Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Thursday 19 December 2013
Ringleader of International Rhino Smuggling Conspiracy Pleads Guilty in New Jersey to Wildlife Trafficking CrimesRead the Press Release
Zhifei Li, the owner of an antique business in China, pleaded guilty today to being the organizer of an illegal wildlife smuggling conspiracy in which 30 rhinoceros horns and numerous objects made from rhino horn and elephant ivory worth more than $4.5 million were smuggled from the United States to China.
The guilty plea was announced by Robert G. Dreher, the Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, Paul J. Fishman, U.S. Attorney for the District of New Jersey, Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Dan Ashe, Director of the U.S. Fish and Wildlife Service (USFWS).
Li, 29, of Shandong, China, the owner of Overseas Treasure Finding in Shandong, pleaded guilty today before U.S. District Judge Esther Salas in Newark, N.J., to a total of 11 counts: one count of conspiracy to smuggle and violate the Lacey Act; seven counts of smuggling; one count of illegal wildlife trafficking in violation of the Lacey Act; and two counts of making false wildlife documents.
Li was arrested in Florida in January 2013 on federal charges brought under seal in New Jersey and shortly after arriving in the country. Before he was arrested, he purchased two endangered black rhinoceros horns from an undercover USFWS agent in a Miami Beach hotel room for $59,000 while attending an antique show. Li was arrested as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.
In papers filed in Newark federal court, Li admitted that he was the “boss” of three antique dealers in the United States whom he paid to help obtain wildlife items and smuggle them to him via Hong Kong. One of those individuals was Qiang Wang, aka “Jeffrey Wang,” who was sentenced to serve 37 months in prison on Dec. 5, 2013, in the Southern District of New York . Li played a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating the price, directing how to smuggle the items out of the United States and obtaining the assistance of additional collaborators in Hong Kong to receive the smuggled goods and then smuggle them to him in mainland China.
“The take-down of the Li smuggling ring is an important development in our effort to enforce wildlife protection laws,” said Acting Assistant Attorney General Dreher for the Justice Department’s Environment and Natural Resources Division. “Rhino horn can sell for more than gold and is just as rare, but rhino horn and elephant ivory are more than mere commodities. Each illegally traded horn or tusk represents a dead animal, poaching, bribery, smuggling and organized crime. The Justice Department will continue to vigorously enforce the law designed to protect wildlife. This is a continuing investigation."
“The brutality of animal poaching, wherever it occurs, feeds the demand of a multibillion-dollar illegal international market,” said U.S. Attorney Fishman. “As a major hub of international commerce through our ports and busy airport, the District of New Jersey plays an important role in curbing the escalation of this devastating trade. Zhifei Li’s conviction is a warning to those who would be lured by the profits of dealing in cruelty.”
“The illegal trade in rhino horn has devastated the wild population of these magnificent animals, with the real possibility emerging that all sub-species will be extinct in the wild within our lifetimes,” said U.S. Attorney Ferrer. “Additionally, the poaching activities have cost the lives of enforcement rangers and wardens as the traffickers have resorted to greater levels of violence to feed the black market. This case reflects the seriousness with which we regard these activities and our commitment to work collectively to quash the conduct and hold the law-breakers accountable.”
“The staggering prices paid for rhino horn by criminals like Zhifei Li and his accomplices ensure that unscrupulous poachers continue to slaughter these animals, and it’s our hope that his conviction serves as a warning to other traffickers of the severe consequences they face,” said Fish and Wildlife Service Director Ashe. “The unparalleled greed of criminal trafficking rings like Li’s fuel the poaching epidemic that is decimating rhinoceros populations in the wild. Regardless of whether the horns he smuggled were sawed off the corpse of a rhino last year or a decade ago, each one represents the death of one of the world’s most endangered animals.”
Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (known as CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.
In pleading guilty, Li admitted that he sold 30 smuggled, raw rhinoceros horns worth approximately $3 million – approximately $17,500 per pound – to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu (which means “to make it as old” in Mandarin). In China, there is a centuries-old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn. Owning or drinking from such a cup is believed by some to bring good health, and true antiques are highly prized by collectors. The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques.
According to the charges, plea agreement and a detailed joint factual statement filed in in Newark federal court , the investigation of Li began in November 2011, after a confidential informant sold two raw rhino horns to a middleman at the Vince Lombardi rest stop on the New Jersey Turnpike in an Operation Crash undercover sale. These government-supplied rhino horns were, in turn, sold to a Long Island City antiques dealer who was working for Li.
At Li’s direction, raw rhino horns were hidden by wrapping them in duct tape, hiding them in porcelain vases and falsely describing them on customs and shipping documents, including by labeling them as porcelain vases or handicrafts.
Li purchased 25 raw rhino horns, including 13 endangered black rhinoceros horns weighing approximately 151 pounds, through connections in New York and New Jersey, and another five raw rhino horns weighing at least 20 pounds through an accomplice in Dallas.
Li sold whole rhino horns to factories where they would be carved into fake antiques. The leftover pieces from the carving process were sold for alleged “medicinal” purposes even though rhino horn is made of compressed keratin, the same material in human hair and nails and has no proven medical efficacy.
Between 2011 and 2013, Li purchased approximately 60 carved ivory items from U.S. auction houses with an approximate market value of $500,000, all of which were smuggled to China at Li’s direction.
Before arriving in Miami, Li sent a text message to the Long Island City antiques dealer saying that he had as much as $500,000 to spend in the U.S. on antiques and rhino horn. When purchasing two rhino horns from an undercover USFWS agent at a Miami Beach hotel, Li told the covert agent that he was interested in buying more rhino horns regardless of quality, as much as the agent could find, and inquired if the horns could be shipped directly to Hong Kong.
In April 2012, after a Dallas-based accomplice purchased a large, eight-pound raw rhino horn for Li in Florida worth more than $140,000, Li sent the dealer an email directing him to cut the horn into two pieces, wrap them in electrical tape, and send them to Hong Kong in separate packages. The email included a photo of the rhino horn with a red line drawn though it indicating where the lengthy horn should be cut.
After Li’s conspirator in Long Island City purchased two raw elephant tusks for Li weighing more than 100 lbs, Li sent instructions by email that the shipper should declare the contents as “automobile parts” and not use the word “tusk” on the shipping documents.
Li smuggled libation cups carved from rhinoceros horns from the U.S. to Hong Kong. Rhino carvings valued as much as $242,500 were sold to Li’s customers in China. In early 2013, one of those customers, Shusen Wei, pleaded guilty in the Southern District of Florida to knowingly buying a smuggled rhino carving from Li.
The plea agreement requires Li to forfeit $3.5 million in proceeds of his criminal activity as well as several Asian artifacts. Also, various ivory objects seized by the USFWS as part of the investigation will be surrendered. The maximum potential penalty is 10 years for each of the smuggling counts and five years for each of the other offenses, as well as a $250,000 fine per count, or twice the gross gain or loss from the offense. Sentencing before Judge Salas has been scheduled.
The investigation is continuing and is being handled by the U.S. Fish & Wildlife Service’s Office of Law Enforcement, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Attorney’s Office for the Southern District of Florida and the Justice Department’s Environmental Crimes Section. The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Barbara Ward of the New Jersey U.S. Attorney’s Office Criminal Division and Asset Forfeiture and Money Laundering Unit, Assistant U.S. Attorney Thomas Watts-FitzGerald of the U.S. Attorney’s Office for the Southern District of Florida and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.Related Materials:
Superseding Information
Li, zhifei JFSRingleader of International Rhino Smuggling Conspiracy Pleads Guilty in New Jersey to Wildlife Trafficking CrimesRead the Press Release
WASHINGTON – Zhifei Li, the owner of an antique business in China, pleaded guilty today to being the organizer of an illegal wildlife smuggling conspiracy in which 30 rhinoceros horns and numerous objects made from rhino horn and elephant ivory worth more than $4.5 million were smuggled from the United States to China.
The guilty plea was announced by Paul J. Fishman, U.S. Attorney for the District of New Jersey; Robert G. Dreher, the Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Dan Ashe, Director of the U.S. Fish and Wildlife Service (USFWS).
“The brutality of animal poaching, wherever it occurs, feeds the demand of a multibillion-dollar illegal international market,” said U.S. Attorney Fishman. “As a major hub of international commerce through our ports and busy airport, the District of New Jersey plays an important role in curbing the escalation of this devastating trade. Zhifei Li’s conviction is a warning to those who would be lured by the profits of dealing in cruelty.”
Li, 29, of Shandong, China, the owner of Overseas Treasure Finding in Shandong, pleaded guilty today before U.S. District Judge Esther Salas in Newark, N.J., to a total of 11 counts: one count of conspiracy to smuggle and violate the Lacey Act; seven counts of smuggling; one count of illegal wildlife trafficking in violation of the Lacey Act; and two counts of making false wildlife documents.
Li was arrested in Florida in January 2013 on federal charges brought under seal in New Jersey and shortly after arriving in the country. Before he was arrested, he purchased two endangered black rhinoceros horns from an undercover USFWS agent in a Miami Beach hotel room for $59,000 while attending an antique show. Li was arrested as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.
In papers filed in Newark federal court, Li admitted that he was the “boss” of three antique dealers in the United States whom he paid to help obtain wildlife items and smuggle them to him via Hong Kong. One of those individuals was Qiang Wang, aka “Jeffrey Wang,” who was sentenced to 37 months in prison on Dec. 5, 2013, in the Southern District of New York. Li played a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating the price, directing how to smuggle the items out of the United States, and obtaining the assistance of additional collaborators in Hong Kong to receive the smuggled goods and then smuggle them to him in mainland China.
“The take-down of the Li smuggling ring is an important development in our effort to enforce wildlife protection laws. Rhino horn can sell for more than gold and is just as rare, but rhino horn and elephant ivory are more than mere commodities. Each illegally traded horn or tusk represents a dead animal, poaching, bribery, smuggling and organized crime,” said Acting Assistant Attorney General Dreher. “The Justice Department will continue to vigorously enforce the law designed to protect wildlife. This is a continuing investigation.”
“The illegal trade in rhino horn has devastated the wild population of these magnificent animals; with the real possibility emerging that all sub-species will be extinct in the wild within our lifetimes,” said U.S. Attorney Ferrer. “Additionally, the poaching activities have cost the lives of enforcement rangers and wardens as the traffickers have resorted to greater levels of violence to feed the black market. This case reflects the seriousness with which we regard these activities and our commitment to work collectively to quash the conduct and hold the law-breakers accountable.”“The staggering prices paid for rhino horn by criminals like Zhifei Li and his accomplices ensure that unscrupulous poachers continue to slaughter these animals, and it’s our hope that his conviction serves as a warning to other traffickers of the severe consequences they face,” said Fish and Wildlife Service Director Ashe. “The unparalleled greed of criminal trafficking rings like Li’s fuel the poaching epidemic that is decimating rhinoceros populations in the wild. Regardless of whether the horns he smuggled were sawed off the corpse of a rhino last year or a decade ago, each one represents the death of one of the world’s most endangered animals.”
Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (known as CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.
In pleading guilty, Li admitted that he sold 30 smuggled, raw rhinoceros horns worth approximately $3 million – approximately $17,500 per pound – to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu (which means “to make it as old” in Mandarin. In China, there is a centuries old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn. Owning or drinking from such a cup is believed by some to bring good health, and true antiques are highly prized by collectors. The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques.
According to the charges, plea agreement and a detailed joint factual statement filed in in Newark federal court:
The investigation of Li began in November 2011, after a confidential informant sold two raw rhino horns to a middleman at the Vince Lombardi rest stop on the New Jersey Turnpike in an Operation Crash undercover sale. These government-supplied rhino horns were, in turn, sold to a Long Island City antiques dealer who was working for Li.
At Li’s direction, raw rhino horns were hidden by wrapping them in duct tape, hiding them in porcelain vases and falsely describing them on customs and shipping documents, including by labeling them as porcelain vases or handicrafts.
Li purchased 25 raw rhino horns, including 13 endangered black rhinoceros horns weighing approximately 151 pounds, through connections in New York and New Jersey, and another five raw rhino horns weighing at least 20 pounds through an accomplice in Dallas, Texas.
Li sold whole rhino horns to factories where they would be carved into fake antiques. The leftover pieces from the carving process were sold for alleged “medicinal” purposes even though rhino horn is made of compressed keratin, the same material in human hair and nails and has no proven medical efficacy.
Between 2011 and 2013, Li purchased approximately 60 carved ivory items from U.S. auction houses with an approximate market value of $500,000, all of which were smuggled to China at Li’s direction.
Before arriving in Miami, Li sent a text message to the Long Island City antiques dealer saying that he had as much as $500,000 to spend in the U.S. on antiques and rhino horn. When purchasing two rhino horns from an undercover USFWS agent at a Miami Beach hotel, Li told the covert agent that he was interested in buying more rhino horns regardless of quality, as much as the agent could find, and inquired if the horns could be shipped directly to Hong Kong.
In April 2012, after a Dallas-based accomplice purchased a large, eight-pound raw rhino horn for Li in Florida worth more than $140,000, Li sent the dealer an email directing him to cut the horn into two pieces, wrap them in electrical tape, and send them to Hong Kong in separate packages. The email included a photo of the rhino horn with a red line drawn though it indicating where the lengthy horn should be cut.
After Li’s conspirator in Long Island City purchased two raw elephant tusks for Li weighing more than 100 pounds, Li sent instructions by email that the shipper should declare the contents as “automobile parts” and not use the word “tusk” on the shipping documents.
Li smuggled libation cups carved from rhinoceros horns from the U.S. to Hong Kong. Rhino carvings valued as much as $242,500 were sold to Li’s customers in China. In early 2013, one of those customers, Shusen Wei, pleaded guilty in the Southern District of Florida to knowingly buying a smuggled rhino carving from Li.The plea agreement requires Li to forfeit $3.5 million in proceeds of his criminal activity as well as several Asian artifacts. Also, various ivory objects seized by the USFWS as part of the investigation will be surrendered. The maximum potential penalty is 10 years for each of the smuggling counts and five years for each of the other offenses, as well as a $250,000 fine per count, or twice the gross gain or loss from the offense. Sentencing before Judge Salas has been scheduled for April 1, 2014.
The investigation is continuing and is being handled by the U.S. Fish & Wildlife Service’s Office of Law Enforcement, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Attorney’s Office for the Southern District of Florida and the Justice Department’s Environmental Crimes Section.
The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Barbara Ward of the New Jersey U.S. Attorney’s Office Criminal Division and Asset Forfeiture and Money Laundering Unit, Assistant U.S. Attorney Thomas Watts-FitzGerald of the U.S. Attorney’s Office for the Southern District of Florida and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
13-475
Defense counsel: Gary Cutler Esq., New York
Li, Zhifei Superseding Information
Li, Zhifei JFS
Li, Zhifei JFS Exhibits
Li Exhibt 1
Li Exhibit 1a
Li Exhibit 2
Li Exhibit 7
Li Exhibit 10
Li Exhibit 10a
Li Exhibit 11
Li Exhibit 12Richmond Man Pleads Guilty and Admits to Stealing Millions Through A Rehabilitation Tax Credit SchemeRead the Press Release
RICHMOND, Va. – Billy Gene Jefferson, 52, of Richmond, Va., pleaded guilty today for his role in stealing over $12,000,000 from federal and state tax credit programs that are designed to promote the rehabilitation of historic buildings in the area.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Kenneth T. Cuccinelli, II, Attorney General of Virginia; Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office; Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office; Gary Barksdale, Inspector in Charge of the United States Postal Inspection Service, Washington, D.C. Division; and Colonel W. Steven Flaherty, Superintendent of Virginia State Police, made the announcement after the plea was accepted by United States District Judge John A. Gibney, Jr.
Jefferson was charged in a criminal information with Major Fraud Against the United States and Engaging in Unlawful Monetary Transactions. He faces a maximum penalty of 20 years in prison, restitution to the victims, a fine of up to $500,000, and three years of supervised release when he is sentenced on April 8, 2014.
According to a statement of facts filed with the plea agreement, Jefferson was the managing member of “River City Renaissance, LC” and “River City Renaissance III, LC,” both real estate development companies that specialized in urban renewal projects and the rehabilitation of historic buildings. The defendant also used another corporation, “River City Real Estate, Inc.,” (RCRE) as the general contractor for rehabilitation work on the properties. Using these entities, Jefferson applied for millions in state and federal historic tax credits in connection with his rehabilitation of a number of historic properties throughout the Richmond area.
At the state level, the Virginia Department of Historic Resources (VDHR) administered the Virginia Historic Rehabilitation Tax Credit program. That program allowed the property owner to receive a state income tax credit equal to 25 percent of the amount spent on eligible rehabilitation expenses. At the federal level, the U.S. Department of the Interior National Park Service (DOI-NPS) administered the Federal Historic Preservation Tax Incentives program, which encouraged private sector rehabilitation of historic buildings through tax credits equal to 20 percent of the amount spent on eligible rehabilitation expenses.
Jefferson admitted that from 2009 through 2011 he fraudulently participated in the state and federal historic rehabilitation tax credit programs through the rehabilitation of qualified properties. Specifically, he submitted applications for federal and state tax credits on the rehabilitation of a former tobacco manufacturing plant in the Manchester Industrial Historic District of Richmond, Virginia (referred to as the TABAC Project), which was followed by the rehabilitation of ten historic buildings located in the Fan District of Richmond, Virginia (referred to as the River City Renaissance Projects).
Among other steps in his fraudulent rehabilitation tax credit scheme, Jefferson executed and submitted false applications to the VDHR and DOI-NPS for the tax credit approval process, including the Part 3: Historic Preservation Certification Application – Request for Completed Work form that requires accurate certification of “costs attributed solely to rehabilitation of the historic structure.” Within the Part 3 Certifications, Jefferson falsely inflated the Qualified Rehabilitation Expenses (QREs), thereby increasing the tax credits claimed for specific projects. Jefferson agreed that if actual amounts had been submitted to federal and state authorities, he would have received less in Virginia and federal tax credits.
With respect to the River City Renaissance Projects, Jefferson admitted to initiating the historic rehabilitation tax credit application process on at least 10 different properties in Richmond, Virginia. Due to concerns with the accuracy of the defendant’s QRE submissions, VDHR required additional information to address the concerns on six of the properties. During the verification process for those expenses, Jefferson provided false information and concealed the actual QRE expenditures that he knew to be less than the amounts claimed on the original submissions to VDHR. In total, for the River City Renaissance Projects, Jefferson’s account records established that of the $28,836,342 in QRE expenses claimed, only $9,796,252.08 could have qualified as QREs for federal and state tax credits on the River City Renaissance Projects. As a result of those false submissions, Jefferson fraudulently received approximately $7,775,410.46 in actual tax credits on the River City Renaissance Projects.
Jefferson also admitted to submitting inflated QREs for the TABAC Project. His account records established that of the $57,064,858 in QRE expenses claimed, only $45,570,466.20 could have qualified as QREs for federal and state tax credits on the TABAC Project. As a result of those false submissions, Jefferson fraudulently obtained approximately $5,172,476.31 in tax credits on the TABAC Project.
Jefferson also admitted to using different business arrangements resulting in portions of the Federal tax credits accruing to the benefit of corporation C.U.S.A. and portions of the state tax credits accruing to benefit of corporation F & Co. Through those arrangements, he received payments from those corporations in exchange for the tax credits. Jefferson admitted that as part of the ongoing scheme to defraud, he caused C.U.S.A. to wire transfer $3,674,277 from a Citibank bank account to the River City Renaissance, LC Wachovia Bank account (ending in 9277), in Richmond, Virginia. Jefferson subsequently transferred those funds to different accounts under his control, including personal accounts he maintained at HSBC Bank International.
In connection with his guilty plea, Jefferson agreed that the loss amount relating to the federal tax credits is $5,754,616.34, and the loss amount relating to the state credits is $7,193,270.43, for a combined total of $12,947,886.77. He agreed to pay that full amount for restitution, as well as an additional $750,000 for criminal forfeiture.
This case was investigated by the Internal Revenue Service Criminal Investigation Division, Federal Bureau of Investigation Richmond Office, the United States Postal Inspection Service, and the Virginia State Police. The Virginia Department of Historic Resources also assisted law enforcement in the investigation. Assistant United States Attorneys Michael Gill and Wingate Grant and Special Assistant United States Attorney Patrick Dorgan are prosecuting the case on behalf of the United States.
This investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is comprised of several federal and state agencies, including the Virginia Attorney General’s Office. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force (FFETF), an interagency national task force.
The FFETF was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Real Estate Agent Headed to Prison for Money LaunderingRead the Press Release
McALLEN, Texas - Freddy Centeno, 52 of Brownsville, has been ordered to prison for money laundering for a convicted drug trafficker, announced United States Attorney Kenneth Magidson. Centeno, a licensed real estate agent, pleaded guilty to a one-count criminal information August 30, 2013.
Today, U.S. District Judge Micaela Alvarez handed Centeno a sentence of 24 months in prison to be immediately followed by a two-year-term of supervised release. In handing down the sentence, Judge Alvarez noted Centeno was responsible for laundering more than $200,000 and further ordered the forfeiture of all real properties.
At the time of his plea, he admitted he helped a narcotics trafficker launder drug profits through the purchase of real properties in Brownsville. Centeno structured financial transactions of residential and commercial properties to conceal the identity and ownership of a narcotics trafficker.
The conviction and sentence comes as a result of the Organized Crime Drug Enforcement Task Force investigation dubbed Operation Spike Strip. The narcotics trafficking and money-laundering investigation targeted the Armando Arambul drug trafficking organization which operated under the auspices of the Gulf Cartel in Matamoros, Mexico, and throughout the Southern District of Texas.
Arambul and others were responsible for transporting multi-ton quantities of cocaine to Houston and other major U.S. cities and remitted millions of dollars to the Gulf Cartel. Arambul was convicted and was previously sentenced to 14 years in prison.
The investigation was conducted by the Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation, Homeland Security Investigations, FBI, Customs and Border Protection, Border Patrol, Cameron County District Attorney’s Office-Narcotics Investigation Division and the U.S. Marshals Service. Assistant United States Attorneys Jesse Salazar is prosecuting the case.Quad Cities Area Man Sentenced on Federal Marijuana ConspiracyRead the Press Release
DAVENPORT, IA – On December 19, 2013, Autumn E. Skelton, age 38, of Port Byron, Illinois, was sentenced by Chief United States District Judge James E. Gritzner to 18 months imprisonment for conspiracy to distribute at least 50 kilograms of marijuana, announced United States Attorney Nicholas A. Klinefeldt. Skelton was also ordered to serve three years of supervised release following the imprisonment and to pay $100 towards the Crime Victims Fund.
Beginning in approximately October 2010 and continuing until about October 27, 2012, Skelton conspired with other persons to distribute marijuana in the Quad Cities area. Specifically, Skelton and co-defendant John Michael Masterson received multiple kilograms of marijuana on multiple occasions from persons transporting the marijuana in vehicles from Northern California to the Davenport, Iowa area on behalf of co-defendant David Gabriel Morago. Skelton further distributed the marijuana he received to customers in the Port Byron, Illinois area.
On October 8, 2013, Chief Judge Gritzner sentenced Masterson to 24 months imprisonment and three years of supervised release following imprisonment for conspiracy to distribute marijuana. On October 23, 2013, Judge Gritzner sentenced Morago to 110 months imprisonment and four years of supervised release for conspiracy to distribute marijuana.
This case was investigated by the United States Drug Enforcement Agency - Quad Cities Metropolitan Enforcement Group; Davenport, Iowa, Police Department; South Dakota Highway Patrol; South Dakota Division of Criminal Investigation; and Mendocino County California Sherriff’s Office. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
Previously Convicted Sex Offender Sentenced to 25 Years for Sex Trafficking a Minor and Two AdultsRead the Press Release
Terrance Anderson, aka Scooby, has been sentenced to federal prison on charges of sex trafficking of a minor and two counts of transporting adults in interstate commerce for prostitution. Anderson, 42, of Ellenwood, Ga., was sentenced by U.S. District Judge Thomas W. Thrash to serve 25 years in prison to be followed by seven years supervised release. Anderson was ordered to pay restitution to three victims totaling $154,500. Anderson pleaded guilty to the charges on July 19, 2013.
“This sentence makes clear that those who prey upon women and girls and coerce them into prostitution will be punished severely,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Department of Justice will continue to devote its full efforts to investigating and prosecuting those who commit such heinous crimes.”
“This defendant chose to earn a living exploiting minors, even continuing to do so after previously serving a federal sentence for sex trafficking-related conduct,” said U.S. Attorney Sally Quillian Yates of the Northern District of Georgia. “Our office will remain vigilant in our efforts to prosecute those who exploit children and young women in this district.”"Today's sentencing removes a dangerous individual from our streets who has repeatedly shown a callous disregard for the basic human rights of others,” said Acting Special Agent in Charge Ricky Maxwell for the Federal Bureau of Investigation (FBI) Atlanta Field Office. “Human trafficking and child exploitation cases such as this reaffirm the FBI's mission as we work to protect and help those that may not be able to help themselves."
According to U.S. Attorney Yates, the charges and other information presented in court, from February 2008 through December 2011, Anderson ran a prostitution ring in which he advertised the sexual services of a minor and young women on the internet, including K.B., T.B., A.C. and other victims. He advertised on sites such as Backpage, Craig’s List and Eros, as well as his own website, Rentsomethingsexy.com. Anderson caused K.B., a 17-year-old girl, to engage in commercial sex acts in multiple states, requiring her to earn $1,000 a day, work seven days-a-week and give all of her earnings to him. Anderson also transported 18-year-old T.B. and 24-year-old A.C. from Georgia to Virginia, where he required the young women to perform numerous commercial sex acts for his financial gain.
Anderson previously pleaded guilty in August 2001 to using a cell phone, which is a facility of interstate commerce, to cause a juvenile to engage in prostitution and to being a felon in possession of a firearm. He received a sentence of seven years in federal prison after providing information to federal investigators about other sex trafficking crimes and testifying at the trial of two other human traffickers. However, Anderson resumed his sex trafficking activities after completing his prison sentence.
This case was investigated by Special Agents of the FBI. If anyone has any information about human trafficking, they are encouraged to report the information to the FBI at 404-679-9000.
Assistant U.S. Attorney Susan Coppedge of the Northern District of Georgia and Deputy Chief Karima Maloney of the Civil Rights Division 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/.
Previously Convicted Sex Offender Sentenced to 25 Years for Child Sex TraffickingRead the Press Release
ATLANTA – Terrance Anderson, a/k/a/ Scooby, has been sentenced to federal prison on charges of sex trafficking of a minor and two counts of transporting adults in interstate commerce for prostitution.
“This defendant lived off the sexual exploiting of minors, even after previously serving a federal sentence for sex trafficking-related conduct,” said United States Attorney Sally Quillian Yates. “Our office will remain vigilant in our efforts to prosecute those who exploit children and young women in this district.”“For his own benefit, the defendant preyed upon women and girls, coercing them into prostitution,” said Jocelyn Samuels Acting Assistant Attorney General for the Civil Rights Division. “The Department of Justice will continue to devote its full efforts to prosecuting those who commit such heinous crimes.”
Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: “Today's sentencing removes a dangerous individual from our streets who has repeatedly shown a callous disregard for the basic human rights of others. Human trafficking and child exploitation cases such as this reaffirm the FBI's mission as we work to protect and help those that may not be able to help themselves.”
According to United States Attorney Yates, the charges and other information presented in court: From February 2008 through December 2011, Anderson ran a prostitution ring in which he advertised the sexual services of a minor and young women, including victims K.B., T.B., A.C. and other victims on the Internet. He advertised on sites such as Backpage, Craig’s List and Eros, as well as his own website, Rentsomethingsexy.com. Anderson caused K.B., a 17-year-old girl, to engage in commercial sex acts in multiple states, requiring her to earn $1,000 a day, work seven days-a-week, and give all her earnings to him. Anderson also transported 18-year-old T.B., and 24-year-old A.C., from Georgia to Virginia, where he required the young women to perform numerous commercial sex acts for his financial gain.
Anderson previously pleaded guilty in August 2001 to using a cell phone, which is a facility of interstate commerce, to cause a juvenile to engage in prostitution, and to being a felon in possession of a firearm. He received a sentence of seven years in federal prison after providing information to federal investigators about other sex trafficking crimes and testifying at the trial of two other human traffickers. However, Anderson resumed his sex trafficking activities after completing his prison sentence.
Terrance Anderson, 42, of Ellenwood, Ga., was sentenced by United States District Judge Thomas W. Thrash to 25 years in prison to be followed by seven years of supervised release. Anderson was ordered to pay restitution to victims totaling $154,550. Anderson pleaded guilty to the charges on July 19, 2013.
This case was investigated by Special Agents of the Federal Bureau of Investigation. If anyone has any information about human trafficking, they are encouraged to report the information to the Federal Bureau of Investigation at 404-679-9000.
Assistant United States Attorney Susan Coppedge and Department of Justice Deputy Chief Karima Maloney 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/.
President Obama Grants Commutations and PardonsRead the Press Release
Today President Barack Obama granted clemency to 21 individuals, consisting of eight commutations and 13 pardons.
The President granted commutations to the following eight individuals:
- Clarence Aaron - Mobile, Ala.
Offense: Conspiracy to possess with intent to distribute cocaine and cocaine base; possession with intent to distribute cocaine; attempt to possess cocaine with intent to distribute (Southern District of Alabama)
Sentence: Life imprisonment, five years' supervised release (Dec. 10, 1993)
Commutation Grant: Prison sentence commuted to expire on April 17, 2014 - Stephanie Yvette George - Pensacola, Fla.
Offense: Conspiracy to possess cocaine base with intent to distribute (Northern District of Florida)
Sentence: Life imprisonment, ten years' supervised release (May 5, 1997)
Commutation Grant: Prison sentence commuted to expire on April 17, 2014 - Ezell Gilbert - Tampa, Fla.
Offense: Possession with intent to deliver cocaine base; possession with intent to distribute marijuana (Middle District of Florida)
Sentence: 292 months' imprisonment, five years' supervised release (Mar. 25, 1997)
Commutation Grant: Prison sentence commuted to time already served - Helen R. Alexander Gray - Ty Ty, Ga.
Offense: Conspiracy to possess with intent to distribute cocaine base; possession with intent to distribute cocaine base; possession of a firearm by a convicted felon (Middle District of Georgia)
Sentence: 240 months' imprisonment; 10 years’ supervised release (Oct. 8, 1996)
Commutation Grant: Prison sentence commuted to expire on April 17, 2014 - Jason Hernandez - McKinney, Tex.
Offense: Conspiracy to possess with intent to distribute controlled substances; possession with intent to distribute cocaine base; possession with intent to distribute methamphetamine; possession with intent to distribute a mixture of methamphetamine and cocaine hydrochloride; distribution of a controlled substance within 1,000 feet of a protected property; establishing a place for manufacture and distribution of controlled substances (Eastern District of Texas)
Sentence: Life imprisonment; eight years' supervised release; $5,000 fine (Oct. 2, 1998)
Commutation Grant: Prison sentence commuted to 240 months (20 years) - Ricky Eugene Patterson - Fort Pierce, Fla.
Offense: Conspiracy to possess with intent to distribute cocaine base; possession with intent to distribute cocaine base (Southern District of Florida)
Sentence: Life imprisonment, 10 years’ supervised release (Aug. 3, 1995)
Commutation Grant: Prison sentence commuted to expire on April 17, 2014 - Billy Ray Wheelock - Belton, Tex.
Offense: Conspiracy to distribute more than 50 grams of crack cocaine; possession with intent to distribute more than 5 grams of crack cocaine within 1,000 feet of a school; possession with intent to distribute crack cocaine; aiding and abetting possession with intent to distribute and distributing more than 5 grams of crack cocaine within 1,000 feet of a school (Western District of Texas)
Sentence: Life imprisonment, 10 years' supervised release, $3,000 fine (Jun. 9, 1993)
Commutation Grant: Prison sentence commuted to expire on April 17, 2014 - Reynolds Allen Wintersmith, Jr. - Rockford, Ill.
Offense: Conspiracy to possess with intent to distribute and distribute cocaine and cocaine base; possession with intent to distribute cocaine base (Northern District of Illinois)
Sentence: Life imprisonment, five years' supervised release, $1,000 fine (Nov. 23, 1994)
Commutation Grant: Prison sentence commuted to expire on April 17, 2014
The President granted pardons to the following thirteen individuals:
- William Ricardo Alvarez - Marietta, Ga.
Offense: Conspiracy to possess with intent to distribute heroin ; conspiracy to import heroin (District of Puerto Rico)
Sentence: Time served after service of nine months' imprisonment, four years' supervised release (Apr. 30, 1997; amended Jul. 31, 1997) - Charlie Lee Davis, Jr . - Wetumpka, Ala.
Offense: Possession with intent to distribute and distribution of cocaine base; use of a minor to distribute cocaine base (Middle District of Alabama)
Sentence: 87 months' imprisonment, five years' supervised release (Mar. 21, 1995) - Ronald Eugene Greenwood - Crane, Mo.
Offense: Conspiracy to violate the Clean Water Act (District of South Dakota)
Sentence: Three years' probation, conditioned on six months' home confinement and 100 hours’ community service, $5,000 restitution, $1,000 fine (Nov. 18, 1996) - Little Joe Hatch , aka Joe Hatch Sr. - Lake Placid, Fla.
Offense: Possession with intent to distribute marijuana (Southern District of Florida)
Sentence: 60 months' imprisonment, four years' supervised release (May 15, 1990) - Martin Alan Hatcher . - Foley, Ala.
Offense: Distribution and possession with intent to distribute marijuana (Southern District of Alabama)
Sentence: Five years' probation (Nov. 9, 1992) - Derek James Laliberte - Auburn, Me.
Offense: Money laundering (District of Maine)
Sentence: 18 months imprisonment, 2 years' supervised release (Oct. 2, 1992, as amended May 21, 1993) - Alfred J. Mack - Manassas, Va.
Offense: Unlawful distribution of heroin (District of Columbia Superior Court)
Sentence: 18 to 54 months' imprisonment (Apr. 5, 1982) - Robert Andrew Schindler - Goshen, Va.
Offense: Conspiracy to commit wire fraud; conspiracy to commit mail and wire fraud (District of Utah)
Sentence: Three years' probation conditioned on four months' home confinement, $10,000 restitution (May 14, 1996) - Willie Shaw, Jr. - Myrtle Beach, S.C.
Offense: Armed bank robbery (District of South Carolina)
Sentence: Fifteen years' imprisonment (Aug. 7, 1974) - Kimberly Lynn Stout , formerly known as Kimberly Lynn Cooley - Bassett, Va.
Offense: Bank embezzlement; false entries in the books of a lending institution (Western District of Virginia)
Sentence: One day of imprisonment, three years' supervised release, conditioned on five months’ home detention) (Nov. 9, 1993) - Bernard Anthony Sutton, Jr. - Norfolk, Va.
Offense: Theft of personal property (Eastern District of Virginia)
Sentence: Three years' probation, $825 restitution, $500 fine (Apr. 4, 1989) - Chris DeAnn Switzer , formerly known as Chris DeAnn Rasco - Omaha, Neb.
Offense: Conspiracy to violate narcotics laws (methamphetamine) (District of Nebraska)
Sentence: Four years' probation, conditioned on six months’ home confinement and 200 hours' community service (Jun. 25, 1996) - Miles Thomas Wilson - Williamsburg, Ohio.
Offense: Mail fraud (Southern District of Ohio)
Sentence: Three years’ probation (Jul. 15, 1981)
- Clarence Aaron - Mobile, Ala.
Pollock Prisoner Sentenced to 80 Months in Prison for Assaulting Fellow InmateRead the Press Release
ALEXANDRIA, La. –United States Attorney Stephanie A. Finley announced today that John Waller, 41, of New Rochelle, N.Y., was sentenced by U.S. District Judge Dee D. Drell to 80 months in prison and three years of supervised release for attacking a fellow inmate with a makeshift knife at the U.S. Penitentiary at Pollock, La. A federal jury found Waller guilty on September 17, 2013 after a two-day trial.
At the trial, it was established that on March 28, 2010, Waller stabbed a fellow inmate repeatedly with a makeshift knife. The assaulted inmate received puncture wounds to the upper body and was brought to a nearby hospital for treatment. The attack was recorded by the prison’s video recording system. Waller is currently serving a 320-month sentence on narcotics and weapons charges.
The Federal Bureau of Investigation and U.S. Bureau of Prisons conducted the investigation. Assistant U.S. Attorney Brandon B. Brown prosecuted the case.
Pine Ridge Man Sentenced for Abusive Sexual Contact with A MinorRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man convicted of Abusive Sexual Contact with a Minor was sentenced on December 16, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Archie Backward, age 22, was sentenced to 14 months in custody, 5 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Backward pled guilty to the charge on August 26, 2013. The charge related to Backward engaging in sexual contact with a minor female on November 6, 2012, at Pine Ridge.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Backward was immediately turned over to the custody of the U.S. Marshals Service.
Pikeville Man Sentenced for Robbing North Carolina and South Carolina BanksRead the Press Release
GREENVILLE - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Terrence W. Boyle sentenced BRIAN GARLAND LANCASTER, 47, of Pikeville, North Carolina, to 84 months imprisonment, consecutive on each count, followed by 5 years of supervised release.
On September 16, 2013 LANCASTER was charged in a three-count superseding criminal information. On September 24, 2013 he pled guilty to two counts of Armed Bank Robbery, in violation of Title 18, United States Code, Sections 2113(a) and 2113(d); and to one count of Attempted Bank Robbery in violation of Title 18, United States Code, Section 2113(a).
According to the investigation, on October 12, 2012, LANCASTER robbed the First Citizens Bank in Myrtle Beach, South Carolina with a BB gun. He took approximately $6,190.00, in currency. On October 16, 2012 LANCASTER approached the entrance to Heritage Bank in Fremont, North Carolina and pulled the hood of his sweatshirt over his head. A bank employee observed LANCASTER’S suspicious behavior and activated the automatic door lock feature. LANCASTER fled the scene. On October 17, 2012, LANCASTER, entered the Southern Bank in Roanoke Rapids armed with a BB gun. He pointed the gun at two tellers and commanded them to fill his bag with money. The tellers complied and LANCASTER fled with $7,862.98 currency.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Roanoke Rapids Police Department, Asheville Police Department, Halifax Police Department, and the Federal Bureau of Investigation. Assistant United States Attorney, S. Katherine Burnette prosecuted the case.
Pamlico County Drug Trafficker Sentenced in Operation “No Quarter”Read the Press Release
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today that United States District Judge Louise W. Flanagan sentenced NORRIS WILLIS, 42, of Bayboro, North Carolina, to 123 months of imprisonment and 10 years of supervised release. WILLIS previously pled guilty to conspiracy to distribute 5 kilograms or more of cocaine and 280 grams or more of crack cocaine.
On October 21, 2008, WILLIS was arrested in South Carolina after he and his co-conspirators purchased 1 kilogram of cocaine from a confidential informant. On November 30, 2010, the Pamlico County Sheriff’s Office used another confidential informant to buy 4.8 grams of cocaine base (crack) from WILLIS. The investigation revealed that WILLIS was accountable for the distribution of 100 kilograms of cocaine, 1.48 kilograms of cocaine base (crack) and 27 kilograms of marijuana from 1992 until November 30, 2010.
The Organized Crime Drug Enforcement Task Force (OCDETF) Operation "No Quarter" was designed to attack the infrastructure of the Mexican Drug Trafficking Organizations (DTO), including those of the Los Zetas, La Familia, Gulf and Sinaloa drug cartels, operating not only in the Eastern District of North Carolina, but throughout North Carolina, the United States and Mexico. These DTO's are responsible for the importation of large quantities of cocaine, marijuana, heroin, and methamphetamine into the United States, as well as the related remittance of illegal drug proceeds back into Mexico.
The investigation spanned ten years and five North Carolina counties. As part of the investigation, over 100 individuals have been charged by indictment or criminal information in the Eastern District of North Carolina and state courts. Law enforcement officials seized drugs with a street value $4.6 million, including 127 kilograms of cocaine, 53 pounds of crystal methamphetamine, 160 pounds of marijuana, and 32 grams of heroin. Additionally, $2.2 million in U.S. Currency, 35 firearms and 35 real properties valued at $1.5 million were seized by law enforcement authorities.
Investigation of this case was conducted by the Drug Enforcement Administration (DEA) - Raleigh and Greensboro Resident Offices, the New York Field Division and numerous other DEA offices in the United States and Mexico; the Internal Revenue Service - Criminal Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) - Raleigh and Wilmington offices; the United States Marshals Service; the United States Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) - Raleigh and Tampa, Florida offices; the North Carolina State Bureau of Investigation; the North Carolina National Guard; the North Carolina State Highway Patrol; the Greenville Police Department; the Pitt County Sheriff's Office; the Pamlico County Sheriff's Office; the Lenoir County Sheriff's Office; the Craven County Sheriff's Office; the Carteret County Sheriff's Office; the Beaufort County Sheriff's Office; the New Bern Police Department, the Wayne County Sheriff's Office; the Person County Sheriff's Office; the Farmville Police Department; the Goldsboro Police Department; the Rocky Mount Police Department; the Burlington Police Department, the Alamance County Sheriff's Office, and the Wilson Police Department.
he federal prosecutions were handled by Special Assistant United States Attorneys Glenn Perry and Augustus Willis, IV. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Mr. Willis is a prosecutor with the Carteret, Craven and Pamlico Counties District Attorney’s Office. District Attorneys Kimberly Robb and Scott Thomas have assigned Mr. Perry and Mr. Willis to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Their assignments to the United States Attorney’s Office have been made possible by grants funded by the Governor’s Crime Commission.
Pair Pleads Guilty to $4.4 Million False Income Tax Refund SchemeRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO -- Jose Luis Martinez, 47, of Columbus, Ohio, and Mercedes Emelinda-Silie, 41, of Grove City, Ohio both pleaded guilty to one count of conspiracy to defraud the Internal Revenue Service (IRS) by filing false claims for federal income tax refunds. Martinez also pleaded guilty to one count of operating an unlicensed money transmitting business. The total tax loss in this case is approximately $4,415,492.58. Martinez and Silie each face a maximum of ten years in prison and a fine of up to $250,000
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office; and Dugan T. Wong, Inspector in Charge, U.S. Postal Inspection Service announced the guilty pleas entered today before U.S. District Judge Gregory L. Frost.
According to court documents, during 2010 and 2011 Martinez and Silie jointly owned and operated San Isidro Cargo in Columbus. San Isidro Cargo was registered with the U.S. Treasury Department as a Money Service Business to provide services such as check-cashing, wire transfers, tax-preparation, notary services, and title services among others.
Martinez operated San Isidro Cargo without a check-casher’s license knowing that one was required by the Ohio Revised Code. Martinez used San Isidro Cargo to assist co-conspirators, primarily located in New York and New Jersey, in carrying out the income tax refund scheme which came to be known as “Operation Mass Mail.”
This scheme involved the mass filing of hundreds of false income tax returns with Social Security Numbers and identifying information of residents of Puerto Rico. The false income tax returns contained fictitious information including employee wages and employee withholding. The false income tax returns were accompanied by counterfeit Forms W-2 that used, without legal authority, the names and Employer Identification Numbers of legitimate U.S. businesses. The income tax refund checks were mailed to pre-arranged addresses, usually apartments in New York. Many of the income tax refund checks shared the same street address, but different apartment numbers, making it easier for co-conspirators to collect the checks from one location. The checks were collected by corrupt letter carriers and apartment managers or by other perpetrators who simply waited for the checks to be delivered by unknowing mail carriers. The conspirators then used couriers to travel to other states, including Ohio, to cash the checks at various check-cashing services, including San Isidro Cargo.
Martinez and Silie knew the U.S. Treasury checks they received from persons from New York and New Jersey stemmed from fictitious income tax returns. Martinez and Silie also knew the endorsements on the checks were forged. Martinez allowed one individual to cash bulk quantities of sizable income tax refund checks bearing the names of others and addresses located primarily in New York. Silie made several over the counter cash withdrawals and provided these funds to co-conspirators. Martinez and Silie received and retained copies of hundreds of counterfeit driver’s licenses from co-conspirators in order to conceal the fraudulent nature of the scheme.
Everyone involved in the scheme, from the income tax return preparer to the check-casher, was paid a cut of the fraudulent income tax refund. Martinez charged a fee of seven to eight percent of check’s face value. This fee was a premium for the conversion of the ill-gotten checks, and was well above the three percent fee permitted by Ohio Revised Code for the cashing of government checks, and the two percent fee charged to legitimate customers.
After San Isidro Cargo’s bank accounts were closed by the bank, Martinez continued the scheme by recruiting others to cash the fraudulent checks on their own bank accounts.
From February 2010 through February 2011, Martinez, Silie and others assisted in the conversion and laundering of approximately 696 fraudulently obtained U.S. Treasury checks totaling $4,415,492.58. During 2010, Martinez, Silie and others conducted bank withdrawals in excess of $4 million from San Isidro Cargo’s business accounts.
A third person, Suheidy A. Warner, 30, of Columbus, was also charged in this case in an April 2013 indictment alleging one count of conspiracy to defraud the IRS by filing false claims for federal income tax refunds, one count of conspiracy to commit money laundering, four counts of aggravated identity theft and 25 counts of converting U.S. monies to her own use. Warner is currently a fugitive.
“The object of this refund fraud scheme was to swindle the government and the taxpaying public,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Be assured that IRS Criminal Investigation, along with our law enforcement partners and the U.S. Attorney's Office, will hold those who engage in refund fraud fully accountable."
These cases are being prosecuted by Assistant United States Attorney Daniel Brown and they were investigated by special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service.
# # #Owner of Invision Investments Sentenced on Wire Fraud ChargesRead the Press Release
St. Louis, MO - The United States Attorney's Office announced today that KEVIN BROWN, owner of Invision Investments, was sentenced to 36 months of imprisonment for operating a Ponzi-style investment scheme in which Brown falsely and fraudulently represented to investors that their money would be used to invest in real estate.
According to court documents, Brown represented to investors and potential investors that Invision Investments had equity in property when in truth and fact, only a portion of investor funds went into the purchase and/or rehabilitation of properties. Brown executed and provided promissory notes that falsely and fraudulently represented the rate of return investors were promised to receive. He represented that Invision Investments would acquire, rehabilitate and resell properties sufficient to produce the promised rates of return. In truth, Invision's real estate purchases and efforts to rehabilitate and resell properties were insufficient to generate the promised funds. Investors were paid returns on their investments using funds obtained from subsequent investors, in addition to returns on legitimate investments, i.e. the sale of real estate. In addition, Brown used investor's funds for business expenses, to pay interest to other investors and to pay Brown's compensation and some personal expenses.
Brown was also ordered to pay more than $1.6 million in restitution to victims of his fraud scheme.
This case was investigated by the United States Postal Inspection Service and the Federal Bureau of Investigation. Assistant United States Attorney Dianna R. Collins handled the case for the U.S. Attorney's Office.
Oviedo Man Sentenced to 30 Months in Prison for Tax Fraud and ObstructionRead the Press Release
Orlando, Florida – U.S. District Judge Gregory A. Presnell yesterday sentenced Daniel M. Metz (54, Oviedo) to 30 months in federal prison for filing false returns and attempting to obstruct justice. He was also ordered to serve a 3-year term of supervision, following his release from prison, and to pay $112,995 in restitution.
Metz was found guilty by a federal jury, on July 18, 2013.
According to court documents, in 2009, Metz's business account was the subject of an Internal Revenue Service civil audit. During the course of the audit, the auditor realized that Metz had not filed personal tax returns for years 2005, 2006, and 2007. After being told about the personal tax returns, Metz prepared the returns and attached false 1099s, which he also had prepared. Metz mailed the returns to the auditor. The auditor suspected that the 1099s were false and requested records from Metz's personal bank accounts. The banks confirmed that the 1099s were false. The personal tax returns were never processed. Had they been processed, Metz would have received approximately $330,344 in refunds from the IRS. Through various means, Metz tried to hinder the IRS' investigation, including filing a lawsuit against the IRS Commissioner and the special agent who was conducting a criminal investigation. That lawsuit was ultimately dismissed.
At the sentencing hearing, the court spoke at length about Metz’s plan to defraud the United States government. The court said that the scheme was long term and “egregious.” It added that Metz had “intentionally filed patently false documents to cheat his way out of paying taxes.”
This case was investigated by Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorney Tanya Davis Wilson.
Orlando Man Sentenced to over 12 Years in Prison for Distribution and Possession of Child PornographyRead the Press Release
Orlando, Florida – Chief U.S. District Judge Anne C. Conway today sentenced Jeffrey Alan Barnett (46, Orlando) to 12 years, 11 months in federal prison for distribution and possession of child pornography. The court also ordered Barnett to serve a 10-year term of supervision, following his release from prison, and to register as a sex offender.
Barnett pleaded guilty on August 7, 2013.
According to court documents, Barnett used a peer-to-peer filing sharing program to distribute child pornography to an undercover federal task force agent, on three separate occasions. On March 21, 2013, a federal search warrant was executed at Barnett’s residence. During the execution of that warrant, investigators found a computer located in Barnett’s bedroom that contained child pornography. During an interview, Barnett admitted that the computer belonged to him, that he had been using a peer-to-peer file sharing program to download and trade child pornography, and that he had been trading child pornography for over twenty years. Barnett was arrested on federal charges on March 21, 2013. A forensic examination of his computer found that he possessed over 250 videos of child pornography, including images of sadistic and masochistic conduct.
This case was investigated by the Federal Bureau of Investigation and the Seminole County Sheriff's Office. It was prosecuted by Assistant United States Attorney Roger B. Handberg.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Operator of Multi-Million Dollar Ponzi Scheme Indicted on Federal ChargesRead the Press Release
Defendant Allegedly Defrauded Over 200 Investors
CHARLOTTE, N.C. – The operator of a $44 million Ponzi scheme that defrauded more than 200 investors has been indicted on federal charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A federal grand jury sitting in Charlotte returned the criminal indictment on Wednesday, December 18, 2013, charging Daniel H. Williford, 55, of Statesville, N.C. with one count of securities fraud, one count of wire fraud, and five counts of money laundering. The indictment also includes a forfeiture allegation seeking a money judgment in the amount of $44,000,000.
U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI).
“For those fraudsters who have not gotten the message yet, I am committed to prosecuting financial crimes and going after those who take money from victims with fake promises. Let me make it simple: you rip people off, you get indicted,” said U.S. Attorney Tompkins.
“For years, Daniel Williford swindled hundreds of people, including his own co-workers out of their hard-earned money. While most people struggle to afford college, he paid those expenses using cash from his investors. Now he will be held accountable for his actions because of the agents and prosecutors who worked so diligently to bring him to justice,” said John A. Strong, Special Agent in Charge of the FBI in North Carolina.
According to allegations contained in the indictment, from January 2007 through July 2013, Williford induced over 200 investors in Charlotte and elsewhere to invest over $44 million, by promising his victims their money would be invested in wireless internet equipment, internet towers, and other facilities and companies. Instead of investing the money, the indictment alleges, Williford used it to run a Ponzi-style scheme and to fund his personal lifestyle. According to the indictment, during the course of the fraud, Williford invested only $7.7 million of the victims’ money as promised. The indictment alleges that Williford used approximately $32 million of the investor’s money to cover personal expenses and to pay some of his victims supposed “profits” on their investments. However, these payouts came from funds contributed by new investors, known as “Ponzi” payments.
Williford has been ordered by the U.S. District Court to appear on a summons for his initial appearance, which will be scheduled by the Court. If convicted, Williford faces a maximum of 20 years in prison each for the securities fraud and wire fraud counts, and a maximum of 10 years imprison for each of the money laundering counts. The securities fraud count carries a maximum fine of $5,000,000, the wire fraud count a maximum fine of $250,000, and each of the money laundering counts carries a maximum fine of $250,000 or twice the amount of criminally derived proceeds.
The details contained in this indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI investigated the case. The prosecution is being handled by Assistant U.S. Attorney Kurt Meyers of the Western District of North Carolina.
The President’s Financial Fraud Enforcement 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.
Ocean County, N.J., Man Sentenced to 20 Years in Prison for Sexually Abusing Toddler, Streaming Assault Live over the InternetRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., man was sentenced today to 20 years in prison for sexually abusing a toddler and streaming footage of the assault over the Internet, U.S. Attorney Paul J. Fishman announced.
Rodford W. Brindley, 68, of Toms River, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an information charging him with one count of sexual exploitation of a minor. Judge Pisano imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Brindley engaged in online chats with someone whom he believed to be a mother living in Ohio, but who was, in fact, an Ohio law enforcement officer. On April 2, 2012, with no encouragement from the officer, Brindley sexually abused a child in his care at his Toms River home and streamed live video of that conduct over the Internet. He was arrested the same day by Ocean County authorities. He has been in custody since the case was adopted federally in May 2012.
In addition to the prison term, Judge Pisano sentenced Brindley to serve five years of supervised release. He is also required to register as a sex offender.U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; and the Franklin County Sheriff’s Department in Ohio, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Harvey Bartle, Attorney-in-Charge of the U.S. Attorney’s Office in Trenton.
13-475
Defense counsel: William Cunningham Esq., Brick, N.J.Northern Michigan Resident Convicted of Criminal Copyright Infringement and Mail FraudRead the Press Release
Bruce Alan Edward, 49, of Atlanta, Michigan, was convicted Tuesday of criminal copyright infringement and mail fraud, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement, Office of Homeland Security Investigations (HSI).
After a one-week trial, a federal jury returned guilty verdicts finding the defendant guilty of two counts of criminal copyright infringement and one count of mail fraud.
Edward was charged with both criminal copyright infringement and mail fraud after selling more than 2,500 counterfeit copies of copyrighted Microsoft software valued at more than 1 million dollars retail. From about May 11, 2008, until approximately September 16, 2010, Edward purchased counterfeit Microsoft software from various suppliers located primarily in China, Singapore and the United States, and sold them on eBay to unwitting buyers."Online consumers should beware of counterfeit goods and products of inferior quality," McQuade said. "We hope this prosecution will raise awareness and deter these kinds of fraud schemes."
Edward will be sentenced March 20, 2014, before U.S. District Judge Thomas Ludington.
The case was prosecuted by the Bay City and Flint branches of the United States Attorney's Office for the Eastern District of Michigan and the Computer Crime and Intellectual Property Section of the Criminal Division, United States Department of Justice and investigated by Homeland Security Investigations (HSI) branch located in Sault Ste. Marie, Michigan, and HSI Intellectual Property Rights Center located in Arlington, Virginia.
Nine Defendants Charged in Connection with Herion Distribution in Marinette County, Brown County and Menominee, MichiganRead the Press Release
United States Attorney James L. Santelle of the Eastern District of Wisconsin, announced the filing of a criminal complaint alleging that nine people were involved with the distribution of heroin in Marinette County, Brown County and Menominee, Michigan. Brian L. King (age: 55) of Chicago was charged with Distribution of Heroin in violation of Title 21 United States Code, Section 841(a)(1), (b)(1)(B). The other eight defendants listed in the table below are charged with conspiracy to distribution heroin in violation Title 21 United States Code, Sections 841(a)(1), (b)(1)(B), and Title 18 United States Code, Section 2.
Name Age and ResidencyAndrea M. Paris (nee Addington)
29, Marinette, Wisconsin
23, Marinette, Wisconsin
Shawn A. Klatt
33, Marinette, Wisconsin
Karen A. Sanchez
38, Marinette, Wisconsin
Gerald F. Pichette
50, Green Bay, Wisconsin
Michael D. Peak
40, Menominee, Michigan
Donald M. Myers
41, Menominee, Michigan
Eric E. Ebbole
42, Menominee, Michigan
According to charging documents it is alleged that King is responsible for the distribution of over 500 grams of heroin in the Marinette, Wisconsin, Green Bay, Wisconsin, and Menominee, Michigan areas. The others charged in the complaint are alleged to have conspired to fund, purchase, transport, distribute, and sell large amounts of heroin in northeast Wisconsin and Menominee, Michigan.
If convicted each defendant, faces a maximum penalty of between 5 and 40 years imprisonment, a maximum fine of $5,000,000, a $100 special assessment, and between 4 years to life on supervised release.
This case was a joint investigation by the Drug Enforcement Administration and the Wisconsin Department of Justice Division of Criminal Investigation with assistance from the Milwaukee and Chicago High Intensity Drug Trafficking Area programs, the Marinette County Sheriff’s Department, the Brown County Sheriff’s Department, the Marinette Police Department, the Menominee County Michigan Sheriff’s Department and the Menominee Michigan Police Department. It will be prosecuted by Assistant United States Attorney Daniel R. Humble.
A criminal complaint is only a charge and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove each of them guilty beyond a reasonable doubt.
New Jersey Man Charged with Possession of Heroin as Result of Carlisle Truck Stop ArrestRead the Press Release
A New Jersey man was indicted by a federal grand jury in Harrisburg yesterday on charges of possessing more than 3 ounces of heroin with the intent to distribute.
United States Attorney Peter J. Smith announced that Rafael Cabrera, 35, of Passaic, New Jersey, was charged in a two count indictment with possessing at least 100 grams of heroin with the intent to distribute it and with traveling in interstate commerce to distribute the drug. Cabrera was arrested on February 11, 2013 at a truck stop in Carlisle by federal and state agents who were conducting surveillance of the location and waiting for Cabrera to arrive. A search of Cabrera and his vehicle led to the alleged seizure of the heroin.
Cabrera faces a mandatory minimum sentence of 5 years and up to a maximum of 40 years in prison if convicted and faces a potential combined maximum fine of $1.25 million.
The case was investigated by the Federal Bureau of Investigation and the Pennsylvania State Police. Prosecution of the case has been assigned to Assistant United States Attorney William A. Behe.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 40 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Moorefield Man Sentenced to Fifteen Years for Trafficking of PainkillersRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
Sixteen Others Appear for Plea and Sentencing Hearings
ELKINS, WEST VIRGINIA – United States Attorney William J. Ihlenfeld, II, announced that TIMOTHY JUSTON WIMER, age 29, of Moorefield, West Virginia, was sentenced to 188 months in prison as a result of his convictions for “Possession with Intent to Distribute Hydrocodone,” “Possession with Intent to Distribute Oxycodone,” “Possession with Intent to Distribute Methamphetamine,” and “Possession with Intent to Distribute Morphine.” The investigation began in 2012 and ended in 2013, with the criminal acts taking place in Grant and Hardy counties.
WIMER has five prior felony convictions in State Court in Hardy, Grant, and Mineral counties, including one for “Sexual Assault.” He was remanded to the custody of the United States Marshal pending designation to a federal prison.
This case was investigated by uniformed officers of the West Virginia State Police, West Virginia State Police-BCI, Federal Bureau of Investigation, the Moorefield Police Department, the Grant County Sheriff’s Office and the Hardy County Sheriff’s Office. Chief Judge John Preston Bailey imposed the sentence upon WIMER.
Sixteen others appeared before Judge Bailey and Magistrate Judge John S. Kaull for plea and sentencing hearings, as follows:
JAMES FRANKLIN FLUHARTY, age 45, of Bridgewater, Virginia, was sentenced to 57 months in prison for Possession of Pseudoephedrine to be Used in the Manufacture of Methamphetamine.” FLUHARTY, who is free on bond, will self-report to the designated Federal institution. This case was investigated by uniformed officers of the West Virginia State Police and the West Virginia State Police BCI unit.
RODOLFO VILLAGOMEZ CORREA a/k/a “CHINO,” age 33, of Buckhannon, West Virginia, was sentenced to 46 months in prison for “Possession of Firearms by an Alien Illegally in the United States.” The Court ordered that CORREA’s sentence run consecutive to any sentence he may receive in Upshur County, where he has been charged with murder. The Court also ordered that CORREA abandon to the United States Department of Homeland Security all right, title, interest and claim to 16 firearms, a counterfeit Resident Alien Card, a counterfeit Permanent Resident Card, and other items seized. CORREA was returned back to the custody of the State of West Virginia. This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI); the West Virginia State Police; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the United States Forest Service; and, the Buckhannon Police Department.
LEONARDO RAMOS RODRIGUEZ, age 36, of Petersburg, West Virginia, was sentenced to 37 months in prison for one count off “Distribution of Oxycodone” and one count of “Felon in Possession of a Firearm.” RODRIGUEZ was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI); the West Virginia State Police-Bureau of Criminal Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; uniformed officers of the West Virginia State Police; the Grant County Sheriff’s Office; and, the Grant County Probation Office.
JACK FRANCIS GIBBINS, age 36, of Moorefield, was sentenced to 37 months in prison for “Distribution of Heroin.” GIBBINS was remanded to the custody of the United States Marshal pending designation to a Federal institution.
CHRISTOPHER MICHAEL FISCHER, age 27, of Moorefield, was sentenced to 32 months in prison for “Possession of Pseudoephedrine to be Used in the Manufacture of Methamphetamine.” FISCHER, who is free on bond, will self-report to the designated Federal institution.
TONYA RENEE HAYMOND, age 28, of Romney, West Virginia, was sentenced to 31 months in prison for “Distribution of Heroin.” HAYMOND was remanded to the custody of the United States Marshal pending designation to a Federal institution.
ROGER ALLEN SEE, age 23, of Lost River, West Virginia, was sentenced to 30 months in prison for “Possession of Material to be Used in the Manufacture of Methamphetamine.” SEE, who is free on bond, will self-report to the designated Federal institution.
The GIBBONS, FISCHER, HAYMOND and SEE cases were investigated by the Hardy County Sheriff’s Office and the Moorefield Police Department.
LISHA LYNN RUNIONS, age 52, of Fisher, West Virginia, and, LISA LYNN CRITES, 37, of Moorefield, were sentenced to 5 years of probation for “Possession of Material Used in the Manufacture of Methamphetamine.” This case was investigated by the West Virginia State Police-BCI, uniformed officers of the West Virginia State Police and the Hardy County Sheriff’s Department.
MEGAN ROHRBAUGH, age 23, of Rio, West Virginia, was sentenced to 2 years of probation for “Distribution of Oxycodone.” This case was investigated by the West Virginia State Police-BCI.
TIMOTHY ALLEN HAWKS, age 20, ELIZABETH CHRISTINE SAMPSELL, age 42, COURTNEY LEE KNIGHT, age 30, and CYNTHIA MARIE TAYLOR, age 28, of Moorefield, entered pleas of guilty before Magistrate Kaull. HAWKS entered a plea to “Possession of Material to be Used in the Manufacture of Methamphetamine” and SAMPSELL, KNIGHT and TAYLOR entered pleas of guilty to ““Possession of Pseudoephedrine to be Used in the Manufacture of Methamphetamine.” HAWKS, who is in custody pending sentencing, faces up to 10 years in prison. SAMPSELL, KNIGHT and TAYLOR, who are free on bond pending sentencing, face up to 20 years in prison. This case was investigated by the Potomac Highlands Drug & Violent Crime Task Force, consisting of officers from the Federal Bureau of Investigation, and the West Virginia State Police - Bureau of Criminal Investigations and US Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI); the Grant County Sheriff’s Office, the Hardy County Sheriff’s Office and the Moorefield Police Department.
MATTHEW PAUL SELLERS, age 25, of Annapolis, Maryland, entered a plea of guilty before Judge Kaull to “Possession of Pseudoephedrine to be Used in the Manufacture of Methamphetamine.” SELLERS, who is in bond pending sentencing, faces up to 20 years in prison. This case was investigated by the West Virginia State Police and the Lewis County Sheriff’s Department.
SUSAN CHLOE RIDLEY, age 48, of Parsons, West Virginia, entered a plea of guilty before Judge Bailey to “Distribution of Pseudoephedrine.” RIDLEY, who is on bond pending sentencing, faces up to 5 years in prison. This case was investigated by agents and officers of the United States Forest Service and the Tucker County Sheriff’s Office.
The above-listed cases were prosecuted by Assistant U.S. Attorney Stephen D. Warner.
PATRICK S. CRITES, age 46, of Moorefield, was sentenced to 10 months in prison for “Transmitting Threatening Communications in Interstate Commerce.” CRITES was remanded to the custody of the United States Marshal pending designation to a Federal institiution. This case was prosecuted by Criminal Chief Shawn A. Morgan and was investigated by the United States Secret Service, as the threat was made to the White House.
Mobile Man Sentenced to Twenty Four Months Imprisonment of Firearms OffenseRead the Press Release
MOBILE, AL-- The United States Attorney, Kenyen R. Brown, announces that Kevin Alphonzo Johnson was sentenced to twenty four months imprisonment today by United States District Court Judge Callie V. Granade, after pleading guilty to being a felon in possession of a firearm in violation of Title 18 USC '922(g)(1). Johnson was previously convicted of the felony offense of Receiving Stolen Property 2nd Degree in the Circuit Court of Mobile County, Alabama, Case No. CC2001-004567, on or about August 7, 2012. The firearm that Johnson possessed was a Chinese made, Model SKS .762 caliber rifle.
The case was jointly investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Mobile County Sheriff=s Office, Narcotics Division.
Mission Woman Sentenced for Wire FraudRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, woman convicted of Wire Fraud was sentenced on December 16, 2013, by U.S. District Court Judge Roberto A. Lange.
Clarice Brave, age 51, was sentenced to 5 months in custody, 5 months of home confinement, 3 years of supervised release, a $100 special assessment to the Federal Crime Victims Fund, and $16,852.38 in restitution to Family Dollar and $5,000 in restitution to Country Pride Cooperative.
Brave was indicted by a federal grand jury on July 17, 2013, for Wire Fraud, Larceny, and Making False Statements to a Federal Agency. She pled guilty on September 9, 2013, to one count of wire fraud.
The conviction stems from incidents that occurred between August 1, 2012, and September 24, 2012, when Brave devised a rolling deposit scheme to obtain money from the Family Dollar in Mission, South Dakota. Brave took cash out of store deposit bags for personal use, and delayed taking deposits to the bank until she had enough cash from successive days to make up the difference in the bags from which she took the cash. When Family Dollar management began to suspect Brave was rolling deposits, Brave was required to fax deposit tickets, the deposit log, and the store’s daily cash receipt totals to the Family Dollar’s Loss Prevention Director in Shawnee, Kansas, on a daily basis. On September 21, 2012, Brave fraudulently persuaded a teller to issue five deposit tickets from the bank without depositing any cash into Family Dollar’s bank account. She then faxed the fraudulently obtained deposit tickets from Mission to Shawnee, Kansas, in an attempt to conceal the rolling deposit scheme.
As part of the plea agreement in the case involving Family Dollar, Brave agreed to pay $5,000 in restitution to Country Pride Cooperative. The case in which Brave was indicted on February 13, 2013, for allegedly taking monies from Country Pride Cooperative was dismissed at sentencing.
The investigations were conducted by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. The cases were prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
Brave must self-report to the U.S. Marshals Service on December 30, 2013, to begin serving her sentence.
Michigan Man Convicted of Conspiracy to Distribute Heroin in KentuckyRead the Press Release
LEXINGTION, KY - A Michigan man, who led a drug conspiracy that brought heroin into eastern Kentucky for distribution, was convicted by a federal jury.
On Tuesday, a federal jury in Lexington convicted 32 year-old Douglas Martin of one count of conspiracy to distribute controlled substances, following an hour and a half of deliberation and two days of trial. Martin was also convicted of witness tampering.
According to the evidence at trial, Martin conspired with others to obtain heroin in Detroit, Mich., and bring it back for distribution in Madison, Fayette and Bourbon Counties in Kentucky. The evidence established that, from June 2012 until March 2013, Martin conspired to distribute 2.7 ounces of heroin, which has a street value of approximately $15,000. It also established that Martin and others conspired to distribute cocaine and that Martin would live in an apartment in Richmond when he came to Kentucky.
The investigation started when officers with the Paris Police Department conducted a routine traffic stop of a vehicle, with Martin and his co-defendants, Andre Hawkins, Ameida Udousoro and Jessica Cavezza inside. The officers subsequently located several thousand dollars, in cash, on the defendants.
Udousoro and Cavezza previously pleaded guilty to their roles in the conspiracy and Hawkins remains a fugitive.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, Rodney Brewer, Kentucky State Police Commissioner, and Kevin Sutton, Chief of the Paris Police Department, jointly announced the verdict.
The investigation was conducted by Kentucky State Police, FBI and the Paris Police Department. Assistant U.S. Attorney Todd Bradbury represents the U.S. Attorney’s Office in this case.
Martin will be sentenced on March 19, 2014. He faces a maximum of 30 years in prison, for the drug conspiracy, and 20 years for the witness tampering offense. However, any sentence following conviction would come after the Court considers the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Mexican Man Charged with Illegal Re-EntryRead the Press Release
A grand jury returned a one-count indictment charging Jose Isabel Sandate-Lozano, age 30, with illegally reentering the United States following his deportation, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Sandate-Lozano is an alien who was previously removed or deported from the United States to Mexico on July 19, 2005, subsequent to a conviction for an aggravated felony.
If convicted, the defendant’s sentence will be determined by the Court after 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 and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Gregory C. Sasse, following investigation by agents of the Homeland Security Investigations of the Immigration and Customs Enforcement Agency.
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.
McLaughlin Woman Charged with Assaulting, Resisting, or Impeding Federal OfficersRead the Press Release
United States Attorney Brendan V. Johnson announced that a McLaughlin, South Dakota, woman has been indicted by a federal grand jury for Assaulting, Resisting, or Impeding two federal contract officers.
Twyla Crow Ghost, age 29, was indicted on December 10, 2013. She appeared before U.S. Magistrate Judge Mark A. Moreno on December 16, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Crow Ghost is accused of assaulting two Cheyenne River Sioux Tribal detention officers. Crow Ghost inflicted bodily injury on one of the officers while the officers were employed by the Cheyenne River Sioux Tribe Police Department under contract with the Bureau of Indian Affairs. The charge is merely an accusation and Crow Ghost is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Crow Ghost was released on bond pending trial. A trial date has not been set.
Mansfield Man Faces ChargesRead the Press Release
A grand jury returned a two-count indictment charging Cameron J. Lawhorn, 21, of Mansfield, Ohio, with one count of damage to and interference with an air navigation facility and one count of theft of government property, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Lawhorn willfully damaged, destroyed, and disabled a Federal Aviation Administration air navigation facility located in Shelby, Ohio. The indictment further alleges that Lawhorn knowingly stole Federal Aviation Administration property, including a laptop computer, multimeter, and oscilloscope.
If convicted, the defendant’s sentence will be determined by the Court after 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 and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney M. Kendra Klump following an investigation by the Federal Bureau of Investigation and the Richland County Sheriff’s Office.
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.
Manhattan U.S. Attorney Announces Indictment of Political Consultant for Defrauding the New York Democratic Senate Campaign CommitteeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, today announced that STEPHEN COLANGELO, Jr., pled guilty to two counts of securities fraud and two counts of wire fraud in connection with two separate schemes that defrauded investors out of more than $2.7 million. COLANGELO’s first scheme involved a hedge fund he controlled called the Brickell Fund, LLC (the “Brickell Fund”), and his second scheme involved three companies he created and controlled called “Hedge Community,” “Start A Hedge Fund,” and “Under the Radar SEO” (collectively, the “Business Ventures”). COLANGELO misled investors in the course of both of these schemes by making numerous misrepresentations, which included issuing fraudulent performance statements, private placement memoranda, and other business documents. COLANGELO pled guilty in Manhattan federal court before U.S. Magistrate Judge James Cott.
Manhattan U.S. Attorney Preet Bharara said: “Investors deserve fair and honest services from their money managers. Stephen Colangelo, Jr. and others like him who fraudulently pocket investor money undermine confidence in the markets.”
According to the Indictment and related court proceedings:
From March 2009 to February 2011, COLANGELO represented that he was an investment manager and solicited funds from private investors for the Brickell Fund, a purported hedge fund he operated. In the course of soliciting funds from investors, COLANGELO made numerous misrepresentations. Specifically, he told potential investors that his compensation for managing their investments in the Brickell Fund would be a nominal management fee and a certain percentage of trading profits, thus ensuring his compensation would be dependent on his trading success. In reality, COLANGELO regularly misappropriated large amounts of investor money for his own personal benefit and to support unrelated business ventures. He also regularly made false claims to investors about investment strategy and alleged profits. Based on these and other fraudulent statements and misrepresentations, COLANGELO defrauded investors out of more than $1.6 million in connection with the Brickell Fund.
From August 2009 to October 2011, COLANGELO also solicited investments in the Business Ventures. In doing so, COLANGELO represented that investment money would be used for legitimate business expenses, when in reality, he misappropriated a large amount of the investments for his own personal benefit. COLANGELO defrauded investors of well over $1.1 million in connection with the Business Ventures.
COLANGELO, 46, pled guilty to two counts of securities fraud and two counts of wire fraud. The securities fraud and wire fraud charges each carry a maximum term of 20 years in prison. The sentencing before U.S. District Judge Robert W. Sweet is scheduled for April 3, 2014 at 4:30 p.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and also thanked the Securities and Exchange Commission for its assistance.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive,
coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20
federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition
of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases
against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For
more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Steve Lee is in charge of the prosecution.
US v. Melvin Lowe Indictment
Man Using False Identity Arrested for Sex Trafficking in Miami and AustraliaRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, and Wendy A. Bashnan, Special Agent in Charge, Bureau of Diplomatic Security (DS), Miami Field Office, announce the arrest of Damion St. Patrick Baston, 36, in New York City, New York, where he was ordered detained.
Baston has been charged in Miami by indictment with one count of sex trafficking a victim by means of force, fraud, and coercion, both in the Southern District of Florida and in multiple countries around the world, including Australia, in violation of Title 18, United States Code, Sections 1591(a)(1) and 1596. Title 18, United States Code, Section 1596 provides for extraterritorial jurisdiction in human trafficking cases. The indictment charges a second count of forcible sex trafficking of a victim in the Southern District of Florida. If convicted on either count, Baston faces a mandatory minimum penalty of fifteen years in prison and a maximum penalty of life in prison.
Baston is also charged with five counts of transporting multiple individuals for prostitution, in violation of Title 18, United States Code, Section 2421, importation of an alien for prostitution, in violation of Title 8, United States Code, Section 1328, use of a passport secured by false statement, in violation of Title 18, United States Code, Section 1542, aggravated identity theft, in violation of Title 18, United States Code, Section 1028A, and three counts of money laundering, in violation of Title 18, United States Code, Section 1956. Baston, who is a Jamaican national, has also been charged with illegal reentry of an alien previously ordered removed, in violation of Title 8, United States Code, Section 1326.
The 14 count federal indictment was returned on December 12, 2013. Baston was located and arrested by DS and ICE-HSI agents in New York on December 17, 2013. Baston remains in custody and is expected in federal district court here in Miami soon.
U.S. Attorney Wifredo A. Ferrer stated, “Human trafficking is one the most deplorable crimes our office prosecutes. Law enforcement agencies are teaming up to identify, arrest and prosecute those who seek to profit at the expense of the suffering of others. Working with our dedicated law enforcement partners here and abroad we will press on with efforts to reach those who are being exploited, and prosecute those who choose to engage in this inhumane practice.”
“Sex trafficking is one of the most heinous crimes we investigate, these victims are taken advantage of on a daily basis” said Alysa D. Erichs, Special Agent in Charge, ICE-HSI. “Investigative efforts by HSI alongside our partners at the DSS and the Australian Federal Police highlight the collaborative effort within federal and international law enforcement partners to ensure international boundaries do not hinder the enforcement of justice.”
“We are thankful for our continued partnership with the international law enforcement community. A team of Miami and international DS resources worked closely with the Australian authorities to locate and apprehend Damion Baston,” said Special Agent in Charge Wendy A. Bashnan of the DS Miami Field Office. “We hope that the long awaited prosecution of Baston will provide some satisfaction to the many individuals he victimized and their families. DS’s worldwide presence at U.S. Embassies around the world allows us to work with our host country law enforcement to track and capture fugitives who have fled the U.S. to avoid prosecution.”
Mr. Ferrer commended the investigative efforts of ICE-HSI and DS, as well as the Australian Federal Police. The case is being prosecuted by Assistant U.S. Attorneys Olivia S. Choe and Roy K. Altman.
An indictment is only an accusation, and a defendant is presumed innocent unless and until proven guilty.
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.
MS-13 Members Receive Life SentencesRead the Press Release
ATLANTA - Ernesto Escobar, a/k/a Pink Panther, a/k/a Flaco, Miguel Alvarado-Linares, a/k/a Joker, and Dimas Alfaro-Granados, a/k/a Toro have been sentenced to life in prison for their roles in committing murders and attempted murders in Gwinnett and DeKalb Counties.
“The defendants sentenced today were the local leaders of the notorious MS-13 gang,” said United States Attorney Sally Quillian Yates. “These defendants upheld MS‑13’s reputation for spreading fear throughout the community by committing brazen and indiscriminate acts of violence, including killing rival gang members and suspected cooperators. They have rightfully earned their life sentences.”
“Homeland Security Investigations, in partnership with our federal, state and local law enforcement partners, have made a priority of targeting the most violent members of transnational gangs who are involved in murder and mayhem and significantly escalate violence in our neighborhoods, and these three individuals fit that bill,” said Brock Nicholson, special agent in charge of HSI Atlanta. “Our communities are now safer because these heinous criminals will spend the rest of their lives behind bars”
Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: "An investigation that helped secure life sentences for such violent offenders that have proven time and again that they have no respect for the lives of others is a very successful investigation. Such international gangs as MS-13 will continue to be the focus of a joint law enforcement effort at all levels with the goal to arrest those involved and to dismantle the organization as a whole."
According to United States Attorney Yates, the charges and other information presented in court: MS-13 is an international gang that has operated in the Atlanta area since at least 2005. During the course of this investigation, which ended in 2010, more than 75 MS-13 members have been arrested, charged, and/or deported. Members were organized into “cliques,” or groups, but they operated under the larger umbrella of MS‑13. Each clique had a leader, often referred to as “the first word,” who conducted weekly meetings. At these meetings, members discussed their crimes against rival gang members and their plans to retaliate against rivals. The clique leaders collected dues from the gang members, which they used to buy guns and post bail for jailed gang members. Clique leaders often sent money back to MS-13 leaders in their home countries of El Salvador and Honduras, and clique leaders often reported back to MS-13 leaders in their home countries about MS-13 activities in the Atlanta area.
The gang members staked out Gwinnett and DeKalb Counties as their home territory, where they committed murders, attempted murders, and armed robberies. The evidence at trial showed that the defendants committed the following crimes:
- Alvarado-Linares and Alfaro-Granados, along with another gang member, killed Lal Ko in October 2006. Ko was a fellow MS-13 member, but Alvarado-Linares, one of the gang leaders, thought that Ko was cooperating with police and ordered his murder.
- In December 2006, when another MS-13 gang member wanted to quit the gang, Alvarado-Linares and Alfaro-Granados ordered him to kill a rival gang member as a condition of leaving MS-13. On Christmas Eve 2006, that gang member, following orders, shot at a car on Highway 316 that he believed contained rival gang members. The driver, Celso Villalobos, was shot, and his passenger, Angel Gonzalez, was murdered. Angel Gonzalez was 20 years old.
- On New Year’s Eve 2006, Alvarado-Linares was at an apartment complex where he exchanged gang hand signs and insults with two members of the rival gang SUR-13. Alvarado-Linares pulled out a gun and shot the men.
- A few weeks after the New Year’s Eve incident, Alfaro-Granados got into a fight with a suspected rival gang member at a nightclub. Alvarado-Linares, Alfaro-Granados, and Escobar later returned to the club, where Escobar shot a man walking through the parking lot.
- In August 2007, Escobar got into a scuffle with two teenagers at a Shell gas station in Gwinnett County. Escobar reported the incident to the clique leader, who gave Escobar a .45 caliber semi-automatic handgun to retaliate. Escobar went back to the Shell station and shot one of the teenagers as he was painting lines in the parking lot. The victim, David Hernandez, was only 16 years old.
- In October 2007, Alvarado-Linares was in Gwinnett County and came across a suspected 18th Street member. Alvarado fired a shotgun and killed Pablo Archila-Baires. Archila-Baires was only 15 years old.
Ernesto Escobar, a/k/a Pink Panther, a/k/a Flaco, 30, of Norcross, Ga., was sentenced today to life in prison. Miguel Alvarado-Linares, a/k/a Joker, 25, of Norcross, Ga., was sentenced to life in prison on October 15, 2013, and Dimas Alfaro-Granados, a/k/a Toro, 30, of Duluth, Ga., was sentenced to life in prison on October 29, 2013. Escobar, Alvarado-Linares and Alfaro-Granados were found guilty by a jury on July 15, 2013. Parole has been abolished in the federal system.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Federal Bureau of Investigation with assistance from the U.S. Marshals Service, Gwinnett County Police Department, DeKalb County Police Department, Chamblee Police Department, and Gwinnett County Sheriff’s Office.
Assistant United States Attorneys Paul R. Jones and Kim S. Dammers and U.S. Department of Justice, Organized Crime and Gang Section, Trial Attorney Joseph K. Wheatley 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/.
Local Woman Indicted on Federal Bank Fraud and Identity Theft ChargesRead the Press Release
St. Louis, MO - MELANIE ANN MAHANEY was indicted on multiple fraud charges involving her alleged misuse of bank funds.
According to the indictment, between March 8, 2013, and April 19, 2013, defendant was recruited to impersonate car burglary victims in a bank fraud scheme. During the course of the scheme, defendant received stolen drivers licenses, social security cards, personal checks, credit and debit cards and other forms of identification which had been stolen by others from the vehicles. Using the stolen identification of one car burglary victim, defendant cashed checks stolen from other car burglary victims at banks located in the St. Louis Metropolitan Area and the Southern District of Illinois.
Mahaney, St. Louis, was indicted by a federal grand jury on two felony counts of bank fraud and two felony counts of aggravated identity theft.
If convicted, each count of bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1 million and each count of aggravated identity theft carries a mandatory imprisonment of 2 years and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the U.S. Postal Inspection Service. Assistant United States Attorney Tracy Berry handled the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Local Venture Capitalist Sentenced on Tax ChargesRead the Press Release
St. Louis, MO -- BURTON DOUGLAS MORRISS was sentenced to sixty months on tax evasion charges associated with his evasion of taxes on millions of dollars of income he earned between 2006 and 2009. According to his plea agreement, the tax liability Morriss attempted to evade in 2007 was $2,888,483. The total tax due and owing by Morriss for all tax years is $5,559,386.
"Tax evasion is not a victimless crime, said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. "We all pay when others swindle the government."
According to court documents, Morriss was a venture capitalist living in St. Louis County. Morriss admitted that, through his work, he was versed in tax laws. As a venture capitalist, he would discuss tax consequences of buying and selling investments to sophisticated investors. Moreover, he had been dealing with advisers and lawyers regarding his personal taxes for many years before 2006.
For the tax year 2007, which is the tax evasion count to which he pleaded guilty, Morriss earned substantial income from his venture capital activities. In order to reduce his tax liability for that year, he claimed $18,160,613 in losses associated with a number of entities, including Morriss Holdings, MIC Aircraft, Tech Aircraft and MIC Real Estate. These entities were established as single-member limited liability companies for Morriss' mother. Additionally, Mrs. Morriss had already claimed these passive losses for her own benefit in previous years. In addition to these 2007 tax losses, Morriss admitted to evading millions more in taxes on income from his venture capital companies in subsequent tax years.
Morriss did not timely file tax returns for 2006, 2007, 2008 and 2009. On June 27,2011, Morriss filed the delinquent 2007 tax return that is the subject of the guilty plea, along with delinquent 2008 and 2009 tax returns.Morriss, Creve Coeur, MO, pled guilty in August to one felony count of tax evasion, and appeared today for sentencing before United States District Judge Rodney Sippel.
Morriss' case was prosecuted at the same time as the civil enforcement action of Securities and Exchange Commission v. Burton Douglas Morriss was pending in the Eastern District of Missouri. On August 13, 2013, United States District Judge Carol E. Jackson ordered that Morriss, among other things, be prohibited from acting as an officer or director of certain companies issuing securities. The SEC matter was filed in 2012 in the wake of the collapse of the Acartha Group, LLC and other venture capital companies run by Morriss. The SEC complaint alleged that Morriss had fraudulently transferred millions of investor dollars to himself for personal use. In addition to the director/officer bar, the SEC will ask the Court to order disgorgement of ill-gotten gains and civil penalties.
In addition to the SEC, this case was investigated by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney's Office.
Local Appraiser Pleads Guilty to Conspiracy to Commit Bank FraudRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Darryl Glasco, 54, of North Tonawanda, N.Y., a licensed New York State appraiser, pleaded guilty to conspiracy to commit bank fraud. The charge carries a maximum penalty of 30 years in prison, a fine of $ 1,000,000, or both.
Assistant U.S. Attorney Kathleen A. Lynch, who is handling the case, stated that the defendant conspired with James P. Vasiliou Jr., a borrower, to submit a false appraisal to JP Morgan Chase Bank to refinance a property located at 16 Blackley Court in Lockport, N.Y. The false statements resulted in an inflated fair market value for the property and were used to obtain approval of the loan.
Vasiliou pleaded guilty to bank fraud and is awaiting sentencing.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The plea is the result of an investigation by the Mortgage Fraud Task Force of WNY, led by the U.S. Attorney’s Office, which includes agents and personnel from the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast, and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig.Lehigh County Couple Charged with Passing Counterfeit U.S. Currency in Five Pennsylvania CountiesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Mohammed Abughaniyeh, age 29, of Laury’s Station, Pennsylvania, and Stacy Miller, age 25, of Whitehall, Pennsylvania, were indicted yesterday by a federal grand jury in Harrisburg and charged with Uttering Counterfeit Obligations of the United States.
According to U.S. Attorney Peter J. Smith, in October 2013 and November 2013, Abughaniyeh and Miller allegedly passed counterfeit $100 bills, at businesses in Mifflin, Blair, Clearfield, Indiana, and Bedford Counties. If convicted, they each face up to 20 years’ imprisonment and a fine of up to $250,000.
This case is being investigated by the United States Secret Service and the Pennsylvania State Police and is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.Leader of Detroit-based Identity-theft Ring SentencedRead the Press Release
Organizer of Traveling Fraud Scheme to Serve 10.5 Years in Federal Prison
GRAND RAPIDS, MICHIGAN – The lead defendant in a prosecution that resulted in felony convictions of eight Detroit residents for identity theft, wire fraud, and conspiracy was sentenced today by Chief U.S. District Judge Paul L. Maloney. Charles J. Finley, 26, will serve 10.5 years in federal prison for his crimes, and was also ordered to pay restitution of $95,489 to the victims of the crime.
The investigation, which was conducted by the Grand Rapids office of the U.S. Secret Service, began in May 2012 after loss-prevention investigators of Meijer corporation became aware that teams of identity thieves were visiting stores in the Lansing and Grand Rapids area and purchasing high-value Meijer gift cards using credit cards that had been re-encoded with account data from compromised credit card accounts. The in-store cards were then used to purchase large numbers of expensive electronic devices such as iPads, iPhones, and laptop computers. Already familiar with similar “carding” schemes based on previous successful investigations, through which it had developed a close working relationship with Meijer loss-prevention specialists, the Secret Service opened an investigation that eventually identified most of the participants in this latest appearance of the fraud. The subsequent prosecution resulted in the following sentences: Sharonique S. Pointer, 22, will serve 24 months; Mark A. Houston, Jr., 24, will serve 36 months; Donald D. Peterson, Jr., 26, will serve 33 months; Gary K. Smith-Brown, Jr., 27, will serve 36 months; Adrian R. Evans, 26, will serve 75 months; and Dewain J. Clark, 29, will serve 24 months. Each defendant was also ordered to pay restitution to the victims of the offenses. Deaunte G. Finley, the last defendant to be arrested and convicted, is scheduled to be sentenced on 13 January 2014.
Commenting on the case, U.S. Attorney Patrick A. Miles, Jr., stressed his Office’s commitment to pursue all forms of identity-theft, which he described as one of the “most serious, and growing, forms of white-collar crime.” Said Miles, “identity theft doesn’t just cause financial harm, it damages the hard-earned reputations of productive members of society. Identity thieves who think that West Michigan is fertile ground to commit this crime are making a serious mistake. These defendants learned that fact the hard way.”
Resident Agent-in-Charge Kim Cheatle, U.S. Secret Service, echoed Miles. “This investigation demonstrated the commitment the Secret Service has to partner with private industry to pursue financial crimes cases. This case in particular had a significant community impact. We are thankful for the assistance rendered by the Meijer Corporation, and the relationship we have with the U.S. Attorney’s Office, which culminated in the successful prosecution of this group.”
The case was prosecuted by Assistant U.S. Attorney Hagen W. Frank, who leads the U.S. Attorney’s Office identity-theft task force.
END
Key West Man Sentenced to Thirty Years on Drug ChargesRead the Press Release
TALLAHASSEE, FLORIDA – United States Attorney Pamela C. Marsh announced thatMichael Clifford Watson, 32, of Key West, Florida, was sentenced today by United States District Judge Robert Hinkle to serve 360 months in prison for drug conspiracy charges. Watson will serve an eight-year term of supervised release after his incarceration.
Watson was arrested at a Tallahassee apartment on November 19, 2012, based upon outstanding drug charges from Key West. Six ounces of cocaine, digital scales, and $2,760 were seized at the time of his arrest. At Watson’s sentencing, the Court determined that he was distributing oxycodone in addition to cocaine in Tallahassee. Watson pled guilty in October 2013, on the date set for jury selection.
Watson was sentenced as a career offender. He was convicted in 2001 of possession of cocaine with intent to sell, and in 2010 of sale of cocaine, both times in Key West. According to court proceedings, Watson has served three terms in the Florida Department of Corrections.
U.S. Attorney Marsh credited the success of this prosecution to the joint efforts of the Tallahassee Police Department, the U.S. Drug Enforcement Administration, the U.S. Marshal’s Service, and the Key West Police Department.
The case was prosecuted by Assistant United States Attorney Michael T. Simpson.
KC Man Sentenced to 20 Years for Illegal FirearmRead the Press Release
Project Ceasefire
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for illegally possessing a firearm.
Dennis T. Hart, 55, of Kansas City, was sentenced by U.S. District Judge Beth Phillips to 20 years in federal prison without parole.
On Sept. 17, 2013, Hart pleaded guilty to being a felon in possession of a firearm. Hart was arrested after police officers responded to a report of an outside disturbance at about 12:56 p.m. at 29th and Prospect in Kansas City, Mo., on April 7, 2013, following an altercation between Hart and another person. After punching the victim in the face, Hart pulled up his sweater to show the victim he had a loaded Lorcin .380-caliber pistol tucked into his waistband. When the victim drove away, Hart got on a bus and left.
Officers later located Hart along the bus route. While struggling with the officers during his arrest, Hart pulled out the firearm and dropped it on the ground.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Hart has three prior felony convictions for possessing a controlled substance, a prior felony conviction for distributing a controlled substance, two prior felony convictions for forgery, two prior felony convictions for assault, and prior felony convictions for tampering and fraud.
This case is being prosecuted by Assistant U.S. Attorney Bruce E. Clark. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Ceasefire
Project Ceasefire, launched in October 1999, is a cooperative initiative by federal and local law enforcement and the Kansas City Crime Commission that targets for federal prosecution persons who unlawfully use or possess firearms.Justice Department Reaches Settlement with State of New Hampshire to Expand Community Mental Health Services and Prevent Unnecessary InstitutionalizationRead the Press Release
The Justice Department announced today that the United States and a coalition of mental health advocacy organizations have entered into a comprehensive settlement agreement with the state of New Hampshire that will transform New Hampshire’s mental health system by significantly expanding and enhancing mental health service capacity in integrated community settings.
The settlement agreement will provide people with serious mental illness in New Hampshire with robust community alternatives that will reduce or eliminate the need for hospitalization. Individuals who receive expanded services in New Hampshire will have fewer visits to emergency rooms and will avoid unnecessary institutionalization at state mental health facilities, including New Hampshire Hospital and the Glencliff Home.
“Today’s agreement realizes the promise of the Americans with Disabilities Act for people with serious mental illness in New Hampshire,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “It will better ensure that effective community services will get to the people most in need when and where they need services – in their homes and communities. These services will help people with mental illness avoid and respond to crises without escalating them and without giving up their important connections to their communities. This agreement is also a testament to the vision and leadership of Governor Maggie Hassan and Attorney General Joe Foster.”
“The settlement of this landmark federal civil rights lawsuit marks a major step forward in New Hampshire’s treatment of one of its most vulnerable populations – those who suffer from mental illness,” said U.S. Attorney John P. Kacavas for the District of New Hampshire. “I commend the progressive leadership of Governor Hassan and New Hampshire Attorney General Joe Foster and their respective staffs, without whose efforts and will this achievement would not have been possible.”
The agreement requires the state to create and expand services over the next six years. The state will: create new mobile crisis teams and new community crisis apartments in Manchester, Concord and Nashua; expand and enhance Assertive Community Treatment team services, which will provide state-wide coverage for at least 1,500 people; add hundreds of new supported housing units and work to create community alternatives for people with complex health care needs; and expand effective supported employment services for hundreds of people. An independent expert reviewer will evaluate the state’s compliance with the agreement and will issue public reports on the state’s ongoing implementation efforts.
The settlement resolves outstanding issues in a 2012 federal class action lawsuit brought under the Americans with Disabilities Act (ADA) – Amanda D. v. Hassan; United States v. New Hampshire. The ADA and the Supreme Court’s landmark decision in Olmstead v. L.C. affords individuals with disabilities the right to receive services in the most integrated setting appropriate to their needs, and today’s agreement will help ensure that adults with serious mental illness in New Hampshire can exercise that right.
In recent years, the Justice Department’s Civil Rights Division has entered into a number of statewide ADA/Olmstead settlements, including comprehensive agreements with Georgia, Delaware, Virginia, North Carolina, and now New Hampshire, that give thousands of persons with disabilities new and meaningful opportunities to live in and be active members of their communities – outside of segregated institutional settings. Visit www.ada.gov/olmstead to learn more about these settlement agreements, the Olmstead decision, the ADA, and other laws enforced by the Civil Rights Division.
The parties’ proposed class action settlement agreement must still be approved by U.S. District Court Judge Steven J. McAuliffe, who is presiding over the lawsuit. In September 2013, the Court certified a class of plaintiffs that includes all persons with serious mental illness who are unnecessarily institutionalized in NHH or Glencliff or who are at serious risk of unnecessary institutionalization in these facilities. The parties have proposed that appropriate notice of the settlement be provided to class members, that they be able to submit concerns or comments to the proposed settlement by the end of January 2014, and that the Court schedule a fairness hearing on or after Feb. 17, 2014.The New Hampshire settlement agreement was realized due to the efforts of the following attorneys in the Special Litigation Section: Deputy Chief Judy C. Preston and Trial Attorneys Richard J. Farano, Deena S. Fox, Katherine V. Houston and Alexandra L. Shandell. In addition, the Civil Rights Division received ongoing support and assistance from Assistant U.S. Attorney John J. Farley for the District of New Hampshire.
Justice Department Reaches Settlement with Fort Davis State Bank to Resolve Allegations of Lending DiscriminationRead the Press Release
The Justice Department announced today that Fort Davis State Bank, based in Fort Davis, Texas, will implement uniform pricing policies, conduct employee training and pay $159,000 as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of national origin.
The settlement, which is subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Western District of Texas. The complaint alleges that Fort Davis State Bank violated the Equal Credit Opportunity Act (ECOA) by charging higher prices for unsecured consumer loans to Hispanic borrowers than to similarly qualified non-Hispanic borrowers.
Fort Davis State Bank is a community bank with three branches that for many years has been a significant presence in the local Hispanic community.
“This settlement ensures that Hispanic borrowers who paid more for their loans will be properly compensated,” said Acting Assistant Attorney General Jocelyn Samuels for the department’s Civil Rights Division. “We commend Fort Davis State Bank’s commitment to meeting the special lending needs of all individuals within its community on an equal basis and to working cooperatively with the Justice Department in reaching an appropriate resolution of this case.”The lawsuit originated from a 2011 referral to the Department by the Federal Deposit Insurance Corporation (FDIC). Fort Davis State Bank is regulated by the FDIC.
The proceeds of the settlement will be used to compensate Hispanic victims of Fort Davis State Bank’s alleged discrimination. Under the proposed settlement, a list of individual victims will be identified by the United States and receive notification of eligibility from the bank, and the department will monitor the compensation process.Prior to the settlement, Fort Davis State Bank implemented uniform pricing policies that substantially reduced the discretion of its loan officers to vary a loan’s interest rate from the price it set based on borrower’s objective credit-related factors. Today’s settlement requires Fort Davis State Bank to keep its improved policies in place for at least the next three years, as well as to continue to monitor its lending for signs of discrimination and provide monitoring reports to the United States.
The 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 29 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The settlements in these matters provide for nearly $700 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 FDIC 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 a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, along 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.justive.gov/fairhousing .
Justice Department Announces Fair Housing Settlement with W.V. DeveloperRead the Press Release
The Justice Department announced today that developer Douglas Pauley and entities affiliated with him have agreed to pay $110,000 and make all retrofits required to remove accessibility barriers at 30 apartment complexes, involving more than 750 units, in West Virginia that were developed through the federal government’s Low-Income Housing Tax Credit program. The parties’ agreement will settle the United States’ claims that defendants violated the Fair Housing Act by building the complexes with a variety of features that made them inaccessible to persons with disabilities.
Under the terms of the parties’ agreement, Pauley, as general partner of 30 limited liability partnerships, must take extensive actions to make the complexes accessible to persons with disabilities. These corrective actions include replacing cabinets in bathrooms and kitchens to provide sufficient room for wheelchair users, reducing door threshold heights, replacing excessively sloped portions of sidewalks and installing properly sloped curb ramps that allow persons with disabilities access to sidewalks from the parking areas. In addition, the defendants will pay $100,000 to establish a settlement fund for the purpose of compensating disabled individuals impacted by the accessibility violations and $10,000 as a civil penalty.
“The Fair Housing Act protects the rights of persons with disabilities to have equal opportunities to enjoy the housing of their choice,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division . “The Justice Department is strongly committed to the enforcement of the fair housing laws. It is especially important that multi-family properties developed using federal programs are designed to provide accessible and affordable housing to those who need it the most.”
“When developers and building professionals fail to design and construct homes with the required accessibility features, we will vigorously enforce the law," said U.S. Attorney R. Booth Goodwin for the Southern District of West Virginia.
Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement. Notices of the settlement and a list of subject properties will be published in the Charleston Gazette. Persons who believe they were subjected to unlawful discrimination at one of those properties either when they lived there or considered living there should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9993 or e-mail the Justice Department at [email protected]The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact The Department of Housing and Urban Development at 1-800-669-9777.
International Arms Smuggler Sentenced to 180 Months in PrisonRead the Press Release
Siarhei Baltutski, aka Sergey Boltutskiy, 41, of Minsk, Belarus, was sentenced today to serve 180 months in prison for conspiracy to violate the Arms Export Control Act, conspiracy to violate the International Emergency Economic Powers Act and conspiracy to commit money laundering.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting Assistant Attorney General John Carlin of the Justice Department’s National Security Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania made the announcement.
Baltutski pleaded guilty on Jan. 25, 2013. In addition to the prison term, U.S. District Court Judge Paul S. Diamond of the Eastern District of Pennsylvania ordered Baltutski to serve three years of supervised release.
Between Jan. 1, 2008, and Sept. 21, 2011, Baltutski organized a network of buyers in the United States to obtain and illegally export to Belarus high-tech military hardware such as Scorpion Thermal Weapon Sights, ThOR 2 Thermal Imaging Scopes, Thermal-Eye Renegade 320’s, and other night vision targeting devices. During the course of the conspiracy, Baltutski and his associates illegally exported hundreds of these items. Baltutski then arranged for hundreds of thousands of dollars to be secretly wired, via offshore shell companies, to purchase these items, to pay for shipping, and to pay his network of buyers.
The Arms Export Control Act and the International Emergency Economic Power Act prohibit the export of high-tech military technology. Keeping this technology out of the hands of current and potential adversaries is critical to national interest and the safety and success of U.S. service members in combat.
This case was investigated by the U.S. Immigration and Customs Enforcement Homeland Security Investigations and the FBI. The case was prosecuted by Trial Attorney Jerome Maiatico of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Robert Livermore of the Eastern District of Pennsylvania, with assistance from Trial Attorney David Recker of the National Security Division’s Counterespionage Section.Illinois Woman Pleads Guilty in Federal Court to False PersonificationRead the Press Release
PANAMA CITY, FLORIDA– Adrienne Eve Williams, 32, of Wexford, Illinois, pleaded guilty today in federal court to falsely personifying an officer or employee of the United States.
During the plea hearing, Williams admitted that between October 2012 and April 2013, she impersonated Northern District of Florida United Stated District Judge Richard Smoak, United States Attorney Pamela C. Marsh, and a certified legal assistant when she drafted fraudulent legal documents that pertained to a pending civil case and were allegedly signed by Smoak, Marsh, and the legal assistant.
Williams is currently scheduled to be sentenced in federal court on March 5, 2014, in Panama City. She faces a term of imprisonment of up to three years, followed by a term of one year of supervised release, and a fine of up to $250,000.
This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Katy Risinger.
Holabird Woman Charged with Wire FraudRead the Press Release
United States Attorney Brendan V. Johnson announced that a Holabird, South Dakota, woman has been indicted by a federal grand jury for Wire Fraud.
Frances Smith, age 68, was indicted on November 13, 2013. She appeared before U.S. Magistrate Judge Mark A. Moreno on December 16, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that from 2009 to the present, Smith and two others organized and conducted a fraudulent investment scheme involving wire fraud.
The charge is merely an accusation and Smith is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internal Revenue Service. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Smith was released on bond pending trial. A trial date has not been set.
Health Care Clinic Owner Sentenced<br /> for Role in $7 Million Medicare Fraud SchemeRead the Press Release
The owner of a Miami home health care company was sentenced to serve 235 months in prison today for her participation in a $7 million health care fraud scheme involving defunct home health care company Anna Nursing Services Corp.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Dora Moreira, 46, was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to her prison term, Moreira was sentenced to serve three years of supervised release and ordered to pay $6,928,931 in restitution.
In October 2013, Moreira was convicted by a jury of one count of conspiracy to commit health care fraud, one count of conspiracy to defraud the United States and receive and pay health care kickbacks, one count of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering and five counts of money laundering.
Moreira was the owner and operator of Anna Nursing, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.According to evidence presented at trial, Moreira operated Anna Nursing for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.
Moreira paid kickbacks and bribes to patients, negotiated and interacted with patient recruiters, and coordinated and oversaw the submission of fraudulent claims to the Medicare program. Moreira also laundered money received from Medicare in order to conceal her financial transactions and generate cash needed to pay kickbacks to patients, patient recruiters, and others in return for assisting her in the fraudulent scheme at Anna Nursing.
From approximately July 2010 through approximately May 2013, Anna Nursing was paid approximately $7 million by Medicare for fraudulent claims for home health services that were not medically necessary and/or not provided.
This case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case was prosecuted by Assistant Chief Benton Curtis and Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.govGrand Island Man Convicted of Receipt of Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced today that following a 3 day trial in United States District Court, a jury found James B. Haugh, age 57, guilty of receiving and distributing child pornography. Haugh, a resident of Grand Island, Nebraska, faces imprisonment of at least 5 years and a maximum of 20 years, a fine of $250,000, and a term of supervised release after imprisonment of at least 5 years and a maximum life term of supervision. In addition, United States District Court Judge John M. Gerrard ordered that the property used to commit the crime be forfeited to the United States.
Haugh came to the attention of investigators of the Nebraska Attorney General’s Office through a proactive investigation conducted by the Nebraska Attorney General into the receipt and distribution of child pornography through file sharing software. Investigators used automated software to determine that a computer utilizing a specific IP address was sharing child pornography through the Internet.
The investigation led to the execution of a search warrant on December 28, 2012, at Haugh’s residence in Grand Island, Nebraska. A forensic examination of a computer and other storage media seized at the residence revealed numerous videos child pornography that had been received and distributed between January 3, 2009 and December 28, 2013.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.This case was investigated by the Nebraska Attorney General’s Office.
Georgia Aircraft Restorer settles dispute with Federal Authorities over removing rare aircraft parts from Alaska Public LandRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that an aircraft restoration company based in Douglas, Georgia, reached a settlement agreement for unauthorized use of public lands in Alaska.
B-25 Group, LLC, a commercial aircraft restoration company, led by Aircraft Restoration Specialist Edward Thomas Reilly Jr. has paid the U.S. Bureau of Land Management (BLM) $55,000 to conclude a five year investigation surrounding the unauthorized removal of parts from a historic F-82 crash site located south of Fairbanks, Alaska.
The F-82, serial number 46-497, took off with two other F-82 aircraft from Ladd Air Force Base (AFB) (currently U.S Army Garrison Fort Wainwright) on January 16, 1950, for local practice of aerial interceptions. During the flight 46-497 crashed on the Tanana Flats near Fairbanks, killing both military service members on-board.
During July 2008, salvagers affiliated with B-25 Group located and removed parts from the crash site without authorization from BLM, the agency that manages federally owned lands. B-25 Group initially asserted the parts had been lawfully acquired from a salvage yard in Fairbanks. Although the U.S. Air Force had formally abandoned ownership of the remains of all USAF aircraft which had crashed prior to November 1961, Air Force and public land policy requires salvagers to obtain permission and coordinate salvage plans with the owner of the land. In the case of this F-82 aircraft, the land owner is the U.S. Department of the Interior, Bureau of Land Management.
The settlement agreement provides BLM with $50,000 for archeological work in recovering the remainder of this historic aircraft. B-25 Group has also agreed to provide patterns and specifications for the parts it recovered from 46-497 and built into its P-82 currently undergoing restoration.
Ms. Loeffler commends the U.S. Bureau of Land Management, Department of the Interior, for the investigation of this case. In addition to the BLM, the Federal Bureau of Investigation and U.S. Air Force Office of Special Investigations also are to be commended for their efforts associated with the investigation of this case.
According to Assistant U.S. Attorney Stephen Cooper, the additional $5,000 was assessed as a civil penalty and will be used by BLM to further its efforts to protect historic aviation properties in the State of Alaska.Four Defendants in Tax Fraud Scheme Sentenced to PrisonRead the Press Release
PANAMA CITY, FLORIDA — United States Attorney Pamela C. March announced the sentencing of four defendants by United States District Judge Richard Smoak today.
Wilson Calle, 55, of New York, New York, Blaine Johnston, 62, of Marianna, Florida, Wilfredo Rodriguez, 53, and Diana Gonzalez, 63, both of Miami, Florida, were all sentenced today, based on charges brought against them by the U.S. Attorney’s Office, alleging various federal tax violations. During a federal trial in September, Calle and Johnston were found guilty by a federal jury of conspiring to defraud the United States by filing, or assisting others in filing, false federal income tax returns, and multiple counts of filing false federal income tax returns. Rodriguez was found guilty by the jury of filing a false federal income tax return seeking a false and fraudulent refund. Gonzalez had previously entered a guilty plea to the charge of conspiracy to defraud the United States by filing, or assisting others in filing, false federal income tax returns seeking false and fraudulent refunds.
The sentences imposed today by Judge Smoak for each defendant are as follows:
- Wilson Calle was sentenced to 78 months in prison and was ordered to pay restitution to the Internal Revenue Service in conjunction with other defendants in the amount of $245,747.32;
- Blaine Johnston was sentenced to 78 months in prison and was ordered to pay restitution to the Internal Revenue Service in conjunction with other defendants in the amount of $245,747.32;
- Wilfredo Rodriguez was sentenced to 27 months in prison and was ordered to pay restitution to the Internal Revenue Service in the amount of $160,490.93; and
- Diana Gonzalez was sentenced to 63 months in prison and was ordered to pay restitution to the Internal Revenue Service in conjunction with other defendants in the amount of $245,747.32.
In announcing the sentence imposed by the court, United States Attorney Marsh said, “In these difficult economic times, tax refund fraud is especially harmful to our communities and our nation. It harms the government, as well as every honest taxpayer who dutifully pays taxes. We will continue to aggressively pursue those who defraud and illegally manipulate the tax system, especially those individuals who concoct schemes to submit false tax returns and assist others in doing so.”
During the jury trial, the prosecutors presented evidence that, between 2008 and 2009, the defendants prepared and filed fraudulent tax returns seeking more than $19 million in refunds. By using an obscure IRS Form 1099-OID, the defendants falsely reported that creditors of the defendants and their clients had withheld large amounts of federal income taxes and asserted that the creditors had paid those amounts over to the IRS. In doing so, the defendants fraudulently reported debts they owed as income tax withholdings. As a result of the fraudulently overstated income tax withholding, the tax returns filed on behalf of the defendants or their clients claimed large refunds, to which they were not entitled.
The case was prosecuted by Assistant U.S. Attorneys J. Ryan Love and Randall J. Hensel.Former Vice President of Alberici Constructors and Subcontractor Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO - CLONE JEFFERSON OLIVER was sentenced to 60 months in prison for his participation in a scheme to defraud Alberici Constructors, Inc. by inflating invoices.
Oliver, Apollo Beach FL, former vice-president of construction at St. Louis-based Alberici, pled guilty to six counts of mail fraud, wire fraud and money laundering last September and appeared today for sentencing before United States District Judge Catherine D. Perry.Sybil Smith, Special Agent in Charge of IRS Criminal Investigation said, “This is yet another example of multiple agencies working together with our financial fraud investigators to dismantle a sophisticated fraud scheme.”
According to court documents, Oliver was the project manager for Alberici on a project to build a water treatment plant in Arlington County, Virginia. Work on the project began in September 2006 and the cost of the project was $238,000,000. Oliver and Kenneth Marc Simmons, a subcontractor on the project, participated in a scheme to defraud Alberici through the preparation and submission of inflated invoices and false change orders for materials provided to the project by Simmons' business, Industrial and Municipal Supply (IMS). When IMS received payment on the bad invoices, Simmons kept a share and then forwarded money in the nature of kickbacks to Oliver. Simmons made many of the payments to a corporation formed by Oliver called Advanced Construction Solutions, which had the same initials (ACS) as another supplier to the Arlington project, American Construction Services. The court document refers to Oliver's company as the "fake ACS" while the latter company is referred to as the “real ACS.” Oliver admitted that, in the scheme to overpay IMS, Alberici was overbilled in the amount of $4.8 million from 2006 through 2011.
The real ACS provided welding services to the project. At Oliver's direction the owner of the real ACS billed Alberici for piping actually supplied by IMS in a situation where the real ACS provided only welding services on that piping. IMS invoiced the real ACS for that piping through inflated invoices of approximately $2,000,000. The real ACS included those billings in the invoices it submitted to Alberici for payment.Oliver will be liable to pay Alberici the full $6.8 million in restitution. He also agreed that property and assets he acquired with the stolen money would be forfeited. This includes two houses in Florida (one in Apollo Beach and one in Zephyrhills), a diamond ring with platinum mounting, a 2010 Mercedes Benz vehicle, a 2007 Sea Ray boat, two SeaDoo Bombardier water craft and several bank accounts.
Co-defendant Kenneth Marc Simmons, La Grange GA, pled guilty in September to two felony counts of mail fraud and two felony counts of wire fraud and was sentenced yesterday to 24 months prison and ordered to pay restitution of $4.8 million.
This case was investigated by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation. Assistant United States Attorneys Anthony Franks and Richard Finneran handled the case for the U.S. Attorney’s Office.
Former Stock Broker Pleads Guilty in Manhattan Federal Court to Insider Trading ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DAVID J. WEISHAUS, a former stock broker at a securities trading firm (“Securities Trading Firm-1”), pled guilty today in Manhattan federal court to charges arising from his involvement in an insider trading scheme. The alleged scheme involved the misappropriation of material, non-public information (“Inside Information”) concerning IBM’s acquisition of a software company, SPSS, Inc., in 2009. WEISHAUS was charged in November 2012, and pled guilty today before U.S. District Judge Andrew L. Carter, Jr., pursuant to a cooperation agreement.
According to the Indictment to which WEISHAUS pled guilty, statements made during the plea proceeding, and other court documents:
The Inside Information concerning IBM’s acquisition of SPSS originated from a corporate lawyer who was part of the legal team that represented IBM in the transaction (“Attorney-1”) in 2009. On May 31, 2009, Attorney-1 shared Inside Information concerning the transaction, including the names of the parties and the fact that IBM was going to acquire SPSS for a significant premium over its market price, with his close friend, Trent Martin, a former research analyst at an international financial services firm. The information was shared in confidence and, based on their longstanding history of sharing confidences, Attorney-1 expected that Martin would not share the information or use it to trade.
However, in June and July 2009, Martin bought SPSS common stock and call option contracts based on the Inside Information he was given by Attorney-1 and, in turn, shared the tip with his roommate, Thomas Conradt, who worked as a stock broker at Securities Trading Firm-1. In June and July 2009, Conradt bought SPSS common stock and tipped WEISHAUS, his co-worker at Securities Trading Firm-1, who also bought SPSS common stock and call options. Conradt also tipped his co-workers at Securities Trading Firm-1 (“CC-1 and CC-2”), who then bought SPSS call option contracts. When IBM announced its acquisition of SPSS on July 28, 2009, the share price of SPSS common stock rose by 41% in one day. Thereafter, Martin, Conradt, WEISHAUS, CC-1, and CC-2 sold their SPSS positions, yielding total profits of approximately $1 million.
WEISHAUS, 33, of New York, New York, pled guilty to one count of conspiracy to commit securities fraud and one count of securities fraud. The conspiracy count carries a maximum sentence of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million. As part of his plea agreement, WEISHAUS agreed to forfeit his share of the proceeds obtained from the offense. He is scheduled to be sentenced by Judge Carter on April 25, 2014, at 3:15 p.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission. Mr. Bharara noted that the investigation is continuing.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive,
coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20
federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition
of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases
against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For
more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John T. Zach and Telemachus P. Kasulis are in charge of the prosecution.
U.S. v. Thomas C. Conradt and David J. Weishaus Indictment 12 Cr 887