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11 February 2014
Six Defendants Charged in Manhattan Federal Court for Jamaican Lottery Telemarketing Fraud Scheme Targeting Elderly U.S. CitizensRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, the Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that NADEISHA BLAKE, RASHINA WATSON, CRYSTAL MOSS, KIMONA PETERKIN, MELISSA BLAKE, and SOPHIA BLAKE were arrested today for allegedly engaging in a lottery telemarketing fraud scheme that obtained over $400,000 from elderly victims in the United States between 2010 and March 2013. Five of the defendants – NADEISHA BLAKE, MOSS, PETERKIN, MELISSA BLAKE, and SOPHIA BLAKE – were arrested this morning in New York, and will be presented and arraigned in Manhattan federal court this afternoon before U.S. Magistrate Judge Andrew J. Peck. WATSON, the sixth defendant, was arrested this morning in Bladensburg, Maryland, and will be presented in federal court in Maryland this afternoon.
U.S. Attorney Preet Bharara said: “As alleged, the defendants sought out and preyed on the elderly through their lottery telemarking scam. This Office will aggressively pursue and prosecute fraudsters who seek to exploit our citizens for financial gain. Thanks to the cooperative efforts of law enforcement, both here and abroad, this alleged international fraud scheme was uncovered, and the defendants will now be made to face justice. Citizens should be wary of these types of fraudulent lottery schemes that sound too good to be true.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Foreign lotteries prey upon trusting individuals who believe they have won a large prize. Not only are they illegal, but those who choose to participate run the risk of criminal charges for their involvement, like these alleged defendants. Postal Inspectors will bring to justice anyone who uses the mail for their illegal enterprise, both foreign and domestic.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:
The defendants participated in a fraudulent scheme in which dozens of elderly victims in the United States were informed that they had won substantial cash prizes in an international sweepstakes lottery, but that in order to claim these prizes, they first needed to pay tens of thousand dollars in fees and taxes. In fact, there was no sweepstakes lottery and the victims never received any cash prize, even after victims sent cash and checks totaling up to $100,000 each to the defendants and their co-conspirators in Jamaica.
As part of this scheme to defraud, the defendants worked with several co-conspirators in Jamaica. The Jamaican co-conspirators bought lists containing information about elderly Americans, called them, and informed them that they had won the lottery. All the victims had to do to get their prizes, according to the Jamaican co-conspirators, was to send payments for certain “taxes” and “fees.” The victims were then instructed to send the money to the defendants by wire transfer or U.S. mail. Victims who sent money were often contacted again by the Jamaican co-conspirators and instructed to send additional money in order to claim their prizes. After receiving money from the victims, the defendants transmitted the funds to their Jamaican co-conspirators either through wire transfers or by carrying cash to Jamaica.
All of the defendants are charged with one count of conspiracy to commit mail and wire fraud, one substantive count of mail fraud, and one substantive count of wire fraud, which each carry a maximum sentence of 20 years in prison. A chart containing each defendant’s age and residence information is attached. The case is assigned to U.S. District Judge Victor Marrero.
The investigation into the lottery telemarketing fraud scheme is being conducted in New York by the USPIS, in cooperation with the Jamaican Constabulary Force (“JCF”). Mr. Bharara praised the investigative work of the USPIS and the JCF, and expressed his gratitude to the Office of International Affairs, United States Department of Justice Criminal Division, and the Consumer Protection Branch of the United States Department of Justice Civil Division for their cooperation in the investigation.
This case is being prosecuted by the Office’s General Crimes Unit. Assistant United States Attorneys Megan Gaffney and Tatiana R. Martins are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty
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U.S. v. Nadeisha Blake, et al. Indictment PR
Rochester Man Sentenced on Child Pornography ChargesRead the Press Release
ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced that Richard Bailey, 55, of Rochester, N.Y., who was convicted of distributing and receiving child pornography, was sentenced to 96 months in prison by U.S. District Court Judge Charles J. Siragusa.
Assistant U.S. Attorney John J. Field, who handled the case, stated that Bailey used peer-to-peer software to obtain and distribute images of child pornography. The defendant avoided detection by stealing other people’s wireless internet connection to trade the child pornography. This conduct exposed people who were innocent of any wrongdoing to the risk of having search warrants executed on their homes.
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.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig.
Rhode Island State Probation Officer Convicted on Child Pornography ChargesRead the Press Release
PROVIDENCE, R.I. –A Rhode Island state probation officer assigned to the sex offender unit was convicted by a federal court jury in Providence on Monday on charges of receiving and possessing child pornography. Gerald J. Silva, 59, of Coventry, was convicted on six counts of receiving child pornography and one count of possession of child pornography, announced United States Attorney Peter F. Neronha; Shelly Binkowski, Acting Inspector in Charge of the U.S. Postal Inspection Service, Boston Division; Coventry Police Chief Bryan J. Volpe; and Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police.
A joint investigation by the U.S. Postal Inspection Service and the Toronto Police Service, dubbed Operation Spade, resulted in the discovery of more than 10,000 customers who had videos shipped to the United States. Silva was arrested in September 2012 by U.S. Postal Inspectors when the investigation revealed that Silva was among the list of individuals who had purchased videos depicting child pornography from a Toronto based company and had the videos shipped to addresses in the United States.
According to the government’s evidence presented to the jury during nearly three days of testimony, in May 2011 Toronto Police Service detectives executed a court authorized search warrant at the business premises of Azov Films, which was producing child pornographic DVDs and selling them in over 90 countries. Detectives obtained Azov Films’ business records, which revealed that Silva was a customer.
The evidence revealed that between October 2011 and April 2012, Silva purchased 75 different videos depicting child pornography in 22 separate orders for $1,589 via the Toronto company's website. The videos, depicting minor and prepubescent males involving the lascivious exhibitions of the genitals, were shipped to Silva’s Coventry residence.
According to the government’s evidence, Postal Inspectors, assisted by Coventry Police and Rhode Island State Police troopers and officers from the Internet Crimes Against Children task force, executed a court authorized federal search warrant at Silva’s residence on September 27, 2012, at which time they seized numerous DVDs depicting child pornography and a laptop computer.
Silva argued to the jury that he ordered and collected the videos as part of a project he had undertaken in his role as a state probation officer. The jury returned guilty verdicts on all charges after less than one hour of deliberations on Monday afternoon.
Receipt of child pornography is punishable by a minimum of 5 years and a maximum of 20 years in federal prison and up to lifetime supervised release; possession of child pornography is punishable by up to 10 years in federal prison.
Silva is scheduled to be sentenced by U.S. District Court Chief Judge William E. Smith on May 16, 2014. At the Government’s request, Silva was ordered detained following his conviction.
The case was prosecuted by Assistant U.S. Attorney Terrence P. Donnelly.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
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[email protected]Rapid City Woman Sentenced for Concealing A FugitiveRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, woman convicted of Concealing Person from Arrest was sentenced on February 3, 2014, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Tina Ladeaux, a/k/a Tina M. Cooper, a/k/a Tina Cooperboyd, age 41, was sentenced to 1 year of probation, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund and a $250 fine.
Between September 2012 and November 2012, at Rapid City, Ladeaux concealed her husband, Eric Ladeaux, from law enforcement after she was informed that there was a warrant for his arrest for Escape on federal charges.The investigation was conducted by the U.S. Marshals Service. The case was prosecuted by Assistant U.S. Attorney Sarah B. Collins.
Puyallup Man Sentenced to Five Years in Federal Prison for Receipt of Child PornographyRead the Press Release
Richland, Washington – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Robert John Kearns, age 54, of Puyallup, Washington, was sentenced today after having previously pleaded guilty in November of 2013 to Receipt of Child Pornography. Senior United States District Court Judge Edward F. Shea sentenced Kearns to a five year term of imprisonment, to be followed by a life term of court supervision after he is released from Federal prison. In addition, Kearns will be required to register as a sex offender.
According to court records, in March of 2010, the Federal Bureau of Investigation and Grant County Sherriff's Office conducted an investigation of a mother using her children to produce images of child pornography. The mother, Pamela Ortega, plead guilty to three counts of Rape of a Minor and was sentenced in Washington State to 300 months imprisonment. As a result of the investigation into Ortega, law enforcement determined that one of the individuals she was communicating with about producing child pornography images was Robert John Kearns. On April 14, 2011, the FBI executed a search warrant at Kearns' residence and located a laptop computer belonging to Kearns. A forensic examination of Kearns' laptop revealed that it contained images of child pornography that Kearns had requested Ortega send him from her residence in Warden, Washington, to Kearns at his residence in Puyallup, Washington.
Michael C. Ormsby said, "Prosecuting offenders who possess and collect child pornography is a priority of the United States Attorney's Office in the Eastern District of Washington. This Office, together with its Federal and state law enforcement partners, is and will continue to be committed to prosecuting aggressively and seeking appropriate punishment for child pornography-related crimes."
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States 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. The Project Safe Childhood Initiative ("PSC") has five major components:
- Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue child victims;
- Participation of PSC partners in coordinated national initiatives;
- Increased federal enforcement in child pornography and enticement cases;
- Training of federal, state, and local law enforcement agents; and
- Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources".
This investigation was conducted by the Federal Bureau of Investigation and Grant County Sherriff's Office. The case was prosecuted by Stephanie J. Lister, an Assistant United States Attorney and PSC Coordinator for the Eastern District of Washington.
CR-13-06005-EFS
Prior Sex Offender Sentenced to Fifteen Years in Prison for Child Pornography ConvictionRead the Press Release
ALBUQUERQUE – Chad F. Summers, 41, of Albuquerque, N.M., was sentenced this afternoon to 15 years in federal prison followed by a lifetime of supervised release. Summers will be required to register as a sex offender after he completes his prison sentence. Summers also was ordered to pay $500 in restitution to the victim whose image is associated with Summers’ crime of conviction.
The sentence was announced by Acting U.S. Attorney Steven C. Yarbrough, Special Agent in Charge Dennis A. Ulrich, II, of Homeland Security Investigations (HSI) in El Paso, Texas, Chief Pete N. Kassetas of the New Mexico State Police (NMSP) and Chief Allen Banks of the Albuquerque Police Department (APD).
Summers was arrested on Feb. 12, 2013, on a criminal complaint alleging that he received and possessed child pornography in Bernalillo County, N.M., between Aug. 2012 and Feb. 2013. The complaint also charged Summers with unlawfully possessing a firearm on Feb. 12, 2013. At the time, Summers was prohibited from possessing firearms or ammunition because he previously had been convicted of child pornography offenses in an Oregon state court. On March 5, 2013, Summers was indicted and charged with three counts of receipt of child pornography, one count of possession of child pornography, and being a felon in possession of a firearm.
On July 11, 2013, Summers pleaded guilty to Count 1 of the indictment, charging him with receipt of child pornography. In his plea agreement, Summers acknowledged that HSI, NMSP and APD executed a search warrant at his residence on Feb. 12, 2013 and seized computers and computer-related media. The search warrant was issued based on an undercover investigation by the NMSP that began in Oct. 2012, and targeted individuals who possessed, received and distributed child pornography. The investigation revealed that an IP Address which was subscribed to Summers was being used to offer child pornography images and videos through a peer-to-peer file-sharing program.
Summers acknowledged voluntarily participating in a recorded interview on Feb. 12, 2013, during which he admitted downloading child pornography images of preteens. He also admitted having a prior conviction for child pornography offenses from Oregon. In his plea agreement, Summers acknowledged that a forensic examination of his computers and computer-media uncovered more than 1600 child pornography images and videos.
This case was investigated by the Albuquerque office of HSI, NMSP and APD and was prosecuted by Assistant U.S. Attorney Marisa A. Lizarraga. The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 74 federal, state and local law enforcement agencies associated with the ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Pooler Resident Indicted on Two Local RobberiesRead the Press Release
SAVANNAH, GA -- BOBBY JOE WHITE, JR., 42, of Pooler, Georgia was indicted last week by the federal grand jury sitting in Savannah for robbing the Sea Island Bank and the Biomat USA Savannah Blood Plasma Donation Center. According to the indictment, White allegedly robbed the Sea Island Bank on November 1, 2013 by “force, violence, and intimidation.” Three weeks later, on November 22, 2013, White allegedly robbed the Biomat USA Savannah Plasma Donation Center of about $8,000 in cash.
White faces a maximum sentence of 20 years in prison, a $250,000 fine and 3 years of supervised release for each robbery charge. An indictment is only an accusation and is not evidence of guilt. The defendant is entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case arose out of an investigation by the FBI Safe Streets Violent Crime Task Force of Southeast Georgia, which was assisted by the Pooler Police Department and the Savannah-Chatham Metropolitan Police Department. Assistant United States Attorney Charlie Bourne is prosecuting the case on behalf of the United States.
Ojo Amarillo Woman Sentenced to Six Years in Federal Prison for Using a Firearm During an AssaultRead the Press Release
ALBUQUERQUE – Perfinna King, 34, an enrolled member of the Navajo Nation who resides in Ojo Amarillo, N.M., was sentenced this morning to six years in federal prison followed by three years of supervised release for using a firearm during a crime of violence. The sentence was announced by Acting U.S. Attorney Steven C. Yarbrough, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI, and Director John Billison of the Navajo Nation Division of Public Safety.
King was arrested in April 2012, based on a criminal complaint charging her with assaulting her domestic partner, another Navajo woman, with a knife and a pistol on April 6, 2012. King subsequently was indicted and charged with assault with a dangerous weapon, assault resulting in serious bodily injury, and using and carrying a firearm during a crime of violence. Prosecution of this case was delayed by competency proceedings.
Court filing reflect that, in the early hours of April 6, 2012, King had an argument with the victim during which King stabbed the victim in the leg in a residence located in the Navajo Indian Reservation. Although the victim tried to get away from King by hiding in a bathroom, King dragged the victim out of the bathroom and stabbed her again. Thereafter, King shot the victim in the leg as the victim ran out of the residence in an effort to get away from King. The victim was treated for multiple stab wounds and a gunshot wound on her leg.
On November 13, 2013, King entered a guilty plea to Count 3 of the indictment and admitted using a firearm during an assault she committed on April 6, 2012.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety, and was prosecuted by Assistant U.S. Attorney Presiliano A. Torrez. The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project which is sponsored by the Justice Department’s Office on Violence Against Women, and seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
New London Heroin Dealer Sentenced to 68 Months in Federal PrisonRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CRUZ BONILLA, also known as “Jay,” 30, of New London, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 68 months of imprisonment, followed by four years of supervised release, for distributing heroin.
According to court documents and statements made in court, in early 2012, Homeland Security Investigations (“HSI”), the U.S. Secret Service and the New London Police Department initiated an investigation to combat the large-scale trafficking of heroin and cocaine from the Dominican Republic and Puerto Rico into and around southeastern Connecticut. On multiple occasions in the fall of 2012, BONILLA was intercepted over court-authorized wiretaps ordering heroin from other members of the conspiracy. BONILLA then sold the drug to his own customers. In October 2012, while he was incarcerated for state parole violations, BONILLA arranged to have his then-girlfriend purchase and distribute heroin on his behalf.
On October 2, 2013, BONILLA pleaded guilty to one count of conspiracy to possess with the intent to distribute 100 grams or more of heroin.
BONILLA has been incarcerated since October 2012, but his time served will not be credited toward his 68-month federal sentence.
More than 100 individuals have been charged with federal and state offenses as a result of this investigation.
This matter is being investigated by Homeland Security Investigations; U.S. Secret Service; U.S. Postal Inspection Service; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection, Office of Air and Marine; Connecticut State Police; New London Police Department, Norwich Police Department, Waterford Police Department, Groton Town Police Department, East Lyme Police Department and Putnam Police Department. The United States Marshals Service; ICE Enforcement and Removal Operations; Drug Enforcement Administration; HSI Assistant Attaché, Santo Domingo, Dominican Republic; HSI Arecibo, Puerto Rico Resident Office; Internal Revenue Service – Criminal Investigation; Connecticut Department of Correction, Parole and Community Services; and the Groton City, Willimantic, New Haven and Bristol Police Departments have provided valuable assistance to the investigation.
The federal case is being prosecuted by Assistant U.S. Attorneys Alina P. Reynolds, Sarah P. Karwan and Henry K. Kopel. The state cases are being prosecuted by the State’s Attorney for the New London Judicial District and Senior Assistant State’s Attorneys Paul Narducci and Stephen Carney.
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(203) 821-3722 [email protected]Minnesota Man and Woman Sentenced for Participating in a Sex Trafficking ConspiracyRead the Press Release
Today, the Justice Department announced that Andre James Hertzog, 29, was sentenced to serve 10 years in prison and eight years of supervised release for participating in a sex trafficking conspiracy. Hertzog’s co-defendant, Nicole Bramer, 29, was sentenced to serve 21 months in prison, to be followed by five years of supervised release. In addition, the defendants were each ordered to pay $6100 in restitution to the victims of the offense. Hertzog and Bramer are both from St. Paul, Minn.
“The defendants preyed upon vulnerable young women by a variety of deplorable means,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Department of Justice is committed to prosecuting those who sexually exploit vulnerable women for financial benefit.”
“Working with victims of sex trafficking to attain a measure of justice is a serious responsibility,” said Special Agent in Charge Christopher Warrener for the FBI’s Minneapolis Field Office. “These sentences are the culmination of investigators and prosecutors effectively communicating with victims.”
Bramer pleaded guilty to participating in the sex trafficking conspiracy on May 29, 2013, and Hertzog pleaded guilty on July 2, 2013. During his plea hearing, Hertzog admitted that, from April 2011 to August 2012, he and Bramer engaged in a scheme to target and recruit young, vulnerable women, one of whom was a minor, and to compel them into performing commercial sex acts for their own financial gain. Hertzog and Bramer used coercive tactics, including physical violence and psychological coercion, to isolate the young women, control them and cause them to perform acts of prostitution. As part of the trafficking scheme, the defendants transported the victims across state lines for the purpose of having them engage in prostitution, and the defendants routinely advertised the sexual services of the young women on the internet website Backpage.com.
The case was investigated by the FBI and prosecuted jointly by Special Assistant U.S. Attorney Mark Kappelhoff for the District of Minnesota, Trial Attorney Christine M. Siscaretti, and former Trial Attorney Amanda Gregory for the Civil Rights Division’s Human Trafficking Prosecution Unit.
Middleburg Man Pleads Guilty to Making False Statements to the FAA and Illegally Piloting an AircraftRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Reginald Wayne Sibley, Jr. (39, Middleburg) today pleaded guilty to making false statements and representations to the Federal Aviation Administration (FAA) and illegally piloting an aircraft in air transportation. Sibley faces a maximum penalty of eight years in federal prison. His sentencing hearing is scheduled for May 12, 2014.
According to the plea agreement, Sibley was certified by the FAA to serve as a pilot in command of Lear Jet aircraft only. As part of the FAA certification process, Sibley was required to undergo annual medical examinations to determine his medical fitness as a pilot. On June 1, 2009, Sibley stated on his FAA airmen medical certificate application form that he did not have a criminal history, when in fact, he had at least three criminal convictions. An investigation also revealed that, on October 8, 2009, Sibley was the pilot in command of a Gulfstream aircraft that departed from the Orlando Executive Airport and landed at an airport in California. After landing, Sibley claimed, to an FAA representative, that he was “rated” to fly the Gulfstream aircraft that he was piloting. The FAA informed Sibley that it had no record of his “rating” for this kind of aircraft and recommended that Sibley not continue to fly the aircraft to his next destination. Sibley disregarded the FAA and proceeded to board passengers onto the aircraft and fly to another location, in California. The investigation confirmed that Sibley was not authorized or “rated” to fly the Gulfstream aircraft, which he operated on October 8, 2013.
This case was investigated by the U.S. Department of Transportation, Office of Inspector General. It is being prosecuted by Assistant United States Attorney Andrew C. Searle.
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Mexican National Living in Star Sentenced to 188 Months for Trafficking MethRead the Press Release
Defendant and Four Others Admitted to Distributing Approx. 130 Pounds of Meth
BOISE – U.S. Attorney Wendy J. Olson announced today that Ausencio Gonzalez Tovar, 48, a Mexican national living in Star, Idaho, was sentenced yesterday to 188 months in prison followed by five years of supervised release for possession with intent to distribute 500 grams or more of methamphetamine. Tovar appeared before Senior U.S. District Judge William Fremming Nielsen of the Eastern District of Washington. Tovar was also ordered to forfeit $100,000 in proceeds derived from the drug trafficking offense and $18,400 in seized currency. He will be deported to Mexico after serving his prison sentence.
Tovar pleaded guilty to the charge on October 2, 2013. According to court proceedings, he was arrested on April 3, 2013, and was found to be in possession of 1.7 kilograms of pure methamphetamine and a firearm. The government argued at sentencing that Tovar was responsible for distributing approximately 130 pounds of high purity methamphetamine between October 2012 and April 2013.
Four co-defendants from the Treasure Valley were sentenced to prison earlier for their role in the conspiracy. Michael Scott Longhi was sentenced to 188 months in prison; Samantha Jo Tackitt to 151 months; Darin James Bangham to 87 months; and Ashley Marie Armstrong to 51 months.
The case was investigated by the Ada County Sheriff’s Office, Meridian Police Department, and Drug Enforcement Administration.
Logan County Husband and Wife Plead Guilty to Distributing MethamphetamineRead the Press Release
CHARLESTON, W.Va. – A Logan County couple has pleaded guilty to distribution of methamphetamine, United States Attorney Booth Goodwin announced today. In a plea hearing held in Charleston before United States District Judge John T. Copenhaver, Jr., Rodney and Opal Wiley admitted that in January of last year, they sold methamphetamine, a dangerous and addictive controlled substance, to a confidential informant working with the US 119 Drug Task Force in exchange for $40.00. The drug deal took place on the parking lot of the Dollar General Store in Chapmanville, West Virginia. Following the sale, the Wileys were arrested and pre-recorded buy money was recovered from Rodney Wiley. Both Wileys provided post-arrest statements in which they admitted to having been involved in the distribution of methamphetamine for several months leading up to their arrest. The Wileys are scheduled to be sentenced by Judge Copenhaver on May 8, 2014 and face possible penalties of up to 20 years imprisonment and fines of up to $1,000,000.00.
Local Physician Indicted on Charges of Healthcare FraudRead the Press Release
ROCKFORD — A suspended Rockford physician was indicted today by a federal grand jury on charges of healthcare fraud. CHARLES S. DEHANN, 59, of Belvidere, Ill., was charged with nine counts of engaging in a scheme to defraud Medicare.
The indictment alleges that DeHaan, a physician licensed in Illinois, and president of Housecall Physicians Group of Rockford, S.C., treated numerous patients at Rockford-area assisted living facilities and, as a physician, had access to patients and patient records. The indictment alleges that, from January 2013 through Jan. 24, 2014, in order to enrich himself, DeHaan submitted false claims to Medicare for reimbursement for medical services that DeHaan provided to patients in their homes. As part of the scheme, DeHaan allegedly obtained patient information of Medicare beneficiaries through his affiliation with and privileges granted to him at various Rockford-area assisted living facilities, without the knowledge or consent of the patients. It is also alleged that DeHaan billed for medical services purportedly provided to patients whom DeHaan never actually treated, and billed routine visits with Medicare patients at the highest levels of in-home care when he knew that his visits with these patients typically did not qualify for such billing.
In addition, DeHaan allegedly billed for medical services provided to patients when he knew he did not provide any reimbursable medical service. For instance, on multiple occasions, DeHaan billed Medicare for medical services purportedly provided to patients, when DeHaan’s visit with the patient involved no medical care and instead involved DeHaan’s having sexual contact and attempting to have sexual contact with a patient and making sexual advances toward a patient, according to the indictment.
DeHaan was initially charged with federal healthcare fraud last month when he was arrested on a criminal complaint. He was released on bond and will appear for arraignment on February 12, 2014, at 10:00 a.m. in Federal Court in Rockford, before U.S. Magistrate Iain D. Johnston.
Each count of healthcare fraud carries a maximum potential penalty of up to 10 years in prison, a fine of up to $250,000, and full restitution. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Lamont Pugh, III, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General.
The federal case was investigated by the FBI and HHS-OIG, with the assistance of the Illinois Department of Financial and Professional Regulation. The government is being represented by Assistant U.S. Attorney Scott R. Paccagnini.
The public is reminded that an indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving his guilt beyond a reasonable doubt.
Indictment
Liberty Man Pleads Guilty to Social Security FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Liberty, Mo., man pleaded guilty in federal court today to stealing $84,137 by spending his deceased mother’s Social Security benefits.
Jeffery Schwed, 40, of Liberty, pleaded guilty before U.S. Chief District Judge Greg Kays to the charge contained in a Feb. 19, 2013, federal indictment.
According to today’s plea agreement, Schwed was a joint owner of his mother’s bank account, where her monthly Social Security payments were deposited. Schwed’s mother died on March 16, 2007, but the monthly benefits continued to be deposited into the bank account for approximately five years, through April 2012. Schwed admitted that he converted at least some of these payments for his own personal use.
Schwed admitted that he knowingly and intentionally concealed his mother’s death from the Social Security Administration in order to fraudulently obtain Social Security payments that he knew he was not entitled to receive. Schwed was incarcerated when the Social Security Administration made some of its deposits. Approximately $18,000 in ATM withdrawals were made during the periods when he was incarcerated.
Under the terms of today’s plea agreement, Schwed must pay $84,137 in restitution to the Social Security Administration.
Under federal statutes, Schwed is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorney Trey Alford. It was investigated by the Social Security Administration, Office of Inspector General.Leader of Large-Scale Identity Theft Ring Sentenced to 12 Years in Prison for His Role in Fraud EnterpriseRead the Press Release
NEWARK, N.J. – The leader of a fraud ring that engaged in identity theft and financial crimes which have led to charges against 54 individuals was sentenced today to 144 months in prison for directing the large-scale, sophisticated criminal enterprise, U.S. Attorney Paul J. Fishman announced.
Sang-Hyun Park, a/k/a “Jimmy,” 48, of Palisades Park, N.J., previously pleaded guilty before then-U.S. Magistrate Judge Patty Shwartz to a five-count information charging him with conspiracy to unlawfully produce identification documents and false identification documents (Count One); conspiracy to commit wire fraud affecting financial institutions and bank fraud (Count Two); aggravated identity theft (Count Three); money laundering (Count Four); and conspiracy to defraud the Internal Revenue Service (Count Five). U.S. District Court Judge Katharine S. Hayden imposed the sentence today in Newark federal court.
“Sang-Hyun Park presided over a criminal enterprise that was extraordinary in its scope and complexity,” U.S. Attorney Fishman said. “The crimes for which he was sentenced today put us all at risk, not just because of the cost to our financial institutions, but also because of the threat posed by fake identification documents. Fortunately, the law enforcement agents and prosecutors who target identity theft and organized crime were just as patient and painstaking as the defendants who designed and executed this scheme, Mr. Park today joins dozens of his criminal conspirators in federal prison.”
“Sang Hyun Park was the mastermind behind multiple, complex, fraudulent schemes that affected numerous financial institutions and individual victims,” FBI-Newark Special Agent in Charge Aaron T. Ford said. “In doing so, he exploited the close ties of the community he lived in. The severity of the sentence imposed today speaks to the outstanding efforts of the FBI, IRS, DHS-HSI, and the United States Attorney's Office who uncovered, investigated and prosecuted Park and all of his co-conspirators who participated in these schemes.”
According to documents filed in these cases and statements made in court:
Park was the leader of a criminal organization (the “Park Criminal Enterprise”) headquartered in Bergen County, N.J., that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud and tax fraud. As part of the scheme, the Park Criminal Enterprise obtained Social Security cards beginning with the prefix “586.” Social Security cards with that prefix were issued by the United States to individuals, usually from China, employed in American territories, such as American Samoa, Guam, and Saipan. The Park Criminal Enterprise sold the cards to its customers and then escorted the customers to various states to use them to obtain identification cards and driver’s licenses.
The Park Criminal Enterprise then engaged in the fraudulent “build up” of credit scores associated with these fraudulently obtained identities. They did so by adding these identities as authorized users to the credit card accounts of various conspirators who received a fee for this service - members of the enterprise’s credit build-up teams. By attaching the identities to these existing credit card accounts, the teams increased the credit scores associated with the identities to between 700 and 800. The members of the build-up teams knew neither the real person to whom the identity belonged nor virtually any of the customers who had purchased the identities.After building the credit scores associated with these identities, Park and his conspirators assisted, coached and directed his customers to open bank accounts and obtain credit cards. Park and his conspirators then used these accounts and credit cards to commit fraud. Park relied on several collusive merchants who possessed credit card processing machines. For a fee, known as a “kkang fee,” these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit card related to these fraudulent transactions, the collusive merchants gave the money to Park and his conspirators, minus their kkang fee.
Park admitted that he operated the criminal enterprise out of several offices in Bergen County, ran advertisements in local newspapers to attract customers interested in his illegal services, met with customers and other conspirators and otherwise directed the activities of the criminal enterprise. He also admitted that he obtained and sold 586-prefix Social Security cards to his customers and members of his criminal enterprise escorted more than 100 customers to various states so they could fraudulently obtain identification cards and driver’s licenses using the Social Security cards and other fraudulent documents – such as counterfeit Chinese passports.
Park also admitted he conspired with and paid cash to various build-up teams to build the credit scores and establish credit histories for the fraudulent identities that he had sold to his customers. Park also laundered portions of the money he obtained through the fraud by wiring the money to various accounts in South Korea.Park defrauded various credit card companies, banks, and lenders out of $4 million. He and his conspirators also claimed more than $182,000 in tax refunds from the IRS through the filing of false and fictitious tax returns and accompanying documents.
In addition to the prison term, Judge Hayden sentenced Park to five years of supervised release and ordered to pay restitution of $4,774, 116. He will also be deported upon his release from prison.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special
Agent in Charge Aaron T. Ford in Newark; IRS Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; the Department of Homeland Security’s
Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Andrew M. McLees; the Federal Deposit Insurance Corporation –Office of Inspector General, under the direction of Acting Inspector General Fred W. Gibson Jr.; and the Bergen County Prosecutor’s Office and the office’s Chief of Detectives Steven Cucciniello for their work leading to today’s sentence.The government is represented by Assistant U.S. Attorneys Jane Yoon of the U.S. Attorney’s Office Criminal Division and Anthony Moscato of the Office’s Organized Crime/Gangs Unit in Newark.
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Defense counsel: Christian P. Fleming Esq., East Brunswick, N.J.Leader of Drug Conspiracy That Resulted in Death Sentenced to 27 Years in PrisonRead the Press Release
St. Louis, MO – ANDREUS O'BRYANT, St. Louis, Missouri, was sentenced to 330 months imprisonment for his organization and leadership in a drug conspiracy that required the murder of Jamie Benson of Houston, TX, on April 22, 2011. In August 2013, O’Bryant pleaded guilty to conspiracy to possess with the intent to distribute over 500 grams of cocaine. O’Bryant was sentenced today by United States District Court Judge Audrey G. Fleissig after a two-day sentencing hearing.
According to court documents and testimony provided during the sentencing hearing, in early April 2011, O’Bryant recruited multiple individuals, including his co-defendants Scott Compton and Lodgy Jackson, to participate in a conspiracy that included robbing and murdering victim Benson within the City of St. Louis, after luring Benson from Houston to St. Louis. Compton was recruited by O’Bryant to act as an individual interested in purchasing over 500 grams of cocaine from Benson for an inflated price. Compton played that role. In doing so, Compton, along with O’Bryant and Jackson, convinced Mr. Benson that a drug transaction was going to occur when, in reality, O’Bryant, Jackson and others intended to rob Benson of the cocaine and murder him.
Jackson was brought to St. Louis by O’Bryant for purposes of carrying out the murder in exchange for compensation from O’Bryant. In the early morning hours of April 22, 2011, O’Bryant drove himself, Benson, Jackson and another individual to a St. Louis alley. O’Bryant exited the vehicle. Jackson and Benson sat inside O’Bryant’s vehicle. Benson was the front seat passenger. Jackson sat directly behind him. To facilitate Benson’s murder, Jackson initiated a heated argument with Benson. As the argument began, Jackson sent a text to O’Bryant notifying O’Bryant that the murder was imminent. As the argument continued, Jackson mouthed the words “watch this” to another passenger inside O’Bryant’s vehicle. Jackson then fired one shot into the back of Benson’s head from a firearm Jackson possessed. That firearm was given to Jackson by O’Bryant prior to the murder. Jackson, O’Bryant and another abandoned Benson's body in the alley, where it was later discovered by the St. Louis Metropolitan Police Department. Jackson, O’Bryant and others undertook significant efforts to cover up the conspiracy and destroy evidence of the crime.
Upon learning of the indictment against him, O’Bryant fled the State of Missouri. He eluded authorities for almost a year. A joint task force of officers from St. Louis, Missouri, and Houston, Texas, with the Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Marshals Service apprehended O’Bryant in Houston, Texas, and returned him to the Eastern District of Missouri to face the indictment. O’Bryant is the third of three defendants to be sentenced in this matter. Compton pleaded guilty for his involvement and has been sentenced to 5 years imprisonment. Jackson also pleaded guilty and has been sentenced to 33 years imprisonment.
This case was investigated by the St. Louis Metropolitan Police Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the United States Marshals Service; the Franklin County Sheriff's Department; the St. Charles County Police Department and the O’Fallon Police Department.Las Cruces Man Sentenced to Ten Years in Federal Prison for Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Agustin Abascal, 28, of Las Cruces, N.M., was sentenced this morning in Las Cruces federal court to 10 years in federal prison followed by five years of supervised release for his methamphetamine trafficking conviction.
The sentence was announced by Acting U.S. Attorney Steven C. Yarbrough, Special Agent in Charge Joseph M. Arabit of the El Paso Division of the DEA, Special Agent in Charge Bobby Holden of the Las Cruces/Doña Ana County Metro Narcotics Agency and New Mexico State Police Chief Pete N. Kassetas.
Abascal and Mark Anthony Harriman, 45, also of Las Cruces, were arrested in April 2013, based on a criminal complaint charging them with conspiracy to distribute methamphetamine in Doña Ana County, N.M., between Nov. 2012 and March 2013. According to the complaint, Harriman and Abascal sold quantities of methamphetamine to a New Mexico State Police officer and a DEA informant who were acting in undercover capacities during the five month period. Both men have been in federal custody since their arrests.
Abascal entered a guilty plea in July 2013, to a one-count felony information charging him with distribution of methamphetamine. In his plea agreement, Abascal admitted selling methamphetamine to an undercover officer on five separate occasions between Nov. 1, 2012 and March 7, 2013.
Harriman pled guilty in July 2013 to a two-count felony information charging him with possession of methamphetamine with intent to distribute and being a felon in possession of a firearm. Harriman admitted that between Feb. 6, 2013 and March 14, 2013, he obtained methamphetamine from California and sold it in Las Cruces. He also admitted selling an ounce of methamphetamine to an informant on Feb. 26, 2013. Harriman further admitted that he was returning to Las Cruces from California with two ounces of methamphetamine when he was arrested in this case.
Harriman also admitted that, when federal agents executed a search warrant at his residence, they seized nine firearms and large amounts of ammunition that belonged to him. Harriman acknowledged that he was prohibited from possessing firearms or ammunition because he previously was convicted of two felony offenses.
On October 29, 2013, Harriman was sentenced to 20 years in federal prison followed by five years of supervised release. Harriman also was ordered to forfeit the firearms and more than 1000 rounds of ammunition seized from his residence in addition to $13,940 in cash.
This case was investigated by the Las Cruces office of the DEA, the Las Cruces/Doña Ana County Metro Narcotics Agency and the New Mexico State Police, and was prosecuted by Assistant U.S. Attorney Renee L. Camacho of the U.S. Attorney’s Las Cruces Branch Office.
Lakeland Man Pleads Guilty to Sex Trafficking and Child Pornography ChargesRead the Press Release
Tampa, Florida– United States Attorney A. Lee Bentley, III announces that Michael Gallon (48, Lakeland) pleaded guilty last week to sex trafficking of a minor by force, fraud or coercion and distribution of child pornography. He faces a maximum penalty of life in federal prison. A sentencing date has not yet been scheduled.
According to the plea agreement, Gallon was a “pimp” who was operating in the state of Florida and southeastern United States. He recruited adult and minor aged females to join his “dance team.” Gallon then transported the females to bachelor parties and house parties that he arranged. The females danced and performed acts of prostitution at the parties. Gallon set up “VIP” rooms at each of the parties, where he would encourage the females to engage in commercial sex acts. Gallon charged the women to use the “VIP” rooms; he also kept most of the money the women earned. Law enforcement has identified at least twelve minor-aged victims of Gallon’s crime.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Lakeland Police Department. It is being prosecuted by Assistant United States Attorney Stacie B. Harris.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.projectsafechildhood.gov.
Kirtland, N.M., Man Sentenced to Ninety-Seven Months in Federal Prison for Sexual Assault ConvictionRead the Press Release
ALBUQUERQUE – Hareldo Horse, 31, an enrolled member of the Navajo Nation who resides in Kirtland, N.M., was sentenced this afternoon to 97 months in federal prison followed by five years of supervised release for his sexual assault conviction. Horse will be required to register as a sex offender when he completes his prison sentence.
The sentence was announced by Acting U.S. Attorney Steven C. Yarbrough, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI and Director John Billison of the Navajo Nation Division of Public Safety.
Horse was arrested on March 11, 2013, on an indictment charging him with sexually assaulting a woman in a location within the Navajo Indian Reservation on Oct. 20, 2012. He has been in federal custody since that time. On Sept. 10, 2013, Horse pleaded guilty to the indictment and admitted inappropriately touching the victim’s genitals at a time when the victim was physically in capable of declining to participate in the sexual act.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety and was prosecuted by Assistant U.S. Attorney Paul Mysliwiec. The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Kankakee Area Father, Son Plead Guilty to $1.7 Million Bank Fraud SchemeRead the Press Release
Urbana, Ill. – Sentencing has been scheduled for May 16, 2014, for Bourbonnais, Ill., businessman Gregory Yates, 54, and his son, Terrance Yates, 32, who yesterday entered pleas of guilty to defrauding a federal business loan program of $1.7 million. Both appeared yesterday afternoon before U.S. Magistrate Judge David G. Bernthal in Urbana. Gregory and Terrance Yates each pled guilty to one count of conspiracy to commit bank fraud. In addition, Terrance Yates pled guilty to one count of money laundering. Both defendants were allowed to remain on bond.
At the time of the fraud, from April 2009 to July 2011, Gregory Yates was the president and chief executive officer of Quality Concepts, LLC; his son, Terrance, was the chief financial officer. Gregory Yates also owned and operated QC Manufacturing, LLC, and Champion Development, LLC, a construction company. Terrance was the chief financial officer and vice-president of operations for Champion Development, LLC. For each company, the principal office location was 1475 Harvard Drive, Kankakee, Ill.
In court proceedings and according to court documents, in May 2009, Gregory Yates, doing business as QC Manufacturing, LLC, purchased a manufacturing facility, tools and equipment, owned by Casey Tool and Machine, at 400 West Delaware Ave., Casey, Ill. At the time of the purchase, Casey Tool and Machine was in bankruptcy. Prior to its bankruptcy, Casey Tool and Machine was owned by Gregory Yates’ brother, Jim Yates.
In November 2009, QC Manufacturing, LLC, applied for and was subsequently awarded a Business and Industry Loan through the U.S. Department of Agriculture, Office of Rural Development. Although the $5.95 million loan was processed through Country Bank of Aledo, the loan guarantee was funded by the USDA using money allocated through the American Recovery and Reinvestment Act.
Gregory Yates admitted that, as part of the loan application, he submitted a letter stating that he intended to use the $5.95 million USDA loan to purchase a vacant manufacturing facility in Casey, Ill., tools and equipment to operate within the facility, and start up working capital for initial cash and inventory. The letter represented that the facility would be used to produce and distribute precision lighting equipment and he estimated that more than 200 new jobs would be created. The loan application included a budget of $1.7 million to perform construction and improvements on the Casey facility.
Although the bank approved the loan, including the renovation budget, QC Manufacturing, LLC was required to complete the work for which it was requesting payment before Country Bank would fund any portion of the $1.7 million allocation. Gregory and Terrance Yates admitted that they agreed with each other to use only their own construction company, Champion Development, and no subcontractors, to perform the construction and improvements. By listing only their own construction company, the Yateses admitted they were able to falsely and substantially inflate the value of the labor or materials furnished by Champion Development, thereby drawing money from the USDA loan for work that was either never performed or was of lesser value than claimed on the contractor’s sworn statements provided to the bank. For example, Gregory Yates admitted he told employees of Champion Development to ‘simply spruce up’ the Casey facility to lower the cost of improvements.
Terrance, in agreement with Gregory Yates, admitted that fraudulent sworn statements and affidavits, signed by Terrance, were submitted to the bank claiming that Champion Development had performed work and supplied materials. Based on these fraudulent statements, the bank disbursed $1.7 million to QC Manufacturing. Of the $1.7 million disbursed, more than $1.3 million was transferred from QC Manufacturing to Champion Development and then transferred to other accounts.
At sentencing, the maximum statutory penalty for conspiracy to commit bank fraud is up to 30 years in prison. For money laundering, the maximum statutory penalty is 10 years in prison.
The charges were investigated by Internal Revenue Service Criminal Investigation; the U.S. Department of Agriculture Office of Inspector General; the Federal Deposit Insurance Corporation (FDIC) Office of Inspector General; and the FBI. The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller.
Justice Department Highlights Ongoing Efforts to Protect the Public and Shut Down Fraudulent Tax Return Preparers and Promoters NationwideRead the Press Release
Today, the Justice Department announced the results of its ongoing efforts to combat fraudulent tax-return preparers and promoters of tax-fraud schemes. Taxpayers filed an estimated 142 million individual income tax returns for the 2011 tax year, with nearly 70 million taxpayers using a paid return preparer according to the Internal Revenue Service (IRS) Compliance Data Warehouse, Individual Returns Transaction File and Return Preparers and Providers Database, Tax Year 2011, filed through March 2013. The return filing deadline for the 2013 tax year is just over two months away on April 15, 2014. The department’s Tax Division has an active program to stop fraudulent return preparers and promoters from violating federal tax laws, particularly where their fraudulent activity can harm individual customers or drain the U.S. Treasury. In the last year, the division has obtained permanent injunctions against more than 60 preparers and promoters doing business all over the United States.
“During the time when honest taxpayers are preparing their returns, the Tax Division will work tirelessly to challenge those who would abuse the tax laws and take advantange of their customers,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “The division’s attorneys and staff, along with our colleagues in the Internal Revenue Service, are working hard to shut down these abusive schemes and scams and punish the perpetrators where appropriate.”
The division’s enforcement efforts have been directed against against both large-scale return preparation franchises and smaller, independent return preparers and promoters. For example, in 2013 the Tax Division concluded civil actions resulting in permanent injunctions against ITS Financial LLC, the parent company of the Instant Tax Service franchise located in Dayton, Ohio, and against Instant Tax franchises in Las Vegas, Kansas City , Kan., Los Angeles and Indianapolis. Instant Tax Service claimed to be the fourth-largest tax-preparation firm in the nation. In entering the permanent injunction in November 2013 that ordered ITS Financial LLC to cease operating, the court found the "defendants' harm to the public is extensive and egregious, indeed appalling…especially so given the nature of Instant Tax Service's core customer - the working poor - who are particularly vulnerable to [the] defendants' fraudulent practices.” The injunction also barred Fesum Ogbazion, the sole owner and CEO of ITS Financial, from operating or being involved with any business relating to tax-return preparation.
Similarly, in September 2013, the division obtained injunctions that permanently barred the owners, Markey Granberry and Derrick Robinson, as well as Eumora Reese, a former manager of Mo' Money Taxes, the Memphis, Tenn., based tax-preparation chain that at one time operated as many as 300 offices in 18 states, from preparing tax returns for others and owning or operating a tax return preparation business. Earlier, in March 2013, a federal district court in Tennessee permanently shut down a Nashville, Tenn., licensee of Mo’ Money Taxes LLC and MoneyCo USA LLC.
Numerous smaller tax return preparation businesses and individual preparers around the country were also subjects of injunctions shutting down their business, including tax return preparers in Indiana, Maryland, Missouri, Texas, Georgia, South Carolina, Florida and California who were engaging in fraudulent practices.
The division also obtained injunctions against a number of fraudulent tax-scheme promoters. For example, in October 2013, a federal court permanently barred Tobias Elsass and his companies from preparing federal tax returns, promoting the availability of theft loss deductions or engaging in any other tax-related business. The court found that Elsass and Fraud Recovery Group promoted a nationwide scheme that falsely informed customers that they were entitled to claim large theft loss tax deductions, and then prepared the tax returns that improperly claimed such deductions. The court stated “there can be no doubt that the collective transgressions represent concerted and conscious attempts to game the nation’s income tax system not necessarily for the benefit of FRG’s customers, but for the profit of Elsass himself.” At the division’s urging, federal courts also enjoined a real estate appraiser who allegedly inflated easement values on historic properties to help customers claim millions in improper deductions, and a Chicago lawyer who the complaint alleges had lawyers, entrepreneurs and professional football players among his customers, from promoting tax fraud schemes and from preparing various types of tax returns (IRS Forms 1040, 1041, 1065 and 1120) for individuals, estates and trusts, partnerships or corporations, to help facilitate the schemes.
As set forth in the civil injunction complaints filed by the United States, fraudulent return preparers commonly falsify return information to take advantage of refundable credits available under the tax code, often manipulating a taxpayer’s income, expenses and dependents to maximize the amount of the refundable credit claimed. Some return preparers also take advantage of their customers by selling deceptive loan products with exhorbitant fees. As identified in the complaints, some of the fraudulent schemes and practices that have been stopped through injunction orders entered include:
· Preparing phony tax-return forms with fabricated businesses and income;
· Claiming false education and homebuyer credits;
· Claiming false and inflated deductions;
· Claiming false filing status;
· Claiming false dependents;
· Selling deceptive loan products and defrauding customers, who were largely low-income earners, by marketing false and fraudulent loan products to lure them into the tax-preparation offices;
· Filing tax returns without customer consent or authorization;
· Preparing bogus W-2 Forms, based on information from employee paystubs;
· Falsifying return information to claim inflated Earned Income Tax Credits;
· Preparing tax returns for cash payments, but not signing the tax returns; and
· Defrauding customers by requiring franchisees to charge phony and exorbitant fees.
In addition to the civil enforcement through injunctions that stop their illegal actions, many return preparers also face prosecution. Examples of those investigations can be found for fiscal years 2013 and 2014
In the past decade, the Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the department website . Return preparer fraud is one of the IRS’s “Dirty Dozen Tax Scams.”
The IRS advises taxpayers who may select a tax professional to prepare their return to be careful in selecting a tax professional to prepare a return. The IRS offers some basic tips and guidelines to assist taxpayers in choosing a reputable tax professional and is also offering taxpayers a number of instructional YouTube videos to help them prepare their own taxes for the upcoming filing season. Several options, including free assistance with preparation and electronic filing for the elderly and individuals making $50,000 or less, are available to help taxpayers prepare for the 2014 tax season and receive their refunds as easily as possible.
Justice Department Highlights Ongoing Efforts to Protect the Public and Shut Down Fraudulent Tax Return Preparers and Promoters NationwideRead the Press Release
WASHINGTON – Today, the Justice Department announced the results of its ongoing efforts to combat fraudulent tax-return preparers and promoters of tax-fraud schemes. Taxpayers filed an estimated 142 million individual income tax returns for the 2011 tax year, with nearly 70 million taxpayers using a paid return preparer according to the Internal Revenue Service (IRS) Compliance Data Warehouse, Individual Returns Transaction File and Return Preparers and Providers Database, Tax Year 2011, filed through March 2013. The return filing deadline for the 2013 tax year is just over two months away on April 15, 2014. The department's Tax Division has an active program to stop fraudulent return preparers and promoters from violating federal tax laws, particularly where their fraudulent activity can harm individual customers or drain the U.S. Treasury. In the last year, the division has obtained permanent injunctions against more than 60 preparers and promoters doing business all over the United States.
"During the time when honest taxpayers are preparing their returns, the Tax Division will work tirelessly to challenge those who would abuse the tax laws and take advantange of their customers," said Assistant Attorney General Kathryn Keneally for the Tax Division. "The division's attorneys and staff, along with our colleagues in the Internal Revenue Service, are working hard to shut down these abusive schemes and scams and punish the perpetrators where appropriate."
The division's enforcement efforts have been directed against against both large-scale return preparation franchises and smaller, independent return preparers and promoters. For example, in 2013 the Tax Division concluded civil actions resulting in permanent injunctions against ITS Financial LLC, the parent company of the Instant Tax Service franchise located in Dayton, Ohio, and against Instant Tax franchises in Las Vegas, Kansas City, Kan., Los Angeles and Indianapolis. Instant Tax Service claimed to be the fourth-largest tax-preparation firm in the nation. In entering the permanent injunction in November 2013 that ordered ITS Financial LLC to cease operating, the court found the "defendants' harm to the public is extensive and egregious, indeed appalling especially so given the nature of Instant Tax Service's core customer - the working poor - who are particularly vulnerable to [the] defendants' fraudulent practices." The injunction also barred Fesum Ogbazion, the sole owner and CEO of ITS Financial, from operating or being involved with any business relating to tax-return preparation.
Similarly, in September 2013, the division obtained injunctions that permanently barred the owners, Markey Granberry and Derrick Robinson, as well as Eumora Reese, a former manager of Mo' Money Taxes, the Memphis, Tenn., based tax-preparation chain that at one time operated as many as 300 offices in 18 states, from preparing tax returns for others and owning or operating a tax return preparation business. Earlier, in March 2013, a federal district court in Tennessee permanently shut down a Nashville, Tenn., licensee of Mo' Money Taxes LLC and MoneyCo USA LLC.
Numerous smaller tax return preparation businesses and individual preparers around the country were also subjects of injunctions shutting down their business, including tax return preparers in Indiana, Maryland, Missouri, Texas, Georgia, South Carolina, Florida and California who were engaging in fraudulent practices.
The division also obtained injunctions against a number of fraudulent tax-scheme promoters. For example, in October 2013, a federal court permanently barred Tobias Elsass and his companies from preparing federal tax returns, promoting the availability of theft loss deductions or engaging in any other tax-related business. The court found that Elsass and Fraud Recovery Group promoted a nationwide scheme that falsely informed customers that they were entitled to claim large theft loss tax deductions, and then prepared the tax returns that improperly claimed such deductions. The court stated "there can be no doubt that the collective transgressions represent concerted and conscious attempts to game the nation's income tax system not necessarily for the benefit of FRG's customers, but for the profit of Elsass himself." At the division's urging, federal courts also enjoined a real estate appraiser who allegedly inflated easement values on historic properties to help customers claim millions in improper deductions, and a Chicago lawyer, who the complaint alleges had lawyers, entrepreneurs and professional football players among his customers, from promoting tax fraud schemes and from preparing various types of tax returns (IRS Forms 1040, 1041, 1065 and 1120) for individuals, estates and trusts, partnerships or corporations, to help facilitate the schemes.
As set forth in the civil injunction complaints filed by the United States, fraudulent return preparers commonly falsify return information to take advantage of refundable credits available under the tax code, often manipulating a taxpayer's income, expenses and dependents to maximize the amount of the refundable credit claimed. Some return preparers also take advantage of their customers by selling deceptive loan products with exhorbitant fees. As identified in the complaints, some of the fraudulent schemes and practices that have been stopped through injunction orders entered include:
- Preparing phony tax-return forms with fabricated businesses and income;
- Claiming false education and homebuyer credits;
- Claiming false and inflated deductions;
- Claiming false filing status;
- Claiming false dependents;
- Selling deceptive loan products and defrauding customers, who were largely low-income earners, by marketing false and fraudulent loan products to lure them into the tax-preparation offices;
- Filing tax returns without customer consent or authorization;
- Preparing bogus W-2 Forms, based on information from employee paystubs;
- Falsifying return information to claim inflated Earned Income Tax Credits;
- Preparing tax returns for cash payments, but not signing the tax returns; and
- Defrauding customers by requiring franchisees to charge phony and exorbitant fees.
In addition to the civil enforcement through injunctions that stop their illegal actions, many return preparers also face prosecution. Examples of those investigations can be found for fiscal years 2013 and 2014.
In the past decade, the Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the department website. Return preparer fraud is one of the IRS's "Dirty Dozen Tax Scams."
The IRS advises taxpayers who may select a tax professional to prepare their return to be careful in selecting a tax professional to prepare a return. The IRS offers some basic tips and guidelines to assist taxpayers in choosing a reputable tax professional and is also offering taxpayers a number of instructional YouTube videos to help them prepare their own taxes for the upcoming filing season. Several options, including free assistance with preparation and electronic filing for the elderly and individuals making $50,000 or less, are available to help taxpayers prepare for the 2014 tax season and receive their refunds as easily as possible.
Indictment Charges IRS Employee with Tax Fraud and Aggravated Identity TheftRead the Press Release
PHILADELPHIA - Sherelle Pratt, 49, of Philadelphia, was charged by Indictment, unsealed today, with filing false tax returns, aiding and assisting other individuals in preparing and filing false tax returns, theft of government property, and aggravated identity theft, announced United States Attorney Zane David Memeger. Pratt was arrested today.
According the Indictment Pratt is an IRS employee. Pratt, according to the indictment, is alleged to have prepared federal income tax returns for a number of individuals during tax years through 2006 through 2008. Pratt caused the refunds, and stimulus payments that the filers were supposed to receive, to be deposited into her personal bank account. In some cases, she gave the filers a portion of the refunds and stimulus payments. In other instances, according to the indictment, Pratt kept the refund and stimulus payments.
If convicted, the defendant faces a maximum possible sentence of 33 years in prison, including a two year minimum mandatory sentence, a fine of up to $2.25 million dollars, a special assessment of $900, and two years of supervised release.
The case was investigated by the Treasury Inspector General for Tax Administration, Philadelphia Field Office and the Internal Revenue Service’s Criminal Investigation Division and is being prosecuted by Assistant United States Attorney Floyd J. Miller.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Indiana, Pa., Man Sentenced to 5 Years in Prison for Possessing Child PornographyRead the Press Release
PITTSBURGH – An Indiana, Pa., resident has been sentenced in federal court to 60 months in prison, to be followed by 12 years of supervised release, on his conviction of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Christopher Murdock, 27.
According to information presented to the court, on or about Nov. 17, 2012, Murdock possessed visual depictions, namely, videos and images in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct.
Assistant United States Attorney Jessica Lieber Smolar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Pennsylvania State Police and the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Murdock.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Highlands Ranch Man Sentenced for Forced Labor and Trafficking in Forced Labor as Well as Other OffensesRead the Press Release
DENVER – Kizzy Kalu, age 49, of Highlands Ranch, was sentenced today by Chief U.S. District Court Judge Marcia S. Krieger to serve 130 months in federal prison after earlier being found guilty of mail fraud, visa fraud, human trafficking and money laundering. Following his prison sentence, Kalu was ordered to serve 3 years on supervised release, and pay $3,790,338.55 in restitution to the victims of his crime. Kalu, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Kalu was first indicted by a federal grand jury in Denver on March 1, 2012. After a 17‑day jury trial, Kalu was found guilty of 89 counts of mail fraud, visa fraud, human trafficking and money laundering on July 1, 2013. He was found not guilty of 6 counts. The jury deliberated for approximately a day and a half before reaching its verdict.
Prior to trial, co-defendant, Philip Langerman, age 78, of McDonough, Georgia, pled guilty for his role in the criminal scheme. Langerman was sentenced by Chief Judge Krieger to serve 3 years on probation. He was also ordered to pay restitution totaling $3,790,338.55 joint and several with Kalu. Langerman appeared at the hearing free on bond.
According to the indictment and evidence presented at trial, Kalu and Langerman were involved in a scheme making false representations to foreign nationals, to the State of Colorado, to the United States of America, and others for the purpose of obtaining money. Kalu and Langerman provided false information to the U.S. government to obtain the apparent lawful presence in the U.S. of foreign nationals. The foreign nationals then worked for nursing homes and other long‑term care facilities. Those facilities paid Kalu’s company, Foreign Healthcare Professionals Group, for the hours the foreign nationals worked. Kalu retained approximately 40% of the money earned from the labor of the foreign nationals.
Among the false information provided to the U.S. government was that the foreign nationals would be employed by Adam University as nurse instructor supervisors (which were considered "specialty occupations" under U.S. immigration law and regulations) and earn more than the prevailing wage so as not to undermine the wages of U.S. workers. Adam University existed largely in name only and had no genuine need for nurse instructor supervisors. The foreign nationals were granted H‑1B visas based on fraudulent representations permitting them to be employed as nurse instructors/supervisors by the largely nonexistent Adam University. Rather than working in specialty occupations, the foreign nationals worked as nurses.
Kalu also made false representations to the foreign nationals, including that they would have full time work available in Colorado. Upon their arrival, they learned that they would have to interview for positions and would not be employed by Adam University in a clinical setting. Some were unable to find full time work. Some learned that Kalu would not allow them to travel freely. Kalu threatened to cause their deportation if the foreign nationals did not provide him their labor and services. As Kalu’s scheme evolved, Kalu directed that the foreign nationals find work on their own and be paid directly by the healthcare facilities. However, Kalu demanded that the foreign nationals pay him between $800 to $1,200 a month or face deportation. Kalu threatened to notify the U.S. Department of Homeland Security and have their visas canceled if they did not pay him the money he demanded. Kalu used debt to help keep the foreign nationals with him. Many had gone deeply into debt to pay him for assistance in obtaining the visas. In addition, Kalu required the foreign nationals to sign employment contracts that provided they would owe Kalu $25,000 if they left his employment.
“Forced labor is a deplorable crime that is intolerable in a free society,” commented Acting Assistant Attorney General Jocelyn Samuels. “These defendants used fraud and deception to lure the victims into the United States, then used a scheme of debts and threats to hold the guest workers in fear. The Civil Rights Division commends the District of Colorado for bringing these traffickers to justice.”
“One of the most important missions the U.S. Attorney’s Office has is protecting the civil liberties and civil rights of individuals, including those who come here from other countries,” said U.S. Attorney John Walsh. “The defendant brought people to the United States under false pretenses, made them work for little pay, and threaten to have them deported if they spoke up. This is classic human trafficking, and as today’s sentence demonstrates, we are committed to stopping those who commit this serious federal crime.”
"The sentencing in this case is indicative of the seriousness of these crimes and the degree that the Diplomatic Security Service is committed to fighting human trafficking and ensuring the integrity of our documents," said Daniel M. Childs, Resident Agent in Charge, Denver Resident Office, Diplomatic Security Service, U.S. Department of State. "This is a textbook case of large‑scale fraud, exploiting workers who are seeking a better life. The tireless efforts of our partners have guaranteed a result that will punish and discourage these acts in Colorado and throughout the world."
"Mr. Kalu fraudulently enticed many foreign nurses to the United States with false promises of jobs," said Kumar C. Kibble, special agent in charge of HSI Denver. "Then, after threatening them with deportation, he coerced money from them on a monthly basis. Homeland Security Investigations, with our law enforcement partners, aggressively investigates and pursues prosecution against modern‑day slavery criminals like Mr. Kalu. For the desperation he has caused to so many people, he deserves every day of the prison sentence he was awarded."
"Today's sentencing highlights our efforts to investigate fraud against the Department of Labor's foreign labor certification program. The defendant devised a scheme to falsify labor certification applications and illegally obtain H-1B visas for foreign nationals, whose earnings he then stole for personal gain. The Office of Inspector General and its law enforcement partners remain committed to investigating these types of crimes," said David C. Wickersham, Special Agent‑in‑Charge for the Dallas Regional Office of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
This case was investigated by the Department of State’s Diplomatic Security Service, ICE Homeland Security Investigations, and the U.S. Department of Labor’s Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations. Further critical support was provided by U.S. Citizenship and Immigration Services, Office of Fraud Detection and National Security and the Douglas County Sheriff’s Office.
Kalu was prosecuted by Assistant U.S. Attorney Robert Brown and ICE Special Assistant U.S. Attorney Beth Gibson.
Hamden Man Sentenced to 30 Months in Prison for Distributing CrackRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DEANDRE BARNES, also known as “D-Man,” 24, of Hamden, was sentenced today by Senior U.S. District Judge Warren W. Eginton in Bridgeport to 30 months of imprisonment, followed by four years of supervised release, for distributing crack cocaine.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI New Haven Safe Streets Task Force and the New Haven Police Department into drug distribution and related violence allegedly being committed by members and associates of the Grape Street Crips in New Haven.
On April 9, 2012, a grand jury returned an indictment charging BARNES and 17 other individuals with narcotics distribution offenses stemming from this investigation. On October 16, 2013, BARNES pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine base (“crack cocaine”).
Eight defendants are awaiting trial, which is currently scheduled for March 2014. With respect to these defendants, U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the FBI’s New Haven Safe Streets Task Force, the New Haven, Hamden and Milford Police Departments, and the State of Connecticut Department of Correction. The investigation has been assisted by the U.S. Marshals Service and the Westerly (R.I.) Police Department.
This case is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and H. Gordon Hall.
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(203) 821-3722 [email protected]Gunman in Armed Robbery Spree Exiled to 25 Years in PrisonRead the Press Release
Brandished a Gun in All 22 Robberies and Shot a Customer in One Robbery
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Hatratico Smith, age 48, of Baltimore, Maryland, today to 25 years in prison, followed by five years of supervised release, for a series of armed commercial robberies committed from January through June, 2012. Smith brandished a gun in all of the robberies and shot a customer during one of the robberies.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Baltimore City State’s Attorney Gregg L. Bernstein; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore Police Commissioner Anthony W. Batts.
According to Smith=s plea agreement, from January 22, 2012 through June 11, 2012, he conspired with Rico Bias, Monzell Lee and others, to commit 22 robberies of convenience stores, fast food restaurants, and other businesses. Smith brandished a gun during the robberies, and on two occasions fired the gun, including on February 21, 2012, which resulted in the shooting of a customer. Lee participated in four of the robberies and Bias admitted that in addition to checking out the stores prior to his codefendants entering the businesses to commit the robberies, he obtained and drove the get away car in each of the robberies. The defendants have been in federal custody since their arrests.
Rico Bias, age 34, and Monzell Lee, age 20, both of Baltimore, pleaded guilty to their roles in the robberies. Bias was sentenced to 185 months in prison and Lee was sentenced to nine years in prison for the four robberies in which he participated.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department, Baltimore County Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney A. David Copperthite, who prosecuted the case.
Georgia Woman Arraigned for Social Security FraudRead the Press Release
ATLANTA - Cathy Thomas has been arraigned in federal court on charges arising out of a scheme to obtain benefits that should have been used for a disabled, mentally incompetent beneficiary.
“This Defendant was entrusted with the responsibility of making certain that the Social Security benefits were used to care for this defenseless woman who was unable to care for herself, and could not even communicate her name to others" said United States Attorney Sally Quillian Yates. "Instead, the Defendant stole her money and let her languish in various hospitals where they did not even know her true identity."
“The Office of the Inspector General has no higher priority than the protection of those Social Security beneficiaries least able to defend themselves,” said Thomas Caul, Special Agent in Charge, of the Office of the Inspector General for the Social Security Administration. “Representative payees are appointed to ensure the well-being of a beneficiary when the beneficiary is unable to administer his or her own affairs, and the violation of that trust will be prosecuted. We are gratified to see this case brought to a successful conclusion, and appreciative of the U.S. Attorney’s commitment to helping us protect those most in need.”
According to United States Attorney Yates, the indictment, and other information presented in court: In August 2010, an unidentified, mentally incompetent woman was abandoned at an Alabama hospital emergency room. Because she was unable to communicate she remained unidentified until August 2013, when the Alabama Bureau of Investigation, working in connection with the Georgia Bureau of Investigation, was able to identify her. The Social Security Administration (SSA) determined that the woman was a Supplemental Security Income (SSI) beneficiary. They further determined that Cathy Thomas was the woman’s representative payee, and was continuing to receive the woman’s monthly SSI benefits.
Thomas, 59, of Douglasville, Ga. was arraigned on February 7, 2014, on an indictment that charged her with one count of wire fraud in violation of Title 18 USC Section 1343, three counts of false statements to a federal agency in violation of Title 18 USC Section 1001, and one count of representative payee fraud in violation of Title 42 USC Section 1383a(a)(4).
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Social Security Administration, Office of the Inspector General.
Special Assistant United States Attorney Diane C. Schulman is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Four Employees of Adoption Services Provider<br /> Charged with Conspiracy to Defraud the United States<br /> in Connection with Ethiopia OperationsRead the Press Release
Four current and former employees of International Adoption Guides Inc. (IAG), an adoption services provider, have been indicted by a grand jury in South Carolina for allegedly conspiring to defraud the United States in connection with IAG’s adoption services in Ethiopia. IAG is a South Carolina company that identified children in Ethiopia for adoption and arranged for their adoption by U.S.-based parents.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney William N. Nettles of the District of South Carolina and Assistant Secretary Gregory B. Starr of the Department of State’s Bureau of Diplomatic Security made the announcement.
“The defendants are accused of obtaining adoption decrees and U.S. visas by submitting fraudulent adoption contracts signed by orphanages that never cared for or housed the children, thus undermining the very laws that are designed to protect the children and families involved,” said Acting Assistant Attorney General Raman. “As today’s indictments show, the Justice Department, alongside its partners both here and abroad, will respond vigorously to these criminal schemes and will act to protect the many families and children who rely on the integrity of the adoption process.”
“The Bureau of Diplomatic Security uses its global presence to vigorously investigate any fraud related to the acquisition of U.S. visas,” said Assistant Secretary Starr. “The Department of State’s Bureaus of Consular Affairs and Diplomatic Security are firmly committed to working with the U.S. Department of Justice to investigate and bring to justice people who victimize children and families by abusing inter-country adoption system and bribe officials to facilitate their actions.”
The international program director and coordinator for IAG, James Harding, 53, of Lawrenceville, Ga., was arrested today in Georgia. Alisa Bivens, 42, of Gastonia, N.C., who oversaw the Ethiopian operations from the United States, is scheduled to make an appearance at a later date in U.S. District Court in Charleston, S.C. The company’s executive director, Mary Mooney, 53, of Belmont, N.C., was apprehended in Belize by Belizean authorities and transported to the United States. Haile Mekonnen, age unknown, an Ethiopian national who ran IAG’s operations on the ground in Ethiopia, was also charged in the indictment.
According to the indictment, the defendants allegedly engaged in a five-year conspiracy to violate laws relating to the adoption of Ethiopian children by U.S. parents. The scheme involved, among other things, paying orphanages to “sign off” on contracts of adoption with the adopting parents as if the children had been raised by those orphanages — even though the children had never resided in those orphanages and had not been cared for or raised there. These orphanages could not, therefore, properly offer these children up for adoption. In some instances, the children resided with a parent or relative.
As part of the charged conspiracy, the defendants then allegedly submitted or caused to be submitted these fraudulent contracts of adoption to Ethiopian courts in order to secure adoption decrees, and submitted or caused to be submitted the fraudulent contracts of adoption and the fraudulently procured adoption decrees to the U.S. Embassy in Ethiopia in order to obtain U.S. visas for the children to travel to the United States to be with their new families. The indictment also charges that the defendants’ scheme involved paying bribes to an Ethiopian government official and agreeing to create counterfeit U.S. Citizenship and Immigration Service forms that were to be submitted to the Ethiopian government.
The charge of conspiring to defraud the United States carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
If you believe you have been a victim of this crime involving the named individuals or International Adoption Guides, please call 1-800-837-2655 and leave your contact information. If you have questions or concerns about adoptions from Ethiopia in general, please contact the Office of Children’s Issues at the Department of State through the email address [email protected] . If you have specific questions about an adoption from Ethiopia that IAG facilitated, you should contact the Office of Children’s Issues at the Department of State through the email address [email protected] .
This ongoing investigation is being conducted by the Bureau of Diplomatic Security. The prosecution is being conducted by Assistant United States Attorney Jamie Schoen of the District of South Carolina and Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section.Former Postal Service Employee Sentenced to Nine Years for Drug Conspiracy and Possessing Stolen MailRead the Press Release
Anchorage, Alaska-United States Attorney Karen L. Loeffler announced that a Wasilla woman was sentenced yesterday by U.S. District Court Judge Sharon Gleason to nine years in federal prison for her role in a drug conspiracy as well as for possession of stolen mail.
Brenda Sue Cox, 53, of Wasilla, Alaska, previously pled guilty to conspiring with others to distribute large amounts of methamphetamine and heroin. Cox, a former contract employee with the United States Postal Service, also admitted to being in possession of mail that she had removed from her postal route. In addition to her prison sentence, Cox will pay $1,949.92 in restitution to the individuals and businesses whose mail she had in her possession at the time of her arrest.
In sentencing Cox, Judge Gleason noted that Cox’s drug trafficking appeared to be motivated by greed and stressed that she found the nature and circumstances of Cox’s offenses troubling. Judge Gleason also emphasized the need for deterrence in these types of cases.
Responding to the sentence, Inspector in Charge of the Seattle Division of the United States Postal Inspection Service, Bradley Kleinknecht, stated that, “The United States Postal Inspection Service is committed to ensuring that the United States mail remains one of the most trusted forms of communication in the world, and that the theft of the United States mail will be prosecuted to the fullest extent of the law.”
Kleinknecht went on to state that “United States Postal Inspectors are also committed to identifying mail containing drugs, while ensuring that drug traffickers know that the United States mail is no safe haven for them. This sentence sends a strong message to anyone who misuses the United States mail in any way; you will be caught and you will be prosecuted.”
In announcing the sentencing, U.S. Attorney Loeffler praised the United States Postal Inspection Service and the Alaska State Troopers, who conducted the investigation in this case.
Former Mingo County Chief Magistrate Arrested for Violating Bond ConditionsRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin confirmed today that former Mingo County Chief Magistrate Dallas Toler was arrested last night for violating the conditions of his release on bond. Toler had been free on bond since he pleaded guilty on December 2, 2013, to procuring a false voter registration application. The arrest came in response to a motion filed by Goodwin’s office detailing Toler’s involvement in illegal drug activity. The full motion is available here, and the Court is expected to schedule a hearing on the motion soon.
Former Grandview Mayor Pleads Guilty to $35,000 Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former mayor of Grandview, Mo., pleaded guilty in federal court today to a wire fraud scheme in which he used a bogus charity to steal $35,000 in contributions from International House of Prayer, a local nonprofit organization.
Stephen S. Dennis, 50, of Grandview, waived his right to a grand jury and pleaded guilty before U.S. Senior District Judge Howard F. Sachs to a federal information that charges him with the felony offense of wire fraud. Dennis resigned as mayor of Grandview on Jan. 10, 2014.
By pleading guilty today, Dennis admitted that he engaged in a scheme from Dec. 12, 2011, to Nov. 29, 2013, to solicit donations to a corporation called Matters of the Heart. Dennis incorporated Matters of the Heart as a nonprofit corporation under state law, but falsely claimed it was also a federally tax-exempt 501(c)(3) corporation. Dennis never applied for 501(c)(3) status with the IRS for Matters of the Heart, even though application instructions were given to him in December 2011 by an attorney from whom he sought legal advice.
According to today’s plea agreement, Dennis received two checks from International House of Prayer Forerunner Christian Fellowship, a nonprofit organization in Grandview, totaling $35,000 in 2012. After obtaining the $35,000, Dennis used these funds for his own personal benefit, including his immediate family’s living expenses, rather than for any charitable purpose.
Matters of the Heart is now dissolved. In the organization’s articles of incorporation, Dennis listed himself as incorporator, registered agent, and one of the three directors of the board. He listed two persons, identified as “B.S.” and “J.M.” as the other two directors. B.S. and J.M. had no knowledge that they were listed as directors, and at no time gave Dennis permission or authority to claim them as such. B.S. and J.M. have never served as directors on the Matters of the Heart board of directors.
Under the terms of today’s plea agreement, the government will jointly recommend with the defendant a sentence of one year and one day in prison. The court may also order Dennis to pay restitution to International House of Prayer. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Roseann A. Ketchmark. It was investigated by the FBI.
Public Corruption Hotline
The FBI has established a toll-free public corruption hotline, 1-855-KCPCTIP, and email [email protected]. Details regarding the various types of public corruption investigated by the FBI can be found online: http://www.fbi.gov/about-us/investigate/corruption.Former Franklin Man Sentenced to Prison for Failing to Register as A Sex OffenderRead the Press Release
ERIE, Pa. - A former resident of Franklin, Pennsylvania, has been sentenced in federal court to ten months in jail on his conviction of failure to register under the Sex Offender Registration and Notification Act, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Thomas K. Baker, 56.
According to information presented to the court, Baker knowingly failed to update his registration as required by the Sex Offender Registration and Notification Act.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Marshal’s Service for the investigation leading to the successful prosecution of Baker.
Former Employee Pleads GuiltyTo Stealing Garmin GPS DevicesRead the Press Release
KANSAS CITY, KAN. – A man who worked for the Garmin Company in Olathe, Kan., pleaded guilty Tuesday to stealing boxes of GPS devices from the company, U.S. Attorney Barry Grissom said.
Terrence M. Heathington, 31, formerly of Olathe and currently of Atlanta, Ga., pleaded guilty to one count of mail fraud. In his plea, he admitted that the crime was committed from March to September 2008 when he worked in Garmin International, Inc.’s warehouse in Olathe as a material handler. He shipped a large quantity of Garmin GPS devices to his personal address and the address of high school friends living in Atlanta. He and his friends sold the devices on eBay and to other individuals.
The thefts were discovered when a person who bought one of the stolen devices contacted the company. An audit revealed that boxes of GPS devices had been shipped to Heathington’s home in Ottawa and to addresses in Georgia, where Heathington had lived.
Sentencing will be set at a later date. He faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. Grissom commended the Overland Park Police Department, the U.S. Secret Service and Assistant U.S. Attorney Chris Oakley for their work on the case.
Former City Worker Sentenced to Probation with Home Detention for Bid-rigging SchemeRead the Press Release
PITTSBURGH - A former City of Pittsburgh employee has been sentenced in federal court to three years supervised release which consists of six months home detention and a $6,000 fine on her conviction of conspiracy, United States Attorney David J. Hickton announced today.
United States District Judge Cathy Bissoon imposed the sentence on Christine Kebr, 57, of Pittsburgh, Pa.
According to information presented to the court, Kebr was an employee of the City of Pittsburgh with responsibility for installing radios and mobile data terminals (MDTs) in City Police cars. She conspired with others to create a company, Alpha Outfitters, in order to steer a city contract to Alpha Outfitters, for the installation of MDTs in police cars. Alpha received the contract in part by fraudulently representing that the company was a Women's Business Enterprise (WBE).
Assistant United States Attorneys Robert S. Cessar and Lee J. Karl prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations for the investigation leading to the successful prosecution of Kebr.
Former Cameron County District Attorney Armando Villalobos Sentenced to Federal Prison in Connection with South Texas Bribery SchemeRead the Press Release
In Brownsville today, former Cameron County District Attorney Armando R. Villalobos was sentenced to 13 years in federal prison for his role in a South Texas bribery and extortion scheme announced United States Attorney Robert Pitman.
In addition to the prison term, U.S. District Judge Andrew Hanen ordered that Villalobos pay $339,000 in restitution, pay a $30,000 fine, and be placed under supervised release for a period of three years after completing his prison term. Judge Hanen also ordered that Villalobos be remanded to the custody of the U.S. Marshals Service following today’s sentencing hearing.
“The most important component of an effective justice system is the public’s ability to trust those who are responsible for enforcing the law. But even when there is a breach of that trust, as in this case, the public should take some comfort in knowing that there is a mechanism for detecting, rooting out and punishing those who would corrupt the process,” stated United States Attorney Robert Pitman.
In May 2013, a federal jury convicted Villalobos of one count of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act, one count of conspiracy to violate the RICO Act and five counts of extortion. Jurors acquitted Villalobos of two counts of extortion. This afternoon, Judge Hanen granted the defendant’s motion for acquittal on an extortion count (count 3) before sentencing Villalobos to 156 months incarceration on each of the six remaining charges all to run concurrent.
Evidence presented at trial revealed that from October 2, 2006, through May 3, 2012, Villalobos and others were involved in a scheme to illegally generate income for themselves and others through a pattern of bribery and extortion, favoritism, improper influence, personal self-enrichment, self-dealing, concealment and conflict of interest. Jurors found that Villalobos solicited and accepted over $100,000 in bribes and kickbacks in the form of cash and campaign contributions in return for favorable acts of prosecutorial discretion, including minimizing charging decisions, pretrial diversion agreements, agreements on probationary matters and case dismissals. Furthermore, Villalobos solicited and arranged for private counsel to handle civil and forfeiture matters associated with criminal matters pending in the Office of the District and County Attorney of Cameron County.
This investigation was conducted by the Federal Bureau of Investigation, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation and the Brownsville Police Department. Former Southern District of Texas Assistant United States Attorney Michael Wynne and current Western District of Texas Assistant United States Attorney Greg Surovic prosecuted this case on behalf of the Government.
Financial Advisor Sentenced to 10 Years in Prison for Investment Fraud SchemeRead the Press Release
RENO, Nev. – A former bank financial advisor in Reno who defrauded six persons of over $2 million during 2010 and 2011, has been sentenced to 10 years in prison, five years of supervised release and ordered to pay restitution to the victims, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Gary H. Lane, 60, of Reno, who pleaded guilty in September 2013 to 12 counts of mail fraud and five counts of attempt to evade or defeat tax, was sentenced on Monday, Feb. 10, 2014, by U.S. District Judge Robert C. Jones.
“Beware of persons who offer better interest rates than traditional sources,” said U.S. Attorney Bogden. “They prey on the elderly and unsophisticated and will use numerous methods to steal your money. If you do not know if an investment opportunity is legitimate, it is always better to investigate the person or company first before turning over any money to them.”
Lane was employed until March 2011 as a financial advisor with Bank of America Investment Services, which later merged with Merrill Lynch. During the course of Lane’s employment, he allegedly developed a scheme to entice persons to invest monies with him through the use of an E-Trade account rather than through normal bank procedures. Lane allegedly looked for investors who were elderly or lacked investing experience and who had a desire for high returns and aversion to risk. Lane told the investors that their funds would be invested in U.S. Treasury Bonds which would pay better than six percent interest and would mature in two years. Lane corroborated the trades by creating false confirmations and distributing them to the victims by mail. After receiving the monies from the victims, Lane gave them to his spouse who mailed them to her E-Trade account. The monies were then withdrawn at Lane’s direction for his own use or to pay other investors. In actuality, Lane never purchased any U.S. Treasury Bonds with the victims’ monies. In fact, there were never any United States Treasury Bonds that existed with a rate of return of greater than six percent and a maturity period of less than two years.
Using this scheme, Lane defrauded approximately six persons of over $2 million between January 2010 and March 2011. Lane also allegedly filed false and fraudulent individual tax returns for the years 2006 through 2010, substantially understating his income and tax due and owing to the IRS.
The case was investigated by the FBI, IRS Criminal Investigation and the Nevada Secretary of State Securities Division, and prosecuted by Assistant U.S. Attorney Ronald C. Rachow.
This case was handled in connection with the President's Financial Fraud Enforcement Task Force. 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.Federal Jury Finds Legal Permanent Resident from China Guilty on Fraud, Immigration and Witness Tampering ChargesRead the Press Release
ALBUQUERQUE – A federal jury sitting in Las Cruces, N.M., returned a verdict earlier today finding Hai Gan guilty on fraud, immigration and witness-tampering charges after a six-day trial. The verdict was announced by Acting U.S. Attorney Steven C. Yarbrough, Special Agent in Charge Dennis A. Ulrich, II, of Homeland Security Investigations (HSI) in El Paso, Texas Ulrich, and Chief Patrol Agent Scott A. Luck, El Paso Sector of the U.S. Border Patrol.
Hai Gan, 56, a legal permanent resident from China who resides in The Colony, Texas, was arrested on May 11, 2011, at a U.S. Border Patrol checkpoint on Interstate 25 north of Doña Ana County, N.M., when Border Patrol Agents learned that he was transporting an illegal alien. Hai Gan subsequently was indicted and charged with 51 counts of fraud in connection with identification documents, eight counts of transporting illegal aliens, three counts of money laundering and two counts of witness-tampering. The indictment also sought forfeiture of three residences owned by Hai Gan, two in Albuquerque and another in Moriarty, as well as Hai Gan’s residence in The Colony as assets used in or derived from Gan’s illegal activities.
Hai Gan’s trial began on Feb. 3, 2014 and concluded this afternoon when the jury returned a verdict of guilty on all counts.
The evidence at trial established that from Aug. 2009 to May 2011, Hai Gan engaged in a scheme to aid undocumented aliens who were not New Mexico residents in obtaining New Mexico drivers’ licenses by assisting the aliens in fabricating fraudulent documents purportedly establishing New Mexico residency; arranging for the aliens to travel to New Mexico; and assisting the aliens in securing New Mexico drivers’ licenses by fraudulently attesting that they were New Mexico residents. The evidence also established that Hai Gan advertised his services in Chinese–language newspapers, and charged each alien upwards of $3000 for his services. Hai Gan would first work with the alien to develop false residency documents using one of the residences he owned in New Mexico as the alien’s address. After sufficient fraudulent residency documentation was developed, Hai Gan typically would meet the alien at the Albuquerque airport and assist the alien in obtaining a temporary New Mexico driver’s license. When the alien’s permanent driver’s license was delivered to the address identified as the alien’s residence, Hai Gun would mail the driver’s license to the alien’s true home.
The evidence also established that Hai Gan transported undocumented aliens in Bernalillo and Torrance Counties on eight occasions between Dec. 2009 and May 2011. An undocumented alien testified that in Nov. or Dec. 2012, Hai Gan attempted to dissuade him from testifying against him by suggesting that he would be arrested if he did not relocate. The wife of another alien testified that Hai Gan called her and requested that her husband relocate or deny knowledge of Hai Gan’s criminal activities.
The jury deliberated approximately three hours before returning its guilty verdict.
Hai Gan was remanded into custody after the jury returned its verdict and remains detained pending his sentencing hearing which has yet to be scheduled. At sentencing, Hai Gan faces the following maximum penalties: 15 years in prison on each of the 51 counts of document fraud; ten years in prison on each of the eight alien transportation counts; ten years in prison on each of the three money laundering counts; and 20 years in prison on each of the witness-tampering charges. The court will render a verdict on the issue of forfeiture at sentencing.
This case was investigated Homeland Security Investigations, the U.S. Border Patrol, the Department of Homeland Security-Office of Inspector General, and HSI El Paso’s Financial Operations and Currency Unified Strike Force (FOCUS), which includes DEA, Texas Department of Public Safety, IRS Criminal Investigation and U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorneys Randy M. Castellano and Michael S. Pleters.
Federal Advisory Committee Examines Juvenile Courts and Justice System Programs for American Indian Children Exposed to ViolenceRead the Press Release
More than 30 tribal leaders, juvenile court judges, child advocates, juvenile justice system experts and community members from the Salt River Pima-Maricopa Indian Community testified today in the second public hearing of the Advisory Committee of the Attorney General’s Task Force on American Indian and Alaska Native Children Exposed to Violence. The hearing focused on how juvenile courts and other programs within tribal juvenile justice systems address the impact of children’s exposure to violence.
“Too many native children encounter violence in their homes and communities that can disrupt a path to living healthy adult lives, and we must do all that we can to protect these young people,” said Associate Attorney General Tony West. “By intervening early, we can help these children avoid a fate involving courts and the corrections system.”
During the hearing, experts explained how children entering tribal, state or federal justice systems are screened and treated for trauma from previous exposure to violence. They also discussed a variety of issues facing Native children in juvenile justice systems, including the availability of legal representation, tribal court transfer of juvenile cases to adult courts, culturally sensitive programs and services that divert youth from entering the juvenile justice system.
“The long-term impact of a child’s exposure to violence depends heavily on how law enforcement officials, prosecutors, defenders, judges, and corrections professionals handle that child’s case,” said Assistant Attorney General of the Office of Justice Programs Karol V. Mason. “Through the work of the task force, we hope to find ways to make the justice system a force for positive change in a young person’s life.”
The Attorney General’s Task Force on American Indian and Alaska Native Children exposed to violence is comprised of a federal working group that includes U.S. Attorneys and officials from the Departments of the Interior and Justice and an advisory committee of experts on American Indian studies, child health and trauma, victim services and child welfare and law.
The 13-member advisory committee is co-chaired by former U.S. Sen. Byron Dorgan and Iroquois composer and singer Joanne Shenandoah. The advisory committee will draw upon research and information gathered through public hearings to draft a final report of policy recommendations that it will present to Attorney General Eric Holder by late 2014.
Attorney General Holder created the task force in April 2013 as part of his Defending Childhood initiative to prevent and reduce children’s exposure to violence as victims and witnesses. The task force is also a component of the Justice Department’s ongoing collaboration with leaders in American Indian and Alaska Native communities to improve public safety.
The advisory committee held its first public hearing Dec. 9, 2013, in Bismarck, N.D. and will hold additional public hearings, in Fort Lauderdale, Fla. and Anchorage, Alaska.
For more information about the advisory committee and public hearings, please visit www.justice.gov/defendingchildhood.
The Office of Justice Programs (OJP), headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP can be found at www.ojp.gov.
Fast Food Restaurant Robbers Sentenced for Firearms OffensesRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that TREVIN MAURICE GIBSON of Greenville, MICHAEL RONDALE GIBSON of Greenville and DESHAUN ENTREA SPRUILL of Robersonville were each sentenced today resulting from their earlier guilty pleas to firearms charges. The charges involved a string of robberies of fast food restaurants in and around Greenville from September 2011 through January 2012. The robberies involved outlets of Bojangles, KFC, Subway, Burger King, McDonalds and Popeyes.
In November, 2013, each defendant entered a plea before Chief U.S. District Judge James C. Dever, III to two counts of using or carrying a firearm during and in relation to a crime of violence, or possessing a firearm in furtherance of a crime, in violation of Title 18, United States Code, Section 924(c)(1)(A). Judge Dever sentenced TREVIN GIBSON to 43 years in prison. TREVIN GIBSON was also sentenced to 2 additional years in prison for violating the release terms from a prior federal conviction, resulting in a total sentence of 45 years in prison. TREVIN GIBSON was also ordered to pay $21,336 in restitution and to be supervised for 5 years following his release. MICHAEL GIBSON, Trevin Gibson’s brother, was sentenced to 36 years in prison and ordered to pay $10,061 in restitution. He was also ordered to be supervised for 5 years following his release. SPRUILL was sentenced to 33 years in prison, and ordered to pay $20,251 in restitution. He will also be supervised for 5 years following his release.
Two other defendants, Prentise Wilkins and Marcus Garrett, will be sentenced at a later date.
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 Bureau of Alcohol, Tobacco, Firearms and Explosives, the Greenville Police Department, the Williamston Police Department, the Robersonville Police Department, the Wilson Police Department, the Farmville Police Department, the Elizabeth City Police Department, the Goldsboro Police Department, the Snow Hill Police Department, and the Pitt County Sheriff’s Office. Assistant United States Attorney John Bennett is prosecuting the case.
Erie Man Indicted on Drug ChargesRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania has been indicted by a federal grand jury in Erie on charges of violating federal drug laws, United States Attorney David J. Hickton announced today.
The three-count indictment named Jamie Darnell Pacely, 35, as the sole defendant.
According to the indictment presented to the court, on three occasions, Pacely possessed with intent to distribute and distributed less than 28 grams of crack cocaine.
The law provides for a maximum total sentence of 60 years in prison, a fine of $3,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The EAGLE task force, which is comprised of members of the Federal Bureau of Investigation, the Pennsylvania State Police, the Erie Police Department, and the Pennsylvania Office of Attorney General Bureau of Narcotics Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Durable Medical Equipment Clinic Owner Sentenced for His Role in $11 Million Health Care Fraud SchemeRead the Press Release
The former owner of a defunct durable medical equipment (DME) clinic was sentenced today in Miami to serve 70 months in prison for his role in an $11 million health care fraud scheme involving World Class Medical Clinic Corp. (World Class).
U.S. Attorney for the Southern District of Florida Wifredo A Ferrer, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Special Agent in Charge Michael B. Steinbach of the FBI's Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigation’s Miami Office made the announcement.
Francisco Enrique Chavez, 36, of Miami, was sentenced by U.S. District Judge Patricia A. Seitz in the Southern District of Florida. In addition to his prison term, Chavez was sentenced to three years of supervised release and ordered to pay $1,713,959 in restitution.
On Nov. 21, 2013, Chavez pleaded guilty to one count of health care fraud.
During the course of the health care fraud scheme, Chavez served as the president and sole corporate officer of World Class, a defunct DME company located in Miami. From March 27, 2006 through Aug. 22, 2006, Chavez submitted and caused to be submitted approximately $11.3 million in false and fraudulent claims to the Medicare program on behalf of World Class for DME that was neither prescribed by a physician nor medically necessary. Medicare paid more than $1.7 million on these false and fraudulent claims. The proceeds of the World Class fraud scheme were deposited into corporate bank accounts that were controlled by Chavez. Chavez, in turn, made numerous cash withdrawals and deposits into personal and shell entity bank accounts to facilitate and conceal the nature of the scheme.
The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Allan J. Medina and Sarah M. Hall of the Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely billed the Medicare program for more than $5.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the 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: http://www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Durable Medical Equipment Clinic Owner Sentenced <br /> for His Role in $11 Million Health Care Fraud SchemeRead the Press Release
The former owner of a defunct durable medical equipment (DME) clinic was sentenced today in Miami to serve 70 months in prison for his role in an $11 million health care fraud scheme involving World Class Medical Clinic Corp. (World Class).
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Southern District of Florida Wifredo A Ferrer; 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 Investigation’s Miami Office made the announcement.
Francisco Enrique Chavez, 36, of Miami, was sentenced by U.S. District Judge Patricia A. Seitz in the Southern District of Florida. In addition to his prison term, Chavez was sentenced to three years of supervised release and ordered to pay $1,713,959 in restitution.
On Nov. 21, 2013, Chavez pleaded guilty to one count of health care fraud.
During the course of the health care fraud scheme, Chavez served as the president and sole corporate officer of World Class, a defunct DME company located in Miami. From March 27, 2006 through Aug. 22, 2006, Chavez submitted and caused to be submitted approximately $11.3 million in false and fraudulent claims to the Medicare program on behalf of World Class for DME that was neither prescribed by a physician nor medically necessary. Medicare paid more than $1.7 million on these false and fraudulent claims. The proceeds of the World Class fraud scheme were deposited into corporate bank accounts that were controlled by Chavez. Chavez, in turn, made numerous cash withdrawals and deposits into personal and shell entity bank accounts to facilitate and conceal the nature of the scheme.
The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Allan J. Medina and Sarah M. Hall of the Fraud Section .
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely billed the Medicare program for more than $5.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Douglas Man Arrested for Attempting to Entice A Federal Agent Posing as MinorRead the Press Release
BOSTON - A Douglas man was charged in the U.S. District Court in Worcester today with attempting to entice a 13-year-old girl over the internet.
Scot Trudeau, 39, was charged in a complaint with using a means or facility of interstate commerce to induce and/or entice a minor to engage in unlawful sexual activity.
An affidavit unsealed today alleges that an undercover investigation was initiated after receiving complaints that Trudeau had been communicating via email with a minor in New York State. Between September 2013 and January 2014, federal agents posed as a 13-year-old-girl and communicated with Trudeau via email during which time Trudeau repeatedly enticed the agent to engage in unlawful sexual conduct and discussed the possibility of traveling to New York to meet and engage in sexual acts.
If convicted, Trudeau faces a mandatory minimum sentence of 10 years and a maximum of a lifetime in prison, a mandatory minimum of five years and up to a lifetime of supervised release.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Mark J. Grady of Ortiz’s Worcester Branch Office.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274, and messages will be promptly returned.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and 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.
Defendant Sentenced on Federal Drug ChargeRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced today that Timothy Dewayne Hunt of Mobile was sentenced to 15 months imprisonment, following a May 2013 guilty plea to a charge of possession with intent to distribute a controlled substance. The charge arose from a July 27, 2012, traffic stop in which Hunt was found in possession of marijuana and powder cocaine. The sentence was imposed by Senior U.S. District Court Judge Charles R. Butler, Jr. During the same Court proceeding, Judge Butler also imposed a consecutive sentence of (10 months) based upon a revocation of Hunt’s supervised release on an earlier federal conviction.
This case was investigated by the Federal Bureau of Investigation Safe Streets Task Force, with assistance from the Mobile and Fairhope Police Departments. The case was prosecuted by the United States Attorney’s Office for the Southern District of Alabama.
DOJ and City Hail Federal Judge’s Approval of the new Seattle Police Department Crisis Intervention PolicyRead the Press Release
U.S. District Judge James L. Robart today approved a new Crisis Intervention Policy for the Seattle Police Department, announced U.S. Attorney Jenny A. Durkan. The policy, developed with local, regional and nationally-recognized experts in the fields of mental health and drug addiction, is designed to improve community safety and provide officers with the guidance and training they need to treat those having a behavioral crisis with dignity and respect, and to resolve crisis incidents by connecting those individuals with community services that can provide long-term stabilizing support. One key component of the policy calls for officers to de-escalate the situation when feasible and reasonable.
The new policy will become the official policy of the Seattle Police Department on March 3, 2014, and initial training to the policy will begin soon thereafter.
“SPD’s data shows that far too many situations requiring force involve people suffering from mental health or substance abuse issues. This new policy creates critical new organizational and operational changes for the Seattle Police Department that will guide and help officers when dealing with such individuals,” said U.S. Attorney Jenny A. Durkan. “The phased approach is a model for urban policing. While all officers will be trained, selected officers will be certified with advanced training to manage the scene when dealing with a person in crisis. A crisis response team will follow up on criminal investigations where mental illness is suspected. These organizational and operational changes are recognized as best practices at the best law enforcement agencies in the nation. We thank the members of the Crisis Intervention Committee (and their sponsoring agencies) for the time they generously spent in diligently and carefully helping to craft these policies.”The new policy was developed over months of work by the Crisis Intervention Committee (CIC), composed of mental and behavioral health experts: providers, clinicians, advocates, academics, outside law enforcement representatives, members of the Seattle Police Department (SPD) and the judiciary. The CIC was created in 2013 to provide a problem-solving forum for interagency issues, including the development of policy, the evaluation of training for SPD’s officers engaged with this population, and the collection of data and other information to track systemic failures in providing the available services.
“People experiencing a behavioral crisis are victims who deserve of our care and attention, and our SPD officers deserve clear expectations for how to approach and interact with those in this kind of situation,” said Seattle Mayor Ed Murray. “The many lessons learned from the tragic John T. Williams shooting have helped inform the Department’s new crisis intervention policy, which I believe will be of significant help to officers as they face these kinds of encounters in the future.”
The policy creates the position of a Crisis Intervention Team (CIT) coordinator, Lt. Marty Rivera, who is appointed by the Chief of Police and provides command-level oversight of the Crisis Intervention Program and, who is the primary point of contact for the mental health provider/clinician/advocacy community for the SPD.
The Crisis Intervention Program consists of three distinct levels of expertise: all line patrol officers who will receive basic training on crisis intervention; the “certified” Crisis Intervention officers; and the follow-up Crisis Response Team. To become a CIT “certified” officer, those officers must take a 40 hour crisis intervention course with a certification exam and complete additional annual training. A CIT-certified officer will be dispatched to every scene where the police communications center suspects a behavioral crisis and, for the first time, will take primary responsibility at the scene of crisis events. The Crisis Response Team is tasked with following up on officer encounters with those enduring a crisis to assess that appropriate services are in place.
“The new Crisis Intervention Policy gives my officers clear guidelines and resources when they encounter people who are experiencing behavioral crisis,” said Interim Seattle Police Chief Harry Bailey. “This policy also provides access and resources to a vulnerable population. As police officers we are also charged with community care taking duties and this new policy works in concert with that philosophy and will provide officers with the necessary training and tools to help people that are in need of those services. I want to thank the Crisis Intervention Committee for helping us reach another milestone in the DOJ settlement agreement.”
Also, for the first time, officers will be required to collect data on every encounter they have with individuals in behavioral crisis, again to systematically track and assess the deployment and effectiveness of resources.
The Justice Department’s investigation in 2011 found that SPD’s patterns of excessive force often arose from encounters with persons with mental illnesses or those under the influence of alcohol or drugs. This finding was particularly troubling because, by its own estimates, 70% of SPD’s use of force during that time period involved these populations.
Connecticut Man Found Guilty of Drug Conspiracy After TrialRead the Press Release
DAVENPORT, IA - On February 7, 2014, a twelve-member jury found Michael G. Efthimiatos, age 35, of Danbury, Connecticut guilty of conspiracy to possess with intent to distribute marijuana. The trial commenced on Monday, February 3, 2014. Michael Efthimiatos was charged along with his brother, Angelo Efthimiatos, and the jury concluded that Michael Efthimiatos was a member of the conspiracy with his brother.
Angelo Efthimiatos was arrested on February 19, 2013, in Washington, Iowa, after he landed an airplane at the Washington Municipal Airport. The airplane contained approximately 55 pounds of high grade marijuana. Angelo Efthimiatos pleaded guilty on December 20, 2013, to conspiracy to manufacture, distribute, and possess with intent to distribute more than 50 kilograms of marijuana, and a separate charge of possession with intent to distribute marijuana.
The case was investigated by the United States Department of Homeland Security Investigations and Customs and Border Protection, the United States Drug Enforcement Administration, the Washington, Iowa, Police Department, the State of Connecticut Department of Public Safety, and the Danbury, Connecticut, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Chinese Citizen Arrested for Attempting to Violate the Arms Control Export ActRead the Press Release
A citizen of China was arrested in Seattle on February 10, 2014, after he entered the United States as part of a scheme to obtain restricted parts and illegally smuggle them to China, announced U.S. Attorney Jenny A. Durkan. SEE KEE CHIN, a/k/a, Alfred Chin, 56, of Hong Kong appeared in U.S. District Court in Seattle today. CHIN is charged by complaint with violating the Arms Control Export Act by seeking to obtain and export certain accelerometers that are designated on the United States Munitions List, International Traffic in Arms Regulations. The accelerometers are designed for low and zero gravity inertial navigation systems that are used in spacecraft.
According to the criminal complaint, a U.S. company that sells accelerometers reported suspicious contact with a Canadian who wanted to purchase restricted equipment. Between September 2013 and February 2014, the investigation revealed that the Canadian was inquiring on behalf of CHIN. CHIN indicated he would personally pick up the order and was arrested in Seattle after he made payment of over $85,000, and picked up the items.
The penalties for violating the Arms Control Export Act are up to twenty years of imprisonment and up to a million dollar fine. The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The Department of State promulgates the United States Munitions List, which consists of categories of defense articles and services that cannot be exported without a license issued by the Department of State. The U.S. Munitions List includes the accelerometers ordered in this case. As a result, the export requires an export license.
The case is being investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigation (HSI).
The case is being prosecuted by Assistant United States Attorney Thomas Woods.
Caldwell Man Sentenced for Possessing Obscene Visual Representations of the Sexual Abuse of MinorsRead the Press Release
BOISE — U.S. Attorney Wendy J. Olson announced today that Patrick S. Baker, 50, of Caldwell, Idaho, was sentenced today in United States District Court to 12 months and one day in prison. Baker pleaded guilty on November 21, 2013, to possessing obscene visual representations of the sexual abuse of children. U.S. District Judge William Fremming Nielsen, from the Eastern District of Washington, also ordered Baker to be on supervised release for three years after his release from prison, and to participate in sex offender treatment. Baker was also ordered to forfeit the laptop computer used in the offense.
According to the plea agreement, officers from the Nampa Police Department responded to the Hilton Inn in Nampa, Idaho, on March 14, 2013, in response to a request from hotel management to remove a guest who had overstayed the contracted time. Officers discovered Baker in the room. He had checked in the previous night and used the hotel’s wireless Internet service to download hundreds of images of child erotica and at least 36 realistic-looking digitally created images depicting prepubescent minors engaged in various sexual acts with adults, according to the plea agreement. Investigators also found several images of minor females, most approximately ages 3 to 12 years, in various kinds of dress, posing in ways to bring attention to their genital or pubic area. Baker admitted that he had downloaded the images and that he had a long-standing addiction to pornography, including adults and children.
The case was investigated by the Nampa Police Department, an affiliate of the Idaho Internet Crimes Against Children Task Force (ICAC). The ICAC is a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icacidaho.org.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”