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6 February 2014
Norfolk Man Pleads Guilty to Theft of Military OrdnanceRead the Press Release
NORFOLK, Va. – David Karl Becker, 24, of Norfolk, Va., pleaded guilty today to theft of government property.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Charles T. May Jr., the Naval Criminal Investigative Service (NCIS) Acting Executive Assistant Director for Atlantic Operations; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after Becker’s plea was accepted today by United States Magistrate Judge Lawrence R. Leonard.
Becker was indicted on December 20, 2013 by a federal grand jury on charges of theft of government property, sale of stolen ammunition, and sale of stolen explosives. Becker is scheduled to be sentenced on May 9, 2014.
According to a statement of facts filed with the plea agreement, Becker, while an active duty Navy SEAL stationed in Virginia Beach, Virginia, was attempting to sell military property through an outdoor equipment auction website. NCIS agents observed Becker listing military M18 smoke grenades for sale online. On November 20, 2013, an undercover agent met Becker and purchased two M18 smoke grenades, which were explosive material under federal law and the property of the United States Navy. A second purchase was arranged for November 25, 2013 at Becker’s residence. That day, Becker offered to sell the undercover agent numerous firearms and items of military equipment. The undercover agent purchased two Special Forces grade gas masks and 200 rounds of 5.56 NATO ammunition from Becker. Everything purchased was property of the United States, taken by Becker from his Navy command.
The case was investigated by the Naval Criminal Investigative Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Special Assistant United States Attorney Christopher A. George prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Newport News Woman Sentenced to 33 Months for Role in MurderRead the Press Release
NEWPORT NEWS, Va. – Tayvonna Licorish, 26, of Newport News was sentenced today to thirty-three months in prison for her part in the 2008 murder of Jonte Terry, in the K-mart parking lot located at Oriana Drive in Newport News.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia and Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by United States District Judge Arenda L. Wright Allen.
Licorish was charged on January 16, 2013, in a superseding indictment with accessory after the fact and misprision of a felony. Her boyfriend, Aronte Jarvis was indicted on October 10, 2012 on charges of murder in aid of racketeering activity, discharge of a firearm during a crime of violence, murder with a firearm and drug conspiracy. Jarvis was sentenced to life in prison on September 20, 2013. Licorish pled guilty on October 21, 2013 to misprision of a felony.
According to court records, Jarvis was a member of a criminal organization known as “Thug Relations,” operating in the Aqueduct Apartments, St. Michael’s Apartments, Warwick Lawns, Warwick Town Homes, Heritage Trace Apartments, Mariner’s Landing Apartments, Sharon Drive and the Savage Drive areas of Newport News. The defendant and others established the power and prestige of the gang through violence, including the murder of Jonte Terry on February 3, 2008. Terry, 22, was shot in the K-mart parking lot located at Oriana Drive in Newport News. Licorish was with Jarvis and their child at the time of the shooting and witnesses told agents that Licorish was driving the car as the victim tried to flee. Following the murder Jarvis, accompanied by Licorish, provided the black pistol used in the murder to an associate gang member who later disposed of it in an effort to hide the weapon from law enforcement officers. Licorish admitted to a number of witnesses that she was present when Jarvis shot Jonte Terry multiple times.This case was investigated by the Federal Bureau of Investigation, with the assistance of the Newport News Police Department and the Virginia State Police. Assistant United States Attorneys Howard J. Zlotnick and Lisa R. McKeel prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
New York Business must pay up to $1 Million, Pleads Guilty to Contraband Cigarette TraffickingRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a New York business must pay up to $1 million in fines, forfeiture and restitution after pleading guilty in federal court today to its role in a conspiracy to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, Mo., area to the state of New York, where they were sold primarily on Indian reservations.
AJ’s Candy & Tobacco, LLC, of Irving, N.Y., pleaded guilty before U.S. District Judge Brian C. Wimes to participating in a conspiracy to commit wire fraud and traffic in contraband cigarettes from June 2010 to Jan. 26, 2012.
Under the terms of today’s plea agreement, the company must forfeit to the government $221,550 (which represents the proceeds of the offense) and pay a fine of $243,400. The court may also order the company to pay an additional $535,050 in restitution to the state of New York. The government and the defendant are in agreement that a sentence of two years of probation is appropriate. Also, as part of the agreement, AJ’s is prohibited from selling premium cigarettes for two years.
AJ’s, a tobacco wholesaler located on a reservation, is not licensed to bring untaxed cigarettes into the state of New York. By pleading guilty today, the company admitted that AJ’s ordered contraband cigarettes from co-conspirators and caused those cigarettes to be transported into New York, knowing that the state excise tax of $4.35 per pack would not be paid as required by state and federal law.
As a result of AJ’s role in this conspiracy, the amount of total excise tax loss to the state of New York was approximately $535,050.
According to the indictment, conspirators purchased more than $17 million worth of contraband cigarettes from ATF agents during an undercover operation. Approximately 620,600 cartons of cigarettes – containing 10 packs per carton – were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The total state excise tax lost to the state of New York was more than $8 million.
In addition to the federal indictment, the undercover operation resulted in a $3.5 million civil forfeiture. Following the seizures that occurred as a result of the investigation, the U.S. Attorney’s Office started a $3.5 million civil forfeiture case naming the assets taken up to that point. On Oct. 23, 2012, the court entered a default order of forfeiture for more than $2 million seized from bank accounts and by agents, more than 300 cases of seized cigarettes, a 2009 Cessna T206H Stationair aircraft, two 2012 Peterbilt 389 trucks and two 2012 Peterbilt 386 trucks. The seized cigarettes have been sold at auction for $532,500. The 2009 Cessna Aircraft has been sold for $450,000. The four trucks have been sold for the following amounts: $115,000; $115,000; $113,000; and $113,000. The civil case has been stayed pending the resolution of the criminal case.
The operation also resulted in a non-prosecution agreement that requires HCI Distribution, a Winnebago, Neb., company, to pay a $300,000 penalty. HCI Distribution is a subsidiary of Ho-Chunk, Inc., a corporation operated by the Winnebago Tribe of Nebraska, a federally recognized Indian tribe.
This case is being prosecuted by Assistant U.S. Attorneys Paul S. Becker and Justin G. Davids. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS – Criminal Investigation, the Federal Deposit Insurance Corporation – Office of Inspector General and the Kansas City, Mo., Police Department.New Jersey Man Sentenced to Nearly Five Years in Prison for Possessing Illegal PillsRead the Press Release
BECKLEY, W.Va. – U.S. Attorney Booth Goodwin announced today that a New Jersey man was sentenced to four years and nine months in federal prison for possession with intent to distribute oxycodone, a powerful prescription painkiller. William Ponder, 24 of Teaneck, New Jersey previously pled guilty in October of 2013, admitting that he had illegally possessed the drugs. The oxycodone pills were seized during the execution of a search warrant at a home in Mabscott, West Virginia where Ponder was temporarily staying. Ponder’s sentence was handed down by United States District Judge Irene Berger.
The U.S. Drug Enforcement Administration and the Beckley Police Department handled the investigation.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Mountaineer Highway Interdiction Team Expands into Harrison CountyRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMHIT to patrol area roadways for drug traffickers
BRIDGEPORT, WEST VIRGINIA – Law enforcement officials announced the formation of a new interdiction team that will patrol the roads of Harrison County in order to slow the flow of illegal drugs into the region.
United States Attorney William J. Ihlenfeld, II, Captain James Merrill of the West Virginia State Police, and Chief John Walker of the Bridgeport Police Department unveiled the Mountaineer Highway Interdiction Team on Thursday. They also provided details regarding successful patrols by the unit that have already taken place.
According to Ihlenfeld, the team – also known as MHIT South - will have the primary purpose of enhancing interdiction operations in order to slow the flow of illegal drugs into and through North Central West Virginia. The team’s major focus will be on highways and state routes but it will also concentrate on airports, bus terminals, hotels, motels, and parcel and package interdiction. The member agencies are the U.S. Drug Enforcement Administration, the West Virginia State Police, the Bridgeport Police Department and the United States Attorney’s Office for the Northern District.
Besides enhancing regional highway interdiction operations, MHIT South will have the added benefit of disrupting criminal organizations operating within West Virginia and of preserving citizen safety on West Virginia highways through effective traffic and commercial vehicle enforcement. It will also assist in investigating kidnappings, bank robberies, Amber Alerts and interstate theft; the detection and recovery of firearms; human trafficking and immigration violations; and fugitive apprehension.
MHIT South will support the Greater Harrison County Drug Task Force and other law enforcement agencies in the region and be available to act upon intelligence related to drug trafficking.
The unit is the second of its kind in West Virginia, with the first MHIT unit having been formed in the Northern Panhandle in 2011. MHIT North also consists of local, state and federal law enforcement agencies. In 2013, the northern version of MHIT made 235 arrests, with 98 of those for felonies It seized over 1,600 dosage units of prescription drugs in 2013, including oxycodone, hydrocodone, and other painkillers. It also seized large amounts of heroin, cocaine, and marijuana along with firearms and other stolen property. Nearly $40,000 in U.S. currency was recovered and forfeited as proceeds of illegal drug trafficking.
MHIT South has been in operation since the end of 2013 and its officers have made over 50 arrests, with nearly half of those arrests on drug-related charges. The unit has recovered large amounts of diverted prescription medication as well as over half a kilogram of marijuana. In addition, quantities of heroin and methamphetamine have been seized along with two firearms and $6,960 in U.S. currency. One fugitive was apprehended, two search warrants were obtained, and eight informants were developed. The team is presently made up of West Virginia State Troopers and City of Bridgeport police officers, including a K-9 officer. The MHIT executive board hopes to add more officers in 2014.
“MHIT South will provide an aggressive response to drug trafficking and other forms of criminal activity that we’re faced with in North Central West Virginia,” said Ihlenfeld. “It has been highly successful in other parts of the Northern District, and I’m confident that it will make a big impact here and change the way we fight crime in Harrison County.”
“Law enforcement must work together to implement a comprehensive strategy in order to combat the epidemic of drug abuse in our region,” said Captain Merrill. “The concept of highway interdiction, when practiced on a consistent basis, greatly increases the pressure placed upon drug dealers and makes them uncomfortable to the point that they often elect to go elsewhere to do business.”
“This multi-agency drug interdiction unit is about pooling our resources and working together with a common goal. That goal is to ensure the safety and protection of our citizens and precious future generations from the drug epidemic,” said Chief Walker. “We will seek out, arrest, and prosecute those individuals who choose to benefit financially from the sale of illegal narcotics in our community.”
Regular updates on the work of MHIT will be made via press releases from its member agencies as well as via the official Twitter feed of the United States Attorney’s Office, @NDWVnews.
Mcdowell County Woman Sentenced for Interfering with an Irs InvestigationRead the Press Release
Charleston, W.Va. – A McDowell County woman was sentenced to one year and one day in federal prison for attempting to interfere with the administration of internal revenue laws, U.S. Attorney Booth Goodwin announced today. The defendant, Bonita Witt-Hird, 59, of Thorpe, West Virginia, was also sentenced to one year of supervised release and ordered to pay restitution in the amount of $422,180.69, which includes $186,819.24 in tax loss and $235,361.46 in interest and penalties.
Witt-Hird was employed by Richmorr and Associates, an Elkview, West Virginia sewage treatment company. Between 2003 and 2009, Witt-Hird failed to file required employment tax returns and make tax deposits for taxes that had been collected from the wages of employees. When contacted by agents with the Internal Revenue Service (IRS), Witt-Hird provided false and altered records, checks, and receipts. These documents were provided to establish that she had satisfied her tax obligations when, in fact, she had not. A subsequent audit revealed that the required taxes had not been paid. The original records were also recovered and compared to the altered records provided by Witt-Hird. Witt Hird admitted to providing false records to IRS agents in an effort to obstruct their investigation. She admitted that she had failed to pay the IRS the employment taxes, and instead diverted money to pay other bills owed by Richmorr and Associates.
The Internal Revenue Service conducted the investigation. Assistant United States Attorney Erik S. Goes handled the prosecution, assisted by Jed Silversmith at the United States Department of Justice, Tax Division, Southern Criminal Enforcement Section. The sentence was imposed by United States District Judge John T. Copenhaver, Jr.
McLaughlin Man Sentenced for Assault by Striking, Beating and Wounding and Simple AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a McLaughlin, South Dakota, man convicted of Assault by Striking, Beating and Wounding and Simple Assault was sentenced on February 4, 2014, by U.S. Magistrate Judge William D. Gerdes.
Conrad Little Bear, age 54, was sentenced to 60 days of custody on each count to be served concurrently, and a $20 special assessment to the Federal Crime Victims Fund.
Little Bear was indicted by a federal grand jury on May 15, 2013. He pled guilty on January 7, 2014.
The conviction stems from an incident on October 18, 2012, when Little Bear was informed by his brother that someone had broken into his house. When he arrived at his home, the victim was asleep on a couch in his living room. Little Bear then proceeded to tie up the victim, awaiting the arrival of law enforcement. While waiting for law enforcement to arrive, Little Bear became irate about the situation and proceeded to strike the victim about the head and body, causing injury. When law enforcement arrived, they found the victim bound and tied with a thick rope. The victim was bleeding from the right ear, right eyebrow, and mouth.
This case was investigated by the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Little Bear is to self-report to the U.S. Marshals Service on February 25, 2014.
Massachusetts Man Sentenced on Firearms ChargesRead the Press Release
CONCORD, N.H. –Christian Gonzalez, 35, of Lawrence, Massachusetts, was sentenced in United States District Court for the District of New Hampshire to 21 months in prison for aiding and abetting the making of false statements in connection with the acquisition of firearms, announced United States Attorney John P. Kacavas.
Gonzalez admitted that he was not able to legally purchase a firearm so he solicited another individual, or “straw purchaser,” to purchase firearms for him. On seven different occasions, Gonzalez drove the “straw purchaser” to a federally licensed firearms dealer in New Hampshire and provided him the money to purchase eleven firearms. Gonzalez took possession of the firearms immediately after the purchases were made. Two of the firearms were later recovered in Malden, Massachusetts.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Debra M. Walsh.Maryland Man Pleads Guilty to Traveling into the District of Columbia to Engage in Illicit Sexual ConductWith A Minor and Possession of Child PornographyRead the Press Release
WASHINGTON – Matthew Scanlon, 31, of Pasadena, Md., pled guilty today to charges of traveling interstate to engage in illicit sexual conduct with a minor and possession of child pornography, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Scanlon entered the guilty plea in the U.S. District Court for the District of Columbia. The Honorable Rudolph Contreras is to sentence him on May 21, 2014. Scanlon faces a statutory maximum sentence of 30 years of imprisonment for traveling interstate to engage in illicit sexual conduct and a maximum of 20 years for possession of child pornography, as well as potential fines.
According to the government's evidence, on July 10, 2013, Scanlon contacted an undercover officer with the FBI's Child Exploitation Task Force, who had posted an ad on a social network site. Over the next few days, Scanlon engaged in e-mail and text message conversations with the undercover officer whom the defendant believed was the father of an under-aged girl. During this period of time, Scanlon arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the child.
During the course of their communications, Scanlon also sent the undercover officer one still image and two videos of child pornography. On July 16, 2013, Scanlon traveled from Maryland to a pre-arranged meeting place in Washington, D.C. When he arrived at the meeting place, he was arrested. Pursuant to a search of an external hard drive seized from the defendant’s residence, law enforcement recovered approximately 225 additional images of child pornography.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. Project Safe Childhood is 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 U.S. 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 those who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director Parlave and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended Assistant U.S. Attorney Ari Redbord, who is prosecuting the case.
14-034Manhattan U.S. Attorney Charges Swiss Asset Manager with Conspiring to Hide Millions of Dollars in Swiss Bank AccountsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the indictment today of PETER AMREIN, an asset manager at a Swiss asset management firm who assisted U.S. taxpayer-clients and others in hiding millions of dollars in offshore accounts from the IRS and evading U.S. taxes on the income earned in those accounts.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, from his post in Switzerland, Peter Amrein aided and abetted U.S. taxpayers in their efforts to skirt the tax code and conceal their assets in offshore accounts. As today’s charges make clear, tax evasion is a serious offense. This Office is committed to prosecuting individuals, both U.S. citizens and non-citizens like Amrein, who engage in this illicit conduct.”
IRS Special Agent-in-Charge Weirauch said: “Offshore tax enforcement remains a top priority for the Internal Revenue Service. Individuals who choose to hide income outside of the United States, as well as those who assist them in hiding their assets, expose themselves to a variety of criminal charges and severe penalties. As we continue to gain access to more and more information about individuals involved in offshore tax evasion, potential violators can expect us to use all of our enforcement tools to stop this abuse.”
According to the allegations contained in the Indictment, which was unsealed today in Manhattan federal court, as well as other court documents previously filed:
AMREIN worked as a client adviser at a Swiss bank (“Swiss Bank No. 3) and, later, as an asset manager at a Swiss asset management firm (the “Swiss Asset Management Firm”). In those roles, between 1998 and 2012, AMREIN helped U.S. taxpayers evade taxes and hide millions of dollars in undeclared accounts at various Swiss banks, including, among others, Wegelin & Co. (“Wegelin”), which previously pled guilty in Manhattan federal court for conspiring with U.S. taxpayers to evade taxes.
In 1998, AMREIN began to work with Edgar Paltzer, a Zurich-based attorney, in the management of undeclared accounts for a number of U.S. taxpayers (collectively, the “Amrein/Paltzer Clients”). Paltzer has previously pled guilty in the Southern District of New York to conspiring to help U.S. taxpayers evade taxes. AMREIN requested that Paltzer establish sham foundations, organized under the laws of non-U.S. countries, such as Liechtenstein, so that the assets of the Amrein/Paltzer Clients could be maintained in accounts held in the names of these foreign foundations rather than in the names of the clients themselves. AMREIN made this request in order to help clients conceal their ownership of these undeclared accounts from the IRS.
In 2006, AMREIN left his position as a client adviser at Swiss Bank No. 3, and began to work as an asset manager at the Swiss Asset Management Firm. When AMREIN left Swiss Bank No. 3, he transferred the undeclared accounts of the Amrein/Paltzer Clients to another Swiss bank (“Swiss Bank No. 4”). At Swiss Bank No. 4, the accounts continued to be held in the names of the sham foundations created by Paltzer, and continued to be hidden from the IRS.
In 2008, it became publicly known that UBS AG (“UBS”) was being investigated by United States law enforcement for helping U.S. taxpayers maintain undeclared accounts. Because of the investigation of UBS, Swiss Bank No. 4 informed AMREIN that it was going to close the undeclared accounts of the Amrein/Paltzer Clients. In order to assist his clients in continuing to maintain undeclared accounts, AMREIN searched for and found another bank in Switzerland (“Swiss Bank No. 1”) that would maintain undeclared accounts of the Amrein/Paltzer Clients.
Thereafter, in 2009, AMREIN opened undeclared accounts for the Amrein/Paltzer Clients at Swiss Bank No. 1 in the name of sham foundations and transferred his clients’ assets from Swiss Bank No. 4 to these accounts at Swiss Bank No. 1. For some of these clients, AMREIN, with Paltzer’s assistance, helped send funds back to the United States and to other foreign jurisdictions in ways that were designed to prevent U.S. authorities from discovering the existence of the clients’ undeclared accounts. For instance, AMREIN and Paltzer instructed a client adviser at Swiss Bank No. 1 to empty one of the accounts by sending checks in amounts smaller than $9,900 to the beneficial owner of the account, i.e., the U.S. taxpayer. On another occasion, AMREIN and Paltzer instructed the same client adviser to transfer the balance of one of the accounts, which was then valued at over $2.4 million, to another account controlled by the U.S. taxpayer in Belize City, Belize.
AMREIN, 52, a Swiss citizen, resides in Switzerland and has not been arrested.
AMREIN is charged with one count of conspiracy to defraud the United States and the IRS, and faces a maximum sentence of five years in prison, a maximum term of three years of supervised release, and a fine of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss to the victims.
Mr. Bharara praised the outstanding efforts of IRS-CI in the investigation, which he noted is ongoing. He also thanked the Department of Justice’s Tax Division for their significant assistance in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Sarah E. Paul, Jason H. Cowley, and Jared Lenow are in charge of the prosecution.
The charge and allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Manhattan U.S. Attorney Charges Swiss Asset Manager with Conspiring to Hide Millions of Dollars in Swiss Bank AccountsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the indictment today of PETER AMREIN, an asset manager at a Swiss asset management firm who assisted U.S. taxpayer-clients and others in hiding millions of dollars in offshore accounts from the IRS and evading U.S. taxes on the income earned in those accounts.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, from his post in Switzerland, Peter Amrein aided and abetted U.S. taxpayers in their efforts to skirt the tax code and conceal their assets in offshore accounts. As today’s charges make clear, tax evasion is a serious offense. This Office is committed to prosecuting individuals, both U.S. citizens and non-citizens like Amrein, who engage in this illicit conduct.”
IRS Special Agent-in-Charge Weirauch said: “Offshore tax enforcement remains a top priority for the Internal Revenue Service. Individuals who choose to hide income outside of the United States, as well as those who assist them in hiding their assets, expose themselves to a variety of criminal charges and severe penalties. As we continue to gain access to more and more information about individuals involved in offshore tax evasion, potential violators can expect us to use all of our enforcement tools to stop this abuse.”
According to the allegations contained in the Indictment, which was unsealed today in Manhattan federal court, as well as other court documents previously filed:
AMREIN worked as a client adviser at a Swiss bank (“Swiss Bank No. 3) and, later, as an asset manager at a Swiss asset management firm (the “Swiss Asset Management Firm”). In those roles, between 1998 and 2012, AMREIN helped U.S. taxpayers evade taxes and hide millions of dollars in undeclared accounts at various Swiss banks, including, among others, Wegelin & Co. (“Wegelin”), which previously pled guilty in Manhattan federal court for conspiring with U.S. taxpayers to evade taxes.
In 1998, AMREIN began to work with Edgar Paltzer, a Zurich-based attorney, in the management of undeclared accounts for a number of U.S. taxpayers (collectively, the “Amrein/Paltzer Clients”). Paltzer has previously pled guilty in the Southern District of New York to conspiring to help U.S. taxpayers evade taxes. AMREIN requested that Paltzer establish sham foundations, organized under the laws of non-U.S. countries, such as Liechtenstein, so that the assets of the Amrein/Paltzer Clients could be maintained in accounts held in the names of these foreign foundations rather than in the names of the clients themselves. AMREIN made this request in order to help clients conceal their ownership of these undeclared accounts from the IRS.
In 2006, AMREIN left his position as a client adviser at Swiss Bank No. 3, and began to work as an asset manager at the Swiss Asset Management Firm. When AMREIN left Swiss Bank No. 3, he transferred the undeclared accounts of the Amrein/Paltzer Clients to another Swiss bank (“Swiss Bank No. 4”). At Swiss Bank No. 4, the accounts continued to be held in the names of the sham foundations created by Paltzer, and continued to be hidden from the IRS.
In 2008, it became publicly known that UBS AG (“UBS”) was being investigated by United States law enforcement for helping U.S. taxpayers maintain undeclared accounts. Because of the investigation of UBS, Swiss Bank No. 4 informed AMREIN that it was going to close the undeclared accounts of the Amrein/Paltzer Clients. In order to assist his clients in continuing to maintain undeclared accounts, AMREIN searched for and found another bank in Switzerland (“Swiss Bank No. 1”) that would maintain undeclared accounts of the Amrein/Paltzer Clients.
Thereafter, in 2009, AMREIN opened undeclared accounts for the Amrein/Paltzer Clients at Swiss Bank No. 1 in the name of sham foundations and transferred his clients’ assets from Swiss Bank No. 4 to these accounts at Swiss Bank No. 1. For some of these clients, AMREIN, with Paltzer’s assistance, helped send funds back to the United States and to other foreign jurisdictions in ways that were designed to prevent U.S. authorities from discovering the existence of the clients’ undeclared accounts. For instance, AMREIN and Paltzer instructed a client adviser at Swiss Bank No. 1 to empty one of the accounts by sending checks in amounts smaller than $9,900 to the beneficial owner of the account, i.e., the U.S. taxpayer. On another occasion, AMREIN and Paltzer instructed the same client adviser to transfer the balance of one of the accounts, which was then valued at over $2.4 million, to another account controlled by the U.S. taxpayer in Belize City, Belize.
AMREIN, 52, a Swiss citizen, resides in Switzerland and has not been arrested.
AMREIN is charged with one count of conspiracy to defraud the United States and the IRS, and faces a maximum sentence of five years in prison, a maximum term of three years of supervised release, and a fine of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss to the victims.
Mr. Bharara praised the outstanding efforts of IRS-CI in the investigation, which he noted is ongoing. He also thanked the Department of Justice’s Tax Division for their significant assistance in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Sarah E. Paul, Jason H. Cowley, and Jared Lenow are in charge of the prosecution.
The charge and allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Peter Amrein Indictment
Manhattan U.S. Attorney Announces Return to Poland of Johann Conrad Seekatz Painting Stolen by the Nazis During World War IIRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, and James T. Hayes, Jr., the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), announced today the return to the Polish Government of the Johann Conrad Seekatz painting, “St. Philip Baptizing a Servant of Queen Kandaki” (the “Seekatz Painting”), that was stolen from the National Museum of the City of Warsaw by Nazi forces during World War II.
Manhattan U.S. Attorney Preet Bharara said: “Decades ago, during World War II, this Johann Conrad Seekatz painting was removed from its home in a national Polish museum by Nazi forces. Since then it has crisscrossed the globe, but today, we are very pleased to finally be able to return this Polish national treasure to the country and its people.”
HSI New York Special Agent-in-Charge James T. Hayes, Jr. said: “We are deeply grateful to return this cherished painting to our partners from the Republic of Poland. Homeland Security Investigations will continue to work tirelessly to track down objects stolen during World War II and return them to their rightful owners.”
During World War II, Nazi forces invaded and occupied Poland and removed from the National Museum of the City of Warsaw numerous works of art, including the Seekatz Painting. The Seekatz Painting was never returned to the City of Warsaw following its removal by the Nazis during World War II. In 2006, the Seekatz Painting, erroneously labeled with another title, was sold to a gallery in London, England. In 2012, an evaluation of the Seekatz Painting was conducted and it was determined that it was, in fact, the painting stolen by the German Army from the National Museum of the City of Warsaw during World War II. On July 12, 2012, the U.S. Attorney’s Office submitted, and the U.S. District Court for the Southern District entered, a stipulation and order (the “Order”) providing for the seizure and return of the Seekatz Painting to the Republic of Poland. Subsequent to the entry of the Order, ICE HSI took possession of the painting in London, with the voluntary cooperation of the gallery in London, and returned the Seekatz Painting to New York.
The Seekatz Painting was returned to the Minister of Culture and National Heritage of Poland, Bogdan Zdrojewski, and the Polish Ambassador to the United States, Ryszard Schnepf, today at a repatriation ceremony at the Consulate General of the Republic of Poland in New York, New York. Its return to the Government of Poland marks the seventh time that the U.S. Attorney’s Office for the Southern District of New York, in conjunction with ICE HSI, has returned important historical and cultural property and art work stolen during either World War I or World War II to its rightful owner.
Mr. Bharara praised the investigative work of ICE HSI in this matter, and its ongoing efforts to find and repatriate stolen and looted art and cultural property.
The case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorney Jason H. Cowley is in charge of the case.
Man Pleads Guilty to Attempting to Destroy Beauty Supply Store by ArsonRead the Press Release
LAS VEGAS, Nev. – A man pleaded guilty today to maliciously attempting to destroy a local beauty supply store by fire and explosive devices, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Reynaldo Staana, 48, of Las Vegas, pleaded guilty before U.S. District Judge James C. Mahan to one count of arson of property used in or affecting interstate commerce. Sentencing is scheduled for May 6, 2014, at 10:00 a.m. Staana, who is in federal custody on the charges, faces a mandatory minimum of five years in prison and a maximum of 20 years in prison, as well as a fine of up to $250,000.
According to the court records filed in the case, Staana had been an assistant manager at Beauty Supply Warehouse located at 3310 South Nellis Boulevard in Las Vegas but was terminated from his position in August 2013. On about Sept. 8, 2013, Staana entered the business after hours without permission in order to commit theft of property, and while inside the business, intentionally and maliciously used fire to ignite a flammable liquid with intent to destroy the business. The fire caused more than $1 million in damage to structure and contents.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Clark County Fire Department, and the Las Vegas Metropolitan Police Department, and was prosecuted by Assistant U.S. Attorney Christina M. Brown.Luzerne County Man Sentenced to 15 Years in Prison for Receiving and Distributing Child PornographyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 39-year-old former Luzerne Borough resident who admitted to receiving and distributing child pornography during 2012 through June 2013, was sentenced today to serve 15 years in prison by U.S. District Court Judge Malachy E. Mannion.
According to United States Attorney Peter J. Smith, the defendant, Michael Shaw, pleaded guilty to the crime on October 23, 2013.
Shaw was indicted by a federal grand jury in September 2013, for using a computer to receive and distribute child pornography.
The charge against Shaw resulted from an investigation by the Federal Bureau of Investigation, Lackawanna County Detectives and the Luzerne County District Attorney’s Office.
Judge Mannion also ordered that Shaw be placed on supervised release for 10 years following his prison sentence. Shaw must also receive sex offender treatment and abide by sex offender registration requirements after his release from prison.
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."
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Local Woman Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO - THERESA MOORE was sentenced to 44 months in prison and ordered to pay $86,084 restitution to the victims of the crimes. Moore employed various aliases and claimed to be with law enforcement and the legal profession to induce victims to pay her money by convincing them that she could assist them with various legal matters. Moore contacted her victims by telephone and made false representations about non-existent legal matters.
According to court documents, in July 2009, Moore met an elderly widower through a telephone dating service. Soon after making the acquaintance, Moore, and her associates, using various aliases, began contacting him by telephone to inform him he was a victim of identity theft. Moore intentionally deceived him into believing that he was entitled to restitution and that he had to pay money up front in order to collect the restitution payment. At other times, Moore intentionally deceived him into believing that he would be receiving money as part of a legal settlement, but that he had to pay money up front in order to collect the settlement. In reliance on Moore's false representations, over the course of about three years the man made numerous payments to Moore totaling in excess of $61,473.
In May 2011, Moore and one of her associates contacted victim J.N. by telephone and told J.N. that there were several warrants out for the arrest of J.N.'s adult daughter, P.N., who had developmental learning disabilities. Moore stated to J.N. that Moore had paid fines on behalf of P.N. and needed to be reimbursed, when in fact, Moore was not aware of any such arrest warrants and had made no such payments. Moore enlisted an associate who posed as a police detective in order to lend credibility to her scheme. J.N. paid Moore in excess of $23,894 as a result of the fraud scheme.
Moore, St. Louis, Missouri, pled guilty last September to four felony counts of wire fraud. She appeared today for sentencing before United States District Judge John A. Ross.
This case was investigated by the United States Postal Inspection Service, the Hazelwood Police Department, the Clayton Police Department, The St. Louis County Police Department and the Missouri Attorney General’s Office. Assistant United States Attorney Reginald Harris handled the case for the U.S. Attorney’s Office.Lenoir City Residents Arrested on Federal ChargesRead the Press Release
KNOXVILLE, Tenn. -- Joshua Hayworth, 23, and Timothy E. Chudley, 35, both of Lenoir City, Tenn., were charged on Feb. 5, 2014, with federal Hobbs Act violations for their roles in the Jan. 30, 2014, robbery of a Lenoir City Burger King restaurant.
Chudley was arrested in Knoxville on Feb. 5, 2014, without incident, and appeared in federal court the same day. Hayworth was arrested on state charges on Feb. 3, 2014, following a series of events which also resulted in federal carjacking charges against Hayworth. He will appear in federal court at a later date.
The criminal complaint on file with the U.S. District Court charges both men with federal Hobbs Act violations, while Hayworth is also charged with carjacking. The complaint alleges that Hayworth, with the assistance of Chudley, planned the robbery of the Lenoir City Burger King, which was carried out on Jan. 30, 2014. According to the complaint, on Feb. 3, 2014, Hayworth was observed driving a stolen vehicle in Knoxville, which Hayworth abandoned in a trailer park on Bob Gray Road, as law enforcement pursued.
Later the same day, Hayworth is accused of carjacking another vehicle from a pregnant female on Doubletree Lane in Knoxville, which he wrecked on Bob Gray Road. After fleeing on foot, it is alleged that Hayworth broke into a residence, where he was apprehended by law enforcement. Follow-up investigation by the multiple agencies involved uncovered Chudley’s role in the robbery scheme.
The arrests are the result of joint efforts by multiple law enforcement agencies, including the FBI Safe Streets Task Force (SSTF), composed of the FBI, Knoxville Police Department (KPD), and Knox County Sheriff’s Department (KCSO), the Lenoir City Police Department, KPD, KCSO, Loudon County Sheriff’s Office, and the Clinton Police Department. Assistant U.S. Attorney Kelly Norris will represent the United States.
Members of the public are reminded that the complaint constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Justice Department Announces Three Tribes to ImplementSpecial Domestic Violence Criminal Jurisdiction Under VAWA 2013Read the Press Release
Three American Indian tribes – the Pascua Yaqui Tribe of Arizona, the Tulalip Tribes of Washington, and the Umatilla Tribes of Oregon – will be the first in the nation to exercise special criminal jurisdiction over certain crimes of domestic and dating violence, regardless of the defendant’s Indian or non-Indian status, under a pilot project authorized by the Violence Against Women Reauthorization Act of 2013 (VAWA 2013).
“This is just the latest step forward in this administration’s historic efforts to address the public safety crisis in Indian country,” said Attorney General Eric Holder. “Every day, we’re working hard to strengthen partnerships with tribal leaders and confront shared challenges – particularly when it comes to protecting Indian women and girls from the shocking and unacceptably high rates of violence they too often face. With the important new tools provided by the Violence Against Women Reauthorization Act of 2013, these critical pilot projects will facilitate the first tribal prosecutions of non-Indian perpetrators in recent times. This represents a significant victory for public safety and the rule of law, and a momentous step forward for tribal sovereignty and self-determination.”
Although the provisions authorizing the special jurisdiction take effect generally in March 2015, the law also gives the Attorney General discretion to grant a tribe’s request to exercise the jurisdiction earlier, through a voluntary pilot project. The authority to approve such requests has been delegated to Associate Attorney General Tony West. Associate Attorney General West today congratulated tribal leaders on this historic achievement in letters to the three tribes.“The old jurisdictional scheme failed to adequately protect the public – particularly native women – with too many crimes going unprosecuted and unpunished amidst escalating violence in Indian Country,” stated Associate Attorney General West. “Our actions today mark a historic turning point. We believe that by certifying certain tribes to exercise jurisdiction over these crimes, we will help decrease domestic and dating violence in Indian Country, strengthen tribal capacity to administer justice and control crime, and ensure that perpetrators of sexual violence are held accountable for their criminal behavior.”
Since the Supreme Court’s 1978 opinion in Oliphant v. Suquamish Indian Tribe, tribes have been prohibited from exercising criminal jurisdiction over non-Indian defendants. This included domestic violence and dating violence committed by non-Indian abusers against their Indian spouses, intimate partners, and dating partners. Even a violent crime committed by a non-Indian husband against his Indian wife, in the presence of her Indian children, in their home on the Indian reservation, could not be prosecuted by the tribe. In granting the pilot-project requests of the Pascua Yaqui, Tulalip, and Umatilla tribes today, the United States is recognizing and affirming the tribes’ inherent power to exercise “special domestic violence criminal jurisdiction” (SDVCJ) over all persons, regardless of their Indian or non-Indian status, for crimes committed on or after Feb. 20, 2014.
As described in the Department of Justice’s Final Notice on the pilot project, today’s decisions are based on a diligent, detailed review of application questionnaires submitted by the tribes in December 2013, along with excerpts of tribal laws, rules, and policies, and other relevant information. That review, conducted in close coordination with the Department of the Interior and after formal consultation with affected Indian tribes, led the Justice Department to determine that the criminal justice systems of the Pascua Yaqui, Umatilla, and Tulalip tribes have adequate safeguards in place to fully protect defendants’ rights under the Indian Civil Rights Act of 1968, as amended by VAWA 2013.
The Department of Justice is posting notices of the pilot-project designation on the Tribal Justice and Safety website and in the Federal Register. In addition, each tribe’s application questionnaire and related tribal laws, rules, and policies will be posted on the Web site. These materials will serve as a resource for those tribes that may also wish to participate in the pilot project or to commence exercising SDVCJ in March 2015 or later, after the pilot project has concluded.
For more information on VAWA 2013, please visit http://justice.gov/tribal/vawa-tribal.html.
Jury Returns Guilty Verdict Against Connecticut Man for Advertising and Distributing Child PornographyRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced that a Connecticut man was convicted in federal court in Anchorage on Thursday, February 6, 2014, for one count of Advertising Child Pornography and two counts of Distributing Child Pornography.
According to Assistant U.S. Attorney Kimberly Sayers-Fay, who prosecuted the case at trial, Michael J. Carroll, 59, a resident of Milford, Connecticut, was convicted by a jury of one count of Advertising Child Pornography and two counts of Distribution of Child Pornography. Trial evidence demonstrated that in late 2011, Carroll offered to trade sexually explicit images of children with other users involved in an international email group that an undercover agent in Alaska had infiltrated. Carroll also distributed close to 100 sexually explicit images on two occasions to the approximately fifty persons in this same email group, including the Alaskan undercover agent. The sexually explicit images of children that Carroll distributed involved victims ranging in age from infancy to prepubesence. Other offenders in the same email group were previously prosecuted in Alaska.
Carroll argued that remote control of his computer via “hacking” explained both the presence of hundreds of images and videos of child pornography on his multiple computers, as well as the distribution of child pornography from his Yahoo! email address. Carroll testified that he was a highly skilled computer technician with a very sophisticated network, and that despite this, hackers were able to cause his email to send messages reflecting the Internet Protocol (IP) address assigned to his home, and were also able to populate his computer system with sexually explicit images of children organized in a plethora of conspicuously named folders. Carroll likened his experience to that of Target, the retailer whose data was harvested by hackers. In convicting the defendant, the jury rejected the assertion that someone else was responsible for these crimes.
Chief U.S. District Court Judge Ralph R. Beistline scheduled Carroll’s sentencing for April 23, 2014. Carroll faces a mandatory minimum sentence of fifteen years’ imprisonment for advertising child pornography, and a maximum of thirty years’ imprisonment. For the distribution counts, Carroll faces a mandatory minimum sentence of five years. Carroll may also be fined up to $250,000 for each count, and faces a minimum of five years of supervised release.
Ms. Loeffler commends Homeland Security Investigations in Alaska and Connecticut, the Alaska Bureau of Investigation and the Anchorage Police Department for the investigation that culminated in Carroll’s convictions.
Jury Finds Three New Haven Men Guilty of Narcotics Distribution OffensesRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that a federal jury in New Haven today found New Haven residents RICHARD ANDERSON, also known as “Mayut” and “Porter,” 27, PHILIP BRYANT, also known as “Phat Phil” and “Fizzy,” 27, and ROBERT SANTOS, also known as “Scoot,” 31, guilty of narcotics distribution offenses. The trial before Senior U.S. District Judge Ellen Bree Burns began on January 21.
According to court documents and statements made in court, this matter stems from “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven. Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms. More than 100 individuals were charged as a result of the investigation.
According to the evidence at trial, ANDERSON, BRYANT and SANTOS conspired with Kevin Wilson, also known as “Nature,” to distribute narcotics, primarily in the Dwight/Chapel area of New Haven.
ANDERSON supplied crack cocaine on multiple occasions to co-defendant Jesus Morales, also known as “Cano,” in deals that were brokered by Wilson. On several occasions, Anderson was intercepted on a wiretap threatening violence against Morales in an effort to collect a drug debt. At times, ANDERSON also obtained quantities of heroin from Wilson.
BRYANT was intercepted on multiple occasions arranging heroin and cocaine transactions with Wilson. In May 2011, BRYANT also provided Wilson with 26.3 grams of crack cocaine that Wilson, in turn, sold to two individuals who were working with law enforcement. In addition, trial testimony established that BRYANT, Wilson and other co-defendants shared a stash of firearms to use in furtherance of their drug trafficking activity.
SANTOS partnered with Wilson, pooling money to acquire large quantities of heroin from a New York-based supplier, and then distributing the drug in greater New Haven.
ANDERSON was convicted of one count of conspiracy to possess with intent to distribute, and to distribute, 28 grams or more of cocaine base (“crack”), which carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years. BRYANT was convicted of one count of conspiracy to possess with intent to distribute, and to distribute, cocaine, cocaine base and heroin, which carries a maximum term of imprisonment of 20 years. SANTOS was convicted of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin. Based on his criminal history, SANTOS faces a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.
Judge Burns scheduled sentencing for all three defendants for June 3, 2014.
Wilson and Morales previously pleaded guilty. On September 26, 2013, Morales was sentenced to 63 months of imprisonment. Wilson awaits sentencing.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments have provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.
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(203) 821-3722 [email protected]Jonesville Virginia Man Arrested for Impersonating A Deputy United States MarshalRead the Press Release
BIG STONE GAP, VIRGINIA – United States Attorney Timothy J. Heaphy announced today that Richard Wayne Parsons, 35,of Jonesville, Va., has been arrested in Lee County, Virginia on a federal criminal complaint charging him with impersonation of a Deputy United States Marshal. The United States Marshals Service and the Lee County Sheriff’s Department took Parsons into custody on February 5, 2014.
The investigation of the case was conducted by United States Marshals Service and the Lee County Sheriff’s Department. Assistant United States Attorney Zachary T. Lee will prosecute the case for the United States.
The criminal complaint for impersonation of a federal officer is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Anyone with additional information regarding similar incidents should contact the United States Marshals Service at 276-628-7940.
Jonesborough Man Sentenced to Serve Three Years in Prison for Synthetic Drugs and StructuringRead the Press Release
GREENEVILLE, Tenn. – Jason Glenn Catoe, 23, of Jonesborough, Tenn., was sentenced on Feb. 5, 2012, by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 36 months in federal prison.
Catoe pleaded guilty to an information in March 2013, charging him with possession with intent to distribute synthetic cannabinoids and structuring currency transactions to evade reporting requirements. In a statement of facts submitted in support of his guilty plea, Catoe admitted that beginning in March 2011 he opened a "head shop" called "Ultimate Smoke" in Kingsport, Tenn. The business sold synthetic drugs, "bath salts" and "incense," as well as drug paraphernalia for the ingestion of the drugs. Ultimate Smoke generated substantial cash income, with "Crystal Clean," a synthetic cathinone, being one of the business's best-selling products. Ultimate Smoke also sold large quantities of synthetic cannabinoids. Local law enforcement agencies made undercover purchases of the drugs beginning in August 2011.
A federal search warrant was executed at Catoe’s residence in Jonesborough, Tenn., in March 2012. Agents recovered $290,794.00 in cash from a safe at the residence. In addition to five firearms and two bullet-proof vests, agents recovered synthetic drugs labeled “Mary Joy,” “K2 Summit,” “Hammer Head,” “Wacked,” “Outer Limits,” “Zombie,” “Happy Hour Passion Fruit,” “Mad Hatter,” Mystery Machine,” and “Da Bomb.” Bank records reflected that Catoe, assisted by his half-brother, structured over $400,000 in cash deposits to a local financial institution.
The cash seized from Catoe’s residence, along with approximately $80,000 seized from bank accounts and a commercial building in Kingsport, were forfeited to the United States.
Agencies involved in this investigation included the Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Sullivan County Sheriff’s Office, Kingsport Police Department, and Second Judicial District Drug Task Force. Assistant U.S. Attorney Neil Smith represented the United States.
Husband and Wife Ordered to Prison for Falsifying Client Tax ReturnsRead the Press Release
HOUSTON – Tax return preparers Marlin Jermaine Beckett and Gia Cooper Beckett have sent to prison for making up deductions that resulted in approximately $360,000 in fraudulent client refunds, announced United States Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service – Criminal Investigation (IRS-CI). Both pleaded guilty in April 2013.
Today, U.S. District Judge Nancy F. Atlas, who accepted the guilty pleas, handed Marlin Beckett a 36-month sentence to be followed by a one-year-term of supervised release. He was also ordered to pay $196,923 in restitution to the IRS. Gia Beckett will be on probation for three years and must pay another $163,441 in restitution. The court further ordered neither person prepare any more tax returns except their own.
“One of the IRS’s main objectives is to ensure that all tax practitioners and preparers adhere to professional standards and follow the law,” said Cruz. “CI’s efforts to deter refund fraud are critical to overall tax compliance; our special agents play a valuable role by identifying, investigating and recommending prosecution of abusive return preparers. As we approach tax filing season, we remind taxpayers to be very diligent when deciding who they select to prepare their returns.”
The Becketts are husband and wife tax return preparers and were charged in separate, but related cases. According to the factual basis in support of their respective pleas, they each admitted they claimed false business mileage deductions for local clients that fraudulently increased tax refunds by approximately $360,000 for tax years 2006 through 2009.
Originally released on bond, Marlin Beckett was recently taken into custody when further investigation of his activities revealed he continued to prepare tax returns in violation of his bond conditions. At least one of those tax returns had the same kind of false deductions that had led to his conviction.
Further investigation of Marlin Beckett’s activities also led to the successful prosecution of Yevette Lauren Walton and Lakisha Lashell Rodgers for their role in a local stolen identity refund scheme. Rodgers and Walton pleaded guilty, admitting they used dozens of identities over a two-year period that caused about $60,000 in actual losses during the 2012 tax filing season. The scheme could have caused another $540,000 had it not been detected early in the 2013 tax filing season.
Stolen identity refund frauds typically involve the use of stolen identities to obtain fraudulent tax refunds wired to debit cards in the victims’ names so the refunds can be harvested anonymously by the perpetrators. Walton and Rodgers were also sentenced today to 24-month-terms of imprisonment before Judge Lee Rosenthal.
The investigation leading to these charges was conducted by IRS-CI with assistance from the United States Postal Inspection Service. Assistant U.S. Attorney Jimmy Sledge Jr. is prosecuting both cases.
Husband and Wife Ordered to Prison for Falsifying Client Tax ReturnsRead the Press Release
HOUSTON – Tax return preparers Marlin Jermaine Beckett and Gia Cooper Beckett have sent to prison for making up deductions that resulted in approximately $360,000 in fraudulent client refunds, announced United States Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service – Criminal Investigation (IRS-CI). Both pleaded guilty in April 2013.
Today, U.S. District Judge Nancy F. Atlas, who accepted the guilty pleas, handed Marlin Beckett a 36-month sentence to be followed by a one-year-term of supervised release. He was also ordered to pay $196,923 in restitution to the IRS. Gia Beckett will be on probation for three years and must pay another $163,441 in restitution. The court further ordered neither person prepare any more tax returns except their own.
“One of the IRS’s main objectives is to ensure that all tax practitioners and preparers adhere to professional standards and follow the law,” said Cruz. “CI’s efforts to deter refund fraud are critical to overall tax compliance; our special agents play a valuable role by identifying, investigating and recommending prosecution of abusive return preparers. As we approach tax filing season, we remind taxpayers to be very diligent when deciding who they select to prepare their returns.”
The Becketts are husband and wife tax return preparers and were charged in separate, but related cases. According to the factual basis in support of their respective pleas, they each admitted they claimed false business mileage deductions for local clients that fraudulently increased tax refunds by approximately $360,000 for tax years 2006 through 2009.
Originally released on bond, Marlin Beckett was recently taken into custody when further investigation of his activities revealed he continued to prepare tax returns in violation of his bond conditions. At least one of those tax returns had the same kind of false deductions that had led to his conviction.
Further investigation of Marlin Beckett’s activities also led to the successful prosecution of Yevette Lauren Walton and Lakisha Lashell Rodgers for their role in a local stolen identity refund scheme. Rodgers and Walton pleaded guilty, admitting they used dozens of identities over a two-year period that caused about $60,000 in actual losses during the 2012 tax filing season. The scheme could have caused another $540,000 had it not been detected early in the 2013 tax filing season.
Stolen identity refund frauds typically involve the use of stolen identities to obtain fraudulent tax refunds wired to debit cards in the victims’ names so the refunds can be harvested anonymously by the perpetrators. Walton and Rodgers were also sentenced today to 24-month-terms of imprisonment before Judge Lee Rosenthal.
The investigation leading to these charges was conducted by IRS-CI with assistance from the United States Postal Inspection Service. Assistant U.S. Attorney Jimmy Sledge Jr. is prosecuting both cases.
Houston Man Sentenced in Multi-State Health Care Fraud SchemeRead the Press Release
Department of Justice
Office of Public AffairsSHERMAN, Texas – A 55-year-old Houston man has been sentenced to federal prison for his role in a multi-state health care fraud scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Peter Pedro Egede pleaded guilty on Apr. 4, 2013, to health care fraud and was sentenced to 87 months in federal prison today by U.S. District Judge Marcia A. Crone. Egede was also ordered to pay restitution in the amount of $1,635,447.60 to the Medicare and Medicaid programs and a fine of $12,500.
According to the indictment, from May 2002 to June 2003, Egede conspired with others to defraud Medicare and Medicaid through the mass marketing of motorized wheelchairs. As part of the scheme, the defendant and his co-conspirators recruited Medicare and Medicaid beneficiaries by representing that the government was “giving away” motorized wheelchairs. The recruiters would secure the beneficiaries protected health information, including names, dates of birth, and Medicare numbers from mostly elderly individuals. Egede and his co-conspirators created false medical necessity certificates for each beneficiary by drafting, without authorization, prescriptions from doctors who had never examined those beneficiaries. Often, Egede billed Medicare for motorized wheelchairs, but instead delivered less expensive scooters to the beneficiaries. In other instances, Egede did not deliver anything even though Medicare had paid for a motorized wheelchair. Claims were submitted by the defendant for over 500 beneficiaries located in Texas, Oklahoma, Arkansas, Louisiana, and Mississippi. A great portion of the beneficiaries resided in counties within the Eastern District of Texas, including Smith, Bowie, Denton and Lamar counties. Egede submitted false and fraudulent claims to Medicare of more than $4.1 million and obtained more than $1.6 million in claims paid. Egede was indicted by a federal grand jury on June 15, 2006.
This case was investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigations and the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU). This case was prosecuted by Special Assistant U.S. Attorney Alma Hernandez.
Homar Renova-Castillo Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on February 5, 2014, before U.S. District Judge Susan P. Watters, HOMAR RENOVA-CASTILLO, a 37 year-old resident of Tucson, Arizona, was sentenced to a term of:
Prison: 135 months
Special Assessment: $ 200
Restitution: N/A
Supervised Release: 5 years
Renova-Castillo was sentenced in connection with his guilty plea to conspiracy to possess with intent to distribute methamphetamine and illegal re-entry of deported alien.
In an Offer of Proof filed by Assistant U.S. Attorney Brendan McCarthy, the government stated it would have proved at trial the following:
Homar Renova-Castillo, an alien and citizen of Mexico, was previously convicted in 2000 in Yellowstone County, Montana, for felony criminal endangerment. Renova-Castillo was then deported from the United States on January 31, 2002, and left through El Paso, Texas. Renova-Castillo was subsequently found in the United States. Specifically, on November 19, 2012, Renova-Castillo was pulled over in a motor vehicle near Park City, Montana by a Yellowstone County Deputy Sheriff. Renova-Castillo was never granted permission by the Attorney General or the Secretary of the Department of Homeland Security to enter the United States.
In August of 2012, agents with the EMHIDTA began investigating the sale of methamphetamine in Billings by J.S. and Homar Renova-Castillo. On August 22, 2012, agents spoke with co-conspirator who stated that he had made two trips to Idaho with Homar Renova to pick up methamphetamine. The co-conspirator estimated that they picked up two pounds of methamphetamine each time. The co-conspirator stated that the methamphetamine was provided to Renova's distributor in Billings, J.S.
A confidential informant then made purchases of methamphetamine from J.S. on eight separate occasions from September of 2012 through April of 2013. Each purchase was for approximately 1/4 grams of methamphetamine. J.S. indicated to the confidential informant that Renova was her source of supply.
Hallettsville Man Gets 28 Years for Receiving Child PornographyRead the Press Release
VICTORIA, Texas – Hallettsville resident James Leland Copeland, 42, has been sentenced to a significant term of federal imprisonment for receiving child pornography, announced United States Attorney Kenneth Magidson. Copeland pleaded guilty on May 10, 2013.
U.S. District Judge Gregg Costa, who accepted the guilty plea, sentenced Copeland to the 28-year-term taking into consideration the need to protect the public and deter future criminal behavior in the defendant and others. He was further ordered to serve the rest of his life on supervised release following completion of the prison term. In handing down the sentence, Judge Costa noted Copeland’s recidivism and substantially greater role in the offense than the average child pornography recipient. Judge Costa determined that Copeland, while not directly producing the child pornography he received himself, he nonetheless played a significant role in causing it to be produced. Copeland will also be required to register as a sex offender.
Copeland was a wanted person from Tennessee for failure to register as a sex offender. He had been previously convicted of possession of child pornography in the Eastern District of Tennessee in 2004 and sentenced to 51 months in the Bureau of Prisons. The U.S. Marshals Service (USMS) determined Copeland was living in Hallettsville and had failed to register within the state of Texas.
As a result of a federal arrest and search warrant, authorities searched Copeland’s residence on Dec. 18, 2012, at which time several electronic storage devices and other written media were seized from the home. The Corpus Christi Police Department’s Internet Crimes Against Children Task Force (CCPD-ICAC) conducted a forensic examination of the electronic storage devices which led to the discovery of several images of child pornography. An examination of the written media revealed it to be the transcription of emails and other Internet-based communications between Copeland and various persons on the Internet.
Some of that correspondence was with a person calling herself “Ms. Majesty,” later identified as Desiree Lee Padilla, of Brownsville. The communications between the two were primarily sexual in nature and discussed their mutual sexual attraction to children. Padilla sent several pictures of child pornography wherein she sexually assaulted an infant female relative.
Padilla was prosecuted by state authorities for aggravated sexual assault of a child and subsequently sentenced to 25 years imprisonment on Sept. 11, 2013.
Copeland will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI, CCPS-ICAC investigated with the assistance of USMS.
This case, prosecuted by Assistant United States Attorney Lance Duke, 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."
Hallettsville Man Gets 28 Years for Receiving Child PornographyRead the Press Release
VICTORIA, Texas – Hallettsville resident James Leland Copeland, 42, has been sentenced to a significant term of federal imprisonment for receiving child pornography, announced United States Attorney Kenneth Magidson. Copeland pleaded guilty on May 10, 2013.
U.S. District Judge Gregg Costa, who accepted the guilty plea, sentenced Copeland to the 28-year-term taking into consideration the need to protect the public and deter future criminal behavior in the defendant and others. He was further ordered to serve the rest of his life on supervised release following completion of the prison term. In handing down the sentence, Judge Costa noted Copeland’s recidivism and substantially greater role in the offense than the average child pornography recipient. Judge Costa determined that Copeland, while not directly producing the child pornography he received himself, he nonetheless played a significant role in causing it to be produced. Copeland will also be required to register as a sex offender.
Copeland was a wanted person from Tennessee for failure to register as a sex offender. He had been previously convicted of possession of child pornography in the Eastern District of Tennessee in 2004 and sentenced to 51 months in the Bureau of Prisons. The U.S. Marshals Service (USMS) determined Copeland was living in Hallettsville and had failed to register within the state of Texas.
As a result of a federal arrest and search warrant, authorities searched Copeland’s residence on Dec. 18, 2012, at which time several electronic storage devices and other written media were seized from the home. The Corpus Christi Police Department’s Internet Crimes Against Children Task Force (CCPD-ICAC) conducted a forensic examination of the electronic storage devices which led to the discovery of several images of child pornography. An examination of the written media revealed it to be the transcription of emails and other Internet-based communications between Copeland and various persons on the Internet.
Some of that correspondence was with a person calling herself “Ms. Majesty,” later identified as Desiree Lee Padilla, of Brownsville. The communications between the two were primarily sexual in nature and discussed their mutual sexual attraction to children. Padilla sent several pictures of child pornography wherein she sexually assaulted an infant female relative.
Padilla was prosecuted by state authorities for aggravated sexual assault of a child and subsequently sentenced to 25 years imprisonment on Sept. 11, 2013.
Copeland will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI, CCPS-ICAC investigated with the assistance of USMS.
This case, prosecuted by Assistant United States Attorney Lance Duke, 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."
Grand Jury Returns IndictmentsRead the Press Release
MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in St. Paul, recently returned the following indictments. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.Mexican citizen charged with illegal re-entry into U.S.
Delfino Guadarrama-Miranda, age 57, a citizen of Mexico, is charged with one count of illegally re-entering the United States after previously being deported subsequent to a conviction for a felony.
If convicted, Gutierrez-Garcia faces a potential maximum penalty of ten years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations and is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.Three people charged with conspiracy to distribute marijuana
Alexander Edward Heying, age 31, and Peter Gregory Heying, age 27, both of Minnetonka; and Acacia Lauren Ruiz, age 33, of Ukiah, California, are each charged with one count of conspiracy to distribute marijuana and one count of conspiracy to commit money laundering.
If convicted, the defendants face a potential maximum penalty of life in prison on the marijuana count and 20 years on the money laundering count. This case is the result of an investigation by the U.S. Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigations, the West Metro Drug Task Force, the Hennepin County Sheriff’s Office, the West Hennepin Public Safety Department, and the police departments of Medina and Orono. It is being prosecuted by Assistant U.S. Attorney LeeAnn K. Bell.Hastings felon charged with possessing firearms and ammunition
Samuel David Shoen, age 35, of Hastings, was charged with three counts of being a felon in possession of a firearm, two counts of being a felon in possession of ammunition, one count of possession with intent to distribute methamphetamine, and one count of possession of a firearm during and in relation to a drug-trafficking crime.
If convicted, Shoen faces a potential maximum penalty of 20 years in prison on the methamphetamine count, a consecutive five years on the possession of a firearm during and in relation of a drug-trafficking crime count, and ten years on each of the remaining counts. This case is the result of an investigation by the St. Paul Police Department, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). It is being prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Bradley M. Endicott.Ginseng Root Poacher Sentenced to Jail TimeRead the Press Release
The Public Is Reminded Gathering Ginseng On The Nantahala National Forest Without A Permit Is Illegal
ASHEVILLE, N.C. – U.S. Magistrate Judge Dennis L. Howell sentenced Charles R. Nash, of Whittier, N.C. to serve 10 days in jail for the illegal possession or harvesting of American ginseng from the Nantahala National Forest, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina and Kristin Bail, Forest Supervisor of the U.S. Forest Service National Forests in North Carolina.
According to the January 30, 2014 sentencing hearing and other documents, on October 12, 2013, Nash admitted to illegally possessing 24 American ginseng roots he had dug from the Mosses Creek and Wayehutta Off-Road Vehicle areas in Jackson County. He pleaded guilty to the poaching charge. Staff of the Forest Service replanted the recovered viable roots.
American ginseng is on the list of the Convention of International Trade of Endangered Species. The U.S. Attorney’s Office reminds the public that gathering ginseng on the Nantahala National Forest without a permit is illegal. U.S. Forest Service lands have been severely impacted by ginseng poachers in western North Carolina. American ginseng was formerly abundant throughout the eastern mountains, but due to repeated poaching, populations have been reduced to a point that they can barely reproduce. The roots poached in this park are usually young, between the ages of 5 and 10 years, and have not yet reached their full reproductive capacity. In time, the plant’s populations could recover if poaching ceased.
The Division of Scientific Authority, U.S. Fish & Wildlife Service is the regulatory agency that evaluates the biological and management status of wild American ginseng throughout its native range. The Division issues an annual or biennial report detailing if any harvest conditions need to be modified to ensure the sustainable harvest of wild native ginseng. Permits to collect ginseng root in National Forests are issued through the U.S. Forest Service in early September. Permits are not available in National Park lands such as the Blue Ridge Parkway and the Great Smoky Mountains National Park, where even the possession of American Ginseng is prohibited.
The investigation of the case was handled by the U.S. Forest Service. The U.S. Attorney’s Office in Asheville handled the prosecution.
To report illegal harvesting activities of American ginseng, please call 828-257-4200.
Georgia Dentist Pleads Guilty to Tax EvasionRead the Press Release
Dr. Dayo Obebe of Muscogee County, Ga., pleaded guilty today in federal court in Columbus, Ga., to one count of tax evasion, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.
According to court documents, Obebe is a dentist licensed in Georgia and Alabama, where he operated the Moon Road Cosmetic & Family Dentistry in Columbus, Ga., and the Brent Dental Dentistry in Brent, Ala. In 2004, Obebe began intentionally concealing money he earned from patients who paid with credit cards from his accountants and the IRS by placing credit card payments into a separate bank account from other cash and check receipts. Consequently, Obebe intentionally underreported his total income from the dental practice on his 2004, 2005 and 2006 federal income tax returns by more than $500,000 and falsely claimed a tax refund.
In 2007, the IRS audited Obebe’s tax return. In 2008 Obebe lied during an audit when he stated that he accurately reported his income on his tax return, when he knew that he had earned substantially more income over the three-year period than he had reported to the IRS. In total, Obebe evaded paying over $185,000 in tax to the IRS on his 2004, 2005 and 2006 federal income tax returns.
Obebe faces a statutory maximum sentence of five years in prison, three years of supervised release and a $250,000 fine. In addition, according to the plea agreement, he has agreed to pay restitution to the IRS in the amount of $189,661. Sentencing has not been scheduled.
The case was investigated by special agents of the IRS - Criminal Investigation, and Trial Attorneys Charles Edgar and Justin Gelfand for the Tax Division are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax.
Georgia Dentist Pleads Guilty to Tax EvasionRead the Press Release
WASHINGTON – Dr. Dayo Obebe of Muscogee County, Ga., pleaded guilty today in federal court in Columbus, Ga., to one count of tax evasion, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.According to court documents, Obebe is a dentist licensed in Georgia and Alabama, where he operated the Moon Road Cosmetic & Family Dentistry in Columbus, Ga., and the Brent Dental Dentistry in Brent, Ala. In 2004, Obebe began intentionally concealing money he earned from patients who paid with credit cards from his accountants and the IRS by placing credit card payments into a separate bank account from other cash and check receipts. Consequently, Obebe intentionally underreported his total income from the dental practice on his 2004, 2005 and 2006 federal income tax returns by more than $500,000 and falsely claimed a tax refund.
In 2007, the IRS audited Obebe’s tax return. In 2008 Obebe lied during an audit when he stated that he accurately reported his income on his tax return, when he knew that he had earned substantially more income over the three-year period than he had reported to the IRS. In total, Obebe evaded paying over $185,000 in tax to the IRS on his 2004, 2005 and 2006 federal income tax returns.
Obebe faces a statutory maximum sentence of five years in prison, three years of supervised release and a $250,000 fine. In addition, according to the plea agreement, he has agreed to pay restitution to the IRS in the amount of $189,661. Sentencing has not been scheduled.
The case was investigated by special agents of the IRS - Criminal Investigation, and Trial Attorneys Charles Edgar and Justin Gelfand for the Tax Division are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax
For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Former Tennessee Police Officer Sentenced for Assaulting an ArresteeRead the Press Release
Jackson, TN – Christopher Eugene Reynolds, 39, a former police officer of the Selmer, Tenn., Police Department, was sentenced yesterday by Chief U.S. District Judge J. Daniel Breen to serve one year and one day in prison following his conviction for violating the civil rights of an arrestee, announced United States Attorney Edward L. Stanton III.
Reynolds pleaded guilty on November 6, 2013. Judge Breen also sentenced Reynolds to a period of two years supervised release and a $100 special assessment. Reynolds admitted that on April 28, 2011, while using his authority as a SPD officer, he slammed a handcuffed arrestee to the floor of the McNairy Regional Hospital and struck him once in the face. According to information presented in court, Reynolds acknowledged that this assault was unreasonable, did not serve a legitimate law enforcement purpose and was not made by accident, mistake or inadvertence.
“Law enforcement officers must abide by and adhere to the same laws they take an oath to enforce,” said U.S. Attorney Stanton. “Instead of serving and protecting the public, this officer used physical force to violate the civil rights of an individual and will now serve prison time, vividly illustrating that no one is above the law.”
This case was investigated by FBI Special Agent Christopher Miller with the assistance of the Tennessee Bureau of Investigation. The case was prosecuted by Trial Attorney Ryan J. Murguía for the Civil Rights Division and Special Litigation Counsel Gerard V. Hogan, with the assistance of Assistant U.S. Attorney Victor L. Ivy for the Western District of Tennessee.Former State Treasurer Martha Shoffner Charged with Mail FraudRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; and David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation announced that new charges were handed down by a federal grand jury charging Martha Anne Shoffner, age 69, of Newport with ten counts of mail fraud.
The Second Superseding Indictment alleges that Shoffner used $9,800 of campaign funds from her re-election campaign for Treasurer of the State of Arkansas for personal expenses. According to the Indictment, campaign checks were mailed for payments to a personal Wells Fargo credit card from November 5, 2010 through October 9, 2011. Individual checks ranged from $200 to $5,000. The charges to the credit card included clothing, cosmetics and other personal expenses.
The new counts of mail fraud against Shoffner are in addition to the previous six counts of extortion under color of official right, one count of attempted extortion and seven counts of receipt of a bribe by an agent of a state government receiving federal funds. Trial is set for March 3, 2014, before United States District Judge J. Leon Holmes.
The charges stem from an investigation by the Federal Bureau of Investigation’s ArkTrust Public Corruption Task Force. The ArkTrust Public Corruption Task Force is comprised of FBI Agents, and Task Force Officers from the Arkansas State Police Department, Pulaski County Sheriff’s Office, and the Little Rock Police Department. If you think you see public corruption contact the public corruption hotline at (501)221-8200.
Mail fraud carries a possible sentence of not more than 20 years’ imprisonment and/or not more than a $250,000 fine with not more than three years of supervised release.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Former Rosedale Resident Sentenced to 27 Years in Prison for Armed Robbery of A Business Resulting in the Owner’s DeathRead the Press Release
Robbers Stole $11,000 and Left Victim Bound and in Obvious Pain
Baltimore, Maryland - U.S. District Judge William D. Quarles, Jr. sentenced Pedro Rodriguez Garcia, age 35, formerly of Rosedale, Maryland, to 27 years in prison followed by three years of supervised release for conspiring to commit, and committing, an armed commercial robbery, and brandishing a gun during the robbery.
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; Commissioner Anthony W. Batts of the Baltimore City Police Department; Chief James W. Johnson of the Baltimore County Police Department; Baltimore City State’s Attorney Gregg L. Bernstein; Baltimore County State’s Attorney Scott Shellenberger; Special Agent in Charge Niall Meehan of the Washington Field Office of the U.S. Department of State’s Diplomatic Security Service; and Maryland Attorney General Douglas F. Gansler.
“Superb law enforcement coordination brought the defendant to justice for the armed robbery that resulted in the tragic death of Constantine Frank,” said U.S. Attorney Rod J. Rosenstein.
According to evidence presented at the five day bench trial, Garcia participated in a robbery planned by co-defendant Nikolaos Mamalis. Mamalis recruited Garcia, Daniel Chase and others to rob Constantine Frank, the owner of Precision Vending located on S. Lakewood Avenue in Baltimore. Mamalis knew the owner socially and from prior business dealings, and he was familiar with the physical layout and security at Precision Vending from previous visits with Mr. Frank. On July 29, 2009, after Mamalis advised his co-conspirators that Mr. Frank was alone inside, Garcia and Chase entered the business disguised as package delivery men. Chase took out a gun from a false package they had brought inside, brandished the weapon and then gave it to Garcia who used the gun to hold Mr. Frank captive. The two robbers also used zip-ties and duct tape to restrain the victim while Chase searched the business for cash, stealing over $11,000. Knowing that Mr. Frank would recognize him, Mamalis waited outside the building and received periodic reports from Chase using prepaid wireless phones which Mamalis and Garcia had previously purchased.
The robbers left Mr. Frank bound, knowing that he was sweating profusely and in obvious discomfort. Shortly after leaving, Chase called one of Mr. Frank’s other businesses and said: “Your boss is in his office, and he is not doing so good.” Mr. Frank had suffered a stroke by the time officers found him conscious, but still in physical restraints and unable to speak. Mr. Frank was listed in critical condition when he arrived at the hospital and died less than two weeks later on August 11, 2009. The autopsy concluded that the cause of death was an intra-cerebral hemorrhage associated with stress resulting from the robbery and ruled the death a homicide.
After Mr. Frank’s death, Garcia fled the country and was captured by agents from the U.S. Border Patrol two years later.
Nikolaos Mamalis, age 56, of Edgewood, Maryland, was sentenced to 77 years in prison for conspiracy, three counts of commercial robbery and three corresponding firearms charges in connection with the Precision Vending robbery and two home invasion robberies in Maryland. Mamalis was convicted by a federal jury on February 3, 2011. Daniel Chase, age 67, of Browns Mill, New Jersey; pleaded guilty to his participation in a series of robberies planned by Mamalis and was sentenced to 141 months in prison.
United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation; Baltimore City and County Police Departments; New Jersey State Police; Baltimore City and County State’s Attorney’s Offices; U.S. Department of State’s Diplomatic Security Service and Maryland Attorney General’s Office for their work in this investigation and prosecution. Mr. Rosenstein commended Assistant United States Attorney Debra L. Dwyer and Special Assistant United States Attorney Gerald A. A. Collins, a cross designated Maryland Assistant Attorney General assigned to Exile cases, who prosecuted the case.
Former President of Bennington School Sentenced to 18 Months in Federal Prison for Tax and Health Care Fraud ConvictionsRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on February 5, 2014, Matthew Merritt, Jr., 82, of West Stockbridge, Massachusetts was sentenced to 18 months in federal prison after his guilty plea to charges that he engaged in a scheme to defraud a health care program and commit tax fraud. United States District Judge William K. Sessions III, sitting in Burlington, also ordered that Merritt, Jr. serve one year of supervised release following his prison term.
Merritt, Jr. is the founder and former President of Bennington School, Inc. (BSI). According to court records, the Office of the United States Attorney for the District of Vermont and the Office of the Vermont Attorney General previously entered into a global resolution of criminal and civil investigative matters concerning alleged tax and health care fraud by former officers of Bennington School, Inc. (BSI). Pursuant to that resolution agreement, Merritt, Jr., along with his son, Defendant Matthew Merritt III, BSI’s Plant Manager, and his son-in-law, Defendant Ray Crowley, who served as CFO of BSI, plead guilty to one charge each of federal tax fraud, which is a felony. In addition, Matthew Merritt, Jr., pled guilty to a federal felony charge of engaging in a scheme to defraud a health care program. To resolve potential civil health care fraud liability, the three Merritt family members have paid a total of $3,000,000.00 to the United States and the State of Vermont. Defendant Jeff LaBonte, the Executive Director of BSI also pled guilty to a federal tax fraud charge and paid $1,300,000.00 to resolve his potential civil health care fraud liability. Of the total $4.3M recovery, the State of Vermont has received $2,113,708.00 and the United States has received $2,186,292.00.
Until 2013, BSI, a for-profit, closely-held corporation, operated a residential program in Bennington, Vermont that offered therapeutic and educational services for socially and emotionally challenged boys and girls. Over the course of the last two decades, the State of Vermont placed many students at BSI, and was responsible for their tuition and other expenses. The funding for these placements came from the Vermont Medicaid program (approximately 60% federal funding and 40% state funding) and from several Vermont state agencies, including the Department of Education, the Department of Mental Health, and the Department of Children and Families. This funding was based on a per diem rate for each student, determined on an annual basis by the Division of Rate Setting (DRS), within the Vermont Agency of Human Services. The annual rate set by DRS was determined upon a review of BSI’s application materials, including various accounting reports and budgets. In particular, the formula for the rate calculated by DRS for Medicaid and Education payments to BSI was based upon the school’s reported allowable expenses. The higher the allowed expenses, the higher the per diem rate for each student.
BSI President, Matthew Merritt, Jr. and Executive Director Jeff LaBonte, with the assistance of CFO Ray Crowley and Plant Manager Matthew Merritt III, implemented a system of compensating certain employees of BSI by providing personal benefits, such as cars, gasoline, oil for personal residences, payments of personal expenses on credit card accounts, salaries for family members who did not work at BSI, and reimbursements for various personal expenses. These forms of compensation were never reported on the individual’s tax returns. In addition, these unallowable expenses were embedded in the books and records of BSI, which were used to create the reports, budgets and other financial documents that BSI presented to DRS as accurate and allowable for rate setting.
The Government=s investigation arose in 2011 following a request by BSI for a rate change due to reduced enrollment. In processing that request, DRS auditors took a close look at some of the financial information submitted and determined an audit should be performed. The audit, completed in 2012, resulted in a recalculation of the rate BSI received during the years 2003-2012. DRS calculated the total amount of overpayment by the State during those years to be over $3.6 Million. Under the False Claims Act, 31 U.S.C. § 3729, and potential state law remedies, should the Government prevail at a trial, the defendants would be liable for treble damages as well as mandatory penalties up to $11,000 per claim. The defendants dispute DRS’s calculation, and the parties have settled to avoid further investigation and litigation.
For his federal health care fraud conviction, Matthew Merritt, Jr. faced a maximum term of imprisonment of ten years under 18 U.S.C. § 1347. For his federal tax fraud conviction, he faced a maximum prison term of three years under 26 U.S.C. § 7206. Pursuant to a written plea agreement, the parties agreed that Matthew Merritt Jr.’s total term of imprisonment should not exceed 24 months. At sentencing, Merritt, Jr. asked that Judge Sessions impose no prison sentence, while the United States argued that Merritt, Jr. should serve the full 24 months in prison. In determining the 18-month sentence, Judge Sessions noted, among other factors, the gravity of Merritt, Jr.’s crimes, the fact that he engaged in the fraudulent conduct over the course of many years, and the harm Merritt, Jr.’s crimes cause the community.
For their federal tax fraud convictions, Matthew Merritt III and Raymond Crowley each faced a maximum prison term of three years under 26 U.S.C. § 7206. Pursuant to a written plea agreement, the parties agreed that Matthew Merritt III and Raymond Crowley’s prison terms should not exceed 18 months. In a sentencing hearing held on December 23, 2013, Judge Sessions sentenced Crowley to one year of probation, which includes six months of home confinement, and 200 hours of community service.
The same day, Judge Sessions sentenced Merritt III to one year of probation, which includes six months of home confinement and 200 hours of community service. Judge Sessions also ordered Merritt III to pay an additional $30,000 fine.
For his federal tax fraud conviction, Jeffrey Labonte faced a maximum prison term of three years under 26 U.S.C. § 7206. Pursuant to a written plea agreement, the government agreed to make the nature and extent of Jeffrey Labonte’s cooperation known to the federal court and, as a result of his cooperation, request that the court sentence Jeffrey Labonte to a term of imprisonment below that recommended by the advisory sentencing guidelines. In a November 18, 2013 sentencing hearing, Judge Sessions sentenced Labonte to a one-year term of probation, which includes four months of home confinement and 100 hours of community service. Judge Sessions also ordered Labonte to pay an additional $30,000 fine.
The school continues to operate as a fully-licensed residential treatment program. However, as of January 1, 2013, management and ownership of the programs at Bennington School were transferred to Vermont Permanency Initiative Inc., which is part of the Becket Family of Services. Matthew Merritt, Jr., has resigned as President and Trustee of BSI, and Jeff LaBonte, Matthew Merritt III and Raymond Crowley have left the school’s employ.This matter was investigated by the United States Attorney=s Office, the Medicaid Fraud and Abuse Unit of the Vermont Attorney General’s Office, the Internal Revenue Service, the Federal Bureau of Investigation, and the Office of Inspector General, U.S. Department of Health and Human Services. United States Attorney Coffin commends the investigative agencies for their hard work on this criminal and civil investigation.
On the criminal matters, the United States is represented by First Assistant U.S. Attorney Paul Van de Graaf and Assistant United States Attorney Timothy C. Doherty, Jr. The civil investigation was handled by Civil Chief, Carol L. Shea and Assistant United States Attorney, Nikolas Kerest. The State of Vermont was represented by Assistant Attorney General Edward Baker.
Matthew Merritt, Jr. is represented by David V. Kirby of O’Connor and Kirby in Burlington, Vermont. Jeffrey LaBonte is represented by John Pucci of Buckley Richardson in Springfield, Massachusetts. Matthew Merritt III is represented by Richard Berne in Portland, Maine. Raymond Crowley is represented by Maryanne E. Kampmann of Stetler, Allen & Kampmann in Burlington, Vermont.
Former Hospital CFO Charged with Health Care FraudRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – The former Chief Financial Officer for Dr. Tariq Mahmood’s Texas hospitals has been charged with health care fraud violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Joe White, 66, of Cameron, Texas, was indicted by a federal grand jury on Jan. 22, 2014, and charged with making false statements to the Centers for Medicare and Medicaid Services (CMS) and aggravated identity theft. White appeared for an arraignment hearing today before U.S. Magistrate Judge John D. Love.
The American Recovery and Reinvestment Act of 2009 established incentive payments under the Medicare and Medicaid programs for eligible professionals and eligible hospitals that meaningfully use Certified Electronic Health Record Technology. The incentive programs were created to promote the adoption of health information technology and encourage the electronic exchange of health information in order to improve the quality and lower the cost of health care in the United States. Upon meeting certain conditions, an eligible hospital could qualify for incentive payments from CMS if the hospital attested that it had meaningfully used Certified Electronic Health Record Technology for the prior fiscal year.
According to the indictment, on Nov. 20, 2012, White falsely attested to CMS that Shelby Regional Medical Center (Shelby Regional) met the meaningful use requirements for the 2012 fiscal year. However, Shelby Regional relied on paper records throughout the fiscal year and only minimally used electronic health records. To give the false appearance that the hospital was actually using Certified Electronic Health Record Technology, White directed its software vendor and hospital employees to manually input data from paper records into the electronic health record (EHR) software, often times months after the patient was discharged and after the end of the fiscal year.
The indictment further alleges that White falsely attested to the hospital’s meaningful use by using another person’s name and information without that individual’s consent or authorization. As a result of the false attestation, CMS paid Shelby Regional $785,655.00. In total, hospitals operated by Dr. Mahmood, including Shelby Regional, were paid $16,794,462.66 by the Medicaid and Medicare EHR incentive programs for fiscal years 2011 and 2012.
“As more and more federal dollars are made available to providers to adopt Electronic Health Record systems, our office is expecting to see more cases like this one,” said Special Agent in Charge Mike Fields of the U.S. Department of Health and Human Services Office of Inspector General's (OIG) Dallas Regional Office. “The Office of Inspector General is committed to protecting the millions of taxpayer dollars used to pay providers to adopt Electronic Health Record systems.”
If convicted, White faces up to five years in federal prison for making a false statement and up to two years in federal prison for aggravated identity theft.
This case is being investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), and the Federal Bureau of Investigation. Assistant U.S. Attorney Nathaniel C. Kummerfeld and Special Assistant U.S. Attorney Kenneth C. McGurk are prosecuting this case.
A grand jury indictment is not evidence of guilt and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former East Windsor Resident Charged with Federal Firearms, Explosives and Obstruction OffensesRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury in Hartford has returned a six-count indictment charging PAUL GOTTA, 55, formerly of East Windsor, with firearms, explosives and obstruction offenses. The indictment was returned on January 30, 2014, and unsealed today during GOTTA’s arraignment before U.S. Magistrate Judge Donna F. Martinez in Hartford. GOTTA entered a plea of not guilty.
According to the indictment and statements made in court, between July and December 2012, GOTTA is alleged to have assisted a juvenile in acquiring a handgun, thousands of rounds of ammunition and explosive material, and also assisted in the manufacture of a pipe bomb. It is further alleged that in May and June 2013, GOTTA attempted to obstruct the investigation of his involvement in this matter by making false statements to ATF special agents.
The indictment charges GOTTA with one count of aiding and abetting the unlawful transport of a firearm in interstate commerce, which carries a maximum term of imprisonment of five years; one count of aiding and abetting the possession of a handgun by a juvenile, which carries a maximum term of imprisonment of one year; one count of aiding and abetting the possession of ammunition by a juvenile, which carries a maximum term of imprisonment of one year; one count of distribution of explosive material to an individual under the age of 21, which carries a maximum term of imprisonment of 10 years; one count of aiding and abetting the attempted manufacture of a pipe bomb, which carries a maximum term of imprisonment of 10 years and one count of obstruction of justice, which carries a maximum term of imprisonment of five years.
GOTTA was arrested on a federal criminal complaint on July 19, 2013, and is currently confined to his home in Bridgeport while released on bond.
This matter is assigned to U.S. District Judge Robert N. Chatigny in Hartford.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the East Windsor Police Department, and is being prosecuted by Assistant U.S. Attorney Robert M. Spector.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Former Baltimore Police Officer Sentenced to 5 Years in Prison for Protecting A Heroin Dealer and Illegally Accessing Police Databases in Fraudulent Tax Refund SchemeRead the Press Release
Police Officer Heads to Federal Prison for “Disgraceful Violation of Public Trust”
Baltimore, Maryland - U.S. District Judge William D. Quarles, Jr. sentenced former Baltimore Police officer Ashley Roane, age 26, of Pikesville, Maryland, today to five years in prison for extortion and aggravated identity theft.
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; and Commissioner Anthony W. Batts of the Baltimore Police Department.“Ashley Roane sold her police powers for a few thousand dollars, in a disgraceful violation of the public trust,” said U.S. Attorney Rod J. Rosenstein. “Ms. Roane agreed to provide armed security for drug deals while in uniform in her patrol car, and to check a police database to identify informants. She also used a police database to obtain names, birth dates, and Social Security numbers of arrestees that could be used in a scheme to obtain fraudulent tax refunds from the IRS.”
According to her plea agreement, beginning in the fall of 2012, Roane and her roommate Erica Hughes engaged in a scheme whereby they provided the names and social security numbers of persons arrested by the Baltimore Police to an individual who could file false tax returns to obtain fraudulent tax refunds. Roane obtained the personal information of more than 30 people from law enforcement databases through her position as a Baltimore Police officer. Roane and Hughes provided the information to the individual, who they believed worked as a tax preparer, in addition to being a large scale heroin trafficker in Baltimore.On April 4, 2013, FBI agents watched as Roane arrived in her marked police patrol car for a meeting with the individual to obtain a fraudulent tax refund payment. As directed by the individual, Roane retrieved an envelope containing $2,500 from the source’s vehicle. At a recorded meeting on April 24, 2013, the individual went to Roane’s house and gave Roane an additional $1,500 that the FBI had provided to the individual, purported to be a fraudulent tax refund.
Roane admitted that she also provided protection for the individual’s purported drug trafficking. For example, on March 31, 2013, Roane told the individual that she had performed an unauthorized criminal check of one of the individual’s alleged associates, to determine if the associate was a police informant, and the individual was “clean.” After Roane agreed to provide protection during drug transactions, on April 30, 2013, the FBI set up a controlled purchase by the individual of white powder which resembled a kilogram of heroin. The FBI watched while Roane, in uniform, armed with her service gun, and in a marked police car, provided protection while the individual purportedly retrieved heroin from a vehicle provided by the FBI. Shortly thereafter, at a prearranged meeting, the individual paid Roane $500 for her protection. Roane agreed to provide such protection again in a future transaction involving multiple kilograms of heroin.
During the course of the schemes, Roane and Hughes received $5,250 from the individual in what Roane believed was proceeds of fraudulent tax refunds. Roane also received a total of $1,000 in exchange for providing protection to the individual during what Roane believed were kilogram-level heroin transactions.
Co-defendant Erica Hughes, age 26, of Pikesville, previously pleaded guilty to aggravated identity theft and was sentenced to two years in prison.
United States Attorney Rod J. Rosenstein praised the FBI and Baltimore Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Peter M. Nothstein, who prosecuted the case.
Florida Man Charged in Federal Counterfeit Case for Trafficking Bogus Automotive Devices ‘Reverse Engineered’ in ChinaRead the Press Release
LOS ANGELES – A Florida man was charged today with trafficking in counterfeit electronic engine control devices manufactured and marketed by a Southern California company for use in modified Honda and Acura vehicles.
Marc Heera, 24, of Sunrise, Florida, was charged with one count of trafficking in counterfeit goods, an offense that carries a statutory maximum penalty of 10 years in federal prison. The charge is contained in a criminal information filed this morning in United States District Court.
Federal prosecutors today also filed a plea agreement in which Heera agreed to plead guilty to the felony offense of selling counterfeit circuit boards that are installed in engine control units to boost performance. In the plea agreement, Heera admits that he reverse-engineered, manufactured, advertised and sold approximately 86 counterfeit Hondata “K-Pro” and “S300” devices, which are aftermarket devices manufactured and sold by the Torrance-based Hondata, Inc.
In the plea agreement, Heera admits that, beginning in 2009, he arranged for Hondata’s K-Pro and S300 devices to be reverse-engineered. Investigators believe that Heera had the devices reverse engineered in China and he then paid an unknown Chinese company to build some of the devices. Heera also manufactured counterfeit circuit boards at his workplace, which contained Hondata’s proprietary software. The counterfeit devices bore Hondata’s trademarked name, as well as counterfeit serial numbers. Heera also admitted creating counterfeit packaging, labels, instructions and compact discs for the devices.
Heera, using the online screen name “Maddman7887,” then advertised and sold the counterfeit K-Pro and S300 devices over the Internet, he admitted in the plea agreement. To avoid detection, Heera installed the counterfeit K-Pro devices into used ECUs or instructed the customers to send their ECU’s to him for installation. Heera specifically admitted selling 62 counterfeit K-Pro devices and 24 counterfeit S300 devices, generating approximately $58,000 in income. If the products had been genuine, they would have had a retail value of approximately $74,000.
Heera has agreed to appear in federal court in Los Angeles for an arraignment on March 24.
The investigation in this matter was conducted by the Federal Bureau of Investigation.
Release No. 14-015
Final Defendant in Tax Fraud Scheme Sentenced to PrisonRead the Press Release
PANAMA CITY, FLORIDA — United States Attorney Pamela C. Marsh announced today that Angel Done, 54, of New York, New York, was sentenced by United States District Judge Richard Smoak to 78 months in prison and was ordered to pay restitution to the Internal Revenue Service in conjunction with other defendants in the amount of $245,747.32.
Done is the fifth and final defendant sentenced to federal prison as a result of charges brought against him and four other co-defendants by the U.S. Attorney’s Office, alleging various federal tax violations. On December 19, 2013, Judge Smoak imposed the following sentences on the other defendants:
- Wilson Calle, 55, of New York, New York, was sentenced to 78 months in prison and was ordered to pay restitution to the Internal Revenue Service in conjunction with other defendants in the amount of $245,747.32;
- Blaine Johnston, 62, of Marianna, Florida, was sentenced to 78 months in prison and was ordered to pay restitution to the Internal Revenue Service in conjunction with other defendants in the amount of $245,747.32;
- Wilfredo Rodriguez, 53, of Miami, Florida, was sentenced to 27 months in prison and was ordered to pay restitution to the Internal Revenue Service in the amount of $160,490.93; and
- Diana Gonzalez, 63, of Miami, Florida, was sentenced to 63 months in prison and was ordered to pay restitution to the Internal Revenue Service in conjunction with other defendants in the amount of $245,747.32.
U.S. Attorney Marsh praised the investigators and prosecutors for bringing this case to a successful conclusion and said, “As the number of greedy offenders willing to steal identities and tax dollars has grown, so has our ability to track, investigate, arrest, and prosecute these cases, effectively and cooperatively. We are pursuing those engaged in these schemes, with intensity, and we are ready for tax season.”
During the federal trial in September, prosecutors presented evidence that between 2008 and 2009, the defendants prepared and filed fraudulent tax returns seeking more than $19 million in refunds. The defendants falsely reported that creditors of the defendants and their clients had withheld large amounts of federal income taxes and asserted that the creditors had paid those amounts over to the IRS. As a result of the fraudulently overstated income tax withholding, the tax returns filed on behalf of the defendants or their clients claimed large refunds, to which they were not entitled.
Following the trial, Done, Calle, and Johnston were found guilty by a federal jury of conspiring to defraud the United States by filing, or assisting others in filing, false federal income tax returns and of multiple counts of filing false federal income tax returns. Rodriguez was found guilty by the jury of filing a false federal income tax return seeking a false and fraudulent refund. Gonzalez had previously entered a guilty plea to the charge of conspiracy to defraud the United States by filing, or assisting others in filing, false federal income tax returns seeking false and fraudulent refunds.
This case was investigated by the Internal Revenue Service – Criminal Investigation and prosecuted by Assistant U.S. Attorneys J. Ryan Love and Randall J. Hensel.
Federal Grand Jury in El Paso Charges Former Army Physician, Former El Paso Physician, Two Other Individuals and Two Businesses in Connection with an Estimated $7.3 Million Health Care Fraud SchemeRead the Press Release
In El Paso, a federal grand jury has returned a 65-count indictment charging four individuals and two companies in connection with an estimated $7.3 million Health Care related fraud scheme announced United States Attorney Robert Pitman; Janice M. Flores, Special Agent in Charge of the Defense Criminal Investigative Service’s Southwest Field Office, Arlington, TX; Special Agent in Charge Scott Wilk of the Southwest Fraud Field Office of the U.S. Army Criminal Investigation Command Major Procurement Fraud Unit, Arlington, TX; and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.
Charged in the indictment, which was returned yesterday afternoon, include: 44-year-old former William Beaumont Army Medical Center (WBAMC) physician Richard Craig Rooney of Medina, WA; his 46-year-old wife and former El Paso Otolaryngology (Ear, Nose and Throat) physician and cosmetic surgeon Angie Unchi Song; 44 year-old Julia Lynn Eller, President and Chief Executive Officer of Allure Spine, LLC (Allure) in Charlotte, North Carolina; 71-year-old Charlie Takhyun Song of Grapeview, WA, father of Angie Unchi Song and independent sales representative; Spondylos Consulting, LLC (Spondylos), a company owned by Angie Unchi Song; and, Allure Spine, LLC, a company owned by Julia Eller.
Rooney, Angie Song, Eller, Charlie Song, Spondylos and Allure are all charged with one count of conspiracy to commit illegal remuneration in regard to Federal Health Care programs; two counts of aiding and abetting illegal remuneration in regard to Federal Health Care programs; one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Rooney, Angie Song, Eller and the two companies are charged in 39 substantive counts of wire fraud. Also, Rooney, Eller and Allure are charged with 17 substantive money laundering counts; and Angie Song, Charlie Song and Spondylos, with one substantive money laundering count. In addition, the indictment also charges Rooney and Eller with two counts each of making material false statements to federal authorities.
The indictment alleges that between September 2002 and August 2010, the defendants participated in an illegal scheme whereby Eller funneled money and other things of value, including firearms, to Rooney, Angie Song and Charlie Song so that Rooney would request the use of Allure Spine surgical implant devices and other medical related equipment in surgeries he performed at WBAMC and at Darnall Army Medical Center at Ft. Hood, TX (DAMC).
The indictment also includes a notice of criminal forfeiture wherein the Government is seeking proceeds derived from the fraudulent scheme as well as funds totaling more than $4.25 million seized from financial institutions and two residential real estate properties located in the State of Washington.
“Today’s indictment demonstrates that the FBI and our partners at the U.S. Attorney’s Office; U.S. Department of Defense, Criminal Investigative Service; U.S. Army Criminal Investigative Command, Major Procurement Fraud Unit; and, the U.S. Postal Inspector Service are committed to thoroughly investigate Health Care Fraud in our community, including Ft. Bliss, whenever health care professionals engage in activity to defraud our health care system for the sole purpose of self-enrichment,” stated FBI Special Agent in Charge Douglas E. Lindquist.
Upon conviction: conspiracy to commit illegal remuneration carries a penalty of up to five years in federal prison; aiding and abetting illegal remuneration in regard to Federal Health Care Programs carries a penalty of up to five years in federal prison; conspiracy to commit money laundering and money laundering carry a penalty of up to 20 years in federal prison; conspiracy to commit wire fraud and wire fraud carry penalties up to 20 years in federal prison; and false statement to federal authorities carries a penalty of up to five years in federal prison.
This indictment resulted from an investigation conducted by agents with the Defense Criminal Investigative Service (DCIS); agents of the Criminal Investigation Command Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command; and agents of the Federal Bureau of Investigation (FBI). Assistant United States Attorneys Debra Kanof and Anna Arreola are prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Federal Criminal Complaint Charges PSU-Altoona Student from Russia with Making Unregistered Destructive DevicesRead the Press Release
JOHNSTOWN, Pa. – A college student from Russia has been charged in the Western District Pennsylvania for allegedly making two destructive devices that were found in a suitcase in his rented apartment on the Penn State Altoona campus.
U.S. Attorney David J. Hickton of the Western District of Pennsylvania made the announcement.
Vladislav Miftakhov, 18, a legal permanent resident of the United States, was charged in federal court in Johnstown, Pa., with possessing and making an unregistered destructive device.
According to accusations contained in the criminal complaint, Miftakhov constructed the devices using Magnesium, Potassium perchlorate and an aluminum container, which he purchased and had shipped to his residence. The two devices found in Miftakhov’s apartment on Jan. 24, 2014, qualify as destructive devices as defined by federal law and therefore are required to be registered in the National Firearms Registration and Transfer Record (NFRTR). The defendant does not have any firearms registered to him in the NFRTR.
The investigation is continuing.
The law provides for a maximum penalty of 10 years in prison, a $10,000 fine or both.
The Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from the Pennsylvania State Police, the Blair County District Attorney’s Office and the Altoona Police Department, conducted the investigation leading to the federal charges against Miftakhov. Assistant U.S. Attorney James T. Kitchen is prosecuting this case on behalf of the government.
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Elma Man Indicted on Gun Charges and Making False StatementsRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an indictment charging Bernard T. Grucza, 38, of Elma, N.Y., with making false statements during a firearm purchase, possession of a firearm by a person subject to as domestic violence order of protection and making false statements. The charges carry a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that according to the indictment, the defendant made false oral and written statements to South Georgia Outdoors in an effort to obtain a Beretta 9mm pistol. In addition Grucza made false written statements to Big Daddy Guns in order to obtain a Ruger .380 caliber pistol.
The indictment also states that between July 13, 2013 and October 16, 2013, the defendant possessed a Ruger .380 caliber pistol despite being the subject of a restraining order issued by Elma Town Court. The indictment further states that Grucza made false statements to Special Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives that he had destroyed the Ruger .380 caliber pistol and thrown out the parts when in fact he had not.
The defendant will be arraigned on February 10, 2014 at 2:00 p.m. before U.S. Magistrate Judge H. Kenneth Schroeder, Jr.
The indictment is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon, the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig, the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard, and the Hamburg Police Department, under the direction of Michael Williams.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Dubuque Woman Sentenced for Trying to Hire Someone to Commit MurderRead the Press Release
A woman who used Craigslist to try to hire someone to commit murder was sentenced on February 5, 2014, to more than seven years in federal prison.
Megan Schmidt, 23, from Dubuque, Iowa, received the prison term after a November 20, 2013, guilty plea to one count of using interstate commerce facilities in the commission of murder for hire.
In a plea agreement, Schmidt admitted that two advertisements were posted on the website “Craigslist” from her Apple iPhone, soliciting for someone to do a “one time job.” In response to the advertisements, multiple individuals contacted defendant by email, including an individual also from Dubuque. During an exchange of emails between Schmidt and this individual, Schmidt stated that she wanted a man killed. Eventually, using her cell phone, Schmidt called and spoke to a man in she thought was the individual she had emailed. However, Schmidt was actually talking to an undercover deputy from the Dubuque County Sheriff’s office. During this phone call, Schmidt agreed to pay $10,000 to have a man killed. The undercover deputy then arranged to meet Schmidt at a location in Dubuque in order to see a picture of the man Schmidt wanted killed. Following this meeting, Schmidt was arrested.
Schmidt was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Schmidt was sentenced to 87 months’ imprisonment. A special assessment of $100 was imposed. Schmidt must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Dubuque County Sheriff’s Office and the Dubuque Police Department.
Court file information is available at https://ecf.iand.uscourts.gov. The case file number is 13-CR-1013.
Dorchester Man Sentenced in Murder-For-Hire CaseRead the Press Release
BOSTON - A Dorchester man was sentenced today in U.S. District Court in Worcester for a murder-for-hire plot against an Assistant District Attorney in Worcester County.
Pernell Powell, 76, was sentenced by U.S. District Court Judge Timothy S. Hillman to nine years in prison and two years of supervised release. In August 2013, Powell was convicted following a jury trial of using interstate commerce facilities in the commission of a murder-for-hire.
Powell tried to hire his cellmate at the Worcester County House of Correction to murder an Assistant District Attorney who he believed was involved in the prosecution of his pending OUI multiple offender case. Evidence against Powell included recorded conversations which contained explicit threats against the ADA.
U.S. Attorney Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; and Sheriff Lewis G. Evangelidis of the Worcester County Sheriff's Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Cory S. Flashner and Michelle L. Dineen Jerrett of Ortiz's Worcester Branch Office.
Confederated Tribes of the Umatilla Indian Reservation to Prosecute Domestic Violence Cases Under VAWA 2013Read the Press Release
Pilot Project Allows Tribal Prosecution of Non-Indian Abusers For the First Time in More Than Three DecadesMISSION, Ore. – The Confederated Tribes of the Umatilla Indian Reservation (“CTUIR”) will be one of three American Indian tribes to be the first in the nation to exercise special criminal jurisdiction over crimes of domestic and dating violence, regardless of the defendant’s Indian or non-Indian status, under a pilot project authorized by the Violence Against Women Reauthorization Act of 2013 (“VAWA 2013”). Besides the CTUIR, two other tribes, the Pascua Yaqui Tribe of Arizona and the Tulalip Tribes of Washington, will also begin exercising special criminal jurisdiction under VAWA 2013.
“Umatilla has once again shown that it is a national leader in criminal justice reform,” said Amanda Marshall, United States Attorney for the District of Oregon. “This expanded jurisdiction will give Umatilla tribal court the authority it needs to protect victims of domestic violence and hold offenders accountable.”
The Reauthorization of the Violence Against Women Act of 2013 expands the inherent jurisdiction of tribes that meet certain conditions to prosecute non-Indian domestic violence offenses perpetrated against Indian victims. It also permits those tribes to prosecute non-Indian protection order violations when the protected person is an Indian. Such authority is limited to non-Indians who reside, go to school, or work on a tribe’s reservation. To exercise this enhanced authority, a tribe must guarantee certain rights to defendants similar to those guaranteed by the United States Constitution, such as the right to a public defender and effective assistance of counsel. Tribes must also include non-Indians in jury pools. The CTUIR meets these requirements.
From February 20, 2014 forward, any non-Indian who commits a qualifying crime in the Indian country of the CTUIR will be subject to prosecution in tribal court. A copy of the Criminal Code is available on the CTUIR’s website. Since this is an exercise of the CTUIR’s inherent sovereignty, any tribal prosecution would not preclude the United States Attorney’s Office from also prosecuting the non-Indian defendant in federal court for the same offense.
"This is important not only for the CTUIR in exercising and expanding our sovereignty, but for the sovereignty of all tribes,” said Umatilla Board of Trustees Chair Gary Burke. “I am proud of the work and dedication of staff, the Court, the Law and Order Committee, and the General Counsel to support and push this effort forward. Once again, CTUIR is blazing a path forward for the good of all tribes.”
For over thirty years, tribes have been prohibited from exercising criminal jurisdiction over non-Indian defendants. Even a violent crime committed by a non-Indian husband against his Indian wife, in the presence of her Indian children, in their home on the Indian reservation, could not be prosecuted by the tribe. In granting the pilot-project requests of the Umatilla, Pascua Yaqui, and Tulalip tribes today, the United States is recognizing and affirming the tribes’ inherent power to exercise “special domestic violence criminal jurisdiction” over all persons, regardless of their Indian or non-Indian status.
The Department of Justice is posting notices of the pilot-project designation on the Tribal Justice and Safety Web site (www.justice.gov/tribal/) and in the Federal Register. In addition, each tribe’s application questionnaire and related tribal laws, rules, and policies will be posted on the Web site. These materials will serve as a resource for those tribes that may also wish to participate in the pilot project or to commence exercising “special domestic violence criminal jurisdiction” in the future.
For more information on VAWA 2013, please visit www.justice.gov/tribal/vawa-tribal.html.
Columbus Woman Pleads Guilty to Embezzling Hud Program Funds, Filing False Income Tax ReturnsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Wendy Harper, 44, Columbus, Ohio pleaded guilty in U.S. District Court to embezzling HUD program funds from her employer, Harvest Management Group, Inc, which manages more than 900 units for elderly and disabled people who qualify for HUD assistance. She also pleaded guilty to filing a false income tax return.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Barry McLaughlin, Special Agent in Charge, U.S. Department of Housing and Urban Development Office of Inspector General (HUD), and Kathy Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS) announced the pleas entered today before U.S. District Judge Gregory L. Frost.
According to court documents, Harper was responsible for managing payroll and payment functions for the agency. Harper manipulated the system to give herself unauthorized salary increases and unauthorized mileage reimbursements between 2009 and 2012.
Testimony presented during the plea hearing revealed that, according to calculations made by criminal investigators in this case, Harper would have had to have driven more than 1,200,000 miles in order for the mileage reimbursements to have been legitimate.
In a plea agreement, Harper acknowledged that the U.S. showed the amount of money she embezzled was $588,121.46 and that she concealed her crime by filing false income tax returns for 2009, 2010 and 2011 on which she failed to report the embezzled funds. The tax loss to the government was $126,019.36. Harper’s theft of these HUD program funds contributed to Harvest Management Group having difficulties maintaining the properties to minimum HUD standards and paying its property taxes.
Theft of federal program funds is punishable by up to ten years in prison, a fine of $250,000 and three years of supervised release. Filing false income tax returns is punishable by up to three years in prison, a $250,000 fine, the costs of prosecution and one year of supervised release. Judge Frost could also order her to pay restitution in an amount determined by the court. She will be required to file corrected tax returns for the three years and pay any due taxes and penalties.
Judge Frost will schedule a sentencing hearing following a pre-sentence investigation by the court.
U.S. Attorney Stewart commended the investigation by HUD and the IRS, the Reynoldsburg Police who referred the case for federal investigation, and Assistant U.S. Attorney Dale E. Williams Jr., who is representing the United States in this case.
Collin County Man Sentenced in Mortgage Fraud SchemeRead the Press Release
Department of Justice
Office of Public AffairsSHERMAN, Texas – A 46-year-old Frisco, Texas man has been sentenced for his role in a mortgage fraud scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Michael Burnham pleaded guilty in July 2013 to conspiracy to commit bank fraud in connection with a FHA insured home loan and was sentenced to 51 months in federal prison today by U.S. District Judge Marcia Crone. Burnham was also ordered to pay restitution in the amount of $1.3 million.
According to court documents, between March and August 2010, Burnham conspired with another individual, Michael Battista, to defraud Flagstar Bank, a federally insured bank. Burnham agreed with Battista that Burnham would recruit buyers to purchase houses that Battista owned. As an incentive to purchase the house, Burnham would promise the buyer a cash payment following the closing of the sale. Battista and Burnham fraudulently overstated the true purchase price of the houses in sales contracts and closing documents. This caused the buyers’ mortgage lenders, such as Flagstar Bank, to unknowingly fund purchase loans that generated more sales proceeds to Battista than what Battista was purportedly demanding for the houses. Battista then used the excess sales proceeds to pay a kickback to Burnham for recruiting the buyer, and Burnham would make the cash incentive payment to the buyer out of his kickback funds. The scheme caused a loss to mortgage lenders of more than $1.3 million. Burnham was ordered to make restitution in that amount to the victims of his scheme. Battista previously pleaded guilty and has been sentenced for his participation in the scheme.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.
President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case was investigated by the Federal Housing Finance Agency Office of Inspector General and the Department of Housing and Urban Development Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Andy Williams.
Cape May County, N.J., Man Admits Transporting Minor Across State Lines for SexRead the Press Release
CAMDEN, N.J. – A Cape May County, N.J. man today admitted transporting an underage girl across state lines for the purpose of engaging in sexual activity, U.S. Attorney Paul J. Fishman announced.
Michael Kulick, 46, of Dennis Township, N.J., pleaded guilty before U.S. District Court Judge Joseph E. Irenas to an information charging him with one count of transportation of a minor over state lines in order to engage in sexual activity.
According to documents filed in this case and statements made in court:
In August 2012, Kulick and his family went on a vacation to Lancaster, Pa., accompanied by his daughter’s friend, a 15-year-old girl. Kulick engaged in sexual contact with the minor girl while staying at a hotel in Pennsylvania. Kulick admitted that after returning to New Jersey, he continued to have a sexual relationship with the minor girl for approximately two months. Kulick also admitted that at the time that he transported the minor girl to and from Pennsylvania, he knew that it was illegal in both New Jersey and Pennsylvania to commit statutory rape.
The count to which Kulick pleaded guilty is punishable by a maximum potential penalty of 10 years in prison, a $250,000 fine and restitution for the victim. He will also be required to serve at least five years of supervised release. Sentencing is scheduled for May 13, 2014.
U.S. Attorney Fishman credited special agents of the FBI Atlantic City resident agency, under the direction of Special Agent In Charge Aaron T. Ford; in Newark; the N.J. State Police, under the direction of Col. Rick Fuentes, superintendent of the state police, and investigators with the Cape May County Prosecutor’s office, under the direction of Prosecutor Robert L. Taylor, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S. Attorney’s Office Criminal Division in Camden.
14-042
Defense counsel: Edwin J. Jacobs Jr. Esq., of Atlantic City, N.J.
Kulick Information
California Woman Sentenced in Fraudulent Tax Refund SchemeRead the Press Release
U.S. District Judge D. Lowell Jensen sentenced Noemi Rubio Baez, of Salinas, Calif., to serve 30 months in prison for her involvement in a stolen identity tax refund fraud scheme, Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division and U.S. Attorney Melinda Haag for the Northern District of California announced that today. Baez was also ordered to serve three years supervised release and to pay $703,536.86 in restitution to the Internal Revenue Service (IRS). Baez pleaded guilty on Oct. 31, 2013, to conspiring to file false claims for tax refunds with the IRS and to aggravated identity theft.
According to the plea agreement, beginning around Feb. 28, 2008, and continuing through April 16, 2012, Baez and a co-conspirator participated in a scheme to obtain and help others to obtain false claims from the IRS by electronically filing false federal income tax returns in her own name and in the names of others. Baez and her co-conspirator created false income information in the names and Social Security numbers of multiple individuals, and filed materially false tax returns with the IRS that claimed refunds derived from tax credits including the Earned Income Credit, the Additional Child Tax Credit and the Making Work Pay Credit.
According to court documents, in some instances, the taxpayers requested the returns be prepared, but in others, the taxpayers did not provide Baez or her co-conspirator with their personal identification information and were unaware that the returns had been filed in their names. Baez and her co-conspirator filed more than 150 false and fraudulent returns with false claims totaling more than $400,000.
Assistant Attorney General Keneally and U.S. Attorney Haag thanked special agents of the IRS - Criminal Investigation who investigated the case, and Trial Attorneys Charles O’Reilly, Erin S. Mellen and Sonia M. Owens for the Tax Division, who prosecuted the case.