the rights of employees in military service.
According to the ESGR, the Patriot Award reflects the efforts made to support Citizen Warriors through a wide-range of measures including flexible schedules, time off prior to and after deployment, caring for families and granting leaves of absence if needed. Patriot Awards are awarded to individual supervisors, not to an entire staff or organization as a whole.Supervisors receive a Patriot Award certificate and accompanying lapel pin.
Please see attached photo of the ESGR’s presentation of the Patriot Award to U.S. Attorney Limtiaco.
U.S. Attorney Alicia Limtiaco is seen here receiving the ESGR Award from ESGR
State Chair David Sablan and members of the ESGR, together with First Assistant
Steve Sinnot, second from the right, from the U.S. Attorney’s OfficeAbbott Laboratories to Pay $5.475 Million to Resolve Federal Health Care Fraud InvestigationRead the Press Release
KNOXVILLE, Tenn. - Abbott Laboratories, a global healthcare company, has agreed to pay $5.475 million to settle alleged violations of the False Claims Act, and other federal laws and regulations in connection with the operation of its medical device business which manufactures, markets and supplies carotid, biliary, and peripheral vascular products.
As alleged in the settlement agreement, between 2005 and 2010, through its employees and third party continuing medical education providers, Abbott offered physicians paid teaching and training assignments, consulting arrangements, speaking engagements, and/or sponsorship grants for physician conferences, for the purpose of inducing physicians to arrange for or recommend that the hospitals with which they were affiliated purchase or order Abbott’s carotid, biliary and peripheral vascular products. These financial arrangements were improper and did not meet the requirements of the Anti-Kickback Statute – a law designed to protect patients as well as the integrity of government- funded health care benefit programs such as Medicare. Where the choice of devices used in medical procedures is impacted by such improper arrangements, suppliers that cause claims for such devices and procedures to be submitted to Medicare and other federal health care programs violate the False Claims Act.
As U.S. Attorney Bill Killian explained, “Physicians should make decisions regarding medical devices based on what is in the best interest of patients without being induced by payments from manufacturers competing for their business.” Federal law prohibits medical providers from submitting claims to government-funded health care benefit programs for services and devices referred, ordered, or arranged for by physicians who received such prohibited financial inducements.
“Offering financial inducements can distort health care decision-making,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “OIG and our law enforcement partners vigilantly protect government health programs from such alleged abuses.” During the period between 2005 and 2010 hospitals affiliated with the physicians who received such inducements submitted to the Medicare program claims which included the cost of the medical devices referred, ordered or arranged for by such physicians. Medicare paid the claims that included the cost of the medical devices. This settlement addresses the financial harm to the Medicare trust fund for the moneys paid out of the fund which resulted from violations of the False Claims Act resulting from the kickbacks.
Mr. Killian further noted that this settlement resulted from a comprehensive investigation which began as a result of a qui tam or whistleblower complaint filed in 2010. The investigative team whose efforts resulted in this settlement was comprised of representatives from the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the U.S. Attorney’s Office for the Eastern District of Tennessee, the U.S. Department of Justice Civil Division Fraud Section, and the U.S. Attorney’s Office for the Northern District of California. U.S. Attorney Killian commended the cooperative efforts of the agencies which participated in this complex investigation, and, in particular, lead HHS-OIG Special Agent Tony Maffei, DOJ Trial Counsel Adam Schwartz, Assistant U.S. Attorney Betsy Tonkin, Assistant U.S. Attorney Tom Green, and Special Assistant U.S. Attorney Ben Cunningham.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $12.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases in 2013 alone exceeded $3.8 billion. False Claims Act recoveries by the United States Attorney’s Office for the Eastern District of Tennessee alone during the period since January 2009 exceed $100 million.
Abbott Laboratories Pays U.S. $5.475 Million to Settle Claims That Company Paid Kickbacks to PhysiciansRead the Press Release
Abbott Laboratories has agreed to pay the United States $5.475 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce doctors to implant the company’s carotid, biliary and peripheral vascular products, the Justice Department announced today. Abbott is a global pharmaceuticals and health care products company based in Abbott Park, Ill.
“Patients have a right to treatment decisions that are based on their own medical needs, not the personal financial interests of their health care providers,” said Assistant Attorney General Stuart F. Delery of the Civil Division of the Department of Justice. “Kickbacks undermine the ability of health care providers to objectively evaluate and treat their patients, and will continue to be a primary focus of the Department’s health care enforcement efforts.”
The settlement resolves allegations that Abbott knowingly paid prominent physicians for teaching assignments, speaking engagements and conferences with the expectation that these physicians would arrange for the hospitals with which they were affiliated to purchase Abbott’s carotid, biliary and peripheral vascular products. As a result, the United States alleged Abbott violated the Anti-Kickback Act and caused the submission of false claims to Medicare for the procedures in which these Abbott products were used.
“Physicians should make decisions regarding medical devices based on what is in the best interest of patients without being induced by payments from manufacturers competing for their business,” said U.S. Attorney Bill Killian of the Eastern District of Tennessee.
“Offering financial inducements can distort health care decision-making,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “OIG and our law enforcement partners vigilantly protect government health programs from such alleged abuses.”
Carotid and peripheral vascular products are used to treat circulatory disorders by increasing blood flow to the head and various parts of the body, respectively. Biliary products are used to treat obstructions that occur in the bile ducts.
The settlement resolves allegations originally brought in a lawsuit filed by Steven Peters and Douglas Gray, former Abbott employees, under the qui tam provision of the False Claims Act , which allows whistleblowers to file suit on behalf of the United States for false claims and share in any recovery As part of today’s resolution, Peters and Gray will receive a total payment of more than $1 million.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
This settlement was the result of an investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Eastern District of Tennessee and the Northern District of California and the Office of Inspector General at the U.S. Department of Health and Human Services.
The lawsuit is captioned United States ex rel. Peters et al. v. Abbott Laboratories, Inc., Civil Action No. 3:09-CV-430 (E.D. Tenn.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
2013 Guam Coalition Against Sexual Assault & Family Violence SummitRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak at the “No More! Coming Together to End the Violence” 2013 Regional Summit held on October 25, 2013, and sponsored by the Guam Coalition Against Sexual Assault & Family Violence.
U.S. Attorney Limtiaco spoke on the topic of “Sexual Assault and Human Trafficking in Our Region” and presented “Strategies for Justice: A Pacific Regional Response to Combat Human Trafficking.” The “Pacific Regional Response to Combat Human Trafficking” initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders. The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities. Providing fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.
U.S. Attorney Limtiaco also provided an overview of the Blue Lighting Campaign. The Blue Lightning Campaign was created in recognition of the fact that victims of human trafficking are trafficked through the use of airlines. It is a Department of Homeland Security initiative that provides U.S. commercial airlines and their employees training materials on the indicators of suspected human trafficking and more importantly, provides airlines with a voluntary mechanism to identify suspected human trafficking victims and notify federal authorities. U.S. Attorney Limtiaco further discussed domestic and international trafficking, human trafficking laws, and public awareness and enforcement efforts.
The two-day Summit was attended by approximately 154 participants, including participants from our neighboring islands, the Commonwealth of the Northern Mariana Islands and the Republic of the Marshall Islands.
Attached is a photo taken at the 2013 Guam Coalition Against Sexual Assault & Family Violence Regional Summit.
U.S. Attorney Limtiaco addressing the participants at the Summit.2013 Foreign Labor Compliance ConferenceRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands participated at the 2013 Foreign Labor Compliance Conference held in Guam on March 19-20, 2013. U.S. Attorney Limtiaco spoke on the topic, “An Overview of the Pacific Regional Response to Combat Human Trafficking – Collaboration in the Western Pacific.” The conference was sponsored by the Guam Department of Labor and over 200 people attended the two-day training.
At the Conference, U.S. Attorney Limtiaco discussed Department of Justice initiatives, including Project Safe Childhood (PSC), Project Safe Neighborhoods (PSN) and Diverse Community Outreach.
Launched in May 2006, PSC is a nationwide initiative designed to protect children from online sexual exploitation and abuse. Led by U.S. Attorneys= Offices, the Child Exploitation and Obscenity Section of the Department=s Criminal Division, and Internet Crimes Against Children task forces, PSC marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. PSC’s goal is to educate parents about the potential dangers that their children face online, and warns potential online predators that exploiting a child online is a serious federal offense.
PSN is a nationwide commitment to aggressively prosecute defendants who engage in drug distribution, gang involvement and violent crime.
The purpose of the Diverse Community Outreach is to increase and improve communication and collaboration between the community and law enforcement. Faith-based community members and Consulate Offices are invited and participate in the initiative. Issues discussed at the Diverse Community Outreach meetings include human trafficking; hate crimes and civil rights; immigration; labor; cultural competency; national security; and crime prevention.
See attached photo of U.S. Attorney Alicia Limtiaco addressing the participants.
Thursday 26 December 2013
Texas Man Charged with Federal Hate Crime for Punching and Breaking Jaw of 79-year-old African American ManRead the Press Release
Conrad Alvin Barrett, 27, has been charged with a federal hate crime related to a racially-motivated assault of a 79-year-old African American man, announced Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division along with U.S. Attorney Kenneth Magidson of the Southern District of Texas and Special Agent in Charge Stephen L. Morris of the FBI.
“Hate crimes tear at the fabric of entire communities,” said Acting Assistant Attorney General Samuels. “As always, the Civil Rights Division will work with our federal and state law enforcement partners to ensure that hate crimes are identified and prosecuted, and that justice is done.”
The criminal complaint was filed under seal Dec. 24, 2013, and unsealed today upon Barrett's arrest. He is expected to make an initial appearance before U.S. Magistrate Judge Frances Stacy at 10:00 a.m. CST.
The complaint charges Barrett, of Katy, Texas, with one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. According to the complaint, on Nov. 24, 2013, Barrett attacked the elderly man because of the man’s race and color in what Barrett called a “knockout.”
“Suspected crimes of this nature will simply not be tolerated,” said U.S. Attorney Magidson. “Evidence of hate crimes will be vigorously investigated and prosecuted with the assistance of all our partners to the fullest extent of the law.”
Barrett allegedly recorded himself on his cell phone attacking the man and showed the video to others. The complaint alleges Barrett made several videos, one in which he identifies himself and another in which he makes a racial slur. In addition, Barrett had allegedly been working up the “courage” to play the “knockout game” for approximately a week.
The “knockout game” is an assault in which an assailant aims to knock out an unsuspecting victim with one punch. According to the complaint, the conduct has been called by other names and there have been similar incidents dating as far back as 1992.
According to the complaint, Barrett comments in a video that “the plan is to see if I were to hit a black person, would this be nationally televised?” The complaint further alleges Barrett claims he would not hit “defenseless people” just moments before punching the elderly man in the face. Barrett allegedly hit the man with such force that the man immediately fell to the ground. Barrett then laughed and said “knockout,” as he ran to his vehicle and fled, according to allegations. The complaint indicates the victim suffered two jaw fractures and was hospitalized for several days as a result of the attack.
“It is unimaginable in this day and age that one could be drawn to violently attack another based on the color of their skin,” said Special Agent in Charge Morris. “We remind all citizens that we are protected under the law from such racially motivated attacks, and encourage everyone to report such crimes to the FBI.”
If convicted, Barrett faces a statutory maximum of 10 years in prison and a $250,000 fine.
The investigation was conducted by the FBI in cooperation with the Fulshear and Katy, Texas, Police Departments as well as the Drug Enforcement Administration. The case is being prosecuted by Civil Rights Division Trial Attorneys Saeed Mody and Olimpia Michel and Assistant United States Attorneys Ruben R. Perez and Joe Magliolo in cooperation with Ft. Bend County District Attorney John Healey.
A criminal complaint is merely an accusation of criminal conduct, not evidence. A defendant is presumed innocent unless proven guilty through due process of law.Ten Indicted in Loan Modification Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paula Reid, Special Agent in Charge, United States Secret Service, Miami Field Office, and Ronald J. Verrochio, Inspector in Charge, United States Postal Inspection Service, Miami Division, announce the unsealing of a 20-count indictment returned by a Federal Grand Jury in West Palm Beach charging mail fraud and conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Sections 1341 and 1349.
The following defendants were charged in the indictment:
- Jason Andrew Vitulano, 38, of West Palm Beach, FL;
- Robert Harry Bacon, 34, of West Newbury, MA;
- Peter Ian Brown, 26, of Sound Beach, NY;
- Christopher Francisco Duharte, 36, of Coconut Creek, FL;
- Brian Fleuridor, 29, of Delray Beach, FL;
- Arthur Vincent Fogarty, III, 57, of Hollywood, FL;
- Neil Lawrence Sack, 40, of Fort Lauderdale, FL;
- Gregory B. Small, 28, of Boynton Beach, FL;
- Jeffrey Charles Leroy Taylor, 39, of North Lauderdale, FL; and
- Ajay Alexander Thuraisingham, 26, of Tamarac, FL.
Each defendant is charged with one count of conspiracy to commit mail and wire fraud and multiple counts of mail fraud. According to the Indictment, between September 2008 and August 2009, the defendants operated boiler rooms that collected advance fees from distressed homeowners purportedly in exchange for obtaining loan modifications for the homeowners which were, with few exceptions, never provided.
The indictment alleges that defendant Vitulano was the organizer and operator of FHA All Day.com, Inc. and two other companies, Housing Assistance Law Center, Inc. and Safety Financial Corp., which operated the boiler rooms in Boca Raton and later in Deerfield Beach. According to the indictment, defendant Bacon was an operations manager who wrote and edited sales scripts, while the other eight defendants served as team managers of four to eight telemarketers who made thousands of phone calls to homeowners behind on their mortgage payments.
As alleged in the indictment, the defendants made false statements to the homeowners including telling homeowners they had already been approved or pre-approved for a loan modification that would save the homeowner a specific amount off their mortgage payment, reducing the interest rate and often the principal balance on the mortgage loan. The defendants, according to the indictment, routinely told customers that they had been approved by an “underwriter” and that they had a team of “expert attorneys” who would finalize the loan modifications.
The indictment further alleges that the defendants targeted homeowners across the country that were facing foreclosure, falsely telling them that the company would stop the foreclosure process and that homeowners could stop making mortgage payments while they waited for the company to finalize their loan modifications. FHA All Day, as alleged in the indictment, moved its offices and changed the corporate name several times to avoid law enforcement scrutiny and to hamper consumer complaints. Through the use of these and other false representations, the defendants, according to the indictment, induced over 2,000 distressed homeowners to pay up front fees totaling more than seven million dollars to the defendants.
Defendant Vitulano faces up to 20 years imprisonment on each of the 20 counts against him. Defendants Taylor and Thuraisingham face up to 20 years in prison for each of the four counts against them. The other seven defendants, who are each charged in three counts, face up to 20 years in prison on each of those counts. All ten defendants further face up to $250,000 in fines and mandatory restitution as to each charge.
Defendant Vitulano is expected to make his initial appearance in West Palm Beach on January 15, 2014. Defendant Brown made his initial appearance in federal court in the Eastern District of New York on December 24, 2013 and was released on bond. Defendant Thuraisingham will make his initial appearance in the Eastern District of New York today.
Defendants Duharte, Fleuridor, Fogerty, Sack and Taylor made their initial appearances today in West Palm Beach. Fleuridor and Fogarty are being held pending bond hearings scheduled for Monday, December 30, 2013. Defendant Taylor’s pre-trial detention hearing is set for Tuesday, December 31, 2013. Defendants Bacon and Small will make their initial appearances in federal court on December 31, 2013 in West Palm Beach. These initial appearances and hearings will take place at 10:00 A.M. in U.S. Magistrate’s Court in West Palm Beach on their respective days. Defendants Duharte and Sack were released on bond today.
Mr. Ferrer commended the investigative efforts of the U.S. Secret Service and the U.S. Postal Inspection Service. This case is being prosecuted by Assistant U.S. Attorneys Lauren Jorgensen and Ellen Cohen.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
Attachment:
Indictment (PDF)
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.
Katy Man Charged with Federal Hate Crime for Punching and Breaking Jaw of 79-Year-old African American ManRead the Press Release
HOUSTON - Conrad Alvin Barrett, 27, has been charged with a federal hate crime related to a racially-motivated assault of a 79-year-old African American man, announced United States Attorney Kenneth Magidson along with Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division and Special Agent in Charge Stephen L. Morris of the FBI.
“Suspected crimes of this nature will simply not be tolerated,” said Magidson. “Evidence of hate crimes will be vigorously investigated and prosecuted with the assistance of all our partners to the fullest extent of the law.”
The criminal complaint was filed under seal Dec. 24, 2013, and unsealed today upon Barrett's arrest. He is expected to make an initial appearance before U.S. Magistrate Judge Frances Stacy at 10:00 a.m. or 2:00 p.m.
The complaint charges Barrett, of Katy, with one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. According to the complaint, on Nov. 24, 2013, Barrett attacked the elderly man because of the man’s race and color in what Barrett called a “knockout.”
“Hate crimes tear at the fabric of entire communities,” said Samuels. “As always, the Civil Rights Division will work with our federal and state law enforcement partners to ensure that hate crimes are identified and prosecuted, and that justice is done.”
Barrett allegedly recorded himself on his cell phone attacking the man and showed the video to others. The complaint alleges Barrett made several videos, one in which he identifies himself and another in which he makes a racial slur. In addition, Barrett had allegedly been working up the “courage” to play the knockout game for approximately a week.
The “knockout game” is an assault in which an assailant aims to knockout an unsuspecting victim with one punch. According to the complaint, the conduct has been called other names and there have been similar incidents dating as far back as 1992.
According to the complaint, Barrett comments in a video that “the plan is to see if I were to hit a black person, would this be nationally televised?” The complaint further alleges Barrett claims he would not hit “defenseless people” just moments before punching the elderly man in the face. Barrett allegedly hit the man with such force that the man immediately fell to the ground. Barrett then laughed and said “knockout,” as he ran to his vehicle and fled, according to allegations. The complaint indicates the victim suffered two jaw fractures and was hospitalized for several days as a result of the attack.
“It is unimaginable in this day and age that one could be drawn to violently attack another based on the color of their skin,” said Morris. “We remind all citizens we are protected under the law from such racially motivated attacks, and encourage everyone to report such crimes to the FBI.”
If convicted, Barrett faces a statutory maximum of 10 years in prison and a $250,000 fine.
The investigation was conducted by the FBI in cooperation with the Fulshear and Katy Police Departments as well as the Drug Enforcement Administration. The case is being prosecuted by Assistant United States Attorneys Ruben R. Perez and Joe Magliolo and Civil Rights Division Trial Attorneys Saeed Mody and Olimpia Michel in cooperation with Ft. Bend County District Attorney John Healey.
A defendant is presumed innocent unless proven guilty through due process of law.District Court Enters Permanent Injunction Against Pennsylvania-Based Dairy Firms and Individuals to Prevent Distribution of Foods That Contain Excessive Drug ResidueRead the Press Release
U.S. District Court Judge Kim R. Gibson of the Western District of Pennsylvania has entered a consent decree of permanent injunction against Metzler & Sons LLC and Pleasant View Farms Inc., the Justice Department announced today. The permanent injunction was also entered against Rodney L. Metzler, Gretchen A. Metzler, Rodney T. Metzler and Lee M. Metzler, all of whom have ownership in the firms. The permanent injunction is designed to prevent the distribution of foods that contain excessive drug residue.
The Pennsylvania firms, Metzler & Sons LLC and Pleasant View Farms Inc., own and operate several farms that sell cows for slaughter and for use as food. As set forth in the complaint filed on Dec. 18, 2013, inspections by United States Food and Drug Administration (FDA) and laboratory analyses performed by the United States Department of Agriculture (USDA) indicated that the defendants sold for slaughter for use as food dairy cows and bob veal calves that contained excessive and illegal residues of drugs in their edible tissues. According to the complaint, these inspections revealed that the defendants delivered adulterated food into interstate commerce in violation of the Federal Food, Drug and Cosmetic Act (FDCA). As set forth in the complaint, the defendants received numerous warnings from both FDA and USDA that their conduct violated the law, and despite these warnings, the defendants continued to hold animals that they sold for slaughter as food in a manner that may have rendered the animals’ edible tissues injurious to the public health.
As set forth in the complaint, levels of new animal drugs in the edible tissues of animals in amounts above the tolerances established in federal regulations pose a significant public healthrisk. For example, consumers of edible animal tissues who are susceptible to antibiotics may experience severe allergic reactions as a result of ingesting food containing out-of-tolerance
antibiotic levels. Furthermore, food containing above-tolerance antibiotic levels contributes to the development of antibiotic-resistant strains of bacteria in those who eat or handle food containing residues of such drugs.
The complaint filed by the United States asked the court to permanently enjoin the firms and individual defendants from violating the FDCA. The permanent injunction entered by the court requires the firms and individual defendants to take a wide range of actions to correct their violations and ensure that they do not happen again. Among other actions, the firms must establish and implement a written record-keeping system for every animal receiving drugs to prevent the firms from selling or distributing any animals whose edible tissues contain new animal drugs in amounts above the levels permitted by law. The firms must also establish and implement a system that ensures that their use of new animal drugs conforms to the uses approved by the FDA or, for new animal drugs used in an extra-label manner, to the lawful written order of a licensed veterinarian.
“Foods that contain excessive levels of antibiotics and other drugs pose a significant risk to the public health,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “Along with our partners at HHS, FDA and USDA, the Department of Justice is committed to making sure that the food on our tables is safe to eat.”
FDA recently said that it is implementing a voluntary plan with industry to phase out the use of certain antibiotics for enhanced food production. For more information on this, you can visit the FDA website at http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm378100.htm .
Assistant Attorney General Delery thanked the FDA for referring this matter to the Department of Justice. Roger Gural, Trial Attorney at the Consumer Protection Branch of the Justice Department, in conjunction with Assistant U.S. Attorney David Lew in the Western District of Pennsylvania, and Christopher Fanelli, Assistant Chief Counsel for Enforcement of the Food and Drug Division, Department of Health and Human Services, brought this case on behalf of the United States.Clark County Defendant Faces Federal Charges of Credit Card, Wire FraudRead the Press Release
NEW ALBANY – Joseph H. Hogsett, the United States Attorney, announced today that Jennifer D. Jekel, age 27, of Marysville, has been indicted by a federal grand jury with one count of access device fraud and four counts of wire fraud. This follows an investigation by the United States Secret Service and the New Albany Police Department.
“When Hoosiers steal from Hoosiers, we all lose – no matter if the theft takes place in a back alley or a back office,” Hogsett said. “That is why, together with our law enforcement partners, we are committed to doing all we can to hold accountable those who seek to enrich themselves by embracing a culture of corruption.”
The indictment alleges that between March 1, 2011 and October 10, 2011, Jekel fraudulently caused Fifth Third Bank to issue new credit cards linked to her employer without her employer’s knowledge and consent. She also allegedly had the bank increase the credit limits on existing credit card accounts. The defendant then allegedly used the credit cards and account numbers to make personal purchases with a total value of approximately $114,000.
According to Assistant U.S. Attorney Todd S. Shellenbarger, who is prosecuting the case for the government, Jekel faces up to ten years in federal prison on the access device fraud count and up to twenty years in federal prison on each of the wire fraud counts. She also faces years of federally-supervised release at the end of her prison term. An initial hearing is scheduled for Friday, December 27, before Magistrate Judge Michael Naville.
An Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
ATTACHMENT:2013-099_RuralMetro_Settlement Agreement (PDF)Read the Press Release
RURAL/METRO TO PAY $2.8 MILLION TO RESOLVE FALSE CLAIMS ALLEGATIONS
PHOENIX – Rural/Metro Corporation, a Delaware corporation that through its subsidiaries and affiliates provides private ambulance and fire protection services in Arizona and approximately 20 other states, has agreed to pay the United States $2,802,112 to resolve civil allegations that various Rural/Metro ambulance companies violated the federal False Claims Act by submitting false bills to Medicare.
“The need to protect federal funds, including the Medicare trust fund, from fraud, waste, and abuse has never been greater,” said U.S. Attorney John S. Leonardo. “The U.S. Attorney’s Office will continue to use the False Claims Act to pursue entities and individuals who improperly profit from federal dollars at the expense of the public. This settlement agreement is a substantial recovery for taxpayers and sends a clear message that the federal government will not stand idly by when its programs lose money due to false claims for payment.”The settlement agreement resolves allegations that from Jan. 1, 2007, through Dec. 31, 2011, various ambulance companies owned and operated by Rural/Metro—including SW General Inc., dba Southwest Ambulance; Southwest Ambulance of Casa Grande Inc., dba SWARA; and Southwest Ambulance of Tucson Inc., dba Kords Ambulance—billed Medicare for transporting patients from one hospital to another on an emergency basis when, in fact, the calls were not emergencies. The United States alleged that as a result of these false and “upcoded” claims, Medicare paid substantially more for the ambulance services than was warranted. The settlement is neither an admission of liability by Rural/Metro, nor is it a concession by the United States that its claims are not well founded.
Individuals with information regarding fraud, waste, or abuse related to Medicare or other federal programs are encouraged to file a complaint with the U.S. Attorney’s Office through the office’s website, http://www.justice.gov/usao/az/, or by calling (602) 514-7500.
RELEASE NUMBER: 2013-099_Rural/Metro
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Tuesday 24 December 2013
Two Founders of S3 Partners Convicted in $21 Million Investment Fraud SchemeRead the Press Release
SAN JOSE – Yesterday a federal jury convicted two of the founders of S3 Partners on investment fraud related charges, United States Attorney Melinda Haag and FBI Special Agent in Charge David J. Johnson announced.
Evidence at trial showed that from 2006 to 2009, Melvin Russell “Rusty” Shields, 44, of Granite Falls, N. Car., Michael Sims, 59, of Gilroy, Calif., and the third S3 Partner founder, Sam Stafford, 57, of Campbell, Calif. (who pleaded guilty prior to trial) defrauded individual investors in the Northern District of California and elsewhere in connection with various real estate development projects. The three defendants conducted their business as “S3 Partners” out of a variety of locations including San Jose and Campbell; Hickory, N. Car.; and Valrico, Flor.
Shields, Sims, and Stafford engaged in investment fraud targeting elderly investors, encouraging them to cash out their individual retirement accounts (IRAs) and wire the proceeds to the S3 Partners for the purchase of shares in an S3 Partners-controlled company or to invest in other S3 projects. The defendants falsely represented to investors that they would receive predictable high rates returns (as high as 12-15% per year), with minimal to no risk of investing, and that investor money would go to a particular project. Shields and Stafford fraudulently obtained millions of dollars from banks by submitting forged and fraudulent invoices and loan closing documents. Shields, Sims, and Stafford collectively obtained more than $21 million from investors and banks and converted a substantial portion of those funds for their personal benefit, their personal business ventures, and other unauthorized purposes. Their conduct resulted in a near-total loss to investors.
The jury convicted Shields on 32 of the 39 counts in the superseding indictment, including finding him guilty of conspiracy to commit wire and bank fraud, 14 counts of wire fraud, 7 counts of bank fraud, 7 counts of making a false statement to a bank, and 3 counts of securities fraud. The jury acquitted Shields as to the remaining counts in the superseding indictment. The jury convicted Sims of 2 counts of wire fraud and acquitted him on the remaining counts in the superseding indictment. Stafford, pleaded guilty on October 17, 2013, to having conspired with Shields and Sims to commit wire, mail, and bank fraud.
Shields and Sims are scheduled to be sentenced on April 14, 2013, before the Honorable Ronald M. Whyte, United States District Court Judge, in San Jose. Stafford’s sentencing is scheduled for March 17, 2014 at 9:00 a.m. before the Honorable Ronald M. Whyte in San Jose. Shields, Sims, and Stafford have been out of custody on home electronic monitoring since their May 2012 arrest.
The maximum statutory penalty for conspiracy to commit wire and bank fraud, bank fraud, and making a false statement to a bank, in violation of Title 18, United States Code, Sections 1349, 1341 and 1014, is 30 years in prison and a fine of $1,000,000, plus restitution. The maximum statutory penalty for wire fraud, in violation of Title 18, United States Code, Section 1343, is 20 years in prison and a fine of $250,000, plus restitution. The maximum statutory penalty for each count of Title 15, United States Code, Sections 78j(b) and 78ff; and 17 C.F.R. Section 240.10b-5-securities fraud, is 20 years in prison and a fine of $5 million, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Joseph Fazioli and Assistant U.S. Attorney Timothy Lucey prosecuted the case with the assistance of Paralegal Specialist Lakisha Holliman and Legal Assistant Laurie Worthen. This prosecution is the result of an investigation by the Federal Bureau of Investigation.
(S3 superseding indictment )
Omaha Man Sentenced for Interstate Prostitution Enterprise ConspiracyRead the Press Release
United States Attorney Deborah R. Gilg announced that Christopher J. Tierney was sentenced on December 23, 2013, by U.S. District Judge Laurie Smith Camp to a term of probation of three years. Mr. Tierney was also ordered to pay a fine of $15,000.00. Mr. Tierney pled guilty on August 19, 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 of 2008 and continuing to January of 2012 Tierney assisted in the operation of 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. Each spa was, in fact, a front for prostitution
Tierney provided computer and electronic services for the spas. He set up a spa website accessible over the internet. The website advertised available services and contact information. He also upgraded the website to include a “Members Only” section. Established customers of the spas could access a “Members Only” section of the website to read about the female workers providing services and view provocative pictures of them. Tierney conducted “photo shoots” of workers for inclusion in the “Members Only” section of the website. The website also allowed customers to communicate with the spas by e-mail and to set up appointments online. Tierney also participated in “sessions” with workers during which he received sex acts in exchange for money.
In addition to setting up the website for the spas, Tierney set up and maintained surveillance cameras at the 93rd Street Spa and later at the 72nd Street Spa. Using those cameras and the internet, Tierney and others could remotely monitor what was occurring inside and outside the 72nd Street Spa.
Tierney also created and upgraded 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.New York Man Provided Contraband to Federal InmateRead the Press Release
ERIE, Pa. - A resident of Newark, New York pleaded guilty in federal court to a charge of providing contraband in a federal prison, United States Attorney David J. Hickton announced today.
Mirelis Lopez, 32, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that on February 3, 2013, Lopez provided a quantity of marijuana to an inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania.
Judge Cercone scheduled sentencing for April 28, 2014. The law provides for a total sentence of 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
Officers of the McKean Federal Correctional Institution conducted the investigation that led to the prosecution of Lopez.
National Drug Trafficking and Money Laundering Organization in Sandy Springs DismantledRead the Press Release
ATLANTA – Jiles and Shannon Johnson, a husband and wife who owned the now closed KC Pit BBQ Restaurant in Sandy Springs, Ga., and Matthew Ware, the accountant for the restaurant, have been sentenced to federal prison.
“Businesses and professionals who use legitimate organizations to filter laundered drug proceeds denigrate legitimate earnings while destroying the jobs of those who work in those businesses,” said United States Attorney Sally Quillian Yates. “Illegal drugs lure many into that lifestyle with offers of big money, easily made. In the end, what really happens is lives are destroyed, businesses close, and the dealers go to jail. We will continue working to remove harmful drugs from our streets.”
“All of the defendants in this case are deserving of the sentences handed down. Several of these individuals masked themselves as legitimate businessmen, while everyone lined their pockets with excessive profits gained from drug trafficking,” said Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division. “These sentences should serve as a clear reminder to those business operators who facilitate fraud and money laundering schemes, that while you think you may be flying under the radar, you are not. It’s just a matter of time before you get caught and brought to justice. I express gratitude to the law enforcement partners who helped make this case a success.”
George Frazier, Assistant Postal Inspector in Charge of the Atlanta Field Office stated, “This investigation was an excellent example of a partnership between local, state and federal law enforcement agencies across the country, working together to bring down a nationwide organized drug ring. I fully commend the hard work and countless hours put forth by all of the law enforcement agencies involved, which resulted in bringing these individuals in this case to justice.”
“We are proud to have worked with our law enforcement partners in disrupting this organization’s money laundering ability, the trafficking of drugs and the commission of crimes against our community,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “Pretending to operate legitimate businesses will not thwart law enforcement’s efforts in determining the true nature of the businesses and the crimes they promote.”
“This case goes to show the success of task force investigations, where local police detective’s team up with our federal counterparts and share our resources, experience and knowledge to bring down criminal enterprises. This is a great example of the effectiveness of working together to reach a common goal, which is the protection of our community,” said Police Chief Kenneth DeSimone, Sandy Springs Police Department.
According to United States Attorney Yates, the charges, and other information presented in court: This large scale drug trafficking and money laundering organization coordinated (1) the distribution of thousands of kilograms of cocaine imported from Mexico and transported from California to Kansas City, Philadelphia and Washington D.C., and (2) the laundering of millions of dollars in drug proceeds in Georgia. The organization coordinated its efforts through the KC PIT BBQ Restaurant in Sandy Springs, with the assistance of other businesses and professionals.
In 2003, Jiles and Shannon Johnson were the owners of the KC PIT BBQ Restaurant. Jiles Johnson was also a commercial truck driver. To supplement his restaurant income, he began driving kilograms of cocaine from California to Philadelphia on behalf of Mark Walker. Mark Walker was a Philadelphia cocaine distributor with access to street-level dealers, including his brother Sidney Walker, Ronald Martin, Lloyd Ellis and others. Johnson also supplied cocaine to Kansas City and Washington D.C.
As Johnson and Walker generated cash from cocaine sales, they purchased real estate in Georgia through Linda Tong, a local real estate broker. Tong made “structured” deposits of over $500,000 into bank accounts. “Structuring” occurs when a person breaks down over $10,000 in cash into smaller deposits under $10,000 to avoid the filing of a Currency Transaction Report (CTR) by a financial institution. The Johnsons invested over three million dollars in real estate holdings, including an 80 acre motorcycle racetrack in Twiggs County.
Matthew Ware, the accountant for the KC PIT BBQ Restaurant, accepted bags of cash in excess of $10,000 from Jiles Johnson. Ware provided the cash to some of his accounting firm’s clients and they repaid him with checks made payable to Johnson and his businesses. When the cash volume increased, Ware connected Johnson to another client, financial planner Jacques Degaule, to assist with the laundering. Degaule traveled to banks in Georgia, Missouri, Pennsylvania and New Jersey where he deposited over seven million dollars. No IRS 8300 Forms were filed, which are required when a trade or business receives cash over $10,000. The Johnsons used these laundered funds to underwrite their investments and their restaurant’s operations. Evan Francis, a local car broker, coordinated the delivery of loads of cocaine, solicited customers, and structurally deposited cash. Schawn Lemon Wortham laundered Mark Walker’s funds while he remained incarcerated.
The cocaine originated from Mexico and was supplied from California by Jose Gastelum and Lorenzo Vargas. When Johnson experienced financial losses, Gastelum and Vargas collateralized his drug debt on behalf of the source of supply by taking ownership interests in his restaurant and racetrack. Ware, the accountant, assisted them in the process.
The organization unraveled in 2010 when Thallas Amie, Lavern Simon and Jiles Johnson attempted to deliver 35 kilograms of cocaine to Philadelphia. The cocaine was intercepted by law enforcement which ultimately led to the organization’s dismantlement.
All sentenced defendants entered guilty pleas except for the accountant, Ware, who was convicted after a jury trial in January 2013. The sentencing’s were before United States District Judge Richard W. Story, as were other members of the organization who were sentenced for their respective roles as follows:
- Jiles Delwin Johnson, 47, of Sandy Springs, Ga., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine and one count of money laundering conspiracy in the Northern District of Georgia, and one count of distribution of cocaine in the Eastern District of Pennsylvania. On December 19, 2013, Mr. Johnson was sentenced to 15 years in federal prison, followed by five years of supervised release.
- Mark Lamont Walker, 46, of Cumming, Ga., and Philadelphia, Penn., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine and one count of money laundering conspiracy. On September 3, 2013, Mr. Walker was sentenced to eight years, six months in federal prison to run consecutively to an existing nine year sentence he received in the Eastern District of Pennsylvania. Combined, Mr. Walker’s sentence was 17 years, six months in federal prison, to be followed by five years of supervised release.
- Jose Marcial Gastelum, 33, of Chula Vista, Ca., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine. On May 16, 2013, Mr. Gastelum was sentenced to 12 years, three months in federal prison, followed by five years of supervised release.
- Lorenzo Vargas, 32, of Fullerton, Ca., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine. On October 13, 2011, Mr. Vargas was sentenced to ten years in federal prison, followed by five years of supervised release.
- Sidney Walker, 45, of Huntington, Penn., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine and one count of money laundering conspiracy. On December 20, 2013, Mr. Walker was sentenced to 11 years and three months in federal prison, followed by five years of supervised release.
- Ronald Martin, 67, of Philadelphia, Penn., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine. On November 26, 2013, Mr. Martin was sentenced to six years in federal prison, followed by five years of supervised release. Mr. Martin received no credit against his imposed sentence for time previously served.
- Lloyd Ellis, 43, of Philadelphia, Penn., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine. On October 10, 2013, Mr. Ellis was sentenced to 11 years in federal prison, followed by five years of supervised release.
- Evan Francis, 48, of Lawrenceville, Ga., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine and one count of money laundering conspiracy. On September 3, 2013, Mr. Francis was sentenced to ten years, one month in federal prison, followed by five years of supervised release.
- Thallas Amie, 32, of Sandy Springs, Ga., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine. On September 4, 2013, Mr. Amie was sentenced to six years, six months in federal prison, followed by five years of supervised release.
- Laverne Simon, 54, of Forest Park, Ga., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine. On September 4, 2013, Mr. Simon was sentenced to seven years in federal prison, followed by five years of supervised release.
- Matthew Ware, 57, of Tucker, Ga., was convicted after a jury trial in January 2013, on one count of money laundering conspiracy. On October 29, 2013, Mr. Ware was sentenced to six years in federal prison, followed by three years of supervised release.
- Jacques Degaule, 52, of Atlanta, Ga., entered a guilty plea to two counts of interstate transportation in aid of racketeering enterprises. On September 4, 2013, Mr. Degaule was sentenced to three years in federal prison, followed by one year of supervised release. Mr. Degaule received no credit against his sentence for time previously served.
- Shannon Renee Johnson, 46, of Sandy Springs, Ga., entered a guilty plea to one count of money laundering conspiracy. On December 19, 2013, Ms. Johnson was sentenced to three years in federal prison, followed by three years of supervised release.
- Schwan Lemon-Wortham, 52, of Sandy Springs, Ga., entered a guilty plea to one count of money laundering conspiracy. On November 26, 2013, Ms. Wortham was sentenced to two years, six months in federal prison, followed by three years of supervised release.
- Linda Tong, 68, of Alpharetta, Ga., entered a guilty plea to one count of Structuring. On September 4, 2013, Ms. Tong was sentenced to three years of probation with the special condition of ten months home detention.
In addition, related cases were filed against defendants in the Western District of Missouri, the Eastern District of Pennsylvania, and the Southern District of New York.
The investigation and prosecution of this case was a coordinated effort with the Drug Enforcement Administration (DEA), the United States Postal Inspection Service (USPIS), the Internal Revenue Service-Criminal Investigations (IRS-CI), and the Sandy Springs Police Department through the Atlanta-Carolinas HIDTA High Intensity Drug Trafficking Area (HIDTA) Task Force and the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. Other agencies that assisted in the investigation include the United States Marshal Service; Federal Bureau of Investigation (FBI) Philadelphia; Gwinnett County District Attorney=s Office; Gwinnett County Police Department; Georgia Bureau of Investigation; Georgia Department of Corrections; Forsyth County Sheriff=s Office; Atlanta Police Department; Heard County Sheriff=s Office; New Mexico State Police, Arkansas State Police; Los Angeles Police Department; Philadelphia Police Department and the Tennessee Highway Patrol. Other United States Attorney=s Offices that assisted in this investigation include: the Eastern District of Pennsylvania; Southern District of New York; District of Massachusetts; Eastern District of Missouri; Southern District of California; Southern District of Florida; and the Western District of Arkansas.
Assistant United States Attorneys Michael Smith, C. Brock Brockington, R. Scott Ferber and G. Jeffery Viscomi 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 Atlanta Division is http://www.justice.gov/usao/gan/.
Missouri Man Sentenced for Firearm OffenseRead the Press Release
Jeremi J. Blake, 20, of Jennings, Missouri, was sentenced in federal district court on December 20, 2013, to 15 months in prison, to be followed by three years supervised release, a $100 special assessment, and a $150 fine, for unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Facts presented in court revealed that on or about June 20, 2013, Metropolitan Enforcement Group of Southwestern Illinois (MEGSI) officers encountered Blake loitering outside a business in East St. Louis, Illinois, wearing a hoodie sweatshirt on a day the temperature exceeded 90 degrees with high humidity, exhibiting suspicious behavior in an area notorious for gun violence and open air drug sales. When Blake was approached by one of the officers and asked if he was armed, Blake responded, “yeah, I got a gun for protection.” A firearm was removed from Blake’s waistband and secured. Blake has a prior felony conviction in Missouri involving unlawful use of a weapon.
This investigation was conducted by Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Metropolitan Enforcement Group of Southwestern Illinois (MEGSI). The case was prosecuted by Special Assistant United States Attorney Neal C. Hong.
Judges Sentences Inmate Caught Speeding Away from Federal Prison CampRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to 2 months in jail on his conviction for escape after conviction, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Locksley Brian Millwood, 37. The sentence was imposed to run consecutively to the sentence Millwood is currently serving.
According to information presented to the court, on August 21, 2013, Millwood escaped from the McKean Federal Prison Camp. He was returned to the prison within a few hours after his escape, when he was found in a vehicle that was stopped for speeding by the Bradford Township Police Department.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Officers of the McKean Federal Correctional Institution and the Bradford Township Police Department for the investigation leading to the successful prosecution of Millwood.
Judge Sentences Inmate to 4 Additional Months in Prison for Possessing ContrabandRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to 4 months in jail on his conviction for possession of contraband in prison, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Pedro Kline, 25. The sentence was imposed to run consecutively to the sentence Kline is currently serving.
According to information presented to the court, from on or about May 11, 2013 to on or about May 13, 2013, Kline was in possession of contraband, namely, marijuana.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Officers of the McKean Federal Correctional Institution for the investigation leading to the successful prosecution of Kline.
Federal Inmate in Possession of A Cell Phone Sentenced to 3 More Months in PrisonRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to 3 months in jail on his conviction for possession of contraband in prison, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Ameet Kotak, 27. The sentence was imposed to run consecutively to the sentence Kotak is currently serving.
According to information presented to the court, on or about June 28, 2013, Kotak was in possession of contraband, namely, a cell phone.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
Federal Inmate Gets 3 More Months in Prison for Possessing MarijuanaRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to 3 months in jail on his conviction for possession of contraband in prison, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Jason Cruz, 36. The sentence was imposed to run consecutively to the sentence Cruz is currently serving.
According to information presented to the court, on February 3, 2013, a visitor provided a quantity of marijuana to Jason Cruz, an inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Officers of the McKean Federal Correctional Institution for the investigation leading to the successful prosecution of Cruz.
Federal Grand Jury in Fort Wayne Returns IndictmentRead the Press Release
Hammond South Bend Fort Wayne
Fort Wayne, Indiana - The United States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictment on November 20, 2013:
Daniel Perry, 24, of Fairmount, Indiana, is charged in a two Indictment with receipt of material involving the sexual exploitation of minors on or about June 11, 2012, and knowingly possessing visual depictions of minor(s) engaged in sexually explicit conduct on or about January 24, 2013. The Indictment also seeks the forfeiture of computers and hard drives. These charges were filed as a result of an investigation by the Federal Bureau of Investigation and the Fort Wayne Police Department. This case has been assigned to and will be prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.Federal Court Shuts Down Montgomery-Area Tax PrepaperRead the Press Release
Alabama Preparer Allegedly Falsified Tax Returns at Cost of Millions to U.S. Treasury
Montgomery, Alabama - A federal court in Montgomery, Alabama, permanently barred Kenya Hendrix Adams from preparing tax returns for others, announced George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama. The permanent injunction order was signed by Judge Mark E. Fuller of the U.S. District Court for the Middle District of Alabama.
The order also requires Adams to turn over to the United States copies of all returns or claims for refund that she prepared after January 1, 2008, and to notify each person for whom she prepared returns since that date. The order authorizes the United States to monitor Adams’ compliance with the terms of the order.
The government’s complaint alleged that Adams repeatedly prepared federal tax returns that understated her clients’ federal tax liabilities. According to the complaint, Adams did so by falsely claiming or inflating tax credits or fabricating deductions. The suit alleges that the harm to the United States Treasury as a result of her conduct could be in the millions of dollars.
“These fraudulent tax preparers create a horrible problem in this area,” stated U.S. Attorney George L. Beck, Jr. “What they are doing must be stopped and I applaud the IRS for taking the steps to shut them down.”
Claiming bogus tax refunds is one of the IRS’s Dirty Dozen Tax Scams. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website. For more information about choosing a tax return preparer, see the IRS website and the IRS YouTube Channel.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Federal Court Shuts Down Montgomery Area Tax PreparerRead the Press Release
A federal court in Montgomery, Ala., permanently barred Kenya Hendrix Adams from preparing tax returns for others, the Justice Department announced today. The permanent injunction order was signed by U.S. District Court Judge Mark E. Fuller of the Middle District of Alabama.
The order, filed on Dec. 20, 2013, also requires Adams to turn over to the United States copies of all returns or claims for refund that she prepared after Jan. 1, 2008, and to notify each person for whom she prepared returns since that date. The order authorizes the United States to monitor Adams’ compliance with the terms of the order.The government’s complaint alleged that Adams repeatedly prepared federal tax returns that understated her clients’ federal tax liabilities. According to the complaint, Adams did so by falsely claiming or inflating tax credits or fabricating deductions. The suit alleges that the harm to the United States Treasury as a result of her conduct could be in the millions of dollars.
“These fraudulent tax preparers create a horrible problem in this area,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. “What these people are doing must be stopped. I applaud the IRS for taking the steps to shut down those fraudulent tax preparers.”
Claiming bogus tax refunds is one of the IRS’s Dirty Dozen Tax Scams. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website . For more information about choosing a tax return preparer, see the IRS website and the IRS YouTube Channel .District Woman Found Guilty of First-Degree Murder in June 2012 Slaying of Next-Door Neighbor-Victim Was Stabbed in Presence of Her Six-Year-Old Child-Read the Press Release
WASHINGTON Cydrisse Alvin, 33, of Washington, D.C. has been found guilty by a jury of first-degree murder while armed for the June 2012 stabbing of her next-door neighbor, U.S. Attorney Ronald C. Machen Jr. announced.
Alvin was found guilty by a jury on Dec. 19, 2013, following a trial in the Superior Court of the District of Columbia. The Honorable Ronna L. Beck scheduled sentencing for Feb. 21, 2014. Alvin faces a potential sentence of 60 years in prison.
According to the government’s evidence, on June 4, 2012, at about 9 a.m., Alvin knocked on the door of the victim, 28-year-old Amber Kent, her next-door neighbor and former friend. Ms. Kent answered the door in her pajamas. Within seconds, Alvin entered and stabbed Ms. Kent three times – once in the chest and twice in the back. The murder happened in the presence of Ms. Kent’s six-year-old daughter.
After stabbing Ms. Kent, Alvin quickly fled the scene and was apprehended hours later.
In announcing the verdict, U.S. Attorney Machen praised the work of the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Marian Russell, Fern Rhedrick, Phil Aronson, Ethel Noble, Sharon Newman, and Mia Beamon; Litigation Technology Specialist Joshua Ellen; Investigative Analyst Sharon Johnson, and David Foster and Tamara Ince of the Victim Witness Assistance Unit. Finally, U.S. Attorney Machen recognized the work of Assistant U.S. Attorney Lara Worm, who investigated and prosecuted the case.
13-427District Man Found Guilty of Sexually Abusing Nine-Year-Old Boy-Defendant Repeatedly Abused Child over Six-Month Period-Read the Press Release
WASHINGTON - A 49-year-old man, of Washington, D.C., has been found guilty of sexually abusing a nine-year-old male relative, U.S. Attorney Ronald C. Machen Jr. announced.
The man, who is not identified here to protect the privacy of the victim and his family, was found guilty by a jury on Dec. 18, 2013, of first-degree child sexual abuse with aggravating circumstances. The verdict followed a trial in the Superior Court of the District of Columbia. The Honorable Russell F. Canan scheduled sentencing for March 14, 2014.
According to the government’s evidence, the defendant repeatedly sexually abused the victim in 2009 during a six-month period in which he and the victim lived together in Laurel, Md. One incident took place in Washington D.C., at the defendant’s place of employment.
In announcing the jury’s verdict, U.S. Attorney Machen commended the work of the agencies that investigated the case, including the Laurel, Md., Police Department and the Metropolitan Police Department (MPD)’s Youth Investigations Division. He also expressed appreciation for the assistance provided by the U.S. Marshals Service, the FBI, and the Department of Justice, as well as the Children’s Advocacy Center, which provided critical services and treatment to the victim. In addition, he acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Child Forensic Interview Specialist Karen Giannakoulias; Paralegal Specialist Donhue Griffith; the Litigation Support Unit, including Litigation Technology Specialists Paul Howell and Joseph Calvarese, and the Victim Witness Assistance Unit, including Victim/Witness Advocates Melissa Milam and Elsa Resendiz. Finally, he praised the work of Criminal Investigator Mark Crawford and Assistant U.S. Attorney Lindsay Suttenberg, who indicted and prosecuted the case.
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Anesthesiologist Pleads Guilty to Unlawfully Distributing OxycodoneRead the Press Release
A former hospital anesthesiologist pleaded guilty today in U.S. District Court in Seattle to distribution of oxycodone, announced U.S. Attorney Jenny A. Durkan. HIEU TU LE, 40, of Snohomish, Washington, a medical doctor licensed in Washington State since 2004, operated medical clinics in Seattle and Everett, Washington. In his plea agreement, LE admits that between March 2012 and July 2013 he wrote oxycodone prescriptions for cash and obtained oxycodone that he distributed for cash, all without a legitimate medical need to do so. When sentenced by U.S. District Judge Thomas S. Zilly on April 3, 2014, the prosecution and defense will recommend between five and seven years in prison. Judge Zilly is not bound by the recommendation and can impose any sentence up to the 20 years in prison allowed by law.
According to records filed in the case and statements made in court today, LE left his job as an anesthesiologist with Valley General Hospital in Monroe, Washington in March 2012. From March to September 2012, LE operated a medical clinic on Seattle’s Capitol Hill neighborhood providing medical marijuana authorizations. In September 2012, LE opened a clinic in Everett called Northwest Green Medical. Beginning in March 2012 and continuing until July 2013, LE wrote multiple oxycodone prescriptions for cash to people who did not need them for legitimate medical purposes. LE would also hand deliver the prescriptions to an Everett pharmacy, pick up the oxycodone pills, and then sell the pills to people who he knew did not have a legitimate medical need for the pills. LE knew that some of the people to whom he sold the pills were reselling them to others, feeding drug addiction in the community. LE’s Everett clinic was the subject of a federal search warrant in July 2013. At that time, LE voluntarily surrendered his DEA registration, which had authorized him to prescribe controlled substances.
As part of the plea agreement, LE is forfeiting to the government various brokerage and bank accounts as proceeds of his drug distribution, and a 2009 Toyota Highlander Hybrid purchased with drug distribution proceeds.
The case was investigated by the Drug Enforcement Administration (DEA) and Health and Human Services (HHS), and is being prosecuted by Assistant United States Attorneys Mike Lang and Matt Diggs.
Monday 23 December 2013
Williamsville Man Sentenced for Bomb MakingRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Duncan Badding, 25, of Williamsville, N.Y., was sentenced to one year in prison, to be followed by a 2 year period of supervised release, for unlawfully making and unlawfully possessing destructive devices.
Assistant U.S. Attorney Joel L. Violanti, who is handling the case, stated that police received a complaint on August 8, 2012 of shots being fired in the defendant’s backyard. Thereafter a search of the defendant?s residence, at 66 Williamsburg Square in Williamsville, New York, by the Amherst Police Department and Bureau of Alcohol, Tobacco, Firearms, and Explosives, enforcement officers discovered Triacetone Triperoxide (TAPT), ANFO which is ammonium nitrate and fuel oil mixed, Tannerite which is a mixture of prilled ammonium and aluminum powder, three (3) pvc pipes and 5 cans of commercial Goex Black Powder.
In addition, several apparent destructive devices, or combination of parts and devices designed or intended to be used or converted into destructive devices, were also found.
This sentencing is the culmination of an investigation on the part of officers from the Amherst Police Department, under the direction of Chief John Askey, Special Agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Resident Agent in Charge Frank Christiano.Waynesboro Tax Preparer Sentenced to 2 Years in Prison for Preparing False Tax ReturnsRead the Press Release
AUGUSTA, GA - CARLOS NEWTON, 44, of Waynesboro, Georgia was sentenced last week by United States District Court Judge Dudley H. Bowen, Jr. to 2 years in prison for his role in the preparation of numerous fraudulent federal tax returns.
According to evidence presented during his guilty plea and sentencing hearings, Newton worked as a tax preparer from 2009 through 2011. During this time, Newton placed fictitious businesses, fictitious income, and fictitious expenses on federal income tax forms, which fraudulently qualified some of his clients for refunds through the earned income tax credit. For his services, Newton requested additional fees from his clients. He referred to those fees as “love offerings.” Newton prepared 22 fraudulent federal tax returns between January 2009 and January 2011. The federal government paid out almost $90,000 in refunds based upon these bogus returns.United States Attorney Edward Tarver said, “As we prepare to enter tax season, cases like this one demonstrate the substantial risks to the return preparer for filing false returns. The United States Attorney’s Office will continue our efforts to protect the integrity of the IRS Return Preparer Program and to apprehend those responsible for stealing the hard-earned money of honest taxpayers.”
Special Agent Roger Garland of IRS-Criminal Investigations investigated the case. Assistant United States Attorney Lamont A. Belk prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.VA Supervisor Indicted for Theft of Government PropertyRead the Press Release
A grand jury returned a three-count indictment charging Okey Wise, 64, of Bath, with theft of government property, depredation of government property, and false statements made to federal investigators, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Wise, a supervisor at the U.S. Department of Veterans Affairs (VA), in or around April 2013 used his position of authority to steal raw materials from the local VA Medical Center, including wiring and other materials necessary for the Medical Center’s backup generator to function. The theft and destruction of the wiring system resulted in a power failure at the Medical Center that left the hospital without access to its electronic records and other essential services.
The indictment also alleges that Wise made false statements to federal officials investigating the incident.
“These government funds and property should have been used to care for our nation’s heroes rather than to personally enrich a VA supervisor” said Gavin McClaren, United States Department of Veterans Affairs – Office of Inspector General, Resident Agent in Charge, Cleveland.
Assistant United States Attorneys Antoinette T. Bacon and Matthew J. Cronin are prosecuting the case following an investigation by the VA Office of Inspector General and the VA Police.
If convicted, the Court will determine the defendant’s sentence after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum. In most cases, it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Two Miami Women Sentenced to Ten Years in Prison for Conspiring to Pay Healthcare KickbacksRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS OIG), Miami Regional Office, announce that U.S. District Judge Federico A. Moreno sentenced Yiral Cardona, 39, of Miami, and Susan Chi, 42, of Miami, to ten years in prison stemming from their leadership role in a conspiracy to pay healthcare kickbacks.
At trial, Cardona and Chi were convicted on October 22, 2013 of one count of conspiracy to pay healthcare kickbacks and to defraud the United States, in violation of Title 18, United States Code, Section 371, and three counts of unlawful payment of healthcare kickbacks, in violation of Title 42, United States Code, Section 1320a-7b(b)(2)(A).
According to the evidence presented at trial and the sentencing hearing, Cardona and Chi owned Vista Home Health Services, Inc. (“Vista”), a Miami-Dade based home health agency that purportedly provided skilled nursing and home health services to Medicare beneficiaries. The defendants illegally obtained Medicare patients by paying bribes and kickbacks of at least $141,000 to patient recruiters to induce the referral of Medicare patients to Vista for home health services. Cardona and Chi billed the Medicare program for home health services that were not medically necessary and/or not provided. Between approximately May 15, 2009 and April 26, 2012, Medicare paid Vista more than $4.1 million in claims. The Court ordered the defendants to pay more than $733,000 in restitution.
Mr. Ferrer commended the investigative efforts of the FBI and HHS-OIG. This case was prosecuted by Assistant U.S. Attorneys Kevin J. Larsen and Eric Morales.
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.
Three Operation Bloodline Defendants Are SentencedRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that three New Haven residents involved in a narcotics trafficking ring were sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven.
TYRICE WHITE, also known as “Ears,” 38, was sentenced to 110 months of imprisonment, followed by five years of supervised release. On April 17, 2013, WHITE pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin.
JAMES MOORE, also known as “Coolie D,” 34, was sentenced to 41 months of imprisonment, followed by three years of supervised release. On August 27, 2013, MOORE pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, heroin.
MARCUS WYLIE, 23, was sentenced to approximately 19 months of imprisonment, time already served, and three years of supervised release. On October 7, 2013, WYLIE pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, heroin.
WHITE, MOORE, WYLIE and more than 100 other individuals were charged as a result of “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven. Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms.
WHITE has been detained since his arrest on July 25, 2012. MOORE and WYLIE have been detained since May 17, 2012.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments have provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Stamford Dental Practice Employee Sentenced to 30 Months in Prison for Embezzling More Than $100kRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BARBARA O’HARA-LEONE, 53, formerly of Norwalk, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 30 months of imprisonment, followed by three years of supervised release, for embezzling from a Stamford dental practice.
According to court documents and statements made in court, O’HARA-LEONE worked as an office manager for a dental practice in Stamford. From approximately June 2012 to May 2012, O’HARA-LEONE stole insurance checks issued to the victim and deposited them into her personal bank account. In addition, she submitted fraudulent claims to several insurance companies for work that was never completed in the names of existing patients, and then deposited the resulting insurance checks into her personal bank account. As part of those fraudulent claims, O’HARA-LEONE used names, dates of birth, and Social Security numbers of the victim’s patients. During the course of the scheme, O’HARA-LEONE stole more than $100,000.
O’HARA-LEONE was ordered to pay restitution in the amount of $100,979.89.
O’HARA-LEONE has been detained since her arrest in North Carolina on April 23, 2013. On October 4, 2013, she pleaded guilty to one count of wire fraud.
This investigation was conducted by the Connecticut Financial Crimes Task Force, which includes members of the U.S. Secret Service, U.S. Postal Inspection Service, Internal Revenue Service – Criminal Investigation, Connecticut State Police, and the Greenwich, Hartford, Monroe, Stamford, Shelton, Stratford and Waterford Police Departments. U.S. Attorney Daly specifically recognized the efforts of the Greenwich and Stamford Police Departments for their assistance in the investigation and prosecution of this matter.
This case was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Rockford Man Pleads Guilty to Income Tax EvasionRead the Press Release
GRAND RAPIDS, MICHIGAN – Robert L. Harley, Jr, of Rockford, Michigan, pleaded guilty to income tax evasion on a 2008 federal income tax return, U.S. Attorney Patrick A. Miles, Jr announced today. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
According to court records, during the 2008 tax year, Harley was working as a manager for Club Concepts, Inc., doing business as the Intersection Bar and Lounge. During this time period, Harley received gross income totaling over $174,500 and purposely filed a false federal income tax return reporting his income as $9,080 with zero tax due. In addition, Harley failed to pay over $32,592 in tax due and owing to the Internal Revenue Service.
Harley entered the guilty plea in U.S. District Court before Magistrate Judge Ellen S. Carmody.
“Harley deliberately filed a false tax return, failing outright to report almost 95% of his adjusted gross income,” said Special Agent in Charge Erick Martinez. “We all have to pay our fair share and his conduct is unacceptable.”The maximum penalty for failing to file federal tax return is imprisonment of not more than five years and a $250,000 fine per each count.
The investigation of this case was conducted by special agents of the Internal Revenue Service, and prosecuted by Assistant U.S. Attorneys Don Davis and Rene Shekmer.
END
Richland County Man Sentenced on Methamphetamine Related ChargesRead the Press Release
A Richland County man was sentenced on December 20, 2013, to federal prison on methamphetamine related charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Ivan D. Smith, 42, of Olney, Illinois, was sentenced to 144 months’ imprisonment, three years’ supervised release following his imprisonment, and was fined $200. Smith had previously pleaded guilty to two counts in a federal indictment. Count 1 charged that from on or about March 2011, until on or about June 11, 2013, in Richland County, Smith conspired to manufacture methamphetamine. Count 2 charged that on June 11, 2013, in Richland County, Smith possessed equipment, chemicals, products, or materials which may be used to manufacture methamphetamine, knowing, intending, and having reasonable cause to believe, that those items would be used to manufacture methamphetamine.
The investigation in this case was conducted by the Richland County Sheriff’s Office.
The case is being handled by Assistant United States Attorney George Norwood.
Ohio Lobbyist Pleads Guilty <br /> for Role in Kickback and Money Laundering SchemeRead the Press Release
An Ohio attorney and lobbyist pleaded guilty today for his role in a bribery and money laundering scheme involving the Ohio Treasurer’s Office.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, and Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division made the announcement.
Mohammed Noure Alo, 35, of Columbus, Ohio, appeared before U.S. District Judge Michael H. Watson of the Southern District of Ohio and pleaded guilty to aiding and abetting honest services wire fraud. He faces a maximum penalty of 20 years in prison, and sentencing will be set at a later date.
Alo is a partner and founding member of a Columbus-based law firm and became a registered lobbyist to the State of Ohio in 2010. Court records state that from approximately January 2009 through January 2011, Alo admitted he conspired with his close personal friend Amer Ahmad, 38, of Chicago, and others to use Ahmad’s role as deputy treasurer to direct official State of Ohio broker services business to Douglas E. Hampton, 39, a securities broker from Canton, Ohio, in return for payments from Hampton. Hampton funneled in excess of $123,000 to Alo. Ahmad and Joseph M. Chiavaroli, 33, of Chicago, concealed additional payments from Hampton by passing them through the accounts of a landscaping business in which Ahmad and Chiavaroli held ownership interests.
As a result of the scheme, Hampton received approximately $3.2 million in commissions for 360 trades on behalf of the Ohio Treasurer’s Office. Ahmad and his co-conspirators received in excess of $500,000 from Hampton. Both Hampton and Chiavaroli entered guilty pleas in August 2013.
Ahmad was indicted on Aug. 15, 2013, on charges of conspiracy, honest services wire fraud, money laundering, conspiracy to commit money laundering, federal program bribery, and false statements. He is scheduled for trial on March 3, 2014. A criminal indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.Miami-Dade Resident Pleads Guilty in Identity Theft SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), announce that defendant Jean-Elguentino Cayo, 26, of Miami Gardens, pled guilty today for his participation in a stolen identity scheme. Sentencing is scheduled for March 5, 2014 at 2:00 p.m. before U.S. District Judge Jose E. Martinez.
Cayo pled guilty to one count of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2). At sentencing, the defendant faces a maximum term of ten years in prison.
According to court documents, beginning in December 2012 through June 2013, the defendant sold approximately 400 names, dates of birth, and social security numbers belonging to other persons to a confidential informant and undercover law enforcement officer in exchange for money. The defendant had no authorization to traffic in the names, dates of births, and social security numbers belonging to other persons and acted with the intent to defraud.
Mr. Ferrer commended the investigative efforts of IRS-CI and ICE-HSI. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.
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.
Justice Department and Consumer Financial Protection Bureau Reach $35 Million Settlement to Resolve Allegations of Lending Discrimination by National City BankRead the Press Release
The Justice Department and the Consumer Financial Protection Bureau filed a consent order today to resolve allegations that National City Bank engaged in a pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers who obtained residential mortgages between 2002 and 2008 from National City Bank’s retail offices and nationwide network of mortgage brokers.
The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the Western District of Pennsylvania. The complaint alleges that National City Bank violated the Fair Housing Act and the Equal Credit Opportunity Act (ECOA) by charging more than 75,000 African-American and Hispanic borrowers higher loan prices not based on borrower risk, but because of their race or national origin. Specifically, the allegations involve loans made to African-American and Hispanic borrowers through the more than 400 retail offices directly operated by National City Bank nationwide between 2002 and 2008. The allegations also involve loans made to African-American and Hispanic borrowers between 2003 and 2008 through National City Bank’s national network of mortgage brokers. National City Bank, which was headquartered in Cleveland , Ohio, was purchased in 2009 by Pittsburgh-based PNC Financial Services Group, which is the successor in interest to National City Bank.
“This settlement will provide deserved relief to thousands of African-American and Hispanic borrowers who suffered discrimination at the hands of National City Bank,” said Attorney General Eric Holder. “As alleged, the bank charged borrowers higher rates not based on their creditworthiness, but based on their race and national origin. This alleged conduct resulted in increased loan prices for minority borrowers. This case marks the Justice Department’s latest step to protect Americans from discriminatory lending practices, and shows we will always fight to hold accountable those who take advantage of consumers for financial gain.”
“With today’s settlement, thousands of African-American and Hispanic borrowers who were discriminated against by National City Bank will be entitled to compensation,” said Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division. “We look forward to further collaboration with the Bureau in protecting consumers from illegal and discriminatory lending practices.”
“Borrowers should never have to pay more for a mortgage loan because of their race or national origin,” said Consumer Financial Protection Bureau Director Richard Cordray. “Today’s enforcement action puts money back in the pockets of harmed consumers and makes clear that we will hold lenders accountable for the effects of their discriminatory practices.”
"It undermines confidence in our banking system when people get different deals not only based on their credit scores, but their skin color,” said U.S. Attorney for the Northern District of Ohio Steve Dettelbach. “With all the positive things for which National City Bank stood for so many years, this is a troubling epilogue to be entered on the other side of the ledger. Hopefully, today's settlement will afford some relief to customers who were shortchanged by this conduct."
“Our commitment to assure fair and equal treatment under the law is absolute,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania. “This settlement addresses a serious failure by National City to protect potential homebuyers from discriminatory lending practices.”
National City Bank’s business practices allowed its loan officers and mortgage brokers discretion to vary a loan’s interest rate and fees from the price it set based on the borrower’s objective credit-related factors. This subjective and unguided pricing discretion resulted in African-American and Hispanic borrowers paying more than similarly qualified non-Hispanic White borrowers.
The allegations in the complaint relate solely to loans originated by National City Bank and do not relate to any mortgage lending practices of PNC Financial Services Group.
Under the terms of the proposed settlement, PNC will pay $35 million dollars into a fund for the benefit of victims of National City Bank’s mortgage discrimination. The proposed settlement provides for an independent administrator to contact and disburse payments to borrowers whom the agencies’ identify as victims of National City Bank’s discrimination, at no cost to the borrowers. PNC will pay all costs and expenses of the administrator. Borrowers who are eligible for compensation will be contacted by the administrator. The department will make a public announcement and post contact information on its website once the administrator begins contacting victims. Individuals who believe that they may have been victims of lending discrimination by National City Bank and have questions about the settlement may email the department at [email protected] .
The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 31 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The settlements in these matters provide for over $800 million in monetary relief for impacted communities and individual borrowers. The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications .
The Civil Rights Division and the Consumer Financial Protection Bureau are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
A copy of the complaint and proposed order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.
Hudson Men Arraigned on Food Stamp Fraud ChargesRead the Press Release
Scheme Generated More Than $340,000
ALBANY, NEW YORK – MOFADDAL M. MURSHED, 36, AHMED A. ALGAHAIM, 54, FAISAL Q. MORSHED, 34, and IBRAHIM Q. MURSHED, 24, were arraigned today on an indictment charging them with conspiring to commit Supplemental Nutrition Assistance Program (“SNAP”) fraud by Magistrate Judge Randolph F. Treece announced United States Attorney Richard S. Hartunian, United States Department of Agriculture, Office of the Inspector General, Northeast Region Special Agent-in-Charge William G. Squires, Jr., Columbia County Sheriff David W. Harrison, Jr., and United States Secret Service Resident Agent-in-Charge William Leege. The case is set for trial on February 24, 2014.
SNAP, formerly known as the Food Stamp Program, uses tax dollars to subsidize food purchases by eligible low-income households. SNAP benefits may only be used to purchase food in approved retail food stores, and may not be exchanged for cash. According to the indictment, MOFADDAL M. MURSHED owned D&D’s Grocery & Deli, where AHMED A. ALGAHAIM, FAISAL Q. MORSHED, and IBRAHIM Q. MURSHED worked as employees. The indictment charges that the defendants generated more than $340,000 in fraudulent proceeds by providing cash to SNAP beneficiaries’ in exchange for SNAP benefits.
If convicted, the defendants face up to five years in prison. They could also be ordered to forfeit the proceeds of the offense and to pay a fine of up to $20,000.
The case was investigated by the United States Department of Agriculture, the Columbia County Sheriff’s Office, and the United States Secret Service, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent until and unless proven guilty.
Four Minneapolis-based Return Preparers Indicted for Conspiracy, Aggravated Identity Theft, Preparing False ReturnsRead the Press Release
A 63-count superseding indictment charging Chatonda Khofi, Ishmael Kosh, Amadou Sangaray and Francis Saygbay in a conspiracy to defraud the Internal Revenue Service (IRS) was unsealed on Monday, December 23, in Minneapolis, Minn., the Justice Department and IRS announced today. The superseding indictment was returned by a federal grand jury on Nov. 19, 2013, and alleges that Primetime Tax Services Inc. was a tax return preparation business with three storefronts in the Minneapolis area. Khofi worked as the Chief Executive Officer of Primetime, and Kosh and Sangaray worked as managers of the Brooklyn Center location of Primetime. All four named defendants allegedly prepared false tax returns under the name of Primetime.
According to court documents, Khofi, Kosh, Sangaray and Saygbay conspired amongst themselves and with others to prepare and file false individual income tax returns for the customers of Primetime. Some of these returns reported false dependents, false deductions, false Schedule C business losses and false wage income. These false entries resulted in fraudulently inflated refunds for their customers. As part of the scheme, court documents allege that the defendants prepared and filed false Minnesota state income tax returns for their customers that contained the same or similar false information as reported on the federal income tax returns. From 2007 to 2009, Primetime filed over 2,000 customer federal income tax returns with the IRS.
The indictment further charges each defendant with multiple counts of aggravated identity theft and multiple counts of aiding and assisting in the preparation of false individual income tax returns. The aggravated identity theft charges stem from the defendants’ alleged use of the names and social security numbers of actual persons to falsely claim as dependents on their customers’ individual income tax returns.
According to the indictment, the defendants also accompanied some customers to check-cashing businesses to cash their falsely inflated tax refund checks, then demanded a portion of the cashed refund check in addition to tax preparation fees already collected. The indictment alleges that, in some instances, the defendants withdrew cash from debits cards containing their customers’ refunds without permission, again in addition to the tax preparation fees they had already collected.
An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, the defendants face a maximum potential sentence of five years in prison for the conspiracy count and three years in prison for each count of aiding in the preparation of a false tax return. The aggravated identity theft counts have a mandatory two year sentence.
The case was investigated by special agents of IRS-Criminal Investigation. It is being prosecuted by Trial Attorneys Dennis Kihm and Thomas Flynn of the Justice Department's Tax Division.
Four Active Police Officers and One Retired Sergeant of the Police of Puerto Rico Indicted and Arrested for Obstruction of JusticeRead the Press Release
SAN JUAN, Puerto Rico – On December 19, a federal grand jury in the District of Puerto Rico returned a 23-count indictment against five defendants charged with obstruction of justice, perjury and false statements, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The Federal Bureau of Investigation (FBI) is in charge of the investigation.
On February 1, 2010, police officers from the PRPD Caguas Drug Division arrested three males at a residence located in Juncos, PR. The police officers seized drugs, money and a weapon located inside the residence. The officers lied about material facts on what they saw, who they saw, and the actions the three individuals had undertaken.
According to the indictment, on or about February 2010, defendants Miguel Brenes-Concepción, Ángel A. Reyes-Agosto, Roberto Gonzàlez-Rivera, Juan Rivera-Ocasio, and Reimundo Quiñonez-Castro, police officers, engaged in misleading conduct toward DEA and FBI agents by providing false information concerning what occurred during the arrest and seizure of the three individuals. This misleading conduct was intended to hinder, delay, and prevent the communication to law enforcement officers and Judge of the United States of information relating to the commission and possible commission of a Federal offense, namely, the deprivation of constitutional rights.
The defendants also testified before the Grand Jury of the US District Court for the District of Puerto Rico and knowingly made false declarations in relation to the original investigation against the three individuals. As part of that investigation, the Grand Jury needed to know the circumstances surrounding the seizure of various items that day, the defendants’ interactions with the individuals arrested, and the observations concerning the interactions of other police officers with the individuals arrested.
The case is being prosecuted by Assistant U.S. Attorney José Contreras. If convicted, the defendants could face up to 20 years in prison.
“Law enforcement officers who use their badges as a shield to deprive citizens of their constitutional rights, and subsequently engage in misleading conduct to cover up their actions, are not protecting our citizens, they are abusing the trust of those they have sworn to serve,” said Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. “The Justice Department will continue to aggressively prosecute officers who abuse their power in this manner.”Former Teamsters Official Pleads Guilty to Bribery ChargeRead the Press Release
Michael Townsend, age 69, a former business agent and trustee of Teamsters Local 337, pleaded guilty to bribery charges today, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Special Agent in Charge James Vanderberg, Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and Patrick Kawa, District Supervisor, Department of Labor, Employee Benefits Security Administration.
Townsend entered his guilty plea during a hearing today before U.S. District Judge Arthur J. Tarnow in Detroit.
According to court records, from June 2005 through mid-July 2008, Townsend took bribes in the form of cash payments totaling approximately $18,000 from an officer of LaGrasso Brothers Produce, Inc. in Detroit in exchange for protecting the company from unionizing efforts by Teamsters Local 337.
"This defendant was a union official who was entrusted to help working people organize," McQuade said. "He betrayed the Teamsters and workers for his own profit. We are seeking to hold him accountable for his conduct."
Townsend is facing a maximum of five years in prison and a fine of up to $250,000.
The case was investigated by agents and officers of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations and the Department of Labor, Employee Benefits Security Administration. It is being prosecuted by Assistant United States Attorneys David Morris and Mark Chutkow.
Former Ohio Deputy Treasurer Pleads Guilty <br /> for His Role in Kickback and Money Laundering SchemeRead the Press Release
The former Ohio deputy treasurer pleaded guilty today for his role in leading a bribery and money laundering scheme involving the Ohio Treasurer’s Office.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, and Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division made the announcement.
Amer Ahmad, 38, of Chicago, appeared before U.S. District Judge Michael H. Watson of the Southern District of Ohio and pleaded guilty to conspiracy, which carries a maximum penalty of five years in prison, and federal program bribery, which carries a maximum penalty of 10 years in prison. Sentencing will be scheduled at a later date.
According to court documents, from approximately January 2009 through January 2011, Ahmad and others conspired to use Ahmad’s role as deputy treasurer to direct official State of Ohio broker services business to Douglas E. Hampton, 39, a securities broker from Canton, Ohio, in return for payments from Hampton. Ahmad and Joseph M. Chiavaroli, 33, of Chicago, concealed those payments from Hampton by passing them through the accounts of a landscaping business in which Ahmad and Chiavaroli held ownership interests. Hampton also funneled in excess of $123,000 to Mohammed Noure Alo, 35, of Columbus, Ohio, an attorney and lobbyist who was Ahmad’s close personal friend and business associate.
As a result of the scheme, Hampton received approximately $3.2 million in commissions for 360 trades on behalf of the Ohio Treasurer’s Office. Ahmad and his co-conspirators received in excess of $500,000 from Hampton. Hampton and Chiavaroli entered guilty pleas in August 2013 and Alo pleaded guilty on Dec. 20, 2013.
The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.